H.R. 3598 — what changed

Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)) is amended—

changed “(2) Disability determinations—With respect to a borrower who has been identified under clause (i) or (ii) of paragraph (3)(A), (4)(A), the Secretary shall—

changed “(A) consider such the borrower permanently and totally disabled for the purpose of discharging the loans of such the borrower under this subsection;

changed “(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));“(B)

changed “(C) in a case “(i) notify the borrower of a the intent of the Secretary to discharge the loans of the borrower who lives in a State that may impose a tax liability (as described in paragraph (4)) for such a loan discharge—under this subsection; and

changed “(i) notify “(ii) only if section 108(f)(5) of the Internal Revenue Code of 1986 does not apply to such a loan discharge for the calendar year, include as part of such notice a statement informing the borrower that such loan discharge may be includible in the gross income of the possible tax liability; andborrower for purposes of such Code;

changed “(ii) “(C) provide the borrower with an opportunity to opt-out of such loan discharge; discharge during the 60 day period beginning on the date on which the Secretary transmits the notice required under subparagraph (B) to the borrower; and

changed “(D) notify after the expiration of such borrower period, discharge the loans of potential Federal tax implications the 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 loan discharge under this subsection.”subparagraph (C)).”

changed “(3) “(4) 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.

changed “(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.borrower.”

removed “(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—

removed “(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;

removed “(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

removed “(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.”