text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Teachers For Tomorrow Act of 2001''.
  
  SEC. 2. REVISION OF TEACHER LOAN FORGIVENESS PROGRAMS.
  
      (a) Guaranteed Student Loans.--Part B of title IV of the Higher 
  Education Act of 1965 is amended by--
              (1) redesignating section 428K (20 U.S.C. 1078-11) as 
          section 428L; and
              (2) by inserting after section 428J the following new 
          section:
  
  ``SEC. 428K. EXPANDED LOAN FORGIVENESS FOR TEACHERS.
  
      ``(a) Purpose.--It is the purpose of this section to expand, 
  subject to the availability of appropriations therefor, the eligibility 
  of individuals to qualify for loan forgiveness for teachers beyond that 
  available under section 428J, in order to provide additional incentives 
  for such individuals to enter and continue in the teaching profession.
      ``(b) Program Authorized.--
              ``(1) In general.--From the sums appropriated pursuant to 
          subsection (i), the Secretary shall carry out a program, 
          through the holder of the loan, of assuming the obligation to 
          repay a qualified loan amount for a loan made under section 428 
          or 428H, in accordance with subsection (c), for any new 
          borrower on or after October 1, 1998, who is not eligible for 
          loan forgiveness under section 428J, but who--
                      ``(A) is employed as a full-time teacher--
                              ``(i) in a public elementary or secondary 
                          school;
                              ``(ii) if employed as a secondary school 
                          teacher, is teaching a subject area that is 
                          relevant to the borrower's academic major as 
                          certified by the chief administrative officer 
                          of the public secondary school in which the 
                          borrower is employed; and
                              ``(iii) if employed as an elementary school 
                          teacher, has demonstrated, as certified by the 
                          chief administrative officer of the public 
                          elementary school in which the borrower is 
                          employed, knowledge and teaching skills in 
                          reading, writing, mathematics, or other areas 
                          of the elementary school curriculum;
                      ``(B) has a State certification (which may include 
                  certification obtained through alternative means) or a 
                  State license to teach, and has not failed to comply 
                  with State or local accountability standards; and
                      ``(C) is not in default on a loan for which the 
                  borrower seeks forgiveness.
              ``(2) Selection of recipients.--The Secretary shall by 
          regulations, establish a formula that ensures fairness and 
          equality for applicants in the selection of borrowers for loan 
          repayment under this section, based on the amount available 
          pursuant to subsection (i).
      ``(c) Qualified Loans Amount.--
              ``(1) In general.--The Secretary shall repay not more than 
          the percentage specified in paragraph (2) of the loan 
          obligation on a loan made under section 428 or 428H that is 
          outstanding after the completion of each complete school year 
          of teaching described in subsection (b)(1). No borrower may 
          receive a reduction of loan obligations under both this section 
          and section 460.
              ``(2) Percentage eligible.--The percent of the loan 
          obligation which the Secretary shall repay under paragraph (1) 
          of this subsection is--
                      ``(A) in the case of teaching in a school that 
                  qualifies under section 465(a)(2)(A) for loan 
                  cancellation for Perkins loan recipients who teach in 
                  such schools, 25 percent for the first or second year 
  of such service, and 50 percent for the third year of such service; or
                      ``(B) in the case of any other public elementary or 
                  secondary school, 15 percent for the first or second 
                  year of such service, 20 percent for the third or 
                  fourth year of such service, and 30 percent for the 
                  fifth year of such service.
              ``(3) Treatment of consolidation loans.--A loan amount for 
          a loan made under section 428C may be a qualified loan amount 
          for the purposes of this subsection only to the extent that 
          such loan amount was used to repay a Federal Direct Stafford 
          Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan 
          made under section 428 or 428H for a borrower who meets the 
          requirements of subsection (b), as determined in accordance 
          with regulations prescribed by the Secretary.
              ``(4) Treatment of years of service for continuing 
          education loans.--For purposes of paragraph (2), the year of 
          service is determined on the basis of the academic year that 
          the borrower began the service as a full-time teacher, except 
          that in the case of a borrower who incurs a loan obligation for 
          continuing education expenses while teaching, the year of 
          service is determined on the basis of the academic year 
          following the academic year for which the loan obligation was 
          incurred.
      ``(d) Regulations.--The Secretary is authorized to issue such 
  regulations as may be necessary to carry out the provisions of this 
  section.
      ``(e) Construction.--Nothing in this section shall be construed to 
  authorize any refunding of any repayment of a loan.
      ``(f) List.--If the list of schools in which a teacher may perform 
  service pursuant to subsection (c)(2)(A) is not available before May 1 
  of any year, the Secretary may use the list for the year preceding the 
  year for which the determination is made to make such service 
  determination.
      ``(g) Additional Eligibility Provisions.--
              ``(1) Continued eligibility.--Any teacher who performs 
          service in a school that--
                      ``(A) meets the requirements of subsection 
                  (b)(1)(A) in any year during such service; and
                      ``(B) in a subsequent year fails to meet the 
                  requirements of such subsection,
          may continue to teach in such school and shall be eligible for 
          loan forgiveness pursuant to subsection (b).
              ``(2) Prevention of double benefits.--No borrower may, for 
          the same service, receive a benefit under both this section and 
          subtitle D of title I of the National and Community Service Act 
          of 1990 (42 U.S.C. 12571 et seq.).
      ``(h) Definition.--For purposes of this section, the term `year', 
  where applied to service as a teacher, means an academic year as 
  defined by the Secretary.
      ``(i) Authorization of Appropriations.--There are authorized to be 
  appropriated to carry out this section such sums as may be necessary 
  for fiscal year 2002 and each of the 5 succeeding fiscal years.''.
      (b) Direct Student Loans.--Part D of title IV of the Higher 
  Education Act of 1965 is amended by inserting after section 460 the 
  following new section:
  
