,,ii  #aad? ,,congress  #a/ ,session    
,s4 #baia  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,octob] #ba1 #bjae ,mr4
 ,wyd5 7= himself & ,mr4 ,m]kley7       
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to e/abli%         
,f$]al-,/ate high] education f9anc+     
p>tn]%ips to drive d[n ! co/ ( tuition =
 millions ( ,am]ican /ud5ts4  #a4 ,%ort 
title  ,?is ,act may be cit$ z !        
,promot+ ,access & ,ret5tion ,?r\gh ,new
 ,ef=ts to ,require ,%>$ ,high]         
,inve/m5ts 9 ,po/second>y ,success ,act 
or ! ,,p>tn]%ips ,act4  ,i ,/ate-,f$]al 
college af=dability & completion        
p>tn]%ips  #aja4 ,/ate-,f$]al college   
af=dability & completion p>tn]%ips      
,title ,,iv ( ! ,high] ,education ,act (
 #aife 7#bj ,u4,s4,c4 #ajgj et seq47 is 
am5d$ by add+ at ! end ! foll[+3  ,j    
,/ate-,f$]al college af=dability &      
completion p>tn]%ips  #dii-a4 ,purpose  
,! purpose ( ?is "p is to e/abli% a     
,/ate-,f$]al p>tn]%ip t inc5tivizes     

,/ate inve/m5t 9 public high] education4
  #dii-b4 ,def9itions ,9 ?is "p3 7#a7   
,eligible ,/ate ,! t]m eligible ,/ate   
means a ,/ate t provides1 to public     
in/itutions ( high] education1 net ,/ate
 op]at+ support p] ,,fte /ud5t 9 an     
am\nt equal to n less ?an #ej p]c5t ( ! 
am\nt t reflects ! maximum ,f$]al ,pell 
,grant aw>d am\nt = ! mo/ rec5t academic
 ye>4  7#b7 ,full-"t equival5t /ud5t    
numb] ,! t]m full-"t equival5t /ud5t    
numb] means a numb] reflect+ ! numb] (  
/ud5ts enroll$ full-"t at a public      
in/itution ( high] education 9 ! ,/ate1 
& %all be def9$ & calculat$ 9 ! mann]   
det]m9$ mo/ appropriate by ! ,secret>y4 
7#c7 ,l[-income /ud5t ,! t]m l[-income  
/ud5t means a /ud5t :o is eligible = a  
,f$]al ,pell ,grant "u section #dja4    
7#d7 ,net ,/ate op]at+ support ,! t]m   
net ,/ate op]at+ support means an am\nt 
t is equal to ! am\nt ( ,/ate funds &   
local gov]nm5t appropriations us$ to    
support public high] education annual   
op]at+ exp5ses 9 ! ,/ate1 calculat$ 9   

accordance ) subp>agraphs 7,a7 & 7,b74  
7,a7 ,calculation ,a ,/ate's net ,/ate  
op]at+ support %all1 = a fiscal ye>1 be 
an am\nt t is equal to ! diff]5ce       
result+ f ! gross am\nt ( ,/ate funds   
appropriat$ & disburs$ by ! ,/ate &     
exp5d$ by ! recipi5t in/itutions 9 !    
fiscal ye> = public high] education     
op]at+ exp5ses 9 ! ,/ate1 m9us--  7i7   
su* appropriations t are return$ to !   
,/ate2  7ii7 ,/ate-appropriat$ funds    
d]iv$ f ,f$]al s\rces1 includ+ funds    
provid$ "u ?is "p2  7iii7 local gov]nm5t
 funds n appropriat$ = op]at+ support = 
public high] education2  7iv7 am\nts t  
are portions ( multi-ye> appropriations 
to be di/ribut$ ov] multiple ye>s t are 
n to be sp5t = ! ye> = :i* ! calculation
 is be+ made2  7v7 tuition *>ges remitt$
 to ! ,/ate to (fset ,/ate              
appropriations2  7vi7 ,/ate fund+ =     
/ud5ts 9 non-cr$it cont9u+ or adult     
education c\rses & non-cr$it ext5sion   
c\rses2  7vii7 sums appropriat$ to      
private nonpr(it in/itutions ( high]    

education1 or to propriet>y in/itutions 
( high] education1 = capital outlay or  
op]at+ exp5ses2 &  7viii7 any o!r funds 
exclud$ "u subp>agraph 7,b74  7,b7      
,exclusions ,net ,/ate op]at+ support   
does n include--  7i7 funds =-- 7,i7    
/ud5t aid programs t provide grants to  
/ud5ts att5d+ 9-,/ate private nonpr(it  
in/itutions ( high] education1 9-,/ate  
propriet>y in/itutions ( high]          
education1 indep5d5t in/itutions1       
9-,/ate public in/itutions1 &           
out-(-,/ate in/itutions2  7,,ii7 capital
 outlay2  7,,iii7 def]r$ ma9t5ance2 or  
7,,iv7 rese>* & developm5t2 or  7ii7 any
 o!r funds t ! ,secret>y may exclude4   
7#e7 ,net ,/ate op]at+ support p] ,,fte 
/ud5t ,! t]m net ,/ate op]at+ support p]
 ,,fte /ud5t means1 = a fiscal ye>--    
7,a7 ! net ,/ate op]at+ support = !     
previ\s fiscal ye>2 divid$ by  7,b7 !   
full-"t equival5t /ud5t numb] = !       
previ\s fiscal ye>4  7#f7 ,public       
in/itution ,! t]m public in/itution     
means an in/itution ( high] education 7z

 def9$ 9 section #aja7 ^: liabilities   
are back$ by ! full fai? & cr$it ( !    
,/ate or its equival5t1 z det]m9$ 9     
accordance ) section #ffh4ae ( title    
#cd1 ,code ( ,f$]al ,regulations1 or any
 successor regulation4  7#g7 ,private   
nonpr(it in/itution ( high] education ,!
 t]m private nonpr(it in/itution ( high]
 education means an in/itution ( high]  
education1 z def9$ 9 section #ajb1 t is 
a private nonpr(it in/itution4  7#h7    
,propriet>y in/itution ( high] education
 ,! t]m propriet>y in/itution ( high]   
education has ! mean+ giv5 ! t]m 9      
section #ajb7;b74  #dii-c4              
,au?orization2 use ( funds  7a7         
,au?orization ,! ,secret>y %all aw>d    
annual block grants to eligible ,/ates  
to enc\rage ,/ates to provide additional
 fund+ = public high] education4  7b7   
,use ( funds by ,/ates ,an eligible     
,/ate receiv+ a block grant "u ?is "p   
%all allocate #ajj p]c5t ( block grant  
fund+ to public in/itutions = public    
high] education exp5ditures 9 accordance

