Students and Families Empowerment Act
This bill expands tax deductions and grace periods that apply to student loan payments.
The bill modifies the tax deduction for interest on education loans to replace the dollar limitation and the limitation based on modified adjusted gross income with a $750,000 limit ($1.5 million in the case of a joint return) on the aggregate amount of qualified education loans that may be taken into account for the deduction.
The bill excludes from gross income the discharge of any student loan debt pursuant to income contingent and income-based repayment plans under the Higher Education Act of 1965.
The bill extends from 6 months to 12 months (1) the grace period before payment must begin on Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans after the student ceases to carry at least one-half of the normal full-time academic workload, and (2) the deferment periods for parent borrowers and graduate or professional student borrowers with Federal Direct PLUS Loans.
The bill prohibits interest from accruing on a Federal Direct Unsubsidized Stafford Loan or a Federal Direct PLUS Loan during the 12-month extension or deferral period.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1798 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 1798
To amend the Internal Revenue Code of 1986 to increase the deduction
allowed for student loan interest and to exclude from gross income
discharges of income contingent or income-based student loan
indebtedness.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 14, 2019
Miss Rice of New York introduced the following bill; which was referred
to the Committee on Ways and Means, and in addition to the Committee on
Education and Labor, 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 Internal Revenue Code of 1986 to increase the deduction
allowed for student loan interest and to exclude from gross income
discharges of income contingent or income-based student loan
indebtedness.
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 ``Students and Families Empowerment
Act''.
SEC. 2. INCREASE IN DEDUCTION FOR STUDENT LOAN INTEREST.
(a) Dollar Limitation and Limitation Based on Income Replaced With
Limitation on Aggregate Education Indebtedness That May Be Taken Into
Account.--Section 221(b) of the Internal Revenue Code of 1986 is
amended to read as follows:
``(b) Limitation on Aggregate Education Indebtedness That May Be
Taken Into Account.--The aggregate amount taken into account under
subsection (a) as qualified education loans for any period shall not
exceed $750,000 (twice such amount in the case of a joint return).''.
(b) Conforming Amendments.--Section 221 of such Code is amended by
striking subsections (e) and (f) (relating to special rules and
inflation adjustments, respectively) and inserting the following new
subsection:
``(e) Denial of Double Benefit.--No deduction shall be allowed
under this section for any amount for which a deduction is allowable
under any other provision of this chapter.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 3. EXCLUSION FROM GROSS INCOME FOR DISCHARGE OF INCOME CONTINGENT
AND INCOME-BASED STUDENT LOAN INDEBTEDNESS.
(a) In General.--Paragraph (1) of section 108(f) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(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 reason of
the discharge (in whole or in part) of any student loan if such
discharge was pursuant to--
``(A) a provision of such loan under which all or
part of the indebtedness of the individual would be
discharged if the individual worked for a certain
period of time in certain professions for any of a
broad class of employers, or
``(B) subsections (d)(1)(D) and (e)(7) of section
455 or section 493C(b)(7) of the Higher Education Act
of 1965 (relating to income contingent and income-based
repayment, respectively).''.
(b) Effective Date.--The amendments made by this section shall
apply to discharges of indebtedness after the date of the enactment of
this Act.
SEC. 4. GRACE PERIOD EXTENSION.
(a) In General.--Section 455 of the Higher Education Act of 1965
(20 U.S.C. 1087e) is amended by adding at the end the following:
``(r) Grace Period Extension.--
``(1) In general.--With respect to the Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford Loans,
section 487(b)(7) shall be applied--
``(A) in subparagraph (A), by substituting `12
months' for `6 months'; and
``(B) in subparagraph (D), by substituting `12-
month period' for `6-month period'.
``(2) No accrual of interest.--Notwithstanding any other
provision of this part, interest shall not accrue on a Federal
Direct Unsubsidized Stafford Loan during the 12-month period
described in paragraph (1).
``(s) Extension of Certain Deferment Period for Federal Direct PLUS
Loans.--
``(1) In general.--With respect to Federal Direct PLUS
Loans, section 428B(d)(1)(B) shall be applied--
``(A) in the case of a parent borrower, in clause
(i), by substituting `12-month period' for `6-month
period'; and
``(B) in the case of a graduate or professional
student borrower, in clause (ii), by substituting `12-
month period' for `6-month period'.
``(2) No accrual of interest.--Notwithstanding any other
provision of this part, interest shall not accrue on a Federal
Direct PLUS Loan during the 12-month period described in
paragraph (1).''.
(b) Effective Date and Application.--The amendments made by this
section shall take effect on the date of enactment of this Act, and
shall apply with respect to--
(1) Federal Direct Stafford Loans, Federal Direct
Unsubsidized Stafford Loans, and Federal Direct PLUS Loans made
on or after the date of enactment of this Act; and
(2) Federal Direct Stafford Loans, Federal Direct
Unsubsidized Stafford Loans, and Federal Direct PLUS Loans made
before such date of enactment to borrowers who have not yet
entered repayment on such loans on such date of enactment.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, 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.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, 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.
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