In the Senate of the United States,

July 20 (legislative day, July 19), 2007.

Resolved, That the bill from the House of Representatives (H.R. 2669) entitled ‘‘An Act to provide for reconciliation pursuant to section 601 of the concurrent resolution on

the budget for fiscal year 2008.’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE; REFERENCES.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Higher Education Access Act of 2007’’.

4 (b) REFERENCES.—Except as otherwise expressly pro5 vided, whenever in this Act an amendment or repeal is ex6 pressed in terms of an amendment to, or repeal of, a section

7 or other provision, the reference shall be considered to be

8 made to a section or other provision of the Higher Edu9 cation Act of 1965 (20 U.S.C. 1001 et seq.).
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1 TITLE I—GRANTS TO STUDENTS

2 IN ATTENDANCE AT INSTITU3 TIONS OF HIGHER EDU4 CATION

5 SEC. 101. TUITION SENSITIVITY.

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

7 1070a(b)) is amended by striking paragraph (3).

8 (b) AUTHORIZATION AND APPROPRIATION OF

9 FUNDS.—There is authorized to be appropriated, and there

10 is appropriated, out of any money in the Treasury not oth11 erwise appropriated, for the Department of Education to

12 carry out the amendment made by subsection (a),

13 $5,000,000 for fiscal year 2008.

14 SEC. 102. PROMISE GRANTS.

15 (a) AMENDMENT.—Subpart 1 of part A of title IV (20

16 U.S.C. 1070a et seq.) is amended by adding at the end the

17 following:

18 ‘‘SEC. 401B. PROMISE GRANTS.

19 ‘‘(a) GRANTS.—

20 ‘‘(1) IN GENERAL.—From amounts appropriated

21 under subsection (e) for a fiscal year and subject to

22 subsection (b), the Secretary shall award grants to

23 students in the same manner as the Secretary awards

24 Federal Pell Grants to students under section 401, ex25 cept that—
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1 ‘‘(A) at the beginning of each award year,

2 the Secretary shall establish a maximum and

3 minimum award level based on amounts made

4 available under subsection (e);

5 ‘‘(B) the Secretary shall only award grants

6 under this section to students eligible for a Fed7 eral Pell Grant for the award year; and

8 ‘‘(C) when determining eligibility for the

9 awards under this section, the Secretary shall

10 consider only those students who submitted a

11 Free Application for Federal Student Aid or

12 other common reporting form under section 483

13 as of July 1 of the award year for which the de14 termination is made.

15 ‘‘(2) STUDENTS WITH THE GREATEST NEED.—

16 The Secretary shall ensure grants are awarded under

17 this section to students with the greatest need as de18 termined in accordance with section 471.

19 ‘‘(b) COST OF ATTENDANCE LIMITATION.—A grant

20 awarded under this section for an award year shall be

21 awarded in an amount that does not exceed—

22 ‘‘(1) the student’s cost of attendance for the

23 award year; less

24 ‘‘(2) an amount equal to the sum of—
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1 ‘‘(A) the expected family contribution for

2 the student for the award year; and

3 ‘‘(B) any Federal Pell Grant award re4 ceived by the student for the award year.

5 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—Grants awarded

6 from funds made available under subsection (e) shall be

7 used to supplement, and not supplant, other Federal, State,

8 or institutional grant funds.

9 ‘‘(d) USE OF EXCESS FUNDS.—

10 ‘‘(1) FIFTEEN PERCENT OR LESS.—If, at the end

11 of a fiscal year, the funds available for making grant

12 payments under this section exceed the amount nec13 essary to make the grant payments required under

14 this section to eligible students by 15 percent or less,

15 then all of the excess funds shall remain available for

16 making grant payments under this section during the

17 next succeeding fiscal year.

18 ‘‘(2) MORE THAN FIFTEEN PERCENT.—If, at the

19 end of a fiscal year, the funds available for making

20 grant payments under this section exceed the amount

21 necessary to make the grant payments required under

22 this section to eligible students by more than 15 per23 cent, then all of such funds shall remain available for

24 making such grant payments but grant payments
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1 may be made under this paragraph only with respect

2 to awards for that fiscal year.

3 ‘‘(e) AUTHORIZATION AND APPROPRIATION OF

4 FUNDS.—

5 ‘‘(1) IN GENERAL.—There are authorized to be

6 appropriated, and there are appropriated, out of any

7 money in the Treasury not otherwise appropriated,

8 for the Department of Education to carry out this

9 section—

10 ‘‘(A) $2,620,000,000 for fiscal year 2008;

11 ‘‘(B) $3,040,000,000 for fiscal year 2009;

12 ‘‘(C) $3,460,000,000 for fiscal year 2010;

13 ‘‘(D) $3,900,000,000 for fiscal year 2011;

14 ‘‘(E) $4,020,000,000 for fiscal year 2012;

15 ‘‘(F) $10,000,000 for fiscal year 2013;

16 ‘‘(G) $3,650,000,000 for fiscal year 2014;

17 ‘‘(H) $3,850,000,000 for fiscal year 2015;

18 ‘‘(I) $4,175,000,000 for fiscal year 2016;

19 and

20 ‘‘(J) $4,180,000,000 for fiscal year 2017.

21 ‘‘(2) AVAILABILITY OF FUNDS.—Funds appro22 priated under paragraph (1) for a fiscal year shall

23 remain available through the last day of the fiscal

24 year immediately succeeding the fiscal year for which

25 the funds are appropriated.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by sub2 section (a) shall take effect on July 1, 2008.

3 TITLE II—STUDENT LOAN BENE4 FITS, TERMS, AND CONDI5 TIONS

6 SEC. 201. DEFERMENTS.

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

8 1077(a)(2)(C)(iii)) is amended by striking ‘‘3 years’’ and

9 inserting ‘‘6 years’’.

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

11 (20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking ‘‘3

12 years’’ and inserting ‘‘6 years’’.

13 (c) DIRECT LOANS.—Section 455(f)(2)(D) (20 U.S.C.

14 1087e(f)(2)(D)) is amended by striking ‘‘3 years’’ and in15 serting ‘‘6 years’’.

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

17 1087dd(c)(2)(A)(iv)) is amended by striking ‘‘3 years’’ and

18 inserting ‘‘6 years’’.

19 (e) EFFECTIVE DATE AND APPLICABILITY.—The

20 amendments made by this section shall take effect on July

21 1, 2008, and shall only apply with respect to the loans made

22 to a borrower of a loan under title IV of the Higher Edu23 cation Act of 1965 who obtained the borrower’s first loan

24 under such title prior to October 1, 2012.
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1 SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEM2 BERS OF THE ARMED FORCES.

3 (a) FEDERAL FAMILY EDUCATION LOANS.—Section

4 428(b)(1)(M)(iii) (20 U.S.C. 1078(b)(1)(M)(iii)) is

5 amended—

6 (1) in the matter preceding subclause (I), by

7 striking ‘‘not in excess of 3 years’’;

8 (2) in subclause (II), by striking ‘‘; or’’ and in9 serting a comma; and

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

11 ‘‘and for the 180-day period following the

12 demobilization date for the service described

13 in subclause (I) or (II); or’’.

14 (b) DIRECT LOANS.—Section 455(f)(2)(C) (20 U.S.C.

15 1087e(f)(2)(C)) is amended—

16 (1) in the matter preceding clause (i), by strik17 ing ‘‘not in excess of 3 years’’;

18 (2) in clause (ii), by striking ‘‘; or’’ and insert19 ing a comma; and

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

21 ‘‘and for the 180-day period following the demo22 bilization date for the service described in clause

23 (i) or (ii); or’’.

24 (c) PERKINS LOANS.—Section 464(c)(2)(A)(iii) (20

25 U.S.C. 1087dd(c)(2)(A)(iii)) is amended—
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1 (1) in the matter preceding subclause (I), by

2 striking ‘‘not in excess of 3 years’’;

3 (2) in subclause (II), by striking the semicolon

4 and inserting a comma; and

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

6 ‘‘and for the 180-day period following the demo7 bilization date for the service described in sub8 clause (I) or (II);’’.

9 (d) APPLICABILITY.—Section 8007(f) of the Higher

10 Education Reconciliation Act of 2005 (20 U.S.C. 1078 note)

11 is amended by striking ‘‘loans for which’’ and all that fol12 lows through the period at the end and inserting ‘‘all loans

13 under title IV of the Higher Education Act of 1965.’’.

14 (e) EFFECTIVE DATE.—The amendments made by this

15 section shall take effect on July 1, 2008.

