; and (2) in the case of a borrower of loans that have the same applicable rates of interest, first toward the outstanding balance of principal due on the loan with the highest principal balance among such loans. (c) Data To implement Contractors of the Secretary, and holders of Federal student loans, shall report, to the satisfaction of the Secretary the information necessary to carry out this section. (d) Taxation For purposes of the Internal Revenue Code of 1986, in the case of any cancellation or repayment of indebtedness under this subsection with respect to any borrower: (1) Exclusion from gross income No amount shall be included in the gross income of such borrower by reason of such cancellation or repayment. (2) Waiver of information reporting requirements Amounts excluded from gross income under paragraph (1) shall not be required to be reported (and shall not be taken into account in determining whether any reporting requirement applies) under chapter 61 of such Code. (e) Definitions In this section: (1) Federal student loan The term Federal student loan means a loan— (A) made under part B, part D, or part E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq., 1087a et seq., 1087aa et seq.), and held by the Department of Education; or (B) made, insured, or guaranteed under part B of the such title ( 20 U.S.C. 1071 et seq.), or made under part E of such title ( 20 U.S.C. 1087qaa seq.), and not held by the Department of Education. (2) Secretary The term Secretary means the Secretary of Education.