ent Education Assistance Act of 2006, the 
interest rate on such direct IDEA loan 
shall be assumed to be equal to the inter-
est rate applicable to a consolidation loan 
made under section 428C of the Higher 
Education Act of 1965 (20 U.S.C. 1078– 
3) on that same date. 
‘‘(ii) 
LIMITATION.—The 
aggregate 
amount of interest shall not exceed 110 
percent of the amount determined under 
subparagraph (A) without regard to inter-
est. 
‘‘(C) JOINT RETURNS.—In the case of a 
joint return where each spouse has an account 
balance and is in repayment status, the amount 
determined under subparagraph (A) shall be 
the sum of the base amortization amounts of 
each spouse. 
‘‘(3) PROGRESSIVITY FACTOR.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the progressivity factor with respect to 
a calendar year shall be determined under the 
following table on the basis of the ratio of the 
taxpayer’s modified adjusted gross income bears 
to the median State income of the State in 
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which the taxpayer is resident on the last day 
of the taxable year ending in or with the cal-
endar year: 
‘‘Ratio of modified adjusted gross income to 
median State income is: 
Progres-
sivity 
Factor is: 
Less than or equal to 0.25 ....................................................
0.5052 
Greater than 0.25 and less than or equal to 0.35 ................
0.5668 
Greater than 0.35 and less than or equal to 0.50 ................
0.6283 
Greater than 0.50 and less than or equal to 0.65 ................
0.6907 
Greater than 0.65 and less than or equal to 0.75 ................
0.8146 
Greater than 0.75 and less than or equal to 1.00 ................
0.9073 
Greater than 1.00 and less than or equal to 1.25 ................
1.0000 
Greater than 1.25 and less than or equal to 1.50 ................
1.0000 
Greater than 1.50 and less than or equal to 1.75 ................
1.1520 
Greater than 1.75 and less than or equal to 2.00 ................
1.2700 
Greater than 2.00 and less than or equal to 2.50 ................
1.3640 
Greater than 2.50 and less than or equal to 3.00 ................
1.4850 
Greater than 3.00 and less than or equal to 3.50 ................
1.6000 
Greater than 3.50 ..................................................................
2.0000 
‘‘(B) MEDIAN STATE INCOME.—For pur-
poses of subparagraph (A), the median State 
income shall be the most recent census estimate 
of the median income of such State released by 
the Bureau of Census before the beginning of 
such calendar year. 
‘‘(4) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of this subsection, the term ‘modified 
adjusted gross income’ means adjusted gross income 
for the taxable year— 
‘‘(A) determined without regard to— 
‘‘(i) sections 135, 911, 931, and 933, 
‘‘(ii) the deductions from gross income 
allowable under section 62(a) by reason 
of— 
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‘‘(I) paragraph (6) thereof (relat-
ing to profit-sharing, annuities, and 
bond-purchase plans of self-employed 
individuals), 
‘‘(II) paragraph (7) thereof (re-
lating to retirement savings), and 
‘‘(III) paragraph (17) (relating 
to interest on education loans), and 
‘‘(B) increased by the amount of interest 
received or accrued by the taxpayer during the 
taxable year which is exempt from tax. 
‘‘(5) BASE INCOME AMOUNT.—For purposes of 
this subsection, the term ‘base income amount’ 
means— 
‘‘(A) in the case of a joint return, the sum 
of the standard deduction applicable to such re-
turn and twice the exemption amount for the 
taxable year, and 
‘‘(B) in any other case, the sum of the 
standard deduction applicable to such individual 
and the exemption amount for the taxable year. 
For purposes of this paragraph, the term ‘standard 
deduction’ has the meaning given such term by sec-
tion 63(c), and the term ‘exemption amount’ has the 
meaning given such term by section 151(d). 
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