I 
113TH CONGRESS 
2D SESSION 
H. R. 5399 
To modify the grace period prior to the repayment period for certain Federal 
direct loans and to exclude from Federal income taxation certain em-
ployer-provided student loan assistance. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 1, 2014 
Mr. PETERS of California (for himself and Mr. VARGAS) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Education and the Workforce, 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 com-
mittee concerned 
A BILL 
To modify the grace period prior to the repayment period 
for certain Federal direct loans and to exclude from 
Federal income taxation certain employer-provided stu-
dent loan assistance. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Loan Repay-
ment Assistance Act of 2014’’. 
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SEC. 2. RESTORATION AND AN OPTION TO EXTEND THE 
START OF THE REPAYMENT PERIOD OF CER-
TAIN FEDERAL DIRECT LOANS. 
(a) RESTORATION OF INTEREST SUBSIDY DURING 
FIRST
6-MONTH
GRACE
PERIOD.—Section 
428(a)(3)(A)(i)(I) of the Higher Education Act of 1965 
(20 U.S.C. 1078(a)(3)(A)(i)(I)) is amended by inserting 
‘‘or, for a Federal Direct Stafford Loan for which the first 
disbursement is made on or after July 1, 2013, which ac-
crues prior to the beginning of the repayment period of 
the loan (except for interest which accrues during the last 
6 months prior to the beginning of such period, in the 
case of a student who makes an election under section 
2(b)(2) of the Student Loan Repayment Assistance Act 
of 2014),’’ before ‘‘, or’’. 
(b) GRACE-PERIOD EXTENSION.— 
(1) AMENDMENT.—Section 428(b)(7) of the 
Higher 
Education 
Act 
of 
1965 
(20 
U.S.C. 
1078(b)(7)) is amended— 
(A) in subparagraph (A), by inserting ‘‘or, 
in the case of a student who makes an election 
under section 2(b)(2) of the Student Loan Re-
payment Assistance Act of 2014, 12 months’’ 
after ‘‘6 months’’; and 
(B) in subparagraph (D), by inserting ‘‘or, 
in the case of a student who makes an election 
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under section 2(b)(2) of the Student Loan Re-
payment Assistance Act of 2014, the 12-month 
period’’ after ‘‘6-month period’’. 
(2) ELECTION OF EXTENDED GRACE PERIOD 
FOR CERTAIN FDSL AND FDUS LOANS.—If the un-
employment rate calculated by the Bureau of Labor 
Statistics is greater than the natural rate of unem-
ployment (as established by the Board of Governors 
of the Federal Reserve System), the Secretary of 
Education shall provide an opportunity for each bor-
rower who has a Federal Direct Stafford Loan or 
Federal Direct Unsubsidized Stafford Loan for 
which the first disbursement is made on or after 
July 1, 2013, to elect a 12-month grace period, in 
accordance with section 428(b)(7) of the Higher 
Education Act of 1965, as amended by this sub-
section, before beginning repayment. The Secretary 
shall— 
(A) notify each such borrower of the op-
portunity for such an election not later than 45 
days before the start of the borrower’s repay-
ment period, as determined under section 
428(b)(7) of the Higher Education Act of 1965 
as in effect on the day before the date of enact-
ment of this Act; 
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(B) advise each such borrower of the fi-
nancial consequences of electing such 12-month 
grace period; and 
(C) not require such a borrower to accept 
a 12-month grace period in accordance with 
section 428(b)(7) of the Higher Education Act 
of 1965 (as amended by this subsection), unless 
the borrower specifically elects such 12-month 
grace period not later than 14 days before the 
start of the borrower’s repayment period, as de-
termined under section 428(b)(7) of the Higher 
Education Act of 1965 as in effect on the day 
before the date of enactment of this Act. 
SEC. 3. EXCLUSION FROM GROSS INCOME OF BENEFITS 
UNDER CERTAIN STUDENT LOAN PAYMENT 
ASSISTANCE PROGRAMS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 127 the following new section: 
‘‘SEC. 127A. STUDENT LOAN PAYMENT ASSISTANCE PRO-
GRAMS. 
‘‘(a) IN GENERAL.—Gross income of a qualified em-
ployee does not include amounts paid or incurred by the 
employer for student loan payment assistance provided to 
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