[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 342 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 342
To amend the Internal Revenue Code of 1986 to make higher education
more affordable by providing a full tax deduction for higher education
expenses and interest on student loans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 31, 2001
Mr. Ford 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 make higher education
more affordable by providing a full tax deduction for higher education
expenses and interest on student loans.
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 ``Make College Affordable Act of
2001''.
SEC. 2. DEDUCTION FOR HIGHER EDUCATION EXPENSES.
(a) Deduction Allowed.--Section 221 of the Internal Revenue Code of
1986 is amended to read as follows:
``SEC. 221. HIGHER EDUCATION EXPENSES.
``(a) Allowance of Deduction.--In the case of an individual, there
shall be allowed as a deduction an amount equal to--
``(1) the qualified higher education expenses, and
``(2) interest on qualified higher education loans,
paid by the taxpayer during the taxable year.
``(b) Limitations.--
``(1) Per student.--The aggregate payments during the
taxable year for the qualified higher education expenses of
each individual which may be taken into account under
subsection (a) shall not exceed $10,000.
``(2) Per taxpayer.--The amount allowed as a deduction
under subsection (a) for the taxable year shall not exceed
$20,000.
``(3) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount which would (but for
this paragraph) be taken into account under subsection
(a) shall be reduced (but not below zero) by the amount
determined under subparagraph (B).
``(B) Amount of reduction.--The amount determined
under this subparagraph equals the amount which bears
the same ratio to the amount which would be so taken
into account as--
``(i) the excess of--
``(I) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(II) $55,000 ($85,000 in the case
of a joint return), bears to
``(ii) $15,000.
``(C) Modified adjusted gross income.--For purposes
of this paragraph, the term `modified adjusted gross
income' means the adjusted gross income of the taxpayer
for the taxable year determined--
``(i) without regard to this section and
sections 911, 931, and 933, and
``(ii) after the application of sections
86, 135, 219, 220, and 469.
For purposes of the sections referred to in clause
(ii), adjusted gross income shall be determined without
regard to the deduction allowed under this section.
``(D) Inflation adjustments.--
``(i) In general.--In the case of a taxable
year beginning after 2002, the $55,000 and
$85,000 amounts described in subparagraph (B)
shall each be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2001' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $5,000,
such amount shall be rounded to the next lowest
multiple of $5,000.
``(c) Qualified Higher Education Expenses.--For purposes of this
section--
``(1) Qualified higher education expenses.--
``(A) In general.--The term `qualified higher
education expenses' means--
``(i) tuition and fees charged by an
educational institution and required for the
enrollment or attendance of--
``(I) the taxpayer,
``(II) the taxpayer's spouse,
``(III) any dependent of the
taxpayer with respect to whom the
taxpayer is allowed a deduction under
section 151, or
``(IV) any grandchild of the
taxpayer,
as an eligible student at an institution of
higher education, and
``(ii) room and board for such an
individual while away from home and attending
such institution.
``(B) Eligible courses.--Amounts paid for qualified
higher education expenses of any individual shall be
taken into account under subsection (a) only to the
extent such expenses are attributable to courses of
instruction for which credit is allowed toward a
baccalaureate or graduate degree by an institution of
higher education or toward a certificate of required
course work at a vocational school.
``(C) Exception for nonacademic fees.--Such term
does not include any student activity fees, athletic
fees, insurance expenses, or other expenses unrelated
to a student's academic course of instruction.
``(D) Eligible student.--For purposes of
subparagraph (A), the term `eligible student' means a
student who--
``(i) meets the requirements of section
484(a)(1) of the Higher Education Act of 1965
(20 U.S.C. 1091(a)(1)), as in effect on the
date of the enactment of this section, and
``(ii) is carrying at least one-half the
normal full-time work load for the course of
study the student is pursuing, as determined by
the institution of higher education.
``(E) Identification requirement.--No deduction
shall be allowed under subsection (a) to a taxpayer
with respect to an eligible student unless the taxpayer
includes the name, age, and taxpayer identification
number of such eligible student on the return of tax
for the taxable year.
``(2) Institution of higher education.--The term
`institution of higher education' means an institution which--
``(A) is described in section 481 of the Higher
Education Act of 1965 (20 U.S.C. 1088), as in effect on
the date of the enactment of this section, and
``(B) is eligible to participate in programs under
title IV of such Act.
