Increases the amount of the Lifetime Learning tax credit percentage from 20 to 25 percent. Increases the amount of education expenses subject to such credit from $10,000 to $12,000 (thus making the maximum allowable credit $3,000, rather than the current $2,000). Provides inflation adjustment.
Raises annual income limits for the Hope and Lifetime Learning tax credits to $55,000 single and $110,000 joint.
Amends the Department of Education Appropriations Act, 2002 (Public Law 107-116) to increase the maximum Pell Grant award from $4,000 to $4,500.
Establishes an academic achievement scholarship program. Authorizes the Secretary of Education to award a $1,000 college scholarship to each student in a State who graduates in the top five percent of his or her secondary school's graduating class.