If your client is insolvent of course you can, but be sure he/she is. some student loans are exempt. From IRS. Be sure you get paid up front.
Exceptions to cancellation of debt income:
- Amounts canceled as gifts, bequests, devises, or inheritances
- Certain qualified student loans containing loan provisions for cancellation based on length of employment in certain professions for a broad class of employers
- Certain student loan discharges after December 31, 2020, and before January 1, 2026
- Amounts received or forgiven under certain student loan repayment assistance programs
- Amounts of canceled debt that would be deductible if you, as a cash basis taxpayer, had paid it
- A qualified purchase price reduction given by the seller of property to the buyer
Amounts that meet the requirements for any of the following exclusions aren't included in income, even though they're cancellation of debt income.
