HR7594119th CongressWALLET

Workforce Development Through Post-Graduation Scholarships Act of 2026

Sponsored By: Representative LaHood

Introduced

Summary

Exclude post-graduation scholarship grants from taxable income. This bill would let certain 501(c)(3) charities create loan-repayment scholarships for graduates who live and work in communities with below‑average bachelor’s degree rates, and it builds reporting and tax rules to govern the program.

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  • Graduates and borrowers: Grants must be paid directly to a qualified education loan holder and can cover interest and principal. Recipients must live and work in an applicable community and cannot be employees of the grantmaker.
  • Charities and private foundations: Eligible programs must be run by qualifying charities, including private foundations and community trusts that meet the rules. Payments that meet the conditions are not treated as taxable expenditures by private foundations and organizations set up by medical‑education entities are excluded.
  • Oversight and tax limits: The Treasury would write reporting rules and must report to Congress after 3 years. The Comptroller General must publish a study after 5 years and interest paid through these grants cannot also be claimed under the student loan interest rules.

Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

Tax-free loan help for graduates

If enacted, charity-run grants that repay your student loan would be excluded from your taxable income like a scholarship. The grant must come from a 501(c)(3) private foundation or a qualifying community trust, repay a qualified education loan, pay the loan holder directly, and require you to live and work in an "applicable community" (areas with below-average bachelor's degree rates per Census data). The grant could not be given to an employee of the grant maker or a related entity. Any interest paid by such a grant would not be allowed for the student loan interest deduction. The Treasury would issue rules and reporting. The Treasury must report to Congress within three years and the GAO must study these grants within five years. The change would apply to tax years beginning after enactment.

Sponsors & CoSponsors

Sponsor

LaHood

IL • R

Cosponsors

  • Sewell

    AL • D

    Sponsored 2/17/2026

Roll Call Votes

No roll call votes available for this bill.

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