There were two separate events: 1) Payment of ages, and 2) Forgiveness of Debt. You had to pay tax the first time because you were paid the $3,750. When you left, you were obligated to pay it back, but when you claimed the hardship, the debt was forgiven. Debt forgiveness is considered a taxable income. From a tax perspective, these two items are looked at as two separate, mutually exclusive events.
