I 

114TH CONGRESS 

1ST SESSION H. R. 1713 

To amend the Internal Revenue Code of 1986 to exclude from Federal 

income taxation certain employer-provided student loan assistance, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 26, 2015 

Mr. PETERS introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to exclude 

from Federal income taxation certain employer-provided 

student loan assistance, 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 ‘‘Student Loan Repay5 ment Assistance Act of 2015’’. 


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1 SEC. 2. EXCLUSION FROM GROSS INCOME OF BENEFITS 

2 UNDER CERTAIN STUDENT LOAN PAYMENT 

3 ASSISTANCE PROGRAMS. 

4 (a) IN GENERAL.—Part III of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 127 the following new section: 

7 ‘‘SEC. 127A. STUDENT LOAN PAYMENT ASSISTANCE PRO8 GRAMS. 

9 ‘‘(a) IN GENERAL.—Gross income of a qualified em10 ployee does not include amounts paid or incurred by the 

11 employer for student loan payment assistance provided to 

12 such employee if the assistance is furnished pursuant to 

13 a program which is described in subsection (c). 

14 ‘‘(b) QUALIFIED EMPLOYEE.—For purposes of this 

15 subsection, the term ‘qualified employee’ means any em16 ployee who contributes (in addition to any amount ex17 cluded from gross income under this section) not less than 

18 $50 per month for payment of principal and interest on 

19 the loans subject to the student loan payment assistance 

20 program. 

21 ‘‘(c) LIMITATIONS.— 

22 ‘‘(1) ASSISTANCE LIMITATION.—The amount 

23 taken into account under subsection (a) with respect 

24 to an individual for student loan assistance with re25 spect to student loan payments during a taxable 

26 year shall not exceed $6,000. 


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1 ‘‘(2) EARNED INCOME LIMITATION.—The 

2 amount excluded from the income of an employee 

3 under subsection (a) for any taxable year shall not 

4 exceed the earned income of such employee for such 

5 taxable year. 

6 ‘‘(d) STUDENT LOAN PAYMENT ASSISTANCE PRO7 GRAM.— 

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion a student loan payment assistance program is 

10 a separate written plan of an employer for the exclu11 sive benefit of his employees to provide such employ12 ees with student loan payment assistance which 

13 meets the requirements of paragraphs (2) through 

14 (10) of this subsection. If any plan would qualify as 

15 a student loan payment assistance program but for 

16 a failure to meet the requirements of this subsection, 

17 then, notwithstanding such failure, such plan shall 

18 be treated as a student loan payment assistance pro19 gram in the case of employees who are not highly 

20 compensated employees. 

21 ‘‘(2) DISCRIMINATION.—The contributions or 

22 benefits provided under the plan shall not discrimi23 nate in favor of employees who are highly com24 pensated employees (within the meaning of section 

25 414(q)). 


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1 ‘‘(3) ELIGIBILITY.—The program shall benefit 

2 employees who qualify under a classification set up 

3 by the employer and found by the Secretary not to 

4 be discriminatory in favor of employees described in 

5 paragraph (2). 

6 ‘‘(4) PRINCIPAL SHAREHOLDERS OR OWNERS.— 

7 Not more than 25 percent of the amounts paid or 

8 incurred by the employer for student loan payment 

9 assistance during the year may be provided for the 

10 class of individuals who are shareholders or owners 

11 (or their spouses or dependents), each of whom (on 

12 any day of the year) owns more than 5 percent of 

13 the stock or of the capital or profits interest in the 

14 employer. 

15 ‘‘(5) NO FUNDING REQUIRED.—A program re16 ferred to in paragraph (1) is not required to be 

17 funded. 

18 ‘‘(6) NOTIFICATION OF ELIGIBLE EMPLOY19 EES.—Reasonable notification of the availability and 

20 terms of the program shall be provided to eligible 

21 employees. 

22 ‘‘(7) STATEMENT OF EXPENSES.—The plan 

23 shall furnish to an employee, on or before January 

24 31, a written statement showing the amounts paid 

25 or expenses incurred by the employer in providing 


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1 student loan payment assistance to such employee 

2 during the previous calendar year. 

