I 

110TH CONGRESS 

1ST SESSION H. R. 2669 

To provide for reconciliation pursuant to section 601 of the concurrent 

resolution on the budget for fiscal year 2008. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 12, 2007 

Mr. GEORGE MILLER of California (for himself and Mr. HINOJOSA) introduced the following bill; which was referred to the Committee on Education and Labor 

A BILL 

To provide for reconciliation pursuant to section 601 of 

the concurrent resolution on the budget for fiscal year 2008. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be referred to as 

5 the ‘‘College Cost Reduction Act of 2007’’. 

6 (b) TABLE OF CONTENTS.— 

Sec. 1. Short title; table of contents. 

Sec. 2. References; effective date. 

TITLE I—INVESTING IN STUDENT AID 

PART A—INCREASING THE PURCHASING POWER OF PELL GRANTS

Sec. 101. Mandatory Pell Grant Increases. 

Sec. 102. Support for working students. 
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Sec. 103. Simplified needs test and automatic zero improvements. 

Sec. 104. Definitions. 

PART B—MAKING STUDENT LOANS MORE AFFORDABLE

Sec. 111. Interest rate reductions. 

Sec. 112. Increases in loan limits. 

Sec. 113. Reduction of lender special allowance payments. 

Sec. 114. Elimination of exceptional performer status for lenders. 

Sec. 115. Reduction of lender insurance percentage. 

Sec. 116. Guaranty agency collection retention. 

Sec. 117. Unit costs for account maintenance fees. 

Sec. 118. Increased loan fees from lenders. 

Sec. 119. Student loan information. 

PART C—REWARDING SERVICE IN REPAYMENT

Sec. 141. Loan forgiveness for service in areas of national need. 

‘‘Sec. 428K. Loan forgiveness for service in areas of national need. 

Sec. 142. Income contingent repayment for public sector employees. 

Sec. 143. Income-based repayment. 

‘‘Sec. 493C. Income-based repayment. 

Sec. 144. Definition of economic hardship. 

Sec. 145. Deferrals. 

Sec. 146. Maximum repayment period. 

TITLE II—REDUCING THE COST OF COLLEGE 

Sec. 201. State commitment to affordable college education. 

‘‘Sec. 132. State commitment to affordable college education. 

Sec. 202. Consumer information and public accountability in higher education. 

‘‘Sec. 131. Consumer information and public accountability in higher education. 

Sec. 203. Incentives and rewards for low tuition. 

‘‘Sec. 401B. Incentives and rewards for low tuition. 

Sec. 204. Cooperative education rewards for institutions that restrain tuition 

increases. 

‘‘TITLE VIII—COOPERATIVE EDUCATION REWARDS FOR 

INSTITUTIONS THAT RESTRAIN TUITION INCREASES 

‘‘Sec. 801. Eligible institutions. 

‘‘Sec. 802. Authorization of appropriations; reservations. 

‘‘Sec. 803. Grants for cooperative education. 

‘‘Sec. 804. Demonstration and innovation projects; training and resource 

centers; and research. 

TITLE III—ENSURING A HIGHLY QUALIFIED TEACHER IN EVERY 

CLASSROOM 

PART A—TEACH GRANTS

Sec. 301. TEACH Grants. 

‘‘SUBPART 9—TEACH GRANTS

‘‘Sec. 420L. Program established. 

‘‘Sec. 420M. Eligibility; applications; selection. 
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‘‘Sec. 420N. Definitions. 

‘‘Sec. 420O. Program period and funding. 

PART B—CENTERS OF EXCELLENCE

Sec. 311. Centers of excellence. 

‘‘PART C—CENTERS OF EXCELLENCE

‘‘Sec. 231. Definitions. 

‘‘Sec. 232. Centers of excellence. 

‘‘Sec. 233. Appropriations. 

TITLE IV—COLLEGE ACCESS CHALLENGE GRANT PROGRAM 

Sec. 401. College Access Challenge grants. 

1 SEC. 2. REFERENCES; EFFECTIVE DATE. 

2 (a) REFERENCES.—Except as otherwise expressly 

3 provided, whenever in this Act an amendment or repeal 

4 is expressed in terms of an amendment to, or repeal of, 

5 a section or other provision, the reference shall be consid6 ered to be made to a section or other provision of the 

7 Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 

8 (b) EFFECTIVE DATE.—Except as otherwise ex9 pressly provided therein, the amendments made by this 

10 Act shall be effective on October 1, 2007. 

11 TITLE I—INVESTING IN 

12 STUDENT AID 

13 PART A—INCREASING THE PURCHASING POWER 

14 OF PELL GRANTS 

15 SEC. 101. MANDATORY PELL GRANT INCREASES. 

16 (a) EXTENSION OF AUTHORITY.—Section 401(a) (20 

17 U.S.C. 1070a(a)) is amended by striking ‘‘fiscal year 

18 2004’’ and inserting ‘‘fiscal year 2013’’. 
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1 (b) FUNDING FOR INCREASES.—Section 401(b) (20 

2 U.S.C. 1070a(b)) is amended by adding at the end the 

3 following new paragraph: 

4 ‘‘(9) ADDITIONAL FUNDS.— 

5 ‘‘(A) IN GENERAL.—There are authorized 

6 to be appropriated, and there are appropriated, 

7 to carry out subparagraph (B) of this para8 graph (in addition to any other amounts appro9 priated to carry out this section and out of any 

10 money in the Treasury not otherwise appro11 priated) the following amounts: 

12 ‘‘(i) $420,000,000 for fiscal year 

13 2008; 

14 ‘‘(ii) $870,000,000 for fiscal year 

15 2009; 

16 ‘‘(iii) $1,330,000,000 for fiscal year 

17 2010; 

18 ‘‘(iv) $1,820,000,000 for fiscal year 

19 2011; 

20 ‘‘(v) $2,340,000,000 for fiscal year 

21 2012; 

22 ‘‘(vi) $2,390,000,000 for fiscal year 

23 2013; 

24 ‘‘(vii) $2,430,000,000 for fiscal year 

25 2014; 
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1 ‘‘(viii) $2,470,000,000 for fiscal year 

2 2015; 

3 ‘‘(ix) $2,500,000,000 for fiscal year 

4 2016; and 

5 ‘‘(x) $2,520,000,000 for fiscal year 

6 2017. 

7 ‘‘(B) INCREASE IN FEDERAL PELL

8 GRANTS.—The amounts made available pursu9 ant to subparagraph (A) of this paragraph shall 

10 be used to increase the amount of the maximum 

11 Pell Grant for which a student shall be eligible 

12 during an award year, as specified in the last 

13 enacted appropriation Act applicable to that 

14 award year, by— 

15 ‘‘(i) $100 for award year 2008–2009; 

16 ‘‘(ii) $200 for award year 2009–2010; 

17 ‘‘(iii) $300 for award year 2010– 

18 2011; 

19 ‘‘(iv) $400 for award year 2011–2012; 

20 and 

21 ‘‘(v) $500 for award year 2012–2013 

22 and each subsequent award year. 

23 ‘‘(C) USE OF FISCAL YEAR FUNDS FOR

24 AWARD YEARS.—The amounts made available 

25 by subparagraph (A) for any fiscal year shall be 
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1 available and remain available for use under 

2 subparagraph (B) for the award year that be3 gins in such fiscal year.’’. 

4 (c) AUTHORIZED MAXIMUMS.—Section 401(b)(2)(A) 

5 (20 U.S.C. 1070a(b)(2)(A)) is amended to read as follows: 

6 ‘‘(2)(A) The amount of the Federal Pell Grant 

7 for a student eligible under this part shall be— 

8 ‘‘(i) $7,600 for academic year 2008–2009; 

9 ‘‘(ii) $8,600 for academic year 2009–2010; 

10 ‘‘(iii) $9,600 for academic year 2010– 

11 2011; 

12 ‘‘(iv) $10,600 for academic year 2011– 

13 2012; 

14 ‘‘(v) $11,600 for academic year 2012– 

15 2013, 

16 less an amount equal to the amount determined 

17 to be the expected family contribution with re18 spect to that student for that year.’’. 

19 (d) TUITION SENSITIVITY.— 

20 (1) AMENDMENT.—Section 401(b) (20 U.S.C. 

21 1070a(b)) is further amended— 

22 (A) by striking paragraph (3); and 

23 (B) by redesignating paragraphs (4) 

24 through (9) as paragraphs (3) through (8), re25 spectively. 
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1 (2) EFFECTIVE DATE.—The amendments made 

2 by paragraph (1) of this subsection are effective on 

3 the date of enactment of this Act. 

4 (e) MULTIPLE GRANTS.—Paragraph (5) of section 

5 401(b) (as redesignated by subsection (d)(2)) is amended 

6 to read as follows: 

7 ‘‘(5) YEAR-ROUND PELL GRANTS.—The Sec8 retary is authorized, for students enrolled full time 

9 in a baccalaureate or associate’s degree program of 

10 study at an eligible institution, to award such stu11 dents not more than two Pell grants during an 

12 award year to permit such students to accelerate 

13 progress toward their degree objectives by enrolling 

14 in academic programs for 12 months rather than 9 

15 months.’’. 

16 (f) ACADEMIC COMPETITIVENESS GRANTS.—Section 

17 401A (as amended by section 8003 of Public Law 109– 

18 171) is amended— 

19 (1) in subsection (c)(3)(A)(ii), by inserting ‘‘, 

20 except as part of a secondary school program of 

21 study’’ before the semicolon; 

22 (2) by redesignating subsection (g) as sub23 section (h); and 

24 (3) by inserting after subsection (f) the fol25 lowing new subsection: 
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1 ‘‘(g) DETERMINATION OF ACADEMIC YEAR.—Not2 withstanding section 481(a)(2), for the purpose of deter3 mining eligibility for a grant under this section, a student 

4 shall be considered to be enrolled or accepted for enroll5 ment in the first, second, third, or fourth academic year 

6 of a program of undergraduate education based on the 

7 student’s class standing, as determined by the institution 

8 of higher education at which the student is enrolled or ac9 cepted for enrollment.’’. 

10 SEC. 102. SUPPORT FOR WORKING STUDENTS. 

11 (a) DEPENDENT STUDENTS.—Subparagraph (D) of 

12 section 475(g)(2) (20 U.S.C. 1087oo)(g)(2)(D)) is amend13 ed to read as follows: 

14 ‘‘(D) an income protection allowance of the 

15 following amount (or a successor amount pre16 scribed by the Secretary under section 478)— 

17 ‘‘(i) for the 2009–2010 academic year, 

18 $3,750; 

19 ‘‘(ii) for the 2010–2011 academic 

20 year, $4,500; 

21 ‘‘(iii) for the 2011–2012 academic 

22 year, $5,250; and 

23 ‘‘(iv) for the 2012–2013 academic 

24 year, $6,000;’’. 
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1 (b) INDEPENDENT STUDENTS WITHOUT DEPEND2 ENTS OTHER THAN A SPOUSE.—Clause (iv) of section 

3 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended 

4 to read as follows: 

5 ‘‘(iv) an income protection allowance 

6 of the following amount (or a successor 

7 amount prescribed by the Secretary under 

8 section 478)— 

9 ‘‘(I) for single or separated stu10 dents, or married students where both 

11 are enrolled pursuant to subsection 

12 (a)(2)— 

13 ‘‘(aa) for the 2009–2010 

14 academic year, $6,690; 

15 ‘‘(bb) for the 2010–2011 

16 academic year, $7,160; 

17 ‘‘(cc) for the 2011–2012 

18 academic year, $7,630; and 

19 ‘‘(dd) for the 2012–2013 

20 academic year, $8,090; and 

21 ‘‘(II) for married students where 

22 1 is enrolled pursuant to subsection 

23 (a)(2)— 

24 ‘‘(aa) for the 2009–2010 

25 academic year, $10,720; 
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1 ‘‘(bb) for the 2010–2011 

2 academic year, $11,470; 

3 ‘‘(cc) for the 2011–2012 

4 academic year, $12,220; and 

5 ‘‘(dd) for the 2012–2013 

6 academic year, $12,960;’’. 

7 (c) UPDATED TABLES AND AMOUNTS.—Section 

8 478(b) (20 U.S.C. 1087rr(b)) is amended— 

9 (1) in paragraph (1)— 

10 (A) by striking ‘‘REVISED TABLES.—For 

11 each’’ and inserting ‘‘REVISED TABLES.— 

12 ‘‘(A) IN GENERAL.—For each’’; 

13 (B) in subparagraph (A) (as designated by 

14 subparagraph (A)), in the third sentence— 

15 (i) by striking ‘‘preceding sentence’’ 

16 and inserting ‘‘subparagraph (A)’’; and 

17 (ii) by striking ‘‘For the 2007–2008’’ 

18 and inserting the following: 

19 ‘‘(B) SPECIAL RULE FOR 2007–2008 ACA20 DEMIC YEAR.—For the 2007–2008’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(C) SPECIAL RULE FOR 2009–2010

23 THROUGH 2012–2013 ACADEMIC YEARS.—For 

24 the 2009–2010 academic year, and for each of 

25 the 3 succeeding academic years, the Secretary 
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1 shall revise the tables in accordance with this 

2 paragraph, except that, for the table in section 

3 477(b)(4), the Secretary shall revise such table 

4 by increasing the amounts contained in such 

5 table for the preceding academic year by 10 

6 percent.’’; and 

7 (2) in paragraph (2), by striking ‘‘shall be de8 veloped’’ and all that follows through the period at 

9 the end and inserting ‘‘shall be developed— 

10 ‘‘(A) for academic year 2008–2009, by in11 creasing each of the dollar amounts contained 

12 in such section as such section was in effect on 

13 the day before the date of enactment of the Col14 lege Cost Reduction Act of 2007 by a percent15 age equal to the estimated percentage increase 

16 in the Consumer Price Index (as determined by 

17 the Secretary) between December 2006 and the 

18 December next preceding the beginning of such 

19 academic year, and rounding the result to the 

20 nearest $10; and 

21 ‘‘(B) for each academic year after 2012– 

22 2013, by increasing each of the dollar amounts 

23 contained in such section for academic year 

24 2012–2013 by a percentage equal to the esti25 mated percentage increase in the Consumer 
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1 Price Index (as determined by the Secretary) 

2 between December 2006 and the December 

3 next preceding the beginning of such academic 

4 year, and rounding the result to the nearest 

5 $10;’’. 

6 (d) EFFECTIVE DATE.—The amendments made by 

7 subsections (a) and (b) shall take effect on October 1, 

8 2008, and the amendment made by subsection (c) shall 

9 take effect on July 1, 2008. 

