H.R. 7594

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7594 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7594

To amend the Internal Revenue Code of 1986 to exclude certain post-
graduation scholarship grants from gross income in the same manner as 
qualified scholarships to promote economic growth.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 17, 2026

Mr. LaHood (for himself and Ms. Sewell) introduced the following bill; 
which was referred to the Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to exclude certain post-
graduation scholarship grants from gross income in the same manner as 
qualified scholarships to promote economic growth.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Workforce Development Through Post-
Graduation Scholarships Act of 2026''.

SEC. 2. POST-GRADUATION SCHOLARSHIP GRANTS EXCLUDED FROM GROSS INCOME 
IN SAME MANNER AS QUALIFIED SCHOLARSHIPS.

(a) In General.--Section 117(a) of the Internal Revenue Code of 
1986 is amended--
(1) by striking the period at the end and inserting ``, 
or'',
(2) by striking ``any amount received'' and inserting the 
following: ``any amount which--
``(1) is received'', and
(3) by adding at the end the following new paragraph:
``(2) is received as a post-graduation scholarship grant 
paid on behalf of an individual.''.
(b) Post-Graduation Scholarship Grant.--Section 117(b) of such Code 
is amended by redesignating paragraph (2) as paragraph (3) and by 
inserting after paragraph (1) the following new paragraph:
``(2) Post-graduation scholarship grant.--
``(A) In general.--The term `post-graduation 
scholarship grant' means any grant program--
``(i) which is established by an 
organization which--
``(I) is described in section 
501(c)(3) and exempt from tax under 
section 501(a), and
``(II) is either a private 
foundation or community trust described 
in section 170(b)(1)(A)(vi), (other 
than an organization established by an 
organization described in section 
170(b)(1)(A)(ii) or an organization 
described in section 170(b)(1)(A)(iii) 
the principal purpose or function of 
which is the provision of medical 
education),
``(ii) under which, in accordance with the 
conditions of a grant, such organization repays 
any portion of an applicable education loan 
incurred by an individual,
``(iii) which requires a grantee to live 
and work in an applicable community,
``(iv) under which payments are made 
directly to the holder of the loan, and
``(v) which is not provided to an employee 
of the granting organization or a related 
entity of the granting organization.
``(B) Applicable education loan.--For purposes of 
subparagraph (A), the term `applicable education loan' 
means, with respect to any individual, a qualified 
education loan (as defined in section 221(d)(1)) 
incurred to pay qualified higher education expenses (as 
defined in section 221(d)(2)) of such individual.
``(C) Applicable community.--For purposes of 
subparagraph (A), the term `applicable community' means 
any area that has a bachelor's degree attainment rate 
for the population that is below the state or national 
average for such population (as determined based on 
data collected by the Census Bureau).''.
(c) Amount Not Treated as Taxable Expenditure by Private 
Foundation.--Section 4945(g) of such Code is amended by striking ``or'' 
at the end of paragraph (2), by striking the period at the end of 
paragraph (3) and inserting ``, or'', and by adding at the end the 
following new paragraph:
``(4) the grant is a post-graduation scholarship grant (as 
defined in section 117(b)(2)).''.
(d) Denial of Double Benefit.--Section 221(e) of such Code is 
amended by redesignating paragraphs (2) and (3) as paragraphs (3) and 
(4), respectively, and by inserting after paragraph (1) the following 
new paragraph:
``(2) Denial of double benefit in case of post-graduation 
scholarship grants.--Any interest which is paid as part of a 
post-graduation scholarship grant and excluded from gross 
income under section 117 shall not be taken into account under 
this section.''.
(e) Regulatory Authority.--Section 117 of such Code is amended by 
adding at the end the following new subsection:
``(e) Regulations.--The Secretary shall prescribe such reporting 
requirements and regulations as may be necessary or appropriate to 
carry out subsection (a)(2).''.
(f) Reports.--
(1) Secretary of treasury.--Not later than 3 years after 
the date of the enactment of this Act, and periodically 
thereafter, the Secretary of the Treasury, or the Secretary's 
delegate, shall submit to Congress a report on the 
implementation and effectiveness of the amendments made by this 
section.
(2) Comptroller general.--
(A) In general.--Not later than 5 years after the 
date of enactment of this Act, the Comptroller General 
of the United States shall publish the result of a 
study on post-graduation scholarship grants to which 
section 117 of the Internal Revenue Code of 1986 (as 
amended by this section) applies.
(B) Contents of report.--The information published 
under subparagraph (A) shall include the following:
(i) The length of time involved in such 
grants.
(ii) The amount paid out under such grants.
(iii) The disposition of any funds paid 
under such grants, including the identity of 
any loan holders who benefit from such funds.
(g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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