,,ii #aafth ,,congress #b;d ,session ,s4 #dijc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #ag1 #bjbj,ms4 ,hassan introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,higher ,education ,act of #aife to encourage entrepreneurship by providing loan deferment and loan cancellation for founders and employees of small business startups1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,reigniting ,opportunity for ,innovators ,act4 #b4 ,small business startup founder and employee loan deferment and cancellation 7a7 ,deferment without interest accrual for small business startup founders and employees ,section #dee7;f7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7f77 is amended-- 7#a7 by redesignating paragraphs 7#d7 and 7#e7 as paragraphs 7#e7 and 7#f71 respectively2 and 7#b7 by inserting after paragraph 7#c7 the following3 7#d7 ,deferment without interest accrual for small business startup founders and employees 7,a7 ,in general ,subject to subparagraph 7,b71 a qualifying small business startup borrower shall be eligible for a deferment1 during which periodic installments of principal need not be paid and interest shall not accrue1 during any period while the borrower is employed as a founder or full-time employee of a small business startup4 7,b7 ,limitations ,a qualifying small business startup borrower shall not receive a deferment under this paragraph for any period-- 7i7 in excess of #c years2 or 7ii7 that begins more than #e years1 or ends more than #h years1 after the date the small business startup was established 7as determined by the small business development center that approved such borrower under section #ba7o77#e7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#e7774 7,c7 ,definitions ,in this paragraph-- 7i7 the terms founder1 full-time employee1 and small business startup have the meanings given the terms in subsection 7r77#b72 and 7ii7 the term qualifying small business startup borrower means a borrower of a loan made under this part whose employment as a small business startup founder or full-time employee is approved by a small business development center under section #ba7o77#e7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#e774 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 founders and employees of small business startups in distressed areas 7#a7 ,loan cancellation 7,a7 ,in general ,the ,secretary shall cancel the balance of interest and principal due1 subject to subparagraph 7,b71 on any eligible ,federal ,direct ,loan not in default for a borrower who-- 7i7 at the time of such cancellation1 is employed as a founder or full-time employee of a small business startup in a distressed area who-- 7,i7 has been approved for loan cancellation by a small business development center under section #ba7o77#f7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#f772 and 7,,ii7 began such employment during the #e-year period beginning on the date that the small business startup was established 7as determined by such small business development center72 and 7ii7 during the time period for which the borrower has been approved by the small business development center1 which in no case shall be more than #aj years after the date on which the small business startup was established1 has made #bd monthly payments on the eligible ,federal ,direct ,loan pursuant to any repayment plan under subsection 7d77#a7 or a combination of such plans while so employed4 7,b7 ,loan cancellation maximum ,the ,secretary shall cancel under this subsection not more than an aggregate of #bj1jjj of the loan obligation on the eligible ,federal ,direct ,loans of a borrower4 7,c7 ,timing requirements ,each of the #bd monthly payments required under this subsection shall be made after the date of enactment of this subsection4 7,d7 ,ineligibility for double benefits ,no borrower may1 for the same service1 receive a reduction of loan obligations under both this subsection and-- 7i7 subsection 7m72 or 7ii7 section #dbh;,j1 #dbh,k1 #dbh,l1 or #dfj4 7#b7 ,definitions ,in this subsection3 7,a7 ,distressed area ,the term distressed area has the meaning given the term in section #ba7o77#a7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#a774 7,b7 ,eligible ,federal direct loan ,the term eligible ,federal ,direct ,loan means a ,federal ,direct ,stafford ,loan1 ,federal ,direct ,,plus ,loan1 ,federal ,direct ,unsubsidized ,stafford ,loan1 or a ,federal ,direct ,consolidation ,loan4 7,c7 ,founder2 full-time employee ,the terms founder and full-time employee have the meanings given the terms in section #ba7o77#a7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#a774 7,d7 ,small business startup ,the term small business startup means a business that is certified by a small business development center under section #ba7o77#c7 of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7o77#c774 4 7c7 ,conforming amendments ,title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a et seq47 is further amended-- 7#a7 in section #dbh;,j7g77#b71 by striking section #dee7m7 and inserting subsection 7m7 or 7r7 of section #dee2 7#b7 in section #dbh,k7f7-- 7,a7 by inserting subsection 7m7 or 7r7 of section #dee or before section #dbh;,j2 and 7,b7 by striking #dee7m72 7#c7 in section #dbh,l7g71 by striking #dee7m7 and inserting subsection 7m7 or 7r7 of section #dee2 7#d7 in section #dee7m77#d71 by inserting subsection 7r7 or before section #dbh;,j2 and 7#e7 in section #dfj7;g77#b77;,b71 by striking section #dee7m7 and inserting subsection 7m7 or 7r7 of section #dee4 #c4 ,small business development centers ,section #ba of the ,small ,business ,act 7#ae ,u4,s4,c4 #fdh7 is amended-- 7#a7 in subsection 7c77#c7-- 7,a7 in subparagraph 7,t71 by striking and at the end2 7,b7 in the first subparagraph 7,u7 7relating to encouraging and assisting the provision of succession