,,ii #aadth ,,congress #ast ,session ,s4 #baia ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,october #ba1 #bjae ,mr4 ,wyden 7for himself and ,mr4 ,merkley7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to establish ,federal-,state higher education financing partnerships to drive down the cost of tuition for millions of ,american students4 #a4 ,short title ,this ,act may be cited as the ,promoting ,access and ,retention ,through ,new ,efforts to ,require ,shared ,higher ,investments in ,postsecondary ,success ,act or the ,,partnerships ,act4 ,i ,state-,federal college affordability and completion partnerships #aja4 ,state-,federal college affordability and completion partnerships ,title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj et seq47 is amended by adding at the end the following3 ,j ,state-,federal college affordability and completion partnerships #dii-a4 ,purpose ,the purpose of this part is to establish a ,state-,federal partnership that incentivizes ,state investment in public higher education4 #dii-b4 ,definitions ,in this part3 7#a7 ,eligible ,state ,the term eligible ,state means a ,state that provides1 to public institutions of higher education1 net ,state operating support per ,,fte student in an amount equal to not less than #ej percent of the amount that reflects the maximum ,federal ,pell ,grant award amount for the most recent academic year4 7#b7 ,full-time equivalent student number ,the term full-time equivalent student number means a number reflecting the number of students enrolled full-time at a public institution of higher education in the ,state1 and shall be defined and calculated in the manner determined most appropriate by the ,secretary4 7#c7 ,low-income student ,the term low-income student means a student who is eligible for a ,federal ,pell ,grant under section #dja4 7#d7 ,net ,state operating support ,the term net ,state operating support means an amount that is equal to the amount of ,state funds and local government appropriations used to support public higher education annual operating expenses in the ,state1 calculated in accordance with subparagraphs 7,a7 and 7,b74 7,a7 ,calculation ,a ,state's net ,state operating support shall1 for a fiscal year1 be an amount that is equal to the difference resulting from the gross amount of ,state funds appropriated and disbursed by the ,state and expended by the recipient institutions in the fiscal year for public higher education operating expenses in the ,state1 minus-- 7i7 such appropriations that are returned to the ,state2 7ii7 ,state-appropriated funds derived from ,federal sources1 including funds provided under this part2 7iii7 local government funds not appropriated for operating support for public higher education2 7iv7 amounts that are portions of multi-year appropriations to be distributed over multiple years that are not to be spent for the year for which the calculation is being made2 7v7 tuition charges remitted to the ,state to offset ,state appropriations2 7vi7 ,state funding for students in non-credit continuing or adult education courses and non-credit extension courses2 7vii7 sums appropriated to private nonprofit institutions of higher education1 or to proprietary institutions of higher education1 for capital outlay or operating expenses2 and 7viii7 any other funds excluded under subparagraph 7,b74 7,b7 ,exclusions ,net ,state operating support does not include-- 7i7 funds for-- 7,i7 student aid programs that provide grants to students attending in-,state private nonprofit institutions of higher education1 in-,state proprietary institutions of higher education1 independent institutions1 in-,state public institutions1 and out-of-,state institutions2 7,,ii7 capital outlay2 7,,iii7 deferred maintenance2 or 7,,iv7 research and development2 or 7ii7 any other funds that the ,secretary may exclude4 7#e7 ,net ,state operating support per ,,fte student ,the term net ,state operating support per ,,fte student means1 for a fiscal year-- 7,a7 the net ,state operating support for the previous fiscal year2 divided by 7,b7 the full-time equivalent student number for the previous fiscal year4 7#f7 ,public institution ,the term public institution means an institution of higher education 7as defined in section #aja7 whose liabilities are backed by the full faith and credit of the ,state or its equivalent1 as determined in accordance with section #ffh4ae of title #cd1 ,code of ,federal ,regulations1 or any successor regulation4 7#g7 ,private nonprofit institution of higher education ,the term private nonprofit institution of higher education means an institution of higher education1 as defined in section #ajb1 that is a private nonprofit institution4 7#h7 ,proprietary institution of higher education ,the term proprietary institution of higher education has the meaning given the term in section #ajb7;b74 #dii-c4 ,authorization2 use of funds 7a7 ,authorization ,the ,secretary shall award annual block grants to eligible ,states to encourage ,states to provide additional funding for public higher education4 7b7 ,use of funds by ,states ,an eligible ,state receiving a block grant under this part shall allocate #ajj percent of block grant funding to public institutions for public higher education expenditures in accordance with subsection 7c74 7c7 ,use of funds by