3 ‘‘(8) BENEFITS.— 

4 ‘‘(A) IN GENERAL.—A plan meets the re5 quirements of this paragraph if the average 

6 benefits provided to employees who are not 

7 highly compensated employees under all plans 

8 of the employer is at least 55 percent of the av9 erage benefits provided to highly compensated 

10 employees under all plans of the employer. 

11 ‘‘(B) SALARY REDUCTION AGREEMENTS.— 

12 For purposes of subparagraph (A), in the case 

13 of any benefits provided through a salary reduc14 tion agreement, a plan may disregard any em15 ployees whose compensation is less than 

16 $25,000. For purposes of this subparagraph, 

17 the term ‘compensation’ has the meaning given 

18 such term by section 414(q)(4), except that, 

19 under rules prescribed by the Secretary, an em20 ployer may elect to determine compensation on 

21 any other basis which does not discriminate in 

22 favor of highly compensated employees. 

23 ‘‘(9) CONTRIBUTIONS MADE DIRECTLY TO

24 LENDER.—A plan meets the requirements of this 

25 paragraph if all benefits provided under the plan are 


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1 paid directly to the holder of the indebtedness re2 ferred to in subsection (d)(1)(A)(i). 

3 ‘‘(10) MATCHING CONTRIBUTIONS.—A plan 

4 which meets the requirements of paragraphs (2) 

5 through (9) shall not fail to be treated as a program 

6 described in this subsection merely because such 

7 plan provides for the employer to make matching 

8 contributions with respect to employee contributions. 

9 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur10 poses of this section— 

11 ‘‘(1) STUDENT LOAN PAYMENT ASSISTANCE.— 

12 ‘‘(A) IN GENERAL.—The term ‘student 

13 loan payment assistance’ means the payment of 

14 principal or interest on— 

15 ‘‘(i) any indebtedness incurred by the 

16 employee solely to pay qualified higher 

17 education expenses (as defined in section 

18 221) which— 

19 ‘‘(I) are paid or incurred within a 

20 reasonable period of time before or 

21 after the indebtedness was incurred, 

22 and 

23 ‘‘(II) are attributable to edu24 cation furnished during a period durVerDate Sep 11 2014 06:18 Apr 03, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1713.IH H1713

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1 ing which the employee was an eligible 

2 student, or 

3 ‘‘(ii) any indebtedness used to refi4 nance indebtedness described in clause (i). 

5 Such term shall not include any payment of 

6 principal or interest on indebtedness owed to a 

7 person who is related (within the meaning of 

8 section 267(b) or 707(b)(1)) to the taxpayer or 

9 to any person by reason of a loan under any 

10 qualified employer plan (as defined in section 

11 72(p)(4)) or under any contract referred to in 

12 section 72(p)(5). 

13 ‘‘(B) ELIGIBLE STUDENT.—For purposes 

14 of this subsection, the term ‘eligible student’ 

15 means, with respect to any academic period, a 

16 student who meets the requirements of section 

17 484(a)(1) of the Higher Education Act of 1965 

18 (20 U.S.C. 1091(a)(1)), as in effect on the date 

19 of the enactment of this section. 

20 ‘‘(C) DEPENDENT.—The term ‘dependent’ 

21 has the meaning given such term by section 

22 152 (determined without regard to subsections 

23 (b)(1), (b)(2), and (d)(1)(B) thereof). 

24 ‘‘(2) EARNED INCOME.—The term ‘earned in25 come’ shall have the meaning given such term in 


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1 section 32(c)(2), but such term shall not include any 

2 amounts paid or incurred by an employer for stu3 dent loan payment assistance to an employee. 

4 ‘‘(3) EMPLOYEE.—The term ‘employee’ in5 cludes, for any year, an individual who is an em6 ployee within the meaning of section 401(c)(1) (re7 lating to self-employed individuals). 

8 ‘‘(4) EMPLOYER.—An individual who owns the 

9 entire interest in an unincorporated trade or busi10 ness shall be treated as his own employer. A part11 nership shall be treated as the employer of each 

12 partner who is an employee within the meaning of 

13 paragraph (3). 

14 ‘‘(5) ATTRIBUTION RULES.— 

15 ‘‘(A) OWNERSHIP OF STOCK.—Ownership 

16 of stock in a corporation shall be determined in 

17 accordance with the rules provided under sub18 sections (d) and (e) of section 1563 (without re19 gard to section 1563(e)(3)(C)). 

