115th CONGRESS 1st Session |
To provide loan forgiveness to borrowers of Federal student loans who agree to delay eligibility to collect Social Security benefits, and for other purposes.
December 7, 2017
Mr. Garrett (for himself, Mr. Messer, Mr. Rokita, Mr. Ferguson, and Mr. Brat) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, 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
To provide loan forgiveness to borrowers of Federal student loans who agree to delay eligibility to collect Social Security benefits, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Student Security Act of 2017”.
SEC. 2. Student Security Loan Forgiveness Program.
Section 455 of the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at the end the following:
“(r) Student Security Loan Forgiveness Program.—
“(1) PROGRAM AUTHORIZED.—Beginning not later than 180 days after the date of the enactment of the Student Security Act of 2017, the Secretary of Education, jointly with the Commissioner of Social Security, shall carry out a program under which the Secretary shall issue student loan forgiveness credits to qualified borrowers of eligible Federal Direct loans in exchange for delayed eligibility for old-age insurance benefits under title II of the Social Security Act (as amended by the Student Security Act of 2017) in accordance with this subsection.
“(2) AGREEMENT REQUIRED.—To be eligible to participate in the program, a qualified borrower shall enter into a written agreement with the Secretary of Education and the Commissioner of Social Security under which the borrower—
“(A) elects to receive a specified number of student loan forgiveness credits not greater than 73; and
“(B) acknowledges the extent of the borrower’s delayed eligibility for old-age insurance benefits under title II of the Social Security Act (as amended by the Student Security Act of 2017) as a result of receiving such credits.
“(3) TERMINATION.—No borrower may enter into an agreement under paragraph (2) unless such borrower was a qualified borrower on or before the date that is 15 years after the date of the enactment of the Student Security Act of 2017.
“(4) COMBINATION WITH OTHER FORGIVENESS PROGRAMS.—Unless otherwise provided by law, a qualified borrower may combine forgiveness under this subsection with other forgiveness programs under this Act, except in no case shall the total amount of forgiveness received by a borrower under all such programs exceed the amount of Federal student loans owed by such borrower.
“(5) DEFINITIONS.—In this section:
“(A) DEFAULT.—The term ‘default’ has the meaning given the term in section 435(l).
“(B) ELIGIBLE FEDERAL DIRECT LOAN.—The term ‘eligible Federal Direct loan’ means any loan made under this part, including any such loan on which the borrower has defaulted.
“(C) INITIAL QUALIFYING DATE.—The term ‘initial qualifying date’ means the date that is 24 months after the date of the enactment of the Student Security Act of 2017.
“(D) QUALIFIED BORROWER.—The term ‘qualified borrower’—
“(i) with respect to a borrower who seeks to enter into an agreement under paragraph (2) on or before the initial qualifying date, means a borrower of an eligible Federal Direct loan who is not entitled to collect old-age insurance benefits under title II of the Social Security Act as of the date of the agreement under paragraph (2), including a borrower who is a defaulted borrower; and
“(ii) with respect to a borrower who seeks to enter into an agreement under paragraph (2) after the initial qualifying date, means—
“(I) a borrower of an eligible Federal Direct loan who is not entitled to collect old-age insurance benefits under title II of the Social Security Act as of the date of the agreement under paragraph (2), including a borrower who is a defaulted borrower; and
“(II) who was eligible for a deferment under subsection (f)(2)(A) at any time during the five-year period preceding the date of the agreement under paragraph (2).
“(E) STUDENT LOAN FORGIVENESS CREDIT.—The term ‘student loan forgiveness credit’ means the cancellation of the obligation of a qualified borrower to repay $550 in eligible Federal Direct loans in exchange for delayed eligibility for old-age insurance benefits as specified in title II of the Social Security Act (as amended by the Student Security Act of 2017).”.
SEC. 3. Delayed eligibility for old-age insurance benefits.
(a) Retirement age; early retirement age.—Section 216(l) of the Social Security Act (42 U.S.C. 416(l)) is amended by adding at the end the following:
“(4) Notwithstanding the preceding paragraphs of this subsection, in the case of an individual who receives one or more student loan forgiveness credits under section 455(r) of the Higher Education Act of 1965—
“(A) the retirement age with respect to such individual shall be deemed to be—
“(i) the retirement age determined with respect to such individual under paragraph (1); plus
“(ii) a number of additional months equal to the number of student loan forgiveness credits received by the individual under such section 455(r); and
“(B) the early retirement age with respect to such individual shall be deemed to be—
“(i) the early retirement age determined with respect to such individual under paragraph (2); plus
“(ii) a number of additional months equal to the number of student loan forgiveness credits received by the individual under such section 455(r).”.
(b) Delayed retirement credits.—Section 202(w) of the Social Security Act (42 U.S.C. 402(w)) is amended by inserting after “age 70” each place it appears the following: “(or, in the case of an individual described in paragraph (4) of section 216(l), age 70 plus the number of additional months determined under subparagraph (A)(ii) of such paragraph)”.
(c) Voluntary suspension of benefits.—Section 202(z) of the Social Security Act (42 U.S.C. 402(z)) is amended by inserting after “the age of 70” the following: “(or, in the case of an individual described in paragraph (4) of section 216(l), the age of 70 plus the number of additional months determined under subparagraph (A)(ii) of such paragraph)”.
Section 201(l) of the Social Security Act (42 U.S.C. 401(l)) is amended to read as follows:
“(l) (1) If at any time the Managing Trustee determines that borrowing authorized under this subsection is necessary to pay full benefit payments from the Federal Disability Insurance Trust Fund, the Managing Trustee may borrow such necessary amounts from the Federal Old-Age and Survivors Insurance Trust Fund for transfer to and deposit in the Federal Disability Insurance Trust Fund.
“(2) In any case where a loan has been made to the Federal Disability Insurance Trust Fund under paragraph (1), there shall be transferred on the last day of each month after such loan is made, from the borrowing Trust Fund to the lending Trust Fund, the total interest accrued to such day with respect to the unrepaid balance of such loan at a rate equal to the rate which the lending Trust Fund would earn on the amount involved if the loan were an investment under subsection (d) (even if such an investment would earn interest at a rate different than the rate earned by investments redeemed by the lending Trust Fund in order to make the loan).
“(3) (A) If in any month after a loan has been made to the Federal Disability Insurance Trust Fund under paragraph (1), the Managing Trustee determines that the assets of such Trust Fund are sufficient to permit repayment of all or part of any loans made to such Fund under paragraph (1), he shall make such repayments as he determines to be appropriate.
“(B) The full amount of all loans made under paragraph (1) shall be repaid at the earliest feasible date.
“(4) The Board of Trustees shall make a timely report to the Congress of any amounts transferred (including interest payments) under this subsection.”.
SEC. 5. Exclusion from gross income for discharge of student loan indebtedness under the Student Security Loan Forgiveness Program.
(a) In general.—Paragraph (1) of section 108(f) of the Internal Revenue Code of 1986 is amended to read as follows:
“(1) IN GENERAL.—In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any student loan if such discharge was pursuant to—
“(A) a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers, or
“(B) the receipt of student loan forgiveness credits under section 455(r) of the Higher Education Act of 1965.”.
(b) Effective date.—The amendments made by this section shall apply to discharges of indebtedness on or after the date of the enactment of this Act.