 ) subsection 7c74  7c7 ,use ( funds by 
public in/itutions ,a public in/itution 
t receives funds "u ?is "p %all-- 7#a7  
use a portion ( su* funds to directly   
r$uce tuition co/s or mitigate ! ne$ to 
raise tuition & fees = /ud5ts resid+ 9 !
 ,/ate2  7#b7 use a portion ( su* funds 
to support ! enrollm5t ( l[-income      
/ud5ts 9 ! in/itution2  7#c7 use a      
portion ( su* funds to support ret5tion 
& degree completion ( l[-income /ud5ts2 
&  7#d7 create a publicly available     
report t docum5ts ! in/itution's ef=ts  
to satisfy ! requirem5ts describ$ 9     
p>agraphs 7#a7 ?r\gh 7#c74  7d7         
,prohibitions  7#a7 ,no use = end[m5ts  
,a public in/itution may n use funds    
receiv$ "u ?is "p to increase ! end[m5t 
( ! public in/itution4  7#b7 ,no use =  
a?letic or comm]cial v5ues ,no funds    
aw>d$ "u ?is "p may be us$ = !          
mod]nization1 r5ovation1 or repair (    
/adiums or o!r facilities ( a public    
in/itution prim>ily us$ = a?letic       
conte/s or ev5ts = :i* admission is *>g$

 to ! g5]al public4  7e7 ,/ate          
limitations on in/itutions ,no?+ 9 ?is  
section %all be con/ru$ to prohibit a   
,/ate f e/abli%+ additional requirem5ts 
= public in/itutions 9 ! ,/ate = !      
purpose ( increas+ ! af=dability ( high]
 education4  #dii-d4 ,grant =mula  7a7  
,grant ,=mula ,! ,secret>y %all aw>d a  
block grant to an eligible ,/ate = a    
fiscal ye> 9 an am\nt equal to ! product
 (--  7#a7 ! m>g9al ,f$]al mat* am\nt = 
! fiscal ye>1 z det]m9$ "u subsection   
7b72 multipli$ by  7#b7 ! full-"t       
equival5t /ud5t numb] = ! previ\s fiscal
 ye>4  7b7 ,f$]al ,mat* ,am\nt =        
eligible ,/ates ,! m>g9al ,f$]al mat*   
am\nt %all be ! foll[+3  7#a7 ,eligible 
,/ates ) net ,/ate op]at+ support p]    
,,fte /ud5t betwe5 #ej p]c5t & #acj     
p]c5t ( ! maximum ,f$]al ,pell ,grant ,!
 m>g9al ,f$]al mat* am\nt = an eligible 
,/ate ) a net ,/ate op]at+ support p]   
,,fte /ud5t = ! fiscal ye> t is equal to
 or m ?an #ej p]c5t ( ! am\nt ( !       
maximum ,f$]al ,pell ,grant "u section  

#dja = ! mo/ rec5t fiscal ye> b is less 
?an #acj p]c5t ( su* am\nt1 %all be     
equal to ! product (--  7,a7 ! am\nt ( !
 maximum ,f$]al ,pell ,grant = ! mo/    
rec5t fiscal ye>2 multipli$ by  7,b7 !  
result ( ! ma!matical expression        
#j4bfx#b  #j4adx  #j4jje1 :]e x         
repres5ts ! ratio obta9$ by divid+ !    
eligible ,/ate's net ,/ate op]at+       
support p] ,,fte /ud5t by ! am\nt ( !   
maximum ,f$]al ,pell ,grant = ! mo/     
rec5t fiscal ye>4  7#b7 ,eligible ,/ates
 ) net ,/ate op]at+ support equal to or 
great] ?an #acj p]c5t ( ! maximum ,f$]al
 ,pell ,grant ,! m>g9al ,f$]al mat*     
am\nt = an eligible ,/ate ) a net ,/ate 
op]at+ support p] ,,fte /ud5t = ! fiscal
 ye> equal to or great] ?an #acj p]c5t (
 ! am\nt ( ! maximum ,f$]al ,pell ,grant
 = ! mo/ rec5t fiscal ye>1 %all be equal
 to ! sum (--  7,a7 ! am\nt calculat$ "u
 p>agraph 7#a7 = a ,/ate ) a net ,/ate  
op]at+ support p] ,,fte /ud5t equal to  
#acj p]c5t ( ! am\nt ( ! maximum ,f$]al 
,pell ,grant = ! mo/ rec5t fiscal ye>2 &

  7,b7 #aj p]c5t ( ! am\nt by :i* !     
eligible ,/ate's net ,/ate op]at+       
support p] ,,fte /ud5t exce$s #acj p]c5t
 ( su* maximum ,f$]al ,pell ,grant1     
except t 9 no case %all ! m>g9al ,f$]al 
mat* "u ?is p>agraph exce$ an am\nt     
equal to #cj p]c5t ( ! am\nt ( ! maximum
 ,f$]al ,pell ,grant = ! mo/ rec5t      
fiscal ye>4  7c7 ,ratable ,r$uction ,if 
! sums made available "u ?is "p = any   
fiscal ye> are insuffici5t to pay ! full
 am\nts t all ,/ates are eligible to    
receive 9 accordance ) ?is section = su*
 ye>1 ! ,secret>y %all e/abli% proc$ures
 = ratably r$uc+ ea* ,/ate's aw>d am\nt4
  #dii-e4 ,acc\ntability & en=cem5t  7a7
 ,annual ,report  7#a7 ,9 g5]al ,beg9n+ 
= ! fir/ fiscal ye> aft] a ,/ate        
receives a block grant "u ?is "p1 !     
,/ate %all prep>e & submit an annual    
report to ! ,secret>y1 :i* %all include 
detail$ in=mation ab\t ! ,/ate's use ( !
 grant funds to increase ! af=dability (
 public high] education & increase !    
enrollm5t & completion rates ( l[-income

 /ud5ts 7z measur$ by eligibility = a   
,f$]al ,pell ,grant74  7#b7 ,cont5ts ,a 
report describ$ 9 p>agraph 7#a7 %all--  
7,a7 describe ! cause ( any increases 9 
public high] education co/s & ! s\rces (
 new fund+ to address su* increases2    
7,b7 describe all actions tak5 to       
inc5tivize public in/itutions to r$uce  
tuition co/s1 or mitigate ! ne$ to raise
 tuition & fees = 9-,/ate /ud5ts2  7,c7 
expla9 ! ext5t to :i* public in/itutions
 support$ ! enrollm5t ( l[-income /ud5ts
 :o are eligible = ,f$]al ,pell ,grants 
or o!r ne$-bas$ f9ancial assi/ance2     
7,d7 disclose h[ ! ,/ate di/ribut$ !    
allotm5t provid$ "u ?is "p to all public
 in/itutions1 & ! rationale = su*       
di/ribution2  7,e7 include ! aggregat$  
graduation rates = l[-income /ud5ts     
7bas$ on eligibility = ,f$]al ,pell     
,grants71 "p-"t /ud5ts1 & transf]       
/ud5ts1 disaggregat$ by type ( degree or
 cr$5tial2  7,f7 detail ,/ate ef=ts to  
improve ! ret5tion & graduation rates ( 
l[-income /ud5ts at bo? #b-ye> & #d-ye> 

in/itutions ( high] education2 &  7,g7  
be publicly available 9 a mann] t is    
easily accessible to p>5ts1 /ud5ts1 &   
consum] advocates4  7b7 ,ma9ta9+ ,net   
,/ate ,op]at+ ,support ,p] ,,fte ,/ud5t 
7#a7 ,9 g5]al ,ea* ,/ate receiv+ an     
allotm5t "u ?is "p = a fiscal ye> %all--
 7,a7 ensure t ! am\nt exp5d$ by !      
,/ate1 f funds d]iv$ f non-,f$]al       
s\rces1 = net ,/ate op]at+ support p]   
,,fte /ud5t = ! prec$+ fiscal ye> 0 n   
less ?an ! am\nt exp5d$ by ! ,/ate = net
 ,/ate op]at+ support p] ,,fte /ud5t = !
 second prec$+ fiscal ye>2 &  7,b7      
demon/rate ! ,/ate's compliance )       
subp>agraph 7,a7 by provid+ ! ,secret>y 
) a writt5 assurance & detail$          
docum5tation4  7#b7 ,p5alty ,if a ,/ate 
does n comply ) p>agraph 7#a71 ! ,/ate's
 grant aw>d "u ?is "p %all be r$uc$ by  
an am\nt equal to ! product (--  7,a7 ! 
diff]5ce betwe5-- 7i7 ! net ,/ate op]at+
 support p] ,,fte /ud5t = ! second      
prec$+ fiscal ye>2 m9us  7ii7 ! net     
,/ate op]at+ support p] ,,fte /ud5t = ! 

