Higher Education Access and Affordability Act of 1997

Higher Education Access and Affordability Act of 1997 - Amends the Internal Revenue Code to exclude from gross income distributions from a qualified State tuition program used for qualified higher education expenses (including room and board).

(Sec. 3) Makes the employer-provided educational assistance program exclusion permanent.

(Sec. 4) Establishes an income-based deduction of up to $2,500 per year for certain qualified higher education loan interest paid for a taxpayer, spouse, or dependent. Allows such deduction whether or not the taxpayer itemizes deductions. Sets forth reporting requirements.

(Sec. 5) Allows penalty-free early withdrawals from individual retirement plans for higher education expenses of the taxpayer, spouse, child, grandchild, or ancestor of the taxpayer or spouse.

(Sec. 6) Establishes nontaxable education investment accounts which shall permit annual contributions of not more than $1,500 for the account holder's qualified higher education costs. Subjects account distributions used for nonqualifying purposes to taxation, including an additional ten percent tax. Sets forth related reporting requirements.