To amend the Internal Revenue Code of 1986 to allow a credit or deduction for interest paid on education loans.

Amends the Internal Revenue Code to allow a tax credit for interest paid or incurred on any qualified education loan during the first 48 months (whether or not consecutive) for which interest payments are required to be made. Limits such credit to $300.

Allows such tax credit to parents only if the dependent is a student and a personal exemption is claimed for such dependent student.

Reduces interest by the amount bearing the same ratio to the interest as the excess of adjusted gross income over the applicable dollar amount bears to the phaseout range. Establishes applicable dollar amounts and phaseout ranges.

Excludes interest paid on education loans from the definition of "personal interest" (thus, allowing a deduction to be taken) unless a credit or deduction with respect to such interest is taken.