Supporting America’s Young Entrepreneurs Act of 2021

Bill: 117-hr-4293
Sponsor: full_name: Rep. Velazquez, Nydia M. [D-NY-7]
Introduced: 2021-06-30
Policy area: Education
Latest action: action_date: 2021-06-30
text: Referred to the Committee on Education and Labor, and in addition to the Committees on Ways and Means, and Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Summaries:
action_date: 2021-06-30
action_desc: Introduced in House
text: <p><b>Supporting America's Young Entrepreneurs Act of </b><strong>2021</strong></p> <p>This bill provides deferment and cancellation of federal student loans for certain founders and employees of small business start-ups. The bill also establishes a young entrepreneurs business center.</p> <p>First, the bill allows a founder of a small business start-up to defer student loan payments for up to three years.</p> <p>Next, the bill directs the Department of Education (ED) to cancel up to $20,000 in federal student loan debt for a borrower who (1) has made 24 monthly payments on the loan while employed as a founder of a small business start-up in a distressed area, (2) is approved for loan cancellation by the young entrepreneurs business center established by the bill, and (3) is not currently in default on the loan.</p> <p>Further, ED must cancel up to $3,000 in federal student loan debt for a borrower who (1) has made 12 monthly payments on the loan while employed full-time by a small business start-up, and (2) is not currently in default on the loan.</p> <p>The bill also excludes from an individual's gross income, for income tax purposes, the amount of such canceled student loan debt. </p> <p>Finally, the bill establishes a young entrepreneurs business center within the Small Business Administration to certify small business start-ups, identify distressed areas, and approve loan cancellations. To be certified by the center, a start-up must have a founder who is a recent graduate of an institution of higher education.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 4293 IN THE HOUSE OF REPRESENTATIVES June 30, 2021 Ms. Velázquez (for herself, Mr. Phillips , Ms. Chu , Mr. Evans , and Mr. Kim of New Jersey ) introduced the following bill; which was referred to the Committee on Education and Labor , and in addition to the Committees on Ways and Means , and Small Business , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Higher Education Act of 1965 to provide loan deferment and loan cancellation for certain founders and employees of small business start-ups, to amend the Small Business Act to establish a young entrepreneurs business center, and for other purposes.

1. Short title This Act may be cited as the Supporting America’s Young Entrepreneurs Act of 2021 . 2. Small business start-up employee loan deferment and cancellation (a) Deferment Section 455(f) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(f) ) is amended— (1) in paragraph (1), by striking A borrower of a loan and inserting Except as provided in paragraph (5), a borrower of a loan ; and (2) by adding at the end the following: (5) No interest deferment eligibility for founders of small business start-ups A borrower of a loan made under this part shall be eligible for a deferment, during which periodic installments of principal and interest need not be paid, during any period not in excess of 3 years during which the borrower is employed as a founder of a small business start-up (as defined in subsection (r)(3)). . (b) Loan cancellation Section 455 of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ) is amended by adding at the end the following: (r) Loan cancellation for certain small business start-Up founders and employees (1) Founders of a small business start-up in a distressed area (A) In general The Secretary shall cancel $20,000 of the balance of interest and principal due, in accordance with subparagraph (B), on any eligible Federal Direct Loan not in default for a borrower who— (i) has made 24 monthly payments on the eligible Federal Direct Loan after the date of the enactment of this subsection pursuant to any one or a combination of payments under a repayment plan under subsection (d)(1) or (g); (ii) has been employed as a founder of a small business start-up in a distressed area during the period in which the borrower makes each of the 24 payments; (iii) is employed as a founder of a small business start-up in a distressed area at the time of such cancellation; and (iv) is approved for loan cancellation by the young entrepreneurs business center under section 49 of the Small Business Act ( 16 U.S.C. 631 et seq. ). (B) Loan cancellation amount (i) In general After the conclusion of the employment period described in subparagraph (A), the Secretary shall cancel the obligation to repay $20,000 of the balance of interest and principal due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part. (ii) Limitation A borrower may not receive an aggregate amount of more than $20,000 under this subparagraph. (C) Ineligibility for double benefits No borrower may, for the same service, receive a reduction of loan obligations under both this paragraph and— (i) paragraph (2); (ii) subsection (m); or (iii) section 428J, 428K, 428L, or 460. (2) Employees of a small business start-up (A) In general The Secretary shall cancel $3,000 of the balance of interest and principal due, in accordance with subparagraph (B), on any eligible Federal Direct Loan not in default for a borrower who— (i) has made 12 monthly payments on the eligible Federal Direct Loan after the date of the enactment of this subsection pursuant to any one or a combination of payments under a repayment plan under subsection (d)(1) or (g); (ii) has been employed in a small business start-up job during the period in which the borrower makes each of the 12 payments; and (iii) is employed in a small business start-up job at the time of such cancellation. (B) Loan cancellation amount (i) In general After the conclusion of the employment period described in subparagraph (A), the Secretary shall cancel the obligation to repay $3,000 of the balance of interest and principal due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part. (ii) Limitation A borrower may not receive an aggregate amount of more than $15,000 under this subparagraph. (C) Ineligibility for double benefits No borrower may, for the same service, receive a reduction of loan obligations under both this paragraph and— (i) paragraph (1); (ii) subsection (m); or (iii) section 428J, 428K, 428L, or 460. (3) Definitions In this subsection: (A) Distressed area The term distressed area means an area identified under section 49 of the Small Business Act. (B) Eligible Federal Direct Loan The term eligible Federal Direct Loan means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan. (C) Founder The term founder has the meaning given under section 49 of the Small Business Act. (D) Small business start-up The term small business start-up means a business that is certified by the young entrepreneurs business center under section 49 of the Small Business Act. (E) Small business start-up job The term small business start-up job means a full-time job as an employee of a small business start-up. . 3. Young entrepreneurs business center The Small Business Act ( 15 U.S.C. 631 et seq. ) is amended— (1) by redesignating section 49 as section 50; and (2) by inserting after section 48 the following new section: 49. Young entrepreneurs business center (a) Establishment There is established within the Administration a young entrepreneurs business center that shall, for purposes of determining eligibility for loan cancellation for a founder of small business start-up under section 455(r)(1) of the Higher Education Act of 1965— (1) certify small business start-ups under subsection (b); (2) identify distressed areas under subsection (c); and (3) approve loan cancellation for any founder of a small business start-up in a distressed area under subsection (d). (b) Certification (1) Application To be certified by the young entrepreneurs business center, the founder of a small business start-up shall submit an application to the Administrator that includes— (A) a 5-year business plan for such small business start-up; and (B) the number of employees the small business start-up intends to employ on a yearly basis. (2) Requirements To be certified under this section, a small business start-up shall have, on the date an application is submitted under paragraph (1), a founder who is an employee of such small business start-up and who is a recent graduate of an institution of higher education. (c) Distressed area (1) In general Not less than once every 3 years after the date of the enactment of this section, the young entrepreneurs business center shall identify and make publically available on the website of the Administration a list of distressed areas. (2) Requirements A distressed area identified under paragraph (1) shall be a county or equivalent division of local government of a State in which the small business concern is located— (A) that has, for the most recent 24-month period for which statistics are available— (i) a per capita income of 80 percent or less of the national average; or (ii) an unemployment rate that is 1 percent greater than the national average; and (B) for which the young entrepreneurs business center determines would economically benefit from having small business start-ups established in such area. (d) Loan cancellation for founders of small business start-Ups in a distressed area For purposes of loan cancellation under section 455(r)(1) of the Higher Education Act of 1965, the young entrepreneurs business center shall approve a founder of a small business start-up in a distressed area if such founder— (1) established a small business start-up that— (A) was located in a distressed area (as identified under subsection (c)) for not more than 3 years before the date on which such small business start-up was established; (B) was certified under subsection (b); and (C) on the date of approval under this subsection, has been operating continuously for not less than 5 years; and (2) was a founder of a small business start-up in a distressed area during the period in which such founder made the 24 payments described in section 455(r)(1)(A) of such Act. (e) Definitions In this section: (1) Institution of higher education The term institution of higher education has the meaning given such term in section 102 of the Higher Education Act ( 20 U.S.C. 1002 ). (2) Small business start-up The term small business start-up means a small business concern that, as of the date of submission of an application under subsection (b)— (A) does not exist; or (B) has been in existence for not more than 3 years. . 4. Treatment of loan cancellation (a) In general Section 108(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6) Cancellation of certain federal student loans In the case of an individual, gross income shall not include the discharge (in whole or in part) of any student loan pursuant to the cancellation (in whole or in part) of such loan by the Secretary of Education under subsection (r) of section 455 of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ). . (b) Effective date The amendment made by this section shall apply to discharges of indebtedness occurring after the date of the enactment of this Act.