public institutions ,a public institution that receives funds under this part shall-- 7#a7 use a portion of such funds to directly reduce tuition costs or mitigate the need to raise tuition and fees for students residing in the ,state2 7#b7 use a portion of such funds to support the enrollment of low-income students in the institution2 7#c7 use a portion of such funds to support retention and degree completion of low-income students2 and 7#d7 create a publicly available report that documents the institution's efforts to satisfy the requirements described in paragraphs 7#a7 through 7#c74 7d7 ,prohibitions 7#a7 ,no use for endowments ,a public institution may not use funds received under this part to increase the endowment of the public institution4 7#b7 ,no use for athletic or commercial venues ,no funds awarded under this part may be used for the modernization1 renovation1 or repair of stadiums or other facilities of a public institution primarily used for athletic contests or events for which admission is charged to the general public4 7e7 ,state limitations on institutions ,nothing in this section shall be construed to prohibit a ,state from establishing additional requirements for public institutions in the ,state for the purpose of increasing the affordability of higher education4 #dii-d4 ,grant formula 7a7 ,grant ,formula ,the ,secretary shall award a block grant to an eligible ,state for a fiscal year in an amount equal to the product of-- 7#a7 the marginal ,federal match amount for the fiscal year1 as determined under subsection 7b72 multiplied by 7#b7 the full-time equivalent student number for the previous fiscal year4 7b7 ,federal ,match ,amount for eligible ,states ,the marginal ,federal match amount shall be the following3 7#a7 ,eligible ,states with net ,state operating support per ,,fte student between #ej percent and #acj percent of the maximum ,federal ,pell ,grant ,the marginal ,federal match amount for an eligible ,state with a net ,state operating support per ,,fte student for the fiscal year that is equal to or more than #ej percent of the amount of the maximum ,federal ,pell ,grant under section #dja for the most recent fiscal year but is less than #acj percent of such amount1 shall be equal to the product of-- 7,a7 the amount of the maximum ,federal ,pell ,grant for the most recent fiscal year2 multiplied by 7,b7 the result of the mathematical expression #j4bfx#b #j4adx #j4jje1 where x represents the ratio obtained by dividing the eligible ,state's net ,state operating support per ,,fte student by the amount of the maximum ,federal ,pell ,grant for the most recent fiscal year4 7#b7 ,eligible ,states with net ,state operating support equal to or greater than #acj percent of the maximum ,federal ,pell ,grant ,the marginal ,federal match amount for an eligible ,state with a net ,state operating support per ,,fte student for the fiscal year equal to or greater than #acj percent of the amount of the maximum ,federal ,pell ,grant for the most recent fiscal year1 shall be equal to the sum of-- 7,a7 the amount calculated under paragraph 7#a7 for a ,state with a net ,state operating support per ,,fte student equal to #acj percent of the amount of the maximum ,federal ,pell ,grant for the most recent fiscal year2 and 7,b7 #aj percent of the amount by which the eligible ,state's net ,state operating support per ,,fte student exceeds #acj percent of such maximum ,federal ,pell ,grant1 except that in no case shall the marginal ,federal match under this paragraph exceed an amount equal to #cj percent of the amount of the maximum ,federal ,pell ,grant for the most recent fiscal year4 7c7 ,ratable ,reduction ,if the sums made available under this part for any fiscal year are insufficient to pay the full amounts that all ,states are eligible to receive in accordance with this section for such year1 the ,secretary shall establish procedures for ratably reducing each ,state's award amount4 #dii-e4 ,accountability and enforcement 7a7 ,annual ,report 7#a7 ,in general ,beginning for the first fiscal year after a ,state receives a block grant under this part1 the ,state shall prepare and submit an annual report to the ,secretary1 which shall include detailed information about the ,state's use of the grant funds to increase the affordability of public higher education and increase the enrollment and completion rates of low-income students 7as measured by eligibility for a ,federal ,pell ,grant74 7#b7 ,contents ,a report described in paragraph 7#a7 shall-- 7,a7 describe the cause of any increases in public higher education costs and the sources of new funding to address such increases2 7,b7 describe all actions taken to incentivize public institutions to reduce tuition costs1 or mitigate the need to raise tuition and fees for in-,state students2 7,c7 explain the extent to which public institutions supported the enrollment of low-income students who are eligible for ,federal ,pell ,grants or other need-based financial assistance2 7,d7 disclose how the ,state distributed the allotment provided under this part to all public institutions1 and the rationale for such distribution2 7,e7 include the aggregated graduation rates for low-income students 7based on eligibility for ,federal ,pell ,grants71 part-time students1 and transfer students1 disaggregated by type