I
103D CONGRESS
1ST SESSION
H. R. 1667
To amend the Internal Revenue Code of 1986 to allow a credit or deduction
for interest paid on education loans.
IN THE HOUSE OF REPRESENTATIVES
APRIL 2, 1993
Mr. CARDIN (for himself and Mr. BUNNING) 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
credit or deduction for interest paid on education loans.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR INTEREST ON EDUCATION LOANS.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 22 the following new
section:
‘‘SEC. 23. INTEREST ON EDUCATION LOANS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as credit against the tax
imposed by this chapter for the taxable year an amount
equal to 15 percent of the interest paid by the taxpayer
during the taxable year on any qualified education loan.
‘‘(b) MAXIMUM CREDIT.—The credit allowed by sub-
section (a) for the taxable year shall not exceed $300.
‘‘(c) LIMITATION
ON TAXPAYERS ELIGIBLE
FOR
CREDIT.—No credit shall be allowed by this section to an
individual for the taxable year if a deduction under section
151 with respect to such individual is allowed to another
taxpayer for the taxable year beginning in the calendar
year in which such individual’s taxable year begins.
‘‘(d) LIMIT ON PERIOD CREDIT ALLOWED.—
‘‘(1) TAXPAYER
AND
TAXPAYER’S
SPOUSE.—
Except as provided in paragraph (2), a credit shall
be allowed under this section only with respect to in-
terest paid on any qualified education loan during
the first 48 months (whether or not consecutive) in
which interest payments are required. For purposes
of this paragraph, any loan and refinancings of such
loans shall be treated as one loan.
‘‘(2) DEPENDENT.—If the qualified education
loan was used to pay education expenses of an indi-
vidual other than the taxpayer of the taxpayer’s
spouse, a credit shall be allowed under this section
for any taxable year with respect to such loan only
if a deduction under section 151 with respect to
such individual is allowed to the taxpayer for such
taxable year.
‘‘(e) PHASEOUT OF BENEFIT.—
‘‘(1) IN
GENERAL.—The amount of interest
which would (but for this subparagraph) be taken
into account under paragraph (a) for the taxable
year shall be reduced (but not below zero) by the
amount which bears the same ratio to such interest
as the excess of the taxpayer’s adjusted gross in-
come for such taxable year over the applicable dollar
amount bears to phaseout range.
‘‘(2) APPLICABLE DOLLAR AMOUNT; PHASEOUT
RANGE.—For purposes of subparagraph (1)—
‘‘(A) in the case of a return of an unmar-
ried individual, the applicable dollar amount is
$40,000 and the phaseout range is $15,000,
‘‘(B) in the case of joint return, the appli-
cable dollar amount is $60,000 and the phase-
out range is $30,000, and
‘‘(C) in the case of a married individual fil-
ing a separate return, the applicable dollar
amount is $30,000 and the phaseout range is
$15,000.
‘‘(f) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED EDUCATION LOAN.—The term
‘qualified education loan’ means any indebtedness
incurred to pay qualified higher education ex-
penses—
‘‘(A) which are incurred on behalf of the
taxpayer, the taxpayer’s spouse, or a dependent
of the taxpayer,
‘‘(B) which are paid or incurred within a
reasonable period of time before or after the in-
debtedness is incurred, and
‘‘(C) which are attributable to education
furnished during a period during which the re-
cipient was at least a half-time student.
Such term includes indebtedness used to refinance indebt-
edness which qualifies as a qualified education loan. The
term ‘qualified education loan’ shall not include any in-
debtedness owed to a person who is related (within the
meaning of section 267(b) or 707(b)(1)) to the taxpayer.
‘‘(2) QUALIFIED
HIGHER
EDUCATION
EX-
PENSES.—The term ‘qualified higher education ex-
penses’ means the cost of attendance (as defined in
section 472 of the Higher Education Act of 1965,
(section 1087ll of title 20 United States Code), 20
U.S.C. 1087 11, as in effect on the day before the
date of enactment of this Act) of the taxpayer, the
taxpayer’s spouse, or a dependent of the taxpayer at
an eligible educational institution. For purposes of
the preceding sentence, the term ‘eligible educational
institution’ has the same meaning given such term
by section 135(c)(3), except that such term shall
also include an institution conducting an internship
or residency program leading to a degree or certifi-
cate awarded by an institution of higher education,
a hospital, or a health care facility which offers post-
graduate training.
‘‘(3) HALF-TIME
STUDENT.—The term ‘half-
time student’ means any individual who would be a
student as defined in section 151(c)(4) if ‘half-time’
were substituted for ‘full-time’ each place it appears
in such section.
‘‘(4) DEPENDENT.—The term ‘dependent’ has
the meaning given such term by section 152.
‘‘(g) SPECIAL RULES.—
‘‘(1) DENIAL OF DOUBLE BENEFIT.—No credit
shall be allowed under this section for any amount
for which a deduction is allowable under any other
provision of this chapter.