STEM K to Career Act

To provide for loan forgiveness for STEM teachers, and for other purposes. 1. Short title This Act may be cited as the STEM K to Career Act 2. Loan Forgiveness for STEM teachers Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 493E. Loan forgiveness for STEM teachers (a) Loan forgiveness authorized The Secretary shall forgive, in accordance with this section, the qualified loan amount described in subsection (c) of the student loan obligation of a borrower who— (1) is employed as a full-time STEM teacher for service in an academic year (including such a STEM teacher employed by an educational service agency)— (A) in a public or other nonprofit private elementary school or secondary school, which, for the purpose of this paragraph and for that year— (i) has been determined by the Secretary (pursuant to regulations of the Secretary and after consultation with the State educational agency of the State in which the school is located) to be a school in which the number of children meeting a measure of poverty under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965, exceeds 30 percent of the total number of children enrolled in such school; and (ii) is in the school district of a local educational agency which is eligible in such year for assistance pursuant to part A of title I of the Elementary and Secondary Education Act of 1965; or (B) in one or more public, or nonprofit private, elementary schools or secondary schools or locations operated by an educational service agency that have been determined by the Secretary (pursuant to regulations of the Secretary and after consultation with the State educational agency of the State in which the educational service agency operates) to be a school or location at which the number of children taught who meet a measure of poverty under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965, exceeds 30 percent of the total number of children taught at such school or location; and (2) is not in default on a loan for which the borrower seeks forgiveness. (b) Method of loan forgiveness To provide loan forgiveness under subsection (a) (1) through the holder of the loan, to assume the obligation to repay a qualified loan amount for a loan made, insured, or guaranteed under part B (other than an excepted PLUS loan or an excepted consolidation loan (as such terms are defined in section 493C(a))); and (2) to cancel a qualified loan amount for a loan made under part D (other than an excepted PLUS loan or an excepted consolidation loan). (c) Qualified loan amount (1) Forgiveness of percentage of debt based on years of service For each complete year of service by a borrower as a STEM teacher in accordance with this section after the date of enactment of the STEM K to Career Act (2) Principal and interest forgiven If a portion of a loan is forgiven under this section for any year, the entire amount of interest on such loan which accrues for such year shall be forgiven. (d) Special rules (1) List of schools If the list of schools in which a STEM teacher may perform service pursuant to subsection (a)(1) (2) Continuing eligibility Any teacher who performs service in a school which— (A) meets the requirements of subsection (a)(1) (B) in a subsequent year fails to meet the requirements of such subsection, may continue to teach in such school and shall be eligible for loan forgiveness pursuant to this section such subsequent years. (3) Promissory note conflicts An individual with an outstanding student loan obligation who performs service described in subsection (a)(1) (4) Forgiveness not considered income The amount of a loan, and interest on a loan, which is forgiven under this section shall not be considered income for purposes of the Internal Revenue Code of 1986. (5) No refunds Nothing in this subsection shall be construed to authorize refunding of any repayment of a loan. (6) No double benefit No borrower may, for the same service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 ( 42 U.S.C. 12601 (e) Regulations The Secretary is authorized to issue such regulations as may be necessary to carry out this section. (f) Definitions For the purposes of this section— (1) the term year (2) the term STEM teacher . 3. Above-the-line-deduction for STEM education materials (a) In general Section 62(a)(2)(D) (D) Certain expenses of elementary and secondary school teachers (i) In general In the case of taxable years beginning after 2001, the deductions allowed by section 162 which consist of expenses, not in excess of $250, paid or incurred by an eligible educator in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by the eligible educator in the classroom. (ii) STEM education supplies In the case of STEM education supplies, the amount in clause (i) shall be increased by $250. (iii) Coordination Clause (i) shall be applied without regard to clause (ii). . (b) Inflation adjustment Paragraph (3) of section 62(d) of such Code is amended to read as follows: (3) Inflation adjustment (A) In general In the case of any taxable year beginning after 2015, the $250 amount in subsection (a)(2)(D)(i) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2014 calendar year 2016 (B) STEM education supplies In the case of any taxable year beginning after 2018, the $250 amount in subsection (a)(2)(D)(ii) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2017 calendar year 2016 (C) Rounding Any increase determined under subparagraph (A) or (B) shall be rounded to the nearest multiple of $50. . (c) STEM education supplies defined Section 62(d) of such Code is amended is amended by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively, and by inserting after paragraph (1) the following new paragraph: (2) STEM education supplies For purposes of subsection (a)(2)(D), the term STEM education supplies . (d) Clerical amendment The heading for section 62(d) of such Code is amended by striking Definition; special rules Elementary and secondary school teachers (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 4. STEM internship tax credit (a) In general Subpart D of part IV of subchapter A of chapter 1 45T. STEM internship credit (a) General rule For purposes of section 38, in the case of an eligible employer the STEM internship credit determined under this section for the taxable year is equal to $2,000 for each qualified STEM intern employed by the employer during the taxable year. (b) Limitation The total amount of the credit allowed under subsection (a) to a taxpayer for a taxable year may not exceed $50,000. (c) Definitions For purposes of subsection (a)— (1) Qualified STEM intern The term qualified STEM intern (A) each intern is paid not less than the wage in effect under section 6(a) of the Fair Labor Standards Act of 1938, (B) each intern is employed for not less than 20 hours per week by the eligible employer in a position related to the career goals of the intern, (C) each intern completes not less than 6 weeks of employment