To facilitate economic growth and development and to promote Tribal sovereignty, by encouraging a dramatic increase in the number of individuals with higher education degrees working within and for Indian Country.

Summary: Indian Country Educational Empowerment Zone Act -Amends the Higher Education Act of 1965 to authorize the Secretary of the Interior to carry out a program of repaying the student loans for any borrower who obtains employment in Indian country.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Indian Country Educational 
Empowerment Zone Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) A unique legal and political relationship exists 
        between the United States and Indian tribes that is reflected 
        in article I, section 8, clause 3 of the Constitution, various 
        treaties, Federal statutes, Supreme Court decisions, executive 
        agreements, and course of dealing.
            (2) Native Americans continue to rank at the bottom of 
        nearly every indicator of social and economic well-being in 
        America:
                    (A) Unemployment rates average near 50 percent in 
                Indian country and hover well over 90 percent on many 
                reservations.
                    (B) While the national poverty rate is only 11 
                percent, over 26 percent of all Native Americans live 
                in poverty.
                    (C) In addition, Native Americans have some of the 
                lowest levels of educational attainment in the United 
                States.
            (3) Numerous external efforts at economic development in 
        Indian Country have proven unsuccessful. The most successful 
        efforts have been initiated from within the Native communities 
        themselves. Efforts that empower the communities and give them 
        the tools to make their own decisions should be encouraged and 
        pursued.
            (4) Educational achievement continues to be a cyclical 
        obstacle to economic development in Indian Country. Businesses 
        are often unwilling to locate to Indian Country because of the 
        lack of an educated workforce. Over a quarter of all Americans 
        have a bachelors degree or higher. However, only 12 percent of 
        all Native Americans nationwide have such a degree, and only 6 
        percent of those who actually live in Indian Country have a 
        bachelors or higher. Once Natives are finally able to obtain 
        higher education, many are not able to return to their 
        communities because there are no jobs. There needs to be an 
        intervening factor to help break this damaging cycle.

SEC. 3. LOAN FORGIVENESS FOR EMPLOYMENT IN INDIAN COUNTRY.

    Part B of title IV of the Higher Education Act of 1965 is amended 
by inserting after section 428K (20 U.S.C. 1078-11) the following:

``SEC. 428L. LOAN FORGIVENESS FOR EMPLOYMENT IN INDIAN COUNTRY.