16 SEC. 203. INCOME-BASED REPAYMENT PLANS.

17 (a) FFEL.—Section 428 (as amended by sections

18 201(b) and 202(a)) (20 U.S.C. 1078) is further amended—

19 (1) in subsection (b)—

20 (A) in paragraph (1)—

21 (i) in subparagraph (D), by striking

22 ‘‘income contingent’’ and inserting ‘‘income23 based’’; and
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1 (ii) in subparagraph (E)(i), by strik2 ing ‘‘income-sensitive’’ and inserting ‘‘in3 come-based’’; and

4 (B) by striking clause (iii) of paragraph

5 (9)(A) and inserting the following:

6 ‘‘(iii) an income-based repayment

7 plan, with parallel terms, conditions, and

8 benefits as the income-based repayment

9 plan described in subsections (e) and

10 (d)(1)(D) of section 455, except that—

11 ‘‘(I) the plan described in this

12 clause shall not be available to a bor13 rower of an excepted PLUS loan (as

14 defined in section 455(e)(10)) or of a

15 loan made under 428C that includes

16 an excepted PLUS loan;

17 ‘‘(II) in lieu of the process of ob18 taining Federal income tax returns

19 and information from the Internal

20 Revenue Service, as described in sec21 tion 455(e)(1), the borrower shall pro22 vide the lender with a copy of the Fed23 eral income tax return and return in24 formation for the borrower (and, if ap25 plicable, the borrower’s spouse) for the
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1 purposes described in section 455(e)(1),

2 and the lender shall determine the re3 payment obligation on the loan, in ac4 cordance with the procedures developed

5 by the Secretary;

6 ‘‘(III) in lieu of the requirements

7 of section 455(e)(3), in the case of a

8 borrower who chooses to repay a loan

9 made, insured, or guaranteed under

10 this part pursuant to income-based re11 payment and for whom the adjusted

12 gross income is unavailable or does not

13 reasonably reflect the borrower’s cur14 rent income, the borrower shall provide

15 the lender with other documentation of

16 income that the Secretary has deter17 mined is satisfactory for similar bor18 rowers of loans made under part D;

19 ‘‘(IV) the Secretary shall pay any

20 interest due and not paid for under the

21 repayment schedule described in sec22 tion 455(e)(4) for a loan made, in23 sured, or guaranteed under this part

24 in the same manner as the Secretary

25 pays any such interest under section
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1 455(e)(6) for a Federal Direct Stafford

2 Loan;

3 ‘‘(V) the Secretary shall assume

4 the obligation to repay an outstanding

5 balance of principal and interest due

6 on all loans made, insured, or guaran7 teed under this part (other than an ex8 cepted PLUS Loan or a loan under

9 section 428C that includes an excepted

10 PLUS loan), for a borrower who satis11 fies the requirements of subparagraphs

12 (A) and (B) of section 455(e)(7), in the

13 same manner as the Secretary cancels

14 such outstanding balance under section

15 455(e)(7); and

16 ‘‘(VI) in lieu of the notification

17 requirements under section 455(e)(8),

18 the lender shall notify a borrower of a

19 loan made, insured, or guaranteed

20 under this part who chooses to repay

21 such loan pursuant to income-based re22 payment of the terms and conditions of

23 such plan, in accordance with the pro24 cedures established by the Secretary,

25 including notification that—
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1 ‘‘(aa) the borrower shall be

2 responsible for providing the lend3 er with the information necessary

4 for documentation of the bor5 rower’s income, including income

6 information for the borrower’s

7 spouse (as applicable); and

8 ‘‘(bb) if the borrower con9 siders that special circumstances

10 warrant an adjustment, as de11 scribed in section 455(e)(8)(B),

12 the borrower may contact the

13 lender, and the lender shall deter14 mine whether such adjustment is

15 appropriate, in accordance with

16 the criteria established by the Sec17 retary; and’’;

18 (2) in subsection (e)—

19 (A) in the subsection heading, by striking

20 ‘‘INCOME-SENSITIVE’’ and inserting ‘‘INCOME21 BASED’’;

22 (B) in paragraph (1)—

23 (i) by striking ‘‘income-sensitive repay24 ment’’ and inserting ‘‘income-based repay25 ment’’; and
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1 (ii) by inserting ‘‘and for the public

2 service loan forgiveness program under sec3 tion 455(m), in accordance with section

4 428C(b)(5)’’ before the semicolon; and

5 (C) in paragraphs (2) and (3), by striking

6 ‘‘income-sensitive’’ each place the term occurs

7 and inserting ‘‘income-based’’; and

8 (3) in subsection (m)—

9 (A) in the subsection heading, by striking

10 ‘‘INCOME CONTINGENT’’ and inserting ‘‘INCOME11 BASED’’;

12 (B) in paragraph (1), by striking ‘‘income

13 contingent repayment plan’’ and all that follows

14 through the period at the end and inserting ‘‘in15 come-based repayment plan as described in sub16 section (b)(9)(A)(iii) and section 455(d)(1)(D).’’;

17 and

18 (C) in the paragraph heading of paragraph

19 (2), by striking ‘‘INCOME CONTINGENT’’ and in20 serting ‘‘INCOME-BASED’’.

21 (b) CONSOLIDATION LOANS.—Section 428C (20 U.S.C.

22 1078–3) is amended—

23 (1) in subsection (a)(3)(B)(i)(V), by striking ‘‘for

24 the purposes of obtaining an income contingent re25 payment plan,’’ and inserting ‘‘for the purpose of
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1 using the public service loan forgiveness program

2 under section 455(m),’’;

3 (2) in subsection (b)(5)—

4 (A) in the first sentence, by striking ‘‘, or

5 is unable to obtain a consolidation loan with in6 come-sensitive repayment terms acceptable to the

7 borrower from such a lender,’’ and inserting ‘‘,

8 or chooses to obtain a consolidation loan for the

9 purposes of using the public service loan forgive10 ness program offered under section 455(m),’’;

11 and

12 (B) in the second sentence, by striking ‘‘in13 come contingent repayment under part D of this

14 title’’ and inserting ‘‘income-based repayment’’;

15 and

16 (3) in subsection (c)—

17 (A) in paragraph (2)(A)—

18 (i) in the first sentence, by striking ‘‘of

19 graduated or income-sensitive repayment

20 schedules, established by the lender in ac21 cordance with the regulations of the Sec22 retary.’’ and inserting ‘‘of graduated repay23 ment schedules, established by the lender in

24 accordance with the regulations of the Sec25 retary, and income-based repayment sched-
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1 ules, established pursuant to regulations by

2 the Secretary.’’; and

3 (ii) in the second sentence, by striking

4 ‘‘Except as required’’ and all that follows

5 through ‘‘subsection (b)(5),’’ and inserting

6 ‘‘Except as required by such income-based

7 repayment schedules,’’; and

8 (B) in paragraph (3)(B), by striking ‘‘in9 come contingent repayment offered by the Sec10 retary under subsection (b)(5)’’ and inserting

11 ‘‘income-based repayment’’.

12 (c) DIRECT LOANS.—Section 455 (as amended by sec13 tions 201(c) and 202(b)) (20 U.S.C. 1087e) is further

14 amended—

15 (1) in subsection (d)—

16 (A) in paragraph (1)(D)—

17 (i) by striking ‘‘income contingent re18 payment plan’’ and inserting ‘‘income19 based repayment plan’’; and

20 (ii) by striking ‘‘a Federal Direct

21 PLUS loan’’ and inserting ‘‘an excepted

22 PLUS loan or any Federal Direct Consoli23 dation Loan that includes an excepted

24 PLUS loan (as defined in subsection

25 (e)(10))’’; and
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1 (B) in paragraph (5)(B), by striking ‘‘in2 come contingent’’ and inserting ‘‘income-based’’;

3 and

4 (2) in subsection (e)—

5 (A) in the subsection heading, by striking

6 ‘‘INCOME CONTINGENT’’ and inserting ‘‘INCOME7 BASED’’;

8 (B) in paragraphs (1), (2), and (3), by

9 striking ‘‘income contingent’’ each place the term

10 appears and inserting ‘‘income-based’’;

11 (C) in paragraph (4)—

12 (i) by striking ‘‘Income contingent’’

13 and inserting ‘‘Income-based’’; and

14 (ii) by striking ‘‘Secretary.’’ and in15 serting ‘‘Secretary, except that the monthly

16 required payment under such schedule shall

17 not exceed 15 percent of the result obtained

18 by calculating the amount by which—

19 ‘‘(A) the borrower’s adjusted gross income;

20 exceeds

21 ‘‘(B) 150 percent of the poverty line appli22 cable to the borrower’s family size, as determined

23 under section 673(2) of the Community Service

24 Block Grant Act,

25 divided by 12.’’;
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1 (D) in paragraph (5), by striking ‘‘income

2 contingent’’ and inserting ‘‘income-based’’;

3 (E) by redesignating paragraph (6) as

4 paragraph (8);

5 (F) by inserting after paragraph (5) the fol6 lowing:

7 ‘‘(6) TREATMENT OF INTEREST.—In the case of

8 a Federal Direct Stafford Loan, any interest due and

9 not paid for under paragraph (2) shall be paid by the

10 Secretary.

11 ‘‘(7) LOAN FORGIVENESS.—The Secretary shall

12 cancel the obligation to repay an outstanding balance

13 of principal and interest due on all loans made under

14 this part, or assume the obligation to repay an out15 standing balance of principal and interest due on all

16 loans made, insured, or guaranteed under part B,

17 (other than an excepted PLUS Loan, or any Federal

18 Direct Consolidation Loan or loan under section

19 428C that includes an excepted PLUS loan) to a bor20 rower who—

21 ‘‘(A) makes the election under this sub22 section or under section 428(b)(9)(A)(iii); and

23 ‘‘(B) for a period of time prescribed by the

24 Secretary not to exceed 25 years (including any

25 period during which the borrower is in
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1 deferment due to an economic hardship described

2 in section 435(o)), meets 1 of the following re3 quirements with respect to each payment made

4 during such period:

5 ‘‘(i) Has made the payment under this

6 subsection or section 428(b)(9)(A)(iii).

