II 

117TH CONGRESS 

1ST SESSION S. 2191 

To amend the Internal Revenue Code of 1986 to exclude certain post-graduation scholarship grants from gross income in the same manner as qualified scholarships to promote economic growth. 

IN THE SENATE OF THE UNITED STATES 

JUNE 23, 2021 

Mr. PETERS (for himself and Mrs. CAPITO) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to exclude 

certain post-graduation scholarship grants from gross income in the same manner as qualified scholarships to 

promote economic growth. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Workforce Develop5 ment Through Post-Graduation Scholarships Act of 

6 2021’’. 


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1 SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EX2 CLUDED FROM GROSS INCOME IN SAME MAN3 NER AS QUALIFIED SCHOLARSHIPS. 

4 (a) IN GENERAL.—Section 117(a) of the Internal 

5 Revenue Code of 1986 is amended— 

6 (1) by striking the period at the end and insert7 ing ‘‘, or’’, 

8 (2) by striking ‘‘any amount received’’ and in9 serting the following: ‘‘any amount which— 

10 ‘‘(1) is received’’, and 

11 (3) by adding at the end the following new 

12 paragraph: 

13 ‘‘(2) is received as a post-graduation scholar14 ship grant paid on behalf of an individual.’’. 

15 (b) POST-GRADUATION SCHOLARSHIP GRANT.—Sec16 tion 117(b) of the Internal Revenue Code of 1986 is 

17 amended by redesignating paragraph (2) as paragraph (3) 

18 and by inserting after paragraph (1) the following new 

19 paragraph: 

20 ‘‘(2) POST-GRADUATION SCHOLARSHIP

21 GRANT.— 

22 ‘‘(A) IN GENERAL.—The term ‘post-grad23 uation scholarship grant’ means any grant pro24 gram— 

25 ‘‘(i) which is established by an organi26 zation which— 


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1 ‘‘(I) is described in section 

2 501(c)(3) and exempt from tax under 

3 section 501(a), and 

4 ‘‘(II) is either a private founda5 tion or community trust described in 

6 section 170(b)(1)(A)(vi) (other than 

7 an organization established by an or8 ganization described in section 

9 170(b)(1)(A)(ii) or an organization 

10 described in section 170(b)(1)(A)(iii) 

11 the principal purpose or function of 

12 which is the provision of medical edu13 cation), 

14 ‘‘(ii) under which, in accordance with 

15 the conditions of a grant, such organiza16 tion repays any portion of an applicable 

17 education loan incurred by an individual, 

18 ‘‘(iii) which requires a grantee to live 

19 and work in an applicable community, 

20 ‘‘(iv) under which payments are made 

21 directly to the holder of the loan, and 

22 ‘‘(v) which is not provided to an em23 ployee of the granting organization or a re24 lated entity of the granting organization. 


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1 ‘‘(B) APPLICABLE EDUCATION LOAN.—For 

2 purposes of subparagraph (A), the term ‘appli3 cable education loan’ means, with respect to 

4 any individual, a qualified education loan (as 

5 defined in section 221(d)(1)) incurred to pay 

6 qualified higher education expenses (as defined 

7 in section 221(d)(2)) of such individual. 

8 ‘‘(C) APPLICABLE COMMUNITY.—For pur9 poses of subparagraph (A), the term ‘applicable 

10 community’ means any area that has a bach11 elor’s degree attainment rate for the population 

12 that is below the state or national average for 

13 such population (as determined based on data 

14 collected by the Census Bureau).’’. 

15 (c) AMOUNT NOT TREATED AS TAXABLE EXPENDI16 TURE BY PRIVATE FOUNDATION.—Section 4945(g) of the 

17 Internal Revenue Code of 1986 is amended by striking 

18 ‘‘or’’ at the end of paragraph (2), by striking the period 

19 at the end of paragraph (3) and inserting ‘‘, or’’, and by 

20 adding at the end the following new paragraph: 

21 ‘‘(4) the grant is a post-graduation scholarship 

22 grant (as defined in section 117(b)(2)).’’. 

23 (d) DENIAL OF DOUBLE BENEFIT.—Section 221(e) 

24 of the Internal Revenue Code of 1986 is amended by re25 designating paragraphs (2) and (3) as paragraphs (3) and 


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1 (4), respectively, and by inserting after paragraph (1) the 

2 following new paragraph: 

3 ‘‘(2) DENIAL OF DOUBLE BENEFIT IN CASE OF

4 POST-GRADUATION SCHOLARSHIP GRANTS.—Any in5 terest which is paid as part of a post-graduation 

6 scholarship grant and excluded from gross income 

7 under section 117 shall not be taken into account 

8 under this section.’’. 

9 (e) REGULATORY AUTHORITY.—Section 117 of the 

10 Internal Revenue Code of 1986 is amended by adding at 

11 the end the following new subsection: 

12 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 

13 such reporting requirements and regulations as may be 

14 necessary or appropriate to carry out subsection (a)(2).’’. 

15 (f) REPORTS.— 

16 (1) SECRETARY OF TREASURY.—Not later than 

17 3 years after the date of the enactment of this Act, 

18 and periodically thereafter, the Secretary of the 

19 Treasury, or the Secretary’s delegate, shall submit 

20 to Congress a report on the implementation and ef21 fectiveness of the amendments made by this section. 

22 (2) COMPTROLLER GENERAL.— 

23 (A) IN GENERAL.—Not later than 5 years 

24 after the date of enactment of this Act, the 

25 Comptroller General of the United States shall 


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1 publish the result of a study on post-graduation 

2 scholarship grants to which section 117 of the 

3 Internal Revenue Code of 1986 (as amended by 

4 this section) applies. 

5 (B) CONTENTS OF REPORT.—The informa6 tion published under subparagraph (A) shall in7 clude the following: 

8 (i) The length of time involved in such 

9 grants. 

10 (ii) The amount paid out under such 

11 grants. 

12 (iii) The disposition of any funds paid 

13 under such grants, including the identity 

14 of any loan holders who benefit from such 

15 funds. 

16 (g) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 the date of the enactment of this Act. 

Æ 


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