116 Figure 2: Proprietary School Borrowers Are Receiving An 1994 EXHIBIT & The default rate for proprietary school borrowers is greater than Guaranteed Student Loans: Analysis of Student Default Rates AR 2.800 POSCsecondary Schools, CAO/HRD-89-63BR, July 5, 1989. 11 (C) Rounding-if any amount as adjusted under subparagraph (A) or (B) not a multiple of $50, such amount shall be rounded to the nearest mal of $50 (or if such amount is a multiple of $25, such amount shall be rounded to the next highest multiple of $50). (e) Definitions-For purposes of this section (1) Qualified United States savings bond-The term "qualified United States savings bond” means any United States savings bond issued excludes proprietary Sec. 481(a)(1) (1) (B) Exception for education involving sports, etc.-Such term shall not include expenses with respect to any course or other education involving sports, games, or hobbies other than as part of a degree program. (3) Eligible educational institution.-The term "eligible educational institution" means (A) an institution described in section 1201(a) or subparagraph (C) or (D) of section 481(a)(1) of the Higher Education Act of 1965 (as in effect on October 21, 1988), and (B) an area vocational education school (as defined in subparagraph (C) or (D) of section 521(3) of the Carl D. Perkins Vocational Education Act) which is in any State (as defined in section 521(27) of such Act), as such sections are in effect on October 21. 1988. (4) Modified adjusted gross income-The term "modified adjusted gross (A) without regard to this section and sections 911, 931, and 933, and (d) Special rules. (1) Adjustment for certain scholarships and veterans benefits.-The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as— (A) a qualified scholarship which under section 117 is not includable in gross income, (B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or (C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to attendance at an eligible educational institution, which is exempt from income taxation by any law of the United States. EXHIBIT H TŃCOME TAXES 91 (2) No relusion for married ind 26 § 136 filing separate returns.—If the meaning of section 7708), this spouse file a joint return for the (3) Regulations.—The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring record keeping and information reporting. (Added PubL 100-647, Title VI, § 6009(a), Nov. 10, 1988, 102 Stat. 3688, and amended Pub.L 101-239, Title VII, § 7816(eX2), Dec. 19, 1989, 108 Stat. 2420.) HISTORICAL AND STATUTORY NOTES Revision Notes and Legisintive Reports 1989 Act. House Report No. 101-247 and House Conference Report No. 101-386, see 1989 U.S. Code Cong, and Adm. News. p. — in Text The Higher Education Act of 1965, referred to in c. (cX3XA), is Pub. L 89-329, Nov. 8. 1965, 79 Stat 1219, as amended. Section 1201(a) of such Act is classified to section 1141(a) of Title 20, Education Subparagraph (C) or (D) of sec tion 481(a)(1) of such Act is classified to section 1088 (aXIXC). (D) of Title 20. For complete feston of this Act to the Code, see Tables. The Carl D. Perkins Vocational Education Act, referred to in subsec. (c)(3)(B), is Pub.L. 88-210, as added Pub. L. 98-524, Oct. 19, 1984, 98 Stat. 2435, and amended. Subpar. (C) or (D) of secbom 521(3) of such Act is classified to section 2471(3XC). (D) of Title 20, Education, and tion $21(27) of such Act is classified to section 2471(27) of Title 20. For complete classification of this Act to the Code, see Short Title note set out under section 2301 of Title 20 and Tables. Prier Provisions A prior section 135 was abarad section 136 of this title. Parental with Tuition Stamp Study Section 6009(e) of Pub. L. 100-647 provided that: "The Secretary of the Treasury or his del after consultation with the Secretar Educa or his delegate, shall com the feasibility of using stamps or to encourage and facilitate saving towards the purchase of Series EE bonds eligible for the exclumon provided under the amene made by this section (enacting this section and renumbering former section 135 as 136 of this title, amending sections 86, 219, and 469 of this title, and enacting provisions set out as notes under this section and section 86 of this title. Not later than December 31, 1989, the Secretary of the Treasury or his delegate shall submit the results of such study, together with any recommendations deemed appropriate, to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate." Promotion of Public Awareness of Program Section 6009(b) of Pub. L. 100-647 provided that: "The Secretary of the Treasury or his del egate shall take such actions as may be necessary to make the general public aware of the program established by this section." LIBRARY REFERENCES Interest received as taxable income, see Internal Encyclopedias Interest received as taxable income, see C.J.S. Internal Revenue j§ 71, 89, 93. WESTLAW ELECTRONIC RESEARCH Internal revenue cases: 220k(add key number). (1) Allowances and expenditures to meet losses sustained by persons serving the United States abroad, due to appreciation of foreign currencies, see section 5943 of Title 5, United States Code. (2) Amounts credited to the Maritime Administration under section 9(b)(6) of the Merchant Ship Sales Act of 1946. see section 9(c)(1) of that Act (50 U.S.C.App. 1742). (3) Benefits under laws administered by the Veterans' Administration, see section 3101 of title 38, United States Code. (4) Earnings of slip contractors deposited in special reserve funds, see section 607(d) of the Merchant Marine Act, 1936 (46 U.S.C. 1177). (5) Income derived from Federal Reserve banks, including capital stock and surplus, see section 7 of the Federal Reserve Act (12 U.S.C. 531). 