,i #aacth ,,congress #b;d ,session ,h4 ,r4 #ecii ,,in ,,the ,,house ,,of ,,representatives ,august #a1 #bjad ,mr4 ,peters of ,california 7for himself and ,mr4 ,vargas7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,education and the ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to modify the grace period prior to the repayment period for certain ,federal direct loans and to exclude from ,federal income taxation certain employer-provided student loan assistance4 #a4 ,short title ,this ,act may be cited as the ,student ,loan ,repayment ,assistance ,act of #bjad4 #b4 ,restoration and an option to extend the start of the repayment period of certain ,federal direct loans 7a7 ,restoration of interest subsidy during first #f-,month grace period ,section #dbh7;a77#c77;,a77i77,i7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgh7;a77#c77;,a77i77,i77 is amended by inserting or1 for a ,federal ,direct ,stafford ,loan for which the first disbursement is made on or after ,july #a1 #bjac1 which accrues prior to the beginning of the repayment period of the loan 7except for interest which accrues during the last #f months prior to the beginning of such period1 in the case of a student who makes an election under section #b7;b77#b7 of the ,student ,loan ,repayment ,assistance ,act of #bjad71 before 1 or4 7b7 ,grace-,period extension 7#a7 ,amendment ,section #dbh7;b77#g7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgh7;b77#g77 is amended-- 7,a7 in subparagraph 7,a71 by inserting or1 in the case of a student who makes an election under section #b7;b77#b7 of the ,student ,loan ,repayment ,assistance ,act of #bjad1 #ab months after #f months2 and 7,b7 in subparagraph 7,d71 by inserting or1 in the case of a student who makes an election under section #b7;b77#b7 of the ,student ,loan ,repayment ,assistance ,act of #bjad1 the #ab-month period after #f-month period4 7#b7 ,election of extended grace period for certain ,,fdsl and ,,fdus ,loans ,if the unemployment rate calculated by the ,bureau of ,labor ,statistics is greater than the natural rate of unemployment 7as established by the ,board of ,governors of the ,federal ,reserve ,system71 the ,secretary of ,education shall provide an opportunity for each borrower who has a ,federal ,direct ,stafford ,loan or ,federal ,direct ,unsubsidized ,stafford ,loan for which the first disbursement is made on or after ,july #a1 #bjac1 to elect a #ab-month grace period1 in accordance with section #dbh7;b77#g7 of the ,higher ,education ,act of #aife1 as amended by this subsection1 before beginning repayment4 ,the ,secretary shall-- 7,a7 notify each such borrower of the opportunity for such an election not later than #de days before the start of the borrower's repayment period1 as determined under section #dbh7;b77#g7 of the ,higher ,education ,act of #aife as in effect on the day before the date of enactment of this ,act2 7,b7 advise each such borrower of the financial consequences of electing such #ab-month grace period2 and 7,c7 not require such a borrower to accept a #ab-month grace period in accordance with section #dbh7;b77#g7 of the ,higher ,education ,act of #aife 7as amended by this subsection71 unless the borrower specifically elects such #ab-month grace period not later than #ad days before the start of the borrower's repayment period1 as determined under section #dbh7;b77#g7 of the ,higher ,education ,act of #aife as in effect on the day before the date of enactment of this ,act4 #c4 ,exclusion from gross income of benefits under certain student loan payment assistance programs 7a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #abg the following new section3 #abg;,a4 ,student loan payment assistance programs 7a7 ,in general ,gross income of a qualified employee does not include amounts paid or incurred by the employer for student loan payment assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection 7c74 7b7 ,qualified employee ,for purposes of this subsection1 the term qualified employee means any employee who contributes 7in addition to any amount excluded from gross income under this section7 not less than #ej per month for payment of principal and interest on the loans subject to the student loan payment assistance program4 7c7 ,limitations 7#a7 ,assistance limitation ,the amount taken into account under subsection 7a7 with respect to an individual for student loan assistance with respect to student loan payments during a taxable year shall not exceed #f1jjj4 7#b7 ,earned income limitation ,the amount excluded from the income of an employee under subsection 7a7 for