Legislative Tracker: Tax Issues
On this page, you'll find proposals that modify the existing tax code in areas relating to student financial aid.
For tax proposals from the previous session of Congress, visit the Legislative Tracker Archive: Tax Issues.
| *NEW* Students and Families Empowerment Act | |||
| HR 6921 | Sponsor: Rep. Rice (D-NY) |
Co-Sponsors: 0 (0 R; 0 D) |
Introduced: 9/26/2018 |
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NASFAA Analysis & Coverage: This bill would amend the IRS Tax Code to increase the deduction allowed for student loan interest. The Students and Families Empowerment Act would also exclude the discharge of any student loan debt from the result of completing the maximum payment time frame required under any income contingent or income-based repayment programs, from a borrower's gross income. The bill would also extend the grace period of student loan borrowers, currently 6 months, to 12 months. During those months, this bill would also prohibit interest from accruing on all Federal loan types.
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| Tax Cuts and Jobs Act | |||
| HR 1 | Sponsor: Rep. Brady (R-TX) |
Co-Sponsors: 24 (24 R; 0 D) |
Introduced: 11/2/2017 |
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NASFAA Analysis & Coverage: This bill, a comprehensive tax reform measure, makes several changes to tax provisions affecting higher education. In the initial version of the bill passed by the House, the bill would have eliminated the student loan interest deduction, the Lifetime Learning Credit, the employer-provided educational assistance benefit, the Section 117(d) tuition reduction assistance benefit (for employees and graduate-level teaching assistants), among other changes. The Senate bill did not include these provisions, and ultimately, the final conference bill did not include these provisions. However, the final bill does include a 1.4 percent excise tax on certain private university endowments and provides an exclusion from income for any discharge of student loan debt resulting from death or total disability.
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Status: 12/22/2017: Signed into Law by President Trump
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| Student Loan Borrowers' Bill of Rights Act | |||
| HR 3630 | Sponsor: Rep. Wilson (D-FL) |
Co-Sponsors: 0 (0 R; 0 D) |
Introduced: 7/28/2017 |
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NASFAA Analysis & Coverage: The bill excludes student loan discharge or forgiveness from the calculation of gross income for income tax purposes. The bill provides bankruptcy protections for federal and private student loans, reestablishes a statute of limitations on student loan debt collection, and prohibits the garnishment of wages, tax refunds, and Social Security benefits. The bill expands PSLF by allowing borrowers in public service jobs the ability to have half of their loan balance forgiven in five years. The bill allows Parent PLUS loans to be repaid through income-based repayment and forgiven through Public Service Loan Forgiveness (PSLF). In addition, the bill prohibits loan default from preventing a student from accessing transcripts or other certifications or from being used against a borrower in a Federal or State proceeding involving the individual's professional or vocation license.
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| Pell Grant Flexibility Act | |||
| HR 3581 | Sponsor: Rep. DeSaulnier (D-CA) |
Co-Sponsors: 4 (4 R; 0 D) |
Introduced: 7/28/2017 |
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NASFAA Analysis & Coverage: This bill would exclude Pell Grant awards from the calculation of gross income.
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| Student Loan Interest Tax Deduction Expansion Act | |||
| HR 3573 | Sponsor: Rep. Cicilline (D-RI) |
Co-Sponsors: 5 (0 R; 5 D) |
Introduced: 7/28/2017 |
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NASFAA Analysis & Coverage: This bill would increase the dollar limitation for the student loan interest deduction from $2,500 to $7,500 and to $15,000 for joint filers. Taxpayers with a "modified" adjusted gross income over $100,000 (or over $200,000 for joint filers) would be ineligible for the deduction. "Modified adjusted gross income" means adjusted gross income including deductions for student loan interest; qualified tuition and related expenses; domestic manufacturing; income from Guam, American Samoa, the Northern Mariana Islands, or Puerto Rico.
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| Student Opportunity Act | |||
| HR 3346 | Sponsor: Rep. Lawson (D-FL) |
Co-Sponsors: 12 (0 R; 12 D) |
Introduced: 7/20/2017 |
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NASFAA Analysis & Coverage: This bill includes a provision to exempt loan forgiveness and discharge from gross income for income tax purposes. The bill also makes a number of other federal lending changes, including eliminating origination fees, creating a new loan refinancing program, and adjusting interest rates for new loans.
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| Save for Success Act | |||
| HR 2378 | Sponsor: Rep. Lujan (D-NM) |
Co-Sponsors: 6 (0 R; 6 D) |
Introduced: 5/4/2017 |
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NASFAA Analysis & Coverage: This bill would allow families to earn up to $250 per year of the American Opportunity Tax Credit (AOTC) for every year a family contributes to an eligible college savings account (529 plan) beginning with the birth of the student. The lifetime AOTC cap of $10,000 would remain. In addition, the bill would establish a pilot program with the Department of Education and the Department of the Treasury to explore real-time payments of the AOTC to better align with tuition payments.
