I 

117TH CONGRESS 

1ST SESSION H. R. 1143 

To amend the Truth in Lending Act to modify obligations relating to private 

education loans due to the disability of a cosigner or borrower of the 

loan, to amend title 11 of the United States Code to make student 

loans dischargeable, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 18, 2021 

Mr. KILDEE (for himself, Mr. CARSON, Mr. COHEN, Ms. DEAN, Ms. NORTON, 

Mr. PERLMUTTER, and Mr. VARGAS) introduced the following bill; which 

was referred to the Committee on Financial Services, and in addition to 

the Committees on the Judiciary, and 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 amend the Truth in Lending Act to modify obligations 

relating to private education loans due to the disability 

of a cosigner or borrower of the loan, to amend title 

11 of the United States Code to make student loans 

dischargeable, and for other purposes. 

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 ‘‘Lenders Offer Assist5 ance Now Act’’ or the ‘‘LOAN Act’’. 


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1 SEC. 2. DISABILITY OF A COSIGNER OR A BORROWER OF A 

2 PRIVATE EDUCATION LOAN. 

3 (a) IN GENERAL.—Section 140(g) of the Truth in 

4 Lending Act (15 U.S.C. 1650(g)) is amended— 

5 (1) in paragraph (1), by striking ‘‘bankruptcy 

6 or death’’ and inserting ‘‘bankruptcy, death, or dis7 ability’’; and 

8 (2) by adding at the end the following new 

9 paragraphs: 

10 ‘‘(3) DISCHARGE IN CASE OF DISABILITY.—A 

11 lender that extends a private education loan shall 

12 discharge the student obligor’s liability on the loan 

13 if a student obligor experiences a disability. 

14 ‘‘(4) DISABILITY DEFINED.—In this subsection, 

15 the term ‘disability’ means a permanent and total 

16 disability, as determined in accordance with the reg17 ulations of the Secretary of Education under section 

18 437(a) of the Higher Education Act of 1965 (20 

19 U.S.C. 1087(a)), or a determination by the Sec20 retary of Veterans Affairs that the individual is un21 employable due to a service-connected condition.’’. 

22 (b) TAX TREATMENT OF DISCHARGE.—Section 

23 108(f)(5)(A) of the Internal Revenue Code of 1986 is fur24 ther amended by striking ‘‘or’’ in clause (ii), by redesig25 nating clause (iii) as clause (iv), and by inserting after 

26 clause (ii) the following new clause: 


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1 ‘‘(iii) pursuant to paragraph (3) of 

2 section 140(g) of the Truth in Lending 

3 Act, or’’. 

4 (c) IMPACT ON CERTAIN PROGRAMS.—Discharge of 

5 a private education loan due to disability of a borrower 

6 under paragraph (3) of section 140(g) of the Truth in 

7 Lending Act, as added by subsection (a), shall not be re8 garded as income and shall not be regarded as a resource 

9 for purposes of determining the eligibility of the borrower 

10 of such loan (or the borrower’s spouse or family) for bene11 fits or assistance, or the amount or extent of benefits or 

12 assistance, under any Federal program or under any State 

13 or local program financed in whole or in part with Federal 

14 funds. 

15 (d) APPLICABILITY.—The amendments made by this 

16 section shall apply to private education loan agreements 

17 entered into on or after the date that is 180 days after 

18 the date of enactment of this Act. 

19 (e) PRIVATE EDUCATION LOAN DEFINED.—In this 

20 section, the term ‘‘private education loan’’ has the mean21 ing given in section 140(a) of the Truth in Lending Act 

22 (15 U.S.C. 1650(a)). 

23 SEC. 3. EXCEPTION TO DISCHARGE. 

24 (a) IN GENERAL.—Section 523(a) of title 11, United 

25 States Code, is amended— 


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1 (1) by striking paragraph (8); and 

2 (2) by redesignating paragraphs (9) through 

3 (14B) as paragraphs (8) through (14A), respec4 tively. 

5 (b) CONFORMING AMENDMENTS.—Title 11, United 

6 States Code, is amended— 

7 (1) in section 704(c)(1)(C)(iv)(I) by striking 

8 ‘‘(14A)’’ and inserting ‘‘(14)’’; 

9 (2) in section 1106(c)(1)(C)(iv)(I) by striking 

10 ‘‘(14A)’’ and inserting ‘‘(14)’’; 

11 (3) in section 1202(c)(1)(C)(iv)(I) by striking 

12 ‘‘(14A)’’ and inserting ‘‘(14)’’; and 

13 (4) in section 1328(a)(2) by striking ‘‘(8), or 

14 (9)’’ and inserting ‘‘or (8)’’. 

15 (c) EFFECTIVE DATE; APPLICATION OF AMEND16 MENTS.— 

17 (1) EFFECTIVE DATE.—Except as provided in 

18 paragraph (2), this section and the amendments 

19 made by this section shall take effect on the date of 

20 the enactment of this Act. 

21 (2) APPLICATION OF AMENDMENTS.—The 

22 amendments made by this section shall apply only 

23 with respect to cases commenced under title 11 of 


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1 the United States Code on or after the date of the 

2 enactment of this Act. 

Æ 


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