[Congressional Record Volume 151, Number 27 (Wednesday, March 9, 2005)]
[Senate]
[Pages S2391-S2392]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MIKULSKI (for herself, Mr. Lautenberg, Mrs. Boxer, and Mr. 
        Levin):
  S. 575. A bill to amend the Internal Revenue Code of 1986 to provide 
a refundable credit for certain education expenses; to the Committee on 
Finance.
  Ms. MIKULSKI. Mr. President, I rise to introduce the ``Educational 
Opportunity for All Act.'' The core of the American Dream is getting a 
college education and I want to make sure that every student has access 
to that dream. I want to help families who are trying to send their 
children to college and adults who are going back to school--for their 
first degree or their third. This $4,000 tuition tax credit will help 
students who are taking one night class at a community college to 
update their skills or four classes at a university to get their 
bachelor's degree. And my tax credit is refundable so it helps families 
who don't owe taxes.
  Our middle class families are stressed and stretched. Families in my 
State of Maryland are worried--they're worried about their jobs and 
they're terrified of losing their healthcare when costs keep 
ballooning. Many are holding down more than one job to make ends meet. 
They're racing from carpools to work and back again. But most of all, 
they don't know how they can afford to send their kids to college. And 
they want to know what we in the United States Senate are doing to help 
them.
  That's why I want to give every family sending a child to college a 
$4,000 per student per year tuition tax credit. My bill would give help 
to those who practice self help--the families who are working and 
saving to send their child to college or update their own skills.
  College tuition is on the rise across America. Tuition at the 
University of Maryland has increased by almost 40 percent since 2002. 
Tuition for Baltimore Community College rose by $300 in one year. The 
average total cost of going to a 4-year public college is $10,635 per 
year, including tuition, fees, room and board. University of Maryland 
will cost more than $15,000 for a full time undergraduate student who 
lives on campus.
  Financial Aid isn't keeping up with these rising costs. Pell Grants 
cover only 40 percent of average costs at 4-year public colleges. 
Twenty years ago, Pell Grants covered 80 percent of average costs. Our 
students are graduating with so much debt it's like their first 
mortgage. The average undergraduate student debt from college loans is 
almost $19,000. College is part of the American Dream; it shouldn't be 
part of the American financial nightmare.
  Families are looking for help. I'm sad to say, the President doesn't 
offer them much hope. The Republican budget has all the wrong 
priorities. President Bush proposed increasing the maximum Pell Grant 
by just $100 to $4,150. I want to double Pell Grants. Instead of easing 
the burden on middle class families, the Republican budget helps out 
big business cronies with lavish tax breaks while eating into Social 
Security and creating deficits as far as the eye can see.
  We need to do more to help middle class families afford college. We 
need to immediately increase the maximum Pell Grant to $4,500 and 
double it over the next 6 years. We need to make sure student loans are 
affordable. And we need a bigger tuition tax credit for the families 
stuck in the middle who aren't eligible for Pell Grants but still can't 
afford college.
  A $4,000 refundable tax credit for tuition will go a long way. It 
will give middle class families some relief by helping the first-time 
student at our 4-year institutions like University of Maryland and the 
mid-career student at our terrific community colleges. A $4,000 tax 
credit would be 60 percent of the tuition at Maryland and enough to 
cover the cost of tuition at most community colleges. My bill would 
help make college affordable for everyone.
  College education is more important than ever: 40 percent of new jobs 
in the next 10 years will require post-secondary education. College is 
important to families and it's important to our economy. To compete in 
the global economy, we need to make sure all our children have 21st 
century skills for 21st century jobs. And the benefits of education 
help not just the individual but society as a whole.
  To have a safer America and a stronger economy, we need to have a 
smarter America. We need to invest in our human capital to create a 
world class workforce. That means making a college education 
affordable.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.

                                 S. 575

       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 ``Educational Opportunity for 
     All Act of 2005''.

     SEC. 2. EDUCATIONAL OPPORTUNITY FOR ALL TAX CREDIT.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     redesignating section 36 as section 37 and by inserting after 
     section 35 the following new section:

     ``SEC. 36. EDUCATIONAL OPPORTUNITY TAX CREDIT.

