[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 496 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 496
To amend the Internal Revenue Code of 1986 to exclude from taxable
income any student loan forgiveness or discharge.
_______________________________________________________________________
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.
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 Tax Relief Act''.
SEC. 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.
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