[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1143 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 1143
To amend the Truth in Lending Act to modify obligations relating to
private education loans due to the disability of a cosigner or borrower
of the loan, to amend title 11 of the United States Code to make
student loans dischargeable, and for other purposes.
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IN THE HOUSE OF REPRESENTATIVES
February 18, 2021
Mr. Kildee (for himself, Mr. Carson, Mr. Cohen, Ms. Dean, Ms. Norton,
Mr. Perlmutter, and Mr. Vargas) introduced the following bill; which
was referred to the Committee on Financial Services, and in addition to
the Committees on the Judiciary, and Ways and Means, 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 Truth in Lending Act to modify obligations relating to
private education loans due to the disability of a cosigner or borrower
of the loan, to amend title 11 of the United States Code to make
student loans dischargeable, and for other purposes.
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 ``Lenders Offer Assistance Now Act''
or the ``LOAN Act''.
SEC. 2. DISABILITY OF A COSIGNER OR A BORROWER OF A PRIVATE EDUCATION
LOAN.
(a) In General.--Section 140(g) of the Truth in Lending Act (15
U.S.C. 1650(g)) is amended--
(1) in paragraph (1), by striking ``bankruptcy or death''
and inserting ``bankruptcy, death, or disability''; and
(2) by adding at the end the following new paragraphs:
``(3) Discharge in case of disability.--A lender that
extends a private education loan shall discharge the student
obligor's liability on the loan if a student obligor
experiences a disability.
``(4) Disability defined.--In this subsection, the term
`disability' means a permanent and total disability, as
determined in accordance with the regulations of the Secretary
of Education under section 437(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087(a)), or a determination by the
Secretary of Veterans Affairs that the individual is
unemployable due to a service-connected condition.''.
(b) Tax Treatment of Discharge.--Section 108(f)(5)(A) of the
Internal Revenue Code of 1986 is further amended by striking ``or'' in
clause (ii), by redesignating clause (iii) as clause (iv), and by
inserting after clause (ii) the following new clause:
``(iii) pursuant to paragraph (3) of
section 140(g) of the Truth in Lending Act,
or''.
(c) Impact on Certain Programs.--Discharge of a private education
loan due to disability of a borrower under paragraph (3) of section
140(g) of the Truth in Lending Act, as added by subsection (a), shall
not be regarded as income and shall not be regarded as a resource for
purposes of determining the eligibility of the borrower of such loan
(or the borrower's spouse or family) for benefits or assistance, or the
amount or extent of benefits or assistance, under any Federal program
or under any State or local program financed in whole or in part with
Federal funds.
(d) Applicability.--The amendments made by this section shall apply
to private education loan agreements entered into on or after the date
that is 180 days after the date of enactment of this Act.
(e) Private Education Loan Defined.--In this section, the term
``private education loan'' has the meaning given in section 140(a) of
the Truth in Lending Act (15 U.S.C. 1650(a)).
SEC. 3. EXCEPTION TO DISCHARGE.
(a) In General.--Section 523(a) of title 11, United States Code, is
amended--
(1) by striking paragraph (8); and
(2) by redesignating paragraphs (9) through (14B) as
paragraphs (8) through (14A), respectively.
(b) Conforming Amendments.--Title 11, United States Code, is
amended--
(1) in section 704(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)'';
(2) in section 1106(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)'';
(3) in section 1202(c)(1)(C)(iv)(I) by striking ``(14A)''
and inserting ``(14)''; and
(4) in section 1328(a)(2) by striking ``(8), or (9)'' and
inserting ``or (8)''.
(c) Effective Date; Application of Amendments.--
(1) Effective date.--Except as provided in paragraph (2),
this section and the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Application of amendments.--The amendments made by this
section shall apply only with respect to cases commenced under
title 11 of the United States Code on or after the date of the
enactment of this Act.
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