of degree or credential2 7,f7 detail ,state efforts to improve the retention and graduation rates of low-income students at both #b-year and #d-year institutions of higher education2 and 7,g7 be publicly available in a manner that is easily accessible to parents1 students1 and consumer advocates4 7b7 ,maintaining ,net ,state ,operating ,support ,per ,,fte ,student 7#a7 ,in general ,each ,state receiving an allotment under this part for a fiscal year shall-- 7,a7 ensure that the amount expended by the ,state1 from funds derived from non-,federal sources1 for net ,state operating support per ,,fte student for the preceding fiscal year was not less than the amount expended by the ,state for net ,state operating support per ,,fte student for the second preceding fiscal year2 and 7,b7 demonstrate the ,state's compliance with subparagraph 7,a7 by providing the ,secretary with a written assurance and detailed documentation4 7#b7 ,penalty ,if a ,state does not comply with paragraph 7#a71 the ,state's grant award under this part shall be reduced by an amount equal to the product of-- 7,a7 the difference between-- 7i7 the net ,state operating support per ,,fte student for the second preceding fiscal year2 minus 7ii7 the net ,state operating support per ,,fte student for the preceding fiscal year2 multiplied by 7,b7 the full-time equivalent student number for the previous fiscal year4 7c7 ,maintenance of effort for ,state-,based financial aid and avoidance of tuition inflation ,each ,state receiving an allotment under this part for a fiscal year shall1 as a condition of receiving the allotment-- 7#a7 maintain the level of ,state student need-based financial aid support provided for costs associated with postsecondary education at not less than the average annual level of such support provided for the #c academic years immediately preceding the year for which the ,state is receiving the allotment2 and 7#b7 ensure that for the academic year immediately following the academic year for which the ,state is receiving the allotment1 all public institutions of higher education in the ,state will not increase tuition for in-,state students by a percentage greater than the estimated percentage increase in the ,consumer ,price ,index 7as determined by the ,secretary1 using the definition in section #dgh7;f77 for the calendar year for which the ,state is receiving the allotment4 7d7 ,authority to compromise ,notwithstanding subsections 7b7 and 7c71 the ,secretary may waive any maintenance of support and effort requirement described in such subsections for a ,state if there is a clear case of a significant economic downturn in the ,state as evidenced by a reduction in ,state domestic product1 real per capita income1 and employment4 ,such determination shall only be made by the ,secretary following a written appeal by the ,state that documents recent and significant decreases in economic activity in the ,state4 #dii-f4 ,authorization of appropriations ,there are authorized to be appropriated to carry out this part such sums as may be necessary for fiscal year #bjaf and each of the five succeeding fiscal years4 4 ,,ii ,tax provisions #bja4 ,permanent extension and modification of ,american ,opportunity and ,lifetime ,learning credits 7a7 ,in general ,section #be;,a of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #be;,a4 ,american ,opportunity ,tax ,credit 7a7 ,in general ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year1 with respect to each eligible student1 an amount equal to the sum of-- 7#a7 #ajj percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year 7for education furnished to the eligible student during any academic period beginning in such taxable year7 as does not exceed #b1jjj1 plus 7#b7 #be percent of so much of such expenses so paid as exceeds the dollar amount in effect under paragraph 7#a7 but does not exceed twice such dollar amount4 7b7 ,portion of credit refundable #fj percent of the credit allowable under subsection 7a7 with respect to each eligible student 7determined without regard to this subsection and section #bf7;a7 and after application of all other provisions of this section7 shall be treated as a credit allowable under subpart ,c 7and not under this part74 ,the preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom section #a7;g7 applies for such taxable year4 7c7 #e-,year limitation ,no credit shall be allowed under subsection 7a7 with respect to any eligible student for any taxable year if such student was taken into account in determining the credit allowed under such subsection 7by the taxpayer or any other individual7 for any #e prior taxable years4 7d7 ,lifetime ,learning credit 7#a7 ,in general ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter an amount equal to #bj percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year 7for education furnished during any academic period beginning in such taxable year7 as does not exceed #aj1jjj4 7#b7 ,special rules for determining expenses 7,a7 ,coordination with ,american ,opportunity ,tax ,credit ,the qualified tuition and related expenses with respect to an individual who is an eligible student for whom a credit under subsection 7a7 is allowed for the taxable year shall not be taken into account under this subsection4 7,b7 ,expenses eligible for ,lifetime ,learning credit ,for purposes of paragraph 7#a71 qualified tuition and related expenses shall include expenses described in subsection 7f77#b7 with respect to any course of instruction at an eligible educational institution to acquire or improve job skills of the individual4 7e7 ,limitation based on modified adjusted gross income 7#a7 ,in general ,the amount allowable as a credit under subsection 7a7 or 7d7 for any taxable year shall be reduced 7but not below zero7 by an amount which bears the same ratio to the amount so allowable 7determined without regard to this subsection and subsection 7b7 but after application of all other provisions of this section7 as-- 7,a7 the excess of-- 7i7 the taxpayer's modified adjusted gross income for such taxable year1 over 7ii7 #hj1jjj in the case of the credit under subsection 7a71 or #dj1jjj in the case of the credit under subsection 7d71 bears to 7,b7 #aj1jjj4 7#b7 ,joint returns ,in the case of a joint return1 each of the dollar amounts in effect under paragraph 7#a7 shall be increased to twice such amount4 7#c7 ,modified adjusted gross income ,for purposes of this subsection1 the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 7#d7 ,inflation adjustment for ,lifetime ,learning credit phaseout 7,a7 ,in general ,in the case of a taxable year beginning after #bjja1 the #dj1jjj amount in paragraph 7#a77;,a77ii7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjjj for calendar year #aiib in subparagraph 7,b7 thereof4 7,b7 ,rounding ,if any amount as adjusted under subparagraph 7,a7 is not a multiple of #a1jjj1 such amount shall be rounded to the next lowest multiple of #a1jjj4 7f7 ,definitions ,for purposes of this section-- 7#a7 ,eligible student ,the term eligible student means1 with respect to any academic period1 a student who-- 7,a7 meets the requirements of section #dhd7;a77#a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajia7;a77#a771 as in effect on ,august #e1 #aiig1 and 7,b7 is carrying at least #a_/b the normal full-time work load for the course of study the student is pursuing4 7#b7 ,qualified tuition and related expenses 7,a7 ,in general ,the term qualified tuition and related expenses means tuition1 fees1 and course materials1 required for enrollment or attendance of-- 7i7 the taxpayer1 7ii7 the taxpayer's spouse1 or 7iii7 any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section #aea1 at an eligible educational institution for courses of instruction of such individual at such institution4 7,b7 ,computer-related expenses included ,except as provided in subsection 7g77#i71 such term includes expenses for the purchase of computer or peripheral equipment 7as defined in section #afh7;i77#b77;,b771 computer software 7as defined in section #aig7;e77#c77;,b771 or ,internet access and related services1 if such equipment1 software1 or services are to be used primarily by the eligible student during any of the years the student is enrolled at an eligible educational institution4 7,c7 ,special needs services included ,such term includes expenses for special needs services in the case of a special needs beneficiary 7within the meaning of section #ebi7;e77#c77;,a77ii7 as in effect on the day before the date of the enactment of the ,promoting ,access and ,retention ,through ,new ,efforts to ,require ,shared ,higher ,investments in ,postsecondary ,success ,act7 which are incurred in connection with the enrollment or attendance of the student at an eligible educational institution4 7,d7 ,exception for education involving sports1 etc ,such term does not include expenses with respect to any course or other education involving sports1 games1 or hobbies1 unless such course or other education is part of the individual's degree program4 7,e7 ,exception for nonacademic fees ,such term does not include student activity fees1 athletic fees1 insurance expenses1 or other expenses unrelated to an individual's academic course of instruction4 7#c7 ,eligible educational institution ,the term eligible educational institution means an institution-- 7,a7 which is described in section #dha of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh71 as in effect on ,august #e1 #aiig1 and 7,b7 which is eligible to participate in a program under title ,,iv of such ,act4 7g7 ,special rules 7#a7 ,identification requirement ,no credit shall be allowed under this section to a taxpayer with respect to the qualified tuition and related expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual1 and the employer identification number of any institution to which such expenses were paid1 on the return of tax for the taxable year4 7#b7 ,adjustment for certain scholarships1 etc 7,a7 ,in general ,the amount of qualified tuition and related expenses otherwise taken into account under subsection 7a7 or 7d7 with respect to an individual for an academic period shall be reduced 7before the application of subsection 7e77 by the sum of any amounts paid for the benefit of such individual which are allocable to such period as-- 7i7 a qualified scholarship which is excludable from gross income under section #aag1 7ii7 an educational assistance allowance under chapter #cj1 #ca1 #cb1 #cd1 or #ce of title #ch1 ,united ,states ,code1 or under chapter #afjf of title #aj1 ,united ,states ,code1 and 7iii7 a payment 7other than a gift1 bequest1 devise1 or inheritance