10 SEC. 103. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO 

11 IMPROVEMENTS. 

12 (a) SIMPLIFIED NEEDS TEST.—Section 479 (20 

13 U.S.C. 1087ss) is amended— 

14 (1) in subsection (b)— 

15 (A) in paragraph (1)(A)(i)— 

16 (i) in subclause (II), by striking ‘‘or’’ 

17 after the semicolon; 

18 (ii) by redesignating subclause (III) as 

19 subclause (IV); 

20 (iii) by inserting after subclause (II) 

21 the following: 

22 ‘‘(III) 1 of whom is a dislocated 

23 worker; or’’; and 
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1 (iv) in subclause (IV) (as redesignated 

2 by clause (ii)), by striking ‘‘12-month’’ and 

3 inserting ‘‘24-month’’; and 

4 (B) in subparagraph (B)(i)— 

5 (i) in subclause (II), by striking ‘‘or’’ 

6 after the semicolon; 

7 (ii) by redesignating subclause (III) as 

8 subclause (IV); 

9 (iii) by inserting after subclause (II) 

10 the following: 

11 ‘‘(III) 1 of whom is a dislocated 

12 worker; or’’; and 

13 (iv) in subclause (IV) (as redesignated 

14 by clause (ii)), by striking ‘‘12-month’’ and 

15 inserting ‘‘24-month’’; 

16 (2) in subsection (c)— 

17 (A) in paragraph (1)— 

18 (i) in subparagraph (A)— 

19 (I) in clause (ii), by striking ‘‘or’’ 

20 after the semicolon; 

21 (II) by redesignating clause (iii) 

22 as clause (iv); 

23 (III) by inserting after clause (ii) 

24 the following: 
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1 ‘‘(iii) 1 of whom is a dislocated work2 er; or’’; and 

3 (IV) in clause (iv) (as redesig4 nated by subclause (II)), by striking 

5 ‘‘12-month’’ and inserting ‘‘24- 

6 month’’; and 

7 (ii) in subparagraph (B), by striking 

8 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 

9 (B) in paragraph (2)— 

10 (i) in subparagraph (A)— 

11 (I) in clause (ii), by striking ‘‘or’’ 

12 after the semicolon; 

13 (II) by redesignating clause (iii) 

14 as clause (iv); 

15 (III) by inserting after clause (ii) 

16 the following: 

17 ‘‘(iii) is a dislocated worker; or’’; and 

18 (IV) in clause (iv) (as redesig19 nated by subclause (II)), by striking 

20 ‘‘12-month’’ and inserting ‘‘24- 

21 month’’; and 

22 (ii) in subparagraph (B), by striking 

23 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 

24 (C) in the flush matter following para25 graph (2)(B), by adding at the end the fol-
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1 lowing: ‘‘The Secretary shall annually adjust 

2 the income level necessary to qualify an appli3 cant for the zero expected family contribution. 

4 The income level shall be adjusted according to 

5 increases in the Consumer Price Index, as de6 fined in section 478(f).’’; and 

7 (3) in subsection (d)— 

8 (A) by redesignating paragraphs (1) 

9 through (6) as subparagraphs (A) through (F), 

10 respectively; 

11 (B) by striking ‘‘(d) DEFINITION’’ and all 

12 that follows through ‘‘the term’’ and inserting 

13 the following: 

14 ‘‘(d) DEFINITIONS.—In this section: 

15 ‘‘(1) DISLOCATED WORKER.—The term ‘dis16 located worker’ has the meaning given the term in 

17 section 101 of the Workforce Investment Act of 

18 1998 (29 U.S.C. 2801). 

19 ‘‘(2) MEANS-TESTED FEDERAL BENEFIT PRO20 GRAM.—The term’’. 

21 (b) DISCRETION OF STUDENT FINANCIAL AID AD22 MINISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) 

23 is amended in the third sentence by inserting ‘‘a family 

24 member who is a dislocated worker (as defined in section 

25 101 of the Workforce Investment Act of 1998 (29 U.S.C. 
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1 2801)),’’ after ‘‘recent unemployment of a family mem2 ber,’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall be effective on July 1, 2009. 

5 SEC. 104. DEFINITIONS. 

6 (a) TOTAL INCOME.—Section 480(a) (20 U.S.C. 

7 1087vv(a)) is amended— 

8 (1) in paragraph (1), by inserting before the pe9 riod at the end the following: ‘‘, except that the Sec10 retary may, by regulation, provide for the use of the 

11 previous tax year when and to the extent necessary 

12 to carry out the sense of Congress in section 133 of 

13 the College Cost Reduction Act of 2007’’; and 

14 (2) in paragraph (2)— 

15 (A) by striking ‘‘and no portion’’ and in16 serting ‘‘no portion’’; and 

17 (B) by inserting ‘‘and no distribution from 

18 any qualified education benefit described in sub19 section (f)(3) that is not subject to Federal in20 come tax,’’ after ‘‘1986,’’. 

21 (b) UNTAXED INCOME AND BENEFITS.—Section 

22 480(b) (20 U.S.C. 1087vv(b)) is amended to read as fol23 lows: 

24 ‘‘(b) UNTAXED INCOME AND BENEFITS.— 
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1 ‘‘(1) The term ‘untaxed income and benefits’ 

2 means— 

3 ‘‘(A) child support received; 

4 ‘‘(B) workman’s compensation; 

5 ‘‘(C) veteran’s benefits such as death pen6 sion, dependency, and indemnity compensation, 

7 but excluding veterans’ education benefits as 

8 defined in subsection (c); 

9 ‘‘(D) interest on tax-free bonds; 

10 ‘‘(E) housing, food, and other allowances 

11 (excluding rent subsidies for low-income hous12 ing) for military, clergy, and others (including 

13 cash payments and cash value of benefits); 

14 ‘‘(F) cash support or any money paid on 

15 the student‘s behalf, except, for dependent stu16 dents, funds provided by the student’s parents; 

17 ‘‘(G) untaxed portion of pensions; 

18 ‘‘(H) payments to individual retirement ac19 counts and Keogh accounts excluded from in20 come for Federal income tax purposes; and 

21 ‘‘(I) any other untaxed income and bene22 fits, such as Black Lung Benefits, Refugee As23 sistance, railroad retirement benefits, or Job 

24 Training Partnership Act noneducational bene25 fits or benefits received through participation in 
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1 employment and training activities under title I 

2 of the Workforce Investment Act of 1998. 

3 ‘‘(2) The term ‘untaxed income and benefits’ 

4 shall not include the amount of additional child tax 

5 credit claimed for Federal income tax purposes.’’. 

6 (c) ASSETS.—Section 480(f) (20 U.S.C. 1087vv(f)) 

7 is amended— 

8 (1) in paragraph (3), by striking ‘‘shall not be 

9 considered an asset of a student for purposes of sec10 tion 475’’ and inserting ‘‘shall be considered an 

11 asset of the parent for purposes of section 475’’; 

12 (2) by redesignating paragraphs (4) and (5) as 

13 paragraphs (5) and (6), respectively; and 

14 (3) by inserting after paragraph (3) the fol15 lowing: 

16 ‘‘(4) A qualified education benefit shall be con17 sidered an asset of the student for purposes of sec18 tion 476 and 477.’’. 

19 (d) OTHER FINANCIAL ASSISTANCE.—Section 

20 480(j)(2) (20 U.S.C. 1087vv(j)(2)) is amended by insert21 ing ‘‘, or a distribution that is not includable in gross in22 come under section 529 of such Code, under another pre23 paid tuition plan offered by a State, or under a Coverdell 

24 education savings account under section 530 of such 

25 Code,’’ after ‘‘1986’’. 
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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall be effective on July 1, 2009. 

3 PART B—MAKING STUDENT LOANS MORE 

4 AFFORDABLE 

5 SEC. 111. INTEREST RATE REDUCTIONS. 

6 (a) FFEL INTEREST RATES.— 

7 (1) Section 427A(l) (20 U.S.C. 1077a(l)) is 

8 amended by adding at the end the following new 

9 paragraph: 

10 ‘‘(4) REDUCED RATES FOR UNDERGRADUATE

11 SUBSIDIZED LOANS.—Notwithstanding subsection 

12 (h) and paragraph (1) of this subsection, with re13 spect to any loan to an undergraduate student made, 

14 insured, or guaranteed under this part (other than 

15 a loan made pursuant to section 428B, 428C, or 

16 428H) for which the first disbursement is made on 

17 or after July 1, 2006, and before July 1, 2013, the 

18 applicable rate of interest shall be as follows: 

19 ‘‘(A) For a loan for which the first dis20 bursement is made on or after July 1, 2006, 

21 and before July 1, 2008, 6.80 percent on the 

22 unpaid principal balance of the loan. 

23 ‘‘(B) For a loan for which the first dis24 bursement is made on or after July 1, 2008, 
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1 and before July 1, 2009, 6.12 percent on the 

2 unpaid principal balance of the loan. 

3 ‘‘(C) For a loan for which the first dis4 bursement is made on or after July 1, 2009, 

5 and before July 1, 2010, 5.44 percent on the 

6 unpaid principal balance of the loan. 

7 ‘‘(D) For a loan for which the first dis8 bursement is made on or after July 1, 2010, 

9 and before July 1, 2011, 4.76 percent on the 

10 unpaid principal balance of the loan. 

11 ‘‘(E) For a loan for which the first dis12 bursement is made on or after July 1, 2011, 

13 and before July 1, 2012, 4.08 percent on the 

14 unpaid principal balance of the loan. 

15 ‘‘(F) For a loan for which the first dis16 bursement is made on or after July 1, 2012 

17 and before July 1, 2013, 3.40 percent on the 

18 unpaid principal balance of the loan.’’. 

19 (2) SPECIAL ALLOWANCE CROSS REFERENCE.— 

20 Section 438(b)(2)(I)(ii)(II) (20 U.S.C. 

21 1086(b)(2)(I)(ii)(II)) is amended by striking ‘‘sec22 tion 427A(l)(1)’’ and inserting ‘‘section 427A(l)(1) 

23 or (l)(4)’’. 
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1 (b) DIRECT LOAN INTEREST RATES.—Section 

2 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding 

3 at the end the following new subparagraph: 

4 ‘‘(D) REDUCED RATES FOR UNDER5 GRADUATE FDSL.—Notwithstanding the pre6 ceding paragraphs of this subsection, for Fed7 eral Direct Stafford Loans made to under8 graduate students for which the first disburse9 ment is made on or after July 1, 2006, and be10 fore July 1, 2013, the applicable rate of interest 

11 shall be as follows: 

12 ‘‘(i) For a loan for which the first dis13 bursement is made on or after July 1, 

14 2006, and before July 1, 2008, 6.80 per15 cent on the unpaid principal balance of the 

16 loan. 

17 ‘‘(ii) For a loan for which the first 

18 disbursement is made on or after July 1, 

19 2008, and before July 1, 2009, 6.12 per20 cent on the unpaid principal balance of the 

21 loan. 

22 ‘‘(iii) For a loan for which the first 

23 disbursement is made on or after July 1, 

24 2009, and before July 1, 2010, 5.44 per-
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1 cent on the unpaid principal balance of the 

2 loan. 

3 ‘‘(iv) For a loan for which the first 

4 disbursement is made on or after July 1, 

5 2010, and before July 1, 2011, 4.76 per6 cent on the unpaid principal balance of the 

7 loan. 

8 ‘‘(v) For a loan for which the first 

9 disbursement is made on or after July 1, 

10 2011, and before July 1, 2012, 4.08 per11 cent on the unpaid principal balance of the 

12 loan. 

13 ‘‘(vi) For a loan for which the first 

14 disbursement is made on or after July 1, 

15 2012, and before July 1, 2013, 3.40 per16 cent on the unpaid principal balance of the 

17 loan.’’. 

18 SEC. 112. INCREASES IN LOAN LIMITS. 

19 (a) INCREASE IN THIRD AND SUBSEQUENT YEAR

20 LIMITS.— 

21 (1) FEDERAL INSURANCE LIMITS.—Section 

22 425(a)(1)(A)(iii) (20 U.S.C. 1075(a)(1)(A)(iii)) is 

23 amended by striking ‘‘$5,500’’ and inserting 

24 ‘‘$7,500’’. 
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1 (2) GUARANTY LIMITS.—Section 

2 428(b)(1)(A)(iii)(I) (20 U.S.C. 1078(b)(1)(A)(iii)(I)) 

3 is amended by striking ‘‘$5,500’’ and inserting 

4 ‘‘$7,500’’. 

5 (b) INCREASE IN AGGREGATE LIMITS.— 

6 (1) FEDERAL INSURANCE LIMITS.—Section 

7 425(a)(2)(A) (20 U.S.C. 1075(a)(2)(A)(i)) is 

8 amended— 

9 (A) in clause (i), by striking ‘‘$23,000’’ 

10 and inserting ‘‘$30,500’’; and 

11 (B) in clause (ii), by striking ‘‘$65,500’’ 

12 and inserting ‘‘$73,000’’. 

13 (2) GUARANTY LIMITS.—Section 428(b)(1)(B) 

14 (20 U.S.C. 1078(b)(1)(A)(iii)(I)) is amended— 

15 (A) in clause (i), by striking ‘‘$23,000’’ 

16 and inserting ‘‘$30,500’’; and 

17 (B) in clause (ii), by striking ‘‘$65,500’’ 

18 and inserting ‘‘$73,000’’. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall be effective July 1, 2008. 

21 SEC. 113. REDUCTION OF LENDER SPECIAL ALLOWANCE 

22 PAYMENTS. 

23 Section 438(b)(2)(I) (20 U.S.C. 1087–1(b)(2)(I)) is 

24 amended— 
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1 (1) in clause (i), by striking ‘‘clauses (ii), (iii), 

2 and (iv)’’ and inserting ‘‘the following clauses’’; and 

3 (2) by adding at the end the following new 

4 clause: 

5 ‘‘(vi) REDUCTION FOR LOANS ON OR

6 AFTER OCTOBER 1, 2007.—With respect to 

7 a loan on which the applicable interest rate 

8 is determined under section 427A(l), the 

9 percentage to be added under clause 

10 (i)(III) in computing the special allowance 

11 payment pursuant to this subparagraph 

12 shall be the following: 

13 ‘‘(I) IN GENERAL AND PLUS

14 LOANS.—1.79 percent in the case of a 

15 loan described in clause (i) or (iii) for 

16 which the first disbursement of prin17 cipal is made on or after October 1, 

18 2007. 

19 ‘‘(II) IN SCHOOL AND GRACE PE20 RIOD.—1.19 percent in the case of a 

21 loan described in clause (ii)(II) for 

22 which the first disbursement of prin23 cipal is made on or after October 1, 

24 2007. 
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1 ‘‘(III) CONSOLIDATION LOANS.— 

2 2.09 percent in the case of a loan de3 scribed in clause (iv) for which the 

4 first disbursement of principal is 

5 made on or after October 1, 2007’’. 

6 SEC. 114. ELIMINATION OF EXCEPTIONAL PERFORMER 

7 STATUS FOR LENDERS. 

8 (a) ELIMINATION OF STATUS.—Part B of title IV (20 

9 U.S.C. 1071 et seq.) is amended by striking section 428I 

10 (20 U.S.C. 1078–9). 

11 (b) CONFORMING AMENDMENTS.—Part B of title IV 

12 is further amended— 

13 (1) in section 428(c)(1) (20 U.S.C. 

14 1078(c)(1))— 

15 (A) by striking subparagraph (D); and 

16 (B) by redesignating subparagraphs (E) 

17 through (H) as subparagraphs (D) through 

18 (G), respectively; and 

19 (2) in section 438(b)(5) (20 U.S.C. 1087– 

20 1(b)(5)), by striking the matter following subpara21 graph (B). 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 subsections (a) and (b) shall take effect on October 1, 

24 2007. 
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1 SEC. 115. REDUCTION OF LENDER INSURANCE PERCENT2 AGE. 

3 (a) AMENDMENT.—Subparagraph (G) of section 

4 428(b)(1) (20 U.S.C. 1078(b)(1)(G)) is amended to read 

5 as follows: 

6 ‘‘(G) insures 95 percent of the unpaid 

7 principal of loans insured under the program, 

8 except that— 

9 ‘‘(i) such program shall insure 100 

10 percent of the unpaid principal of loans 

11 made with funds advanced pursuant to sec12 tion 428(j) or 439(q); and 

13 ‘‘(ii) notwithstanding the preceding 

14 provisions of this subparagraph, such pro15 gram shall insure 100 percent of the un16 paid principal amount of exempt claims as 

17 defined in subsection (c)(1)(G);’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall take effect with respect to loans made 

20 on or after October 1, 2007. 

