Legislative Tracker Archive: Tax Issues

Legislative TrackerOn this page, you'll find proposals that modify the existing tax code in areas relating to student financial aid.

 

 

115th Session of Congress (2017-2018)

 

Students and Families Empowerment Act
HR 6921 Sponsor:
Rep. Rice (D-NY)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
9/26/2018
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.  
       
Tax Cuts and Jobs Act
HR 1 Sponsor:
Rep. Brady (R-TX)
Co-Sponsors:
24 (24 R; 0 D)
Introduced:
11/2/2017
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. 
Status: 12/22/2017: Signed into Law by President Trump
       
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
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. 
       
Pell Grant Flexibility Act
HR 3581 Sponsor:
Rep. DeSaulnier (D-CA)
Co-Sponsors:
4 (4 R; 0 D)
Introduced:
7/28/2017
NASFAA Analysis & Coverage: This bill would exclude Pell Grant awards from the calculation of gross income.
       
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
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. 
       
Student Opportunity Act
HR 3346 Sponsor:
Rep. Lawson (D-FL)
Co-Sponsors:
12 (0 R; 12 D)
Introduced:
7/20/2017
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.
       
Save for Success Act
HR 2378 Sponsor:
Rep. Lujan (D-NM)
Co-Sponsors:
6 (0 R; 6 D)
Introduced:
5/4/2017
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.
       
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
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.
       
HELP for Students and Parents Act
HR 1656 Sponsor:
Rep. Meehan (R-PA)
Co-Sponsors:
8 (5 R; 3 D)
Introduced:
3/21/2017
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.
       
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
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.
       
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
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.
       
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.
 
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.
 
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.

 

114th Session of Congress (2016-2017)

 

Student Loan Interest Deduction Act
HR 509 Sponsor:
Rep. Rangel (D-NY, 13)
Co-Sponsors:
60 (0 R; 60 D)
Introduced:
1/22/2015
NASFAA Analysis & Coverage: This piece of legislation would double the tax deduction allowed for interest paid on student loan debt from a maximum of $2,500 to $5,000 for singles, and up to $10,000 for married couples. It would also eliminate the income phase-out on deductions.

 

VETS Act
HR 1581 Sponsor:
Rep. Gallego (D-AZ, 7)
Co-Sponsors:
27 (12 R; 15 D)
Introduced:
3/24/2015
NASFAA Analysis & Coverage: This measure would exclude federal discharged loans from gross income when a veteran is totally and permanently disabled or deceased.

 

Student Loan Repayment Assistance Act
HR 1713 Sponsor:
Rep. Peters (D-CA, 52)
Co-Sponsors:
18 (2 R; 16 D)
Introduced:
3/26/2015
NASFAA Analysis & Coverage: This bill creates an above-the-line deduction for student loan payments made as part of a repayment agreement between an employer and employee.

 

Student Loan Tax Debt Relief Act
HR 2429 Sponsor:
Rep. McDermott (D-WA, 7)
Co-Sponsors:
56 (0 R; 56 D)
Introduced:
7/8/2015
NASFAA Analysis & Coverage: This measure expands the exclusion from gross income of income attributable to the discharge of student loan indebtedness to include indebtedness discharged pursuant to income-contingent and income-based repayment plans.

 

Veterinary Medicine Loan Repayment Program Enhancement Act
HR 3095 Sponsor:
Rep. Smith (R-NE, 3)
Co-Sponsors:
34 (10 R; 24 D)
Introduced:
7/16/2015
S. 440 Sponsor:
Sen. Crapo (R-IN)
Co-Sponsors:
22 (10 R; 10 D; 2 I)
Introduced:
2/10/2015
NASFAA Analysis & Coverage: This bill would exempt Veterinary Medicine Loan Repayment Program (VMLRP) awards from withholding taxes.

 

Student Debt Repayment Fairness Act
HR 3170 Sponsor:
Rep. Nugent (R-FL, 11)
Co-Sponsors:
1 (1 R; 0 D)
Introduced:
7/22/2015
NASFAA Analysis & Coverage: The measure would make student loan repayment a “qualified higher education expense,” so 529 plans can be used for loan repayment tax-free.

 

Student Tax Relief Act
HR 3206 Sponsor:
Rep. McDermott (D-WA, 7)
Co-Sponsors:
23 (0 R; 23 D)
Introduced:
7/23/2015
S. 3008 Sponsor:
Sen. Stabenow (D-MI)
Co-Sponsors:
7 (0 R; 7 D)
Introduced:
5/26/2016
NASFAA Analysis & Coverage: This measure expands the exclusion from gross income of income attributable to the discharge of student loan indebtedness to include indebtedness discharged in connection to the closure of an institution. 

