(1) by striking ‘‘2004 or 2005’’ and inserting 
‘‘2004 or thereafter’’, and 
(2) in the heading by striking ‘‘AND 2005’’ and 
inserting ‘‘AND THEREAFTER’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 4. 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 
‘‘$5,000’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
4973(e)(1)(A) of such Code is amended by striking 
‘‘$2,000’’ and inserting ‘‘$5,000’’. 
(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, 2003.
SEC. 5. ALLOWANCE OF ROOM, BOARD, AND SPECIAL 
NEEDS SERVICES IN THE CASE OF SCHOLAR-
SHIPS AND TUITION REDUCTION PROGRAMS 
WITH RESPECT TO HIGHER EDUCATION. 
(a) IN GENERAL.—Paragraph (1) of section 117(b) 
of the Internal Revenue Code of 1986 (defining qualified 
scholarship) is amended by inserting before the period at 
the end the following: ‘‘or, in the case of enrollment or 
attendance at an eligible educational institution, for quali-
fied higher education expenses.’’. 
(b) DEFINITIONS.—Subsection (b) of section 117 of 
such Code is amended by adding at the end the following 
new paragraph: 
‘‘(3) QUALIFIED
HIGHER
EDUCATION
EX-
PENSES; ELIGIBLE
EDUCATIONAL
INSTITUTION.—
The terms ‘qualified higher education expenses’ and 
‘eligible educational institution’ have the meanings 
given such terms in section 529(e).’’. 
(c) TUITION REDUCTION PROGRAMS.—Paragraph 
(5) of section 117(d) of such Code (relating to special 
rules for teaching and research assistants) is amended by 
striking ‘‘shall be applied as if it did not contain the 
phrase ‘(below the graduate level)’.’’ and inserting ‘‘shall 
be applied—
‘‘(A) as if it did not contain the phrase 
‘(below the graduate level)’, and
‘‘(B) by substituting ‘qualified higher edu-
cation expenses’ for ‘tuition’ the second place it 
appears.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid after December 
31, 2003 (in taxable years ending after such date), for 
education furnished in academic periods beginning after 
such date.
SEC. 6. TREATMENT OF PREPAYMENT AND SAVINGS PLANS 
UNDER 
STUDENT 
FINANCIAL 
AID 
NEEDS 
ANALYSIS. 
(a) DEFINITION OF ASSETS.—Subsection (f) of sec-
tion 480 of the Higher Education Act of 1965 (20 U.S.C. 
1087vv(j)) is amended—
(1) in paragraph (1) by inserting ‘‘qualified 
education benefit (except as provided in paragraph 
(3)),’’ after ‘‘tax shelters,’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(3) A qualified education benefit shall not be consid-
ered an asset of the student under section 475 of this part. 
‘‘(4) For purposes of this subsection, the term ‘quali-
fied education benefit’ means—
‘‘(A) a program which is described in clause (i) 
of section 529(b)(1)(A) of the Internal Revenue
Code of 1986 and which meets the requirements of 
section 529(b)(1)(B) of such Code; 
‘‘(B) a State tuition program described in 
clause (ii) of section 529(b)(1)(A) of the Internal 
Revenue Code of 1986 which meets the requirements 
of section 529(b)(1)(B) of such Code; and 
‘‘(C) a Coverdell education savings account (as 
defined in section 530(b)(1) of the Internal Revenue 
Code of 1986).’’. 
(b) DEFINITION
OF OTHER FINANCIAL ASSIST-
ANCE.—Subsection (j) of section 480 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087vv(j)) is amended—
(1) by striking ‘‘; TUITION
PREPAYMENT 
PLANS’’ in the heading of such subsection; 
(2) by striking ‘‘(1) For purposes’’ and insert-
ing ‘‘For purposes’’; and 
(3) by striking paragraph (2). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to determinations of 
need under part F of title IV of the Higher Education 
Act of 1965 for academic years beginning on or after July 
1, 2005.
SEC. 7. REPEAL OF EGTRRA SUNSET APPLICABILITY TO 
CERTAIN EDUCATION PROVISIONS. 
Title IX of the Economic Growth and Tax Relief Rec-
onciliation Act of 2001 (relating to sunset of provisions 
of such Act) shall not apply to subtitles A, B, and D of 
title IV of such Act.
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