7 ‘‘(ii) Has made the payment under a

8 standard repayment plan under section

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

10 ‘‘(iii) Has made a payment that

11 counted toward the maximum repayment

12 period under income-sensitive repayment

13 under section 428(b)(9)(A)(iii) or income

14 contingent repayment under section

15 455(d)(1)(D), as each such section was in

16 effect on June 30, 2008.

17 ‘‘(iv) Has made a reduced payment of

18 not less than the amount required under

19 subsection (e), pursuant to a forbearance

20 agreement under section 428(c)(3)(A)(i) for

21 a borrower described in

22 428(c)(3)(A)(i)(II).’’;

23 (G) in the matter preceding subparagraph

24 (A) of paragraph (8) (as redesignated by sub-
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1 paragraph (E)), by striking ‘‘income contingent’’

2 and inserting ‘‘income-based’’; and

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

4 ‘‘(9) RETURN TO STANDARD REPAYMENT.—A

5 borrower who is repaying a loan made under this

6 part pursuant to income-based repayment may

7 choose, at any time, to terminate repayment pursuant

8 to income-based repayment and repay such loan

9 under the standard repayment plan.

10 ‘‘(10) DEFINITION OF EXCEPTED PLUS LOAN.—

11 In this subsection, the term ‘excepted PLUS loan’

12 means a Federal Direct PLUS loan or a loan under

13 section 428B that is made, insured, or guaranteed on

14 behalf of a dependent student.’’.

15 (d) CONFORMING AMENDMENTS AND TECHNICAL COR16 RECTIONS.—The Act (20 U.S.C. 1001 et seq.) is further

17 amended—

18 (1) in section 427(a)(2)(H) (20 U.S.C.

19 1077(a)(2)(H))—

20 (A) by striking ‘‘or income-sensitive’’; and

21 (B) by inserting ‘‘or income-based repay22 ment schedule established pursuant to regula23 tions by the Secretary’’ before the semicolon at

24 the end; and
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1 (2) in section 455(d)(1)(C) (20 U.S.C.

2 1087e(d)(1)(C)), by striking ‘‘428(b)(9)(A)(v)’’ and

3 inserting ‘‘428(b)(9)(A)(iv)’’.

4 (e) TRANSITION PROVISION.—A student who, as of

5 June 30, 2008, elects to repay a loan under part B or part

6 D of the Higher Education Act of 1965 (20 U.S.C. 1071

7 et seq., 1087a et seq.) through an income-sensitive repay8 ment plan under section 428(b)(9)(A)(iii) of such Act (20

9 U.S.C. 1078(b)(9)(A)(iii)) or an income contingent repay10 ment plan under section 455(d)(1)(D) of such Act (20

11 U.S.C. 1087e(d)(1)(D)) (as each such section was in effect

12 on the day before the date of enactment of this Act) shall

13 have the option to continue repayment under such section

14 (as such section was in effect on such day), or may elect,

15 beginning on July 1, 2008, to use the income-based repay16 ment plan under section 428(b)(9)(A)(iii) or 455(d)(1)(D)

17 (as applicable) of the Higher Education Act of 1965, as

18 amended by this section.

19 (f) EFFECTIVE DATE AND APPLICABILITY.—The

20 amendments made by this section shall take effect on July

21 1, 2008, and shall only apply with respect to a borrower

22 of a loan under title IV of the Higher Education Act of

23 1965 who obtained the borrower’s first loan under such title

24 prior to October 1, 2012.
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1 TITLE III—FEDERAL FAMILY

2 EDUCATION LOAN PROGRAM

3 SEC. 301. REDUCTION OF LENDER INSURANCE PERCENT4 AGE.

5 (a) AMENDMENT.—Section 428(b)(1)(G) (20 U.S.C.

6 1078(b)(1)(G)) is amended—

7 (1) in the matter preceding clause (i), by strik8 ing ‘‘insures 98 percent’’ and inserting ‘‘insures 97

9 percent’’;

10 (2) in clause (i), by inserting ‘‘and’’ after the

11 semicolon;

12 (3) by striking clause (ii); and

13 (4) by redesignating clause (iii) as clause (ii).

14 (b) EFFECTIVE DATE.—The amendment made by sub15 section (a) shall take effect with respect to loans made on

16 or after October 1, 2007.

17 SEC. 302. GUARANTY AGENCY COLLECTION RETENTION.

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

19 1078(c)(6)(A)(ii)) is amended to read as follows:

20 ‘‘(ii) an amount equal to 24 percent of such

21 payments for use in accordance with section

22 422B, except that—

23 ‘‘(I) beginning October 1, 2003 and

24 ending September 30, 2007, this subpara-
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1 graph shall be applied by substituting ‘23

2 percent’ for ‘24 percent’; and

3 ‘‘(II) beginning October 1, 2007, this

4 subparagraph shall be applied by sub5 stituting ‘16 percent’ for ‘24 percent’.’’.

6 SEC. 303. ELIMINATION OF EXCEPTIONAL PERFORMER STA7 TUS 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 is

12 further amended—

13 (1) in section 428(c)(1) (20 U.S.C. 1078(c)(1))—

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

15 (B) by redesignating subparagraphs (E)

16 through (H) as subparagraphs (D) through (G),

17 respectively; and

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

19 1(b)(5)), by striking the matter following subpara20 graph (B).

21 (c) EFFECTIVE DATE.—The amendments made by sub22 sections (a) and (b) shall take effect on October 1, 2007,

23 except that section 428I of the Higher Education Act of

24 1965 (as in effect on the day before the date of enactment

25 of this Act) shall apply to eligible lenders that received a
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1 designation under subsection (a) of such section prior to

2 October 1, 2007, for the remainder of the year for which

3 the designation was made.

4 SEC. 304. DEFINITIONS.

5 (a) AMENDMENTS.—Section 435 (20 U.S.C. 1085) is

6 amended—

7 (1) in subsection (o)(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 line

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

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

13 ‘‘to a family of two’’ and inserting ‘‘to the bor14 rower’s family size’’; and

15 (2) by adding at the end the following:

16 ‘‘(p) ELIGIBLE NOT-FOR-PROFIT HOLDER.—

17 ‘‘(1) DEFINITION OF ELIGIBLE NOT-FOR-PROFIT

18 HOLDER.—The term ‘eligible not-for-profit holder’

19 means an eligible lender under subsection (d) (except

20 for an eligible lender described in subsection

21 (d)(1)(E)) that requests a special allowance payment

22 under section 438(b)(2)(I)(vi)(II) and that is—

23 ‘‘(A) a State of the United States, or a po24 litical subdivision thereof, or an authority, agen25 cy, or other instrumentality thereof (including
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1 such entities that are eligible to issue bonds de2 scribed in section 1.103–1 of title 26, Code of

3 Federal Regulations, or section 144(b) of the In4 ternal Revenue Code of 1986);

5 ‘‘(B) an entity described in section

6 150(d)(2) of such Code that has not made the

7 election described in section 150(d)(3) of such

8 Code;

9 ‘‘(C) an entity described in section

10 501(c)(3) of such Code; or

11 ‘‘(D) a trustee acting as an eligible lender

12 on behalf of an entity described in subparagraph

13 (A), (B), or (C),

14 except that no entity described in subparagraph (A),

15 (B), or (C) shall be owned or controlled in whole or

16 in part by a for-profit entity.

17 ‘‘(2) PROHIBITION.—In the case of a loan for

18 which the special allowance payment is calculated

19 under section 438(b)(2)(I)(vi)(II) and that is sold by

20 the eligible not-for-profit holder holding the loan to a

21 for-profit entity or to an entity that is not an eligible

22 not-for-profit holder, the special allowance payment

23 for such loan shall, beginning on the date of the sale,

24 no longer be calculated under section
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1 438(b)(2)(I)(vi)(II) and shall be calculated under sec2 tion 438(b)(2)(I)(vi)(I) instead.