  ``SEC. 460A. EXPANDED LOAN FORGIVENESS FOR TEACHERS.
  
      ``(a) Purpose.--It is the purpose of this section to expand, 
  subject to the availability of appropriations therefor, the eligibility 
  of individuals to qualify for loan forgiveness for teachers beyond that 
  available under section 460, in order to provide additional incentives 
  for such individuals to enter and continue in the teaching profession.
      ``(b) Program Authorized.--
              ``(1) In general.--From the sums appropriated pursuant to 
          subsection (i), the Secretary shall carry out canceling the 
          obligation to repay a qualified loan amount in accordance with 
          subsection (c) for Federal Direct Stafford Loans and Federal 
          Direct Unsubsidized Stafford Loans made under this part for any 
          new borrower on or after October 1, 1998, who is not eligible 
          for loan forgiveness under section 460, but who--
                      ``(A) is employed as a full-time teacher--
                              ``(i) in a public elementary or secondary 
                          school;
                              ``(ii) if employed as a secondary school 
                          teacher, is teaching a subject area that is 
                          relevant to the borrower's academic major as 
                          certified by the chief administrative officer 
                          of the public secondary school in which the 
                          borrower is employed; and
                              ``(iii) if employed as an elementary school 
                          teacher, has demonstrated, as certified by the 
                          chief administrative officer of the public 
                          elementary school in which the borrower is 
                          employed, knowledge and teaching skills in 
                          reading, writing, mathematics, or other areas 
                          of the elementary school curriculum;
                      ``(B) has a State certification (which may include 
                  certification obtained through alternative means) or a 
                  State license to teach, and has not failed to comply 
                  with State or local accountability standards; and
                      ``(C) is not in default on a loan for which the 
                  borrower seeks forgiveness.
              ``(2) Selection of recipients.--The Secretary shall by 
          regulations, establish a formula that ensures fairness and 
          equality for applicants in the selection of borrowers for loan 
          repayment under this section, based on the amount available 
          pursuant to subsection (i).
      ``(c) Qualified Loans Amount.--
              ``(1) In general.--The Secretary shall cancel not more than 
          the percentage specified in paragraph (2) of the loan 
          obligation on a loan made under this part that is outstanding 
          after the completion of each complete school year of teaching 
          described in subsection (b)(1). No borrower may receive a 
          reduction of loan obligations under both this section and 
          section 428J.
              ``(2) Percentage eligible.--The percent of the loan 
          obligation which the Secretary shall cancel under paragraph (1) 
          of this subsection is--
                      ``(A) in the case of teaching in a school that 
                  qualifies under section 465(a)(2)(A) for loan 
  cancellation for Perkins loan recipients who teach in such schools, 25 
  percent for the first or second year of such service, and 50 percent 
  for the third year of such service; or
                      ``(B) in the case of any other public elementary or 
                  secondary school, 15 percent for the first or second 
                  year of such service, 20 percent for the third or 
                  fourth year of such service, and 30 percent for the 
                  fifth year of such service.
              ``(3) Treatment of consolidation loans.--A loan amount for 
          a Federal Direct Consolidation Loan may be a qualified loan 
          amount for the purposes of this subsection only to the extent 
