Workforce Development Through Post-Graduation Scholarships Act of 2021
Bill: S.2191 | Sponsor: Sen. Peters, Gary C. (D-MI)
Policy area: Taxation

Summary:
Workforce Development Through Post-Graduation Scholarships Act of 2021
This bill excludes from gross income, for income tax purposes, any amount received by an individual taxpayer as a post-graduation scholarship grant by a tax-exempt charitable organization for the payment of certain education expenses or for the repayment of education loans.
The bill requires reports on the post-graduation scholarship grant program by the Department of the Treasury and the Government Accountability Office.

To amend the Internal Revenue Code of 1986 to exclude certain post-
 graduation scholarship grants from gross income in the same manner as 
           qualified scholarships to promote economic growth.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Development Through Post-
Graduation Scholarships Act of 2021''.

SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EXCLUDED FROM GROSS INCOME 
              IN SAME MANNER 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 inserting ``, 
        or'',
            (2) by striking ``any amount received'' and inserting the 
        following: ``any amount which--
            ``(1) is received'', and
            (3) by adding at the end the following new paragraph:
            ``(2) is received as a post-graduation scholarship grant 
        paid on behalf of an individual.''.
    (b) Post-Graduation Scholarship Grant.--Section 117(b) of the 
Internal Revenue Code of 1986 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-graduation 
                scholarship grant' means any grant program--
                            ``(i) which is established by an 
                        organization which--
                                    ``(I) is described in section 
                                501(c)(3) and exempt from tax under 
                                section 501(a), and
                                    ``(II) is either a private 
                                foundation or community trust described 
                                in section 170(b)(1)(A)(vi) (other than 
                                an organization established by an 
                                organization described 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),
                            ``(ii) under which, in accordance with the 
                        conditions of a grant, such organization repays 
                        any portion of an applicable education loan 
                        incurred by an individual,
                            ``(iii) which requires a grantee to live 
                        and work in an applicable community,
                            ``(iv) under which payments are made 
                        directly to the holder of the loan, and
                            ``(v) which is not provided to an employee 
                        of the granting organization or a related 
                        entity of the granting organization.
                    ``(B) Applicable education loan.--For purposes of 
                subparagraph (A), the term `applicable education loan' 
                means, with respect to 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) Applicable community.--For purposes of 
                subparagraph (A), the term `applicable community' means 
                any area that has a bachelor's degree attainment rate 
                for the population that is below the state or national 
                average for such population (as determined based on 
                data collected by the Census Bureau).''.
    (c) Amount Not Treated as Taxable Expenditure by Private 
Foundation.--Section 4945(g) of the Internal Revenue Code of 1986 is 
amended by striking ``or'' at the end of paragraph (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 the Internal 
Revenue Code of 1986 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 interest 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.''.
    (e) Regulatory Authority.--Section 117 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(e) Regulations.--The Secretary shall prescribe such reporting 
requirements and regulations as may be necessary or appropriate to 
carry out subsection (a)(2).''.
    (f) Reports.--
            (1) Secretary of treasury.--Not later than 3 years after 
        the date of the enactment of this Act, and periodically 
        thereafter, the Secretary of the Treasury, or the Secretary's 
        delegate, shall submit to Congress a report on the 
        implementation and effectiveness of the amendments made by this 
        section.
            (2) Comptroller general.--
                    (A) In general.--Not later than 5 years after the 
                date of enactment of this Act, the Comptroller General 
                of the United States shall publish the result of a 
                study on post-graduation scholarship grants to which 
                section 117 of the Internal Revenue Code of 1986 (as 
                amended by this section) applies.
                    (B) Contents of report.--The information published 
                under subparagraph (A) shall include the following:
                            (i) The length of time involved in such 
                        grants.
                            (ii) The amount paid out under such grants.
                            (iii) The disposition of any funds paid 
                        under such grants, including the identity of 
                        any loan holders who benefit from such funds.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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