3 ‘‘(3) REGULATIONS.—Not later than 1 year after

4 the date of enactment of the Higher Education Access

5 Act of 2007, the Secretary shall promulgate regula6 tions in accordance with the provisions of this sub7 section.’’.

8 (b) APPLICABILITY.—The amendment made by sub9 section (a)(1) shall only apply with respect to any borrower

10 of a loan under title IV of the Higher Education Act of

11 1965 who obtained the borrower’s first loan under such title

12 prior to October 1, 2012.

13 SEC. 305. SPECIAL ALLOWANCES.

14 (a) REDUCTION OF LENDER SPECIAL ALLOWANCE

15 PAYMENTS.—Section 438(b)(2)(I) (20 U.S.C. 1087–

16 1(b)(2)(I)) is amended—

17 (1) in clause (i), by striking ‘‘(iii), and (iv)’’

18 and inserting ‘‘(iii), (iv), and (vi)’’; and

19 (2) by adding at the end the following:

20 ‘‘(vi) REDUCTION FOR LOANS DIS21 BURSED ON OR AFTER OCTOBER 1, 2007.—

22 With respect to a loan on which the appli23 cable interest rate is determined under sec24 tion 427A(l) and for which the first dis25 bursement of principal is made on or after
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1 October 1, 2007, the special allowance pay2 ment computed pursuant to this subpara3 graph shall be computed—

4 ‘‘(I) for loans held by an eligible

5 lender not described in subclause

6 (II)—

7 ‘‘(aa) by substituting ‘1.24

8 percent’ for ‘1.74 percent’ in

9 clause (ii);

10 ‘‘(bb) by substituting ‘1.84

11 percent’ for ‘2.34 percent’ each

12 place the term appears in this

13 subparagraph;

14 ‘‘(cc) by substituting ‘1.84

15 percent’ for ‘2.64 percent’ in

16 clause (iii); and

17 ‘‘(dd) by substituting ‘2.14

18 percent’ for ‘2.64 percent’ in

19 clause (iv); and

20 ‘‘(II) for loans held by an eligible

21 not-for-profit holder—

22 ‘‘(aa) by substituting ‘1.99

23 percent’ for ‘2.34 percent’ each

24 place the term appears in this

25 subparagraph;
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1 ‘‘(bb) by substituting ‘1.39

2 percent’ for ‘1.74 percent’ in

3 clause (ii);

4 ‘‘(cc) by substituting ‘1.99

5 percent’ for ‘2.64 percent’ in

6 clause (iii); and

7 ‘‘(dd) by substituting ‘2.29

8 percent’ for ‘2.64 percent’ in

9 clause (iv).’’.

10 (b) INCREASED LOAN FEES FROM LENDERS.—Para11 graph (2) of section 438(d) (20 U.S.C. 1087–1(d)(2)) is

12 amended to read as follows:

13 ‘‘(2) AMOUNT OF LOAN FEES.—The amount of

14 the loan fee which shall be deducted under paragraph

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

16 shall be equal to 1.0 percent of the principal amount

17 of the loan with respect to any loan under this part

18 for which the first disbursement was made on or after

19 October 1, 2007.’’.
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1 TITLE IV—WILLIAM D. FORD FED2 ERAL DIRECT LOAN PROGRAM

3 SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EM4 PLOYEES.

5 Section 455 (as amended by sections 201(c), 202(b),

6 and 203(c)) (20 U.S.C. 1087e) is further amended by add7 ing at the end the following:

8 ‘‘(m) REPAYMENT PLAN FOR PUBLIC SERVICE EM9 PLOYEES.—

10 ‘‘(1) IN GENERAL.—The Secretary shall cancel

11 the balance of interest and principal due, in accord12 ance with paragraph (2), on any eligible Federal Di13 rect Loan not in default for an eligible borrower

14 who—

15 ‘‘(A) has made 120 monthly payments on

16 the Federal Direct Loan after October 1, 2007,

17 pursuant to any combination of—

18 ‘‘(i) payments under an income-based

19 repayment plan under section 455(d)(1)(D);

20 ‘‘(ii) payments under a standard re21 payment plan under section 455(d)(1)(A);

22 or

23 ‘‘(iii) monthly payments under a re24 payment plan under section 455(d)(1) of
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1 not less than the monthly amount calculated

2 under section 455(d)(1)(A); and

3 ‘‘(B)(i) is employed in a public service job

4 at the time of such forgiveness; and

5 ‘‘(ii) has been employed in a public service

6 job during the period in which the borrower

7 makes each of the 120 payments described in

8 subparagraph (A).

9 ‘‘(2) LOAN CANCELLATION AMOUNT.—After the

10 conclusion of the employment period described in

11 paragraph (1), the Secretary shall cancel the obliga12 tion to repay, for each year during such period de13 scribed in paragraph (1)(B)(ii) for which the eligible

14 borrower submits documentation to the Secretary that

15 the borrower’s annual adjusted gross income or annual earnings were less than or equal to $65,000, 1 16 ⁄10

17 of the amount of the balance of principal and interest

18 due as of the time of such cancellation, on the eligible

19 Federal Direct Loans made to the borrower under this

20 part.

21 ‘‘(3) DEFINITIONS.—In this subsection:

22 ‘‘(A) ELIGIBLE BORROWER.—The term ‘eli23 gible borrower’ means a borrower who submits

24 documentation to the Secretary that the bor-
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1 rower’s annual adjusted gross income or annual

2 earnings is less than or equal to $65,000.

3 ‘‘(B) ELIGIBLE FEDERAL DIRECT LOAN.—

4 The term ‘eligible Federal Direct Loan’ means a

5 Federal Direct Stafford Loan, Federal Direct

6 PLUS Loan, Federal Direct Unsubsidized Loan,

7 or a Federal Direct Consolidation Loan if such

8 consolidation loan was obtained by the borrower

9 under section 428C(b)(5) or in accordance with

10 section 428C(a)(3)(B)(i)(V).

11 ‘‘(C) PUBLIC SERVICE JOB.—In this para12 graph, the term ‘public service job’ means—

13 ‘‘(i) a full-time job in public emergency

14 management, government, public safety,

15 public law enforcement, public health, pub16 lic education, public early childhood edu17 cation, public child care, social work in a

18 public child or family service agency, public

19 services for individuals with disabilities,

20 public services for the elderly, public inter21 est legal services (including prosecution or

22 public defense), public library sciences, pub23 lic school library sciences, or other public

24 school-based services; or
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1 ‘‘(ii) teaching as a full-time faculty

2 member at a Tribal College or University as

3 defined in section 316(b).’’.

4 SEC. 402. UNIT COST CALCULATION FOR GUARANTY AGEN5 CY ACCOUNT MAINTENANCE FEES.

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

7 (1) by striking ‘‘Account’’ and inserting the fol8 lowing:

9 ‘‘(1) FOR FISCALYEARS 2006 AND 2007.—For

10 each of the fiscal years 2006 and 2007, account’’; and

11 (2) by adding at the end the following:

12 ‘‘(2) FOR FISCALYEAR 2008 AND SUCCEEDING

13 FISCALYEARS.—

14 ‘‘(A) IN GENERAL.—For fiscal year 2008

15 and each succeeding fiscal year, the Secretary

16 shall calculate the account maintenance fees pay17 able to guaranty agencies under subsection

18 (a)(3), on a per-loan cost basis in accordance

19 with subparagraph (B).

20 ‘‘(B) AMOUNT DETERMINATION.—To deter21 mine the amount that shall be paid under sub22 section (a)(3) per outstanding loan guaranteed

23 by a guaranty agency for fiscal year 2008 and

24 succeeding fiscal years, the Secretary shall—
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1 ‘‘(i) establish the per-loan cost basis

2 amount by dividing the total amount of ac3 count maintenance fees paid under sub4 section (a)(3) for fiscal year 2006 by the

5 number of loans under part B that were

6 outstanding for that fiscal year; and

7 ‘‘(ii) for subsequent fiscal years, adjust

8 the amount determined under clause (i) as

9 the Secretary determines necessary to ac10 count for inflation.’’.

11 TITLE V—FEDERAL PERKINS

12 LOANS

13 SEC. 501. DISTRIBUTION OF LATE COLLECTIONS.

14 Section 466(b) (20 U.S.C. 1087ff(b)) is amended by

15 striking ‘‘March 31, 2012’’ and inserting ‘‘September 30,

16 2012’’.

17 TITLE VI—NEED ANALYSIS

18 SEC. 601. SUPPORT FOR WORKING STUDENTS.

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

20 section 475(g)(2) (20 U.S.C. 1087oo(g)(2)(D)) is amended

21 to read as follows:

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

23 following amount (or a successor amount pre24 scribed by the Secretary under section 478):
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1 ‘‘(i) for academic year 2009–2010,

2 $3,750;

3 ‘‘(ii) for academic year 2010–2011,

4 $4,500;

5 ‘‘(iii) for academic year 2011–2012,

6 $5,250; and

7 ‘‘(iv) for academic year 2012–2013,

8 $6,000;’’.