          that such loan amount was used to repay a Federal Direct 
          Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or 
          a loan made under section 428 or 428H for a borrower who meets 
          the requirements of subsection (b), as determined in accordance 
          with regulations prescribed by the Secretary.
              ``(4) Treatment of years of service for continuing 
          education loans.--For purposes of paragraph (2), the year of 
          service is determined on the basis of the academic year that 
          the borrower began the service as a full-time teacher, except 
          that in the case of a borrower who incurs a loan obligation for 
          continuing education expenses while teaching, the year of 
          service is determined on the basis of the academic year 
          following the academic year for which the loan obligation was 
          incurred.
      ``(d) Regulations.--The Secretary is authorized to issue such 
  regulations as may be necessary to carry out the provisions of this 
  section.
      ``(e) Construction.--Nothing in this section shall be construed to 
  authorize any refunding of any repayment of a loan.
      ``(f) List.--If the list of schools in which a teacher may perform 
  service pursuant to subsection (c)(2)(A) is not available before May 1 
  of any year, the Secretary may use the list for the year preceding the 
  year for which the determination is made to make such service 
  determination.
      ``(g) Additional Eligibility Provisions.--
              ``(1) Continued eligibility.--Any teacher who performs 
          service in a school that--
                      ``(A) meets the requirements of subsection 
                  (b)(1)(A) in any year during such service; and
                      ``(B) in a subsequent year fails to meet the 
                  requirements of such subsection,
          may continue to teach in such school and shall be eligible for 
          loan forgiveness pursuant to subsection (b).
              ``(2) Prevention of double benefits.--No borrower may, for 
          the same service, receive a benefit under both this section and 
          subtitle D of title I of the National and Community Service Act 
          of 1990 (42 U.S.C. 12571 et seq.).
      ``(h) Definition.--For purposes of this section, the term `year', 
  where applied to service as a teacher, means an academic year as 
  defined by the Secretary.
      ``(i) Authorization of Appropriations.--There are authorized to be 
  appropriated to carry out this section such sums as may be necessary 
  for fiscal year 2002 and each of the 5 succeeding fiscal years.''.
  
  SEC. 3. NO INCOME TAX BY REASON OF LOAN FORGIVENESS.
  
      Subsection (f) of section 108 of the Internal Revenue Code of 1986 
  is amended by adding at the end the following new paragraph:
              ``(4) Loan forgiveness for teachers.--In the case of an 
          individual, gross income does not include any amount which (but 
          for this paragraph) would be includible in gross income by 
          reason of the discharge (in whole or in part) of any loan if 
          such discharge was pursuant to section 428J, 428K, 460, or 460A 
          of the Higher Education Act of 1965 (20 U.S.C. 1078-10), as in 
          effect on the date of the enactment of this paragraph.''
target: Teachers for Tomorrow Act of 2001 - Amends the Higher Education Act of 1965 (HEA) to establish new programs for teacher student loan forgiveness, under the guaranteed loan program and the direct loan program. Requires three consecutive complete school years of full-time teaching in a public elementary or secondary school as: (1) a secondary school teacher of a subject area relevant to the borrower's academic major; or (2) an elementary school teacher who has demonstrated knowledge and teaching skills in reading, writing, mathematics, and other curriculum areas.Amends the Internal Revenue Code to exclude from a teacher's gross income any student loan amounts discharged under both the current HEA programs and those added by this Act.
feat_title: To expand the teacher loan forgiveness programs under the guaranteed and direct student loan programs, and for other purposes.