- Associated Press - Tuesday, September 1, 2015

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.

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.

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