9 (b) INDEPENDENT STUDENTS WITHOUT DEPENDENTS

10 OTHER THAN A SPOUSE.—Clause (iv) of section

11 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended

12 to read as follows:

13 ‘‘(iv) an income protection allowance

14 of the following amount (or a successor

15 amount prescribed by the Secretary under

16 section 478):

17 ‘‘(I) for single or separated stu18 dents, or married students where both

19 are enrolled pursuant to subsection

20 (a)(2)—

21 ‘‘(aa) for academic year

22 2009–2010, $7,000;

23 ‘‘(bb) for academic year

24 2010–2011, $7,780;
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1 ‘‘(cc) for academic year

2 2011–2012, $8,550; and

3 ‘‘(dd) for academic year

4 2012–2013, $9,330; and

5 ‘‘(II) for married students where 1

6 is enrolled pursuant to subsection

7 (a)(2)—

8 ‘‘(aa) for academic year

9 2009–2010, $11,220;

10 ‘‘(bb) for academic year

11 2010–2011, $12,460;

12 ‘‘(cc) for academic year

13 2011–2012, $13,710; and

14 ‘‘(dd) for academic year

15 2012–2013, $14,960;’’.

16 (c) INDEPENDENT STUDENTS WITH DEPENDENTS

17 OTHER THAN A SPOUSE.—Paragraph (4) of section 477(b)

18 (20 U.S.C. 1087qq(b)(4)) is amended to read as follows:

19 ‘‘(4) INCOME PROTECTION ALLOWANCE.—The in20 come protection allowance is determined by the tables

21 described in subparagraphs (A) through (D) (or a

22 successor table prescribed by the Secretary under sec23 tion 478).
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1 ‘‘(A) ACADEMIC YEAR 2009–2010.—For aca2 demic year 2009–2010, the income protection al3 lowance is determined by the following table:

‘‘Income Protection Allowance

Family Size

Number in College

12345

2 $17,720 $14,690

3 22,060 19,050 $16,020

4 27,250 24,220 21,210 $18,170

5 32,150 29,120 26,100 23,070 $20,060

6 37,600 34,570 31,570 28,520 25,520

NOTE: For each additional family member, add $4,240.

For each additional college student, subtract $3,020.

4 ‘‘(B) ACADEMIC YEAR 2010–2011.—For aca5 demic year 2010–2011, the income protection al6 lowance is determined by the following table:

‘‘Income Protection Allowance

Family Size

Number in College

12345

2 $19,690 $16,330

3 24,510 21,160 $17,800

4 30,280 26,910 23,560 $20,190

5 35,730 32,350 29,000 25,640 $22,290

6 41,780 38,410 35,080 31,690 28,350

NOTE: For each additional family member, add $4,710.

For each additional college student, subtract $3,350.

7 ‘‘(C) ACADEMIC YEAR 2011–2012.—For aca8 demic year 2011–2012, the income protection al9 lowance is determined by the following table:

‘‘Income Protection Allowance

Family Size

Number in College

12345

2 $21,660 $17,960
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‘‘Income Protection Allowance—Continued

Family Size

Number in College

12345

3 26,960 23,280 $19,580

4 33,300 29,600 25,920 $22,210

5 39,300 35,590 31,900 28,200 $24,520

6 45,950 42,250 38,580 34,860 31,190

NOTE: For each additional family member, add $5,180.

For each additional college student, subtract $3,690.

1 ‘‘(D) ACADEMIC YEAR 2012–2013.—For aca2 demic year 2012–2013, the income protection al3 lowance is determined by the following table:

‘‘Income Protection Allowance

Family Size

Number in College

12345

2 $23,630 $19,590

3 29,420 25,400 $21,360

4 36,330 32,300 28,280 $24,230

5 42,870 38,820 34,800 30,770 $26,750

6 50,130 46,100 42,090 38,030 34,020

NOTE: For each additional family member, add $5,660.

For each additional college student, subtract $4,020.’’.

4 (d) UPDATED TABLES AND AMOUNTS.—Section 478(b)

5 (20 U.S.C. 1087rr(b)) is amended—

6 (1) by striking paragraph (1) and inserting the

7 following:

8 ‘‘(1) REVISED TABLES.—

9 ‘‘(A) IN GENERAL.—For each academic year

10 after academic year 2008–2009, the Secretary

11 shall publish in the Federal Register a revised

12 table of income protection allowances for the
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1 purpose of such sections, subject to subpara2 graphs (B) and (C).

3 ‘‘(B) TABLE FOR INDEPENDENT STU4 DENTS.—

5 ‘‘(i) ACADEMIC YEARS 2009–2010

6 THROUGH 2012–2013.—For each of the aca7 demic years 2009–2010 through 2012–2013,

8 the Secretary shall not develop a revised

9 table of income protection allowances under

10 section 477(b)(4) and the table specified for

11 such academic year under subparagraphs

12 (A) through (D) of such section shall apply.

13 ‘‘(ii) OTHER ACADEMIC YEARS.—For

14 each academic year after academic year

15 2012–2013, the Secretary shall develop the

16 revised table of income protection allow17 ances by increasing each of the dollar

18 amounts contained in the table of income

19 protection allowances under section

20 477(b)(4)(D) by a percentage equal to the

21 estimated percentage increase in the Con22 sumer Price Index (as determined by the

23 Secretary) between December 2011 and the

24 December next preceding the beginning of
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1 such academic year, and rounding the re2 sult to the nearest $10.

3 ‘‘(C) TABLE FOR PARENTS.—For each aca4 demic year after academic year 2008–2009, the

5 Secretary shall develop the revised table of in6 come protection allowances under section

7 475(c)(4) by increasing each of the dollar

8 amounts contained in the table by a percentage

9 equal to the estimated percentage increase in the

10 Consumer Price Index (as determined by the

11 Secretary) between December 1992 and the De12 cember next preceding the beginning of such aca13 demic year, and rounding the result to the near14 est $10.’’; and

15 (2) in paragraph (2), by striking ‘‘shall be devel16 oped’’ and all that follows through the period at the

17 end and inserting ‘‘shall be developed for each aca18 demic year after academic year 2012–2013, by in19 creasing each of the dollar amounts contained in such

20 section for academic year 2012–2013 by a percentage

21 equal to the estimated percentage increase in the Con22 sumer Price Index (as determined by the Secretary)

23 between December 2011 and the December next pre24 ceding the beginning of such academic year, and

25 rounding the result to the nearest $10.’’.
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1 (e) EFFECTIVE DATE.—The amendments made by this

2 section shall take effect on July 1, 2009.

3 SEC. 602. AUTOMATIC ZERO IMPROVEMENTS.

4 (a) IN GENERAL.—Section 479(c) (20 U.S.C.

5 1087ss(c)) is amended—

6 (1) in paragraph (1)(B), by striking ‘‘20,000’’

7 and inserting ‘‘$30,000’’; and

8 (2) in paragraph (2)(B), by striking ‘‘$20,000’’

9 and inserting ‘‘$30,000’’.

10 (b) EFFECTIVE DATE.—The amendments made by this

11 section shall take effect on July 1, 2009.

12 SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMIN13 ISTRATORS.

14 The third sentence of section 479A(a) (20 U.S.C.

15 1087tt(a)) is amended—

16 (1) by inserting ‘‘or an independent student’’

17 after ‘‘family member’’; and

18 (2) by inserting ‘‘a change in housing status that

19 results in homelessness (as defined in section 103 of

20 the McKinney-Vento Homeless Assistance Act),’’ after

21 ‘‘under section 487,’’.

22 SEC. 604. DEFINITIONS.

23 (a) IN GENERAL.—Section 480 (20 U.S.C. 1087vv) is

24 amended—

25 (1) in subsection (a)(2)—
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1 (A) by striking ‘‘and no portion’’ and in2 serting ‘‘no portion’’; and

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

4 any qualified education benefit described in sub5 section (f)(3) that is not subject to Federal in6 come tax,’’ after ‘‘1986,’’;

7 (2) in subsection (d)—

8 (A) by redesignating paragraphs (1), (2),

9 (3) through (6), and (7) as subparagraphs (A),

10 (B), (D) through (G), and (I), respectively, and

11 indenting appropriately;

12 (B) by striking ‘‘INDEPENDENT STU13 DENT.—The term’’ and inserting ‘‘INDEPENDENT

14 STUDENT.—

15 ‘‘(1) DEFINITION.—The term’’;

16 (C) by striking subparagraph (B) (as redes17 ignated by subparagraph (A)) and inserting the

18 following:

19 ‘‘(B) is an orphan, in foster care, or a ward

20 of the court, or was in foster care when the indi21 vidual was 13 years of age or older or a ward

22 of the court until the individual reached the age

23 of 18;

24 ‘‘(C) is an emancipated minor or is in legal

25 guardianship as determined by a court of com-
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1 petent jurisdiction in the individual’s State of

2 legal residence;’’;

3 (D) in subparagraph (G) (as redesignated

4 by subparagraph (A)), by striking ‘‘or’’ after the

5 semicolon;