within the meaning of section #ajb7;a77 for such individual's educational expenses1 or attributable to such individual's enrollment at an eligible educational institution1 which is excludable from gross income under any law of the ,united ,states4 7,b7 ,coordination with ,pell ,grants not used for qualified tuition and related expenses ,for purposes of subparagraph 7,a71 the amount of any ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a7 shall be reduced 7but not below zero7 by the amount of expenses 7other than qualified tuition and related expenses7 which are taken into account in determining the cost of attendance 7as defined in section #dgb of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of the ,promoting ,access and ,retention ,through ,new ,efforts to ,require ,shared ,higher ,investments in ,postsecondary ,success ,act7 of such individual at an eligible educational institution for the academic period for which the credit under subsection 7a7 or 7d7 7whichever is applicable7 is being determined4 7#c7 ,treatment of expenses paid by dependent ,if a deduction under section #aea with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins-- 7,a7 no credit shall be allowed under this section to such individual for such individual's taxable year1 7,b7 qualified tuition and related expenses paid by such individual during such individual's taxable year shall be treated for purposes of this section as paid by such other taxpayer1 and 7,c7 a statement described in paragraph 7#h7 and received by such individual shall be treated as received by the taxpayer4 7#d7 ,treatment of certain prepayments ,if qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first #c months following such taxable year1 such academic period shall be treated for purposes of this section as beginning during such taxable year4 7#e7 ,denial of double benefit ,no credit shall be allowed under this section for any amount for which a deduction is allowed under any other provision of this chapter4 7#f7 ,no credit for married individuals filing separate returns ,if the taxpayer is a married individual 7within the meaning of section #ggjc71 this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year4 7#g7 ,nonresident aliens ,if the taxpayer is a nonresident alien individual for any portion of the taxable year1 this section shall apply only if such individual is treated as a resident alien of the ,united ,states for purposes of this chapter by reason of an election under subsection 7g7 or 7h7 of section #fjac4 7#h7 ,payee statement requirement ,except as otherwise provided by the ,secretary1 no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section #fjej,s7d7 which contains all of the information required by paragraph 7#b7 thereof4 7#i7 ,reduced credit in case of certain students ,in the case of a student who is not an eligible student for the taxable year solely by reason of subparagraph 7,b7 of subsection 7f77#a71 the student shall be treated as an eligible student for purposes of this section 7other than subsection 7f77#b77;,b77 for such taxable year except that the dollar amount in effect under subsection 7a77#a7 shall be #a_/b of the amount otherwise in effect for such taxable year4 7h7 ,regulations ,the ,secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out this section1 including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit4 4 7b7 ,requirement ,to report tuition paid rather than tuition billed ,section #fjej,s7b77#b77;,b77i7 of the ,internal ,revenue ,code of #aihf is amended by striking or the aggregate amount billed4 7c7 ,repeal of education savings bonds 7#a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by striking section #ace4 7#b7 ,table of contents ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by striking the item relating to section #ace4 7d7 ,termination of ,coverdell education savings accounts 7#a7 ,in general ,section #ecj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7i7 ,termination ,subsection 7a7 shall not apply to the portion of any ,coverdell education savings account that is attributable to a contribution made after the later of-- 7#a7 ,december #ca1 #bjae1 or 7#b7 the date of the enactment of this subsection4 4 7#b7 ,rollovers to qualified tuition programs ,subsection 7b7 of section #ebi of such ,code is amended by adding at the end the following new paragraph3 7#g7 ,rollovers from ,coverdell education savings accounts ,a program shall not be treated as a qualified tuition program for any taxable year beginning after ,december #ca1 #bjae1 and before ,january #a1 #bjag1 unless it accepts 7without regard to any contribution limitations otherwise applicable under the program7 contributions made during such taxable year which are paid or distributed from a ,coverdell education savings account for the benefit of the same designated beneficiary as such program or a member of the family of such beneficiary4 4 7e7 ,conforming amendments 7#a7 ,section #fb7;d77#b7 of such ,code is amended by striking #ace14 7#b7 ,sections #hf7;b77#b77;,a71 #acg7;b77#c77;,b71 #aii7;d77#b77;,a71 #bai7;g77#c77;,a77ii71 and #bba7;b77#b77;,c77ii7 of such ,code are each amended by striking #ace14 7#c7 ,section #bba7;d7 of such ,code is amended-- 7,a7 by striking #be;,a7f77#b7 in paragraph 7#b7 and inserting #be;,a7f77#c71 and 7,b7 by striking #be;,a7b77#c7 in paragraph 7#c7 and inserting #be;,a7f77#a74 7#d7 ,section #bbb of such ,code is amended-- 7,a7 by striking elects to have section #be;,a apply in subsection 7c77#b77;,a7 and inserting claims the credit under section #be;,a1 7,b7 by striking if credit elected in the heading of subparagraph 7,a7 of subsection 7c77#b7 and inserting for #be;,a expenses1 7,c7 by striking #ace1 in subsection 7c77#b77;,b71 and 7,d7 by striking #be;,a7f7 in subsection 7d77#a7 and inserting #be;,a7f77#b74 7#e7 ,section #dfi7;i77#c77;,f77ii7 of such ,code is amended by striking sections #ace and #acg and inserting section #acg4 7#f7 ,section #ecj7;d77#b77;,c7 of such ,code is amended by striking ,hope and ,lifetime ,learning credits in the heading and inserting ,american opportunity tax credit4 7#g7 ,section #fajc7l77#bj77;,a77iv7 is amended by striking sections #ace and #iaa and inserting section #iaa4 7#h7 ,section #fbaa7;b77#d77;,a7 of such ,code is amended by striking subsection 7i77#f7 and inserting subsection 7b74 7#i7 ,section #fbac7;g77#b77;,j7 of such ,code is amended by striking ,,tin required under section #be;,a7g77#a7 and inserting ,,tin or employer identification number required under section #be;,a7g77#a74 7#aj7 ,section #ajjd7;c7 of division ,b of the ,american ,recovery and ,reinvestment ,tax ,act of #bjji is amended-- 7,a7 in paragraph 7#a7-- 7i7 by striking section #be;,a7i77#f7 each place it appears and inserting section #be;,a7b71 7ii7 by striking 8with respect to taxable years beginning after #bjjh and before #bjah0 in subparagraph 7,a7 and inserting 8with respect to each taxable year01 and 7iii7 by striking 8for taxable years beginning after #bjjh and before #bjah0 in subparagraph 7,b7 and inserting 8for each taxable year01 7,b7 in paragraph 7#b71 by striking ,section #be;,a7i77#f7 and inserting ,section #be;,a7b71 and 7,c7 in paragraph 7#c77;,c71 by striking subsection 7i77#f7 and inserting subsection 7b74 7#aa7 ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by striking the item relating to section #be;,a and inserting the following new item3 ,sec4 #be;,a4 ,american opportunity tax credit4 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #bjb4 ,expansion of exclusion for educational assistance programs 7a7 ,in general ,paragraph 7#b7 of section #abg7;a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking #e1bej in the heading and inserting #aj1ejj1 and 7#b7 by striking #e1bej both places it appears and inserting #aj1ejj4 7b7 ,expenses of employee's spouse and dependents ,paragraph 7#b7 of section #abg7;c7 of the ,internal ,revenue ,code of #aihf is amended by striking includes and all that follows and inserting 8includes1 for any year-- 7,a7 an individual who is an employee within the meaning of section #dja7;c77#a7 7relating to self-employed individuals71 and 7,b7 any spouse or dependent of an employee4 4 7c7 ,employer-,provided educational loan repayment assistance 7#a7 ,in general ,paragraph 7#a7 of section #abg7;c7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking and at the end of subparagraph 7,a71 7,b7 by striking the comma at the end of subparagraph 7,b7 and inserting 1 and1 and 7,c7 by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 the payment by an employer of any portion of the indebtedness of an employee pursuant to a student loan of the employee1 4 7#b7 ,student loan ,section #abg7;c7 of such ,code is amended-- 7,a7 by redesignating paragraphs 7#d71 7#e71 7#f71 and 7#g7 as paragraphs 7#e71 7#f71 7#g71 and 7#h71 respectively1 and 7,b7 by inserting after paragraph 7#c7 the following new paragraph3 7#d7 ,student loan ,the term student loan means any loan to an individual to assist the individual in attending an educational organization described in section #agj7;b77#a77;,a77ii74 4 7#c7 ,conforming amendment2 denial of double benefit ,paragraph 7#a7 of section #bba7;e7 of such ,code is amended by inserting before the period the following3 1 or for which an exclusion is allowable under section #abg to the taxpayer's employer by reason of the payment by such employer of any indebtedness on a student loan of the taxpayer4 7d7 ,effective date ,the amendments made by this section shall apply to expenses paid or incurred and loan payments made in taxable years beginning after ,december #ca1 #bjae4 #bjc4 ,exclusion of certain student loan repayments and loan forgiveness 7a7 ,in general ,paragraph 7#a7 of section #ajh7;f7 of the ,internal ,revenue ,code of #aihf is amended by striking 7in whole or in part7 and all that follows and inserting 7in whole or in part7 or1 in the case of paragraph 7#c71 the repayment of any student loan if such discharge or repayment meets the requirements of paragraph 7#b71 7#c71 or 7#d744 7b7 ,public interest student loans ,paragraph 7#b7 of section #ajh7;f7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,certain public interest student loans 7,a7 ,in general ,a discharge meets the requirements of this paragraph if it is made pursuant to a provision of a student loan described in subparagraph 7,b7 under which all or part of the indebtedness of an individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers4 7,b7 ,limitation ,a student loan is described in this subparagraph if such loan is made-- 7i7 by the ,united ,states1 or an instrumentality or agency thereof1 7ii7 by a ,state1 