A bill to amend the Higher Education Act of 1965 to automatically discharge the loans of certain veteran borrowers, and for other purposes.

II 116TH CONGRESS 1ST SESSION S. 2049 To amend the Higher Education Act of 1965 to automatically discharge the loans of certain veteran borrowers, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 28 (legislative day, JUNE 27), 2019 Mr. REED (for himself and Mr. ISAKSON) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Higher Education Act of 1965 to automati- cally discharge the loans of certain veteran borrowers, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. AUTOMATIC LOAN DISCHARGE FOR CERTAIN 3 VETERAN BORROWERS. 4 Section 437(a) of the Higher Education Act of 1965 5 (20 U.S.C. 1087(a)) is amended— 6 (1) by striking paragraph (2) and inserting the 7 following: 8 VerDate Sep 11 2014 22:48 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2049.IS S2049 kjohnson on DSK79L0C42 with BILLS 2 •S 2049 IS ‘‘(2) DISABILITY DETERMINATIONS.—With re- 1 spect to a borrower who has been identified under 2 clause (i) or (ii) of paragraph (3)(A), the Secretary 3 shall— 4 ‘‘(A) consider such borrower permanently 5 and totally disabled for the purpose of dis- 6 charging the loans of such borrower under this 7 subsection; 8 ‘‘(B) discharge the loans of such borrower 9 under this subsection, without any further ac- 10 tion by the borrower (except that this subpara- 11 graph shall not apply to a borrower who opts 12 out of such discharge under subparagraph (C)); 13 ‘‘(C) in a case of a borrower who lives in 14 a State that may impose a tax liability (as de- 15 scribed in paragraph (4)) for such a loan dis- 16 charge— 17 ‘‘(i) notify the borrower of the pos- 18 sible tax liability; and 19 ‘‘(ii) provide an opportunity to opt-out 20 of such loan discharge; and 21 ‘‘(D) notify such borrower of potential 22 Federal tax implications of such loan discharge 23 under this subsection.’’; and 24 (2) by adding at the end the following: 25 VerDate Sep 11 2014 22:48 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2049.IS S2049 kjohnson on DSK79L0C42 with BILLS 3 •S 2049 IS ‘‘(3) MATCHING PROGRAM.— 1 ‘‘(A) IN GENERAL.—Not less than twice 2 per year, the Secretary of Education and the 3 Secretary of Veterans Affairs shall carry out a 4 computer matching program under which the 5 Secretary of Education identifies a borrower— 6 ‘‘(i) who has been assigned a rating of 7 total disability by the Secretary of Vet- 8 erans Affairs for a service-connected dis- 9 ability (as defined in section 101 of title 10 38, United States Code); or 11 ‘‘(ii) who has been determined by the 12 Secretary of Veterans Affairs to be unem- 13 ployable due to a service-connected condi- 14 tion. 15 ‘‘(B) MINOR DISCREPANCIES.—With re- 16 spect to each borrower who would have been 17 identified under clause (i) or (ii) of subpara- 18 graph (A) but for a minor discrepancy between 19 the information of the borrower maintained by 20 the Secretary of Education and the Secretary of 21 Veterans Affairs (such as a name discrepancy 22 post marriage, a missing hyphen, a transposed 23 number or letter, or other typo), the Secretary 24 of Education and the Secretary of Veterans Af- 25 VerDate Sep 11 2014 22:48 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2049.IS S2049 kjohnson on DSK79L0C42 with BILLS 4 •S 2049 IS fairs shall work together to correct such minor 1 discrepancy of such borrower. 2 ‘‘(4) STATE TAX LIABILITY.—The Secretary 3 shall determine whether a State may impose a tax 4 liability for the discharge of a loan under this sub- 5 section, and in making that determination, the Sec- 6 retary shall— 7 ‘‘(A) in the case of a State which does not 8 have an income tax, or which excludes discharge 9 of student loans from its definition of income 10 for tax purposes, determine that the State will 11 not impose tax liability; 12 ‘‘(B) in the case of a State which conforms 13 the relevant provisions of its tax law to section 14 108 of the Internal Revenue Code of 1986, de- 15 termine that the State will not impose tax li- 16 ability; and 17 ‘‘(C) in the case of a State which does not 18 conform the relevant provisions of its tax law to 19 section 108 of the Internal Revenue Code of 20 1986, consult with the tax authority of that 21 State to determine if the State would seek to 22 impose tax liability and, if not, determine that 23 a State will not impose tax liability.’’. 24 Æ VerDate Sep 11 2014 22:48 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S2049.IS S2049 kjohnson on DSK79L0C42 with BILLS