prec$+ fiscal ye>2 multipli$ by  7,b7 ! 
full-"t equival5t /ud5t numb] = !       
previ\s fiscal ye>4  7c7 ,ma9t5ance (   
ef=t = ,/ate-,bas$ f9ancial aid &       
avoidance ( tuition inflation ,ea* ,/ate
 receiv+ an allotm5t "u ?is "p = a      
fiscal ye> %all1 z a condition ( receiv+
 ! allotm5t--  7#a7 ma9ta9 ! level (    
,/ate /ud5t ne$-bas$ f9ancial aid       
support provid$ = co/s associat$ )      
po/second>y education at n less ?an !   
av]age annual level ( su* support       
provid$ = ! #c academic ye>s imm$iately 
prec$+ ! ye> = :i* ! ,/ate is receiv+ ! 
allotm5t2 &  7#b7 ensure t = ! academic 
ye> imm$iately foll[+ ! academic ye> =  
:i* ! ,/ate is receiv+ ! allotm5t1 all  
public in/itutions ( high] education 9 !
 ,/ate w n increase tuition = 9-,/ate   
/ud5ts by a p]c5tage great] ?an !       
e/imat$ p]c5tage increase 9 ! ,consum]  
,price ,index 7z det]m9$ by ! ,secret>y1
 us+ ! def9ition 9 section #dgh7;f77 = !
 cal5d> ye> = :i* ! ,/ate is receiv+ !  
allotm5t4  7d7 ,au?ority to compromise  

,not)/&+ subsections 7b7 & 7c71 !       
,secret>y may waive any ma9t5ance (     
support & ef=t requirem5t describ$ 9 su*
 subsections = a ,/ate if !re is a cle> 
case ( a significant economic d[nturn 9 
! ,/ate z evid5c$ by a r$uction 9 ,/ate 
dome/ic product1 real p] capita income1 
& employm5t4 ,su* det]m9ation %all only 
be made by ! ,secret>y foll[+ a writt5  
appeal by ! ,/ate t docum5ts rec5t &    
significant decreases 9 economic        
activity 9 ! ,/ate4  #dii-f4            
,au?orization ( appropriations  ,!re are
 au?oriz$ to be appropriat$ to c>ry out 
?is "p su* sums z may be necess>y =     
fiscal ye> #bjaf & ea* ( ! five succe$+ 
fiscal ye>s4  4  ,,ii ,tax provisions   
#bja4 ,p]man5t ext5sion & modification (
 ,am]ican ,opportunity & ,lifetime      
,le>n+ cr$its  7a7 ,9 g5]al ,section    
#be;,a ( ! ,int]nal ,rev5ue ,code (     
#aihf is am5d$ to read z foll[s3        
#be;,a4 ,am]ican ,opportunity ,tax      
,cr$it  7a7 ,9 g5]al ,9 ! case ( an     
individual1 !re %all be all[$ z a cr$it 

aga9/ ! tax impos$ by ?is *apt] = !     
taxable ye>1 ) respect to ea* eligible  
/ud5t1 an am\nt equal to ! sum (--  7#a7
 #ajj p]c5t ( s mu* ( ! qualifi$ tuition
 & relat$ exp5ses paid by ! taxpay] dur+
 ! taxable ye> 7= education furni%$ to !
 eligible /ud5t dur+ any academic p]iod 
beg9n+ 9 su* taxable ye>7 z does n exce$
 #b1jjj1 plus  7#b7 #be p]c5t ( s mu* ( 
su* exp5ses s paid z exce$s ! doll>     
am\nt 9 effect "u p>agraph 7#a7 b does n
 exce$ twice su* doll> am\nt4  7b7      
,portion ( cr$it refundable #fj p]c5t ( 
! cr$it all[able "u subsection 7a7 )    
respect to ea* eligible /ud5t 7det]m9$  
)\t reg>d to ?is subsection & section   
#bf7;a7 & aft] application ( all o!r    
provisions ( ?is section7 %all be treat$
 z a cr$it all[able "u subp>t ,c 7& n "u
 ?is "p74 ,! prec$+ s5t5ce %all n apply 
to any taxpay] = any taxable ye> if su* 
taxpay] is a *ild to :om section #a7;g7 
applies = su* taxable ye>4  7c7 #e-,ye> 
limitation ,no cr$it %all be all[$ "u   
subsection 7a7 ) respect to any eligible

 /ud5t = any taxable ye> if su* /ud5t 0 
tak5 into acc\nt 9 det]m9+ ! cr$it all[$
 "u su* subsection 7by ! taxpay] or any 
o!r individual7 = any #e prior taxable  
ye>s4  7d7 ,lifetime ,le>n+ cr$it  7#a7 
,9 g5]al ,9 ! case ( an individual1 !re 
%all be all[$ z a cr$it aga9/ ! tax     
impos$ by ?is *apt] an am\nt equal to   
#bj p]c5t ( s mu* ( ! qualifi$ tuition &
 relat$ exp5ses paid by ! taxpay] dur+ !
 taxable ye> 7= education furni%$ dur+  
any academic p]iod beg9n+ 9 su* taxable 
ye>7 z does n exce$ #aj1jjj4  7#b7      
,special rules = det]m9+ exp5ses  7,a7  
,coord9ation ) ,am]ican ,opportunity    
,tax ,cr$it ,! qualifi$ tuition & relat$
 exp5ses ) respect to an individual :o  
is an eligible /ud5t = :om a cr$it "u   
subsection 7a7 is all[$ = ! taxable ye> 
%all n be tak5 into acc\nt "u ?is       
subsection4  7,b7 ,exp5ses eligible =   
,lifetime ,le>n+ cr$it ,= purposes (    
p>agraph 7#a71 qualifi$ tuition & relat$
 exp5ses %all include exp5ses describ$ 9
 subsection 7f77#b7 ) respect to any    

c\rse ( in/ruction at an eligible       
educational in/itution to acquire or    
improve job skills ( ! individual4  7e7 
,limitation bas$ on modifi$ adju/$ gross
 income  7#a7 ,9 g5]al ,! am\nt all[able
 z a cr$it "u subsection 7a7 or 7d7 =   
any taxable ye> %all be r$uc$ 7b n bel[ 
z]o7 by an am\nt :i* be>s ! same ratio  
to ! am\nt s all[able 7det]m9$ )\t reg>d
 to ?is subsection & subsection 7b7 b   
aft] application ( all o!r provisions ( 
?is section7 z--  7,a7 ! excess (-- 7i7 
! taxpay]'s modifi$ adju/$ gross income 
= su* taxable ye>1 ov]  7ii7 #hj1jjj 9 !
 case ( ! cr$it "u subsection 7a71 or   
#dj1jjj 9 ! case ( ! cr$it "u subsection
 7d71 be>s to  7,b7 #aj1jjj4  7#b7 ,jo9t
 returns ,9 ! case ( a jo9t return1 ea* 
( ! doll> am\nts 9 effect "u p>agraph   
7#a7 %all be increas$ to twice su*      
am\nt4  7#c7 ,modifi$ adju/$ gross      
income ,= purposes ( ?is subsection1 !  
t]m modifi$ adju/$ gross income means ! 
adju/$ gross income ( ! taxpay] = !     
taxable ye> increas$ by any am\nt       

