[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7575 Introduced in House (IH)]
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118th CONGRESS
2d Session
H. R. 7575
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 6, 2024
Ms. Velazquez (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.
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 ``Supporting America's Young
Entrepreneurs Act of 2024''.
SEC. 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.''.
SEC. 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:
``SEC. 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.''.
SEC. 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.
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