Students and Families Empowerment Act

I 116TH CONGRESS 1ST SESSION H. R. 1798 To amend the Internal Revenue Code of 1986 to increase the deduction allowed for student loan interest and to exclude from gross income discharges of income contingent or income-based student loan indebted- ness. IN THE HOUSE OF REPRESENTATIVES MARCH 14, 2019 Miss RICE of New York introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall with- in the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to increase the deduction allowed for student loan interest and to exclude from gross income discharges of income contin- gent or income-based student loan indebtedness. 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 ‘‘Students and Families 4 Empowerment Act’’. 5 VerDate Sep 11 2014 00:51 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1798.IH H1798 kjohnson on DSK79L0C42 with BILLS 2 •HR 1798 IH SEC. 2. INCREASE IN DEDUCTION FOR STUDENT LOAN IN- 1 TEREST. 2 (a) DOLLAR LIMITATION AND LIMITATION BASED ON 3 INCOME REPLACED WITH LIMITATION ON AGGREGATE 4 EDUCATION INDEBTEDNESS THAT MAY BE TAKEN INTO 5 ACCOUNT.—Section 221(b) of the Internal Revenue Code 6 of 1986 is amended to read as follows: 7 ‘‘(b) LIMITATION ON AGGREGATE EDUCATION IN- 8 DEBTEDNESS THAT MAY BE TAKEN INTO ACCOUNT.— 9 The aggregate amount taken into account under sub- 10 section (a) as qualified education loans for any period shall 11 not exceed $750,000 (twice such amount in the case of 12 a joint return).’’. 13 (b) CONFORMING AMENDMENTS.—Section 221 of 14 such Code is amended by striking subsections (e) and (f) 15 (relating to special rules and inflation adjustments, re- 16 spectively) and inserting the following new subsection: 17 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction 18 shall be allowed under this section for any amount for 19 which a deduction is allowable under any other provision 20 of this chapter.’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to taxable years beginning after 23 the date of the enactment of this Act. 24 VerDate Sep 11 2014 00:51 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1798.IH H1798 kjohnson on DSK79L0C42 with BILLS 3 •HR 1798 IH SEC. 3. EXCLUSION FROM GROSS INCOME FOR DISCHARGE 1 OF INCOME CONTINGENT AND INCOME- 2 BASED STUDENT LOAN INDEBTEDNESS. 3 (a) IN GENERAL.—Paragraph (1) of section 108(f) 4 of the Internal Revenue Code of 1986 is amended to read 5 as follows: 6 ‘‘(1) IN GENERAL.—In the case of an indi- 7 vidual, gross income does not include any amount 8 which (but for this subsection) would be includible in 9 gross income by reason of the discharge (in whole or 10 in part) of any student loan if such discharge was 11 pursuant to— 12 ‘‘(A) a provision of such loan under which 13 all or part of the indebtedness of the individual 14 would be discharged if the individual worked for 15 a certain period of time in certain professions 16 for any of a broad class of employers, or 17 ‘‘(B) subsections (d)(1)(D) and (e)(7) of 18 section 455 or section 493C(b)(7) of the Higher 19 Education Act of 1965 (relating to income con- 20 tingent and income-based repayment, respec- 21 tively).’’. 22 (b) EFFECTIVE DATE.—The amendments made by 23 this section shall apply to discharges of indebtedness after 24 the date of the enactment of this Act. 25 VerDate Sep 11 2014 00:51 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1798.IH H1798 kjohnson on DSK79L0C42 with BILLS 4 •HR 1798 IH SEC. 4. GRACE PERIOD EXTENSION. 1 (a) IN GENERAL.—Section 455 of the Higher Edu- 2 cation Act of 1965 (20 U.S.C. 1087e) is amended by add- 3 ing at the end the following: 4 ‘‘(r) GRACE PERIOD EXTENSION.— 5 ‘‘(1) IN GENERAL.—With respect to the Federal 6 Direct Stafford Loans and Federal Direct Unsub- 7 sidized Stafford Loans, section 487(b)(7) shall be 8 applied— 9 ‘‘(A) in subparagraph (A), by substituting 10 ‘12 months’ for ‘6 months’; and 11 ‘‘(B) in subparagraph (D), by substituting 12 ‘12-month period’ for ‘6-month period’. 13 ‘‘(2) NO ACCRUAL OF INTEREST.—Notwith- 14 standing any other provision of this part, interest 15 shall not accrue on a Federal Direct Unsubsidized 16 Stafford Loan during the 12-month period described 17 in paragraph (1). 18 ‘‘(s) EXTENSION OF CERTAIN DEFERMENT PERIOD 19 FOR FEDERAL DIRECT PLUS LOANS.— 20 ‘‘(1) IN GENERAL.—With respect to Federal 21 Direct PLUS Loans, section 428B(d)(1)(B) shall be 22 applied— 23 ‘‘(A) in the case of a parent borrower, in 24 clause (i), by substituting ‘12-month period’ for 25 ‘6-month period’; and 26 VerDate Sep 11 2014 00:51 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1798.IH H1798 kjohnson on DSK79L0C42 with BILLS 5 •HR 1798 IH ‘‘(B) in the case of a graduate or profes- 1 sional student borrower, in clause (ii), by sub- 2 stituting ‘12-month period’ for ‘6-month pe- 3 riod’. 4 ‘‘(2) NO ACCRUAL OF INTEREST.—Notwith- 5 standing any other provision of this part, interest 6 shall not accrue on a Federal Direct PLUS Loan 7 during the 12-month period described in paragraph 8 (1).’’. 9 (b) EFFECTIVE DATE AND APPLICATION.—The 10 amendments made by this section shall take effect on the 11 date of enactment of this Act, and shall apply with respect 12 to— 13 (1) Federal Direct Stafford Loans, Federal Di- 14 rect Unsubsidized Stafford Loans, and Federal Di- 15 rect PLUS Loans made on or after the date of en- 16 actment of this Act; and 17 (2) Federal Direct Stafford Loans, Federal Di- 18 rect Unsubsidized Stafford Loans, and Federal Di- 19 rect PLUS Loans made before such date of enact- 20 ment to borrowers who have not yet entered repay- 21 ment on such loans on such date of enactment. 22 Æ VerDate Sep 11 2014 00:51 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H1798.IH H1798 kjohnson on DSK79L0C42 with BILLS