College Debt Alleviation Act of 2006

College Debt Alleviation Act of 2006 - Amends the Internal Revenue Code of 1986 to: (1) extend the tuition and related expenses tax deduction through 2010; (2) increase the maximum eligible adjusted gross income (AGI) threshold from $65,000 to $80,000 (from $130,000 to $160,000 for a joint return); and (3) increase the deduction from $3,000 to $8,000. Revises the formula for determining the AGI for the purposes of this deduction.

Amends the Higher Education Act of 1965 to reduce student loan interest rates on federal PLUS loans and consolidation loans under the Federal Family Education Loan (FFEL) and Direct Loan programs.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5098 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 5098

  To amend the Internal Revenue Code of 1986 to extend and expand the 
deduction for tuition and related expenses for higher education and to 
      reduce the maximum interest rate allowable on student loans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 5, 2006

  Mr. Meehan introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to extend and expand the 
deduction for tuition and related expenses for higher education and to 
      reduce the maximum interest rate allowable 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 ``College Debt Alleviation Act of 
2006''.

SEC. 2. DEDUCTION FOR QUALIFIED TUITION AND RELATED EXPENSES.

    (a) Extension.--Subsection (e) of section 222 of the Internal 
Revenue Code of 1986 (relating to termination) is amended by striking 
``December 31, 2005'' and inserting ``December 31, 2010''.
    (b) Increase in Amount Allowed as Deduction.--Subsection (b) of 
section 222 of such Code (relating to dollar limitations) is amended to 
read as follows:
    ``(b) Dollar Limitations.--
            ``(1) In general.--The amount allowed as a deduction under 
        subsection (a) with respect to the taxpayer for any taxable 
        year shall not exceed the applicable dollar limit.
            ``(2) Applicable dollar limit.--The applicable dollar 
        amount shall be equal to--
                    ``(A) in the case of a taxpayer whose adjusted 
                gross income for the taxable year does not exceed 
                $80,000 ($160,000 in the case of a joint return), 
                $8,000, and
                    ``(B) in the case of any other taxpayer, zero.
            ``(3) Adjusted gross income.--For purposes of paragraph 
        (2), adjusted gross income shall be determined--
                    ``(A) without regard to this section and sections 
                199, 911, 931, and 933, and
                    ``(B) after application of sections 86, 135, 137, 
                219, 221, and 469.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 3. REDUCTION OF STUDENT LOAN INTEREST RATES.

    (a) FFEEL Loans.--Section 427A(l) of the Higher Education Act of 
1965 (20 U.S.C. 1077a(l)) is amended--
            (1) in paragraph (2), by striking ``8.5 percent'' and 
        inserting ``6.8 percent''; and
            (2) in paragraph (3)(B), by striking ``8.25 percent'' and 
        inserting ``6.8 percent''.
    (b) Direct Loans.--Section 455(b)(7) of such Act (20 U.S.C. 
1087e(b)(7)) is amended--
            (1) in subparagraph (B), by striking ``7.9 percent'' and 
        inserting ``6.8 percent''; and
            (2) in subparagraph (C)(ii), by striking ``8.25 percent'' 
        and inserting ``6.8 percent''.
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