SEC. 2. 15-YEAR RATABLE INCLUSION OF CANCELLED STU-
DENT LOAN DEBT. 
(a) IN GENERAL.—Subchapter Q of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new part: 
‘‘PART VIII—RATABLE INCLUSION OF CERTAIN 
INCOME 
‘‘Sec. 1351A. 15-year ratable inclusion of cancelled student loan debt. 
‘‘SEC. 1351A. 15-YEAR RATABLE INCLUSION OF CANCELLED 
STUDENT LOAN DEBT. 
‘‘(a) IN GENERAL.—In the case of any individual who 
elects the application of this section for any taxable year, 
any amount which (but for this section) would be includ-
ible in gross income for the taxable year by reason of the 
discharge (in whole or in part) of any student loan (as 
defined by section 108(f)(2)) by reason of death or dis-
ability shall be so included ratably over the 15-taxable- 
year period beginning with the taxable year of such dis-
charge. 
‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount taken into ac-
count under subsection (a) shall not exceed the 
amount which (but for this subsection) would be so 
taken into account, reduced by the excess (if any) 
of— 
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‘‘(A) the modified adjusted gross income of 
the taxpayer for the taxable year of the dis-
charge, over 
‘‘(B) $80,000 ($160,000 in the case of a 
joint return). 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
The term ‘modified adjusted gross income’ means 
the adjusted gross income of the taxpayer for the 
taxable year determined— 
‘‘(A) without regard to this section and 
sections 911, 931, and 933, and 
‘‘(B) after the application of sections 86, 
135, 137, 199, 219, 221, 222, and 469. 
‘‘(c) SPECIAL RULES.— 
‘‘(1) DEATH OF STUDENT.—In the case of any 
discharge of a student loan by reason of the death 
of an individual to whom the loan was made, no 
election under this section may be made by or on be-
half of such individual. 
‘‘(2) ELECTION.—Any election made under this 
section, once made, shall be irrevocable.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) 
Sections 
86(b)(2)(A), 
135(c)(4)(A), 
137(b)(3)(A), 221(b)(2)(C)(i), 222(b)(2)(C)(i) are 
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each amended by striking ‘‘and 933’’ and inserting 
‘‘933, and 1351A’’. 
(2) Section 199(d)(2)(B) of such Code is 
amended by inserting ‘‘and section 1351A’’ before 
the period at the end. 
(3) Section 219(g)(3)(A)(ii) is amended by 
striking ‘‘and 911’’ and inserting ‘‘911, and 
1351A’’. 
(4) Section 469(i)(3)(F)(iii) of such Code is 
amended by striking ‘‘and 222’’ and inserting ‘‘222, 
and 1351A’’. 
(c) CLERICAL AMENDMENT.—The table of parts for 
subchapter Q of chapter 1 of such Code is amended by 
adding at the end the following new item: 
‘‘PART VIII. RATABLE INCLUSION OF CERTAIN INCOME’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to discharges of indebtedness after 
the date of the enactment of this Act. 
SEC. 3. STUDENT LOAN DEBT CANCELLED BY REASON OF 
DEATH OR DISABILITY DISREGARDED FOR 
FEDERAL MEAN-TESTED PROGRAMS. 
The discharge of any student loan (as defined by sec-
tion 108(f)(2) of the Internal Revenue Code of 1986) by 
reason of death or disability, and any income attributable 
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thereto, shall be disregarded for purposes of determining 
eligibility for any Federal means-tested program. 
Æ 
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