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| Fair Treatment of Scholarships and Pell Grants Act | |||
| HR 1764 | Sponsor: Rep. Messer (R-IN) |
Co-Sponsors: 0 (0 R; 0 D) |
Introduced: 3/28/2017 |
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NASFAA Analysis & Coverage: This measure would exempt scholarships, fellowships, and grants that cover room and board costs and certain research expenses from the calculation of gross income for income tax purposes.
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| HELP for Students and Parents Act | |||
| HR 1656 | Sponsor: Rep. Meehan (R-PA) |
Co-Sponsors: 8 (5 R; 3 D) |
Introduced: 3/21/2017 |
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NASFAA Analysis & Coverage: This measure would provide incentives for employers to establish student loan repayment programs and to make contributions to qualified tuition programs on behalf of children of employees. The bill would make employer contributions to an employee’s student debt repayment and/or to a 529 plan excludable from gross income. Employers would earn a tax credit based on the amount contributed to student debt repayment and/or 529 plans.
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| Stop Taxing Death and Disability Act | |||
| S. 405 | Sponsor: Sen. Coons (D-DE) |
Co-Sponsors: 16 (6 R; 9 D; 1 I) |
Introduced: 2/16/2017 |
| HR 1659 | Sponsor: Rep. Roskum (R-MI) |
Co-Sponsors: 13 (4 R; 9 D) |
Introduced: 3/21/2017 |
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NASFAA Analysis & Coverage: This bill would exclude loan forgiveness from death or disability, including the Total and Permanent Disability loan discharge (TPD), from the calculation of gross income for income tax purposes.
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| Student Loan Fairness Act | |||
| HR 1127 | Sponsor: Rep. Bass (D-CA) |
Co-Sponsors: 2 (0 R; 2 D) |
Introduced: 2/16/2017 |
| NASFAA Analysis & Coverage: This bill excludes loan forgiveness under income-driven repayment plans from gross income for the purposes of income tax. The comprehensive bill would also create the “10/10 Loan Repayment Plan” that allows borrowers to pay 10 percent of their annual discretionary income and forgives the remaining loan balance after ten years of payment. The bill caps new direct loan interest rates at 3.4 percent and significantly modifies Public Service Loan Forgiveness (PSLF) by reducing the required number of qualifying payments from 120 to 60 and including physicians in "Medically Underserved Areas." The bill also allows certain borrowers with private education loans to consolidate them into a direct consolidation loan. | |||
| Employer Participation in Student Loan Assistance/Repayment Act | |||
| HR 795 | Sponsor: Rep. Davis (R-IL) |
Co-Sponsors: 104 (45 R; 59 D) |
Introduced: 2/1/2017 |
| S. 796 | Sponsor: Sen. Warner (D-VA) |
Co-Sponsors: 7 (3 R; 3 D; 1 I) |
Introduced: 3/30/2017 |
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NASFAA Analysis & Coverage: This measure allows employers to contribute pre-tax earnings to help subsidize student loan payments for their employees, up to $5,250 per year per employee.
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| Student Loan Repayment Act | |||
| HR 615 | Sponsor: Rep. Ross (R-FL) |
Co-Sponsors: 0 (0 R; 0 D) |
Introduced: 1/23/2017 |
| NASFAA Analysis & Coverage: This measure would include "qualified student loan repayers" among those eligible under the Work Opportunity Tax Credit for employers. The bill allows for a $1,500 tax credit to employers to implement a repayment match program with a minimum qualifying match contribution of $2,000 per year by employees. Repayment assistance would be considered income and thereby subject to income tax. The bill defines a "qualified student loan repayer" as a borrower with at least an associate’s degree and outstanding debt of at least $10,000. |
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| 529 and ABLE Account Improvement Act | |||
| HR 529 | Sponsor: Rep. Jenkins (R-KS) |
Co-Sponsors: 6 (3 R; 3 D) |
Introduced: 1/13/2017 |
| NASFAA Analysis & Coverage: The bill proposes tax code changes related to 529 and ABLE plans. Among the changes are tax incentives for employers to contribute to 529 and ABLE accounts and removing penalties for using 529 funds to pay student loans. |
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| Student Loan Opportunity Act | |||
| HR 480 | Sponsor: Rep. Flores (R-TX) |
Co-Sponsors: 8 (7 R; 1 D) |
Introduced: 1/12/2017 |
| NASFAA Analysis & Coverage: This bill would allow qualified scholarship funding corporations to use tax-exempt bonds to finance private student loan programs. Currently, qualified scholarship funding corporations, as defined in IRS Code, are ineligible to issue tax-exempt bonds. |
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Publication Date: 10/30/2018