20 ‘‘(B) INTEREST IN UNINCORPORATED

21 TRADE OR BUSINESS.—The interest of an em22 ployee in a trade or business which is not incor23 porated shall be determined in accordance with 

24 regulations prescribed by the Secretary, which 

25 shall be based on principles similar to the prinVerDate Sep 11 2014 06:18 Apr 03, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1713.IH H1713

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1 ciples which apply in the case of subparagraph 

2 (A). 

3 ‘‘(6) UTILIZATION TEST NOT APPLICABLE.—A 

4 student loan payment assistance program shall not 

5 be held or considered to fail to meet any require6 ments of subsection (c) (other than paragraphs (4) 

7 and (8) thereof) merely because of utilization rates 

8 for the different types of assistance made available 

9 under the program. 

10 ‘‘(7) DISALLOWANCE OF EXCLUDED AMOUNTS

11 AS CREDIT OR DEDUCTION.—No deduction or credit 

12 shall be allowed to the employee under any other 

13 section of this chapter for any amount excluded from 

14 the gross income of the employee by reason of this 

15 section. 

16 ‘‘(8) TREATMENT OF SALARY REDUCTION

17 AMOUNTS.—Any matching contribution withheld 

18 from an employee under a student loan payment as19 sistance program pursuant to a salary reduction 

20 agreement shall be treated for purposes of this title 

21 as an amount paid by the employee and not as an 

22 amount paid by the employer.’’. 

23 (b) CONFORMING AMENDMENTS.—Sections 

24 221(d)(2)(A), 414(n)(3)(C) and (t)(2), 3121(a)(18), 


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1 3306(b)(13), 3401(a)(18), and 6039D(d)(1) of such Code 

2 are each amended by inserting ‘‘127A,’’ after ‘‘127,’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for part III of subchapter B of chapter 1 of such Code 

5 is amended by inserting after the item relating to section 

6 127 the following new item: 

‘‘Sec. 127A. Student loan payment assistance programs.’’. 

7 (d) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 the date of the enactment of this Act. 

10 SEC. 3. DEDUCTION FOR STUDENT LOAN PAYMENTS WHICH 

11 ARE MATCHED BY AN EMPLOYER. 

12 (a) IN GENERAL.—Part VII of subchapter B of chap13 ter 1 of the Internal Revenue Code of 1986 is amended 

14 by redesignating section 224 as section 225 and by insert15 ing after section 223 the following new section: 

16 ‘‘SEC. 224. DEDUCTION FOR STUDENT LOAN PAYMENTS 

17 WHICH ARE MATCHED BY AN EMPLOYER. 

18 ‘‘(a) IN GENERAL.—In the case of an individual who 

19 is a qualified employee (as defined in section 127A), there 

20 shall be allowed as a deduction an amount equal to the 

21 student loan payments made by such individual with re22 spect to which an employer of such individual makes 

23 matching contributions under a student loan payment as24 sistance program which are excludible from the gross in25 come of such employee under section 127A. 


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1 ‘‘(b) ANNUAL LIMITATION.—The amount allowable 

2 as a deduction under subsection (a) with respect to any 

3 individual for any taxable year shall not exceed $6,000. 

4 ‘‘(c) LIFETIME LIMITATION.—The amount allowable 

5 as a deduction under subsection (a) with respect to any 

6 individual for any taxable year shall not exceed the excess 

7 of— 

8 ‘‘(1) $50,000, over 

9 ‘‘(2) the aggregate amount allowable as a de10 duction under subsection (a) with respect to such in11 dividual for all prior taxable years. 

12 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—Any amount 

13 excluded from the gross income of an individual under sec14 tion 127A shall not be treated as an amount paid by such 

15 individual for purposes of this section. The amount of 

16 principal and interest with respect to which a deduction 

17 is allowed under this section shall not be taken into ac18 count in determining the amount of any other deduction 

19 or credit allowed under this chapter.’’. 

20 (b) CLERICAL AMENDMENT.—The table of sections 

21 for part VII of subchapter B of chapter 1 of such Code 

22 is amended by redesignating the item relating to section 

23 224 as an item relating to section 225 and by inserting 

24 after the item relating to section 223 the following new 

25 item: 


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‘‘Sec. 224. Deduction for student loan payments which are matched by an employer.’’. 

1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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