[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2765 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2765

 To expand the teacher loan forgiveness programs under the guaranteed 
       and direct student loan programs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 2001

  Mr. Inslee (for himself, Mr. Hastings of Florida, Mr. Hinchey, Mrs. 
 Mink of Hawaii, Mr. Crowley, Mr. Schiff, Mr. McDermott, Ms. McKinney, 
 and Ms. Lee) introduced the following bill; which was referred to the 
   Committee on Education and the Workforce, and in addition to the 
Committee on Ways and Means, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To expand the teacher loan forgiveness programs under the guaranteed 
       and direct student loan programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Teachers For Tomorrow Act of 2001''.

SEC. 2. REVISION OF TEACHER LOAN FORGIVENESS PROGRAMS.

    (a) Guaranteed Student Loans.--Part B of title IV of the Higher 
Education Act of 1965 is amended by--
            (1) redesignating section 428K (20 U.S.C. 1078-11) as 
        section 428L; and
            (2) by inserting after section 428J the following new 
        section:

``SEC. 428K. EXPANDED LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Purpose.--It is the purpose of this section to expand, 
subject to the availability of appropriations therefor, the eligibility 
of individuals to qualify for loan forgiveness for teachers beyond that 
available under section 428J, in order to provide additional incentives 
for such individuals to enter and continue in the teaching profession.
    ``(b) Program Authorized.--
            ``(1) In general.--From the sums appropriated pursuant to 
        subsection (i), the Secretary shall carry out a program, 
        through the holder of the loan, of assuming the obligation to 
        repay a qualified loan amount for a loan made under section 428 
        or 428H, in accordance with subsection (c), for any new 
        borrower on or after October 1, 1998, who is not eligible for 
        loan forgiveness under section 428J, but who--
                    ``(A) is employed as a full-time teacher--
                            ``(i) in a public elementary or secondary 
                        school;
                            ``(ii) if employed as a secondary school 
                        teacher, is teaching a subject area that is 
                        relevant to the borrower's academic major as 
                        certified by the chief administrative officer 
                        of the public secondary school in which the 
                        borrower is employed; and
                            ``(iii) if employed as an elementary school 
                        teacher, has demonstrated, as certified by the 
                        chief administrative officer of the public 
                        elementary school in which the borrower is 
                        employed, knowledge and teaching skills in 
                        reading, writing, mathematics, or other areas 
                        of the elementary school curriculum;
                    ``(B) has a State certification (which may include 
                certification obtained through alternative means) or a 
                State license to teach, and has not failed to comply 
                with State or local accountability standards; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Selection of recipients.--The Secretary shall by 
        regulations, establish a formula that ensures fairness and 
        equality for applicants in the selection of borrowers for loan 
        repayment under this section, based on the amount available 
        pursuant to subsection (i).
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--The Secretary shall repay not more than 
        the percentage specified in paragraph (2) of the loan 
        obligation on a loan made under section 428 or 428H that is 
        outstanding after the completion of each complete school year 
        of teaching described in subsection (b)(1). No borrower may 
        receive a reduction of loan obligations under both this section 
        and section 460.
            ``(2) Percentage eligible.--The percent of the loan 
        obligation which the Secretary shall repay under paragraph (1) 
        of this subsection is--
                    ``(A) in the case of teaching in a school that 
                qualifies under section 465(a)(2)(A) for loan 
                cancellation for Perkins loan recipients who teach in 
                such schools, 25 percent for the first or second year 
of such service, and 50 percent for the third year of such service; or
                    ``(B) in the case of any other public elementary or 
                secondary school, 15 percent for the first or second 
                year of such service, 20 percent for the third or 
                fourth year of such service, and 30 percent for the 
                fifth year of such service.
            ``(3) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C may be a qualified loan amount 
        for the purposes of this subsection only to the extent that 
        such loan amount was used to repay a Federal Direct Stafford 
        Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan 
        made under section 428 or 428H for a borrower who meets the 
        requirements of subsection (b), as determined in accordance 
        with regulations prescribed by the Secretary.
            ``(4) Treatment of years of service for continuing 
        education loans.--For purposes of paragraph (2), the year of 
        service is determined on the basis of the academic year that 
        the borrower began the service as a full-time teacher, except 
        that in the case of a borrower who incurs a loan obligation for 
        continuing education expenses while teaching, the year of 
        service is determined on the basis of the academic year 
        following the academic year for which the loan obligation was 
        incurred.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(f) List.--If the list of schools in which a teacher may perform 
service pursuant to subsection (c)(2)(A) is not available before May 1 
of any year, the Secretary may use the list for the year preceding the 
year for which the determination is made to make such service 
determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan forgiveness pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this section and 
        subtitle D of title I of the National and Community Service Act 
        of 1990 (42 U.S.C. 12571 et seq.).
    ``(h) Definition.--For purposes of this section, the term `year', 
where applied to service as a teacher, means an academic year as 
defined by the Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2002 and each of the 5 succeeding fiscal years.''.
    (b) Direct Student Loans.--Part D of title IV of the Higher 
Education Act of 1965 is amended by inserting after section 460 the 
following new section:

``SEC. 460A. EXPANDED LOAN FORGIVENESS FOR TEACHERS.

