This bill changes the federal tax code so certain post-graduation scholarship grants are not counted as taxable income. The grants must be paid by qualifying charitable organizations (certain 501(c)(3) private foundations or community trusts), must repay part of an individual's qualified student loan by paying the loan holder directly, must require the recipient to live and work in an "applicable community" (areas with bachelor’s degree rates below the state or national average), and cannot be given to employees of the granting organization. The bill also says these grants are not taxable expenditures by private foundations, prevents a double tax benefit for loan interest covered by such grants, gives the Treasury Secretary authority to write regulations, requires a Treasury report within 3 years and a Government Accountability Office study within 5 years, and applies to taxable years after enactment.
If you receive a qualifying post-graduation scholarship grant under this program, the amount paid to your student loan holder would not count as taxable income under section 117 of the Internal Revenue Code. To qualify, you must meet the grant conditions, including living and working in an applicable community and having an applicable education loan. Payments go to the loan holder, not to you. The rule does not apply if you are an employee of the granting organization or a related entity.
No publicly available information on estimated budgetary costs or revenue effects is included in the bill text. The bill does require a Treasury report within 3 years and a GAO study within 5 years that will report on amounts paid and recipients, which will involve administrative work but includes no cost estimates in the bill text.
The bill’s title states its purpose is to "promote economic growth." The text extends the existing tax exclusion for qualified scholarships to cover specified post-graduation scholarship grants that repay education loans and place graduates in communities with below-average bachelor’s degree attainment. Supporters in the bill text present this change as a way to exclude those loan-repayment grants from gross income and to track their implementation through Treasury and GAO reports.
No publicly available information on opposition views or critiques is included in the bill text or the provided metadata.