LibGuides: Student Loan Law: US Code

US Code

As of July 1, 2010, nearly all federal student loan lending is through the Direct Loan Program:

20 USC §§ 1087a - 1087j
William D. Ford Federal Direct Loan Program

Although the Federal Family Education Loan (FFEL) Program was eliminated in July of 2010, there are many existing FFEL loans that will be held, serviced and collected for many more years by FFEL lenders, servicers and guaranty agencies:

20 US Code § § 1071 - 1087-4
FFEL Program
20 U.S. Code § 1091
Student eligibility for all student loans.
20 U.S. Code § 1091a
State statutes of limitations do not apply in the student loan repayment context. There is no statute of limitations on collecting this debt, except when the student dies.
26 U.S. Code § 108(f)
In an exception to the general rule, student loan debt forgiveness is not taxable if it is part of a public service loan forgiveness program. However, loan discharges for closed schools, false certification, unpaid refunds, and death and disability are considered taxable income. Forgiveness of the remaining balance under income-contingent repayment and income-based repayment after 25 years in repayment is considered taxable income. However, the American Rescue Plan makes any student loan forgiveness passed between 12/31/2000- 1/1/26 tax free.
11 U.S. Code § 523(a)(8)
Student loans are not dischargeable in bankruptcy unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents.
Topic Number 456 - Student Loan Interest Deduction
IRS website
Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntarily pre-paid interest payments. You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year. The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.

New Legislation

Justice Department and Department of Education Announce a Fairer and More Accessible Bankruptcy Discharge Process for Student Loan Borrowers
Press Release 11/17/22
H.R.1319 - American Rescue Plan Act of 2021
Makes any student loan forgiveness passed between Dec. 31, 2020, and Jan. 1, 2026, tax-free — rather than having the forgiven debt be treated as taxable income.
Public Law No: 116-251 (12/22/2020)
Stop Student Debt Relief Scams Act of 2019. Establishes criminal penalties for unauthorized access of certain student loan information and expands the requirements for student loan exit counseling
H.R. 78, The Cares Act, Providing emergency assistance and health care response for individuals, families and businesses affected by the 2020 coronavirus pandemic, 3/27/20
SEC. 3513. TEMPORARY RELIEF FOR FEDERAL STUDENT LOAN BORROWERS.
(a) IN GENERAL.—The Secretary shall suspend all payments due for loans made under part D and part B (that are held by the Department of Education) of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a3 et seq.; 1071 et seq.) through September 30, 2020.
Also made employer payments on employees' student loans tax free.
Student loan servicers brace for trouble with restart of payments
The Hill 4/24/23