Washington, DC - United States Senator Elizabeth Warren (D-Mass.) released the statement below following the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service's (IRS) decision to expand tax exemptions for student loan borrowers who attended failing colleges or colleges that defrauded them.

"Predatory for-profit colleges have cheated hundreds of thousands of students who were trying to build a future, and those student loan borrowers shouldn't have to pay taxes on their cancelled student loans," Senator Warren said. "I successfully fought for the tax exemption granted to students defrauded by Corinthian College in 2015, and I'm glad Treasury and the IRS are expanding these guidelines to protect more students from additional hardship."

The announcement comes years after the senator led Senators Sherrod Brown (D-Ohio) and Richard Durbin (D-Ill.), and Congresswoman Maxine Waters (D-Calif.) in a 2015 letter urging the Treasury and IRS to treat discharged student loans under the Education Department's borrower defense authority as non-taxable events for defrauded students, including  those students cheated by Corinthian Colleges. That year, the senator's letter and advocacy resulted in a policy from the IRS, in which the IRS announced that it would not treat borrower defense discharges of student loans as taxable events for students cheated by Corinthian Colleges. After additional pressure from Senator Warren, the IRS later extended this policy to cover students cheated by American Career Institutes (ACI), Inc. in Massachusetts, and eventually to students who took out private student loans to attend ACI and Corinthian Colleges.

This week's announcement from the IRS further extends the policy and finally covers all students who were cheated by predatory colleges or who attended colleges that collapsed. This week's decision cites and relies on the agency's previous policies regarding defrauded students, particularly the initial 2015 policy Senator Warren pushed the IRS to release.

Senator Warren has long advocated for the rights of students cheated by for-profit colleges to have their federal student loans cancelled, tax free. In 2014, Senator Warren forced the Department of Education to acknowledge that students defrauded by their colleges had a right to debt cancellation and launched an initiative to urge the Department to provide that relief. Through public letters, staff investigations, public awareness campaigns and coordination with state officials, Warren urged more and faster relief for cheated students. To date, the Education Department has announced student loan cancellations for more than 28,000 former students across the country cheated by Corinthian Colleges, more than 7,000 students affected by ITT Tech's closure, and some 4,500 Massachusetts students cheated by the American Career Institute.