exclud$ f gross income "u section #iaa1 
#ica1 or #icc4  7#d7 ,inflation adju/m5t
 = ,lifetime ,le>n+ cr$it phase\t  7,a7 
,9 g5]al ,9 ! case ( a taxable ye>      
beg9n+ aft] #bjja1 ! #dj1jjj am\nt 9    
p>agraph 7#a77;,a77ii7 %all be increas$ 
by an am\nt equal to--  7i7 su* doll>   
am\nt1 multipli$ by  7ii7 ! co/-(-liv+  
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s1
 det]m9$ by sub/itut+ cal5d> ye> #bjjj =
 cal5d> ye> #aiib 9 subp>agraph 7,b7    
!re(4  7,b7 ,r\nd+ ,if any am\nt z      
adju/$ "u subp>agraph 7,a7 is n a       
multiple ( #a1jjj1 su* am\nt %all be    
r\nd$ to ! next l[e/ multiple ( #a1jjj4 
7f7 ,def9itions ,= purposes ( ?is       
section-- 7#a7 ,eligible /ud5t ,! t]m   
eligible /ud5t means1 ) respect to any  
academic p]iod1 a /ud5t :o--  7,a7 meets
 ! requirem5ts ( section #dhd7;a77#a7 ( 
! ,high] ,education ,act ( #aife 7#bj   
,u4,s4,c4 #ajia7;a77#a771 z 9 effect on 
,augu/ #e1 #aiig1 &  7,b7 is c>ry+ at   
lea/ #a_/b ! normal full-"t "w load = ! 

c\rse ( /udy ! /ud5t is pursu+4  7#b7   
,qualifi$ tuition & relat$ exp5ses  7,a7
 ,9 g5]al ,! t]m qualifi$ tuition &     
relat$ exp5ses means tuition1 fees1 &   
c\rse mat]ials1 requir$ = enrollm5t or  
att5dance (-- 7i7 ! taxpay]1  7ii7 !    
taxpay]'s sp\se1 or  7iii7 any dep5d5t (
 ! taxpay] ) respect to :om ! taxpay] is
 all[$ a d$uction "u section #aea1  at  
an eligible educational in/itution =    
c\rses ( in/ruction ( su* individual at 
su* in/itution4  7,b7 ,comput]-relat$   
exp5ses includ$ ,except z provid$ 9     
subsection 7g77#i71 su* t]m includes    
exp5ses = ! pur*ase ( comput] or        
p]iph]al equipm5t 7z def9$ 9 section    
#afh7;i77#b77;,b771 comput] s(tw>e 7z   
def9$ 9 section #aig7;e77#c77;,b771 or  
,int]net access & relat$ s]vices1 if su*
 equipm5t1 s(tw>e1 or s]vices are to be 
us$ prim>ily by ! eligible /ud5t dur+   
any ( ! ye>s ! /ud5t is enroll$ at an   
eligible educational in/itution4  7,c7  
,special ne$s s]vices includ$ ,su* t]m  
includes exp5ses = special ne$s s]vices 

9 ! case ( a special ne$s b5efici>y 7)9 
! mean+ ( section #ebi7;e77#c77;,a77ii7 
z 9 effect on ! day be=e ! date ( !     
enactm5t ( ! ,promot+ ,access &         
,ret5tion ,?r\gh ,new ,ef=ts to ,require
 ,%>$ ,high] ,inve/m5ts 9 ,po/second>y  
,success ,act7 :i* are incurr$ 9        
connection ) ! enrollm5t or att5dance ( 
! /ud5t at an eligible educational      
in/itution4  7,d7 ,exception = education
 involv+ sports1 etc ,su* t]m does n    
include exp5ses ) respect to any c\rse  
or o!r education involv+ sports1 games1 
or hobbies1 unless su* c\rse or o!r     
education is "p ( ! individual's degree 
program4  7,e7 ,exception = nonacademic 
fees ,su* t]m does n include /ud5t      
activity fees1 a?letic fees1 insurance  
exp5ses1 or o!r exp5ses unrelat$ to an  
individual's academic c\rse (           
in/ruction4  7#c7 ,eligible educational 
in/itution ,! t]m eligible educational  
in/itution means an in/itution-- 7,a7   
:i* is describ$ 9 section #dha ( !      
,high] ,education ,act ( #aife 7#bj     

,u4,s4,c4 #ajhh71 z 9 effect on ,augu/  
#e1 #aiig1 &  7,b7 :i* is eligible to   
p>ticipate 9 a program "u title ,,iv (  
su* ,act4  7g7 ,special rules  7#a7     
,id5tification requirem5t ,no cr$it %all
 be all[$ "u ?is section to a taxpay] ) 
respect to ! qualifi$ tuition & relat$  
exp5ses ( an individual unless ! taxpay]
 includes ! "n & taxpay] id5tification  
numb] ( su* individual1 & ! employ]     
id5tification numb] ( any in/itution to 
:i* su* exp5ses 7 paid1 on ! return (   
tax = ! taxable ye>4  7#b7 ,adju/m5t =  
c]ta9 s*ol>%ips1 etc  7,a7 ,9 g5]al ,!  
am\nt ( qualifi$ tuition & relat$       
exp5ses o!rwise tak5 into acc\nt "u     
subsection 7a7 or 7d7 ) respect to an   
individual = an academic p]iod %all be  
r$uc$ 7be=e ! application ( subsection  
7e77 by ! sum ( any am\nts paid = !     
b5efit ( su* individual :i* are         
allocable to su* p]iod z--  7i7 a       
qualifi$ s*ol>%ip :i* is excludable f   
gross income "u section #aag1  7ii7 an  
educational assi/ance all[ance "u *apt] 

#cj1 #ca1 #cb1 #cd1 or #ce ( title #ch1 
,unit$ ,/ates ,code1 or "u *apt] #afjf (
 title #aj1 ,unit$ ,/ates ,code1 &      
7iii7 a paym5t 7o!r ?an a gift1 beque/1 
devise1 or inh]itance )9 ! mean+ (      
section #ajb7;a77 = su* individual's    
educational exp5ses1 or attributable to 
su* individual's enrollm5t at an        
eligible educational in/itution1 :i* is 
excludable f gross income "u any law ( !
 ,unit$ ,/ates4  7,b7 ,coord9ation )    
,pell ,grants n us$ = qualifi$ tuition &
 relat$ exp5ses ,= purposes (           
subp>agraph 7,a71 ! am\nt ( any ,f$]al  
,pell ,grant "u section #dja ( ! ,high] 
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajgj;a7 %all be r$uc$ 7b n bel[ z]o7 by
 ! am\nt ( exp5ses 7o!r ?an qualifi$    
tuition & relat$ exp5ses7 :i* are tak5  
into acc\nt 9 det]m9+ ! co/ ( att5dance 
7z def9$ 9 section #dgb ( ! ,high]      
,education ,act ( #aife1 z 9 effect on !
 date ( ! enactm5t ( ! ,promot+ ,access 
& ,ret5tion ,?r\gh ,new ,ef=ts to       
,require ,%>$ ,high] ,inve/m5ts 9       