any taxable year shall not exceed the earned income of such employee for such taxable year4 7d7 ,student loan payment assistance program 7#a7 ,in general ,for purposes of this section a student loan payment assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with student loan payment assistance which meets the requirements of paragraphs 7#b7 through 7#aj7 of this subsection4 ,if any plan would qualify as a student loan payment assistance program but for a failure to meet the requirements of this subsection1 then1 notwithstanding such failure1 such plan shall be treated as a student loan payment assistance program in the case of employees who are not highly compensated employees4 7#b7 ,discrimination ,the contributions or benefits provided under the plan shall not discriminate in favor of employees who are highly compensated employees 7within the meaning of section #dad7q774 7#c7 ,eligibility ,the program shall benefit employees who qualify under a classification set up by the employer and found by the ,secretary not to be discriminatory in favor of employees described in paragraph 7#b74 7#d7 ,principal shareholders or owners ,not more than #be percent of the amounts paid or incurred by the employer for student loan payment assistance during the year may be provided for the class of individuals who are shareholders or owners 7or their spouses or dependents71 each of whom 7on any day of the year7 owns more than #e percent of the stock or of the capital or profits interest in the employer4 7#e7 ,no funding required ,a program referred to in paragraph 7#a7 is not required to be funded4 7#f7 ,notification of eligible employees ,reasonable notification of the availability and terms of the program shall be provided to eligible employees4 7#g7 ,statement of expenses ,the plan shall furnish to an employee1 on or before ,january #ca1 a written statement showing the amounts paid or expenses incurred by the employer in providing student loan payment assistance to such employee during the previous calendar year4 7#h7 ,benefits 7,a7 ,in general ,a plan meets the requirements of this paragraph if the average benefits provided to employees who are not highly compensated employees under all plans of the employer is at least #ee percent of the average benefits provided to highly compensated employees under all plans of the employer4 7,b7 ,salary reduction agreements ,for purposes of subparagraph 7,a71 in the case of any benefits provided through a salary reduction agreement1 a plan may disregard any employees whose compensation is less than #be1jjj4 ,for purposes of this subparagraph1 the term compensation has the meaning given such term by section #dad7q77#d71 except that1 under rules prescribed by the ,secretary1 an employer may elect to determine compensation on any other basis which does not discriminate in favor of highly compensated employees4 7#i7 ,contributions made directly to lender ,a plan meets the requirements of this paragraph if all benefits provided under the plan are paid directly to the holder of the indebtedness referred to in subsection 7d77#a77;,a77i74 7#aj7 ,matching contributions ,a plan which meets the requirements of paragraphs 7#b7 through 7#i7 shall not fail to be treated as a program described in this subsection merely because such plan provides for the employer to make matching contributions with respect to employee contributions4 7e7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,student loan payment assistance 7,a7 ,in general ,the term student loan payment assistance means the payment of principal or interest on-- 7i7 any indebtedness incurred by the employee solely to pay qualified higher education expenses 7as defined in section #bba7 which-- 7,i7 are paid or incurred within a reasonable period of time before or after the indebtedness was incurred1 and 7,,ii7 are attributable to education furnished during a period during which the employee was an eligible student1 or 7ii7 any indebtedness used to refinance indebtedness described in clause 7i74 ,such term shall not include any payment of principal or interest on indebtedness owed to a person who is related 7within the meaning of section #bfg7;b7 or #gjg7;b77#a77 to the taxpayer or to any person by reason of a loan under any qualified employer plan 7as defined in section #gb7p77#d77 or under any contract referred to in section #gb7p77#e74 7,b7 ,eligible student ,the term eligible student has the meaning given such term by section #be;,a7b77#c74 7,c7 ,dependent ,the term dependent has the meaning given such term by section #aeb 7determined without regard to