Short title

This Act may be cited as the

Teacher Loan Forgiveness Enhancement Act

Public school teacher loan forgiveness for undergraduate loans

Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by adding at the end the following:

494A.

Public school teacher loan forgiveness for undergraduate loans

(a)

In general

The Secretary shall forgive, in accordance with this section, the eligible Federal undergraduate loans of a borrower who has been employed full-time as a public school teacher for at least 8 consecutive years. (b)

Method of loan forgiveness

To forgive eligible Federal undergraduate loans under this section, the Secretary shall carry out a program— (1)through the holder of the loan, to assume the obligation to repay such a loan that is made, insured, or guaranteed under part B of this title; (2)to cancel such a loan that is made under this part; and (3)to cancel such a loan made under part E, and to make payments to institutions of higher education for an amount equal to the aggregate of the amounts of loans from its student loan fund which are canceled pursuant to this section, in accordance with the requirements of section 465(b). (c)

Loan forgiveness amounts

Upon completion by a borrower of the 8 consecutive years of employment described in subsection (a), the Secretary shall forgive, in accordance with subsection (b), the balance of principal and interest due as of the time of such forgiveness, on the eligible Federal undergraduate loans of the borrower. (d)

Loan forgiveness not taxable income

The amount of a loan, including interest on a loan, forgiven under this section shall not be considered income for purposes of the Internal Revenue Code of 1986. (e)

Double benefits authorized

An borrower may, for the same service, receive a benefit under both this section and— (1)section 428K; (2)section 460; (3)section 455(m); or (4)subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.). (f)

Definitions

In this section: (1)

Eligible Federal undergraduate loan

The term eligible Federal undergraduate Loan means any loan made, insured, or guaranteed under part B, this part, or part E that is attributable to an undergraduate course or program of study. (2)

ESEA terms

The terms elementary school and secondary school have the meanings given such terms in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801). (3)

Public school teacher

The term public school teacher means a teacher at a public elementary school or public secondary school.

Deferment for public school teachers

(a)

Federal direct loans

Section 455(f) of the Higher Education Act of 1965 (20 U.S.C. 1087e(f)) is amended— (1)by redesignating paragraphs (6) and (7) as paragraphs (7) and (8), respectively; and (2)by inserting after paragraph (5) the following:

(6)

Deferment for borrowers while serving as a public school teacher

(A)

Effect on principal and interest

A borrower of a loan made under this part who meets the requirements of subparagraph (B) shall be eligible for a deferment, during which periodic installments of principal need not be paid, and interest shall not accrue. (B)

Eligibility

A borrower of a loan made under this part shall be eligible for a deferment during— (i)any period in which such borrower is serving as a public school teacher (as defined in section 494A); and (ii)the 6 months after such period. (C)

Applicability

This paragraph shall apply with respect to loans— (i)made on or after the date of the enactment of this paragraph; or (ii)in repayment on the date of the enactment of this paragraph.

(b)

FFEL Loans

(1)Section 427(a)(2)(C) of the Higher Education Act of 1965 (20 U.S.C. 1077(a)(2)(C)) is amended— (A)in clause (iii), by striking or at the end; (B)in clause (iv), by striking the period at the end and inserting ; or; and (C)by inserting after clause (iv), as so amended, the following:

(v)during which the borrower is serving as a public school teacher (as defined in section 494A) and the 6 months after such period;

(2)Section 428(b)(1)(M) of the Higher Education Act of 1965 (20 U.S.C. 1077(b)(1)(M)) is amended— (A)in clause (iv), by striking or at the end; (B)in clause (v), by inserting or at the end; and (C)by adding at the end the following:

(vi)during which the borrower is serving as a public school teacher (as defined in section 494A) and the 6 months after such period;

(c)

Perkins Loans

Section 464(c)(2)(A) of the Higher Education Act of 1965 (20 U.S.C. 1087dd(c)(2)(A))— (1)in clause (v), by striking or at the end; (2)in clause (vi), by adding or at the end; and (3)by inserting after clause (vi), as so amended, the following:

(vii)during which the borrower is serving as a public school teacher (as defined in section 494A) and the 6 months after such period;

Authorization of disclosure by Secretary of the Treasury

(a)

In general

Section 6103(l)(13) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(G)

Public teacher loan forgiveness

The Secretary shall, upon written request from the Secretary of Education, disclose to any authorized person, only for the purpose of (and to the extent necessary in) discharging loans under section 494A the Higher Education Act of 1965, the following return information from returns (for any taxable year specified by the Secretary of Education as relevant to such purpose) of an individual: (i)The return information described in clauses (i) and (vi) of subparagraph (A). (ii)The employer identification number of each employer employing the individual during a specified taxable year. (iii)Verification of whether an individual was employed by an employer during a specified taxable year. (iv)The name of each employer employing the individual during a specified taxable year. (v)The type indicator of the employer employing the individual during a specified taxable year.

(b)

Conforming amendments

(1)Section 6103(p) of such Code is amended— (A)in paragraph (3)(A), by inserting (13)(G), before (14), and (B)in paragraph (4) by inserting (13)(G), after (13)(D)(i), each place it appears. (2)Section 7213(a)(2) of such Code is amended by inserting (13)(G), after (10), (12),. (c)

Effective date

The amendments made by this section shall apply to disclosures made on or after the date of the enactment of this Act.