[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2049 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2049

 To amend the Higher Education Act of 1965 to automatically discharge 
    the loans of certain veteran borrowers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                June 28 (legislative day, June 27), 2019

 Mr. Reed (for himself and Mr. Isakson) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To amend the Higher Education Act of 1965 to automatically discharge 
    the loans of certain veteran borrowers, 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. AUTOMATIC LOAN DISCHARGE FOR CERTAIN VETERAN BORROWERS.

    Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 
1087(a)) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Disability determinations.--With respect to a 
        borrower who has been identified under clause (i) or (ii) of 
        paragraph (3)(A), the Secretary shall--
                    ``(A) consider such borrower permanently and 
                totally disabled for the purpose of discharging the 
                loans of such borrower under this subsection;
                    ``(B) discharge the loans of such borrower under 
                this subsection, without any further action by the 
                borrower (except that this subparagraph shall not apply 
                to a borrower who opts out of such discharge under 
                subparagraph (C));
                    ``(C) in a case of a borrower who lives in a State 
                that may impose a tax liability (as described in 
                paragraph (4)) for such a loan discharge--
                            ``(i) notify the borrower of the possible 
                        tax liability; and
                            ``(ii) provide an opportunity to opt-out of 
                        such loan discharge; and
                    ``(D) notify such borrower of potential Federal tax 
                implications of such loan discharge under this 
                subsection.''; and
            (2) by adding at the end the following:
            ``(3) Matching program.--
                    ``(A) In general.--Not less than twice per year, 
                the Secretary of Education and the Secretary of 
                Veterans Affairs shall carry out a computer matching 
                program under which the Secretary of Education 
                identifies a borrower--
                            ``(i) who has been assigned a rating of 
                        total disability by the Secretary of Veterans 
                        Affairs for a service-connected disability (as 
                        defined in section 101 of title 38, United 
                        States Code); or
                            ``(ii) who has been determined by the 
                        Secretary of Veterans Affairs to be 
                        unemployable due to a service-connected 
                        condition.
                    ``(B) Minor discrepancies.--With respect to each 
                borrower who would have been identified under clause 
                (i) or (ii) of subparagraph (A) but for a minor 
                discrepancy between the information of the borrower 
                maintained by the Secretary of Education and the 
                Secretary of Veterans Affairs (such as a name 
                discrepancy post marriage, a missing hyphen, a 
                transposed number or letter, or other typo), the 
                Secretary of Education and the Secretary of Veterans 
                Affairs shall work together to correct such minor 
                discrepancy of such borrower.
            ``(4) State tax liability.--The Secretary shall determine 
        whether a State may impose a tax liability for the discharge of 
        a loan under this subsection, and in making that determination, 
        the Secretary shall--
                    ``(A) in the case of a State which does not have an 
                income tax, or which excludes discharge of student 
                loans from its definition of income for tax purposes, 
                determine that the State will not impose tax liability;
                    ``(B) in the case of a State which conforms the 
                relevant provisions of its tax law to section 108 of 
                the Internal Revenue Code of 1986, determine that the 
                State will not impose tax liability; and
                    ``(C) in the case of a State which does not conform 
                the relevant provisions of its tax law to section 108 
                of the Internal Revenue Code of 1986, consult with the 
                tax authority of that State to determine if the State 
                would seek to impose tax liability and, if not, 
                determine that a State will not impose tax 
                liability.''.
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