According to the IRS rules
https://www.irs.gov/publications/p970/ch05.html#en_US_2016_publink1000266401

The cancellation of your loan doesn’t qualify as tax-free student loan cancellation if your student loan was made by an educational institution and is canceled because of services you performed for the educational institution or other organization that provided the funds.

So, it seems in most cases it would be tax free, but let’s say you go to a state university, rack up a lot of debt, but get a job at the same university as a professor. Even though the university is a 501c3, your PSLF forgiveness amount would be taxable because that is the institution you received your loans from. Does this mean that any of the 120 payments made while working at the said university would make your entire amount taxable, or does it have to be all 120 payments? Seems suspiciously vague, and I hope I’m reading it wrong….