6 (E) by inserting after subparagraph (G) (as

7 redesignated by subparagraph (A)) the following:

8 ‘‘(H) has been verified as an unaccom9 panied youth who is a homeless child or youth

10 (as such terms are defined in section 725 of the

11 McKinney-Vento Homeless Assistance Act) dur12 ing the school year in which the application is

13 submitted, by—

14 ‘‘(i) a local educational agency home15 less liaison, designated pursuant to section

16 722(g)(1)(J)(ii) of the McKinney-Vento

17 Homeless Assistance Act;

18 ‘‘(ii) the director of a program funded

19 under the Runaway and Homeless Youth

20 Act or a designee of the director; or

21 ‘‘(iii) the director of a program funded

22 under subtitle B of title IV of the McKin23 ney-Vento Homeless Assistance Act (relating

24 to emergency shelter grants) or a designee of

25 the director; or’’; and
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1 (F) by adding at the end the following:

2 ‘‘(2) SIMPLIFYING THE DEPENDENCY OVERRIDE

3 PROCESS.—A financial aid administrator may make

4 a determination of independence under paragraph

5 (1)(I) based upon a documented determination of

6 independence that was previously made by another fi7 nancial aid administrator under such paragraph in

8 the same award year.’’;

9 (3) in subsection (e)—

10 (A) in paragraph (3), by striking ‘‘and’’

11 after the semicolon;

12 (B) in paragraph (4), by striking the period

13 at the end and inserting ‘‘; and’’; and

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

15 ‘‘(5) special combat pay.’’;

16 (4) in subsection (f), by striking paragraph (3)

17 and inserting the following:

18 ‘‘(3) A qualified education benefit shall be con19 sidered an asset of—

20 ‘‘(A) the student if the student is an inde21 pendent student; or

22 ‘‘(B) the parent if the student is a depend23 ent student, regardless of whether the owner of

24 the account is the student or the parent.’’;

25 (5) in subsection (j)—
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1 (A) in paragraph (2), by inserting ‘‘, or a

2 distribution that is not includable in gross in3 come under section 529 of such Code, under an4 other prepaid tuition plan offered by a State, or

5 under a Coverdell education savings account

6 under section 530 of such Code,’’ after ‘‘1986’’;

7 and

8 (B) by adding at the end the following:

9 ‘‘(4) Notwithstanding paragraph (1), special combat

10 pay shall not be treated as estimated financial assistance

11 for purposes of section 471(3).’’; and

12 (6) by adding at the end the following:

13 ‘‘(n) SPECIAL COMBAT PAY.—The term ‘special com14 bat pay’ means pay received by a member of the Armed

15 Forces because of exposure to a hazardous situation.’’.

16 SEC. 605. AUTHORIZATION AND APPROPRIATIONS.

17 There are authorized to be appropriated, and there are

18 appropriated, out of any money in the Treasury not other19 wise appropriated, $10,000,000 for fiscal year 2008 for the

20 Department of Education to pay the estimated increase in

21 costs in the Federal Pell Grant program under section 401

22 of the Higher Education Act of 1965 (20 U.S.C. 1070a) re23 sulting from the amendments made by sections 603 and 604

24 for award year 2007–2008.
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1 TITLE VII—MISCELLANEOUS

2 SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM.

3 Title IV (20 U.S.C. 1070 et seq.) is further amended

4 by adding at the end the following:

5 ‘‘PART I—COMPETITIVE LOAN AUCTION PILOT

6 PROGRAM; STATE GRANT PROGRAM

7 ‘‘SEC. 499. COMPETITIVE LOAN AUCTION PILOT PROGRAM.

8 ‘‘(a) DEFINITIONS.—In this section:

9 ‘‘(1) ELIGIBLE FEDERAL PLUS LOAN.—The term

10 ‘eligible Federal PLUS Loan’ means a loan described

11 in section 428B made to a parent of a dependent stu12 dent.

13 ‘‘(2) ELIGIBLE LENDER.—The term ‘eligible

14 lender’ has the meaning given the term in section 435.

15 ‘‘(b) PILOT PROGRAM.—The Secretary shall carry out

16 a pilot program under which the Secretary establishes a

17 mechanism for an auction of eligible Federal PLUS Loans

18 in accordance with this subsection. The pilot program shall

19 meet the following requirements:

20 ‘‘(1) PLANNING AND IMPLEMENTATION.—During

21 the period beginning on the date of enactment of this

22 section and ending on June 30, 2009, the Secretary

23 shall plan and implement the pilot program under

24 this subsection.
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1 ‘‘(2) ORIGINATION AND DISBURSEMENT; APPLICA2 BILITY OF SECTION 428B.—Beginning on July 1,

3 2009, the Secretary shall arrange for the origination

4 and disbursement of all eligible Federal PLUS Loans

5 in accordance with the provisions of this subsection

6 and the provisions of section 428B that are not incon7 sistent with this subsection.

8 ‘‘(3) LOAN ORIGINATION MECHANISM.—The Sec9 retary shall establish a loan origination auction

10 mechanism that meets the following requirements:

11 ‘‘(A) AUCTION.—The Secretary administers

12 an auction under this paragraph for each State

13 under which eligible lenders compete to originate

14 eligible Federal PLUS Loans under this para15 graph at all institutions of higher education

16 within the State.

17 ‘‘(B) PREQUALIFICATION PROCESS.—The

18 Secretary establishes a prequalification process

19 for eligible lenders desiring to participate in an

20 auction under this paragraph that contains, at

21 a minimum—

22 ‘‘(i) a set of borrower benefits and serv23 icing requirements each eligible lender shall

24 meet in order to participate in such an auc25 tion; and
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1 ‘‘(ii) an assessment of each such eligi2 ble lender’s capacity, including capital ca3 pacity, to participate effectively.

4 ‘‘(C) TIMING AND ORIGINATION.—Each

5 State auction takes place every 2 years, and the

6 eligible lenders with the winning bids for the

7 State are the only eligible lenders permitted to

8 originate eligible Federal PLUS Loans made

9 under this paragraph for the cohort of students

10 at the institutions of higher education within the

11 State until the students graduate from or leave

12 the institutions of higher education.

13 ‘‘(D) BIDS.—Each eligible lender’s bid con14 sists of the amount of the special allowance pay15 ment (including the recapture of excess interest)

16 the eligible lender proposes to accept from the

17 Secretary with respect to the eligible Federal

18 PLUS Loans made under this paragraph in lieu

19 of the amount determined under section

20 438(b)(2)(I).

21 ‘‘(E) MAXIMUM BID.—The maximum bid

22 allowable under this paragraph shall not exceed

23 the amount of the special allowance payable on

24 eligible Federal PLUS Loans made under this

25 paragraph computed under section 438(b)(2)(I)
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1 (other than clauses (ii), (iii), (iv), and (vi) of

2 such section), except that for purposes of the

3 computation under this subparagraph, section

4 438(b)(2)(I)(i)(III) shall be applied by sub5 stituting ‘1.74 percent’ for ‘2.34 percent’.

6 ‘‘(F) WINNING BIDS.—The winning bids for

7 each State auction shall be the 2 bids containing

8 the lowest and the second lowest proposed special

9 allowance payments, subject to subparagraph

10 (E).

11 ‘‘(G) AGREEMENT WITH SECRETARY.—Each

12 eligible lender having a winning bid under sub13 paragraph (F) enters into an agreement with the

14 Secretary under which the eligible lender—

15 ‘‘(i) agrees to originate eligible Federal

16 PLUS Loans under this paragraph to each

17 borrower who—

18 ‘‘(I) seeks an eligible Federal

19 PLUS Loan under this paragraph to

20 enable a dependent student to attend

21 an institution of higher education

22 within the State;

23 ‘‘(II) is eligible for an eligible

24 Federal PLUS Loan; and
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1 ‘‘(III) elects to borrow from the el2 igible lender; and

3 ‘‘(ii) agrees to accept a special allow4 ance payment (including the recapture of

5 excess interest) from the Secretary with re6 spect to the eligible Federal PLUS Loans

7 originated under clause (i) in the amount

8 proposed in the second lowest winning bid

9 described in subparagraph (F) for the ap10 plicable State auction.

11 ‘‘(H) SEALED BIDS; CONFIDENTIALITY.—All

12 bids are sealed and the Secretary keeps the bids

13 confidential, including following the announce14 ment of the winning bids.

15 ‘‘(I) ELIGIBLE LENDER OF LAST RESORT.—

16 ‘‘(i) IN GENERAL.—In the event that

17 there is no winning bid under subpara18 graph (F), the students at the institutions of

19 higher education within the State that was

20 the subject of the auction shall be served by

21 an eligible lender of last resort, as deter22 mined by the Secretary.