21 SEC. 116. GUARANTY AGENCY COLLECTION RETENTION. 

22 Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 

23 1078(c)(6)(A)(ii)) is amended to read as follows: 

24 ‘‘(ii) an amount equal to 23 percent of 

25 such payments for use in accordance with 

26 section 422B, except that beginning Octo-
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1 ber 1, 2007, this subparagraph shall be ap2 plied by substituting ‘16 percent’ for ‘23 

3 percent’.’’. 

4 SEC. 117. UNIT COSTS FOR ACCOUNT MAINTENANCE FEES. 

5 Section 458(b) (20 U.S.C. 1087h(b)) is amended— 

6 (1) by striking ‘‘Account’’ and inserting the fol7 lowing: 

8 ‘‘(1) FOR FISCAL YEARS 2006 AND 2007.—For 

9 fiscal years 2006 and 2007, account’’; and 

10 (2) by adding at the end the following new 

11 paragraph: 

12 ‘‘(2) FOR FISCAL YEAR 2008 AND SUCCEEDING

13 FISCAL YEARS.— 

14 ‘‘(A) UNIT COST BASIS.—For fiscal year 

15 2008 and each succeeding fiscal year, the Sec16 retary shall calculate the account maintenance 

17 fees payable to guaranty agencies under sub18 section (a)(3), on a per-loan cost basis in ac19 cordance with subparagraph (B) of this para20 graph. 

21 ‘‘(B) DETERMINATIONS.—To determine 

22 the amount that shall be paid under subsection 

23 (a)(3) per outstanding loan guaranteed by a 

24 guaranty agency for fiscal year 2008 and suc25 ceeding fiscal years, the Secretary shall— 
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1 ‘‘(i) establish the per-loan cost basis 

2 amount by— 

3 ‘‘(I) dividing the total amount of 

4 account maintenance fees paid under 

5 subsection (a)(3) in fiscal year 2006, 

6 by 

7 ‘‘(II) the number of loans under 

8 part B that were outstanding in that 

9 fiscal year; and 

10 ‘‘(ii) determine on October 1 of fiscal 

11 year 2008 and each subsequent fiscal year, 

12 and pay to each guaranty agency, an 

13 amount equal to the product of the number 

14 of loans under part B that are outstanding 

15 on October 1 of that fiscal year and in16 sured by that guaranty agency multiplied 

17 by— 

18 ‘‘(I) the amount determined 

19 under clause (i); increased by 

20 ‘‘(II) a percentage equal to the 

21 percentage increase in the GDP price 

22 index (as determined by the Bureau 

23 of Labor Statistics of the Department 

24 of Labor) between the calendar quar25 ter ending on June 30, 2006, and the 
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1 calendar quarter ending on the June 

2 30 preceding such October 1 of such 

3 fiscal year.’’. 

4 SEC. 118. INCREASED LOAN FEES FROM LENDERS. 

5 Paragraph (2) of section 438(d) (20 U.S.C. 1087– 

6 1(d)(2)) is amended to read as follows: 

7 ‘‘(2) AMOUNT OF LOAN FEES.— 

8 ‘‘(A) AMOUNT.—The amount of the loan 

9 fee which shall be deducted under paragraph 

10 (1), but which may not be collected from the 

11 borrower, shall be equal to— 

12 ‘‘(i) except as provided in clauses (ii) 

13 and (iii), 0.50 percent of the principal 

14 amount of the loan with respect to any 

15 loan under this part for which the first dis16 bursement was made on or after October 

17 1, 1993; 

18 ‘‘(ii) 1.0 percent of the principal 

19 amount of the loan with respect to any 

20 loan under this part for which the first dis21 bursement was made on or after October 

22 1, 2007, that is held by any holder other 

23 than a holder designated by the Secretary 

24 as a small lender under subparagraph (B); 

25 and 
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1 ‘‘(iii) 0.0 percent of the principal 

2 amount of the loan with respect to any 

3 loan under this part for which the first dis4 bursement was made on or after October 

5 1, 2007, that is held by any holder that, 

6 together with its affiliated holders, is des7 ignated by the Secretary as a small lender 

8 under subparagraph (B). 

9 ‘‘(B) DESIGNATION OF SMALL LENDERS.— 

10 In determining which holders of eligible loans 

11 qualify as small lenders for purposes of sub12 paragraph (A)(iii), the Secretary shall, using 

13 the most recently available data with respect to 

14 the total principal amount of eligible loans held 

15 by holders— 

16 ‘‘(i) rank all holders (combined with 

17 their affiliated holders) of eligible loans in 

18 descending order by total principal amount 

19 of eligible loans held; 

20 ‘‘(ii) calculate the total principal 

21 amount of eligible loans held by all holders; 

22 and 

23 ‘‘(iii) identify the subset of consecu24 tively ranked holders under clause (i), 

25 starting with the lowest ranked holder, 
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1 that together hold a total principal amount 

2 of such loans equal to 15 percent of the 

3 total amount calculated under clause (ii), 

4 but excluding the holder, if any, whose 

5 holdings when added cause the total hold6 ings of the subset to equal but not exceed 

7 such 15 percent of such total amount cal8 culated; and 

9 ‘‘(iv) designate as small lenders any 

10 holder identified as a member of the subset 

11 under clause (iii).’’. 

12 SEC. 119. STUDENT LOAN INFORMATION. 

13 Section 428(k) (20 U.S.C. 1078(k)) is amended by 

14 adding at the end the following new paragraph: 

15 ‘‘(4) STUDENT LOAN INFORMATION.— 

16 ‘‘(A) Notwithstanding any other provision 

17 of law or regulation, a lender, secondary mar18 ket, holder, or guaranty agency shall provide, 

19 free of charge and in a timely and effective 

20 manner, any student loan information main21 tained by that entity that is requested by an in22 stitution of higher education and any third23 party servicer (as defined in section 481(c)) 

24 working on behalf of that institution to prevent 

25 student loan defaults. 
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1 ‘‘(B) An institution and any third-party 

2 servicer obtaining access to information under 

3 subparagraph (A) shall safeguard that informa4 tion in order to prevent potential abuses of that 

5 information, including identity theft. 

6 ‘‘(C) Any third party servicer that obtains 

7 information under this subparagraph shall only 

8 use the information in a manner directly related 

9 to the default prevention work the servicer is 

10 performing on behalf of the institution of higher 

11 education. 

12 ‘‘(D) Any third party servicer that obtains 

13 information under this subparagraph shall be 

14 subject to any regulations established by the 

15 Secretary pursuant to section 432 concerning 

16 the misuse of such information, including any 

17 penalties for such misuse.’’. 

18 PART C—REWARDING SERVICE IN REPAYMENT 

19 SEC. 141. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 

20 NATIONAL NEED. 

21 Section 428K (20 U.S.C. 1078–11) is amended to 

22 read as follows: 

23 ‘‘SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 

24 NATIONAL NEED. 

25 ‘‘(a) PROGRAM AUTHORIZED.— 
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1 ‘‘(1) LOAN FORGIVENESS AUTHORIZED.—The 

2 Secretary shall forgive, in accordance with this sec3 tion, the student loan obligation of a borrower in the 

4 amount specified in subsection (c), for any new bor5 rower after the date of enactment of the College 

6 Cost Reduction Act of 2007, who— 

7 ‘‘(A) has been employed full-time for at 

8 least 5 consecutive complete school, academic, 

9 or calendar years, as appropriate, in an area of 

10 national need described in subsection (b); and 

11 ‘‘(B) is not in default on a loan for which 

12 the borrower seeks forgiveness. 

13 ‘‘(2) METHOD OF LOAN FORGIVENESS.—To 

14 provide loan forgiveness under paragraph (1), the 

15 Secretary is authorized to carry out a program— 

16 ‘‘(A) through the holder of the loan, to as17 sume the obligation to repay a qualified loan 

18 amount for a loan made, insured, or guaranteed 

19 under this part; and 

20 ‘‘(B) to cancel a qualified loan amount for 

21 a loan made under part D of this title. 

22 ‘‘(3) REGULATIONS.—The Secretary is author23 ized to issue such regulations as may be necessary 

24 to carry out the provisions of this section. 
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1 ‘‘(b) AREAS OF NATIONAL NEED.—For purposes of 

2 this section, an individual shall be treated as employed in 

3 an area of national need if the individual is employed full 

4 time as any of the following: 

5 ‘‘(1) EARLY CHILDHOOD EDUCATORS.—An in6 dividual who is employed as an early childhood edu7 cator in an eligible preschool program or eligible 

8 early childhood education program in a low-income 

9 community, and who is involved directly in the care, 

10 development, and education of infants, toddlers, or 

11 young children through age 5. 

12 ‘‘(2) NURSES.—An individual who is em13 ployed— 

14 ‘‘(A) as a nurse in a clinical setting; or 

15 ‘‘(B) as a member of the nursing faculty at 

16 an accredited school of nursing (as those terms 

17 are defined in section 801 of the Public Health 

18 Service Act (42 U.S.C. 296)). 

19 ‘‘(3) FOREIGN LANGUAGE SPECIALISTS.—An 

20 individual who has obtained a baccalaureate degree 

21 in a critical foreign language and is employed— 

22 ‘‘(A) in an elementary or secondary school 

23 as a teacher of a critical foreign language; or 
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1 ‘‘(B) in an agency of the United States 

2 Government in a position that regularly re3 quires the use of such critical foreign language. 

4 ‘‘(4) LIBRARIANS.—An individual who is em5 ployed as a librarian in— 

6 ‘‘(A) a public library that serves a geo7 graphic area within which the public schools 

8 have a combined average of 30 percent or more 

9 of their total student enrollments composed of 

10 children counted under section 1113(a)(5) of 

11 the Elementary and Secondary Education Act 

12 of 1965; or 

13 ‘‘(B) an elementary or secondary school 

14 which is in the school district of a local edu15 cational agency which is eligible in such year 

16 for assistance pursuant to title I of the Elemen17 tary and Secondary Education Act of 1965, and 

18 which for the purpose of this paragraph and for 

19 that year has been determined by the Secretary 

20 (pursuant to regulations and after consultation 

21 with the State educational agency of the State 

22 in which the school is located) to be a school in 

23 which the enrollment of children counted under 

24 section 1113(a)(5) of the Elementary and Sec-
36 

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1 ondary Education Act of 1965 exceeds 30 per2 cent of the total enrollment of that school. 

3 ‘‘(5) HIGHLY QUALIFIED TEACHERS: BILIN4 GUAL EDUCATION AND LOW-INCOME COMMU5 NITIES.—An individual who— 

6 ‘‘(A) is highly qualified as such term is de7 fined in section 9101 of the Elementary and 

8 Secondary Education Act of 1965; and 

9 ‘‘(B)(i) is employed as a full-time teacher 

10 of bilingual education; or 

11 ‘‘(ii) is employed as a teacher for service in 

12 a public or nonprofit private elementary or sec13 ondary school which is in the school district of 

14 a local educational agency which is eligible in 

15 such year for assistance pursuant to title I of 

16 the Elementary and Secondary Education Act 

17 of 1965, and which for the purpose of this 

18 paragraph and for that year has been deter19 mined by the Secretary (pursuant to regulations 

20 and after consultation with the State edu21 cational agency of the State in which the school 

22 is located) to be a school in which the enroll23 ment of children counted under section 

24 1113(a)(5) of the Elementary and Secondary 
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1 Education Act of 1965 exceeds 40 percent of 

2 the total enrollment of that school. 

3 ‘‘(6) CHILD WELFARE WORKERS.—An indi4 vidual who— 

5 ‘‘(A) has obtained a degree in social work 

6 or a related field with a focus on serving chil7 dren and families; and 

8 ‘‘(B) is employed in public or private child 

9 welfare services. 

10 ‘‘(7) SPEECH-LANGUAGE PATHOLOGISTS.—An 

11 individual who is a speech-language pathologist, who 

12 is employed in an eligible preschool program or an 

13 elementary or secondary school, and who has, at a 

14 minimum, a graduate degree in speech-language pa15 thology, or communication sciences and disorders. 

16 ‘‘(8) NATIONAL SERVICE.—An individual who is 

17 engaged as a participant in project under the Na18 tional and Community Service Act of 1990 (as such 

19 terms are defined in section 101 of such Act (42 

20 U.S.C. 12511)). 

21 ‘‘(9) PUBLIC SECTOR EMPLOYEES.—An indi22 vidual who is employed in government, public safety 

23 (including as a first responder, firefighter, police of24 ficer, or other law enforcement or public safety offi25 cer), emergency management (including as an emer-
38 

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1 gency medical technician), public health, or public 

2 interest legal services (including prosecution or pub3 lic defense). 

4 ‘‘(c) QUALIFIED LOAN AMOUNT.—The Secretary 

5 shall forgive not more than $5,000 in the aggregate of 

6 the student loan obligation of a borrower that is out7 standing after the completion of the fifth consecutive 

8 school, academic, or calendar year of employment, as ap9 propriate, described in subsection (a)(1). 

10 ‘‘(d) CONSTRUCTION.—Nothing in this section shall 

11 be construed to authorize the refunding of any repayment 

12 of a loan. 

13 ‘‘(e) SEGAL AMERICORPS EDUCATION AWARD RE14 CIPIENTS.—A student borrower who qualifies for the max15 imum education award under subtitle D of title I of the 

16 National and Community Service Act of 1990 (42 U.S.C. 

17 12601 et seq.) shall not receive under this section more 

18 than the difference between the maximum benefit available 

19 under this section and the maximum award available 

20 under such subtitle. 

21 ‘‘(f) NATIONAL SERVICE AWARD RECIPIENTS.—A 

22 student borrower who receives the maximum education 

23 award under subtitle D of title I of the National and Com24 munity Service Act of 1990 (42 U.S.C. 12601 et seq.) 

25 shall not receive under this section more than the dif-
39 

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1 ference between the maximum benefit available under this 

2 section and the award received under such subtitle. 

3 ‘‘(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No 

4 borrower may receive a reduction of loan obligations under 

5 both this section and section 428J or 460. 

6 ‘‘(h) DEFINITIONS.—In this section: 

7 ‘‘(1) CRITICAL FOREIGN LANGUAGE.—The term 

8 ‘critical foreign language’ includes the languages of 

9 Arabic, Korean, Japanese, Chinese, Pashto, Persian10 Farsi, Serbian-Croatian, Russian, Portuguese, and 

11 any other language identified by the Secretary of 

12 Education, in consultation with the Defense Lan13 guage Institute, the Foreign Service Institute, and 

14 the National Security Education Program, as a crit15 ical foreign language need. 

16 ‘‘(2) EARLY CHILDHOOD EDUCATOR.—The 

17 term ‘early childhood educator’ means an early 

18 childhood educator who works directly with children 

19 in an eligible preschool program or eligible early 

20 childhood education program who has completed a 

21 baccalaureate or advanced degree in early childhood 

22 development, early childhood education, or in a field 

23 related to early childhood education. 

