I
104TH CONGRESS
1ST SESSION
H. R. 157
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
JANUARY 4, 1995
Mr. SOLOMON introduced the following bill; which was referred to the
Committee on Ways and Means
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Student Tax Equity
Act of 1995’’.
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SEC. 2. RESTORATION OF PRIOR LAW EXCLUSION FOR
SCHOLARSHIPS AND FELLOWSHIPS.
(a) IN GENERAL.—Each provision of law amended by
section 123 of the Tax Reform Act of 1986 is amended
to read as if the amendments made by such section had
not been enacted.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
SEC. 3. RESTORATION OF DEDUCTION FOR INTEREST ON
EDUCATIONAL LOANS.
(a) IN GENERAL.—Paragraph (2) of section 163(h)
of the Internal Revenue Code of 1986 (defining personal
interest) is amended by striking ‘‘and’’ at the end of sub-
paragraph (D), by redesignating subparagraph (E) as sub-
paragraph (F), and by inserting after subparagraph (D)
the following new subparagraph:
‘‘(E) any interest on a qualified edu-
cational loan, and’’.
(b) QUALIFIED EDUCATIONAL LOAN DEFINED.—
Subsection (h) of section 163 of such Code is amended
by adding at the end the following new paragraph:
‘‘(6) QUALIFIED EDUCATIONAL LOAN.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, the term ‘qualified educational loan’
means any indebtedness incurred to pay quali-
•H 157 IH
fied educational expenses which are paid or in-
curred within a reasonable period of time before
or after the indebtedness is incurred.
‘‘(B) 
QUALIFIED
EDUCATIONAL
EX-
PENSES.—For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘quali-
fied educational expenses’ means qualified
tuition and related expenses of the tax-
payer, his spouse, or a dependent for at-
tendance at an educational institution de-
scribed in section 170(b)(1)(A)(ii).
‘‘(ii) QUALIFIED TUITION AND RELAT-
ED
EXPENSES.—The term ‘qualified tui-
tion and related expenses’ means—
‘‘(I) tuition and fees required for
enrollment or attendance at an edu-
cational institution described in sec-
tion 170(b)(1)(A)(ii),
‘‘(II) fees, books, supplies, and
equipment required for courses of in-
struction at such an institution, and
‘‘(III) reasonable living expenses
while away from home.
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‘‘(C) DEPENDENT.—For purposes of this
paragraph, the term ‘dependent’ has the mean-
ing given such term by section 152.
‘‘(D) COORDINATION
WITH
PARAGRAPH
(3)(C)(ii).—Any qualified educational loan shall
not be taken into account for purposes of apply-
ing the limitation of paragraph (3)(C)(ii).’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
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