Final answer:
The Tax Cuts and Jobs Act expanded tax-free student loan forgiveness to cases of a student's death or disability. The Act does not provide this benefit for other circumstances like working in certain professions or areas, or for federal employees. Understanding loan forgiveness and federal aid programs through FAFSA is essential for managing student loans.
Step-by-step explanation:
The Tax Cuts and Jobs Act expanded the tax-free nature of student loan forgiveness due to the student's death or disability. This provision aids in alleviating the financial burden on families who are facing such unfortunate circumstances. The Act does not, however, expand tax-free forgiveness for student loans for working in identified professions, working in underserved areas, or working for the federal government. It is important for students and families managing student loans to understand the intricacies of loan forgiveness programs to make informed decisions about postsecondary education financing and potential debt relief options.
Aside from loan forgiveness upon death or disability, other forms of federal aid can significantly impact a student's ability to fund their education. These aids include grants, scholarships, work-study programs, and subsidized loans. The Free Application for Federal Student Aid (FAFSA) is a critical tool for accessing these resources, as it determines eligibility for many forms of federal assistance. While the Higher Education Act of 1965 laid the groundwork for these programs, subsequent legislative measures have continued to refine and expand the options available to students.