I

103D CONGRESS

1ST SESSION H. R. 959

To amend the Internal Revenue Code of 1986 to restore the prior law

exclusion for scholarships and fellowships and to restore the deduction

for interest on educational loans.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 17, 1993

Mr. PRICE (for himself, Mr. LANCASTER, Mr. COX, Mr. FRANK of Massachusetts, Mr. HEFNER, Mr. SCHUMER, Mr. BAKER of Louisiana, Mr. MINETA, Mr. PENNY, Mr. MILLER of California, Mr. RANGEL, Mr. MARTINEZ, Mr. SANDERS, Mr. WALSH, Mr. STUDDS, Mrs. CLAYTON, Mr.

SLATTERY, Mr. RICHARDSON, Mr. BOUCHER, Mr. LIVINGSTON, Mr.

THOMAS of Wyoming, Mr. WATT, Mr. KANJORSKI, Mr. GONZALEZ, Mr.

ACKERMAN, Mrs. MORELLA, Mrs. COLLINS of Illinois, Mr. BRYANT, Mr.

HUGHES, Ms. LONG, Mrs. LOWEY, Mr. SKAGGS, Ms. SLAUGHTER, Mr.

COLEMAN, Mr. LAROCCO, Mr. FROST, Mr. HOCHBRUECKNER, Mr. DURBIN, Mr. NEAL of North Carolina, Mr. PARKER, Mr. VALENTINE, Mr.

WASHINGTON, Mr. STOKES, Mr. ROHRABACHER, Mr. YOUNG of Florida,

Mr. ANDREWS of Maine, Ms. PELOSI, Mr. SAWYER, Mr. CLEMENT, Mr.

EMERSON, Mr. BACCHUS of Florida, Mr. EVANS, Mr. WYDEN, Mr.

ENGEL, Mr. CRAMER, Mr. ABERCROMBIE, Ms. DELAURO, Mr. DEFAZIO,

Ms. NORTON, Mr. RAVENEL, Mr. OWENS, Miss COLLINS of Michigan,

Mr. FILNER, Mr. LAFALCE, Mr. VENTO, Mr. JOHNSON of South Dakota,

Mr. WELDON, Mr. BARTLETT of Maryland, and Mr. TUCKER) introduced

the following bill; which was referred to the Committee on Ways and

Means

MARCH 23, 1993

Additional sponsors: Mr. GLICKMAN, Mrs. MINK, Mrs. BYRNE, Mr.

STRICKLAND, Ms. CANTWELL, Mr. SCHIFF, Mr. INSLEE, Mr. TOWNS,

Mr. FORD of Michigan, Ms. FURSE, Mr. FISH, Mr. BERMAN, Mr. ROMERO-BARCELO ́, and Mr. HINCHEY
2

•HR 959 SC

A BILL

To amend the Internal Revenue Code of 1986 to restore

the prior law exclusion for scholarships and fellowships

and to restore the deduction for interest on educational

loans.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. RESTORATION OF PRIOR LAW EXCLUSION FOR

4 SCHOLARSHIPS AND FELLOWSHIPS.

5 Section 123 of the Tax Reform Act of 1986 (relating

6 to scholarships), and the amendments made by such sec7 tion, are hereby repealed; and the Internal Revenue Code

8 of 1986 shall be applied and administered as if such sec9 tion, and amendments, had never been enacted.

10 SEC. 2. RESTORATION OF DEDUCTION FOR INTEREST ON

11 EDUCATIONAL LOANS.

12 (a) IN GENERAL.—Paragraph (2) of section 163(h)

13 of the Internal Revenue Code of 1986 (defining personal

14 interest) is amended by striking ‘‘and’’ at the end of sub15 paragraph (D), by redesignating subparagraph (E) as sub16 paragraph (F), and by inserting after subparagraph (D)

17 the following new subparagraph:

18 ‘‘(E) any interest on a qualified edu19 cational loan, and’’.

20 (b) QUALIFIED EDUCATIONAL LOAN DEFINED.—

21 Subsection (h) of section 163 of such Code is amended
3

•HR 959 SC

1 by striking paragraph (5) and inserting the following new

2 paragraph:

3 ‘‘(5) QUALIFIED EDUCATIONAL LOAN.—For

4 purposes of this subsection—

5 ‘‘(A) IN GENERAL.—The term ‘qualified

6 educational loan’ means any indebtedness in7 curred to pay qualified educational expenses

8 which are paid or incurred within a reasonable

9 period of time before or after the indebtedness

10 is incurred.

11 ‘‘(B) QUALIFIED EDUCATIONAL EX12 PENSES.—For purposes of this paragraph—

13 ‘‘(i) IN GENERAL.—The term ‘quali14 fied educational expenses’ means qualified

15 tuition and related expenses of the tax16 payer, his spouse, or a dependent for at17 tendance at an educational institution de18 scribed in section 170(b)(1)(A)(ii).

19 (ii) ‘‘QUALIFIED TUITION AND RELAT20 ED EXPENSES.—The term ‘qualified tui21 tion and related expenses’ means—

22 ‘‘(I) tuition and fees required for

23 enrollment or attendance at an edu24 cational institution described in sec25 tion 170(b)(1)(A)(ii),
4

•HR 959 SC

1 ‘‘(II) fees, books, supplies, and

2 equipment required for courses of in3 struction at such an institution, and

4 ‘‘(III) reasonable living expenses

5 while away from home.

6 ‘‘(C) DEPENDENT.—For purposes of this

7 paragraph, the term ‘dependent’ has the mean8 ing given such term by section 152.

9 ‘‘(D) COORDINATION WITH PARAGRAPH

10 (3)(C)(ii).—Any qualified educational loan shall

11 not be taken into account for purposes of apply12 ing the limitation of paragraph (3)(C)(ii).’’

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years beginning after

15 December 31, 1986.

Æ