The bills provide that amounts otherwise qualifying for exclusion from gross income as a scholarship, fellowship grant, or qualified student loan forgiveness under the new Code section would not be includible in gross income merely because of a requirement for postgraduate performance of teaching services for a qualified educational organization. For this rule to apply, the recipient also must establish that the amount of the award or grant was used for qualified tuition and related expenses, under the terms of the scholarship, fellowship, or qualified student loan. Qualified tuition and related expenses would be defined as tuition and fees required for attendance and fees, books, supplies, and equipment required for courses at the educational institution.

Effective date

The Scholarship and loan forgiveness provisions of S. 1194 and of S. 1195 would apply to taxable years beginning after the date of enactment.

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DEPOSIT

JUN 8 1993

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