[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 724 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 724

To amend the Internal Revenue Code of 1986 to allow a deduction for the 
                 payment of interest on student loans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 12, 1997

 Mr. Kennedy of Rhode Island (for himself and Mr. Fox of Pennsylvania) 
 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 allow a deduction for the 
                 payment of 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 ``Student Loan Affordability Act of 
1997''.

SEC. 2. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

    (a) Deduction Allowed.--Part VII of subchapter B of chapter 1 of 
the Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 221 as 
section 222 and by inserting after section 220 the following new 
section:

``SEC. 221. INTEREST ON STUDENT LOANS.

    ``(a) Allowance of Deduction.--In the case of an individual, there 
shall be allowed as a deduction an amount equal to the interest on 
qualified higher education loans paid by the taxpayer during the 
taxable year.
    ``(b) Qualified Higher Education Loan.--For purposes of this 
section--
            ``(1) In general.--The term `qualified higher education 
        loan' means a loan which--
                    ``(A) is made to a student to meet the student's 
                cost of attendance at an institution of higher 
                education;
                    ``(B)(i) is made, insured, or guaranteed by the 
                Federal Government;
                    ``(ii) is made by a State or a political 
                subdivision of a State;
                    ``(iii) is made from the proceeds of a qualified 
                student loan bond under section 144(b); or
                    ``(iv) is 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))); and
                    ``(C) in combination with all other financial 
                assistance awarded to (or on behalf of) such student to 
                meet such cost of attendance, does not exceed such cost 
                of attendance for the academic year for which such loan 
                is made.
            ``(2) Cost of attendance.--The term `cost of attendance' 
        has the meaning given such term by section 472 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ll).
            ``(3) Institution of higher education.--Unless stated 
        otherwise, 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), and
                    ``(B) is eligible to participate in programs under 
                title IV of such Act.
    ``(c) No Double Benefit.--No deduction shall be allowed under 
subsection (a) for interest on qualified higher education loans with 
respect to which a deduction is allowed under any other provision of 
this chapter.
    ``(d) 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.--Section 
62(a) of such Code is amended by inserting after paragraph (16) the 
following new paragraph:
            ``(17) Interest on student loans.--The deduction allowed by 
        section 221.''
    (c) Conforming Amendment.--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:

                              ``Sec. 221. Interest on student loans.
                              ``Sec. 222. Cross reference.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.
                                 <all>