49 See. 481 HIGHER EDUCATION ACT OF 1985 226 any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this title. (g) Assurs.—The term "assets” means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, and the net value of real estate, income producing property, and business and farm assets. (h) NET ASSETS.-The term "net assets" means the current market value at the time of application of the assets included in the definition of “assets”, minus the outstanding liabilities or indebtedness against the assets. (i) TREATMENT OF INCOME TAXES PAID TO OTHER JURISDICTIONS.— (1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Northern Mariana Islands, or the Trust Territory of the Pacific Islands under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes. (2) References in this part to the Internal Revenue Code of 1986, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may prescribe by regulation. (20 U.S.C. 1087vv) Enacted October 17, 1986, P.L. 99-498, sec. 406(a), 100 Stat. 1472; amended June 3, 1987, P.L. 100-50, sec. 14(28), 101 Stat. 353-355; amended July 18, 1988, P.L. 100-369, sec. 7(b), 102 Stat. 837. PART G GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS DEFINITIONS SEC. 481. (a) INSTITUTION OF HIGHER EDUCATION.-1) For the purpose of this title, except subpart 6 of part A and part B, the term "institution of higher education" includes, in addition to the institutions covered by the definition contained in section 1201(a)— (A) a proprietary institution of higher education; (C) a department, division, or other administrative unit in a college or university which provides primarily or exclusively an accredited program of education in professional nursing and allied subjects leading to the degree of bachelor of nursing, or to an equivalent degree, or to a graduate degree in nursing, and (D) a department, division, or other administrative unit in a junior college, community college, college, or university which provides primarily or exclusively an accredited 2-year program of education in professional nursing and allied subjects leading to an associate degree in nursing or to an equivalent degree. (2) The term "accredited" when applied to any program of nurse education means a program accredited by a recognized body or bodies approved for such purpose by the Secretary. LEGISLATIVE HISTORY HOUSE CONF. REP. NO. 100-1104 [page 140) 10. Education savings bonds and modification of student dependency exemption a. Education savings bonds Present Law An exclusion from gross income, or deferral of taxation, for interest or other income is not allowable because the taxpayer uses the income specifically for educational expenses. Taxation of interest accruals on U.S. Series EE savings bonds may be deferred by cash-basis taxpayers until transfer of ownership or redemption of the bonds. No provision. House Bill Senate Amendment Interest income earned on a qualified U.S. Series EE savings bond is excluded from gross income, if, instead of being redeemed. the bond is transferred to an eligible educational institution as payment of qualified educational expenses, i.e., tuition and required fees, for a taxpayer, or taxpayer's spouse or dependents. The amount of exclusion allowed for a taxable year is the lesser of (1) the amount that otherwise is includible in gross income by reason of such transfer, or (2) the amount of such higher education expenses. The exclusion is phased out for a taxpayer with adjusted gross income (AGI) of 360,000 or more for the taxable year: no amount is excludible by a taxpayer whose AGI is $80,000 or more. For a taxpayer with AGI between $60,000 and $70,000, 67 percent of the eligible amount is excludible; for AGI between $70,000 and $80.000, 34 percent of the eligible amount is excludible. In the case of a married individual filing separately, the phaseout amounts are one-half of those described. The phase-out amounts are indexed in calendar years after 1988. With respect to a taxpayer who is a dependent of another taxpayer, the phaseout is applied by taking into account the AGI of both taxpayers. Present law is amended to allow (1) transfer of a U.S. savings bond to an eligible educational institution and (2) redemption of such bond by such institution for the educational purposes of this provision. → An eligible educational institution is defined in the Higher Education Act of 1965 (sec. 1201(a) or 481(a)), or in the Carl D. Perkins Vocational Education Act (subparagraph (C) or (D) of sec. 521(3)). The provision is effective for transfers of qualified U.S. savings 'bonds issued after the date of enactment. Conference Agreement The conference agreement follows the Senate amendment with the following changes. 5200 This would have dean of |