       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this subtitle for the taxable year 
     an amount equal to the qualified tuition expenses paid by the 
     taxpayer during the taxable year (for education furnished 
     during any academic period beginning in such taxable year).
       ``(2) Per student limitation.--The credit allowed under 
     this section shall not exceed $4,000 with respect to any 
     individual.
       ``(b) Election Not to Have Section Apply.--A taxpayer may 
     elect not to have this section apply with respect to the 
     qualified tuition expenses of an individual for any taxable 
     year.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified tuition expenses.--
       ``(A) In general.--The term `qualified tuition expenses' 
     means tuition required for the enrollment or attendance of--
       ``(i) the taxpayer,
       ``(ii) the taxpayer's spouse, or
       ``(iii) any dependent of the taxpayer with respect to whom 
     the taxpayer is allowed a deduction under section 151,

     at an eligible educational institution for courses of 
     instruction of such individual at such institution.
       ``(B) Exception for education involving sports, etc.--Such 
     term does not include expenses with respect to any course or 
     other education involving sports, games, or hobbies, unless 
     such course or other education is part of the individual's 
     degree program.
       ``(C) Exception for nonacademic fees.--Such term does not 
     include student activity fees, athletic fees, insurance 
     expenses, or other fees or expenses unrelated to an 
     individual's academic course of instruction.
       ``(D) Job improvement included.--Such term shall include 
     tuition expenses described in subparagraph (A) with respect 
     to any course of instruction at an eligible educational 
     institution to acquire or improve job skills.
       ``(2) Eligible educational institution.--The term `eligible 
     educational institution' means an institution--
       ``(A) which 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 the Taxpayer Relief Act of 1997, and
       ``(B) which is eligible to participate in a program under 
     title IV of such Act.
       ``(d) Special Rules.--
       ``(1) Identification requirement.--No credit shall be 
     allowed under subsection (a) to a taxpayer with respect to 
     the qualified tuition expenses of an individual unless the 
     taxpayer includes the name and taxpayer identification number 
     of such individual on the return of tax for the taxable year.
       ``(2) Adjustment for certain scholarships, etc.--The amount 
     of qualified tuition expenses otherwise taken into account 
     under subsection (a) with respect to an individual for an 
     academic period shall be reduced by the sum of any amounts 
     paid for the benefit of such individual which are allocable 
     to such period as--
       ``(A) a qualified scholarship which is excludable from 
     gross income under section 117,
       ``(B) an educational assistance allowance under chapter 30, 
     31, 32, 34, or 35 of title 38, United States Code, or under 
     chapter 1606 of title 10, United States Code, and
       ``(C) a payment (other than a gift, bequest, devise, or 
     inheritance within the meaning of section 102(a)) for such 
     individual`s educational expenses, or attributable to such 
     individual's enrollment at an eligible educational 
     institution, which is excludable from gross income under any 
     law of the United States.
       ``(3) Treatment of expenses paid by dependent.--If a 
     deduction under section 151 with respect to an individual is 
     allowed to another taxpayer for a taxable year beginning in 
     the calendar year in which such individual's taxable year 
     begins--
       ``(A) no credit shall be allowed under subsection (a) to 
     such individual for such individual's taxable year, and

[[Page S2392]]

       ``(B) qualified tuition expenses paid by such individual 
     during such individual's taxable year shall be treated for 
     purposes of this section as paid by such other taxpayer.
       ``(4) Treatment of certain prepayments.--If qualified 
     tuition expenses are paid by the taxpayer during a taxable 
     year for an academic period which begins during the first 3 
     months following such taxable year, such academic period 
     shall be treated for purposes of this section as beginning 
     during such taxable year.
       ``(5) Denial of double benefit.--No credit shall be allowed 
     under this section for any expense for which a deduction is 
     allowed under any other provision of this chapter.
       ``(6) Coordination with hope scholarship and lifetime 
     learning credits.--The qualified tuition and related expenses 
     with respect to an individual for whom a Hope Scholarship 
     Credit or the Lifetime Learning Credit under section 25A is 
     allowed for the taxable year shall not be taken into account 
     under this section.
       ``(7)  No credit 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.
       ``(8) 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.
       ``(e) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section, including regulations providing for a recapture 
     of the credit allowed under this section in cases where there 
     is a refund in a subsequent taxable year of any amount which 
     was taken into account in determining the amount of such 
     credit.''.
       (b) Refundability of Credit.--Paragraph (2) of section 
     1324(b) of title 31, United States Code, is amended by 
     inserting before the period ``or enacted by the Educational 
     Opportunity for All Act of 2005''.
       (c) Conforming Amendments.--
       (1) Sections 135(d)(2)(A), 222(c)(2)(A), 
     529(c)(3)(B)(v)(II), and 530(d)(2)(C)(i)(II) of the Internal 
     Revenue Code of 1986 are each amended by inserting ``or 
     section 36'' after ``section 25A'' each place it appears.
       (2) Section 6213(g)(2)(J) of such Code is amended by 
     inserting ``or section 36(d)(1)'' after ``expenses)''.
       (3) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of such Code is amended by striking 
     the item relating to section 36 and inserting the following:

``Sec. 36. Educational opportunity tax credit.
``Sec. 37. Overpayments of tax.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to expenses paid after December 31, 2004, for 
     education furnished in academic periods beginning after such 
     date.
                                 ______