SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Quality Child Care Loan Forgiveness 
Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) New scientific research shows that the electrical 
        activity of brain cells actually changes the physical structure 
        of the brain, and that without a stimulating environment, a 
        baby's brain suffers.
            (2) 12,000,000 children under age 6, and 17,000,000 school-
        aged children of working parents, need child care. Demand for 
        child care is growing as more mothers enter the workforce.
            (3) Good quality child care, in a safe environment, with 
        trained, caring providers who offer stimulating activities 
        appropriate to the child's age, help children grow and thrive. 
        Recent research shows that most child care needs significant 
        improvement.
            (4) Good quality child care depends largely on the 
        provider. Yet providers of child care earn on average only 
        $6.70 per hour or $11,725 per year. Such earnings cause high 
        turnover, which affects the overall quality of a child care 
        program and causes anxiety for children.
            (5) Children attending lower-quality child care facilities 
        and child care facilities with high staff turnover are less 
        competent in language and social development.
            (6) Low-income and high-income children are more likely 
        than middle-income children to attend child care facilities 
        providing high quality child care.
            (7) The quality of child care is primarily related to high 
        staff-to-child ratios, staff education, and administrators' 
        prior experience. In addition, certain characteristics 
        distinguish poor, mediocre, and good-quality child care 
        facilities, the most important of which are teacher wages, 
        education, and specialized training.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to bring more highly trained individuals into the early 
        child care profession; and
            (2) to keep more highly trained child care providers in the 
        early child care field for longer periods of time.

SEC. 4. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

    Part B of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) 
is amended by inserting after section 428J of such Act (20 U.S.C. 1078-
10) the following:

``SEC. 428I. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

    ``(a) Definitions.--In this section:
            ``(1) Child care facility.--The term `child care facility' 
        means a facility that--
                    ``(A) provides child care services; and
                    ``(B) meets applicable State or local government 
                licensing, certification, approval, or registration 
                requirements, if any.
            ``(2) Child care services.--The term `child care services' 
        means activities and services provided for the education and 
        care of children from birth through age 5 by an individual who 
        has a degree in early childhood education.
            ``(3) Degree.--The term `degree' means an associate's or 
        bachelor's degree awarded by an institution of higher 
        education.
            ``(4) Early childhood education.--The term `early childhood 
        education' means education in the areas of early child 
        education, child care, or any other educational area related to 
        child care that the Secretary determines appropriate.
            ``(5) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 1201.
    ``(b) Demonstration Program.--
            ``(1) In general.--The Secretary may carry out a 
        demonstration 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) for any new borrower after October 1, 1994, who 
        completes a degree in early childhood education and obtains 
        full-time employment in a child care facility.
            ``(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) Priority.--The Secretary shall give priority 
                in providing loan repayment under this section for a 
                fiscal year to student borrowers who received loan 
                repayment under this section for the preceding fiscal 
                year.
            ``(3) Regulations.--The Secretary is authorized to 
        prescribe such regulations as may be necessary to carry out the 
        provisions of this section.
    ``(c) Loan Repayment.--
            ``(1) In general.--The Secretary shall assume the 
        obligation to repay 15 percent of the total amount of all loans 
        made after October 1, 1994, to a student under this part or 
        part D for each complete year of employment described in 
        subsection (b)(1).
            ``(2) Construction.--Nothing in this section shall be 
        construed to authorize the refunding of any repayment of a loan 
        made under this part or part D.
            ``(3) 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.
            ``(4) Special rule.--In the case where a student borrower 
        who is not participating in loan repayment pursuant to this 
        section returns to an institution of higher education after 
        graduation from an institution of higher education for the 
        purpose of obtaining a degree in early childhood education, the 
        Secretary is authorized to assume the obligation to repay the 
        total amount of loans made under this part or part D incurred 
        for a maximum of two academic years in returning to an 
        institution of higher education for the purpose of obtaining a 
        degree in early childhood education. Such loans shall only be 
        repaid for borrowers who qualify for loan repayment pursuant to 
        the provisions of this section, and shall be repaid in 
        accordance with the provisions of paragraph (1).
            ``(5) Ineligibility of national service award recipients.--
        No student borrower may, for the same volunteer 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.).
    ``(d) 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 the 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.
            ``(2) Conditions.--An eligible individual may apply for 
        loan repayment under this section after completing each year of 
        qualifying employment. The borrower shall receive forbearance 
        while engaged in qualifying employment unless the borrower is 
        in deferment while so engaged.
    ``(f) Evaluation.--
            ``(1) In general.--The Secretary shall conduct, by grant or 
        contract, an independent national evaluation of the impact of 
        the demonstration program assisted under this section on the 
        field of early childhood education.
            ``(2) Competitive basis.--The grant or contract described 
        in subsection (a) shall be awarded on a competitive basis.
            ``(3) Contents.--The evaluation described in this 
        subsection shall--
                    ``(A) determine the number of individuals who were 
                encouraged by the demonstration program assisted under 
                this section to pursue early childhood education;
                    ``(B) determine the number of individuals who 
                remain employed in a child care facility as a result of 
                participation in the program;
                    ``(C) identify the barriers to the effectiveness of 
                the program;
                    ``(D) assess the cost-effectiveness of the program 
                in improving the quality of--
                            ``(i) early childhood education; and
                            ``(ii) child care services;
                    ``(E) identify the reasons why participants in the 
                program have chosen to take part in the program;
                    ``(F) identify the number of individuals 
                participating in the program who received an 
                associate's degree and the number of such individuals 
                who received a bachelor's degree; and
                    ``(G) identify the number of years each individual 
                participates in the program.
            ``(4) Interim and final evaluation reports.--The Secretary 
        shall prepare and submit to the President and the Congress such 
        interim reports regarding the evaluation described in this 
        subsection as the Secretary deems appropriate, and shall 
        prepare and so submit a final report regarding the evaluation 
        by January 1, 2002.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $10,000,000 for fiscal year 
1998, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.''.

SEC. 5. LOAN CANCELLATION.

    Section 465(a) of the Higher Education Act of 1965 (20 U.S.C. 
1087ee(a)) is amended--
            (1) in paragraph (2)--
                    (A) by redesignating subparagraphs (G), (H), and 
                (I) as subparagraphs (H), (I), and (J), respectively; 
                and
                    (B) by inserting after subparagraph (F), the 
                following:
                    ``(G) as a full-time child care provider or 
                educator--
                            ``(i) in a child care facility operated by 
                        an entity that meets the applicable State or 
                        local government licensing, certification, 
                        approval, or registration requirements, if any; 
                        and
                            ``(ii) who has a degree in early childhood 
                        education;''; and
            (2) in paragraph (3)(A)--
                    (A) in clause (i), by striking ``(G), (H), or (I)'' 
                and inserting ``(H), (I), or (J)''; and
                    (B) in clause (ii), by inserting ``or (G)'' after 
                ``subparagraph (B)''.
Quality Child Care Loan Forgiveness Act - Amends the Higher Education Act of 1965 to authorize the Secretary of Education to carry out a demonstration program of student loan forgiveness for individuals who earn a degree in early childhood education and obtain full-time employment in the early child care profession. 
Requires cancellation of 15 percent of a student loan for each complete year of full-time employment in a child care facility by such a child care provider or educator.
Quality Child Care Loan Forgiveness Act