with the eligible employer as an intern, and (D) each intern is a student who is enrolled full-time in a science, technology, engineering, or math program (including a program of study abroad approved for credit by the eligible institution at which such student is enrolled) leading to a recognized undergraduate or graduate degree at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 of the Higher Education Act of 1965 ( 20 U.S.C. 1094 (2) Eligible employer (A) In general The term eligible employer (B) Rules for determining employer size For purposes of subparagraph (A)— (i) Application of aggregation rule for employers All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. (ii) Employers not in existence in preceding year In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is an eligible employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. (iii) Predecessors Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer. . (b) Credit made part of general business credit Subsection (b) of section 38 of such Code is amended by striking plus , plus (38) the STEM internship credit determined under section 45T(a). . (c) Denial of double benefit Subsection (a) of section 280C of such Code is amended by inserting 45T(a), 45S(a), (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45T. STEM internship credit. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 5. STEM apprenticeship tax credit (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. STEM apprenticeship credit (a) General rule For purposes of section 38, in the case of an eligible employer the STEM apprenticeship credit determined under this section for the taxable year is an amount equal to the taxpayer’s aggregate STEM credit amount for the taxable year. (b) Limitation The total amount of the credit allowed under subsection (a) to a taxpayer for a taxable year may not exceed $50,000. (c) STEM credit amount For purposes of subsection (a), the STEM credit amount with respect to an individual shall be— (1) $2,000 in the case of a new apprentice, (2) $3,000 in the case of a mid-career apprentice, (3) $3,000 in the case of a unemployed apprentice, and (4) 5,000 in the case of a completed apprenticeship employee. (d) Definitions For purposes of subsection (a)— (1) Eligible employer (A) In general The term eligible employer (B) Rules for determining employer size For purposes of subparagraph (A)— (i) Application of aggregation rule for employers All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. (ii) Employers not in existence in preceding year In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is an eligible employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. (iii) Predecessors Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer. (2) New apprentice The term new apprentice (A) completed during the taxable year a qualified apprenticeship program, and (B) prior to beginning the qualified apprenticeship program, has not received compensation during the preceding 1-year period for services provided to the eligible employer. (3) Mid-career apprentice The term mid-career apprentice (A) prior to being employed by the eligible employer was either— (i) employed in an industry sector different from the industry section the eligible employer is in, as determined under regulations of the Secretary, or (ii) or was unemployed, and (B) completed during the taxable year a qualified apprenticeship program. (4) Completed apprenticeship employee The term completed apprenticeship employee (5) Qualified apprenticeship program The term qualified apprenticeship program (6) Unemployed An individual is unemployed if the individual is certified by the designated local agency as being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks during the 1-year period ending on the hiring date. (7) Hiring date; designated local agency The terms hiring date designated local agency (e) Denial of double benefit No deduction or credit shall be allowed under any other provision of this chapter for any expenses paid or incurred with respect to an individual to the extent of the credit allowed under this section with respect to the individual. . (b) Credit made part of general business credit Subsection (b) of section 38 of such Code, as amended by section 4, is amended by striking plus , plus (39) the STEM apprenticeship credit determined under section 45U(a). . (c) Denial of double benefit Subsection (a) of section 280C of such Code is amended by inserting 45U(a), 45T(a), (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45U. STEM apprenticeship credit. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 6. Mandatory minimum allocation of portion of Federal Work-Study program funds for STEM employment (a) Mandatory Minimum Allocation for STEM Employment Section 443(b)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 2753(b)(2) (1) by striking and (2) by redesignating subparagraph (B) as subparagraph (C); and (3) by inserting after subparagraph (A) the following new subparagraph: (B) for fiscal year 2019 and succeeding fiscal years, an institution shall use at least 7 percent of the total amount of funds granted to such institution under this section for such fiscal year to compensate students employed in science, technology, engineering, or mathematics, except that the Secretary may waive this subparagraph if the Secretary determines that enforcing this subparagraph would cause hardship for students at the institution. . (b) Conforming Amendment Relating to Off-Campus STEM Employment for Students at Proprietary Institutions of Higher Education Section 443(b)(8) of such Act ( 20 U.S.C. 2753(b)(8) (1) by striking or (2) by adding or (3) by adding at the end the following new subparagraph: (C) in science, technology, engineering, or mathematics, in accordance with paragraph (2)(B) of this subsection; .

Summary: STEM K to Career Act This bill amends the Higher Education Act of 1965 (HEA) to require the Department of Education to forgive student loan obligations of borrowers employed as full-time teachers of science, technology, engineering, or mathematics (STEM) in elementary or secondary schools in which the number of low-income children exceeds a certain percentage. Portions of the student loan debt, including interest, shall be forgiven on the basis of years of service, with 100% forgiven for five years of teacher service. The bill amends the Internal Revenue Code to allow: (1) an increased tax deduction for expenses by elementary and secondary school teachers for STEM education supplies; (2) a tax credit for the employment of STEM interns; and (3) a tax credit for employment of individuals who participated in an apprenticeship program in a STEM field, with the amount determined according to the degree of completion of a program. Beginning with FY2019, an institution of higher education must use at least 7% of federal work-study funds granted under the HEA to compensate students employed in STEM fields.