Corinthian Students May Get State Income Tax Break

SACRAMENTO, Calif. (AP) - Californians who had their student loans forgiven after the collapse of Corinthian Colleges this year could get a state income tax break.

Senators on Tuesday unanimously approved excluding the forgiven debt from the students' gross income, allowing them to avoid paying income tax on the debt.

RELATED: Some Corinthian Students May Get Loans Forgiven- Under One Condition

Republican Sen. Janet Nguyen of Garden Grove says her SB150 would benefit students who were unable to complete their studies at a for-profit college. She says many of them low-income.

The measure now goes to the Assembly.

Corinthian is providing $480 million in loan forgiveness nationwide under an agreement with federal regulators.

The Franchise Tax Board projects that the tax break would cost California's general fund $34 million this fiscal year.