Supporting America’s Young Entrepreneurs Act of 2024

Bill: 118-hr-7575
Sponsor: full_name: Rep. Velázquez, Nydia M. [D-NY-7]
Introduced: 2024-03-06
Policy area: Education
Latest action: action_date: 2024-03-06
text: Referred to the Committee on Education and the Workforce, 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:

tv_txt: I 118th CONGRESS 2d Session H. R. 7575 IN THE HOUSE OF REPRESENTATIVES March 6, 2024 Ms. Velázquez (for herself, Ms. Chu , Mr. Phillips , and Mr. McGarvey ) introduced the following bill; which was referred to the Committee on Education and the Workforce , 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 2024 . 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 distressed area business (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 distressed area business (A) In general The Secretary shall cancel up to $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 by a distressed area business founded by the borrower during the period in which the borrower makes each of the 24 payments; (iii) is employed by such distressed area business at the time of such cancellation; and (iv) has been approved for such cancellation by the young entrepreneurs business center established 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 up to $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 full-time by a small business start-up during the period in which the borrower makes each of the 12 payments; (iii) is employed full-time by a small business start-up at the time of such cancellation; and (iv) has been approved for such cancellation by the young entrepreneurs business center established 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 $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) Aggregate amount 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) 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. (B) Small Business Act definitions The terms distressed area business , founder , and small business start-up have the meanings given, respectively, under section 49 of the Small Business Act. . 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— (1) provide certifications described under subsection (b); (2) identify distressed areas under subsection (c); and (3) approve loan cancellation requests under subsection (d). (b) Certification for founders of distressed area businesses A founder of a distressed area business seeking certification from the young entrepreneurs business center under this section for such distressed area business shall submit to the Administrator an application that includes— (1) a 5-year business plan for such distressed area business; (2) the number of employees such distressed area business intends to employ for each year of such plan; and (3) evidence that the founder— (A) is also an employee of such distressed area business; and (B) is a recent graduate of an institution of higher education. (c) Distressed area (1) In general Not later than 24 months after the date of the enactment of this section, and at least every 3 years thereafter, 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 unit of local government of a State— (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 not less than 1 percent greater than the national average; and (B) for which the young entrepreneurs business center determines establishing small business start-ups in such area would be economically beneficial. (d) Approval for loan cancellation (1) Founders of distressed area businesses The young entrepreneurs business center shall approve a founder of a distressed area business who submits an application under subsection (b) for loan cancellation under section 455(r)(1) of the Higher Education Act of 1965 if such distressed area business— (A) beginning on the date of such establishment and ending on the date of the 24th monthly payment on a loan described in such section 455(r)(1), was located in a distressed area (as identified under subsection (c)); (B) was certified under subsection (b); and (C) on the date of approval under this paragraph, has been operating continuously for not less than 5 years. (2) Employees of small business start-ups For purposes of loan cancellation under section 455(r)(2) of the Higher Education Act of 1965— (A) an employee of a small business start-up seeking such loan cancellation shall submit to the Administrator an application, which shall include evidence of the employee’s full-time employment at such small business start-up; and (B) if the Administrator verifies the information submitted in such application, the young entrepreneurs business center shall approve such an employee. (3) Submission The young entrepreneurs business center shall submit to the Secretary of Education any approval for loan cancellation made under this subsection. (e) Termination An approval made under this section shall terminate 5 years after the date of submission to the Secretary of Education under subsection (d)(3). (f) Definitions In this section: (1) Distressed area business The term distressed area business means a small business concern located in a distressed area (as identified under subsection (c)) that has been in operation for not more than 8 years as of the date of submission of an application under subsection (b). (2) Institution of higher education The term institution of higher education has the meaning given such term in section 102 of the Higher Education Act. (3) 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.