I 117TH CONGRESS 1ST SESSION H. R. 1564 To amend the Internal Revenue Code of 1986 to exclude from taxable income any student loan forgiveness or discharge. IN THE HOUSE OF REPRESENTATIVES MARCH 3, 2021 Mr. GOMEZ (for himself and Mr. PASCRELL) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude from taxable income any student loan forgiveness or discharge. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Student Loan Tax Re- 4 lief Act’’. 5 SEC. 2. MODIFICATION OF TREATMENT OF STUDENT LOAN 6 FORGIVENESS. 7 (a) IN GENERAL.—Section 108(f) of the Internal 8 Revenue Code of 1986 is amended— 9 VerDate Sep 11 2014 23:44 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1564.IH H1564 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1564 IH (1) by striking paragraphs (1) and (2) and in- 1 serting the following: 2 ‘‘(1) IN GENERAL.—In the case of an indi- 3 vidual, gross income does not include any amount 4 which (but for this subsection) would be includible in 5 gross income by reasons of the discharge (in whole 6 or in part) of— 7 ‘‘(A) any loan provided expressly for post- 8 secondary educational expenses, regardless of 9 whether provided through the educational insti- 10 tution or directly to the borrower, if such loan 11 was made, insured, or guaranteed by— 12 ‘‘(i) the United States, or an instru- 13 mentality or agency thereof, 14 ‘‘(ii) a State, territory, or possession 15 of the United States, or the District of Co- 16 lumbia, or any political subdivision thereof, 17 or 18 ‘‘(iii) any institution of higher edu- 19 cation, 20 ‘‘(B) any private education loan (as de- 21 fined in section 140(a)(7) of the Truth in Lend- 22 ing Act), 23 VerDate Sep 11 2014 23:44 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1564.IH H1564 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1564 IH ‘‘(C) any loan made by any educational or- 1 ganization described in section 170(b)(1)(A)(ii) 2 if such loan is made— 3 ‘‘(i) pursuant to an agreement with 4 any entity described in subparagraph (A) 5 or any private education lender (as defined 6 in section 140(a) of the Truth in Lending 7 Act) under which the funds from which the 8 loan was made were provided to such edu- 9 cational organization, or 10 ‘‘(ii) pursuant to a program of such 11 educational organization which is designed 12 to encourage its students to serve in occu- 13 pations with unmet needs or in areas with 14 unmet needs and under which the services 15 provided by the students (or former stu- 16 dents) are for or under the direction of a 17 governmental unit or an organization de- 18 scribed in section 501(c)(3) and exempt 19 from tax under section 501(a), or 20 ‘‘(D) any loan made by an educational or- 21 ganization described in section 170(b)(1)(A)(ii) 22 or by an organization exempt from tax under 23 section 501(a) to refinance a loan to an indi- 24 vidual to assist the individual in attending any 25 VerDate Sep 11 2014 23:44 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1564.IH H1564 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1564 IH such educational organization but only if the re- 1 financing loan is pursuant to a program of the 2 refinancing organization which is designed as 3 described in subparagraph (C)(ii).’’, 4 (2) by striking paragraph (5), 5 (3) by redesignating paragraphs (3) and (4) as 6 paragraphs (2) and (3), respectively, and 7 (4) in paragraph (2), as so redesignated, by— 8 (A) striking ‘‘made by an organization de- 9 scribed in paragraph (2)(D)’’ and inserting 10 ‘‘made by an organization described in para- 11 graph (1)(C) or made by a private education 12 lender (as defined in section 140(a)(7) of the 13 Truth in Lending Act)’’, and 14 (B) inserting ‘‘or for such private edu- 15 cation lender’’ after ‘‘either such organization’’. 16 (b) EFFECTIVE DATE.—The amendments made by 17 this section shall apply to discharges of loans after Janu- 18 ary 31, 2020. 19 Æ VerDate Sep 11 2014 23:44 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H1564.IH H1564 kjohnson on DSK79L0C42PROD with BILLS