College Debt Alleviation Act of 2006 - Amends the Internal Revenue Code of 1986 to: (1) extend the tuition and related expenses tax deduction through 2010; (2) increase the maximum eligible adjusted gross income (AGI) threshold from $65,000 to $80,000 (from $130,000 to $160,000 for a joint return); and (3) increase the deduction from $3,000 to $8,000. Revises the formula for determining the AGI for the purposes of this deduction.
Amends the Higher Education Act of 1965 to reduce student loan interest rates on federal PLUS loans and consolidation loans under the Federal Family Education Loan (FFEL) and Direct Loan programs.