II 

116TH CONGRESS 

1ST SESSION S. 2049 

To amend the Higher Education Act of 1965 to automatically discharge 

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

IN THE SENATE OF THE UNITED STATES 

JUNE 28 (legislative day, JUNE 27), 2019 

Mr. REED (for himself and Mr. ISAKSON) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

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. AUTOMATIC LOAN DISCHARGE FOR CERTAIN 

4 VETERAN BORROWERS. 

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

6 (20 U.S.C. 1087(a)) is amended— 

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

8 following: 


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1 ‘‘(2) DISABILITY DETERMINATIONS.—With re2 spect to a borrower who has been identified under 

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

4 shall— 

5 ‘‘(A) consider such borrower permanently 

6 and totally disabled for the purpose of dis7 charging the loans of such borrower under this 

8 subsection; 

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

10 under this subsection, without any further ac11 tion by the borrower (except that this subpara12 graph shall not apply to a borrower who opts 

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

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

15 a State that may impose a tax liability (as de16 scribed in paragraph (4)) for such a loan dis17 charge— 

18 ‘‘(i) notify the borrower of the pos19 sible tax liability; and 

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

21 of such loan discharge; and 

22 ‘‘(D) notify such borrower of potential 

23 Federal tax implications of such loan discharge 

24 under this subsection.’’; and 

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


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1 ‘‘(3) MATCHING PROGRAM.— 

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

3 per year, the Secretary of Education and the 

4 Secretary of Veterans Affairs shall carry out a 

5 computer matching program under which the 

6 Secretary of Education identifies a borrower— 

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

8 total disability by the Secretary of Vet9 erans Affairs for a service-connected dis10 ability (as defined in section 101 of title 

11 38, United States Code); or 

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

13 Secretary of Veterans Affairs to be unem14 ployable due to a service-connected condi15 tion. 

16 ‘‘(B) MINOR DISCREPANCIES.—With re17 spect to each borrower who would have been 

18 identified under clause (i) or (ii) of subpara19 graph (A) but for a minor discrepancy between 

20 the information of the borrower maintained by 

21 the Secretary of Education and the Secretary of 

22 Veterans Affairs (such as a name discrepancy 

23 post marriage, a missing hyphen, a transposed 

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

25 of Education and the Secretary of Veterans AfVerDate Sep 11 2014 22:48 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2049.IS S2049

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1 fairs shall work together to correct such minor 

2 discrepancy of such borrower. 

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

4 shall determine whether a State may impose a tax 

5 liability for the discharge of a loan under this sub6 section, and in making that determination, the Sec7 retary shall— 

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

9 have an income tax, or which excludes discharge 

10 of student loans from its definition of income 

11 for tax purposes, determine that the State will 

12 not impose tax liability; 

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

14 the relevant provisions of its tax law to section 

15 108 of the Internal Revenue Code of 1986, de16 termine that the State will not impose tax li17 ability; and 

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

19 conform the relevant provisions of its tax law to 

20 section 108 of the Internal Revenue Code of 

21 1986, consult with the tax authority of that 

22 State to determine if the State would seek to 

23 impose tax liability and, if not, determine that 

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

Æ 


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