territory1 or possession of the ,united ,states1 or the ,district of ,columbia1 or any political subdivision thereof1 7iii7 by a public benefit corporation-- 7,i7 which is exempt from taxation under section #eja7;c77#c71 7,,ii7 which has assumed control over a ,state1 county1 or municipal hospital1 and 7,,iii7 whose employees have been deemed to be public employees under ,state law1 7iv7 by any educational organization described in section #agj7;b77#a77;,a77ii7-- 7,i7 pursuant to an agreement with any entity described in clause 7i71 7ii71 or 7iii7 under which the funds from which the loan was made were provided to such educational organization1 or 7,,ii7 pursuant to a program of such educational organization which is designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students 7or former students7 are for or under the direction of a governmental unit or an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 or 7v7 by an educational organization described in section #agj7;b77#a77;,a77ii7 or an organization exempt from tax under section #eja7;a7-- 7,i7 to refinance a loan that meets the requirements of clause 7i71 7ii71 7iii71 or 7iv71 or 7,,ii7 to refinance a loan to an individual to assist the individual in attending any such educational organization1 but only if the refinancing loan is pursuant to a program of the refinancing organization which is designed as described in clause 7iv77,,ii74 7,c7 ,exception for discharges on account of services performed for certain lenders ,a discharge of a loan made by an organization described in subparagraph 7,b77iv7 does not meet the requirements of this paragraph if the discharge is on account of services performed for either such organization4 4 7c7 ,institution-,provided loan repayments ,paragraph 7#c7 of section #ajh7;f7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#c7 ,institution-provided loan repayments ,a repayment meets the requirements of this paragraph if-- 7,a7 it is made by an organization described in section #eja7;c77#c7 that is exempt from tax under section #eja7;a71 7,b7 it is made pursuant to a program that repays all or a portion of the student loans of individuals on the condition that at the time of the repayment the individuals are working for or under the direction of a governmental unit or an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 and 7,c7 it is not made on account of services performed for the organization described in subparagraph 7,a74 4 7d7 ,certain other student loan forgiveness ,subsection 7f7 of section #ajh of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by redesignating paragraph 7#d7 as paragraph 7#e71 and 7#b7 by inserting after paragraph 7#c7 the following new paragraph3 7#d7 ,certain other student loan forgiveness ,a discharge meets the requirements of this paragraph if it is made-- 7,a7 in the case of a loan made by the ,united ,states or an instrumentality or agency thereof1 pursuant to-- 7i7 an income-based repayment plan under section #dic;,c of the ,higher ,education ,act of #aife1 or 7ii7 an income contingent repayment plan in accordance with section #dee of such ,act1 or 7,b7 because of the death or disability of the student4 4 7e7 ,student loan ,subsection 7f7 of section #ajh of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7d71 is amended-- 7#a7 by redesignating paragraph 7#e7 as paragraph 7#f71 and 7#b7 by inserting after paragraph 7#d7 the following new paragraph3 7#e7 ,student loan ,for purposes of this subsection1 the term student loan means any loan to an individual to assist the individual in attending an educational organization described in section #agj7;b77#a77;,a77ii74 4 7f7 ,conforming amendments 7#a7 ,section #abg7;c77#d7 of the ,internal ,revenue ,code of #aihf1 as added by this ,act1 is amended by striking means any loan and all that follows and inserting has the meaning given such term by section #ajh7;f77#e744 7#b7 ,sections #caba7;a77#bj71 #cbca7;e77#e71 #ccjf7;b77#af71 and #cdja7;a77#ai7 of such ,code are each amended by striking #ajh7;f77#d7 and inserting #ajh7;f77#f74 7g7 ,effective date ,the amendments made by this section shall apply to discharges of indebtedness after ,december #ca1 #bjae4 #bjd4 ,uniform definition of qualifying education expenses 7a7 ,educational assistance programs ,paragraph 7#a7 of section #abg7;c7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking 7including1 but not limited to1 tuition1 fees1 and similar payments1 books1 supplies1 and equipment7 in subparagraph 7,a7 and inserting 7including qualified tuition and related expenses1 as defined in section #be;,a7f77#b771 and 7#b7 by striking the second sentence4 7b7 ,qualified scholarships ,paragraph 7#b7 of section #aag7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking means-- and all that follows and inserting has the meaning given such term by section #be;,a7f77#b744 7c7 ,qualified tuition programs 7#a7 ,computer technology and equipment allowed as a qualified higher education expense for years before #bjah 7,a7 ,in general ,clause 7iii7 of section #ebi7;e77#c77;,a7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7iii7 expenses for the purchase of computer or peripheral equipment 7as defined in section #afh7;i77#b77;,b771 computer software 7as defined in section #aig7;e77#c77;,b771 or ,internet access and related