<prompt> Human: Ive been reading a lot of question on this sub lately about debt and student loans. As someone with 138k in student loans, and no hope of ever paying them off fully, Id like to better understand what Ive gotten myself into. This place is great and Ive been googling and actually reading some tax laws but I just dont understand why my forgiven loans would be considered taxable. Lets say I manage to pay off half of my loans in 25years and end up having something like 70k in student loans forgiven. Its not like Ive actually acquired 70,000. And since I will have been working off of an income based repayment plan, everyone from my loan provider to the IRS knows that I dont make a lot of money. Could someone explain possibly in an explain like Im 10 way why my forgiven loans are going to be considered taxable income when the forgiven loan is not an amount that I receive?  <response>: Lets say I manage to pay off half of my loans in 25years and end up having something like 70k in student loans forgiven. Its not like Ive actually acquired 70,000.Yes you did. That 70,000 was given to the school on your behalf or represents interest that you accrued. The expectation was that youd pay it back, but since you didnt, its basically like getting free money and thus income. 