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Student Loan Disability Forgiveness for Disability (Changes) Please check out HR1, the new Tax Law just signed by President Trump. It appears, that if you have your student loans forgiven for being permanently disabled, the income tax liability has been removed. An copy of the law from the text of the new law is provided below. I do not claim to be an attorney, so please interpret it for yourself. PART IV—EDUCATION SEC. 11031. TREATMENT OF STUDENT LOANS DISCHARGED ON ACCOUNT OF DEATH OR DISABILITY. (a) In General.—Section 108(f) is amended by adding at the end the following new paragraph: “(5) DISCHARGES ON ACCOUNT OF DEATH OR DISABILITY.— “(A) IN GENERAL.—In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income for such taxable year by reasons of the discharge (in whole or in part) of any loan described in subparagraph (B) after December 31, 2017, and before January 1, 2026, if such discharge was— “(i) pursuant to subsection (a) or (d) of section 437 of the Higher Education Act of 1965 or the parallel benefit under part D of title IV of such Act (relating to the repayment of loan liability), “(ii) pursuant to section 464(c)(1)(F) of such Act, or “(iii) otherwise discharged on account of the death or total and permanent disability of the student. “(B) LOANS DESCRIBED.—A loan is described in this subparagraph if such loan is— “(i) a student loan (as defined in paragraph (2)), or “(ii) a private education loan (as defined in section 140(7) of the Consumer Credit Protection Act (15 U.S.C. 1650(7))).”. (b) Effective Date.—The amendment made by this section shall apply to discharges of indebtedness after December 31, 2017.