24 ‘‘(3) ELIGIBLE PRESCHOOL PROGRAM.—The 

25 term ‘eligible preschool program’ means a program 
40 

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1 that provides for the care, development, and edu2 cation of infants, toddlers, or young children 

3 through age 5, meets any applicable State or local 

4 government licensing, certification, approval, and 

5 registration requirements, and is operated by— 

6 ‘‘(A) a public or private school that may be 

7 supported, sponsored, supervised, or adminis8 tered by a local educational agency; 

9 ‘‘(B) a Head Start agency serving as a 

10 grantee designated under the Head Start Act 

11 (42 U.S.C. 9831 et seq.); 

12 ‘‘(C) a nonprofit or community based orga13 nization; or 

14 ‘‘(D) a child care program, including a 

15 home. 

16 ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCATION

17 PROGRAM.—The term ‘eligible early childhood edu18 cation program’ means— 

19 ‘‘(A) a family child care program, center20 based child care program, State prekinder21 garten program, school program, or other out22 of-home early childhood development care pro23 gram, that— 

24 ‘‘(i) is licensed or regulated by the 

25 State; and 
41 

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1 ‘‘(ii) serves 2 or more unrelated chil2 dren who are not old enough to attend kin3 dergarten; 

4 ‘‘(B) a Head Start Program carried out 

5 under the Head Start Act (42 U.S.C. 9831 et 

6 seq.); or 

7 ‘‘(C) an Early Head Start Program carried 

8 out under section 645A of the Head Start Act 

9 (42 U.S.C. 9840a). 

10 ‘‘(5) LOW-INCOME COMMUNITY.—In this sub11 section, the term ‘low-income community’ means a 

12 community in which 70 percent of households earn 

13 less than 85 percent of the State median household 

14 income. 

15 ‘‘(6) NURSE.—The term ‘nurse’ means a nurse 

16 who meets all of the following: 

17 ‘‘(A) The nurse graduated from— 

18 ‘‘(i) an accredited school of nursing 

19 (as those terms are defined in section 801 

20 of the Public Health Service Act (42 

21 U.S.C. 296)); 

22 ‘‘(ii) a nursing center; or 

23 ‘‘(iii) an academic health center that 

24 provides nurse training. 
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1 ‘‘(B) The nurse holds a valid and unre2 stricted license to practice nursing in the State 

3 in which the nurse practices in a clinical set4 ting. 

5 ‘‘(C) The nurse holds one or more of the 

6 following: 

7 ‘‘(i) A graduate degree in nursing, or 

8 an equivalent degree. 

9 ‘‘(ii) A nursing degree from a colle10 giate school of nursing (as defined in sec11 tion 801 of the Public Health Service Act 

12 (42 U.S.C. 296)). 

13 ‘‘(iii) A nursing degree from an asso14 ciate degree school of nursing (as defined 

15 in section 801 of the Public Health Service 

16 Act (42 U.S.C. 296)). 

17 ‘‘(iv) A nursing degree from a diploma 

18 school of nursing (as defined in section 

19 801 of the Public Health Service Act (42 

20 U.S.C. 296)). 

21 ‘‘(7) SPEECH-LANGUAGE PATHOLOGIST.—The 

22 term ‘speech-language pathologist’ means a speech23 language pathologist who meets all of the following: 

24 ‘‘(A) the speech-language pathologist has 

25 received, at a minimum, a graduate degree in 
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1 speech-language pathology or communication 

2 sciences and disorders from an institution of 

3 higher education accredited by an agency or as4 sociation recognized by the Secretary pursuant 

5 to section 496(a) of this Act; and 

6 ‘‘(B) the speech-language pathologist 

7 meets or exceeds the qualifications as defined in 

8 section 1861(ll) of the Social Security Act (42 

9 U.S.C. 1395x). 

10 ‘‘(i) PROGRAM FUNDING.—There shall be available to 

11 the Secretary to carry out this section, from funds not 

12 otherwise appropriated, such sums as may be necessary 

13 to provide loan forgiveness in accordance with this section 

14 to each eligible individual.’’. 

15 SEC. 142. INCOME CONTINGENT REPAYMENT FOR PUBLIC 

16 SECTOR EMPLOYEES. 

17 Section 455(e) (20 U.S.C. 1087e(e)) is amended by 

18 adding at the end the following: 

19 ‘‘(7) REPAYMENT PLAN FOR PUBLIC SECTOR

20 EMPLOYEES.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall 

22 forgive the balance due on any loan made under 

23 this part or section 428C(b)(5) for a bor24 rower— 
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1 ‘‘(i) who has made 120 payments on 

2 such loan pursuant to income contingent 

3 repayment; and 

4 ‘‘(ii) who is employed, and was em5 ployed for the 10-year period in which the 

6 borrower made the 120 payments de7 scribed in clause (i), in a public sector job. 

8 ‘‘(B) PUBLIC SECTOR JOB.—In this para9 graph, the term ‘public sector job’ means a full10 time job in emergency management, govern11 ment, public safety, law enforcement, public 

12 health, education (including early childhood 

13 education), social work in a public child or fam14 ily service agency, or public interest legal serv15 ices (including prosecution or public defense). 

16 ‘‘(8) RETURN TO STANDARD REPAYMENT.—A 

17 borrower who is repaying a loan made under this 

18 part pursuant to income contingent repayment may 

19 choose, at any time, to terminate repayment pursu20 ant to income contingent repayment and repay such 

21 loan under the standard repayment plan.’’. 

22 SEC. 143. INCOME-BASED REPAYMENT. 

23 (a) AMENDMENT.—Part G of title IV (20 U.S.C. 

24 1088 et seq.) is further amended by adding at the end 

25 the following: 
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1 ‘‘SEC. 493C. INCOME-BASED REPAYMENT. 

2 ‘‘(a) DEFINITIONS.—In this section: 

3 ‘‘(1) EXCEPTED PLUS LOAN.—The term ‘ex4 cepted PLUS loan’ means a loan under section 

5 428B, or a Federal Direct PLUS Loan, that is 

6 made, insured, or guaranteed on behalf of a depend7 ent student. 

8 ‘‘(2) PARTIAL FINANCIAL HARDSHIP.—The 

9 term ‘partial financial hardship’ means the amount 

10 by which— 

11 ‘‘(A) the annual amount due on the total 

12 amount of loans made, insured, or guaranteed 

13 under part B or D (other than an excepted 

14 PLUS loan) to a borrower as calculated under 

15 the standard repayment plan under section 

16 428(b)(9)(A)(i) or 455(d)(1)(A); exceeds 

17 ‘‘(B) 15 percent of the result obtained by 

18 calculating the amount by which— 

19 ‘‘(i) the borrower’s, and the bor20 rower’s spouse’s (if applicable), adjusted 

21 gross income; exceeds 

22 ‘‘(ii) 150 percent of the poverty line 

23 applicable to the borrower’s family size as 

24 determined under section 673(2) of the 

25 Community Services Block Grant Act (42 

26 U.S.C. 9902(2)). 
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1 ‘‘(b) INCOME-BASED REPAYMENT PROGRAM AU2 THORIZED.—Notwithstanding any other provision of this 

3 Act, the Secretary shall carry out a program under 

4 which— 

5 ‘‘(1) a borrower of any loan made, insured, or 

6 guaranteed under part B or D (other than an ex7 cepted PLUS loan) who has a partial financial hard8 ship may elect, during any period the borrower has 

9 the partial financial hardship, to have the borrower’s 

10 aggregate monthly payment for all such loans not 

11 exceed the result described in subsection (a)(2)(B) 

12 divided by 12; 

13 ‘‘(2) the holder of such a loan shall apply the 

14 borrower’s monthly payment under this subsection 

15 first toward interest due on the loan and then to16 ward the principal of the loan; 

17 ‘‘(3) any interest due and not paid under para18 graph (2) shall be capitalized; 

19 ‘‘(4) any principal due and not paid under 

20 paragraph (2) shall be deferred; 

21 ‘‘(5) the amount of time the borrower makes 

22 monthly payments under paragraph (1) may exceed 

23 10 years; 
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1 ‘‘(6) if the borrower no longer has a partial fi2 nancial hardship or no longer wishes to continue the 

3 election under this subsection, then— 

4 ‘‘(A) the maximum monthly payment re5 quired to be paid for all loans made to the bor6 rower under part B or D (other than an ex7 cepted PLUS loan) shall not exceed the month8 ly amount calculated under section 

9 428(b)(9)(A)(i) or 455(d)(1)(A) when the bor10 rower first made the election described in this 

11 subsection; and 

12 ‘‘(B) the amount of time the borrower is 

13 permitted to repay such loans may exceed 10 

14 years; 

15 ‘‘(7) the Secretary shall repay or cancel any 

16 outstanding balance of principal and interest due on 

17 all loans made under part B or D (other than a loan 

18 under section 428B or a Federal Direct PLUS 

19 Loan) to a borrower who— 

20 ‘‘(A) is in deferment due to an economic 

21 hardship described in section 435(o) for a pe22 riod of time prescribed by the Secretary, not to 

23 exceed 20 years; or 

24 ‘‘(B)(i) makes the election under this sub25 section; and 
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1 ‘‘(ii) for a period of time prescribed by the 

2 Secretary, not to exceed 20 years (including any 

3 period during which the borrower is in 

4 deferment due to an economic hardship de5 scribed in section 435(o)), meets 1 or more of 

6 the following requirements: 

7 ‘‘(I) Has made reduced monthly pay8 ments under paragraph (1). 

9 ‘‘(II) Has made monthly payments of 

10 not less than the monthly amount cal11 culated under section 428(b)(9)(A)(i) or 

12 455(d)(1)(A) when the borrower first made 

13 the election described in this subsection. 

14 ‘‘(III) Has made payments under a 

15 standard repayment plan under section 

16 428(b)(9)(A)(i) or 455(d)(1)(A). 

17 ‘‘(IV) Has made payments under an 

18 income contingent repayment plan under 

19 section 455(d)(1)(D); and 

20 ‘‘(8) a borrower who is repaying a loan made 

21 under this part pursuant to income-based repayment 

22 may elect, at any time, to terminate repayment pur23 suant to income-based repayment and repay such 

24 loan under the standard repayment plan.’’. 
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1 (b) CONFORMING ICR AMENDMENT.—Section 

2 455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is amended by 

3 inserting ‘‘made on behalf of a dependent student’’ after 

4 ‘‘PLUS loan’’. 

5 SEC. 144. DEFINITION OF ECONOMIC HARDSHIP. 

6 Section 435(o) (20 U.S.C. 1085(o)) is amended— 

7 (1) in paragraph (1)— 

8 (A) in subparagraph (A)(ii), by striking 

9 ‘‘100 percent of the poverty line for a family of 

10 2’’ and inserting ‘‘150 percent of the poverty 

11 line applicable to the borrower’s family size’’; 

12 (B) by striking subparagraph (B); and 

13 (C) by redesignating subparagraph (C) as 

14 subparagraph (B); and 

15 (2) in paragraph (2), by striking ‘‘(1)(C)’’ and 

16 inserting ‘‘(1)(B)’’. 

17 SEC. 145. DEFERRALS. 

18 (a) FISL.—Section 427(a)(2)(C)(iii) (20 U.S.C. 

19 1077(a)(2)(C)(iii)) is amended by striking ‘‘not in excess 

20 of 3 years’’. 

21 (b) INTEREST SUBSIDIES.—Section 428(b)(1)(M)(iv) 

22 (20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking 

23 ‘‘not in excess of 3 years’’. 
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1 (c) DIRECT LOANS.—Section 455(f)(2)(D) (20 

2 U.S.C. 1087e(f)(2)(D)) is amended by striking ‘‘not in ex3 cess of 3 years’’. 

4 (d) PERKINS.—Section 464(c)(2)(A)(iv) (20 U.S.C. 

5 1087dd(c)(2)(A)(iv)) is amended by striking ‘‘not in ex6 cess of 3 years’’. 

7 SEC. 146. MAXIMUM REPAYMENT PERIOD. 

8 (a) IN GENERAL.—Section 455(e) (20 U.S.C. 

9 1087e(e)) is amended by adding at the end the following: 

10 ‘‘(9) MAXIMUM REPAYMENT PERIOD.—In calcu11 lating the extended period of time for which an in12 come contingent repayment plan under this sub13 section may be in effect for a borrower, the Sec14 retary shall include all time periods during which a 

15 borrower of loans under part B, part D, or part E— 

16 ‘‘(A) is not in default on any loan that is 

17 included in the income contingent repayment 

18 plan; and 

19 ‘‘(B)(i) is in deferment due to an economic 

20 hardship described in section 435(o); 

21 ‘‘(ii) makes monthly payments under para22 graph (1) or (6) of section 493C(b); or 

23 ‘‘(iii) makes payments under a standard 

24 repayment plan described in section 

25 428(b)(9)(A)(i) or subsection (d)(1)(A).’’. 
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1 (b) TECHNICAL CORRECTION.—Section 455(d)(1)(C) 

2 (20 U.S.C. 1087e(d)(1)(C)) is amended by striking 

3 ‘‘428(b)(9)(A)(v)’’ and inserting ‘‘428(b)(9)(A)(iv)’’. 

4 TITLE II—REDUCING THE COST 

5 OF COLLEGE 

6 SEC. 201. STATE COMMITMENT TO AFFORDABLE COLLEGE 

7 EDUCATION. 

8 Title I is amended by inserting after section 131 (20 

9 U.S.C. 1015) the following new section: 

10 ‘‘SEC. 132. STATE COMMITMENT TO AFFORDABLE COLLEGE 

11 EDUCATION. 

12 ‘‘(a) MAINTENANCE OF EFFORT REQUIRED.—No 

13 State shall reduce the total amount provided by the State 

14 for public institutions of higher education in such State 

15 for any academic year beginning on or after July 1, 2008, 

16 to an amount which is less than the average amount pro17 vided by such State to such institutions of higher edu18 cation during the 5 most recent preceeding academic years 

19 for which satisfactory data is available. 

20 ‘‘(b) WITHHOLDING OF ALL LEAP FUNDS FOR VIO21 LATIONS.—Notwithstanding any other provision of law, 

22 the Secretary of Education shall withhold from any State 

23 that violates subsection (a) any amount that would other24 wise be available to the State under the Leveraging Edu25 cational Assistance Partnership Program under subpart 4 
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1 of part A of title IV until such State has corrected such 

2 violation.’’. 

3 SEC. 202. CONSUMER INFORMATION AND PUBLIC AC4 COUNTABILITY IN HIGHER EDUCATION. 

5 Section 131 of the Higher Education Act of 1965 (20 

6 U.S.C. 1015) is amended to read as follows: 

7 ‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC8 COUNTABILITY IN HIGHER EDUCATION. 

9 ‘‘(a) COLLEGE OPPORTUNITY ON-LINE (COOL) 

10 WEBSITE RE-DESIGN PROCESS.—In carrying out this 

11 section, the Commissioner of Education Statistics— 

12 ‘‘(1) shall identify the data elements that are of 

13 greatest importance to prospective students, enrolled 

14 students, and their families, paying particular atten15 tion to low-income, non-traditional student popu16 lations, and first-generation college students; 

17 ‘‘(2) shall convene a group of individuals with 

18 expertise in the collection and reporting of data re19 lated to institutions of higher education, the use of 

20 consumer data, and consumer marketing in general 

21 to— 

22 ‘‘(A) determine the relevance of particular 

23 data elements to prospective students, enrolled 

24 students, and families; 
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1 ‘‘(B) assess the cost-effectiveness of var2 ious ways in which institutions of higher edu3 cation might produce relevant data; 

4 ‘‘(C) determine the general comparability 

5 of the data across institutions of higher edu6 cation; 

7 ‘‘(D) make recommendations regarding the 

8 inclusion of specific data items and the most ef9 fective and least burdensome methods of col10 lecting and reporting useful data from institu11 tions of higher education; and 

12 ‘‘(3) shall ensure that the redesigned COOL 

13 website— 

14 ‘‘(A) uses, to the extent practicable, data 

15 elements currently provided by institutions of 

16 higher education to the Secretary; 

17 ‘‘(B) includes clear and uniform informa18 tion determined to be relevant to prospective 

19 students, enrolled students, and families; 

20 ‘‘(C) provides comparable information, by 

21 ensuring that data are based on accepted cri22 teria and common definitions; 

23 ‘‘(D) includes a sorting function that per24 mits users to customize their search for and 

25 comparison of institutions of higher education 
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1 based on the information identified through the 

2 process as prescribed in paragraph (1) as being 

3 of greatest relevance to choosing an institution 

4 of higher education. 

