Student Loan Relief Act
Bill: H.R.6708 | Sponsor: Rep. Gonzalez, Vicente (D-TX)
Policy area: Education

Summary:
Student Loan Relief Act
This bill requires the Department of Education to cancel or repay up to $25,000 in outstanding student loan debt for each borrower. Further, the bill outlines the method of loan discharge and, for tax purposes, excludes loan cancellation or repayment from a borrower's gross income.

To direct the Secretary of Education to cancel or repay up to $25,000 
              in Federal student loans for each borrower.

    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 ``Student Loan Relief Act''.

SEC. 2. WRITING DOWN BALANCES FOR FEDERAL STUDENT LOAN BORROWERS.

    (a) In General.--Not later than 90 days after the date of enactment 
of this Act, the Secretary shall cancel or repay an amount on the 
outstanding balance due (including the unpaid principal amount, any 
accrued interest, and any fees or charges) on the Federal student loans 
of a borrower that is equal to the lesser of--
            (1) $25,000; or
            (2) the total outstanding balance due on such loans of the 
        borrower.
    (b) Application.--Unless otherwise requested by the borrower in 
writing, a cancellation or repayment under subsection (a) shall be 
applied--
            (1) in the case of a borrower whose loans have different 
        applicable rates of interest, first toward the outstanding 
        balance due on the loan with the highest applicable rate of 
        interest among such loans; and
            (2) in the case of a borrower of loans that have the same 
        applicable rates of interest, first toward the outstanding 
        balance of principal due on the loan with the highest principal 
        balance among such loans.
    (c) Data To Implement.--Contractors of the Secretary, and holders 
of Federal student loans, shall report, to the satisfaction of the 
Secretary the information necessary to carry out this section.
    (d) Taxation.--For purposes of the Internal Revenue Code of 1986, 
in the case of any cancellation or repayment of indebtedness under this 
subsection with respect to any borrower:
            (1) Exclusion from gross income.--No amount shall be 
        included in the gross income of such borrower by reason of such 
        cancellation or repayment.
            (2) Waiver of information reporting requirements.--Amounts 
        excluded from gross income under paragraph (1) shall not be 
        required to be reported (and shall not be taken into account in 
        determining whether any reporting requirement applies) under 
        chapter 61 of such Code.
    (e) Definitions.--In this section:
            (1) Federal student loan.--The term ``Federal student 
        loan'' means a loan--
                    (A) made under part B, part D, or part E of title 
                IV of the Higher Education Act of 1965 (20 U.S.C. 1071 
                et seq., 1087a et seq., 1087aa et seq.), and held by 
                the Department of Education; or
                    (B) made, insured, or guaranteed under part B of 
                the such title (20 U.S.C. 1071 et seq.), or made under 
                part E of such title (20 U.S.C. 1087qaa seq.), and not 
                held by the Department of Education.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
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