,i #aaeth ,,congress #ast ,session ,h4 ,r4 #bja ,,in ,,the ,,house ,,of ,,representatives ,january #c1 #bjag,ms4 ,velzquez 7for herself1 ,mr4 ,serrano1 and ,mrs4 ,napolitano7 introduced the following bill2 which was referred to the ,committee on ,education and the ,workforce1 and in addition to the ,committees on ,financial ,services1 ,ways and ,means1 and ,small ,business1 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 amend the ,higher ,education ,act of #aife to provide loan deferment and loan cancellation for founders and employees of small business start-ups1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,supporting ,america's ,young ,entrepreneurs ,act of #bjag4 #b4 ,small business start-up employee loan deferment and cancellation 7a7 ,deferment ,section #dee7;f7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7f77 is amended-- 7#a7 in paragraph 7#a71 by striking ,a borrower of a loan and inserting ,except as provided in paragraph 7#e71 a borrower of a loan2 and 7#b7 by adding at the end the following3 7#e7 ,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 deferment1 during which periodic installments of principal and interest need not be paid1 during any period not in excess of #c years during which the borrower is employed as a founder of a small business start-up 7as defined in subsection 7r77#c774 4 7b7 ,loan cancellation ,section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7 is amended by adding at the end the following3 7r7 ,loan cancellation for certain small business start-,up employees 7#a7 ,founder of a small business start-up in a distressed area 7,a7 ,in general ,the ,secretary shall cancel #bj1jjj of the balance of interest and principal due1 in accordance with subparagraph 7,b71 on any eligible ,federal ,direct ,loan not in default for a borrower who-- 7i7 has made #bd 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 7d77#a7 or 7g72 7ii7 has been employed as a founder of a small business start-up in a distressed area during the period in which the borrower makes each of the #bd payments2 7iii7 is employed as a founder of a small business start-up in a distressed area at the time of such cancellation2 and 7iv7 is approved for loan cancellation by the young entrepreneurs business center under section #dg of the ,small ,business ,act 7#af ,u4,s4,c4 #fca et seq474 7,b7 ,loan cancellation amount 7i7 ,in general ,after the conclusion of the employment period described in subparagraph 7,a71 the ,secretary shall cancel the obligation to repay #bj1jjj of the balance of interest and principal due as of the time of such cancellation1 on the eligible ,federal ,direct ,loans made to the borrower under this part4 7ii7 ,limitation ,a borrower may not receive an aggregate amount of more than #bj1jjj under this subparagraph4 7,c7 ,ineligibility for double benefits ,no borrower may1 for the same service1 receive a reduction of loan obligations under both this paragraph and-- 7i7 paragraph 7#b72 7ii7 subsection 7m72 or 7iii7 section #dbh;,j1 #dbh,k1 #dbh,l1 or #dfj4 7#b7 ,employee of a small business start-up 7,a7 ,in general ,the ,secretary shall cancel #c1jjj of the balance of interest and principal due1 in accordance with subparagraph 7,b71 on any eligible ,federal ,direct ,loan not in default for a borrower who-- 7i7 has made #ab 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 7d77#a7 or 7g72 7ii7 has been employed in a small business start-up job during the period in which the borrower makes each of the #ab payments2 and 7iii7 is employed in a small business start-up job at the time of such cancellation4 7,b7 ,loan cancellation amount 7i7 ,in general ,after the conclusion of the employment period described in subparagraph 7,a71 the ,secretary shall cancel the obligation to repay #c1jjj of the balance of interest and principal due as of the time of such cancellation1 on the eligible ,federal ,direct ,loans made to the borrower under this part4 7ii7 ,limitation ,a borrower may not receive an aggregate amount of more than #ae1jjj under this subparagraph4 7,c7 ,ineligibility for double benefits ,no borrower may1 for the same service1 receive a reduction of loan obligations under both this paragraph and-- 7i7 paragraph 7#a72 7ii7 subsection 7m72 or 7iii7 section #dbh;,j1 #dbh,k1 #dbh,l1 or #dfj4 7#c7 ,definitions ,in this subsection3 7,a7 ,distressed area ,the term distressed area means an area identified under section #dg of the ,small ,business ,act 7#af ,u4,s4,c4 #fca et seq474 7,b7 ,eligible ,federal ,direct ,loan ,the term eligible ,federal ,direct ,loan means a ,federal ,direct ,stafford ,loan1 ,federal ,direct ,,plus ,loan1 or ,federal ,direct ,unsubsidized ,stafford ,loan1 or a ,federal ,direct ,consolidation ,loan4 7,c7 ,founder ,the term founder shall have the meaning given such term by the ,administrator of the ,small ,business ,administration under this paragraph4 7,d7 ,small