5 ‘‘(b) DATA COLLECTION.— 

6 ‘‘(1) DATA SYSTEM.—The Commissioner of 

7 Education Statistics shall continue to redesign the 

8 relevant parts of the Integrated Postsecondary Edu9 cation Data System to include additional data as re10 quired by this section and to continue to improve the 

11 usefulness and timeliness of data collected by such 

12 systems in order to inform consumers about institu13 tions of higher education. 

14 ‘‘(2) COLLEGE CONSUMER PROFILE.—The Sec15 retary shall continue to publish on the COOL 

16 website, for each academic year and in accordance 

17 with standard definitions developed by the Commis18 sioner of Education Statistics (including definitions 

19 developed under section 131(a)(3)(A) as in effect on 

20 the day before the date of enactment of the College 

21 Cost Reduction Act of 2007), from at least all insti22 tutions of higher education participating in pro23 grams under title IV the following information: 
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1 ‘‘(A) The tuition and fees charged for a 

2 first-time, full-time, full-year undergraduate 

3 student. 

4 ‘‘(B) The room and board charges for a 

5 first-time, full-time, full-year undergraduate 

6 student. 

7 ‘‘(C) The price of attendance for a first8 time, full-time, full-year undergraduate student, 

9 consistent with the provisions of section 472. 

10 ‘‘(D) The average amount of financial as11 sistance received by a first-year, full-time, full12 year undergraduate student, including— 

13 ‘‘(i) each type of assistance or benefits 

14 described in 428(a)(2)(C)(ii); 

15 ‘‘(ii) institutional and other assist16 ance; and 

17 ‘‘(iii) Federal loans under parts B, D, 

18 and E of title IV. 

19 ‘‘(E) The number of first-time, full-time, 

20 full-year undergraduate students receiving fi21 nancial assistance described in each clause of 

22 subparagraph (D). 

23 ‘‘(F) The institutional instructional ex24 penditure per full-time equivalent student. 
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1 ‘‘(G) Student enrollment information, in2 cluding information on the number and percent3 age of full-time and part-time students, the 

4 number and percentage of resident and non5 resident students. 

6 ‘‘(H) Faculty-to-student ratios. 

7 ‘‘(I) Faculty information, including the 

8 total number of faculty and the percentage of 

9 faculty who are full-time employees of the insti10 tution and the percentage who are part-time. 

11 ‘‘(J) Completion and graduation rates of 

12 undergraduate students, identifying whether the 

13 completion or graduation rates are from a 2- 

14 year or 4-year program of instruction and, in 

15 the case of a 2-year program of instruction, the 

16 percentage of students who transfer to 4-year 

17 institutions prior or subsequent to completion 

18 or graduation. 

19 ‘‘(K) A link to the institution of higher 

20 education with information of interest to stu21 dents including mission, accreditation, student 

22 services (including services for students with 

23 disabilities), transfer of credit policies, any ar24 ticulation agreements entered into by the insti25 tution, and, if appropriate, placement rates and 
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1 other measures of success in preparing students 

2 for entry into or advancement in the workforce. 

3 ‘‘(L) The college affordability information 

4 elements specified in subsection (c). 

5 ‘‘(M) Any additional information that the 

6 Secretary may require. 

7 ‘‘(c) COLLEGE AFFORDABILITY INFORMATION ELE8 MENTS.—The college affordability information elements 

9 required by subsection (b)(2)(L) shall include, for each in10 stitution submitting data— 

11 ‘‘(1) the sticker price of the institution for the 

12 3 most recent academic years; 

13 ‘‘(2) the net tuition price of the institution for 

14 the 3 most recent academic years; 

15 ‘‘(3) the percentage change in both the sticker 

16 price and the net tuition price over the 3-year time 

17 period that is being reported; 

18 ‘‘(4) the percentage change in the CPI over the 

19 same 3-year time period; and 

20 ‘‘(5) whether the institution has been placed on 

21 affordability alert status as required by subsection 

22 (d)(3). 

23 ‘‘(d) OUTCOMES AND ACTIONS.— 

24 ‘‘(1) RESPONSE FROM INSTITUTION.—Effective 

25 on June 30, 2008, an institution that increases its 
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1 sticker price at a percentage rate for any 3-year in2 terval ending on or after that date that exceeds two 

3 times the rate of change in the CPI over the same 

4 time period shall provide a report to the Secretary, 

5 in such a form, at such time, and containing such 

6 information as the Secretary may require. Such re7 port shall be published by the Secretary on the 

8 COOL website, and shall include— 

9 ‘‘(A) a description of the factors contrib10 uting to the increase in the institution’s costs 

11 and in the tuition and fees charged to students; 

12 and 

13 ‘‘(B) if determinations of tuition and fee 

14 increases are not within the exclusive control of 

15 the institution, a description of the agency or 

16 instrumentality of State government or other 

17 entity that participates in such determinations 

18 and the authority exercised by such agency, in19 strumentality, or entity. 

20 ‘‘(2) QUALITY-EFFICIENCY TASK FORCES.— 

21 ‘‘(A) REQUIRED.—Each institution subject 

22 to paragraph (1) that has a percentage change 

23 in its sticker price that is in the highest 5 per24 cent of all institutions subject to paragraph (1) 
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1 shall establish a quality-efficiency task force to 

2 review the operations of such institution. 

3 ‘‘(B) MEMBERSHIP.—Such task force shall 

4 include administrators, business and civic lead5 ers, and faculty, and may include students, 

6 trustees, parents of students, and alumni of 

7 such institution. 

8 ‘‘(C) FUNCTIONS.—Such task force shall 

9 analyze institutional operating costs in compari10 son with such costs at other institutions within 

11 the class of institutions. Such analysis should 

12 identify areas where, in comparison with other 

13 institutions in such class, the institution oper14 ates more expensively to produce a similar re15 sult. Any identified areas should then be tar16 geted for in-depth analysis for cost reduction 

17 opportunities. 

18 ‘‘(D) REPORT.—Not later than one year 

19 after a quality-efficiency task force is estab20 lished pursuant to subparagraph (A), the re21 sults of the analysis by a such task force shall 

22 be submitted to the Secretary and shall be 

23 made available to the public on the COOL 

24 website. 
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1 ‘‘(3) CONSEQUENCES FOR 2-YEAR CONTINU2 ATION OF FAILURE.—If the Secretary determines 

3 that an institution that is subject to paragraph (1)) 

4 has failed to reduce the subsequent increase in stick5 er price to equal to or below two times the rate of 

6 change in the CPI for 2 consecutive academic years 

7 subsequent to the 3-year interval used under para8 graph (1), the Secretary shall place the institution 

9 on affordability alert status. 

10 ‘‘(4) EXEMPTIONS.—Notwithstanding para11 graph (3), an institution shall not be placed on af12 fordability alert status if, for any 3-year interval for 

13 which sticker prices are computed under paragraph 

14 (1)— 

15 ‘‘(A) with respect to the class of institu16 tions described in paragraph (6) to which the 

17 institution belongs, the sticker price of the in18 stitution is in the lowest quartile of institutions 

19 within such class, as determined by the Sec20 retary, during the last year of such 3-year in21 terval; or 

22 ‘‘(B) the institution has a percentage 

23 change in its sticker price computed under 

24 paragraph (1) that exceeds two times the rate 

25 of change in the CPI over the same time period, 
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1 but the dollar amount of the sticker price in2 crease is less than $500. 

3 ‘‘(5) INFORMATION TO STATE AGENCIES.—Any 

4 institution that reports under paragraph (1)(B) that 

5 an agency or instrumentality of State government or 

6 other entity participates in the determinations of tui7 tion and fee increases shall, prior to submitting any 

8 information to the Secretary under this subsection, 

9 submit such information to, and request the com10 ments and input of, such agency, instrumentality, or 

11 entity. With respect to any such institution, the Sec12 retary shall provide a copy of any communication by 

13 the Secretary with that institution to such agency, 

14 instrumentality, or entity. 

15 ‘‘(6) CLASSES OF INSTITUTIONS.—For purposes 

16 of this subsection, the classes of institutions shall be 

17 those sectors used by the Integrated Postsecondary 

18 Education Data System, based on whether the insti19 tution is public, nonprofit private, or for-profit pri20 vate, and whether the institution has a 4-year, 2- 

21 year, or less than 2-year program of instruction. 

22 ‘‘(7) DATA REJECTION.—Nothing in this sub23 section shall be construed as allowing the Secretary 

24 to reject the data submitted by an individual institu25 tion of higher education. 
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1 ‘‘(e) INFORMATION TO THE PUBLIC.—The Secretary 

2 shall work with public and private entities to promote 

3 broad public awareness, particularly among middle and 

4 high school students and their families, of the information 

5 made available under this section, including by distribu6 tion to students who participate in or receive benefits from 

7 means-tested federally funded education programs and 

8 other Federal programs determined by the Secretary. 

9 ‘‘(f) FINES.—In addition to actions authorized in sec10 tion 487(c), the Secretary may impose a fine in an amount 

11 not to exceed $25,000 on an institution of higher edu12 cation for failing to provide the information required by 

13 this section in a timely and accurate manner, or for failing 

14 to otherwise cooperate with the National Center for Edu15 cation Statistics regarding efforts to obtain data under 

16 subsections (c) and (i) and pursuant to the program par17 ticipation agreement entered into under section 487. 

18 ‘‘(g) REGULATIONS.—The Secretary is authorized to 

19 issue such regulations as may be necessary to carry out 

20 the provisions of this section. 

21 ‘‘(h) DEFINITIONS.—For the purposes of this section: 

22 ‘‘(1) NET TUITION PRICE.—The term ‘net tui23 tion price’ means the average tuition and fees 

24 charged to a first-time, full-time, full-year under-
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1 graduate student, minus the average grants provided 

2 to such students, for any academic year. 

3 ‘‘(2) STICKER PRICE.—The term ‘sticker price’ 

4 means the average tuition and fees charged to a 

5 first-time, full-time, full-year undergraduate student 

6 by an institution of higher education for any aca7 demic year. 

8 ‘‘(3) CPI.—The term ‘CPI’ means the Con9 sumer Price Index-All Urban Consumers (Current 

10 Series).’’. 

11 SEC. 203. INCENTIVES AND REWARDS FOR LOW TUITION. 

12 Subpart 1 of part A of title IV is amended by insert13 ing after section 401A (20 U.S.C. 1070a–1) the following 

14 new section: 

15 ‘‘SEC. 401B. INCENTIVES AND REWARDS FOR LOW TUITION. 

16 ‘‘(a) REWARDS FOR LOW TUITION.—For any institu17 tion of higher education that, for academic year 2008– 

18 2009 or any succeeding academic year, such institution’s 

19 annual net tuition price increase (expressed as a percent20 age) for the most recent academic year for which satisfac21 tory data is available is equal to or less than the percent22 age change in the higher education price index for such 

23 academic year, the Secretary shall, notwithstanding any 

24 other provision of the law, provide such institution an 

25 amount sufficient to provide a 25 percent increase under 
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1 subpart 1 of part A of title IV to each Pell Grant recipient 

2 attending such institution for the next award year begin3 ning after the date of such determination. Each such insti4 tution shall distribute any amounts received under this 

5 subsection among such Pell Grant recipients by increasing 

6 the amount of their Pell Grant awards by 25 percent. 

7 ‘‘(b) REWARDS FOR GUARANTEED TUITION.— 

8 ‘‘(1) BONUS.—For each institution of higher 

9 education that the Secretary of Education deter10 mines complies with the requirements of paragraph 

11 (2) or paragraph (3) of this subsection, the Sec12 retary shall, notwithstanding any other provision of 

13 the law, provide such institution an amount suffi14 cient to provide a 10 percent increase under subpart 

15 1 of part A of title IV to each Pell Grant recipient 

16 attending such institution for the next award year 

17 beginning after the date of such determination. Each 

18 such institution shall distribute any amounts re19 ceived under this subsection among such Pell Grant 

20 recipients by increasing the amount of their Pell 

21 Grant awards by 10 percent. 

22 ‘‘(2) 4-YEAR INSTITUTIONS.—An institution of 

23 higher education that provides a program of instruc24 tion for which it awards a bachelor’s degree complies 

25 with the requirements of this paragraph if such in-
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1 stitution guarantees that for any academic year be2 ginning on or after July 1, 2008, and for each of the 

3 4 succeeding continuous academic years, the net tui4 tion price charged to an undergraduate student will 

5 not exceed— 

6 ‘‘(A) the amount that the student was 

7 charged for an academic year at the time he or 

8 she first enrolled in the institution of higher 

9 education, plus 

10 ‘‘(B) the product of the percentage in11 crease in the higher education price index for 

12 the prior academic year, or the most recent 

13 prior academic year for which data is available, 

14 multiplied by the amount determined under 

15 subparagraph (A). 

16 ‘‘(3) LESS-THAN 4-YEAR INSTITUTIONS.—An 

17 institution of higher education that does not provide 

18 a program of instruction for which it awards a bach19 elor’s degree complies with the requirements of this 

20 paragraph if such institution guarantees that for 

21 any academic year (or the equivalent) beginning on 

22 or after July 1, 2008, and for each of the 1.5 suc23 ceeding continuous academic years, the net tuition 

24 price charged to an undergraduate student will not 

25 exceed— 
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1 ‘‘(A) the amount that the student was 

2 charged for an academic year at the time he or 

3 she first enrolled in the institution of higher 

4 education, plus 

5 ‘‘(B) the product of the percentage in6 crease in the higher education price index for 

7 the prior academic year, or the most recent 

8 prior academic year for which data is available, 

9 multiplied by the amount determined under 

10 subparagraph (A). 

11 ‘‘(c) MAINTAINING AFFORDABLE TUITION.—For any 

12 institution of higher education whose increase in the an13 nual net tuition price (expressed as a percentage), for the 

14 most recent academic year for which satisfactory data is 

15 available, is greater than the percentage increase in the 

16 higher education price index for such academic year, the 

17 Secretary shall require such institution to submit to the 

18 Secretary the following information, within 6 months of 

19 such determination: 

20 ‘‘(1) a detailed report on the exact causes for 

21 the net tuition price increase that outlines revenues 

22 and expenditures; and 

23 ‘‘(2) cost containment strategies to lower net 

24 tuition prices. 

25 ‘‘(d) DEFINITIONS.— 
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1 ‘‘(1) NET TUITION PRICE.—The term ‘net tui2 tion price’ has the same meaning as provided in sec3 tion 131(k). 