    ``(a) Purpose.--It is the purpose of this section--
            ``(1) to dramatically increase in the number of individuals 
        with higher education degrees working within and for Indian 
        country;
            ``(2) to facilitate economic growth and development in 
        Indian country, and promote Tribal sovereignty;
            ``(3) to encourage members of Indian tribes with higher 
        education degrees to return to Indian country;
            ``(4) to encourage the long-term retention of educated 
        individuals in Indian country; and
            ``(5) to encourage public service in Indian country, and to 
        encourage investment in Indian country through an increase in 
        the education level of the available workforce.
    ``(b) Program Authorized.--
            ``(1) In general.--From the funds appropriated under 
        subsection (g), the Secretary shall carry out a program of 
        assuming the obligation to repay, pursuant to subsection (c), a 
        loan made, insured, or guaranteed under this part or part D 
        (excluding loans made under sections 428B and 428C, or 
        comparable loans made under part D) for any borrower, who--
                    ``(A) obtains or has obtained a bachelor's or 
                graduate degree from an institution of higher 
                education; and
                    ``(B) obtains employment in Indian country.
            ``(2) Award basis; priority.--
                    ``(A) Award basis.--Subject to subparagraph (B), 
                loan repayment under this section shall be on a first-
                come, first-served basis, and subject to the 
                availability of appropriations.
                    ``(B) Priorities.--The Secretary shall, by 
                regulation, establish a system for giving priority in 
                providing loan repayment under this section to 
                individual based on the following factors:
                            ``(i) The level of poverty in the locality 
                        within Indian country where the individual is 
                        employed.
                            ``(ii) Whether the individual is an 
                        enrolled member of an Indian tribe.
                            ``(iii) Whether such enrolled member is 
                        performing employment in the Indian country of 
                        the Indian tribe in which they are enrolled.
                            ``(iv) The ratio of the individual's 
                        student loan debt to the individual's annual 
                        income.
                            ``(v) Whether the individual's employer 
                        will provide an additional amount or a matching 
                        percentage for student loan repayment for the 
                        individual.
            ``(3) Outreach.--The Secretary shall post a notice on a 
        Department Internet web site regarding the availability of loan 
        repayment under this section, and shall notify institutions of 
        higher education (including Tribal Colleges and Universities) 
        and the Bureau of Indian Affairs regarding the availability of 
        loan repayment under this section.
    ``(c) Qualified Loan Amounts.--
            ``(1) Percentages.--Subject to paragraph (2), the Secretary 
        shall assume or cancel the obligation to repay under this 
        section--
                    ``(A) 15 percent of the amount of all loans made, 
                insured, or guaranteed after the date of enactment of 
                the Indian Country Educational Empowerment Zone Act to 
                a student under part B or D, for each of the first and 
                second years of employment in Indian country;
                    ``(B) 20 percent of such total amount, for each of 
                the third and fourth years of such employment; and
                    ``(C) 30 percent of such total amount, for the 
                fifth year of such employment.
            ``(2) Maximum.--The Secretary shall not repay or cancel 
        under this section more than--
                    ``(A) for any student with a bachelor's degree, but 
                without a graduate degree, $20,000 in the aggregate of 
                loans made, insured, or guaranteed under parts B and D; 
                and
                    ``(B) for any student with a graduate degree, 
                $20,000 of such loans for each year of employment.
            ``(3) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C may be a qualified loan amount 
        for the purposes of this subsection only to the extent that 
        such loan amount was used to repay a loan made, insured, or 
        guaranteed under part B or D for a borrower who meets the 
        requirements of subsection (b)(1), as determined in accordance 
        with regulations prescribed by the Secretary.
    ``(d) Additional Requirements.--
            ``(1) No refunding of previous payments.--Nothing in this 
        section shall be construed to authorize the refunding of any 
        repayment of a loan made under this part or part D.
            ``(2) Interest.--If a portion of a loan is repaid by the 
        Secretary under this section for any year, the proportionate 
        amount of interest on such loan which accrues for such year 
        shall be repaid by the Secretary.
            ``(3) Double benefits prohibited.--
                    ``(A) Ineligibility of national service award 
                recipients.--No student borrower may, for the same 
                service, receive a benefit under both this section and 
                subtitle D of title I of the National and Community 
                Service Act of 1990 (42 U.S.C. 12601 et seq.).
                    ``(B) Double forgiveness.--No student borrower may, 
                for the same service, receive a benefit under both this 
                section and section 428J, 428K, or 460 of this Act or 
                section 108 of the Indian Health Care Improvement Act 
                (25 U.S.C. 1616a).
            ``(4) Repayment to eligible lenders.--The Secretary shall 
        pay to each eligible lender or holder for each fiscal year an 
        amount equal to the aggregate amount of loans which are subject 
        to repayment pursuant to this section for such year.
    ``(e) Application for Repayment.--
            ``(1) In general.--Each eligible individual desiring loan 
        repayment under this section shall submit a complete and 
        accurate application to the Secretary at such time, in such 
        manner, and containing such information as the Secretary may 
        require. Such application shall contain verification from the 
        employer of the employment in Indian country.
            ``(2) Conditions.--An eligible individual may apply for 
        loan repayment under this section after completing each year of 
        employment in Indian country. The borrower shall receive 
        forbearance while engaged in such employment unless the 
        borrower is in deferment while so engaged.
    ``(f) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $20,000,000 for fiscal year 
2005, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.
    ``(h) Definition of Indian Tribe.--In this section, the term 
`Indian tribe' means any Indian tribe, band, nation, or other organized 
group or community, including any Alaska Native village, which is 
recognized as eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians.''.