A bill to amend the Internal Revenue Code of 1954 to provide a tax credit for certain expenses of higher education and to provide a tax credit for amounts contributed to post-secondary education savings plans.

Allows an income tax credit equal to 20 percent of the expenses paid by the taxpayer for his own, or a dependent's, higher education. Limits the total credit allowable in a tax year to $250, or $125 for a married person filing separately. Permits the credit to be taken for any expenses actually required for, and directly relating to, the effective pursuit of a post-secondary degree or vocational education, except where such expenditures may be deducted as a trade or business expense.

Allows an income tax credit equal to 20 percent of the first $250 deposited in a savings account maintained exclusively for the taxpayer's, or a dependent's, higher education expenses, if such deposits are made during a year in which the beneficiary is not enrolled in such program. Provides for the recapture of all tax credits taken for any amount withdrawn from an educational savings account and spent for something other than the beneficiary's higher education. Provides for the recapture of tax credits taken for amounts remaining in such accounts when the beneficiary attains the age of 25, or if he is enrolled in a higher education program at that time, when his enrollment is terminated.