4 ‘‘(2) HIGHER EDUCATION PRICE INDEX.—The 

5 term ‘higher education price index’ means a statis6 tical measure of change over time in the prices of a 

7 fixed market basket of goods and services purchased 

8 by colleges and universities through current fund 

9 educational and general expenditures (excluding ex10 penditures for research), as developed by the Bureau 

11 of Labor Statistics. 

12 ‘‘(e) FUNDING.—There shall be available to the Sec13 retary to carry out this section, from funds not otherwise 

14 appropriated, $15,000,000 for each of the fiscal years 

15 2008 through 2012. 

16 ‘‘(f) SUNSET.—The authority to carry out this sec17 tion shall expire at the end of fiscal year 2012.’’. 

18 SEC. 204. COOPERATIVE EDUCATION REWARDS FOR INSTI19 TUTIONS THAT RESTRAIN TUITION IN20 CREASES. 

21 The Higher Education Act of 1965 (20 U.S.C. 1101 

22 et seq.) is amended by adding at the end the following 

23 title: 
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1 ‘‘TITLE VIII—COOPERATIVE EDU2 CATION REWARDS FOR INSTI3 TUTIONS THAT RESTRAIN 

4 TUITION INCREASES 

5 ‘‘SEC. 801. ELIGIBLE INSTITUTIONS. 

6 ‘‘(a) ELIGIBLE INSTITUTIONS.—An institution of 

7 higher education shall be eligible to apply for a grant 

8 under this title if such institution, and a combination of 

9 such institutions shall be eligible to apply for such a grant 

10 if each institution in such combination— 

11 ‘‘(1) for the academic year for which the insti12 tution is applying, keeps such institution’s annual 

13 net tuition price increase (expressed as a percent14 age) for the most recent academic year for which 

15 satisfactory data is available equal to or less than 

16 the percentage change in the higher education price 

17 index for such year; and 

18 ‘‘(2) for such academic year, provides the guar19 antee required by paragraph (2) or (3) of section 

20 401A(b). 

21 ‘‘(b) DEFINITIONS.— 

22 ‘‘(1) COOPERATIVE EDUCATION.—For the pur23 pose of this title the term ‘cooperative education’ 

24 means the provision of alternating or parallel periods 

25 of academic study and public or private employment 
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1 in order to give students work experiences related to 

2 their academic or occupational objectives and an op3 portunity to earn the funds necessary for continuing 

4 and completing their education. 

5 ‘‘(2) CALCULATION OF INDEX.—The net tuition 

6 price index shall be equal to the percentage increase 

7 in the net tuition price charged for a first-time, full8 time, full-year undergraduate student between a pre9 ceding academic year and the most recent academic 

10 year for which satisfactory data are available. 

11 ‘‘(3) NET TUITION PRICE.—The term ‘net tui12 tion price’ means the average tuition and fees 

13 charged to first-time, full-year, full-time under14 graduate students, minus the average grants pro15 vided to such students, for any academic year. 

16 ‘‘(4) TUITION.—The term ‘tuition’ means the 

17 average price of or payment for actual instruction of 

18 first-time, full-year, full-time undergraduate stu19 dents at an institution of higher education, for any 

20 academic year. 

21 ‘‘SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RES22 ERVATIONS. 

23 ‘‘(a) APPROPRIATIONS.—There shall be available to 

24 the Secretary to carry out this title from funds not other-
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1 wise appropriated $15,000,000 for each of the fiscal years 

2 2008 through 2012. 

3 ‘‘(b) RESERVATIONS.—Of the amount appropriated 

4 for each such fiscal year— 

5 ‘‘(1) not less than 50 percent shall be available 

6 for carrying out grants to institutions of higher edu7 cation and combinations of such institutions de8 scribed in section 803(a)(1)(A) for cooperative edu9 cation under section 803; 

10 ‘‘(2) not less than 25 percent shall be available 

11 for carrying out grants to institutions of higher edu12 cation described in section 803(a)(1)(B) for coopera13 tive education under section 803; 

14 ‘‘(3) not to exceed 11 percent shall be available 

15 for demonstration projects under paragraph (1) of 

16 section 804(a); 

17 ‘‘(4) not to exceed 11 percent shall be available 

18 for training and resource centers under paragraph 

19 (2) of section 804(a); and 

20 ‘‘(5) not to exceed 3 percent shall be available 

21 for research under paragraph (3) of section 804(a). 

22 ‘‘(c) AVAILABILITY OF APPROPRIATIONS.—Appro23 priations under this title shall not be available for the pay24 ment of compensation of students for employment by em25 ployers under arrangements pursuant to this title. 
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1 ‘‘(d) SUNSET.—The authority to carry out this title 

2 shall expire at the end of fiscal year 2012. 

3 ‘‘SEC. 803. GRANTS FOR COOPERATIVE EDUCATION. 

4 ‘‘(a) GRANTS AUTHORIZED.— 

5 ‘‘(1) IN GENERAL.—The Secretary is author6 ized— 

7 ‘‘(A) from the amount available under sec8 tion 802(b)(1) in each fiscal year and in accord9 ance with the provisions of this title, to make 

10 grants to institutions of higher education or 

11 combinations of such institutions that have not 

12 received a grant under this paragraph in the 

13 10-year period preceding the date for which a 

14 grant under this section is requested to pay the 

15 Federal share of the cost of planning, estab16 lishing, expanding, or carrying out programs of 

17 cooperative education by such institutions or 

18 combinations of institutions; and 

19 ‘‘(B) from the amount available under sec20 tion 802(b)(2) in each fiscal year and in accord21 ance with the provisions of this title, to make 

22 grants to institutions of higher education that 

23 are operating an existing cooperative education 

24 program as determined by the Secretary to pay 

25 the cost of planning, establishing, expanding, or 
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1 carrying out programs of cooperative education 

2 by such institutions. 

3 ‘‘(2) PROGRAM REQUIREMENT.—Cooperative 

4 education programs assisted under this section shall 

5 provide alternating or parallel periods of academic 

6 study and of public or private employment, giving 

7 students work experience related to their academic 

8 or occupational objectives and the opportunity to 

9 earn the funds necessary for continuing and com10 pleting their education. 

11 ‘‘(3) AMOUNT OF GRANTS.— 

12 ‘‘(A) The amount of each grant awarded 

13 pursuant to paragraph (1)(A) to any institution 

14 of higher education or combination of such in15 stitutions in any fiscal year shall not exceed 

16 $500,000. 

17 ‘‘(B)(i) Except as provided in clauses (ii) 

18 and (iii), the Secretary shall award grants in 

19 each fiscal year to each institution of higher 

20 education described in paragraph (1)(B) that 

21 has an application approved under subsection 

22 (b) in an amount which bears the same ratio to 

23 the amount reserved pursuant to section 

24 802(b)(2) for such fiscal year as the number of 

25 unduplicated students placed in cooperative 
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1 education jobs during the preceding fiscal year 

2 (other than cooperative education jobs under 

3 section 804 and as determined by the Sec4 retary) by such institution of higher education 

5 bears to the total number of all such students 

6 placed in such jobs during the preceding fiscal 

7 year by all such institutions. 

8 ‘‘(ii) No institution of higher education 

9 shall receive a grant pursuant to paragraph 

10 (1)(B) in any fiscal year in an amount which 

11 exceeds 25 percent of such institution’s cooper12 ative education program’s personnel and oper13 ating budget for the preceding fiscal year. 

14 ‘‘(iii) The minimum annual grant amount 

15 which an institution of higher education is eligi16 ble to receive under paragraph (1)(B) is $1,000 

17 and the maximum annual grant amount is 

18 $75,000. 

19 ‘‘(4) LIMITATION.—The Secretary shall not 

20 award grants pursuant to paragraphs (1)(A) and 

21 (1)(B) to the same institution of higher education or 

22 combination of such institution in any one fiscal 

23 year. 

24 ‘‘(5) USES.—Grants under paragraph (1)(B) 

25 shall be used exclusively— 
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1 ‘‘(A) to expand the quality and participa2 tion of a cooperative education program; 

3 ‘‘(B) for outreach in new curricular areas; 

4 and 

5 ‘‘(C) for outreach to potential participants 

6 including underrepresented and nontraditional 

7 populations. 

8 ‘‘(b) APPLICATIONS.—Each institution of higher edu9 cation or combination of such institutions desiring to re10 ceive a grant under this section shall submit an application 

11 to the Secretary at such time and in such manner as the 

12 Secretary shall prescribe. Each such application shall— 

13 ‘‘(1) set forth the program or activities for 

14 which a grant is authorized under this section; 

15 ‘‘(2) specify each portion of such program or 

16 activities which will be performed by a nonprofit or17 ganization or institution other than the applicant 

18 and the compensation to be paid for such perform19 ance; 

20 ‘‘(3) provide that the applicant will expend dur21 ing such fiscal year for the purpose of such program 

22 or activities not less than the amount expended for 

23 such purpose during the previous fiscal year; 

24 ‘‘(4) describe the plans which the applicant will 

25 carry out to assure, and contain a formal statement 
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1 of the institution’s commitment which assures, that 

2 the applicant will continue the cooperative education 

3 program beyond the 5-year period of Federal assist4 ance described in subsection (c)(1) at a level which 

5 is not less than the total amount expended for such 

6 program during the first year such program was as7 sisted under this section; 

8 ‘‘(5) provide that, in the case of an institution 

9 of higher education that provides a 2-year program 

10 which is acceptable for full credit toward a bach11 elor’s degree, the cooperative education program will 

12 be available to students who are certificate or asso13 ciate degree candidates and who carry at least one14 half the normal full-time academic workload; 

15 ‘‘(6) provide that the applicant will— 

16 ‘‘(A) for each fiscal year for which the ap17 plicant receives a grant, make such reports with 

18 respect to the impact of the cooperative edu19 cation program in the previous fiscal year as 

20 may be essential to ensure that the applicant is 

21 complying with the provisions of this section, 

22 including— 

23 ‘‘(i) the number of unduplicated stu24 dent applicants in the cooperative edu25 cation program; 
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1 ‘‘(ii) the number of unduplicated stu2 dents placed in cooperative education jobs; 

3 ‘‘(iii) the number of employers who 

4 have hired cooperative education students; 

5 ‘‘(iv) the average income for students 

6 derived from working in cooperative edu7 cation jobs; and 

8 ‘‘(v) the increase or decrease in the 

9 number of unduplicated students placed in 

10 cooperative education jobs in each fiscal 

11 year compared to the previous fiscal year; 

12 and 

13 ‘‘(B) keep such records as are essential to 

14 ensure that the applicant is complying with the 

15 provisions of this title, including the notation of 

16 cooperative education employment on the stu17 dent’s transcript; 

18 ‘‘(7) describe the extent to which programs in 

19 the academic discipline for which the application is 

20 made have had a favorable reception by public and 

21 private sector employers; 

22 ‘‘(8) describe the extent to which the institution 

23 is committed to extending cooperative education on 

24 an institution-wide basis for all students who can 

25 benefit; 
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1 ‘‘(9) describe the plans that the applicant will 

2 carry out to evaluate the applicant’s cooperative edu3 cation program at the end of the grant period; 

4 ‘‘(10) provide for such fiscal control and fund 

5 accounting procedures as may be necessary to assure 

6 proper disbursement of, and accounting for, Federal 

7 funds paid to the applicant under this title; 

8 ‘‘(11) demonstrate a commitment to serving all 

9 underserved populations; and 

10 ‘‘(12) include such other information as is es11 sential to carry out the provisions of this title. 

12 ‘‘(c) DURATION OF GRANTS; FEDERAL SHARE.— 

13 ‘‘(1) DURATION OF GRANTS.—No individual in14 stitution of higher education may receive, individ15 ually or as a participant in a combination of such in16 stitutions— 

17 ‘‘(A) a grant pursuant to subsection 

18 (a)(1)(A) for more than 5 fiscal years; or 

19 ‘‘(B) a grant pursuant to subsection 

20 (a)(1)(B) for more than 5 fiscal years. 

21 ‘‘(2) FEDERAL SHARE.—The Federal share of a 

22 grant under section 803(a)(1)(A) may not exceed— 

23 ‘‘(A) 85 percent of the cost of carrying out 

24 the program or activities described in the appli-
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1 cation in the first year the applicant receives a 

2 grant under this section; 

3 ‘‘(B) 70 percent of such cost in the second 

4 such year; 

5 ‘‘(C) 55 percent of such cost in the third 

6 such year; 

7 ‘‘(D) 40 percent of such cost in the fourth 

8 such year; and 

9 ‘‘(E) 25 percent of such cost in the fifth 

10 such year. 

11 ‘‘(3) SPECIAL RULE.—Any provision of law to 

12 the contrary notwithstanding, the Secretary shall not 

13 waive the provisions of this subsection. 

14 ‘‘(d) MAINTENANCE OF EFFORT.—If the Secretary 

15 determines that a recipient of funds under this section has 

16 failed to maintain the fiscal effort described in subsection 

17 (b)(3), then the Secretary may elect not to make grant 

18 payments under this section to such recipient. 

19 ‘‘SEC. 804. DEMONSTRATION AND INNOVATION PROJECTS; 

20 TRAINING AND RESOURCE CENTERS; AND RE21 SEARCH. 

22 ‘‘(a) AUTHORIZATION.—The Secretary is authorized, 

23 in accordance with the provisions of this section, to make 

24 grants and enter into contracts for— 
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1 ‘‘(1) the conduct of demonstration projects de2 signed to demonstrate or determine the feasibility or 

3 value of innovative methods of cooperative education 

4 from the amounts available in each fiscal year under 

5 section 802(b)(3); 

6 ‘‘(2) the conduct of training and resource cen7 ters designed to— 

8 ‘‘(A) train personnel in the field of cooper9 ative education; 

10 ‘‘(B) improve materials used in cooperative 

11 education programs if such improvement is con12 ducted in conjunction with other activities de13 scribed in this paragraph; 

14 ‘‘(C) furnish technical assistance to institu15 tions of higher education to increase the poten16 tial of the institution to continue to conduct a 

17 cooperative education program without Federal 

18 assistance; 

19 ‘‘(D) encourage model cooperative edu20 cation programs which furnish education and 

21 training in occupations in which there is a na22 tional need; 

23 ‘‘(E) support partnerships under which an 

24 institution carrying out a comprehensive cooper25 ative education program joins with one or more 
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1 institutions of higher education in order to (i) 

2 assist the institutions other than the com3 prehensive cooperative education institution to 

4 develop and expand an existing program of co5 operative education, or (ii) establish and im6 prove or expand comprehensive cooperative edu7 cation programs; and 

8 ‘‘(F) encourage model cooperative edu9 cation programs in the fields of science and 

10 mathematics for women and minorities who are 

11 underrepresented in such fields 

12 from the amounts available in each fiscal year under 

13 section 802(b)(4); and 

14 ‘‘(3) the conduct of research relating to cooper15 ative education, from the amounts available in each 

16 fiscal year under section 802(b)(5). 

17 ‘‘(b) ADMINISTRATIVE PROVISION.— 

18 ‘‘(1) IN GENERAL.—To carry out this section, 

19 the Secretary may— 

20 ‘‘(A) make grants to or contracts with in21 stitutions of higher education, or combinations 

22 of such institutions; and 

23 ‘‘(B) make grants to or contracts with 

24 other public or private nonprofit agencies or or25 ganizations, whenever such grants or contracts 
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1 will make an especially significant contribution 

2 to attaining the objectives of this section. 

3 ‘‘(2) LIMITATION.— 

4 ‘‘(A) The Secretary may not use more than 

5 3 percent of the amount appropriated to carry 

6 out this section in each fiscal year to enter into 

7 contracts described in paragraph (1)(A). 

