For which of the following scenarios could a borrower get tax-free forgiveness?

Tax-free forgiveness applies in several specific situations where certain conditions are met. The scenario that includes total disability, death, and public service loan forgiveness qualifies for tax-free forgiveness due to federal regulations in place designed to relieve borrowers from the burden of student loans under these extreme circumstances.

Under the Public Service Loan Forgiveness (PSLF) program, borrowers who work in qualifying public service jobs after making 120 qualified payments can have their remaining loan balance forgiven without facing a tax liability. Total disability and death discharges also allow borrowers to eliminate their student loans without any tax implications. This is in contrast to other forms of forgiveness where the forgiven amount may be considered taxable income, leading to tax liabilities for the borrower.

In situations involving bankruptcy, certain conditions apply, but generally, the process does not result in tax-free discharge. Options involving Income-Contingent Repayment (ICR) forgiveness or closed school cancellation may also lead to forgiveness, but they might not guarantee a tax-free status. Only specific programs and situations, such as those listed in option B, consistently provide this benefit.