 

The Income-Based Repayment Debt Forgiveness Act
S. 1947 Sponsor:
Sen. Merkley (D-OR)
Co-Sponsors:
1 (0 R; 1 D)
Introduced:
8/5/2015
NASFAA Analysis & Coverage: This bill would exclude the discharge of certain federal student loans from the calculation of gross income.

 

Scholarship Tax Relief for Students Act
HR 3452 Sponsor:
Rep. Kildee (D-MI, 5)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
9/8/2015
NASFAA Analysis & Coverage: This bill would fully exempt Pell Grants and scholarships from income taxes.

 

Promoting Access and Retention Through New Efforts to Require Shared Higher Investments in Postsecondary Success Act (PARTNERSHIPS) Act
S. 2191 Sponsor:
Sen. Wyden (D-OR)
Co-Sponsors:
1 (0 R; 1 D)
Introduced:
10/21/2015
NASFAA Analysis & Coverage: This bill establishes a new federal-state grant program for public institutions and addresses several tax issues. The bill makes the American Opportunity Tax Credit permanent, doubles the maximum amount of tax-free employer educational assistance and makes the employee’s spouse and dependents also eligible for the benefit, and excludes Pell Grants and certain loan forgiveness and loan repayments from income tax.

 

Student Loan Opportunity Act
HR 3822 Sponsor:
Rep. Flores (R-TX, 17)
Co-Sponsors:
2 (1 R; 1 D)
Introduced:
10/23/2015
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.

 

Employer Participation in Student Loan Assistance Act
HR 3861 Sponsor:
Rep. Davis (R-IL, 13)
Co-Sponsors:
32 (15 R; 17 D)
Introduced:
10/29/2015
S. 2457 Sponsor:
Sen. Warner (D-VA)
Co-Sponsors:
5 (3 R; 1 D; 1 I)
Introduced:
1/20/2016
NASFAA Analysis & Coverage: This measure allows employers to contribute pre-tax earnings to help subsidize student loan repayments for their employees, up to $5,250 per year per employee.

 

Student Tax Affordability and Relief Act
HR 4363 Sponsor:
Rep. Scott (R-GA, 8)
Co-Sponsors:
1 (1 R; 0 D)
Introduced:
1/11/2016
NASFAA Analysis & Coverage: This bill would exclude employer student loan payment assistance (up to $10,000) from the calculation of gross income.

 

Make Student Grants Truly Tax-Free Act
S. 2462 Sponsor:
Sen. Blumenthal (D-CT)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
1/21/2016
NASFAA Analysis & Coverage: This bill would exclude Pell Grants, TEACH Grants, and Iraq and Afghanistan Service Grants from the calculation of gross income. 

 

Stop Taxing Death and Disability Act
S. 2800 Sponsor:
Sen. Coons (D-DE)
Co-Sponsors:
17 (9 R; 7 D; 1 I)
Introduced:
4/14/2016
HR 5204 Sponsor:
Rep. Roskum (R-IL, 6)
Co-Sponsors:
17 (9 R; 8 D)
Introduced:
5/12/2016
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.
Status: 9/21/2016: Passed out of House Ways and Means Committee

 

Boost Saving for College Act
S. 2869 Sponsor:
Sen. Burr (R-NC)
Co-Sponsors:
5 (2 R; 3 D)
Introduced:
4/28/2016
NASFAA Analysis & Coverage: This bill looks to increase and modify the use of 529 plans for college savings. The bill would allow low- and middle-income families to use the Saver's Credit, currently available for contributions to retirement accounts, for contributions to 529 plans; encourage employers to match contributions to 529 plans the same way they can currently with retirement accounts; allow 529 plan savings not needed for college to rollover into an Roth IRA without tax penalty; and enable families with a disabled child to rollover funds in a 529 account to an ABLE account.

 

Help All Americans Save for College Act
HR 5186 Sponsor:
Rep. Poliquin (R-ME, 2)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
5/10/2016
NASFAA Analysis & Coverage: This bill would allow employees to deduct up to $5,000 per dependent from their federal taxes for money deposited into a 529 account, allow employers to match contributions tax-free, and change 529s into tax benefits.

 

HELP for Students and Parents Act
HR 5191 Sponsor:
Rep. Dold (R-IL, 10)
Co-Sponsors:
6 (2 R; 4 D)
Introduced:
5/11/2016
NASFAA Analysis & Coverage: This bill 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.

 

529 and ABLE Account Improvement Act
HR 5193 Sponsor:
Rep. Jenkins (R-KS, 2)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
5/11/2016
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.