8 ‘‘(B) The Secretary may use not more 

9 than 3 percent of the amount appropriated to 

10 carry out this section in each fiscal year to 

11 enter into contracts described in paragraph 

12 (1)(B). 

13 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—A recipient of 

14 a grant or contract under this section may use the funds 

15 provided only so as to supplement and, to the extent pos16 sible, increase the level of funds that would, in the absence 

17 of such funds, be made available from non-Federal sources 

18 to carry out the activities supported by such grant or con19 tract, and in no case to supplant such funds from non20 Federal sources.’’. 
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1 TITLE III—ENSURING A HIGHLY 

2 QUALIFIED TEACHER IN 

3 EVERY CLASSROOM 

4 PART A—TEACH GRANTS 

5 SEC. 301. TEACH GRANTS. 

6 Part A of title IV (20 U.S.C. 1070a et seq.) is 

7 amended by adding at the end the following new subpart: 

8 ‘‘Subpart 9—TEACH Grants 

9 ‘‘SEC. 420L. PROGRAM ESTABLISHED. 

10 ‘‘(a) PROGRAM AUTHORITY.— 

11 ‘‘(1) PAYMENTS REQUIRED.—The Secretary 

12 shall pay to each eligible institution such sums as 

13 may be necessary to pay to each eligible student (de14 fined in accordance with section 484) who files an 

15 application and agreement in accordance with sec16 tion 420M, and who qualifies— 

17 ‘‘(A) under paragraph (2) of section 

18 420M(a), a TEACH Grant in the amount of 

19 $4,000 for each academic year during which 

20 that student is in attendance at the institution; 

21 and 

22 ‘‘(B) under paragraphs (2) and (3) of sec23 tion 420M(a), a Bonus TEACH Grant in the 

24 amount of $500 (in addition to the amount of 

25 the TEACH Grant under subparagraph (A)) 
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1 for each academic year during which that stu2 dent so qualifies. 

3 ‘‘(2) REFERENCE.—Grants made under— 

4 ‘‘(A) paragraph (1)(A) shall be known as 

5 ‘Teacher Education Assistance for College and 

6 Higher Education Grants’ or ‘TEACH Grants’; 

7 and 

8 ‘‘(B) paragraph (1)(B) shall be known as 

9 Bonus TEACH Grants. 

10 ‘‘(b) PAYMENT METHODOLOGY.— 

11 ‘‘(1) PREPAYMENT.—Not less than 85 percent 

12 of any funds provided to an institution under sub13 section (a) shall be advanced to eligible institutions 

14 prior to the start of each payment period and shall 

15 be based upon an amount requested by the institu16 tion as needed to pay eligible students until such 

17 time as the Secretary determines and publishes in 

18 the Federal Register with an opportunity for com19 ment, an alternative payment system that provides 

20 payments to institutions in an accurate and timely 

21 manner, except that this sentence shall not be con22 strued to limit the authority of the Secretary to 

23 place an institution on a reimbursement system of 

24 payment. 
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1 ‘‘(2) DIRECT PAYMENT.—Nothing in this sec2 tion shall be interpreted to prohibit the Secretary 

3 from paying directly to students, in advance of the 

4 beginning of the academic term, an amount for 

5 which they are eligible, in cases where the eligible in6 stitution elects not to participate in the disburse7 ment system required by paragraph (1). 

8 ‘‘(3) DISTRIBUTION OF GRANTS TO STU9 DENTS.—Payments under this subpart shall be 

10 made, in accordance with regulations promulgated 

11 by the Secretary for such purpose, in such manner 

12 as will best accomplish the purposes of this subpart. 

13 Any disbursement allowed to be made by crediting 

14 the student’s account shall be limited to tuition and 

15 fees and, in the case of institutionally-owned hous16 ing, room and board. The student may elect to have 

17 the institution provide other such goods and services 

18 by crediting the student’s account. 

19 ‘‘(c) REDUCTIONS IN AMOUNT.— 

20 ‘‘(1) PART-TIME STUDENTS.—In any case 

21 where a student attends an institution of higher edu22 cation on less than a full-time basis (including a stu23 dent who attends an institution of higher education 

24 on less than a half-time basis) during any academic 

25 year, the amount of a grant under this subpart for 
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1 which that student is eligible shall be reduced in 

2 proportion to the degree to which that student is not 

3 attending on a full-time basis, in accordance with a 

4 schedule of reductions established by the Secretary 

5 for the purposes of this subpart, computed in ac6 cordance with this subpart. Such schedule of reduc7 tions shall be established by regulation and pub8 lished in the Federal Register in accordance with 

9 section 482 of this Act. 

10 ‘‘(2) NO EXCEEDING COST.—The amount of a 

11 grant awarded under this subpart, in combination 

12 with Federal assistance and other student assist13 ance, shall not exceed the cost of attendance (as de14 fined in section 472) at the institution at which that 

15 student is in attendance. If, with respect to any stu16 dent, it is determined that the amount of a TEACH 

17 Grant or a Bonus TEACH Grant exceeds the cost 

18 of attendance for that year, the amount of the 

19 TEACH Grant or Bonus TEACH Grant, respec20 tively, shall be reduced until such grant does not ex21 ceed the cost of attendance at such institution. 

22 ‘‘(d) PERIOD OF ELIGIBILITY FOR GRANTS.— 

23 ‘‘(1) UNDERGRADUATE STUDENTS.—The period 

24 during which an undergraduate student may receive 

25 grants under this subpart shall be the period re-
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1 quired for the completion of the first undergraduate 

2 baccalaureate course of study being pursued by that 

3 student at the institution at which the student is in 

4 attendance except that— 

5 ‘‘(A) any period during which the student 

6 is enrolled in a noncredit or remedial course of 

7 study as defined in paragraph (3) shall not be 

8 counted for the purpose of this paragraph; and 

9 ‘‘(B) the total amount that a student may 

10 receive under this subpart for undergraduate 

11 study shall not exceed $16,000 with respect to 

12 a student who receives only TEACH Grants, 

13 and $18,000 with respect to a student who re14 ceives TEACH Grants and Bonus TEACH 

15 Grants. 

16 ‘‘(2) GRADUATE STUDENTS.—The period dur17 ing which a graduate student may receive grants 

18 under this subpart shall be the period required for 

19 the completion of a master’s degree course of study 

20 being pursued by that student at the institution at 

21 which the student is in attendance, except that the 

22 total amount that a student may receive under this 

23 subpart for graduate study shall not exceed $8,000 

24 with respect to a student who receives only TEACH 

25 Grants, and $10,000 with respect to a student who 
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1 receives TEACH Grants and Bonus TEACH 

2 Grants. 

3 ‘‘(3) REMEDIAL COURSE; STUDY ABROAD.— 

4 Nothing in this section shall exclude from eligibility 

5 courses of study which are noncredit or remedial in 

6 nature (including courses in English language acqui7 sition) which are determined by the institution to be 

8 necessary to help the student be prepared for the 

9 pursuit of a first undergraduate baccalaureate de10 gree or certificate or, in the case of courses in 

11 English language instruction, to be necessary to en12 able the student to utilize already existing knowl13 edge, training, or skills. Nothing in this section shall 

14 exclude from eligibility programs of study abroad 

15 that are approved for credit by the home institution 

16 at which the student is enrolled. 

17 ‘‘SEC. 420M. ELIGIBILITY; APPLICATIONS; SELECTION. 

18 ‘‘(a) APPLICATIONS; DEMONSTRATION OF ELIGI19 BILITY.— 

20 ‘‘(1) FILING REQUIRED.—The Secretary shall 

21 from time to time set dates by which students shall 

22 file applications for grants under this subpart. Each 

23 student desiring a grant under this subpart for any 

24 year shall file an application containing such infor25 mation and assurances as the Secretary may deem 
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1 necessary to enable the Secretary to carry out the 

2 functions and responsibilities of this subpart. 

3 ‘‘(2) DEMONSTRATION OF TEACH GRANT ELIGI4 BILITY.—Each application submitted under para5 graph (1) for a TEACH Grant shall contain such in6 formation as is necessary to demonstrate that— 

7 ‘‘(A) if the applicant is an enrolled stu8 dent— 

9 ‘‘(i) the student is an eligible student 

10 for purposes of section 484; 

11 ‘‘(ii) the student— 

12 ‘‘(I) has a grade point average 

13 that is determined, under standards 

14 prescribed by the Secretary, to be 

15 comparable to a 3.25 average on a 

16 zero to 4.0 scale, except that, if the 

17 student is in the first year of a pro18 gram of undergraduate education, 

19 such grade point average shall be de20 termined on the basis of the student’s 

21 cumulative high school grade point av22 erage; or 

23 ‘‘(II) displayed high academic ap24 titude by receiving a score above the 

25 75th percentile on at least one of the 
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1 batteries in an undergraduate or 

2 graduate school admissions test; and 

3 ‘‘(iii) the student is completing 

4 coursework and other requirements nec5 essary to begin a career in teaching, or 

6 plans to complete such coursework and re7 quirements prior to graduating; or 

8 ‘‘(B) if the applicant is a current or pro9 spective teacher applying for a grant to obtain 

10 a graduate degree— 

11 ‘‘(i) the applicant is a teacher or a re12 tiree from another occupation with exper13 tise in a field in which there is a shortage 

14 of teachers, such as math, science, special 

15 education, English language acquisition, or 

16 another high-need subject; or 

17 ‘‘(ii) the applicant is or was a teacher 

18 who is using high-quality alternative cer19 tification routes, such as Teach for Amer20 ica, to get certified. 

21 ‘‘(3) DEMONSTRATION OF BONUS TEACH GRANT

22 ELIGIBILITY.—Each application submitted under 

23 paragraph (1) for a Bonus TEACH Grant shall con24 tain such information as is necessary to demonstrate 

25 that— 
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1 ‘‘(A) the applicant is eligible for, and has 

2 applied for, a TEACH Grant; and 

3 ‘‘(B) the applicant is— 

4 ‘‘(i) a student pursuing an under5 graduate degree in mathematics, science, 

6 or a science-related field; and 

7 ‘‘(ii) a student enrolled in a qualified 

8 teacher preparation program, as defined in 

9 section 420N. 

10 ‘‘(b) AGREEMENTS TO SERVE.—Each application 

11 under subsection (a) shall contain or be accompanied by 

12 an agreement by the applicant that— 

13 ‘‘(1) the applicant will— 

14 ‘‘(A) serve as a full-time teacher for a total 

15 of not less than 4 academic years within 8 

16 years after completing the course of study for 

17 which the applicant received a TEACH Grant 

18 under this subpart; 

19 ‘‘(B) teach in a school described in section 

20 465(a)(2)(A); 

21 ‘‘(C) with respect to an applicant for— 

22 ‘‘(i) TEACH Grants, teach in any of 

23 the following fields: mathematics, science, 

24 a foreign language, bilingual education, or 

25 special education, or as a reading spe-
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1 cialist, or another field documented as 

2 high-need by the Federal Government, 

3 State government, or local education agen4 cy and approved by the Secretary; or 

5 ‘‘(ii) TEACH Grants and Bonus 

6 TEACH Grants, teach mathematics, 

7 science, or a science-related field; 

8 ‘‘(D) submit evidence of such employment 

9 in the form of a certification by the chief ad10 ministrative officer of the school upon comple11 tion of each year of such service; and 

12 ‘‘(E) comply with the requirements for 

13 being a highly qualified teacher as defined in 

14 section 9101 of the Elementary and Secondary 

15 Education Act of 1965; and 

16 ‘‘(2) in the event that the applicant is deter17 mined to have failed or refused to carry out such 

18 service obligation, the sum of the amounts of any 

19 TEACH Grants and Bonus TEACH Grants received 

20 by such applicant will be treated as a loan and col21 lected from the applicant in accordance with sub22 section (c) and the regulations thereunder. 

23 ‘‘(c) REPAYMENT FOR FAILURE TO COMPLETE

24 SERVICE.—In the event that any recipient of a grant 

25 under this subpart fails or refuses to comply with the serv-
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1 ice obligation in the agreement under subsection (b), the 

2 sum of the amounts of any TEACH Grants and Bonus 

3 TEACH Grants received by such recipient shall be treated 

4 as a Direct Loan under part D of title IV, and shall be 

5 subject to repayment, together with interest thereon ac6 cruing after the period of service, in accordance with terms 

7 and conditions specified by the Secretary in regulations 

8 under this subpart. 

9 ‘‘SEC. 420N. DEFINITIONS. 

10 ‘‘For the purposes of this subpart: 

11 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi12 ble institution’ means an institution of higher edu13 cation as defined in section 102, except that such 

14 term does not include an institution described in 

15 subsection (a)(1)(A) of that section. 

16 ‘‘(2) QUALIFIED TEACHER PREPARATION PRO17 GRAM.—The term ‘qualified teacher preparation pro18 gram’ means a program for students described in 

19 subsection (a)(2)(A) of section 420M or teachers de20 scribed in subsection (a)(2)(B) of such section (re21 ferred to jointly in this paragraph as ‘teacher can22 didates’) that— 

23 ‘‘(A) recruits and prepares teacher can24 didates who major in science, technology fields, 

25 engineering, or mathematics disciplines to be-
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1 come certified as elementary and secondary 

2 teachers in those disciplines, with the goals of 

3 improving teacher knowledge and effectiveness 

4 and increasing elementary and secondary stu5 dent academic achievement; 

6 ‘‘(B) is implemented by an institution of 

7 higher education in partnership with high-need 

8 local educational agencies; 

9 ‘‘(C) offers a baccalaureate degree with a 

10 concurrent teacher certification to teacher can11 didates; 

12 ‘‘(D) is implemented in coordination with 

13 the faculty of the education, sciences, and 

14 mathematics departments of the institution of 

15 higher education; 

16 ‘‘(E) utilizes experienced teachers who 

17 have a demonstrated record of success in teach18 ing underserved students to instruct teacher 

19 candidates in science, technology fields, engi20 neering, or mathematics disciplines; 

21 ‘‘(F) provides teacher candidates with— 

22 ‘‘(i) support services, including men23 toring by experienced teachers who have a 

24 demonstrated record of success in teaching 

25 underserved students; 
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1 ‘‘(ii) exposure to, and field experience 

2 in, the classroom within the first year of 

3 entering the qualified teacher preparation 

4 program; and 

5 ‘‘(iii) other related support practices 

6 while the teacher candidates are partici7 pating in the program, and after such can8 didates graduate from the isntitution of 

9 higher education and are employed as 

10 teachers; 

11 ‘‘(G) participates in partnerships which in12 clude the institution of higher education and 

13 local educational agencies and charter districts 

14 to provide opportunities for teacher candidate 

15 field work; 

16 ‘‘(H) focuses on increasing the number of 

17 teachers in the science, technology fields, engi18 neering, or mathematics disciplines; and 

19 ‘‘(I) encourages individuals from underrep20 resented populations to enter into the teaching 

21 profession. 

22 ‘‘SEC. 420O. PROGRAM PERIOD AND FUNDING. 

23 ‘‘There shall be available to the Secretary to carry 

24 out this subpart, from funds not otherwise appropriated, 

25 such sums as may be necessary to provide TEACH Grants 
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1 and Bonus TEACH Grants in accordance with this sub2 part to each eligible student.’’. 

