To put a college education within reach, and for other purposes.

January 15, 2003

Mr. BIDEN introduced the following bill; which was read twice and referred to the Committee on Finance

To put a college education within reach, and for other purposes.

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 `Tuition Assistance for Families Act'.

SEC. 2. EXPANSION OF TUITION TAX DEDUCTION.

(a) IN GENERAL- Subparagraphs (A) and (B) of section 222(b)(2) of the Internal Revenue Code of 1986 (relating to dollar limitation) are amended to read as follows:

`(A) IN GENERAL- The applicable dollar limit shall be equal to--

`(i) in the case of a taxpayer whose adjusted gross income for the taxable year does not exceed $65,000 ($130,000 in the case of a joint return), $12,000,

`(ii) with respect to any taxable year beginning in 2004 or 2005, in the case of a taxpayer not described in clause (i) whose adjusted gross income for the taxable year does not exceed $80,000 ($160,000 in the case of a joint return), $2,000, and

`(iii) in the case of any other taxpayer, zero.

`(B) INFLATION ADJUSTMENT-

`(i) IN GENERAL- In the case of any taxable year beginning after 2003, each dollar amount referred to in subparagraph (A)(i) shall 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, by substituting `2002' for `1992'.

`(ii) ROUNDING- If any amount as adjusted under clause (i) is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.'.

(b) PERMANENT DEDUCTION- Section 222 of the Internal Revenue Code of 1986 (relating to qualified tuition and related expenses) is amended by striking subsection (e).

(c) EFFECTIVE DATE- The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2002.

SEC. 3. EXPANSION OF LIFETIME LEARNING CREDIT.

(a) IN GENERAL- Section 25A(c)(1) of the Internal Revenue Code of 1986 (relating to per taxpayer credit) is amended--

(1) by striking `20 percent' and inserting `25 percent', and

(2) by striking `$10,000 ($5,000 in the case of taxable years beginning before January 1, 2003)' and inserting `$12,000'.

(b) INFLATION ADJUSTMENT- Section 25A(h) of the Internal Revenue Code of 1986 (relating to inflation adjustments) is amended by adding at the end the following new paragraph:

`(3) DOLLAR LIMITATION ON AMOUNT OF LIFETIME LEARNING CREDIT-

`(A) IN GENERAL- In the case of any taxable year beginning after 2003, the dollar amount referred to in subsection (c)(1) shall 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, by substituting `2002' for `1992'.

`(B) ROUNDING- If any amount as adjusted under subparagraph (A) is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2002.

SEC. 4. INCREASE IN INCOME LIMITS FOR HOPE AND LIFETIME LEARNING CREDITS.

(a) IN GENERAL- Section 25A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 (relating to limitation based on modified adjusted gross income) is amended by striking `$40,000 ($80,000' and inserting `$55,000 ($110,000'.

(b) CONFORMING AMENDMENTS- Section 25A(h)(2)(A) of the Internal Revenue Code of 1986 is amended--

(1) by striking `2001' in the matter preceding clause (i) and inserting `2003',

(2) by striking `the $40,000 and $80,000 amounts' in such matter and inserting `the $55,000 and $110,000 amounts', and

(3) by striking `2000' in clause (ii) and inserting `2002'..

(c) EFFECTIVE DATE- The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2002.

SEC. 5. MAXIMUM PELL GRANT AWARDS.

The Department of Education Appropriations Act, 2002 (Public Law 107-116) is amended under the heading `Student Financial Assistance' by striking `$4,000' and inserting `$4,500'.

SEC. 6. ACADEMIC ACHIEVEMENT SCHOLARSHIPS.

(a) SCHOLARSHIPS- The Secretary of Education is authorized to award a scholarship for academic year 2003-2004 and succeeding academic years to each student in a State who graduated in the top 5 percent of such student's graduating class from an accredited secondary school in academic year 2002-2003 or a succeeding academic year to enable such student to pay the cost of attendance at an institution of higher education.

(b) AMOUNT- Each scholarship awarded under this section shall be in the amount of $1,000.

(c) USE- Each student awarded a scholarship under this section shall use the funds to pay the cost of attendance at an institution of higher education.

(d) CONSTRUCTION OF NEEDS PROVISION-

(1) IN GENERAL- Except as provided in paragraph (2), nothing in this section, or any other Act, shall be construed to permit the receipt of a scholarship under this section to be counted for any needs test in connection with the awarding of any grant or the making of any loan under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) or any other provision of Federal law relating to educational assistance.

(2) EXCEPTION- In determining the need of a student for Federal financial assistance, an institution of higher education may take into consideration the amount of scholarship assistance received under this section if the total amount of scholarship assistance received under this section plus the amount of other financial assistance available to a student exceeds the student's cost of attendance at the institution.

(e) REGULATIONS- The Secretary of Education shall promulgate regulations regarding how scholarships awarded under this section will be allocated to both public and private school students.

(f) DEFINITIONS- In this section:

(1) COST OF ATTENDANCE- The term `cost of attendance' has the meaning given the term in section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll).

(2) INSTITUTION OF HIGHER EDUCATION- The term `institution of higher education' has the meaning given the term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

END