Student Loan Relief Act

I 116TH CONGRESS 2D SESSION H. R. 8514 To direct the Secretary of Education to cancel or repay up to $25,000 in Federal student loans for each borrower. IN THE HOUSE OF REPRESENTATIVES OCTOBER 2, 2020 Mr. GONZALEZ of Texas introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Com- mittee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To direct the Secretary of Education to cancel or repay up to $25,000 in Federal student loans for each borrower. 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 Relief 4 Act’’. 5 SEC. 2. WRITING DOWN BALANCES FOR FEDERAL STUDENT 6 LOAN BORROWERS. 7 (a) IN GENERAL.—Not later than 90 days after the 8 date of enactment of this Act, the Secretary shall cancel 9 VerDate Sep 11 2014 04:20 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8514.IH H8514 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8514 IH or repay an amount on the outstanding balance due (in- 1 cluding the unpaid principal amount, any accrued interest, 2 and any fees or charges) on the Federal student loans of 3 a borrower that is equal to the lesser of— 4 (1) $25,000; or 5 (2) the total outstanding balance due on such 6 loans of the borrower. 7 (b) APPLICATION.—Unless otherwise requested by 8 the borrower in writing, a cancellation or repayment under 9 subsection (a) shall be applied— 10 (1) in the case of a borrower whose loans have 11 different applicable rates of interest, first toward the 12 outstanding balance due on the loan with the highest 13 applicable rate of interest among such loans; and 14 (2) in the case of a borrower of loans that have 15 the same applicable rates of interest, first toward 16 the outstanding balance of principal due on the loan 17 with the highest principal balance among such loans. 18 (c) DATA TO IMPLEMENT.—Contractors of the Sec- 19 retary, and holders of Federal student loans, shall report, 20 to the satisfaction of the Secretary the information nec- 21 essary to carry out this section. 22 (d) TAXATION.—For purposes of the Internal Rev- 23 enue Code of 1986, in the case of any cancellation or re- 24 VerDate Sep 11 2014 04:20 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8514.IH H8514 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8514 IH payment of indebtedness under this subsection with re- 1 spect to any borrower: 2 (1) EXCLUSION FROM GROSS INCOME.—No 3 amount shall be included in the gross income of such 4 borrower by reason of such cancellation or repay- 5 ment. 6 (2) WAIVER OF INFORMATION REPORTING RE- 7 QUIREMENTS.—Amounts excluded from gross in- 8 come under paragraph (1) shall not be required to 9 be reported (and shall not be taken into account in 10 determining whether any reporting requirement ap- 11 plies) under chapter 61 of such Code. 12 (e) DEFINITIONS.—In this section: 13 (1) FEDERAL STUDENT LOAN.—The term 14 ‘‘Federal student loan’’ means a loan— 15 (A) made under part B, part D, or part E 16 of title IV of the Higher Education Act of 1965 17 (20 U.S.C. 1071 et seq., 1087a et seq., 1087aa 18 et seq.), and held by the Department of Edu- 19 cation; or 20 (B) made, insured, or guaranteed under 21 part B of the such title (20 U.S.C. 1071 et 22 seq.), or made under part E of such title (20 23 U.S.C. 1087qaa seq.), and not held by the De- 24 partment of Education. 25 VerDate Sep 11 2014 04:20 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8514.IH H8514 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8514 IH (2) SECRETARY.—The term ‘‘Secretary’’ means 1 the Secretary of Education. 2 Æ VerDate Sep 11 2014 04:20 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H8514.IH H8514 pbinns on DSKJLVW7X2PROD with BILLS