3 PART B—CENTERS OF EXCELLENCE 

4 SEC. 311. CENTERS OF EXCELLENCE. 

5 Title II (20 U.S.C. 1021 et seq.) is amended by add6 ing at the end the following: 

7 ‘‘PART C—CENTERS OF EXCELLENCE 

8 ‘‘SEC. 231. DEFINITIONS. 

9 ‘‘As used in this part: 

10 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi11 ble institution’ means— 

12 ‘‘(A) an institution of higher education 

13 that has a teacher preparation program that 

14 meets the requirements of section 203(b)(2) 

15 and that is— 

16 ‘‘(i) a part B institution (as defined in 

17 section 322); 

18 ‘‘(ii) a Hispanic-serving institution (as 

19 defined in section 502); 

20 ‘‘(iii) a Tribal College or University 

21 (as defined in section 316); 

22 ‘‘(iv) an Alaska Native-serving institu23 tion (as defined in section 317(b)); or 

24 ‘‘(v) a Native Hawaiian-serving insti25 tution (as defined in section 317(b)); 
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1 ‘‘(B) a consortium of institutions described 

2 in subparagraph (A); or 

3 ‘‘(C) an institution described in subpara4 graph (A), or a consortium described in sub5 paragraph (B), in partnership with any other 

6 institution of higher education, but only if the 

7 center of excellence established under section 

8 232 is located at an institution described in 

9 subparagraph (A). 

10 ‘‘(2) HIGHLY QUALIFIED.—The term ‘highly 

11 qualified’ when used with respect to an individual 

12 means that the individual is highly qualified as de13 termined under section 9101 of the Elementary and 

14 Secondary Education Act of 1965 (20 U.S.C. 7801) 

15 or section 602 of the Individuals with Disabilities 

16 Education Act (20 U.S.C. 1401). 

17 ‘‘(3) SCIENTIFICALLY BASED READING RE18 SEARCH.—The term ‘scientifically based reading re19 search’ has the meaning given such term in section 

20 1208 of the Elementary and Secondary Education 

21 Act of 1965 (20 U.S.C. 6368). 

22 ‘‘(4) SCIENTIFICALLY BASED RESEARCH.—The 

23 term ‘scientifically based research’ has the meaning 

24 given such term in section 9101 of the Elementary 
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1 and Secondary Education Act of 1965 (20 U.S.C. 

2 7801). 

3 ‘‘SEC. 232. CENTERS OF EXCELLENCE. 

4 ‘‘(a) PROGRAM AUTHORIZED.—From the amounts 

5 appropriated to carry out this part, the Secretary is au6 thorized to award competitive grants to eligible institu7 tions to establish centers of excellence. 

8 ‘‘(b) USE OF FUNDS.—Grants provided by the Sec9 retary under this part shall be used to ensure that current 

10 and future teachers are highly qualified, by carrying out 

11 one or more of the following activities: 

12 ‘‘(1) Implementing reforms within teacher prep13 aration programs to ensure that such programs are 

14 preparing teachers who are highly qualified, are able 

15 to understand scientifically based research, and are 

16 able to use advanced technology effectively in the 

17 classroom, including use for instructional techniques 

18 to improve student academic achievement, by— 

19 ‘‘(A) retraining faculty; and 

20 ‘‘(B) designing (or redesigning) teacher 

21 preparation programs that— 

22 ‘‘(i) prepare teachers to close student 

23 achievement gaps, are based on rigorous 

24 academic content, scientifically based re25 search (including scientifically based read-
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1 ing research), and challenging State stu2 dent academic content standards; and 

3 ‘‘(ii) promote strong teaching skills. 

4 ‘‘(2) Providing sustained and high-quality 

5 preservice clinical experience, including the men6 toring of prospective teachers by exemplary teachers, 

7 substantially increasing interaction between faculty 

8 at institutions of higher education and new and ex9 perienced teachers, principals, and other administra10 tors at elementary schools or secondary schools, and 

11 providing support, including preparation time, for 

12 such interaction. 

13 ‘‘(3) Developing and implementing initiatives to 

14 promote retention of highly qualified teachers and 

15 principals, including minority teachers and prin16 cipals, including programs that provide— 

17 ‘‘(A) teacher or principal mentoring from 

18 exemplary teachers or principals; or 

19 ‘‘(B) induction and support for teachers 

20 and principals during their first 3 years of em21 ployment as teachers or principals, respectively. 

22 ‘‘(4) Awarding scholarships based on financial 

23 need to help students pay the costs of tuition, room, 

24 board, and other expenses of completing a teacher 

25 preparation program. 
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1 ‘‘(5) Disseminating information on effective 

2 practices for teacher preparation and successful 

3 teacher certification and licensure assessment prepa4 ration strategies. 

5 ‘‘(6) Activities authorized under sections 202, 

6 203, and 204. 

7 ‘‘(c) APPLICATION.—Any eligible institution desiring 

8 a grant under this section shall submit an application to 

9 the Secretary at such a time, in such a manner, and ac10 companied by such information the Secretary may require. 

11 ‘‘(d) MINIMUM GRANT AMOUNT.—The minimum 

12 amount of each grant under this part shall be $500,000. 

13 ‘‘(e) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

14 An eligible institution that receives a grant under this part 

15 may not use more than 2 percent of the grant funds for 

16 purposes of administering the grant. 

17 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

18 such regulations as may be necessary to carry out this 

19 part. 

20 ‘‘SEC. 233. APPROPRIATIONS. 

21 ‘‘There shall be available to the Secretary, from funds 

22 not otherwise appropriated, $50,000,000 for the period 

23 beginning with fiscal year 2008 and ending with fiscal 

24 year 2012, to carry out this part beginning with academic 

25 year 2008–2009, which shall remain available until ex-
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1 pended. The authority to carry out this part shall expire 

2 at the end of fiscal year 2012.’’. 

3 TITLE IV—COLLEGE ACCESS 

4 CHALLENGE GRANT PROGRAM 

5 SEC. 401. COLLEGE ACCESS CHALLENGE GRANTS. 

6 (a) CHALLENGE GRANT PROGRAM ESTABLISHED.— 

7 (1) PROGRAM ESTABLISHED.—The Secretary 

8 shall establish a program to award matching grants 

9 to philanthropic organizations to increase the num10 ber of eligible students from underserved populations 

11 who enter and complete college by providing grants 

12 to philanthropic organizations who are members of 

13 eligible consortia to carry out the activities of the 

14 consortia to achieve this purpose, including— 

15 (A) providing need-based grants to eligible 

16 students; 

17 (B) providing support to eligible students 

18 through school- or institution-based mentoring 

19 programs; and 

20 (C) conducting outreach programs to en21 courage eligible students to pursue higher edu22 cation. 

23 (2) GRANT PERIOD; RENEWABILITY.—Grants 

24 under this section shall be awarded for one 5-year 

25 period, and may not be renewed. 
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1 (3) GRANT AMOUNTS.— 

2 (A) IN GENERAL.—A grant awarded under 

3 this part for a given fiscal year to a philan4 thropic organization shall be in an amount 

5 equal to lesser of— 

6 (i) 200 percent of the amount of char7 itable gifts received in the preceding fiscal 

8 year by the eligible consortia, including 

9 charitable gifts received by the individual 

10 members of the consortia; or 

11 (ii) the maximum grant amount estab12 lished by the Secretary by regulation, pur13 suant to subsection (f). 

14 (B) GIFTS PROVIDED IN CASH OR IN15 KIND.—For the purposes of subparagraph (A), 

16 the charitable gifts received by an eligible con17 sortia and its members may be provided in cash 

18 or in-kind, including physical non-cash con19 tributions of monetary value such as property, 

20 facilities, and equipment, but excluding services. 

21 (b) USES OF GRANT.— 

22 (1) IN GENERAL.—A philanthropic organization 

23 receiving a grant under this section shall— 

24 (A) provide grants to eligible students; and 
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1 (B) distribute grants to members of the 

2 consortia with which the philanthropic organiza3 tion is affiliated, in accordance with the plan 

4 described in subsection (c)(2)(A), to fund the 

5 activities of such consortia in accordance with 

6 the application under subsection (c). 

7 (2) LIMITATION.—Not more than 15 percent of 

8 the funds made available annually through a grant 

9 under this section may be used for administrative 

10 purposes. 

11 (c) APPLICATIONS.—A philanthropic organization de12 siring a grant under this section shall submit an applica13 tion to the Secretary at such time, in such manner, and 

14 containing such information as the Secretary may require. 

15 Such application shall include the following: 

16 (1) A description of an eligible consortia that 

17 meets the requirements of subsection (d), with which 

18 the philanthropic organization is affiliated, in ac19 cordance with subsection (g). 

20 (2) A detailed description of— 

21 (A) the philanthropic organization’s plans 

22 for distributing the matching grant funds 

23 among the members of the eligible consortia; 

24 and 
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1 (B) the eligible consortia’s plans for using 

2 the matching grant funds, including how the 

3 funds will be used to provide financial aid, men4 toring, and outreach programs to eligible stu5 dents. 

6 (3) A plan to ensure the viability of the eligible 

7 consortia and the work of the consortia beyond the 

8 grant period. 

9 (4) A detailed description of the activities that 

10 carry out this section that are conducted by the eli11 gible consortia at the time of the application, and 

12 how the matching grant funds will assist the eligible 

13 consortia with expanding and enhancing such activi14 ties. 

15 (5) A description of the organizational structure 

16 that will be used to administer the activities carried 

17 out under the plan, including a description of the 

18 system used to track the participation of students 

19 who receive grants to degree completion. 

20 (6) A description of the strategies that will be 

21 used to identify eligible students who are enrolled in 

22 secondary school and who may benefit from the ac23 tivities of the eligible consortia. 
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1 (d) ELIGIBLE CONSORTIA.—An eligible consortia 

2 with which a philanthropic organization is affiliated for 

3 the program under this section shall— 

4 (1) be a partnership of mulitple entities that 

5 have agreed to work together carry out this section, 

6 including— 

7 (A) such philanthropic organization, which 

8 shall serve as the manager of the consortia; 

9 (B) a State that demonstrates a commit10 ment to ensuring the creation of a Statewide 

11 system to address the issues of early interven12 tion and financial support for eligible students 

13 to enter and remain in college; and 

14 (C) at the discretion of the philanthropic 

15 organization described in subparagraph (A), ad16 ditional partners, including other non-profit or17 ganizations, government entities (including local 

18 municipalities, school districts, cities, and coun19 ties), institutions of higher education, and other 

20 public or private programs that provide men21 toring or outreach programs; and 

22 (2) conducts activites to assist eligible students 

23 with entering and remaining in college, which in24 clude— 
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1 (A) providing need-based grants to eligible 

2 students; 

3 (B) providing early notification to low-in4 come students of their potential eligibility for 

5 Federal financial aid, as well as financial aid 

6 and other support available from the eligible 

7 consortia; 

8 (C) encouraging increased eligible student 

9 participation in higher education through men10 toring or outreach programs; and 

11 (D) conducting marketing and outreach ef12 forts that are designed to— 

13 (i) encourage full participation of eli14 gible students in the activities of the con15 sortia that carry out the purposes of this 

16 section; and 

17 (ii) provide the communities impacted 

18 by the activities of the consortia with a 

19 general knowledge about the efforts of the 

20 consortia. 

21 (e) ANNUAL REPORT.—A philanthropic organization 

22 receiving a grant under this section shall prepare and sub23 mit an annual report to the Secretary on the activities car24 ried out with such grant. The report shall include— 
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1 (1) each activity that was provided to eligible 

2 students over the course of the year; 

3 (2) the cost of providing each such activity; 

4 (3) the number and percentage of eligible stu5 dents who received grants, mentoring, and outreach 

6 services; and 

7 (4) the total amount of charitable gifts received 

8 by the eligible consortia (including its members) 

9 with which the philanthropic organization is affili10 ated for the fiscal year. 

11 (f) REGULATIONS.—The Secretary shall promulgate 

12 regulations to carry out this section. Such regulations 

13 shall include— 

14 (1) the maximum grant amount that may be 

15 awarded to a philanthropic organization under this 

16 section; 

17 (2) the minimum amount of chartable gifts an 

18 eligible consortia (including its members) shall re19 ceive in a fiscal year for the philanthropic organiza20 tion affiliated with such consortia to be eligible for 

21 a grant under this section. 

22 (g) DEFINITIONS.—For the purposes of this section: 

23 (1) ELIGIBLE STUDENT.—The term ‘‘eligible 

24 student’’ means an individual who— 
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1 (A) is a member of an underserved popu2 lation; 

3 (B) is enrolled— 

4 (i) in a secondary school pursuing a 

5 high school diploma; or 

6 (ii) in an institution of higher edu7 cation or is planning to attend an institu8 tion of higher education; and 

9 (C) either— 

10 (i) is receiving, or has received, finan11 cial assistance or support services from the 

12 consortium; or 

13 (ii) meets 2 or more of the following 

14 criteria: 

15 (I) Has an expected family con16 tribution equal to zero (as described 

17 in section 479) or a comparable alter18 native based upon the State’s ap19 proved criteria in section 415C(b)(4). 

20 (II) Has qualified for a free 

21 lunch, or at the State’s discretion a 

22 reduced price lunch, under the school 

23 lunch program established under the 

24 Richard B. Russell National School 

25 Lunch Act. 
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1 (III) Qualifies for the State’s 

2 maximum need-based undergraduate 

3 award. 

4 (IV) Is participating in, or has 

5 participated in, a Federal, State, in6 stitutional, or community mentoring 

7 or outreach program, as recognized by 

8 the eligible consortia carrying out ac9 tivities under this section. 

10 (2) PHILANTHROPIC ORGANIZATION.—The term 

11 ‘‘philanthropic organization’’ means a non-profit or12 ganization— 

13 (A) that does not receive funds under title 

14 IV of the Higher Education Act of 1965 or 

15 under the Elementary and Secondary Education 

16 Act of 1965; 

17 (B) that is not a local educational agency 

18 or an insitution of higher education; 

19 (C) that has a demonstrated record of dis20 persing grant aid to underserved populations to 

21 ensure access to, and participation in, higher 

22 education; 

23 (D) that is affiliated with an eligible con24 sortia (as defined in subsection (e)) to carry out 

25 this section; and 
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1 (E) the primary purpose of which is to 

2 provide financial aid and support services to 

3 students from underrepresented populations to 

4 increase the number of such students who enter 

5 and remain in college. 

6 (3) STATE.—The term ‘‘State’’ means each of 

7 the several States of the United States, the District 

8 of Columbia, and Puerto Rico. 

9 (4) UNDERSERVED POPULATION.—The term 

10 ‘‘underserved population’’ means a group of individ11 uals who traditionally have not been well represented 

12 in the general population of students who pursue 

13 and successfully complete a higher education degree. 

14 (h) PROGRAM FUNDING.— 

15 (1) IN GENERAL.—There shall be available to 

16 the Secretary to carry out this section, from funds 

17 not otherwise appropriated, $300,000,000 for the 

18 period beginning with fiscal year 2008 and ending 

19 with fiscal year 2012. 

20 (2) USE OF EXCESS FUNDS.—If, at the end of 

21 a fiscal year, the funds available for awarding grants 

22 under this section exceed the amount necessary to 

23 make such grants, then all of the excess funds shall 

24 remain available for the subsequent fiscal year, and 

25 shall be used to award grants under section 401 of 
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1 the Higher Education Act of 1965 (20 U.S.C. 

2 1070a) for such subsequent fiscal year. 

3 (i) SUNSET.—The authority to carry out this section 

4 shall expire at the end of fiscal year 2012. 

Æ