Income Dependent Educational Assistance Loan Act

Income Dependent Educational Assistance Loan Act - Amends the Higher Education Act of 1965 (HEA) to add a new title XVI, Income Dependent Educational Assistance Loans (IDEAL).

Directs the Assistant Secretary for Postsecondary Education (the Assistant Secretary) to carry out a demonstration program of making IDEAL loans to students in ten congressional districts.

Sets forth provisions for program requirements and institutional agreements.

Limits the annual amount of such a loan not more than $10,000 or the cost of attendance at the eligible institution, whichever is less. Limits individual borrowing capacity to prohibit receipt of any amount in an additional loan which exceeds the excess of $40,000 over the total original principal amounts of all prior such loans to such individual, less any refunds to the individuals's account. Provides for adjustment of such annual and aggregate limits for inflation. Counts any loan obligations under title IV of HEA or title VII of the Public Health Service Act toward annual and aggregate borrowing capacity limits under the IDEAL program, and vice versa. Adjusts such annual limits for less than full-time students.

Sets forth provisions for: (1) terms of such loans, including income-dependent repayment provisions; and (2) disbursement of proceeds of such loans.

Establishes the Income Dependent Educational Assistance Loan Trust Fund (the Trust Fund) in the Treasury, consisting of: (1) amounts transferred by the Secretary of the Treasury equivalent to IDEAL loan repayment levies received under the Internal Revenue Code, as amended by this Act; (2) specified amounts authorized to be appropriated under HEA, as amended by this Act; and (3) any interest earned on investment of certain amounts in the Trust Fund by the Assistant Secretary. Directs the Assistant Secretary to: (1) hold the Trust Fund; and (2) report annually to the Congress on the Trust Fund's financial condition and operations results during the preceding fiscal year and its expected condition and operations during the next fiscal year.

Sets forth repayment provisions. Directs the Assistant Secretary to develop a procedure for computing a repayment percentage for each borrower using specified cohort repayment factors. Requires the following factors to be considered in determining such percentage: (1) total amount of IDEAL loans to the borrower; (2) borrower's age; (3) year in which such a loan was awarded; (4) such percentage to only apply to the first $50,000 of an individual's wages and self-employment income, determined without regard to any dollar limitation contained in specified Internal Revenue Code provisions; (5) such percentage to be adjusted over time for average coverage and self-employment income growth; (6) a specified buyout procedure; (7) maximum repayment period not exceeding 25 years; (8) no borrower required to make repayments beyond age 65; and (9) whether the Trust Fund is intended to earn an overall interest rate, on all loans made in any academic year, equal to the average interest rate on U.S. obligations issued in such year, plus an administrative expense premium of not more than 0.25 percent.

Directs the Assistant Secretary to develop a buyout procedure under which the borrower may repay, at any time, the total amount of IDEAL loans borrowed, including a prepayment premium to discourage borrowers from using such buyout procedure. Provides for a certification procedure under which the Assistant Secretary is to: (1) calculate the repayment percentage for each borrower determined to be in repayment status; and (2) transmit such information, along with the borrower's taxpayer identification number, to the borrower and the Secretary of the Treasury by January 1 of each year.

Makes eligible for the IDEAL loan program any student who is a U.S. citizen and who is between 17 and 56 year old.

Authorizes appropriations to the Equity Investment in America Trust Fund to carry out the IDEAL program.

Amends the Internal Revenue Code to add provisions for an educational loan repayment levy. Imposes such repayment levy equal to the repayment percentage of an individual's qualified earnings for the taxable year not exceeding $50,000, in the case of any individual receiving a certification from the Assistant Secretary under the IDEAL program. (Defines qualified earnings as wages and self-employment income, determined without regard to any dollar limitation contained in special provisions.)