Student Loan Tax Relief Act

Bill: 117-s-496
Sponsor: full_name: Sen. Menendez, Robert [D-NJ]
Introduced: 2021-03-01
Policy area: Taxation
Subjects: Government lending and loan guarantees

Higher education

Income tax exclusion

Student aid and college costs
Latest action: action_date: 2021-03-01
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2021-03-01
action_desc: Introduced in Senate
text: <p><b>Student Loan Tax Relief Act</b></p> <p>This bill modifies tax provisions allowing an exclusion from gross income for income arising from discharges of student loan debt after January 31, 2020. This includes loans for postsecondary educational expenses, private education loans, and loans made by tax-exempt educational organizations. </p> <p>The bill eliminates the temporary expiration date for the exclusion and the death or total and permanent disability requirement for a discharge. </p>

tv_txt: II 117th CONGRESS 1st Session S. 496 IN THE SENATE OF THE UNITED STATES March 1, 2021 Mr. Menendez (for himself and Ms. Warren ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to exclude from taxable income any student loan forgiveness or discharge.

1. Short title This Act may be cited as the Student Loan Tax Relief Act . 2. Modification of treatment of student loan forgiveness (a) In general Section 108(f) of the Internal Revenue Code of 1986 is amended— (1) by striking paragraphs (1) and (2) and inserting the following: (1) In general In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reasons of the discharge (in whole or in part) of— (A) any loan provided expressly for postsecondary educational expenses, regardless of whether provided through the educational institution or directly to the borrower, if such loan was made, insured, or guaranteed by— (i) the United States, or an instrumentality or agency thereof, (ii) a State, territory, or possession of the United States, or the District of Columbia, or any political subdivision thereof, or (iii) any institution of higher education, (B) any private education loan (as defined in section 140(a)(7) of the Truth in Lending Act), (C) any loan made by any educational organization described in section 170(b)(1)(A)(ii) if such loan is made— (i) pursuant to an agreement with any entity described in subparagraph (A) or any private education lender (as defined in section 140(a) of the Truth in Lending Act) under which the funds from which the loan was made were provided to such educational organization, or (ii) pursuant to a program of such educational organization which is designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or an organization described in section 501(c)(3) and exempt from tax under section 501(a), or (D) any loan made by an educational organization described in section 170(b)(1)(A)(ii) or by an organization exempt from tax under section 501(a) to refinance a loan to an individual to assist the individual in attending any such educational organization but only if the refinancing loan is pursuant to a program of the refinancing organization which is designed as described in subparagraph (C)(ii). ; (2) by striking paragraph (5); (3) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and (4) in paragraph (2), as so redesignated, by— (A) striking made by an organization described in paragraph (2)(D) and inserting made by an organization described in paragraph (1)(C) or made by a private education lender (as defined in section 140(a)(7) of the Truth in Lending Act) ; and (B) inserting or for such private education lender after either such organization . (b) Effective Date The amendments made by this section shall apply to discharges of loans after January 31, 2020.