``(d) Qualified Higher Education Loan.--For purposes of this
section--
``(1) In general.--The term `qualified higher education
loan' means a loan which is--
``(A) made, insured, or guaranteed by the Federal
Government,
``(B) made by a State or a political subdivision of
a State,
``(C) made from the proceeds of a qualified student
loan bond under section 144(b), or
``(D) made by an institution of higher education
(as defined in section 1201(a) of the Higher Education
Act of 1965 (20 U.S.C. 1141(a))).
``(2) Limitation.--The amount of interest on a qualified
higher education loan which is taken into account under
subsection (a)(2) shall not exceed the amount which bears the
same ratio to such amount of interest as--
``(A) the proceeds from such loan used for
qualified higher education expenses, bears to
``(B) the total proceeds from such loan.
For purposes of the preceding sentence, the term `qualified
higher education expenses' shall be determined without regard
to subsection (c)(1)(A)(i)(IV).
``(e) Special Rules.--
``(1) No double benefit.--
``(A) In general.--No deduction shall be allowed
under subsection (a) for any expense for which a
deduction is allowable to the taxpayer under any other
provision of this chapter unless the taxpayer
irrevocably waives his right to the deduction of such
expense under such other provision.
``(B) Denial of deduction if credit elected.--No
deduction shall be allowed under subsection (a) for a
taxable year with respect to the qualified higher
education expenses of an individual if the taxpayer
elects to have section 25A apply with respect to such
individual for such year.
``(C) Dependents.--No deduction shall be allowed
under subsection (a) to any individual with respect to
whom a deduction under section 151 is allowable to
another taxpayer for a taxable year beginning in the
calendar year in which such individual's taxable year
begins.
``(D) Coordination with exclusions.--A deduction
shall be allowed under subsection (a) for qualified
higher education expenses only to the extent the amount
of such expenses exceeds the amount excludable under
section 135 or 530(d)(2) for the taxable year.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed
under subsection (a) for qualified higher education
expenses for any taxable year only to the extent such
expenses are in connection with enrollment at an
institution of higher education during the taxable
year.
``(B) Certain prepayments allowed.--Subparagraph
(A) shall not apply to qualified higher education
expenses paid during a taxable year if such expenses
are in connection with an academic term beginning
during such taxable year or during the first 3 months
of the next taxable year.
``(3) Adjustment for certain scholarships and veterans
benefits.--The amount of qualified higher education expenses
otherwise taken into account under subsection (a) or (d)(2)
with respect to the education of an individual shall be reduced
(before the application of subsection (b)) by the sum of the
amounts received with respect to such individual for the
taxable year as--
``(A) a qualified scholarship which under section
117 is not includable in gross income,
``(B) an educational assistance allowance under
chapter 30, 31, 32, 34, or 35 of title 38, United
States Code, or
``(C) a payment (other than a gift, bequest,
devise, or inheritance within the meaning of section
102(a)) for educational expenses, or attributable to
enrollment at an eligible educational institution,
which is exempt from income taxation by any law of the
United States.
``(4) No deduction for married individuals filing separate
returns.--If the taxpayer is a married individual (within the
meaning of section 7703), this section shall apply only if the
taxpayer and the taxpayer's spouse file a joint return for the
taxable year.
``(5) Nonresident aliens.--If the taxpayer is a nonresident
alien individual for any portion of the taxable year, this
section shall apply only if such individual is treated as a
resident alien of the United States for purposes of this
chapter by reason of an election under subsection (g) or (h) of
section 6013.
``(6) Regulations.--The Secretary may prescribe such
regulations as may be necessary or appropriate to carry out
this section, including regulations requiring recordkeeping and
information reporting.''
(b) Deduction Allowed in Computing Adjusted Gross Income.--
Paragraph (17) of section 62(a) of such Code is amended to read as
follows:
``(17) Higher education expenses.--The deduction allowed by
section 221.''
(c) Conforming Amendments.--
(1) The table of sections for part VII of subchapter B of
chapter 1 of such Code is amended by striking the item relating
to section 221 and inserting the following new item:
``Sec. 221. Higher education expenses.''
(2) Section 6050S(e) of such Code is amended by striking
``such term by section 221(e)(1)'' and inserting ``the term
`qualified higher education loan' by section 221(d)(1)''.
(d) Effective Date.--The amendments made by this section shall
apply to payments made after December 31, 2000.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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