H.R. 5204 would amend the Internal Revenue Code to exclude from gross income any amount discharged from a federal student or private education loan because of the death or disability of the borrower. In addition, the bill would amend the Higher Education Act (HEA) to allow for the discharge of any remaining balance that parents owe on an outstanding federal loan borrowed on behalf of certain students who become disabled.
The staff of the Joint Committee on Taxation (JCT) and CBO estimate that enacting H.R. 5204 would increase federal deficits by $88 million over the 2017-2026 period. JCT estimates that revenues would decrease by $69 million and CBO estimates direct spending would increase by $19 million.
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO and JCT estimate that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2027.
CBO and JCT have determined that H.R. 5204 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).