The resolution urges Congress to amend the federal tax code to exclude all forms of discharged student loans from federal income taxation. Currently, while certain discharges, such as those for teachers and public service employees or due to death or disability (for a limited time), are exempt from taxation, many borrowers still face tax liabilities on forgiven loans, particularly those discharged after long repayment periods under Income-Driven Repayment Plans. This creates a financial burden for individuals who have their student loans forgiven, as they are required to pay income tax on the amount discharged.

The General Assembly of New Jersey believes that eliminating the tax on all forms of discharged student loans would significantly benefit borrowers, especially those in dire financial situations. The resolution calls for Congress to reassess the current tax treatment of discharged student loans and to make the existing exemptions permanent, thereby alleviating the tax burden on individuals who have had their student debt forgiven. Copies of the resolution will be sent to relevant congressional representatives and federal officials to advocate for this change.