LRAP Plus Policies

Taxability and Program Administration

The forgiveness of LRAP Loans is, in most cases, not subject to federal income tax pursuant to Section 108(f) of the Internal Revenue Code (IRC). Participants who are working for or under the direction of a governmental unit or an organization described in 501(c)(3) of the IRC generally will not have this forgiveness added to their gross income. Section 108(f) of the Internal Revenue Code details the requirements for tax-free forgiveness.

Please feel free to refer to IRS Publication 970 for an overview of the treatment of LRAP loan forgiveness, as well as the deductibility of student loan interest payments. By providing you with this information NYU is not rendering, or purporting to render, legal, accounting, or tax guidance. NYU strongly urges participants to consult with their tax advisors regarding the taxability of the forgiveness of their loans.

NOTE: While NYU is strongly committed to LRAP, it is important to note that neither the existence of the Program, nor the formula used by the Program to calculate benefits is guaranteed. The formula and other terms of the Program will be determined at the discretion of the Program Administrator and may be adjusted as Program resources, participation rates, and indebtedness of participants change. Participants may receive more or less funding in succeeding years.