services1 if such equipment1 software1 or services are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution4 4 7,b7 ,effective date ,the amendment made by this paragraph shall apply to taxable years beginning after ,december #ca1 #bjae4 7#b7 ,permanent definition ,paragraph 7#c7 of section #ebi7;e7 of such ,code1 as amended by paragraph 7#a71 is amended-- 7,a7 by striking subparagraph 7,a7 and inserting the following new subparagraph3 7,a7 ,in general ,except as provided in subparagraph 7,b71 the term qualified higher education expenses has the same meaning as the term qualified tuition and related expenses as defined in section #be;,a7f77#b74 1 7,b7 by striking section #be;,a7b77#c7 in clause 7i7 of subparagraph 7,b7 and inserting section #be;,a7f77#a7 7not including any individual treated as an eligible student solely by reason of section #be;,a7g77#i771 and 7,c7 by striking such institution in clause 7i7 of subparagraph 7,b7 and inserting an eligible educational institution4 7d7 ,technical amendment ,clause 7iii7 of section #ecj7;b77#c77;,a7 of the ,internal ,revenue ,code of #aihf is amended by striking 7as defined in section #agj7;e77#f77;,f77i77 or and inserting described in section #be;,a7f77#b77;,b7 or any4 7e7 ,repeal of deadwood 7#a7 ,in general ,part ,,ii of subchapter ,y of chapter #a of the ,internal ,revenue ,code of #aihf is amended by striking section #adjj,o4 7#b7 ,clerical amendment ,the table of sections for part ,,ii of subchapter ,y of chapter #a of such ,code is amended by striking the item relating to section #adjj,o4 7f7 ,effective date ,except as provided in subsection 7d77#a77;,b71 the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #bje4 ,expansion of ,pell ,grant exclusion from gross income2 treatment under ,hope ,scholarship and ,lifetime ,learning credits 7a7 ,in general ,paragraph 7#a7 of section #aag7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking received by an individual and all that follows and inserting 8received by an individual-- 7,a7 as a scholarship or fellowship grant to the extent the individual establishes that1 in accordance with the conditions of the grant1 such amount was used for qualified tuition and related expenses1 or 7,b7 as a ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife 7as in effect on the date of the enactment of this subparagraph74 4 7b7 ,coordination with ,hope ,scholarship and ,lifetime ,learning credits ,paragraph 7#b7 of section #be;,a7g7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by redesignating subparagraphs 7,a71 7,b71 and 7,c7 as clauses 7i71 7ii71 and 7iii71 respectively1 and by moving such clauses #b ems to the right1 7#b7 by striking etc4--,the amount and inserting 8etc4-- 7,a7 ,in general ,the amount 1 and 7#c7 by adding at the end the following new subparagraph3 7,b7 ,coordination with ,pell ,grants not used for qualified tuition and related expenses ,for purposes of subparagraph 7,a71 the amount of any ,federal ,pell ,grant under section #dja of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a7 shall be reduced 7but not below zero7 by the amount of expenses 7other than qualified tuition and related expenses7 which are taken into account in determining the cost of attendance 7as defined in section #dgb of the ,higher ,education ,act of #aife1 as in effect on the date of the enactment of the ,promoting ,access and ,retention ,through ,new ,efforts to ,require ,shared ,higher ,investments in ,postsecondary ,success ,act7 of such individual at an eligible educational institution for the academic period for which the credit under subsection 7a7 is being determined4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjae4 #bjf4 ,modifications to qualified tuition programs 7a7 ,elimination of distribution aggregation requirements 7#a7 ,in general ,section #ebi7;c77#c7 of the ,internal ,revenue ,code of #aihf is amended by striking subparagraph 7,d74 7#b7 ,effective date ,the amendment made by this subsection shall apply to distributions after ,december #ca1 #bjae4 7b7 ,recontribution of refunded amounts 7#a7 ,in general ,section #ebi7;c77#c7 of the ,internal ,revenue ,code of #aihf1 as amended by subsection 7a71 is amended by adding at the end the following new subparagraph3 7,d7 ,special rule for contributions of refunded amounts ,in the case of a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution1 subparagraph 7,a7 shall not apply to that portion of any distribution for the taxable year which is recontributed to a qualified tuition program of which such individual is a beneficiary1 but only to the extent such recontribution is made not later than #fj days after the date of such refund and does not exceed the refunded amount4 4 7#b7 ,effective date 7,a7 ,in general ,the amendment made by this subsection shall apply with respect to refunds of qualified higher education expenses after ,december #ca1 #bjae4 7,b7 ,transition rule ,in the case of a refund of qualified higher education expenses received after ,december #ca1 #bjae1 and before the date of the enactment of this ,act 7if later71 section #ebi7;c77#c77;,d7 of the ,internal ,revenue ,code of #aihf 7as added by this section7 shall be applied by substituting not later than #fj days after the date of the enactment of this subparagraph for not later than #fj days after the date of such refund4