planning71 by striking the period at the end of clause 7v7 and inserting a semicolon2 7,c7 in the second subparagraph 7,u7 7relating to providing training in conjunction with the ,united ,states ,patent and ,trademark ,office7-- 7i7 by redesignating that subparagraph as subparagraph 7,v72 and 7ii7 in clause 7ii77,,ii71 by striking the period at the end and inserting a semicolon2 and 7,d7 by adding at the end the following3 7,w7 certifying small business startups under subsection 7o77#c72 and 7,x7 approving loan deferment or cancellation under paragraph 7#e7 or 7#f7 of subsection 7o7 for founders and full-time employees of certain small business startups1 as those terms are defined in paragraph 7#a7 of that subsection4 2 and 7#b7 by adding at the end the following3 7o7 ,deferment or cancellation of certain loans 7#a7 ,definitions ,in this subsection-- 7,a7 the term distressed area has the meaning given the term low-income community in section #de;,d7e7 of the ,internal ,revenue ,code of #aihf2 7,b7 the term eligible ,federal ,direct ,loan has the meaning given the term in section #dee7r77#b7 of the ,higher ,education ,act of #aife2 7,c7 the terms founder and full-time employee1 with respect to a small business startup1 have the meanings given the terms by the ,administrator2 and 7,d7 the term small business startup means a small business concern that1 as of the date that the small business concern submits an application under paragraph 7#c71 has been in existence for not more than #c years4 7#b7 ,role of small business development centers ,any small business development center may1 for purposes of eligible ,federal ,direct ,loan deferment or cancellation under subsection 7f77#d7 or 7r7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7-- 7,a7 certify a small business startup under paragraph 7#c72 and 7,b7 approve eligible ,federal ,direct ,loan deferment or cancellation for a founder or full-time employee of a qualifying small business startup under paragraph 7#e7 or 7#f74 7#c7 ,certification ,in order to be certified by a small business development center1 a small business startup shall submit to the small business development center an application that includes-- 7,a7 a #e-year business plan for the small business startup2 7,b7 the number of employees that the small business startup intends to employ on an annual basis2 and 7,c7 information that demonstrates that the small business startup has the potential for success4 7#d7 ,publication of distressed areas ,not less frequently than once every #c years beginning after the date of enactment of this subsection1 the ,administrator shall identify and make publically available on the website of the ,administration a list of distressed areas4 7#e7 ,loan deferment for founders and full-time employees of a small business startup 7,a7 ,application ,in order to be approved by a small business development center for eligible ,federal ,direct ,loan deferment under subsection 7f77#d7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e71 a borrower of an eligible ,federal ,direct ,loan shall submit to the small business development center an application that includes such information as the ,administrator may require4 7,b7 ,requirements ,a small business development center shall approve a borrower who applies under subparagraph 7,a7 for eligible ,federal ,direct ,loan deferment if the small business development center determines that-- 7i7 the borrower is1 as of the date on which the application is submitted1 a founder or full-time employee of a small business startup that is certified under paragraph 7#c72 and 7ii7 the employment of the borrower with the small business startup began during the #e-year period beginning on the date on which the small business startup was established4 7#f7 ,loan cancellation for founders and full-time employees of a small business startup in a distressed area 7,a7 ,application ,in order to be approved by a small business development center for eligible ,federal ,direct ,loan cancellation under subsection 7r7 of section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e71 a borrower of an eligible ,federal ,direct ,loan shall submit to the small business development center an application that includes such information as the ,administrator may require1 including an identification of the time period during which the borrower has made #bd monthly payments on the eligible ,federal ,direct ,loan1 as required under subparagraphs 7,a77ii7 and 7,c7 of paragraph 7#a7 of such subsection 7r74 7,b7 ,requirements ,a small business development center shall approve a borrower who applies under subparagraph 7,a7 for eligible ,federal ,direct ,loan cancellation if the small business development center determines that the borrower-- 7i7 as of the date on which the application is submitted1 is employed as a founder or full-time employee of a small business startup that-- 7,i7 is located in an area that was a distressed area not more than #c years before the date on which the small business startup was established2 7,,ii7 is certified under paragraph 7#c7 by the small business development center2 and 7,,iii7 as of the date on which the small business development center approves the borrower under this paragraph1 has been operating continuously for not less than #e years and not more than #aj years2 and 7ii7 was employed as a founder or a full-time employee by a small business startup described in clause 7i7 during a period beginning not more than #e years after the date on which the small business startup was established1 as identified by the borrower under subparagraph 7,a74 4 #d4 ,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 following3 7#f7 ,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 subsection 7a7 shall apply to discharges of indebtedness occurring after the date of enactment of this ,act4