II 

110TH CONGRESS 

1ST SESSION S. 454 

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. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 31, 2007 

Ms. COLLINS introduced the following bill; which was read twice and referred 

to the Committee on Finance 

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. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Improving Access to 

5 Higher Education Act of 2007’’. 


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1 SEC. 2. INCREASE IN FEDERAL PELL GRANTS. 

2 (a) AMENDMENT.—Section 401 of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1070a) is amended— 

4 (1) in subsection (a)(1), by striking ‘‘2004’’ and 

5 inserting ‘‘2008’’; and 

6 (2) in subsection (b)— 

7 (A) in subparagraph (A) of paragraph (2), 

8 by striking ‘‘shall be—’’ and all that follows 

9 through ‘‘that year.’’ and inserting ‘‘shall be 

10 $5,100 for academic year 2007–2008, less an 

11 amount equal to the amount determined to be 

12 the expected family contribution with respect to 

13 that student for that year.’’; and 

14 (B) in paragraph (5), by striking ‘‘$400’’ 

15 each place the term appears and inserting 

16 ‘‘$500’’. 

17 (b) ADDITIONAL FUNDS.— 

18 (1) IN GENERAL.—There are authorized to be 

19 appropriated, and there are appropriated, to carry 

20 out paragraph (2) (in addition to any other amounts 

21 appropriated to carry out section 401 of the Higher 

22 Education Act of 1965 (20 U.S.C. 1070a) and out 

23 of any money in the Treasury not otherwise appro24 priated) $4,331,000,000 for academic year 2007– 

25 2008. 


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1 (2) INCREASE IN FEDERAL PELL GRANTS.— 

2 The funds made available pursuant to paragraph (1) 

3 shall be used to increase the amount of the max4 imum Federal Pell Grant under section 401 of the 

5 Higher Education Act of 1965 for which funds are 

6 appropriated under appropriations Acts for fiscal 

7 year 2007 by $1,050 for award year 2007–2008. 

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

9 subsection (a)(2)(B) shall take effect on July 1, 2007. 

10 SEC. 3. EXPANSION OF DEDUCTION FOR INTEREST ON EDU11 CATION LOANS. 

12 (a) INCREASED LIMITATION.— 

13 (1) MAXIMUM DEDUCTION.—Paragraph (1) of 

14 section 221(b) of the Internal Revenue Code of 1986 

15 (relating to maximum deduction) is amended to read 

16 as follows: 

17 ‘‘(1) IN GENERAL.—Except as provided in para18 graph (2), the deduction allowed by subsection (a) 

19 for the taxable year shall not exceed $3,750.’’. 

20 (2) INCREASE IN PHASEOUT.—Subclause (II) of 

21 section 221(b)(2)(i) of such Code is amended by 

22 striking ‘‘$50,000 ($100,000’’ and inserting 

23 ‘‘$75,000 ($150,000’’. 

24 (b) CONFORMING AMENDMENT.—Section 221(f)(1) 

25 of such Code is amended to read as follows: 


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1 ‘‘(1) IN GENERAL.—In the case of a taxable 

2 year beginning after 2007, the $75,000 and 

3 $150,000 amounts in subsection (b)(2) shall each be 

4 increased by an amount equal to— 

5 ‘‘(A) such dollar amount, multiplied by 

6 ‘‘(B) the cost-of-living adjustment deter7 mined under section 1(f)(3) for the calendar 

8 year in which the taxable year begins, deter9 mined by substituting ‘calendar year 2006’ for 

10 ‘calendar year 1992’ in subparagraph (B) 

11 thereof.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2006. 

15 (d) REPEAL OF EGTRRA SUNSET.—Title IX of the 

16 Economic Growth and Tax Relief Reconciliation Act of 

17 2001 (relating to sunset of provisions of such Act) shall 

18 not apply to section 412 of such Act (relating to elimi19 nation of 60-month limit and increase in income limitation 

20 on student loan interest deduction). 

21 SEC. 4. COVERDELL EDUCATION SAVINGS ACCOUNTS. 

22 (a) INCREASE IN ALLOWABLE CONTRIBUTIONS.— 

23 (1) IN GENERAL.—Clause (iii) of section 

24 530(b)(1)(A) of the Internal Revenue Code of 1986 


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1 is amended by striking ‘‘$2,000’’ and inserting 

2 ‘‘$3,000’’. 

3 (2) CONFORMING AMENDMENT.—Section 

4 4973(e)(1)(A) of such Code is amended by striking 

5 ‘‘$2,000’’ and inserting ‘‘$3,000’’. 

6 (b) REPORTS.—Subsection (h) of section 530 of such 

7 Code is amended by striking the period at the end of the 

8 last sentence and inserting ‘‘, except that reports shall be 

9 so filed and furnished for any calendar year not later than 

10 June 30 of the following year.’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2006. 

14 (d) REPEAL OF EGTRRA SUNSET.—Title IX of the 

15 Economic Growth and Tax Relief Reconciliation Act of 

16 2001 (relating to sunset of provisions of such Act) shall 

17 not apply to section 401 of such Act (relating to modifica18 tions to education individual retirement accounts). 

19 SEC. 5. REPEAL OF EGTRRA SUNSET FOR EMPLOYER-PRO20 VIDED EDUCATIONAL ASSISTANCE. 

21 Title IX of the Economic Growth and Tax Relief Rec22 onciliation Act of 2001 (relating to sunset of provisions 

23 of such Act) shall not apply to section 411 of such Act 


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1 (relating to extension of exclusion for employer-provided 

2 educational assistance). 

Æ 


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