subsections 7b77#a71 7b77#b71 and 7d77#a77;,b7 thereof74 7#b7 ,earned income ,the term earned income shall have the meaning given such term in section #cb7;c77#b71 but such term shall not include any amounts paid or incurred by an employer for student loan payment assistance to an employee4 7#c7 ,employee ,the term employee includes1 for any year1 an individual who is an employee within the meaning of section #dja7;c77#a7 7relating to self-employed individuals74 7#d7 ,employer ,an individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer4 ,a partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph 7#c74 7#e7 ,attribution rules 7,a7 ,ownership of stock ,ownership of stock in a corporation shall be determined in accordance with the rules provided under subsections 7d7 and 7e7 of section #aefc 7without regard to section #aefc7;e77#c77;,c774 7,b7 ,interest in unincorporated trade or business ,the interest of an employee in a trade or business which is not incorporated shall be determined in accordance with regulations prescribed by the ,secretary1 which shall be based on principles similar to the principles which apply in the case of subparagraph 7,a74 7#f7 ,utilization test not applicable ,a student loan payment assistance program shall not be held or considered to fail to meet any requirements of subsection 7c7 7other than paragraphs 7#d7 and 7#h7 thereof7 merely because of utilization rates for the different types of assistance made available under the program4 7#g7 ,disallowance of excluded amounts as credit or deduction ,no deduction or credit shall be allowed to the employee under any other section of this chapter for any amount excluded from the gross income of the employee by reason of this section4 7#h7 ,treatment of salary reduction amounts ,any matching contribution withheld from an employee under a student loan payment assistance program pursuant to a salary reduction agreement shall be treated for purposes of this title as an amount paid by the employee and not as an amount paid by the employer4 4 7b7 ,conforming amendments ,sections #bba7;d77#b77;,a71 #dad 7n77#c77;,c7 and 7t77#b71 #caba7;a77#ah71 #ccjf7;b77#ac71 #cdja7;a77#ah71 and #fjci;,d7d77#a7 of such ,code are each amended by inserting #abg;,a1 after #abg14 7c7 ,clerical amendment ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting after the item relating to section #abg the following new item3 ,sec4 #abg;,a4 ,student loan payment assistance programs4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #d4 ,deduction for student loan payments which are matched by an employer 7a7 ,in general ,part ,,vii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by redesignating section #bbd as section #bbe and by inserting after section #bbc the following new section3 #bbd4 ,deduction for student loan payments which are matched by an employer 7a7 ,in general ,in the case of an individual who is a qualified employee 7as defined in section #abg;,a71 there shall be allowed as a deduction an amount equal to the student loan payments made by such individual with respect to which an employer of such individual makes matching contributions under a student loan payment assistance program which are excludible from the gross income of such employee under section #abg;,a4 7b7 ,annual limitation ,the amount allowable as a deduction under subsection 7a7 with respect to any individual for any taxable year shall not exceed #f1jjj4 7c7 ,lifetime limitation ,the amount allowable as a deduction under subsection 7a7 with respect to any individual for any taxable year shall not exceed the excess of-- 7#a7 #ej1jjj1 over 7#b7 the aggregate amount allowable as a deduction under subsection 7a7 with respect to such individual for all prior taxable years4 7d7 ,denial of double benefit ,any amount excluded from the gross income of an individual under section #abg;,a shall not be treated as an amount paid by such individual for purposes of this section4 ,the amount of principal and interest with respect to which a deduction is allowed under this section shall not be taken into account in determining the amount of any other deduction or credit allowed under this chapter4 4 7b7 ,clerical amendment ,the table of sections for part ,,vii of subchapter ,b of chapter #a of such ,code is amended by redesignating the item relating to section #bbd as an item relating to section #bbe and by inserting after the item relating to section #bbc the following new item3 ,sec4 #bbd4 ,deduction for student loan payments which are matched by an employer4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4