 

Student Loan Employment Benefits Act Act
HR 5382 Sponsor:
Rep. Israel (D-NY, 3)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
6/3/2016
NASFAA Analysis & Coverage: This bill would exempt up to $5,000 per year paid by an employer on an employee’s student loans from the employee’s gross income for the purposes of income tax.

 

Middle Class College Tuition Tax Credit Expansion Act
HR 5383 Sponsor:
Rep. Israel (D-NY, 3)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
6/3/2016
NASFAA Analysis & Coverage: The bill would expand the American Opportunity Tax Credit (AOTC) from $2,500 to $5,000 per student per year. The bill would also change the maximum adjusted gross income for eligibility from $160,000 for a couple to $450,000, which would be modified annually based on a cost-of-living adjustment.

 

Helping Employers Lessen Payments for Students (HELPS) Act
HR 5415 Sponsor:
Rep. Stefanik (R-NY, 21)
Co-Sponsors:
2 (2 R; 0 D)
Introduced:
6/9/2016
NASFAA Analysis & Coverage: The bill would exclude up to $10,000 per year in education loan payments made by an employer on behalf of an employee from the calculation of gross income.

 

Student Loan Fairness Act 
HR 5487 Sponsor:
Rep. Bass (D-CA, 37)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
6/15/2016
NASFAA Analysis & Coverage: This bill would 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 excludes loan forgiveness under Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE) repayment plans from the calculation of gross income for the purposes of income tax.

 

Underwater Student Borrowers Act
HR 5617 Sponsor:
Rep. Pocan (D-WI, 2)
Co-Sponsors:
20 (0 R; 20 D)
Introduced:
7/1/2016
NASFAA Analysis & Coverage: This bill would exempt from the calculation of gross income any debt discharged as a result of federal loan forgiveness programs, discharged from an income-based or income-driven repayment plan, or discharged under other provisions, such as closed school discharge and Total and Permanent Disability loan discharge (TPD).

 

Fair Treatment of Scholarships Act
HR 5730 Sponsor:
Rep. Messer (R-IN, 6)
Co-Sponsors:
4 (0 R; 4 D)
Introduced:
7/12/2016
NASFAA Analysis & Coverage: This bill would exclude scholarships used to cover room and board costs from the calculation of gross income. The bill would also exclude up to $300 in scholarships for research expenses from gross income, adjusted annually for inflation.

 

Pell Grant Flexibility Act
HR 5764 Sponsor:
Rep. DeSaulnier (D-CA, 11)
Co-Sponsors:
6 (3 R; 3 D)
Introduced:
7/13/2016
NASFAA Analysis & Coverage: This bill would exclude Pell Grant awards from the calculation of gross income. 

 

Student Loan Tax Relief Act
S. 3266 Sponsor:
Sen. Menendez (D-NJ)
Co-Sponsors:
4 (0 R; 4 D)
Introduced:
7/14/2016
NASFAA Analysis & Coverage: This bill would exclude federal and private student loan forgiveness or discharge from the calculation of gross income.

 

Student Loan Repayment Act
HR 6191 Sponsor:
Rep. Ross (R-FL-15)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
9/27/2016

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.

 

American Opportunity Tax Credit Reform Act
HR 6237 Sponsor:
Rep. Davis (D-IL, 7)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
9/28/2016

NASFAA Analysis & Coverage: This measure would modify IRS code impacting the American Opportunity Tax Credit (AOTC) to allow Pell Grant dollars counted against qualified tuition and related expenses (QTRE) to be reduced by other cost of attendance components applicable to that student's institution not already included in the calculation of QTRE. In addition, this bill would exclude Pell Grant awards from the calculation of gross income for income tax purposes. 

 

To amend the Internal Revenue Code of 1986 to extend for one year the above-the-line deduction for qualified tuition and related expenses.
HR 6352 Sponsor:
Rep. Grayson (D-FL, 9)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
11/17/2016
NASFAA Analysis & Coverage: This bill would extend the above-the-line deduction for qualified tuition and related expenses, which expires in 2016, for one year.

 

To amend the Internal Revenue Code of 1986 to extend for two years the above-the-line deduction for qualified tuition and related expenses.
HR 6354 Sponsor:
Rep. Grayson (D-FL, 9)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
11/17/2016
NASFAA Analysis & Coverage: This bill would extend the above-the-line deduction for qualified tuition and related expenses, which expires in 2016, for two years.

 

Students and Families Empowerment Act
HR 6521 Sponsor:
Rep. Rice (D-NY, 4)
Co-Sponsors:
0 (0 R; 0 D)
Introduced:
12/8/2016
NASFAA Analysis & Coverage: This measure would exclude loan discharges under income contingent or income-based repayment plans from the calculation of gross income for income tax purposes. In addition, the bill would increase the deduction allowed for student loan interest. 

 

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Publication Date: 2/26/2019


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