,po/second>y ,success ,act7 ( su*       
individual at an eligible educational   
in/itution = ! academic p]iod = :i* !   
cr$it "u subsection 7a7 or 7d7 7:i*ev]  
is applicable7 is be+ det]m9$4  7#c7    
,treatm5t ( exp5ses paid by dep5d5t ,if 
a d$uction "u section #aea ) respect to 
an individual is all[$ to ano!r taxpay] 
= a taxable ye> beg9n+ 9 ! cal5d> ye> 9 
:i* su* individual's taxable ye> beg9s--
  7,a7 no cr$it %all be all[$ "u ?is    
section to su* individual = su*         
individual's taxable ye>1  7,b7 qualifi$
 tuition & relat$ exp5ses paid by su*   
individual dur+ su* individual's taxable
 ye> %all be treat$ = purposes ( ?is    
section z paid by su* o!r taxpay]1 &    
7,c7 a /atem5t describ$ 9 p>agraph 7#h7 
& receiv$ by su* individual %all be     
treat$ z receiv$ by ! taxpay]4  7#d7    
,treatm5t ( c]ta9 prepaym5ts ,if        
qualifi$ tuition & relat$ exp5ses are   
paid by ! taxpay] dur+ a taxable ye> =  
an academic p]iod :i* beg9s dur+ ! fir/ 
#c mon?s foll[+ su* taxable ye>1 su*    

academic p]iod %all be treat$ = purposes
 ( ?is section z beg9n+ dur+ su* taxable
 ye>4  7#e7 ,d5ial ( d\ble b5efit ,no   
cr$it %all be all[$ "u ?is section = any
 am\nt = :i* a d$uction is all[$ "u any 
o!r provision ( ?is *apt]4  7#f7 ,no    
cr$it = m>ri$ individuals fil+ sep>ate  
returns ,if ! taxpay] is a m>ri$        
individual 7)9 ! mean+ ( section #ggjc71
 ?is section %all apply only if !       
taxpay] & ! taxpay]'s sp\se file a jo9t 
return = ! taxable ye>4  7#g7           
,nonresid5t ali5s ,if ! taxpay] is a    
nonresid5t ali5 individual = any portion
 ( ! taxable ye>1 ?is section %all apply
 only if su* individual is treat$ z a   
resid5t ali5 ( ! ,unit$ ,/ates =        
purposes ( ?is *apt] by reason ( an     
election "u subsection 7g7 or 7h7 (     
section #fjac4  7#h7 ,payee /atem5t     
requirem5t ,except z o!rwise provid$ by 
! ,secret>y1 no cr$it %all be all[$ "u  
?is section unless ! taxpay] receives a 
/atem5t furni%$ "u section #fjej,s7d7   
:i* conta9s all ( ! in=mation requir$ by

 p>agraph 7#b7 !re(4  7#i7 ,r$uc$ cr$it 
9 case ( c]ta9 /ud5ts ,9 ! case ( a     
/ud5t :o is n an eligible /ud5t = !     
taxable ye> solely by reason (          
subp>agraph 7,b7 ( subsection 7f77#a71 !
 /ud5t %all be treat$ z an eligible     
/ud5t = purposes ( ?is section 7o!r ?an 
subsection 7f77#b77;,b77 = su* taxable  
ye> except t ! doll> am\nt 9 effect "u  
subsection 7a77#a7 %all be #a_/b ( !    
am\nt o!rwise 9 effect = su* taxable    
ye>4  7h7 ,regulations ,! ,secret>y may 
prescribe su* regulations or o!r        
guidance z may be necess>y or           
appropriate to c>ry out ?is section1    
includ+ regulations provid+ = a         
recapture ( ! cr$it all[$ "u ?is section
 9 cases :]e !re is a refund 9 a        
subsequ5t taxable ye> ( any am\nt :i* 0 
tak5 into acc\nt 9 det]m9+ ! am\nt ( su*
 cr$it4  4  7b7 ,requirem5t ,to report  
tuition paid r ?an tuition bill$        
,section #fjej,s7b77#b77;,b77i7 ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ or ! aggregate am\nt bill$4    

7c7 ,repeal ( education sav+s bonds     
7#a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,b ( 
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by /rik+ section #ace4   
7#b7 ,table ( cont5ts ,! table (        
sections = "p ,,iii ( sub*apt] ,b (     
*apt] #a ( su* ,code is am5d$ by /rik+ !
 item relat+ to section #ace4  7d7      
,t]m9ation ( ,cov]dell education sav+s  
acc\nts  7#a7 ,9 g5]al ,section #ecj ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by add+ at ! end ! foll[+ new          
subsection3  7i7 ,t]m9ation  ,subsection
 7a7 %all n apply to ! portion ( any    
,cov]dell education sav+s acc\nt t is   
attributable to a contribution made aft]
 ! lat] (--  7#a7 ,decemb] #ca1 #bjae1  
or  7#b7 ! date ( ! enactm5t ( ?is      
subsection4  4  7#b7 ,rollov]s to       
qualifi$ tuition programs ,subsection   
7b7 ( section #ebi ( su* ,code is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#g7 ,rollov]s f ,cov]dell education    
sav+s acc\nts ,a program %all n be      
treat$ z a qualifi$ tuition program =   

any taxable ye> beg9n+ aft] ,decemb]    
#ca1 #bjae1 & be=e ,janu>y #a1 #bjag1   
unless x accepts 7)\t reg>d to any      
contribution limitations o!rwise        
applicable "u ! program7 contributions  
made dur+ su* taxable ye> :i* are paid  
or di/ribut$ f a ,cov]dell education    
sav+s acc\nt = ! b5efit ( ! same        
designat$ b5efici>y z su* program or a  
memb] ( ! family ( su* b5efici>y4  4    
7e7 ,con=m+ am5dm5ts  7#a7 ,section     
#fb7;d77#b7 ( su* ,code is am5d$ by     
/rik+ #ace14  7#b7 ,sections            
#hf7;b77#b77;,a71 #acg7;b77#c77;,b71    
#aii7;d77#b77;,a71                      
#bai7;g77#c77;,a77ii71 &                
#bba7;b77#b77;,c77ii7 ( su* ,code are   
ea* am5d$ by /rik+ #ace14  7#c7 ,section
 #bba7;d7 ( su* ,code is am5d$-- 7,a7 by
 /rik+ #be;,a7f77#b7 9 p>agraph 7#b7 &  
ins]t+ #be;,a7f77#c71 &  7,b7 by /rik+  
#be;,a7b77#c7 9 p>agraph 7#c7 & ins]t+  
#be;,a7f77#a74  7#d7 ,section #bbb ( su*
 ,code is am5d$--  7,a7 by /rik+ elects 
to h section #be;,a apply 9 subsection  

