Tax Benefits for Education›2025 Returns›! tax-free treatment if it is canceled because of
Refinanced Loan
Publication 970 — Tax Benefits for Education · 2026-10-03 edition · updated 2026-10-04 · United States
If you refinanced a student loan with another loan from an educational organization or a tax-exempt organization, the cancellation of that loan may also be treated as discussed above. This applies if the new loan is made under a program of the refinancing organization that is designed to encourage students to serve in occupations with unmet needs or in areas with unmet needs where the services required of the students are for or under the direction of a governmental unit or a tax-exempt section 501(c)(3) organization (defined earlier).
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