A bill to provide an increase in funding for Federal Pell Grants, to amend the Internal Revenue Code of 1986 in order to expand the deduction for interest paid on student loans, raise the contribution limits for Coverdell Education Savings Accounts, and make the exclusion for employer provided educational assistance permanent, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improving Access to Higher Education 
Act of 2007''.

SEC. 2. INCREASE IN FEDERAL PELL GRANTS.

    (a) Amendment.--Section 401 of the Higher Education Act of 1965 (20 
U.S.C. 1070a) is amended--
            (1) in subsection (a)(1), by striking ``2004'' and 
        inserting ``2008''; and
            (2) in subsection (b)--
                    (A) in subparagraph (A) of paragraph (2), by 
                striking ``shall be--'' and all that follows through 
                ``that year.'' and inserting ``shall be $5,100 for 
                academic year 2007-2008, less an amount equal to the 
                amount determined to be the expected family 
                contribution with respect to that student for that 
                year.''; and
                    (B) in paragraph (5), by striking ``$400'' each 
                place the term appears and inserting ``$500''.
    (b) Additional Funds.--
            (1) In general.--There are authorized to be appropriated, 
        and there are appropriated, to carry out paragraph (2) (in 
        addition to any other amounts appropriated to carry out section 
        401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) and 
        out of any money in the Treasury not otherwise appropriated) 
        $4,331,000,000 for academic year 2007-2008.
            (2) Increase in federal pell grants.--The funds made 
        available pursuant to paragraph (1) shall be used to increase 
        the amount of the maximum Federal Pell Grant under section 401 
        of the Higher Education Act of 1965 for which funds are 
        appropriated under appropriations Acts for fiscal year 2007 by 
        $1,050 for award year 2007-2008.
    (c) Effective Date.--The amendments made by subsection (a)(2)(B) 
shall take effect on July 1, 2007.

SEC. 3. EXPANSION OF DEDUCTION FOR INTEREST ON EDUCATION LOANS.

    (a) Increased Limitation.--
            (1) Maximum deduction.--Paragraph (1) of section 221(b) of 
        the Internal Revenue Code of 1986 (relating to maximum 
        deduction) is amended to read as follows:
            ``(1) In general.--Except as provided in paragraph (2), the 
        deduction allowed by subsection (a) for the taxable year shall 
        not exceed $3,750.''.
            (2) Increase in phaseout.--Subclause (II) of section 
        221(b)(2)(i) of such Code is amended by striking ``$50,000 
        ($100,000'' and inserting ``$75,000 ($150,000''.
    (b) Conforming Amendment.--Section 221(f)(1) of such Code is 
amended to read as follows:
            ``(1) In general.--In the case of a taxable year beginning 
        after 2007, the $75,000 and $150,000 amounts in subsection 
        (b)(2) shall each be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2006' for `calendar year 1992' in 
                subparagraph (B) thereof.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
    (d) Repeal of EGTRRA Sunset.--Title IX of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 (relating to sunset of provisions 
of such Act) shall not apply to section 412 of such Act (relating to 
elimination of 60-month limit and increase in income limitation on 
student loan interest deduction).

SEC. 4. COVERDELL EDUCATION SAVINGS ACCOUNTS.

    (a) Increase in Allowable Contributions.--
            (1) In general.--Clause (iii) of section 530(b)(1)(A) of 
        the Internal Revenue Code of 1986 is amended by striking 
        ``$2,000'' and inserting ``$3,000''.
            (2) Conforming amendment.--Section 4973(e)(1)(A) of such 
        Code is amended by striking ``$2,000'' and inserting 
        ``$3,000''.
    (b) Reports.--Subsection (h) of section 530 of such Code is amended 
by striking the period at the end of the last sentence and inserting 
``, except that reports shall be so filed and furnished for any 
calendar year not later than June 30 of the following year.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
    (d) Repeal of EGTRRA Sunset.--Title IX of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 (relating to sunset of provisions 
of such Act) shall not apply to section 401 of such Act (relating to 
modifications to education individual retirement accounts).

SEC. 5. REPEAL OF EGTRRA SUNSET FOR EMPLOYER-PROVIDED EDUCATIONAL 
              ASSISTANCE.

    Title IX of the Economic Growth and Tax Relief Reconciliation Act 
of 2001 (relating to sunset of provisions of such Act) shall not apply 
to section 411 of such Act (relating to extension of exclusion for 
employer-provided educational assistance).

Summary: Improving Access to Higher Education Act of 2007 - Amends the Higher Education Act of 1965 to increase the maximum Pell Grant award to $5,100 for the 2007-2008 academic year. Raises the minimum Pell Grant award from $400 to $500. Amends the Internal Revenue Code to raise: (1) the maximum student loan interest deduction to $3,750. And (2) the modified adjusted gross income level where such deduction begins to be phased-out. Exempts from the sunset provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA): (1) the elimination of the 60-month limit on the period of such deduction. And (2) the increase in the income limitation on such deduction. Increases the maximum annual contribution limit for Coverdell education savings accounts from $2,000 to $3,000, and makes such increase permanent. Repeals the EGTRRA sunset on the tax exclusion of employer-provided educational assistance.