7c77#b77;,a7 & ins]t+ claims ! cr$it "u 
section #be;,a1  7,b7 by /rik+ if cr$it 
elect$ 9 ! head+ ( subp>agraph 7,a7 (   
subsection 7c77#b7 & ins]t+ = #be;,a    
exp5ses1  7,c7 by /rik+ #ace1 9         
subsection 7c77#b77;,b71 &  7,d7 by     
/rik+ #be;,a7f7 9 subsection 7d77#a7 &  
ins]t+ #be;,a7f77#b74  7#e7 ,section    
#dfi7;i77#c77;,f77ii7 ( su* ,code is    
am5d$ by /rik+ sections #ace & #acg &   
ins]t+ section #acg4  7#f7 ,section     
#ecj7;d77#b77;,c7 ( su* ,code is am5d$  
by /rik+ ,hope & ,lifetime ,le>n+ cr$its
 9 ! head+ & ins]t+ ,am]ican opportunity
 tax cr$it4  7#g7 ,section              
#fajc7l77#bj77;,a77iv7 is am5d$ by /rik+
 sections #ace & #iaa & ins]t+ section  
#iaa4  7#h7 ,section #fbaa7;b77#d77;,a7 
( su* ,code is am5d$ by /rik+ subsection
 7i77#f7 & ins]t+ subsection 7b74  7#i7 
,section #fbac7;g77#b77;,j7 ( su* ,code 
is am5d$ by /rik+ ,,t9 requir$ "u       
section #be;,a7g77#a7 & ins]t+ ,,t9 or  
employ] id5tification numb] requir$ "u  
section #be;,a7g77#a74  7#aj7 ,section  

#ajjd7;c7 ( division ,b ( ! ,am]ican    
,recov]y & ,re9ve/m5t ,tax ,act ( #bjji 
is am5d$--  7,a7 9 p>agraph 7#a7-- 7i7  
by /rik+ section #be;,a7i77#f7 ea* place
 x appe>s & ins]t+ section #be;,a7b71   
7ii7 by /rik+ 8) respect to taxable ye>s
 beg9n+ aft] #bjjh & be=e #bjah0 9      
subp>agraph 7,a7 & ins]t+ 8) respect to 
ea* taxable ye>01 &  7iii7 by /rik+ 8=  
taxable ye>s beg9n+ aft] #bjjh & be=e   
#bjah0 9 subp>agraph 7,b7 & ins]t+ 8=   
ea* taxable ye>01  7,b7 9 p>agraph 7#b71
 by /rik+ ,section #be;,a7i77#f7 &      
ins]t+ ,section #be;,a7b71 &  7,c7 9    
p>agraph 7#c77;,c71 by /rik+ subsection 
7i77#f7 & ins]t+ subsection 7b74  7#aa7 
,! table ( sections = subp>t ,a ( "p    
,,iv ( sub*apt] ,a ( *apt] #a ( !       
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ ! item relat+ to section #be;,a
 & ins]t+ ! foll[+ new item3  ,sec4     
#be;,a4 ,am]ican opportunity tax cr$it4 
4  7f7 ,effective date ,! am5dm5ts made 
by ?is section %all apply to taxable    
ye>s beg9n+ aft] ,decemb] #ca1 #bjag4   

#bjb4 ,expansion ( exclusion =          
educational assi/ance programs  7a7 ,9  
g5]al ,p>agraph 7#b7 ( section #abg7;a7 
( ! ,int]nal ,rev5ue ,code ( #aihf is   
am5d$--  7#a7 by /rik+ #e1bej 9 ! head+ 
& ins]t+ #aj1ejj1 &  7#b7 by /rik+      
#e1bej bo? places x appe>s & ins]t+     
#aj1ejj4  7b7 ,exp5ses ( employee's     
sp\se & dep5d5ts ,p>agraph 7#b7 (       
section #abg7;c7 ( ! ,int]nal ,rev5ue   
,code ( #aihf is am5d$ by /rik+ includes
 & all t foll[s & ins]t+ 8includes1 =   
any ye>--  7,a7 an individual :o is an  
employee )9 ! mean+ ( section           
#dja7;c77#a7 7relat+ to self-employ$    
individuals71 &  7,b7 any sp\se or      
dep5d5t ( an employee4  4  7c7          
,employ]-,provid$ educational loan      
repaym5t assi/ance  7#a7 ,9 g5]al       
,p>agraph 7#a7 ( section #abg7;c7 ( !   
,int]nal ,rev5ue ,code ( #aihf is       
am5d$--  7,a7 by /rik+ & at ! end (     
subp>agraph 7,a71  7,b7 by /rik+ ! comma
 at ! end ( subp>agraph 7,b7 & ins]t+ 1 
&1 &  7,c7 by ins]t+ aft] subp>agraph   

7,b7 ! foll[+ new subp>agraph3  7,c7 !  
paym5t by an employ] ( any portion ( !  
indebt$ness ( an employee pursuant to a 
/ud5t loan ( ! employee1  4  7#b7 ,/ud5t
 loan ,section #abg7;c7 ( su* ,code is  
am5d$-- 7,a7 by r$esignat+ p>agraphs    
7#d71 7#e71 7#f71 & 7#g7 z p>agraphs    
7#e71 7#f71 7#g71 & 7#h71 respectively1 
&  7,b7 by ins]t+ aft] p>agraph 7#c7 !  
foll[+ new p>agraph3  7#d7 ,/ud5t loan  
,! t]m /ud5t loan means any loan to an  
individual to assi/ ! individual 9      
att5d+ an educational organization      
describ$ 9 section                      
#agj7;b77#a77;,a77ii74  4  7#c7 ,con=m+ 
am5dm5t2 d5ial ( d\ble b5efit ,p>agraph 
7#a7 ( section #bba7;e7 ( su* ,code is  
am5d$ by ins]t+ be=e ! p]iod ! foll[+3 1
 or = :i* an exclusion is all[able "u   
section #abg to ! taxpay]'s employ] by  
reason ( ! paym5t by su* employ] ( any  
indebt$ness on a /ud5t loan ( ! taxpay]4
  7d7 ,effective date ,! am5dm5ts made  
by ?is section %all apply to exp5ses    
paid or incurr$ & loan paym5ts made 9   

taxable ye>s beg9n+ aft] ,decemb] #ca1  
#bjae4  #bjc4 ,exclusion ( c]ta9 /ud5t  
loan repaym5ts & loan =giv5ess  7a7 ,9  
g5]al ,p>agraph 7#a7 ( section #ajh7;f7 
( ! ,int]nal ,rev5ue ,code ( #aihf is   
am5d$ by /rik+ 79 :ole or 9 "p7 & all t 
foll[s & ins]t+ 79 :ole or 9 "p7 or1 9 !
 case ( p>agraph 7#c71 ! repaym5t ( any 
/ud5t loan if su* dis*>ge or repaym5t   
meets ! requirem5ts ( p>agraph 7#b71    
7#c71 or 7#d744  7b7 ,public int]e/     
/ud5t loans ,p>agraph 7#b7 ( section    
#ajh7;f7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ to read z foll[s3  7#b7  
,c]ta9 public int]e/ /ud5t loans  7,a7  
,9 g5]al ,a dis*>ge meets ! requirem5ts 
( ?is p>agraph if x is made pursuant to 
a provision ( a /ud5t loan describ$ 9   
subp>agraph 7,b7 "u :i* all or "p ( !   
indebt$ness ( an individual w\ld be     
dis*>g$ if ! individual work$ = a c]ta9 
p]iod ( "t 9 c]ta9 pr(essions = any ( a 
broad class ( employ]s4  7,b7           
,limitation ,a /ud5t loan is describ$ 9 
?is subp>agraph if su* loan is made--   

