I 

116TH CONGRESS 

1ST SESSION H. R. 3598 

To amend the Higher Education Act of 1965 to automatically discharge 

the loans of certain veteran borrowers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 28, 2019 

Mr. LAMB (for himself, Mr. FITZPATRICK, Mr. COURTNEY, Mr. 

RESCHENTHALER, and Mr. LEVIN of Michigan) introduced the following 

bill; which was referred to the Committee on Education and Labor 

A BILL 

To amend the Higher Education Act of 1965 to automatically discharge the loans of certain veteran borrowers, 

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 ‘‘Federally Requiring 

5 Earned Education-debt Discharges for Vets Act’’ or the 

6 ‘‘FREED Vets Act’’. 


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1 SEC. 2. AUTOMATIC LOAN DISCHARGE FOR CERTAIN VET2 ERAN BORROWERS. 

3 Section 437(a) of the Higher Education Act of 1965 

4 (20 U.S.C. 1087(a)) is amended— 

5 (1) by striking paragraph (2) and inserting the 

6 following: 

7 ‘‘(2) DISABILITY DETERMINATIONS.—With re8 spect to a borrower who has been identified under 

9 clause (i) or (ii) of paragraph (3)(A), the Secretary 

10 shall— 

11 ‘‘(A) consider such borrower permanently 

12 and totally disabled for the purpose of dis13 charging the loans of such borrower under this 

14 subsection; 

15 ‘‘(B) discharge the loans of such borrower 

16 under this subsection, without any further ac17 tion by the borrower (except that this subpara18 graph shall not apply to a borrower who opts 

19 out of such discharge under subparagraph (C)); 

20 ‘‘(C) in a case of a borrower who lives in 

21 a State that may impose a tax liability (as de22 scribed in paragraph (4)) for such a loan dis23 charge— 

24 ‘‘(i) notify the borrower of the pos25 sible tax liability; and 


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1 ‘‘(ii) provide an opportunity to opt-out 

2 of such loan discharge; and 

3 ‘‘(D) notify such borrower of potential 

4 Federal tax implications of such loan discharge 

5 under this subsection.’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(3) MATCHING PROGRAM.— 

8 ‘‘(A) IN GENERAL.—Not less than twice 

9 per year, the Secretary of Education and the 

10 Secretary of Veterans Affairs shall carry out a 

11 computer matching program under which the 

12 Secretary of Education identifies a borrower— 

13 ‘‘(i) who has been assigned a rating of 

14 total disability by the Secretary of Vet15 erans Affairs for a service-connected dis16 ability (as defined in section 101 of title 

17 38, United States Code); or 

18 ‘‘(ii) who has been determined by the 

19 Secretary of Veterans Affairs to be unem20 ployable due to a service-connected condi21 tion. 

22 ‘‘(B) MINOR DISCREPANCIES.—With re23 spect to each borrower who would have been 

24 identified under clause (i) or (ii) of subpara25 graph (A) but for a minor discrepancy between 


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1 the information of the borrower maintained by 

2 the Secretary of Education and the Secretary of 

3 Veterans Affairs (such as a name discrepancy 

4 post-marriage, a missing hyphen, a transposed 

5 number or letter, or other typo), the Secretary 

6 of Education and the Secretary of Veterans Af7 fairs shall work together to correct such minor 

8 discrepancy of such borrower. 

9 ‘‘(4) STATE TAX LIABILITY.—The Secretary 

10 shall determine whether a State may impose a tax 

11 liability for the discharge of a loan under this sub12 section, and in making that determination, the Sec13 retary shall— 

14 ‘‘(A) in the case of a State which does not 

15 have an income tax, or which excludes discharge 

16 of student loans from its definition of income 

17 for tax purposes, determine that the State will 

18 not impose tax liability; 

19 ‘‘(B) in the case of a State which conforms 

20 the relevant provisions of its tax law to section 

21 108 of the Internal Revenue Code of 1986, de22 termine that the State will not impose tax li23 ability; and 

24 ‘‘(C) in the case of a State which does not 

25 conform the relevant provisions of its tax law to 


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1 section 108 of the Internal Revenue Code of 

2 1986, consult with the tax authority of that 

3 State to determine if the State would seek to 

4 impose tax liability and, if not, determine that 

5 a State will not impose tax liability.’’. 

Æ 


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