A bill to provide the legal framework necessary for the growth of innovative private financing options for students to fund postsecondary education, and for other purposes.
Investing in Student Success Act of 2015
This bill authorizes an individual (i.e., a student) and another person (i.e., an investor) to enter an income-share agreement (ISA) in which the student agrees to pay a percentage of future income, for a specified period of time, in exchange for funds to pay for postsecondary education, workforce development, or other purposes.
An ISA that complies with specified terms and conditions and meets certain disclosure requirements is a valid, binding, and enforceable contract and is not subject to state laws that limit interest rates or regulate assignments of future income.
The bill amends the Internal Revenue Code to include an ISA as a qualified education loan (a qualified education loan is not dischargeable in bankruptcy), but it prohibits a tax deduction for interest paid on an ISA (interest paid on a qualified education loan is tax deductible).
Payments to a student under an ISA are not includible as: (1) gross income for tax purposes, or (2) income or assets for federal financial aid eligibility purposes under the Higher Education Act of 1965.
The bill amends the Investment Company Act of 1940 to exclude as an investment company any person whose business substantially consists of making ISAs.
Referred to the Subcommittee on Higher Education and Workforce Training.
Introduced in Senate
Read twice and referred to the Committee on Finance.
checking server…
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line