business start-up ,the term small business start-up means a business that is certified by the young entrepreneurs business center under section #dg of the ,small ,business ,act 7#af ,u4,s4,c4 #fca et seq474 7,e7 ,small business start-up job ,the term small business start-up job means a full-time job as an employee of a small business start-up4 4 #c4 ,loan refinancing 7a7 ,in general ,part ,d of title ,,iv of the ,higher ,education ,act of #aife is amended by adding at the end the following3 #dfj4 ,federal ,direct ,refinanced ,private ,loan program 7a7 ,definitions ,in this section3 7#a7 ,eligible private education loan ,the term eligible private education loan means a private education loan1 as defined in section #adj7;a7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afej7;a771 that was for the borrower's own postsecondary educational expenses for an eligible program at an institution of higher education participating in the loan program under this part1 as of the date that the loan was disbursed4 7#b7 ,federal ,direct ,refinanced ,private ,loan ,the term ,federal ,direct ,refinanced ,private ,loan means a loan issued under subsection 7b77#a74 7#c7 ,private educational lender ,the term private educational lender has the meaning given the term in section #adj7;a7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afej7;a774 7#d7 ,qualified borrower ,the term qualified borrower means an individual who-- 7,a7 has an eligible private education loan2 7,b7 has been current on payments on the eligible private education loan for the #f months prior to the date of the qualified borrower's application for refinancing under this section1 and is in good standing on the loan at the time of such application2 7,c7 is not in default on the eligible private education loan or on any loan made1 insured1 or guaranteed under this part or part ,b or ,e2 and 7,d7 meets the eligibility requirements described in subsection 7b77#b74 7b7 ,program authorized 7#a7 ,in general ,the ,secretary1 in consultation with the ,secretary of the ,treasury1 shall carry out a program under which the ,secretary1 upon application by a qualified borrower who has an eligible private education loan1 shall issue such borrower a loan under this part in accordance with the following3 7,a7 ,the loan issued under this program shall be in an amount equal to the sum of the unpaid principal1 accrued unpaid interest1 and late charges of the private education loan4 7,b7 ,the ,secretary shall pay the proceeds of the loan issued under this program to the private educational lender of the private education loan1 in order to discharge the qualified borrower from any remaining obligation to the private educational lender with respect to the original private education loan4 7,c7 ,the ,secretary shall require that the qualified borrower undergo loan counseling that provides all of the information and counseling required under clauses 7i7 through 7viii7 of section #dhe7;b77#a77;,a7 before the loan is refinanced in accordance with this section1 and before the proceeds of such loan are paid to the private educational lender4 7,d7 ,the ,secretary shall issue the loan as a ,federal ,direct ,refinanced ,private ,loan1 which shall have the same terms1 conditions1 and benefits as a ,federal ,direct ,subsidized ,loan1 except as otherwise provided in this section4 7#b7 ,borrower eligibility ,not later than #ahj days after the date of the enactment of this section1 the ,secretary1 in consultation with the ,secretary of the ,treasury and the ,director of the ,bureau of ,consumer ,financial ,protection1 shall establish eligibility requirements-- 7,a7 to ensure eligibility only for qualified borrowers in good standing2 7,b7 to minimize inequities between ,federal ,direct ,refinanced ,private ,loans and other ,federal student loans2 7,c7 to preclude windfall profits for private educational lenders2 and 7,d7 to ensure full access to the program authorized in this subsection for borrowers with private loans who otherwise meet the criteria established in accordance with subparagraphs 7,a7 and 7,b74 7c7 ,interest rate 7#a7 ,in general ,the interest rate for a ,federal ,direct ,refinanced ,private ,loan is1 in the case a private education loan originally issued for undergraduate1 graduate1 or professional degree posts econdary educational expenses1 a rate equal to the rate for ,federal ,direct ,subsidized ,stafford ,loans issued to undergraduate students for the #ab-month period beginning on ,july #a1 #bjaf1 and ending on ,june #cj1 #bjag4 7#b7 ,fixed ,rate ,the applicable rate of interest determined under this subsection for a ,federal ,direct ,refinanced ,private ,loan shall be fixed for the period of the loan4 7d7 ,treatment of loans ,nothing in this section shall affect the ability of a borrower to qualify for loan repayment under a repayment plan under subsection 7d77#a7 or 7g7 of section #dee4 4 7b7 ,notice of potential eligibility ,section #abh7;e7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afch7;e77 is amended by adding at the end the following new paragraph3 7#ab7 ,notice required along with billing statements ,along with each billing statement sent to the borrower1 the private educational lender shall include a statement informing the borrower that the borrower may be eligible for the ,federal ,direct ,refinanced ,private ,loan program established under section #dfj of the ,higher ,education ,act of #aife4 4 #d4 ,young entrepreneurs business center ,the ,small ,business ,act 7#ae ,u4,s4,c4 #fca et seq47 is amended-- 7#a7 by redesignating section #dg as section #dh2 and 7#b7 by inserting after section #df the following3 #dg4 ,young entrepreneurs business center 7a7 ,establishment ,there is established within the ,administration a young entrepreneurs business center that shall1 for purposes of loan cancellation for start-up employees established under subsection 7r7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7-- 7#a7 certify small business start-ups under subsection 7b72 7#b7 identify distressed areas under subsection 7c72 and 7#c7 approve loan cancellation for founders of small business start-ups in distressed areas under subsection 7d74 7b7 ,certification 7#a7 ,application ,to be certified by the young entrepreneurs business center1 a small business start-up shall submit an application to the ,administrator that includes-- 7,a7 a #e-year business plan for such small business start-up2 and 7,b7 the number of employees the small business start-up intends to employ on a yearly basis4 7#b7 ,requirements ,the young entrepreneurs business center may not certify a small business start-up unless such small business start-up1 on the date the application is submitted under paragraph 7#a7-- 7,a7 has a founder who is a recent graduate of a #d-year institution of higher education2 7,b7 is a start-up for which at least #ej percent of the employees of the start-up are recent graduates of such an institution4 7c7 ,distressed area 7#a7 ,in general ,not less than once every #c years after the date of the enactment of this section1 the young entrepreneurs business center shall identify and make publically available on the website of the ,administration a list of distressed areas4 7#b7 ,requirements ,a distressed area identified under paragraph 7#a7 shall be a county or equivalent division of local government of a ,state in which the small business concern is located that-- 7,a7 has1 for the most recent #bd-month period for which statistics are available-- 7i7 a per capita income of #hj percent or less of the national average2 or 7ii7 an unemployment rate that is #a percent greater than the national average2 and 7,b7 the young entrepreneurs business center determines would economically benefit from having small business start-ups established in such area4 7d7 ,loan cancellation for founders of a small business start-,up in a distressed area ,for purposes of loan cancellation under subsection 7r77#a7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7 the young entrepreneurs business center shall approve a founder of a small business start-up in a distressed area if such founder-- 7#a7 established a small business start-up that-- 7,a7 on the date such small business start-up was established1 was located in a distressed area identified by the young entrepreneurs business center under subsection 7c7 not more than #c years before such date of establishment2 7,b7 was certified under subsection 7b72 and 7,c7 on the date of approval under this subsection1 has been operating continuously for not less than #e years2 and 7#b7 was employed as a founder of a small business start-up in a distressed area during the period in which such founder made the #bd payments described in subsection 7r77#a77;,a7 of such section #dee4 7e7 ,definitions ,in this section3 7#a7 ,institution of higher education ,the term institution of higher education has the meaning given such term in section #ajb of the ,higher ,education ,act 7#bj ,u4,s4,c4 #ajjb74 7#b7 ,small business start-up ,the term small business start-up means a small business concern that-- 7,a7 is not yet in existence2 or 7,b7 has been in existence for not more than #c years4 4 #e4 ,treatment of loan cancellation 7a7 ,in general ,section #ajh7;f7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#e7 ,cancellation of certain ,federal student loans ,in the case of an individual1 gross income shall not include the discharge 7in whole or in part7 of any student loan pursuant to the cancellation 7in whole or in part7 of such loan by the ,secretary of ,education under subsection 7r7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e74 4 7b7 ,effective date ,the amendment made by this section shall apply to discharges of indebtedness occurring after the date of the enactment of this ,act4