To amend the Higher Education Act of 1965 to establish a scholarship program to encourage and support students who have contributed substantial public services.

Summary: Youth Service Scholarship Act of 2001 - Amends the Higher Education Act of 1965 to establish a Public Service Incentives college scholarship program to reward low- and moderate-income students who have, during high school, and who continue, during college, to make significant public service contributions to their communities.Requires 300 hours of public service by the student: (1) during each of two academic years of secondary school, to be eligible for a scholarship for the first year of college; and (2) during the preceding postsecondary academic year, to be eligible for a second, third, or fourth year.Requires such students to: (1) have been eligible for a free or reduced price lunch under the Richard B. Russell National School Lunch Act; and (2) be eligible to receive Federal Pell Grants in the year in which the scholarships are awarded. Sets the scholarship amount at $5,000 for any academic year during a student's first four years of undergraduate education, and provides for adjustments of such amount in the event of insufficient appropriations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Youth Service Scholarship Act of 
2001''.

SEC. 2. FINDINGS.

      The Congress finds that--
            (1) young people under 18 years of age are now our most 
        impoverished age group with 1 of every 5 living in poverty, a 
        higher proportion than in 1968, with the percentage for 
        minority children being about twice as high;
            (2) more than 1 of 4 families is headed by a single parent 
        and the percentage of such families headed by such single 
        parents has risen steadily over the past few decades, rising 13 
        percent since 1990;
            (3) there is a need to engage youth as active participants 
        in decision-making that affects their lives, including design, 
        development, implementation, and evaluation of youth 
        development programs at the Federal, State, and community 
        levels;
            (4) existing outcome driven youth development strategies, 
        pioneered by community-based organizations, hold real promise 
        for promoting positive behaviors and preventing youth problems;
            (5) formal evaluations of youth development programs have 
        documented significant reductions in drug and alcohol use, 
        school misbehavior, aggressive behavior, violence, truancy, 
        high-risk sexual behavior, and smoking;
            (6) compared to American youth generally, youth 
        participating in community-based organizations are more than 26 
        percent more likely to report having received recognition for 
        good grades than American youth generally and nearly 20 percent 
        more likely to rate the likelihood of their going to college as 
        ``very high''; and
            (7) the availability and use of Federal resources can be an 
        effective incentive to leverage broader community support to 
        enable local programs, activities and services to provide the 
        full array of developmental core resources, remove barriers to 
        access, promote program effectiveness, and facilitate 
        coordination and collaboration within the community.

SEC. 3. ESTABLISHMENT OF PROGRAM.

    Subpart 2 of part A of title IV of the Higher Education Act of 1965 
is amended--
            (1) by redesignating section 407E (20 U.S.C. 1070a-35) as 
        section 406E; and
            (2) by inserting after such section the following new 
        chapter:

                 ``Chapter 4--Public Service Incentives

``SEC. 407A. PURPOSES.

    ``The purposes of this chapter are to establish a scholarship 
program to reward low-income and moderate-income students who have, 
during high school, and who continue, during college, to make 
significant public service contributions to their communities.

``SEC. 407B. SCHOLARSHIPS AUTHORIZED.

    ``(a) Qualifications for Scholarships.--The Secretary is authorized 
to award scholarships to enable a student to pay the cost of attendance 
at an institution of higher education during the student's first 4 
academic years of undergraduate education, if the student--
            ``(1) in order to be eligible for the first year of such 
        scholarship, performed not less than 300 hours of qualifying 
        public service during each of 2 academic years of the student's 
        secondary school enrollment;
            ``(2) in order to be eligible for the second or any 
        subsequent year of such scholarship, performed not less than 
        300 hours of qualifying public service during the academic year 
        of postsecondary school attendance preceding the academic year 
        for which the student seeks such scholarship;
            ``(3) was eligible for a free or reduced price lunch under 
        the Richard B. Russell National School Lunch Act (42 U.S.C. 
        1721 et seq.);
            ``(4) is eligible to receive Federal Pell Grants for the 
        year in which the scholarships are awarded, except that a 
        student shall not be required to comply or verify compliance 
        with section 485(a)(5) for purposes of receiving a scholarship 
        under this chapter; and
            ``(5) otherwise demonstrates compliance with regulations 
        prescribed by the Secretary under section 407F.
    ``(b) Definition of Qualifying Public Service.--For purposes of 
subsection (a), the term `qualifying public service' means service that 
would be eligible for treatment as community service under the National 
and Community Service Act of 1990 or under the Federal work-study 
program under part C of title IV of the Higher Education Act of 1965.

``SEC. 407C. AMOUNT OF SCHOLARSHIP.

    ``(a) Amount of Award.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        subsection (b), the amount of a scholarship awarded under this 
        chapter for any academic year shall be equal to $5,000.
            ``(2) Adjustment for insufficient appropriations.--If, 
        after the Secretary determines the total number of students 
        selected under section 407D for an academic year, funds 
        available to carry out this chapter for the academic year are 
        insufficient to fully fund all awards under this chapter for 
        the academic year, the amount of the scholarship paid to each 
        student under this chapter shall be reduced proportionately.
    ``(b) Assistance Not To Exceed Cost of Attendance.--A scholarship 
awarded under this chapter to any student, in combination with the 
Federal Pell Grant assistance and other student financial assistance 
available to such student, may not exceed the student's cost of 
attendance.

``SEC. 407D. SELECTION OF SCHOLARSHIP RECIPIENTS.

    ``The Secretary shall designate a panel to select students for the 
award of scholarships under this chapter. Such panel shall be composed 
of 9 individuals who are selected by the Secretary and shall be 
composed of equal numbers of youths, community representatives, and 
teachers. The Secretary shall ensure that no individual assigned under 
this section to review any application has any conflict of interest 
with regard to the application that might impair the impartiality with 
which the individual conducts the review under this section.

``SEC. 407E. APPLICATIONS.

    ``Any eligible student desiring to obtain a scholarship under this 
section shall submit to the Secretary an application at such time, in 
such manner, and containing such information or assurances as the 
Secretary may require. Such application shall--
            ``(1) demonstrate that the eligible student is maintaining 
        satisfactory academic progress and is achieving at least an 
        grade point average of at least 2.0 (on a scale of 4), or its 
        equivalent;
            ``(2) include a recommendation from (A) the supervisor of 
        the community service of the applicant, and (B) a teacher, 
        pastor, employer, or other individual familiar with the 
        character of the applicant; and
            ``(3) include an essay by the applicant on the nature of 
        the community service performed by the applicant.

``SEC. 407F. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
necessary to carry out this chapter.

``SEC. 407G. EVALUATION.

    ``Not less than 2 years after the first fiscal year for which funds 
are made available under this chapter, the Secretary shall prepare and 
submit to the Congress an evaluation of the effectiveness of the 
program under this chapter. Such evaluation shall include--
            ``(1) an evaluation of the demand, by grade level and types 
        of community service sites, for the scholarships provided under 
        this chapter;
            ``(2) general data on the background of program 
        participants and the types of service performed; and
            ``(3) an itemization of the costs of administering the 
        program under this chapter.

``SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this chapter 
$2,000,000 for fiscal year 2002 and each of the 3 succeeding fiscal 
years.''.