I
104TH CONGRESS
1ST SESSION
H. R. 1229
To amend the Internal Revenue Code of 1986 to allow a deduction for
the payment of interest on student loans.
IN THE HOUSE OF REPRESENTATIVES
MARCH 14, 1995
Mr. KENNEDY of Rhode Island 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 allow a
deduction for the payment of interest on student 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 Loan Afford-
ability Act of 1995’’.
SEC. 2. DEDUCTION FOR HIGHER EDUCATION EXPENSES.
(a) DEDUCTION ALLOWED.—Part VII of subchapter
B of chapter 1 of the Internal Revenue Code of 1986 (re-
lating to additional itemized deductions for individuals) is
amended by redesignating section 220 as section 221 and
by inserting after section 219 the following new section:
‘‘SEC. 220. INTEREST ON STUDENT LOANS.
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an
individual, there shall be allowed as a deduction an
amount equal to the interest on qualified higher education
loans paid by the taxpayer during the taxable year.
‘‘(b) QUALIFIED HIGHER EDUCATION LOAN.—For
purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified higher
education loan’ means a loan which—
‘‘(A) is made to a student to meet the stu-
dent’s cost of attendance at an institution of
higher education;
‘‘(B)(i) is made, insured, or guaranteed by
the Federal Government;
‘‘(ii) is made by a State or a political sub-
division of a State;
‘‘(iii) is made from the proceeds of a quali-
fied student loan bond under section 144(b); or
‘‘(iv) is made by an institution of higher
education (as defined in section 1201(a) of the
Higher Education Act of 1965 (20 U.S.C.
1141(a))); and
‘‘(C) in combination with all other finan-
cial assistance awarded to (or on behalf of)
such student to meet such cost of attendance,
does not exceed such cost of attendance for the
academic year for which such loan is made.
‘‘(2) COST OF ATTENDANCE.—The term ‘cost of
attendance’ has the meaning given such term by sec-
tion 472 of the Higher Education Act of 1965 (20
U.S.C. 1087ll).
‘‘(3) INSTITUTION OF HIGHER EDUCATION.—
Unless stated otherwise, the term ‘institution of
higher education’ means an institution which—
‘‘(A) is described in section 481 of the
Higher Education Act of 1965 (20 U.S.C.
1088), and
‘‘(B) is eligible to participate in programs
under title IV of such Act.
‘‘(c) NO DOUBLE BENEFIT.—No deduction shall be
allowed under subsection (a) for interest on qualified high-
er education loans with respect to which a deduction is
allowed under any other provision of this chapter.
‘‘(d) REGULATIONS.—The Secretary may prescribe
such regulations as may be necessary or appropriate to
carry out this section, including regulations requiring rec-
ordkeeping and information reporting.’’
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Section 62(a) of such Code is
amended by inserting after paragraph (15) the following
new paragraph:
‘‘(16) INTEREST ON STUDENT LOANS.—The de-
duction allowed by section 220.’’
(c) CONFORMING AMENDMENT.—The table of sec-
tions for part VII of subchapter B of chapter 1 of such
Code is amended by striking the item relating to section
220 and inserting:
‘‘Sec. 220. Interest on student loans.
‘‘Sec. 221. Cross reference.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995.
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