II 

109TH CONGRESS 

2D SESSION S. 2573 

To amend the Higher Education Act of 1965 to provide interest rate reductions, to authorize and appropriate amounts for the Federal Pell Grant 

program, to allow for in-school consolidation, to provide the administrative account for the Federal Direct Loan Program as a mandatory 

program, to strike the single holder rule, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 6, 2006 

Mr. DURBIN introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the Higher Education Act of 1965 to provide 

interest rate reductions, to authorize and appropriate 

amounts for the Federal Pell Grant program, to allow 

for in-school consolidation, to provide the administrative 

account for the Federal Direct Loan Program as a mandatory program, to strike the single holder rule, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Reverse the Raid on 

5 Student Aid Act of 2006’’. 


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1 SEC. 2. INTEREST RATE REDUCTIONS. 

2 (a) FFEL INTEREST RATES.—Section 427A(l) (20 

3 U.S.C. 1077a(l)) is amended— 

4 (1) in paragraph (1)— 

5 (A) by striking ‘‘6.8 percent’’ and inserting 

6 ‘‘3.4 percent’’; and 

7 (B) by inserting before the period at the 

8 end the following: ‘‘, except that for any loan 

9 made pursuant to section 428H for which the 

10 first disbursement is made on or after July 1, 

11 2006, the applicable rate of interest shall be 6.8 

12 percent on the unpaid principal balance of the 

13 loan’’; and 

14 (2) in paragraph (2), by striking ‘‘8.5 percent’’ 

15 and inserting ‘‘4.25 percent’’. 

16 (b) DIRECT LOANS.—Section 455(b)(7) (20 U.S.C. 

17 1087e(b)(7)) is amended— 

18 (1) in subparagraph (A)— 

19 (A) by striking ‘‘and Federal Direct Un20 subsidized Stafford Loans’’; 

21 (B) by striking ‘‘6.8 percent’’ and inserting 

22 ‘‘3.4 percent’’; and 

23 (C) by inserting before the period at the 

24 end the following: ‘‘, and for any Federal Direct 

25 Unsubsidized Stafford Loan made for which the 

26 first disbursement is made on or after July 1, 


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1 2006, the applicable rate of interest shall be 6.8 

2 percent on the unpaid principal balance of the 

3 loan’’; and 

4 (2) in subparagraph (B), by striking ‘‘7.9 per5 cent’’ and inserting ‘‘4.25 percent’’. 

6 SEC. 3. FEDERAL PELL GRANT AWARDS. 

7 Section 401 of the Higher Education Act of 1965 (20 

8 U.S.C. 1070a) is amended— 

9 (1) in subsection (b)— 

10 (A) in paragraph (2)(A), by striking 

11 clauses (i) through (v) and inserting the fol12 lowing: 

13 ‘‘(i) $4,500 for academic year 2007–2008; 

14 ‘‘(ii) $4,800 for academic year 2008–2009; 

15 ‘‘(iii) $5,200 for academic year 2009–2010; 

16 ‘‘(iv) $5,600 for academic year 2010–2011; and 

17 ‘‘(v) $6,000 for academic year 2011–2012,’’; 

18 (B) in paragraph (3)(A), by striking ‘‘an 

19 appropriation Act’’ and inserting ‘‘this section’’; 

20 and 

21 (C) in paragraph (7), by striking ‘‘the ap22 propriate Appropriation Act for this subpart’’ 

23 and inserting ‘‘this section’’; 

24 (2) by striking subsection (g); 


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1 (3) by redesignating subsections (h), (i), and 

2 (j), as subsections (g), (h), and (i), respectively; and 

3 (4) by adding at the end the following: 

4 ‘‘(j) AUTHORIZATION AND APPROPRIATION OF

5 FUNDS.—There are authorized to be appropriated, and 

6 there are appropriated, to carry out this section— 

7 ‘‘(1) for academic year 2007–2008, such sums 

8 as may be necessary to award each student eligible 

9 for a Federal Pell Grant for such academic year not 

10 more than $4,500; 

11 ‘‘(2) for academic year 2008–2009, such sums 

12 as may be necessary to award each student eligible 

13 for a Federal Pell Grant for such academic year not 

14 more than $4,800; 