    ``(a) Purpose.--It is the purpose of this section to expand, 
subject to the availability of appropriations therefor, the eligibility 
of individuals to qualify for loan forgiveness for teachers beyond that 
available under section 460, in order to provide additional incentives 
for such individuals to enter and continue in the teaching profession.
    ``(b) Program Authorized.--
            ``(1) In general.--From the sums appropriated pursuant to 
        subsection (i), the Secretary shall carry out canceling the 
        obligation to repay a qualified loan amount in accordance with 
        subsection (c) for Federal Direct Stafford Loans and Federal 
        Direct Unsubsidized Stafford Loans made under this part for any 
        new borrower on or after October 1, 1998, who is not eligible 
        for loan forgiveness under section 460, but who--
                    ``(A) is employed as a full-time teacher--
                            ``(i) in a public elementary or secondary 
                        school;
                            ``(ii) if employed as a secondary school 
                        teacher, is teaching a subject area that is 
                        relevant to the borrower's academic major as 
                        certified by the chief administrative officer 
                        of the public secondary school in which the 
                        borrower is employed; and
                            ``(iii) if employed as an elementary school 
                        teacher, has demonstrated, as certified by the 
                        chief administrative officer of the public 
                        elementary school in which the borrower is 
                        employed, knowledge and teaching skills in 
                        reading, writing, mathematics, or other areas 
                        of the elementary school curriculum;
                    ``(B) has a State certification (which may include 
                certification obtained through alternative means) or a 
                State license to teach, and has not failed to comply 
                with State or local accountability standards; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Selection of recipients.--The Secretary shall by 
        regulations, establish a formula that ensures fairness and 
        equality for applicants in the selection of borrowers for loan 
        repayment under this section, based on the amount available 
        pursuant to subsection (i).
    ``(c) Qualified Loans Amount.--
            ``(1) In general.--The Secretary shall cancel not more than 
        the percentage specified in paragraph (2) of the loan 
        obligation on a loan made under this part that is outstanding 
        after the completion of each complete school year of teaching 
        described in subsection (b)(1). No borrower may receive a 
        reduction of loan obligations under both this section and 
        section 428J.
            ``(2) Percentage eligible.--The percent of the loan 
        obligation which the Secretary shall cancel under paragraph (1) 
        of this subsection is--
                    ``(A) in the case of teaching in a school that 
                qualifies under section 465(a)(2)(A) for loan 
cancellation for Perkins loan recipients who teach in such schools, 25 
percent for the first or second year of such service, and 50 percent 
for the third year of such service; or
                    ``(B) in the case of any other public elementary or 
                secondary school, 15 percent for the first or second 
                year of such service, 20 percent for the third or 
                fourth year of such service, and 30 percent for the 
                fifth year of such service.
            ``(3) Treatment of consolidation loans.--A loan amount for 
        a Federal Direct Consolidation Loan may be a qualified loan 
        amount for the purposes of this subsection only to the extent 
        that such loan amount was used to repay a Federal Direct 
        Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or 
        a loan made under section 428 or 428H for a borrower who meets 
        the requirements of subsection (b), as determined in accordance 
        with regulations prescribed by the Secretary.
            ``(4) Treatment of years of service for continuing 
        education loans.--For purposes of paragraph (2), the year of 
        service is determined on the basis of the academic year that 
        the borrower began the service as a full-time teacher, except 
        that in the case of a borrower who incurs a loan obligation for 
        continuing education expenses while teaching, the year of 
        service is determined on the basis of the academic year 
        following the academic year for which the loan obligation was 
        incurred.
    ``(d) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(f) List.--If the list of schools in which a teacher may perform 
service pursuant to subsection (c)(2)(A) is not available before May 1 
of any year, the Secretary may use the list for the year preceding the 
year for which the determination is made to make such service 
determination.
    ``(g) Additional Eligibility Provisions.--
            ``(1) Continued eligibility.--Any teacher who performs 
        service in a school that--
                    ``(A) meets the requirements of subsection 
                (b)(1)(A) in any year during such service; and
                    ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan forgiveness pursuant to subsection (b).
            ``(2) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this section and 
        subtitle D of title I of the National and Community Service Act 
        of 1990 (42 U.S.C. 12571 et seq.).
    ``(h) Definition.--For purposes of this section, the term `year', 
where applied to service as a teacher, means an academic year as 
defined by the Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2002 and each of the 5 succeeding fiscal years.''.

SEC. 3. NO INCOME TAX BY REASON OF LOAN FORGIVENESS.

    Subsection (f) of section 108 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new paragraph:
            ``(4) Loan forgiveness for teachers.--In the case of an 
        individual, gross income does not include any amount which (but 
        for this paragraph) would be includible in gross income by 
        reason of the discharge (in whole or in part) of any loan if 
        such discharge was pursuant to section 428J, 428K, 460, or 460A 
        of the Higher Education Act of 1965 (20 U.S.C. 1078-10), as in 
        effect on the date of the enactment of this paragraph.''
                                 <all>