; and (3) by adding at the end the following new paragraph: (2) is a post-graduation scholarship grant received by or 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 (other than a private foundation 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) or a community trust described in section 170(b)(1)(A)(vi), (ii) which is designed to encourage individuals to serve in occupations of unmet needs or in areas of unmet needs (as such terms are used in section 108(f)(2)(D)(ii)), and (iii) under which, in accordance with the conditions of a grant, such organization repays any portion of an applicable education loan incurred by an individual. (B) Applicable education loan For purposes of subparagraph (A)(iii), 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) 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