I 
116TH CONGRESS 
1ST SESSION H. R. 4038 
To amend the Internal Revenue Code of 1986 to exclude certain post-gradua-
tion scholarship grants from gross income in the same manner as quali-
fied scholarships to promote economic growth. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2019 
Mr. LAHOOD (for himself and Ms. SEWELL of Alabama) 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 
certain post-graduation scholarship grants from gross in-
come in the same manner as qualified scholarships to 
promote economic growth. 
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 ‘‘Workforce Develop-
ment Through Post-Graduation Scholarships Act of 
2019’’. 
VerDate Sep 11 2014 
19:27 Aug 16, 2019
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4038.IH
H4038
pamtmann on DSKBFK8HB2PROD with BILLS
SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EX-
CLUDED FROM GROSS INCOME IN SAME MAN-
NER AS QUALIFIED SCHOLARSHIPS. 
(a) IN GENERAL.—Section 117(a) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking the period at the end and insert-
ing ‘‘, or’’; 
(2) by striking ‘‘any amount received’’ and in-
serting the following: ‘‘any amount which— 
‘‘(1) is received’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) is a post-graduation scholarship grant re-
ceived by or paid on behalf of an individual.’’. 
(b) POST-GRADUATION SCHOLARSHIP GRANT.—Sec-
tion 117(b) of such Code is amended by redesignating 
paragraph (2) as paragraph (3) and by inserting after 
paragraph (1) the following new paragraph: 
‘‘(2) 
POST-GRADUATION
SCHOLARSHIP 
GRANT.— 
‘‘(A) IN GENERAL.—The term ‘post-grad-
uation scholarship grant’ means any grant pro-
gram— 
‘‘(i) which is established by an organi-
zation which— 
VerDate Sep 11 2014 
19:27 Aug 16, 2019
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4038.IH
H4038
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(I) 
is 
described 
in 
section 
501(c)(3) and exempt from tax under 
section 501(a), and 
‘‘(II) is either a private founda-
tion (other than a private foundation 
established by an organization de-
scribed in section 170(b)(1)(A)(ii) or 
an organization described in section 
170(b)(1)(A)(iii) the principal purpose 
or function of which is the provision 
of medical education) or a community 
trust 
described 
in 
section 
170(b)(1)(A)(vi), 
‘‘(ii) which is designed to encourage 
individuals to serve in occupations of 
unmet needs or in areas of unmet needs 
(as such terms are used in section 
108(f)(2)(D)(ii)), and 
‘‘(iii) under which, in accordance with 
the conditions of a grant, such organiza-
tion repays any portion of an applicable 
education loan incurred by an individual. 
‘‘(B) APPLICABLE EDUCATION LOAN.—For 
purposes of subparagraph (A)(iii), the term ‘ap-
plicable education loan’ means, with respect to 
VerDate Sep 11 2014 
19:27 Aug 16, 2019
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4038.IH
H4038
pamtmann on DSKBFK8HB2PROD with BILLS
any individual, a qualified education loan (as 
defined in section 221(d)(1)) incurred to pay 
qualified higher education expenses (as defined 
in section 221(d)(2)) of such individual.’’. 
(c) AMOUNT NOT TREATED AS TAXABLE EXPENDI-
TURE
BY PRIVATE FOUNDATION.—Section 4945(g) of 
such Code is amended by striking ‘‘or’’ at the end of para-
graph (2), by striking the period at the end of paragraph 
(3) and inserting ‘‘, or’’, and by adding at the end the 
following new paragraph: 
‘‘(4) the grant is a post-graduation scholarship 
grant (as defined in section 117(b)(2)).’’. 
(d) DENIAL OF DOUBLE BENEFIT.—Section 221(e) 
of such Code 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) DENIAL OF DOUBLE BENEFIT IN CASE OF 
POST-GRADUATION SCHOLARSHIP GRANTS.—Any in-
terest which is paid as part of a post-graduation 
scholarship grant and excluded from gross income 
under section 117 shall not be taken into account 
under this section.’’. 
VerDate Sep 11 2014 
19:27 Aug 16, 2019
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4038.IH
H4038
pamtmann on DSKBFK8HB2PROD with BILLS
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
VerDate Sep 11 2014 
19:27 Aug 16, 2019
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6301
E:\BILLS\H4038.IH
H4038
pamtmann on DSKBFK8HB2PROD with BILLS