SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Service Implementation Act 
of 1993''.

SEC. 2. INAPPLICABILITY OF DEMONSTRATION PROGRAM LOAN FORGIVENESS TO 
              INDIVIDUALS PERFORMING NATIONAL COMMUNITY SERVICE.

    Section 428J of the Higher Education Act of 1965 (hereafter in this 
Act referred to as the ``Act'') (20 U.S.C. 1078-10) is amended--
            (1) in the heading for subsection (b), by striking 
        ``Demonstration program'' and inserting ``Program authorized'';
            (2) in the heading for paragraph (1) of subsection (b), by 
        striking ``In General'' and inserting ``Demonstration 
        Program'';
            (3) in subsection (b)--
                    (A) in clause (ii) of subparagraph (A), by 
                inserting ``or'' after the semicolon at the end 
                thereof;
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B); and
            (4) in subsection (g)--
                    (A) in paragraph (1), by striking ``program'' and 
                inserting ``programs'';
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by striking 
                        ``program'' and inserting ``programs'';
                            (ii) in subparagraph (C), by striking 
                        ``program'' and inserting ``programs'';
                            (iii) in subparagraph (D), by striking 
                        ``program'' each place such term appears and 
                        inserting ``programs''; and
                            (iv) in subparagraph (E), by striking 
                        ``program'' each place such term appears and 
                        inserting ``programs''; and
                    (C) in paragraph (5) of subsection (g)--
                            (i) by striking ``to carry out this 
                        section''; and
                            (ii) by inserting ``to carry out the 
                        demonstration program described in subsection 
                        (b)(2)'' after ``succeeding fiscal years''.

SEC. 3. LOAN FORGIVENESS ENTITLEMENT PROGRAM.

    Subsection (b) of section 428J of the Act (20 U.S.C. 1078-10(b)) is 
further amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Entitlement program.--(A) The Secretary, in 
        consultation with the Secretary of Health and Human Services, 
        shall assume the obligation to repay, and repay, a loan made, 
        insured or guaranteed under this part (excluding loans made 
        under sections 428A, 428B, or 428C) for any borrower having an 
        application approved under subsection (e) who agrees in writing 
        to volunteer for service under the Peace Corps Act or under the 
        Domestic Volunteer Service Act of 1973, or to perform 
        comparable service as a full-time employee of an organization 
        which is exempt from taxation under section 501(c)(3) of the 
        Internal Revenue Code of 1986, if the borrower does not receive 
        compensation which exceeds the greater of--
                    ``(i) the minimum wage rate described in section 6 
                of the Fair Labor Standards Act of 1938; or
                    ``(ii) an amount equal to 100 percent of the 
                poverty line for a family of two (as defined in section 
                673(2) of the Community Services Block Grant Act.
            ``(B) Entitlement provisions.--Each borrower described in 
        subparagraph (A) having an application approved under 
        subsection (e) shall be entitled to receive loan repayment in 
        accordance with the provisions of this section. Each such 
        borrower shall be deemed to have a contractual right, as 
        against the United States, to receive from the Secretary such 
        loan repayment.''.

SEC. 4. NUMBER OF LOANS WHICH MAY BE FORGIVEN; LOAN REPAYMENT.

    Subsection (c) of section 428J of the Act (20 U.S.C. 1078-10(c)) is 
amended--
            (1) in the heading for paragraph (1), by striking ``In 
        general'' and inserting ``Demonstration program'';
            (2) in the matter preceding subparagraph (A) of paragraph 
        (1), by striking ``The Secretary'' and inserting ``In the case 
        of individuals described in subparagraphs (A) and (B) of 
        subsection (b)(1), the Secretary'';
            (3) in subparagraph (A) of paragraph (1), by striking 
        ``subsection (a)'' and inserting ``subsection (b)(1)'';
            (4) by redesignating paragraphs (2), (3), and (4) as 
        paragraphs (3), (4), and (5), respectively; and
            (5) by inserting after paragraph (1) the following new 
        paragraph:
            ``(1) Entitlement program.--In the case of individuals 
        described in subsection (b)(2)(A), the Secretary shall assume 
        the obligation to repay--
                    ``(A) 15 percent of the total amount of Stafford 
                loans incurred by the student borrower for the first 
                academic year in which such borrower meets the 
                requirements described in subsection (b)(2)(A);
                    ``(B) 20 percent of such total amount for such 
                second academic year;
                    ``(C) 25 percent of such total amount for such 
                third academic year; and
                    ``(D) 30 percent of such total amount for such 
                fourth academic year.''.

SEC. 5. LOAN CANCELLATION APPLICABILITY FOR PERKINS LOAN BORROWERS WHO 
              PERFORM NATIONAL SERVICE.

    Section 465(a)(2) of the Act (20 U.S.C. 1087ee(a)(2)) is amended--
            (1) by striking ``or'' at the end of subparagraph (H);
            (2) by striking the period at the end of subparagraph (I) 
        and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
                    ``(J) as a full-time volunteer under the Peace 
                Corps Act or under the Domestic Volunteer Service Act 
                of 1973, or for comparable service as a full-time 
                employee of an organization which is exempt from 
                taxation under section 501(c)(3) of the Internal 
                Revenue Code of 1986, if the borrower does not receive 
                compensation which exceeds the greater of--
                            ``(i) the minimum wage rate described in 
                        section 6 of the Fair Labor Standards Act of 
                        1938; or
                            ``(ii) an amount equal to 100 percent of 
                        the poverty line for a family of two (as 
                        defined in section 673(2) of the Community 
                        Service Block Grant Act).''.
National Service Implementation Act of 1993 - Amends the Higher Education Act of 1965 (HEA) to revise, expand, and accelerate implementation of loan forgiveness incentives for student borrowers who perform certain full-time, low-paid national community service (as a volunteer under the Peace Corps Act or the Domestic Volunteer Service Act of 1973, or comparable service with a tax-exempt organization). 
Establishes a loan forgiveness entitlement program for such borrowers under the Federal Family Education Loans (FFEL) program (formerly known as the guaranteed student loan or Stafford loan program).  (Makes a current demonstration program for FFEL forgiveness for certain teachers and nurses inapplicable to such borrowers.)  Makes such entitlement program applicable to such borrowers whether their borrowing occurred before or after the beginning of such program, and provides that such forgiveness shall be for an increasing portion of the total of Stafford (or FFEL) loans for the four academic years (15 percent for the first, 20 for the second, 25 for the third, and 30 for the fourth). 
Makes Perkins direct student loan cancellation provisions applicable to Perkins direct loan borrowers who perform the same full-time, low-paid national community service.
National Service Implementation Act of 1993