Higher Education Fairness Act of 1997

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Higher Education 
Fairness Act of 1997''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

    (a) Parents' Available Income.--Section 475(c)(1) is amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) the amount of any tax credit taken by the 
                parents under section 25A of the Internal Revenue Code 
                of 1986.''.
    (b) Student Contribution From Available Income.--Section 475(g)(2) 
is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by striking ``$1,750'' in subparagraph (D) and 
        inserting ``$2,250 (or a successor amount prescribed by the 
        Secretary under section 478)'';
            (3) by striking the period at the end of subparagraph (D); 
        and
            (4) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) the amount of any tax credit taken by the 
                student under section 25A of the Internal Revenue Code 
                of 1986.''.

SEC. 3. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT DEPENDENTS 
              OTHER THAN A SPOUSE.

    (a) Family's Contribution From Available Income.--Section 
476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)) is amended--
            (1) by striking ``and'' at the end of clause (iv); and
            (2) by inserting after clause (v) the following new clause:
                            ``(vi) the amount of any tax credit taken 
                        under section 25A of the Internal Revenue Code 
                        of 1986; and''.
    (b) Income Protection Allowances.--Section 476(b)(1)(A)(iv) is 
amended--
            (1) by striking ``allowance of--'' and inserting 
        ``allowance of the following amount (or a successor amount 
        prescribed by the Secretary under section 478):'';
            (2) by striking ``$3,000'' each place it appears in 
        subclauses (I) and (II) and inserting ``$5,500''; and
            (3) by striking ``$6,000'' in subclause (III) and inserting 
        ``$8,500''.

SEC. 4. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH DEPENDENTS 
              OTHER THAN A SPOUSE.

    Section 477(b)(1) (20 U.S.C. 1087qq(b)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) the amount of any tax credit taken under 
                section 25A of the Internal Revenue Code of 1986.''.

SEC. 5. REGULATIONS; UPDATED TABLES AND AMOUNTS.

    Section 478(b) (20 U.S.C. 1087rr(b)) is amended--
            (1) by striking ``For each academic year'' and inserting 
        the following:
            ``(1) Revised tables.--For each academic year''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Revised amounts.--For each academic year after 
        academic year 1997-1998, the Secretary shall publish in the 
        Federal Register revised income protection allowances for the 
        purpose of sections 475(g)(2)(D) and 476(b)(1)(A)(iv). Such 
        revised allowances shall be developed by increasing each of the 
        dollar amounts contained in such section by a percentage equal 
        to the estimated percentage increase in the Consumer Price 
        Index (as determined by the Secretary) between December 1996 
        and the December next preceding the beginning of such academic 
        year, and rounding the result to the nearest $10.''.

SEC. 6. DEFINITIONS.

    (a) Total Income.--Section 480(a)(2) (20 U.S.C. 1087vv(a)(2)) is 
amended--
            (1) by striking ``individual, and'' and inserting 
        ``individual,''; and
            (2) by inserting ``, and no portion of any tax credit taken 
        under section 25A of the Internal Revenue Code of 1986'' before 
        ``shall be included''.
    (b) Excludable Income.--Section 480(e) is amended
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding after paragraph (4) the following new 
        paragraph:
            ``(5) any tax credit taken under section 25A of the 
        Internal Revenue Code of 1986.''.
    (c) Other Financial Assistance.--Section 480(j) is amended by 
adding at the end the following new paragraph:
    ``(4) Notwithstanding paragraph (1), a tax credit taken under 
section 25A of the Internal Revenue Code of 1986 shall not be treated 
as estimated financial assistance for purposes of section 471(3).''.

Summary: Higher Education Fairness Act of 1997 - Amends the Higher Education Act of 1965 to revise certain need analysis formulas for student assistance. Requires deduction of the amount of the new Hope Scholarship and Lifetime Learning education expense tax credits taken under the Internal Revenue Code, as amended by the Taxpayer Relief Act of 1997 , in calculating family available income for determination of expected family contribution . Increases the amounts of income protection allowances for dependent students and for independent students without dependents other than a spouse.