15 ‘‘(3) for academic year 2009–2010, such sums 

16 as may be necessary to award each student eligible 

17 for a Federal Pell Grant for such academic year not 

18 more than $5,200; 

19 ‘‘(4) for academic year 2010–2011, such sums 

20 as may be necessary to award each student eligible 

21 for a Federal Pell Grant for such academic year not 

22 more than $5,600; 

23 ‘‘(5) for academic year 2011–2012, such sums 

24 as may be necessary to award each student eligible 


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1 for a Federal Pell Grant for such academic year not 

2 more than $6,000; and 

3 ‘‘(6) for each subsequent academic year, such 

4 sums as may be necessary to award each student eli5 gible for a Federal Pell Grant for such subsequent 

6 academic year not more than the amount that is 

7 equal to the maximum award amount for the pre8 vious academic year increased by a percentage equal 

9 to the estimated percentage increase in the Con10 sumer Price Index (as determined by the Secretary) 

11 between such previous academic year and such sub12 sequent academic year.’’. 

13 SEC. 4. IN-SCHOOL CONSOLIDATION. 

14 Section 428(b)(7)(A) of the Higher Education Act of 

15 1965 (20 U.S.C. 1078(b)(7)(A)) is amended by striking 

16 ‘‘shall begin’’ and all that follows through the period and 

17 inserting ‘‘shall begin— 

18 ‘‘(i) the day after 6 months after the date 

19 the student ceases to carry at least one-half the 

20 normal full-time academic workload (as deter21 mined by the institution); or 

22 ‘‘(ii) on an earlier date if the borrower re23 quests and is granted a repayment schedule 

24 that provides for repayment to commence at an 

25 earlier date.’’. 


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1 SEC. 5. ADMINISTRATIVE ACCOUNT FOR DIRECT LOAN 

2 PROGRAM. 

3 Section 458 of the Higher Education Act of 1965 (20 

4 U.S.C. 1087h) is amended to read as follows: 

5 ‘‘SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES. 

6 ‘‘(a) ADMINISTRATIVE EXPENSES.— 

7 ‘‘(1) IN GENERAL.—Each fiscal year there shall 

8 be available to the Secretary, from funds not other9 wise appropriated, funds to be obligated for— 

10 ‘‘(A) administrative costs under this part 

11 and part B, including the costs of the direct 

12 student loan programs under this part; and 

13 ‘‘(B) account maintenance fees payable to 

14 guaranty agencies under part B and calculated 

15 in accordance with subsection (b), 

16 not to exceed (from such funds not otherwise appro17 priated) $904,000,000 in fiscal year 2007, 

18 $943,000,000 in fiscal year 2008, $983,000,000 in 

19 fiscal year 2009, $1,023,000,000 in fiscal year 2010, 

20 $1,064,000,000 in fiscal year 2011, and 

21 $1,106,000,000 in fiscal year 2012. 

22 ‘‘(2) ACCOUNT MAINTENANCE FEES.—Account 

23 maintenance fees under paragraph (1)(B) shall be 

24 paid quarterly and deposited in the Agency Oper25 ating Fund established under section 422B. 


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1 ‘‘(3) CARRYOVER.—The Secretary may carry 

2 over funds made available under this section to a 

3 subsequent fiscal year. 

4 ‘‘(b) CALCULATION BASIS.—Account maintenance 

5 fees payable to guaranty agencies under subsection 

6 (a)(1)(B) shall not exceed the basis of 0.10 percent of the 

7 original principal amount of outstanding loans on which 

8 insurance was issued under part B. 

9 ‘‘(c) BUDGET JUSTIFICATION.—No funds may be ex10 pended under this section unless the Secretary includes 

11 in the Department of Education’s annual budget justifica12 tion to Congress a detailed description of the specific ac13 tivities for which the funds made available by this section 

14 have been used in the prior and current years (if applica15 ble), the activities and costs planned for the budget year, 

16 and the projection of activities and costs for each remain17 ing year for which administrative expenses under this sec18 tion are made available.’’. 

19 SEC. 6. SINGLE HOLDER RULE. 

20 Subparagraph (A) of section 428C(b)(1) of the High21 er Education Act of 1965 (20 U.S.C. 1078–3(b)(1)) is 

22 amended by striking ‘‘and (i)’’ and all that follows through 

23 ‘‘so selected for consolidation)’’. 

Æ 


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