7i7 by ! ,unit$ ,/ates1 or an           
in/rum5tality or ag5cy !re(1  7ii7 by a 
,/ate1 t]ritory1 or possession ( !      
,unit$ ,/ates1 or ! ,di/rict (          
,columbia1 or any political subdivision 
!re(1  7iii7 by a public b5efit         
corporation-- 7,i7 :i* is exempt f      
taxation "u section #eja7;c77#c71       
7,,ii7 :i* has assum$ control ov] a     
,/ate1 c\nty1 or municipal hospital1 &  
7,,iii7 ^: employees h be5 deem$ to be  
public employees "u ,/ate law1  7iv7 by 
any educational organization describ$ 9 
section #agj7;b77#a77;,a77ii7-- 7,i7    
pursuant to an agreem5t ) any entity    
describ$ 9 clause 7i71 7ii71 or 7iii7 "u
 :i* ! funds f :i* ! loan 0 made 7      
provid$ to su* educational organization1
 or  7,,ii7 pursuant to a program ( su* 
educational organization :i* is design$ 
to enc\rage its /ud5ts to s]ve 9        
occupations ) unmet ne$s or 9 areas )   
unmet ne$s & "u :i* ! s]vices provid$ by
 ! /ud5ts 7or =m] /ud5ts7 are = or "u ! 
direction ( a gov]nm5tal unit or an     

organization describ$ 9 section         
#eja7;c77#c7 & exempt f tax "u section  
#eja7;a71 or  7v7 by an educational     
organization describ$ 9 section         
#agj7;b77#a77;,a77ii7 or an organization
 exempt f tax "u section #eja7;a7--     
7,i7 to ref9ance a loan t meets !       
requirem5ts ( clause 7i71 7ii71 7iii71  
or 7iv71 or  7,,ii7 to ref9ance a loan  
to an individual to assi/ ! individual 9
 att5d+ any su* educational             
organization1 b only if ! ref9anc+ loan 
is pursuant to a program ( ! ref9anc+   
organization :i* is design$ z describ$ 9
 clause 7iv77,,ii74  7,c7 ,exception =  
dis*>ges on acc\nt ( s]vices p]=m$ =    
c]ta9 l5d]s ,a dis*>ge ( a loan made by 
an organization describ$ 9 subp>agraph  
7,b77iv7 does n meet ! requirem5ts ( ?is
 p>agraph if ! dis*>ge is on acc\nt (   
s]vices p]=m$ = ei!r su* organization4  
4  7c7 ,in/itution-,provid$ loan        
repaym5ts ,p>agraph 7#c7 ( section      
#ajh7;f7 ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ to read z foll[s3  7#c7  

,in/itution-provid$ loan repaym5ts ,a   
repaym5t meets ! requirem5ts ( ?is      
p>agraph if--  7,a7 x is made by an     
organization describ$ 9 section         
#eja7;c77#c7 t is exempt f tax "u       
section #eja7;a71  7,b7 x is made       
pursuant to a program t repays all or a 
portion ( ! /ud5t loans ( individuals on
 ! condition t at ! "t ( ! repaym5t !   
individuals are work+ = or "u !         
direction ( a gov]nm5tal unit or an     
organization describ$ 9 section         
#eja7;c77#c7 & exempt f tax "u section  
#eja7;a71 &  7,c7 x is n made on acc\nt 
( s]vices p]=m$ = ! organization        
describ$ 9 subp>agraph 7,a74  4  7d7    
,c]ta9 o!r /ud5t loan =giv5ess          
,subsection 7f7 ( section #ajh ( !      
,int]nal ,rev5ue ,code ( #aihf is       
am5d$--  7#a7 by r$esignat+ p>agraph    
7#d7 z p>agraph 7#e71 &  7#b7 by ins]t+ 
aft] p>agraph 7#c7 ! foll[+ new         
p>agraph3  7#d7 ,c]ta9 o!r /ud5t loan   
=giv5ess ,a dis*>ge meets ! requirem5ts 
( ?is p>agraph if x is made-- 7,a7 9 !  

case ( a loan made by ! ,unit$ ,/ates or
 an in/rum5tality or ag5cy !re(1        
pursuant to--  7i7 an income-bas$       
repaym5t plan "u section #dic;,c ( !    
,high] ,education ,act ( #aife1 or  7ii7
 an income cont+5t repaym5t plan 9      
accordance ) section #dee ( su* ,act1 or
  7,b7 because ( ! dea? or disability ( 
! /ud5t4  4  7e7 ,/ud5t loan ,subsection
 7f7 ( section #ajh ( ! ,int]nal ,rev5ue
 ,code ( #aihf1 z am5d$ by subsection   
7d71 is am5d$--  7#a7 by r$esignat+     
p>agraph 7#e7 z p>agraph 7#f71 &  7#b7  
by ins]t+ aft] p>agraph 7#d7 ! foll[+   
new p>agraph3  7#e7 ,/ud5t loan ,=      
purposes ( ?is subsection1 ! t]m /ud5t  
loan means any loan to an individual to 
assi/ ! individual 9 att5d+ an          
educational organization describ$ 9     
section #agj7;b77#a77;,a77ii74  4  7f7  
,con=m+ am5dm5ts  7#a7 ,section         
#abg7;c77#d7 ( ! ,int]nal ,rev5ue ,code 
( #aihf1 z add$ by ?is ,act1 is am5d$ by
 /rik+ means any loan & all t foll[s &  
ins]t+ has ! mean+ giv5 su* t]m by      

section #ajh7;f77#e744  7#b7 ,sections  
#caba7;a77#bj71 #cbca7;e77#e71          
#ccjf7;b77#af71 & #cdja7;a77#ai7 ( su*  
,code are ea* am5d$ by /rik+            
#ajh7;f77#d7 & ins]t+ #ajh7;f77#f74  7g7
 ,effective date ,! am5dm5ts made by ?is
 section %all apply to dis*>ges (       
indebt$ness aft] ,decemb] #ca1 #bjae4   
#bjd4 ,uni=m def9ition ( qualify+       
education exp5ses  7a7 ,educational     
assi/ance programs ,p>agraph 7#a7 (     
section #abg7;c7 ( ! ,int]nal ,rev5ue   
,code ( #aihf is am5d$-- 7#a7 by /rik+  
7includ+1 b n limit$ to1 tuition1 fees1 
& simil> paym5ts1 books1 supplies1 &    
equipm5t7 9 subp>agraph 7,a7 & ins]t+   
7includ+ qualifi$ tuition & relat$      
exp5ses1 z def9$ 9 section              
#be;,a7f77#b771 &  7#b7 by /rik+ !      
second s5t5ce4  7b7 ,qualifi$ s*ol>%ips 
,p>agraph 7#b7 ( section #aag7;b7 ( !   
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ means-- & all t foll[s & ins]t+
 has ! mean+ giv5 su* t]m by section    
#be;,a7f77#b744  7c7 ,qualifi$ tuition  

programs  7#a7 ,comput] te*nology &     
equipm5t all[$ z a qualifi$ high]       
education exp5se = ye>s be=e #bjah  7,a7
 ,9 g5]al ,clause 7iii7 ( section       
#ebi7;e77#c77;,a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ to read z foll[s3
  7iii7 exp5ses = ! pur*ase ( comput] or
 p]iph]al equipm5t 7z def9$ 9 section   
#afh7;i77#b77;,b771 comput] s(tw>e 7z   
def9$ 9 section #aig7;e77#c77;,b771 or  
,int]net access & relat$ s]vices1 if su*
 equipm5t1 s(tw>e1 or s]vices are to be 
us$ prim>ily by ! b5efici>y dur+ any ( !
 ye>s ! b5efici>y is enroll$ at an      
eligible educational in/itution4  4     
7,b7 ,effective date ,! am5dm5t made by 
?is p>agraph %all apply to taxable ye>s 
beg9n+ aft] ,decemb] #ca1 #bjae4  7#b7  
,p]man5t def9ition ,p>agraph 7#c7 (     
section #ebi7;e7 ( su* ,code1 z am5d$ by
 p>agraph 7#a71 is am5d$--  7,a7 by     
/rik+ subp>agraph 7,a7 & ins]t+ ! foll[+
 new subp>agraph3  7,a7 ,9 g5]al ,except
 z provid$ 9 subp>agraph 7,b71 ! t]m    
qualifi$ high] education exp5ses has !  