23 ‘‘(ii) DETERMINATION OF ELIGIBLE

24 LENDER OF LAST RESORT.—Prior to the

25 start of any auction under this paragraph,
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1 eligible lenders that desire to serve as an eli2 gible lender of last resort shall submit an

3 application to the Secretary at such time

4 and in such manner as the Secretary may

5 determine. Such application shall include

6 an assurance that the eligible lender will

7 meet the prequalification requirements de8 scribed in subparagraph (B).

9 ‘‘(iii) GEOGRAPHIC LOCATION.—The

10 Secretary shall identify an eligible lender of

11 last resort for each State.

12 ‘‘(iv) NOTIFICATION TIMING.—The Sec13 retary shall not identify any eligible lender

14 of last resort until after the announcement

15 of all the winning bids for a State auction

16 for any year.

17 ‘‘(J) GUARANTEE AGAINST LOSSES.—The

18 Secretary guarantees the eligible Federal PLUS

19 Loans made under this paragraph against losses

20 resulting from the default of a parent borrower

21 in an amount equal to 99 percent of the unpaid

22 principal and interest due on the loan.

23 ‘‘(K) LOAN FEES.—The Secretary shall not

24 collect a loan fee under section 438(d) with re-
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1 spect to an eligible Federal Plus Loan originated

2 under this paragraph.

3 ‘‘(L) CONSOLIDATION.—

4 ‘‘(i) IN GENERAL.—An eligible lender

5 who is permitted to originate eligible Fed6 eral PLUS Loans for a borrower under this

7 paragraph shall have the option to consoli8 date such loans into 1 loan.

9 ‘‘(ii) NOTIFICATION.—In the event a

10 borrower with eligible Federal PLUS Loans

11 made under this paragraph wishes to con12 solidate the loans, the borrower shall notify

13 the eligible lender who originated the loans

14 under this paragraph.

15 ‘‘(iii) LIMITATION ON ELIGIBLE LEND16 ER OPTION TO CONSOLIDATE.—The option

17 described in clause (i) shall not apply if—

18 ‘‘(I) the borrower includes in the

19 notification in clause (ii) verification

20 of consolidation terms and conditions

21 offered by an eligible lender other than

22 the eligible lender described in clause

23 (i); and

24 ‘‘(II) not later than 10 days after

25 receiving such notification from the
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1 borrower, the eligible lender described

2 in clause (i) does not agree to match

3 such terms and conditions, or provide

4 more favorable terms and conditions to

5 such borrower than the offered terms

6 and conditions described in subclause

7 (I).

8 ‘‘(iv) CONSOLIDATION OF ADDITIONAL

9 LOANS.—If a borrower has a Federal Direct

10 PLUS Loan or a loan made on behalf of a

11 dependent student under section 428B and

12 seeks to consolidate such loan with an eligi13 ble Federal PLUS Loan made under this

14 paragraph, then the eligible lender that

15 originated the borrower’s loan under this

16 paragraph may include in the consolidation

17 under this subparagraph a Federal Direct

18 PLUS Loan or a loan made on behalf of a

19 dependent student under section 428B, but

20 only if—

21 ‘‘(I) in the case of a Federal Di22 rect PLUS Loan, the eligible lender

23 agrees, not later than 10 days after the

24 borrower requests such consolidation

25 from the lender, to match the consoli-
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1 dation terms and conditions that

2 would otherwise be available to the bor3 rower if the borrower consolidated such

4 loans in the loan program under part

5 D; or

6 ‘‘(II) in the case of a loan made

7 on behalf of a dependent student under

8 section 428B, the eligible lender agrees,

9 not later than 10 days after the bor10 rower requests such consolidation from

11 the lender, to match the consolidation

12 terms and conditions offered by an eli13 gible lender other than the eligible

14 lender that originated the borrower’s

15 loans under this paragraph.

16 ‘‘(v) SPECIAL ALLOWANCE ON CONSOLI17 DATION LOANS THAT INCLUDE LOANS MADE

18 UNDER THIS PARAGRAPH.—The applicable

19 special allowance payment for loans consoli20 dated under this paragraph shall be equal

21 to the lesser of—

22 ‘‘(I) the weighted average of the

23 special allowance payment on such

24 loans, except that such weighted aver25 age shall exclude the special allowance
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1 payment for any Federal Direct PLUS

2 Loan included in the consolidation; or

3 ‘‘(II) the result of—

4 ‘‘(aa) the average of the bond

5 equivalent rates of the quotes of

6 the 3-month commercial paper (fi7 nancial) rates in effect for each of

8 the days in such quarter as re9 ported by the Federal Reserve in

10 Publication H–15 (or its suc11 cessor) for such 3-month period;

12 plus

13 ‘‘(bb) 1.59 percent.

14 ‘‘(vi) INTEREST PAYMENT REBATE

15 FEE.—Any loan under section 428C consoli16 dated under this paragraph shall not be

17 subject to the interest payment rebate fee

18 under section 428C(f).

19 ‘‘(c) COLLEGE ACCESS PARTNERSHIP GRANT PRO20 GRAM.—

21 ‘‘(1) PURPOSE.—It is the purpose of this sub22 section to make payments to States to assist the

23 States in carrying out the activities and services de24 scribed in paragraph (7) in order to increase access

25 to higher education for students in the State.
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1 ‘‘(2) AUTHORIZATION AND APPROPRIATIONS.—

2 There are authorized to be appropriated, and there

3 are appropriated, $113,000,000 for each of the fiscal

4 years 2008 and 2009 to carry out this subsection.

5 ‘‘(3) PROGRAM AUTHORIZED.—

6 ‘‘(A) GRANTS AUTHORIZED.—From

7 amounts appropriated under paragraph (2), the

8 Secretary shall award grants, from allotments

9 under paragraph (4), to States having applica10 tions approved under paragraph (5), to enable

11 the State to pay the Federal share of the costs of

12 carrying out the activities and services described

13 in paragraph (7).

14 ‘‘(B) FEDERALSHARE; NON-FEDERAL

15 SHARE.—

16 ‘‘(i) FEDERALSHARE.—The amount of

17 the Federal share under this subsection for

a fiscal year shall be equal to 2 18 ⁄3 of the costs

19 of the activities and services described in

20 paragraph (7).

21 ‘‘(ii) NON-FEDERALSHARE.—The

22 amount of the non-Federal share under this

subsection shall be equal to 1 23 ⁄3 of the costs

24 of the activities and services described in

25 paragraph (7). The non-Federal share may
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1 be in cash or in-kind, and may be provided

2 from a combination of State resources and

3 contributions from private organizations in

4 the State.

5 ‘‘(C) REDUCTION FOR FAILURE TO PAY NON6 FEDERALSHARE.—If a State fails to provide the

7 full non-Federal share required under this para8 graph, the Secretary shall reduce the amount of

9 the grant payment under this subsection propor10 tionately.

11 ‘‘(D) TEMPORARY INELIGIBILITY FOR SUB12 SEQUENT PAYMENTS.—

13 ‘‘(i) IN GENERAL.—The Secretary shall

14 determine a State to be temporarily ineli15 gible to receive a grant payment under this

16 subsection for a fiscal year if—

17 ‘‘(I) the State fails to submit an

18 annual report pursuant to paragraph

19 (9) for the preceding fiscal year; or

20 ‘‘(II) the Secretary determines,

21 based on information in such annual

22 report, that the State is not effectively

23 meeting the conditions described under

24 paragraph (8) and the goals of the ap25 plication under paragraph (5).
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1 ‘‘(ii) REINSTATEMENT.—If the Sec2 retary determines a State is ineligible under

3 clause (i), the Secretary may enter into an

4 agreement with the State setting forth the

5 terms and conditions under which the State

6 may regain eligibility to receive payments

7 under this subsection.

8 ‘‘(4) DETERMINATION OF ALLOTMENT.—

9 ‘‘(A) AMOUNT OF ALLOTMENT.—Subject to

10 subparagraph (B), in making grant payments to

11 States under this subsection, the allotment to

12 each State for a fiscal year shall be equal to the

13 sum of—

14 ‘‘(i) the amount that bears the same re15 lation to 50 percent of the amount appro16 priated under paragraph (2) for such fiscal

17 year as the number of residents in the State

18 aged 5 through 17 who are living below the

19 poverty line applicable to the resident’s

20 family size (as determined under section

21 673(2) of the Community Service Block

22 Grant Act) bears to the total number of such

23 residents in all States; and

24 ‘‘(ii) the amount that bears the same

25 relation to 50 percent of the amount appro-
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1 priated under paragraph (2) for such fiscal

2 year as the number of residents in the State

3 aged 15 through 44 who are living below the

4 poverty line applicable to the individual’s

5 family size (as determined under section

6 673(2) of the Community Service Block

7 Grant Act) bears to the total number of such

8 residents in all States.

9 ‘‘(B) MINIMUM AMOUNT.—No State shall re10 ceive an allotment under this subsection for a fiscal year in an amount that is less than 1 11 ⁄2 of 1

12 percent of the total amount appropriated under

13 paragraph (2) for such fiscal year.

