Depends on your state and when you get the cancellation. Currently (through 2025), there is no federal tax on student loan cancellation. And if Congress doesn’t extent it, it will revert back to being taxed federally in 2026. However, some states will make you pay taxes on it (depending on the reason why it was cancelled). See this guide: State Taxes And Student Loan Forgiveness. And either way, you report it on your tax return.

It’s a myth that student loan debt cannot be discharged in bankruptcy – it absolutely can… it’s just very difficult due to the undue hardship test. Basically, no Federal loan will ever be “undue hardship” because of programs like disability discharge, income-driven repayment, and more. Private loans are much more viable to be discharged, and they are every year. However, it’s usually in combination with other debt as well.

The loan had to be discharged after January 1, 2018. It’s one of Trump’s student loan forgiveness changes.