same mean+ z ! t]m qualifi$ tuition &   
relat$ exp5ses z def9$ 9 section        
#be;,a7f77#b74  1  7,b7 by /rik+ section
 #be;,a7b77#c7 9 clause 7i7 (           
subp>agraph 7,b7 & ins]t+ section       
#be;,a7f77#a7 7n includ+ any individual 
treat$ z an eligible /ud5t solely by    
reason ( section #be;,a7g77#i771 &  7,c7
 by /rik+ su* in/itution 9 clause 7i7 ( 
subp>agraph 7,b7 & ins]t+ an eligible   
educational in/itution4  7d7 ,te*nical  
am5dm5t ,clause 7iii7 ( section         
#ecj7;b77#c77;,a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by /rik+ 7z def9$
 9 section #agj7;e77#f77;,f77i77 or &   
ins]t+ describ$ 9 section               
#be;,a7f77#b77;,b7 or any4  7e7 ,repeal 
( deadwood  7#a7 ,9 g5]al ,"p ,,ii (    
sub*apt] ,y ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
section #adjj,o4  7#b7 ,cl]ical am5dm5t 
,! table ( sections = "p ,,ii ( sub*apt]
 ,y ( *apt] #a ( su* ,code is am5d$ by  
/rik+ ! item relat+ to section #adjj,o4 
7f7 ,effective date ,except z provid$ 9 

subsection 7d77#a77;,b71 ! am5dm5ts made
 by ?is section %all apply to taxable   
ye>s beg9n+ aft] ,decemb] #ca1 #bjag4   
#bje4 ,expansion ( ,pell ,grant         
exclusion f gross income2 treatm5t "u   
,hope ,s*ol>%ip & ,lifetime ,le>n+      
cr$its  7a7 ,9 g5]al ,p>agraph 7#a7 (   
section #aag7;b7 ( ! ,int]nal ,rev5ue   
,code ( #aihf is am5d$ by /rik+ receiv$ 
by an individual & all t foll[s & ins]t+
 8receiv$ by an individual--  7,a7 z a  
s*ol>%ip or fell[%ip grant to ! ext5t ! 
individual e/abli%es t1 9 accordance ) !
 conditions ( ! grant1 su* am\nt 0 us$ =
 qualifi$ tuition & relat$ exp5ses1 or  
7,b7 z a ,f$]al ,pell ,grant "u section 
#dja ( ! ,high] ,education ,act ( #aife 
7z 9 effect on ! date ( ! enactm5t ( ?is
 subp>agraph74  4  7b7 ,coord9ation )   
,hope ,s*ol>%ip & ,lifetime ,le>n+      
cr$its ,p>agraph 7#b7 ( section         
#be;,a7g7 ( ! ,int]nal ,rev5ue ,code (  
#aihf is am5d$-- 7#a7 by r$esignat+     
subp>agraphs 7,a71 7,b71 & 7,c7 z       
clauses 7i71 7ii71 & 7iii71             

respectively1 & by mov+ su* clauses #b  
ems to ! "r1  7#b7 by /rik+ etc4--,!    
am\nt & ins]t+ 8etc4--  7,a7 ,9 g5]al ,!
 am\nt  1 &  7#c7 by add+ at ! end !    
foll[+ new subp>agraph3  7,b7           
,coord9ation ) ,pell ,grants n us$ =    
qualifi$ tuition & relat$ exp5ses ,=    
purposes ( subp>agraph 7,a71 ! am\nt (  
any ,f$]al ,pell ,grant "u section #dja 
( ! ,high] ,education ,act ( #aife 7#bj 
,u4,s4,c4 #ajgj;a7 %all be r$uc$ 7b n   
bel[ z]o7 by ! am\nt ( exp5ses 7o!r ?an 
qualifi$ tuition & relat$ exp5ses7 :i*  
are tak5 into acc\nt 9 det]m9+ ! co/ (  
att5dance 7z def9$ 9 section #dgb ( !   
,high] ,education ,act ( #aife1 z 9     
effect on ! date ( ! enactm5t ( !       
,promot+ ,access & ,ret5tion ,?r\gh ,new
 ,ef=ts to ,require ,%>$ ,high]         
,inve/m5ts 9 ,po/second>y ,success ,act7
 ( su* individual at an eligible        
educational in/itution = ! academic     
p]iod = :i* ! cr$it "u subsection 7a7 is
 be+ det]m9$4  4  7c7 ,effective date ,!
 am5dm5ts made by ?is section %all apply

 to taxable ye>s beg9n+ aft] ,decemb]   
#ca1 #bjae4  #bjf4 ,modifications to    
qualifi$ tuition programs  7a7          
,elim9ation ( di/ribution aggregation   
requirem5ts  7#a7 ,9 g5]al ,section     
#ebi7;c77#c7 ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by /rik+ subp>agraph   
7,d74  7#b7 ,effective date ,! am5dm5t  
made by ?is subsection %all apply to    
di/ributions aft] ,decemb] #ca1 #bjae4  
7b7 ,recontribution ( refund$ am\nts    
7#a7 ,9 g5]al ,section #ebi7;c77#c7 ( ! 
,int]nal ,rev5ue ,code ( #aihf1 z am5d$ 
by subsection 7a71 is am5d$ by add+ at !
 end ! foll[+ new subp>agraph3  7,d7    
,special rule = contributions ( refund$ 
am\nts ,9 ! case ( a b5efici>y :o       
receives a refund ( any qualifi$ high]  
education exp5ses f an eligible         
educational in/itution1 subp>agraph 7,a7
 %all n apply to t portion ( any        
di/ribution = ! taxable ye> :i* is      
recontribut$ to a qualifi$ tuition      
program ( :i* su* individual is a       
b5efici>y1 b only to ! ext5t su*        

recontribution is made n lat] ?an #fj   
days aft] ! date ( su* refund & does n  
exce$ ! refund$ am\nt4  4  7#b7         
,effective date  7,a7 ,9 g5]al ,!       
am5dm5t made by ?is subsection %all     
apply ) respect to refunds ( qualifi$   
high] education exp5ses aft] ,decemb]   
#ca1 #bjae4  7,b7 ,transition rule ,9 ! 
case ( a refund ( qualifi$ high]        
education exp5ses receiv$ aft] ,decemb] 
#ca1 #bjae1 & be=e ! date ( ! enactm5t (
 ?is ,act 7if lat]71 section            
#ebi7;c77#c77;,d7 ( ! ,int]nal ,rev5ue  
,code ( #aihf 7z add$ by ?is section7   
%all be appli$ by sub/itut+ n lat] ?an  
#fj days aft] ! date ( ! enactm5t ( ?is 
subp>agraph = n lat] ?an #fj days aft] !
 date ( su* refund4