14 ‘‘(5) SUBMISSION AND CONTENTS OF APPLICA15 TION.—

16 ‘‘(A) IN GENERAL.—For each fiscal year for

17 which a State desires a grant payment under

18 paragraph (3), the State agency with jurisdic19 tion over higher education, or another agency

20 designated by the Governor of the State to ad21 minister the program under this subsection, shall

22 submit an application to the Secretary at such

23 time, in such manner, and containing the infor24 mation described in subparagraph (B).
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1 ‘‘(B) APPLICATION.—An application sub2 mitted under subparagraph (A) shall include the

3 following:

4 ‘‘(i) A description of the State’s capac5 ity to administer the grant under this sub6 section and report annually to the Secretary

7 on the activities and services described in

8 paragraph (7).

9 ‘‘(ii) A description of the State’s plan

10 for using the grant funds to meet the re11 quirements of paragraphs (7) and (8), in12 cluding plans for how the State will make

13 special efforts to provide such benefits to

14 students in the State that are underrep15 resented in postsecondary education.

16 ‘‘(iii) A description of how the State

17 will provide or coordinate the non-Federal

18 share from State and private funds, if ap19 plicable.

20 ‘‘(iv) A description of the existing

21 structure that the State has in place to ad22 minister the activities and services under

23 paragraph (7) or the plan to develop such

24 administrative capacity.
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1 ‘‘(6) PAYMENT TO ELIGIBLE NONPROFIT ORGANI2 ZATIONS.—A State receiving a payment under this

3 subsection may elect to make a payment to 1 or more

4 eligible nonprofit organizations, including an eligible

5 not-for-profit holder (as defined in section 438(p)), or

6 a partnership of such organizations, in the State in

7 order to carry out activities or services described in

8 paragraph (7), if the eligible nonprofit organization

9 or partnership—

10 ‘‘(A) was in existence on the day before the

11 date of enactment of the Higher Education Ac12 cess Act of 2007; and

13 ‘‘(B) as of the day of such payment, is par14 ticipating in activities and services related to in15 creasing access to higher education, such as those

16 activities and services described in paragraph

17 (7).

18 ‘‘(7) ALLOWABLE USES.—

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (C), a State may use a grant payment

21 under this subsection only for the following ac22 tivities and services, pursuant to the conditions

23 under paragraph (8):

24 ‘‘(i) Information for students and fam25 ilies regarding—
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1 ‘‘(I) the benefits of a postsec2 ondary education;

3 ‘‘(II) postsecondary education op4 portunities;

5 ‘‘(III) planning for postsecondary

6 education; and

7 ‘‘(IV) career preparation.

8 ‘‘(ii) Information on financing options

9 for postsecondary education and activities

10 that promote financial literacy and debt

11 management among students and families.

12 ‘‘(iii) Outreach activities for students

13 who may be at risk of not enrolling in or

14 completing postsecondary education.

15 ‘‘(iv) Assistance in completion of the

16 Free Application for Federal Student Aid

17 or other common financial reporting form

18 under section 483(a).

19 ‘‘(v) Need-based grant aid for students.

20 ‘‘(vi) Professional development for

21 guidance counselors at middle schools and

22 secondary schools, and financial aid admin23 istrators and college admissions counselors

24 at institutions of higher education, to im-
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1 prove such individuals’ capacity to assist

2 students and parents with—

3 ‘‘(I) understanding—

4 ‘‘(aa) entrance requirements

5 for admission to institutions of

6 higher education; and

7 ‘‘(bb) State eligibility re8 quirements for Academic Competi9 tiveness Grants or National

10 SMART Grants under section

11 401A, and other financial assist12 ance that is dependent upon a

13 student’s coursework;

14 ‘‘(II) applying to institutions of

15 higher education;

16 ‘‘(III) applying for Federal stu17 dent financial assistance and other

18 State, local, and private student finan19 cial assistance and scholarships;

20 ‘‘(IV) activities that increase stu21 dents’ ability to successfully complete

22 the coursework required for a postsec23 ondary degree, including activities

24 such as tutoring or mentoring; and
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1 ‘‘(V) activities to improve sec2 ondary school students’ preparedness

3 for postsecondary entrance examina4 tions.

5 ‘‘(vii) Student loan cancellation or re6 payment (as applicable), or interest rate re7 ductions, for borrowers who are employed in

8 a high-need geographical area or a high9 need profession in the State, as determined

10 by the State.

11 ‘‘(B) PROHIBITED USES.—Funds made

12 available under this subsection shall not be used

13 to promote any lender’s loans.

14 ‘‘(C) USE OF FUNDS FOR ADMINISTRATIVE

15 PURPOSES.—A State may use not more than 2

16 percent of the total amount of the Federal share

17 and non-Federal share provided under this sub18 section for administrative purposes relating to

19 the grant under this subsection.

20 ‘‘(8) SPECIALCONDITIONS.—

21 ‘‘(A) AVAILABILITY TO STUDENTS AND FAM22 ILIES.—A State receiving a grant payment

23 under this subsection shall—

24 ‘‘(i) make the activities and services

25 described in clauses (i) through (vi) of para-
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1 graph (7)(A) that are funded under the

2 payment available to all qualifying students

3 and families in the State;

4 ‘‘(ii) allow students and families to

5 participate in the activities and services

6 without regard to—

7 ‘‘(I) the postsecondary institution

8 in which the student enrolls;

9 ‘‘(II) the type of student loan the

10 student receives;

11 ‘‘(III) the servicer of such loan; or

12 ‘‘(IV) the student’s academic per13 formance;

14 ‘‘(iii) not charge any student or parent

15 a fee or additional charge to participate in

16 the activities or services; and

17 ‘‘(iv) in the case of an activity pro18 viding grant aid, not require a student to

19 meet any condition other than eligibility for

20 Federal financial assistance under this title,

21 except as provided for in the loan cancella22 tion or repayment or interest rate reduc23 tions described in paragraph (7)(A)(vii).

24 ‘‘(B) PRIORITY.—A State receiving a grant

25 payment under this subsection shall, in carrying
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1 out any activity or service described in para2 graph (7)(A) with the grant funds, prioritize stu3 dents and families who are living below the pov4 erty line applicable to the individual’s family

5 size (as determined under section 673(2) of the

6 Community Service Block Grant Act).

7 ‘‘(C) DISCLOSURES.—

8 ‘‘(i) ORGANIZATIONALDISCLOSURES.—

9 In the case of a State that has chosen to

10 make a payment to an eligible not-for-profit

11 holder in the State in accordance with

12 paragraph (6), the holder shall clearly and

13 prominently indicate the name of the holder

14 and the nature of its work in connection

15 with any of the activities carried out, or

16 any information or services provided, with

17 such funds.

18 ‘‘(ii) INFORMATIONALDISCLOSURES.—

19 Any information about financing options

20 for higher education provided through an

21 activity or service funded under this sub22 section shall—

23 ‘‘(I) include information to stu24 dents and the students’ parents of the

25 availability of Federal, State, local, in-
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1 stitutional, and other grants and loans

2 for postsecondary education; and

3 ‘‘(II) present information on fi4 nancial assistance for postsecondary

5 education that is not provided under

6 this title in a manner that is clearly

7 distinct from information on student

8 financial assistance under this title.

9 ‘‘(D) COORDINATION.—A State receiving a

10 grant payment under this subsection shall at11 tempt to coordinate the activities carried out

12 with the payment with any existing activities

13 that are similar to such activities, and with any

14 other entities that support the existing activities

15 in the State.

16 ‘‘(9) REPORT.—A State receiving a payment

17 under this subsection shall prepare and submit an

18 annual report to the Secretary on the program under

19 this subsection and on the implementation of the ac20 tivities and services described in paragraph (7). The

21 report shall include—

22 ‘‘(A) each activity or service that was pro23 vided to students and families over the course of

24 the year;
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1 ‘‘(B) the cost of providing each activity or

2 service;

3 ‘‘(C) the number, and percentage, if feasible

4 and applicable, of students who received each ac5 tivity or service; and

6 ‘‘(D) the total contributions from private

7 organizations included in the State’s non-Fed8 eral share for the fiscal year.

9 ‘‘(10) SUNSET.—The authority provided to carry

10 out this subsection shall expire on September 30,

11 2009.

12 ‘‘(d) FINANCIAL LITERACY PROGRAM ESTABLISHED.—

13 ‘‘(1) DEFINITION OF ELIGIBLE ENTITY.—In this

14 subsection, the term ‘eligible entity’ means a non15 profit or for-profit organization, or a consortium of

16 such organizations, with a demonstrated record of ef17 fectiveness in providing financial literacy services to

18 students at the secondary and postsecondary level.

19 ‘‘(2) PROGRAM ESTABLISHED.—From amounts

20 appropriated under paragraph (6), the Secretary

21 shall award grants to eligible entities to enable the el22 igible entities to increase the financial literacy of stu23 dents who are enrolled or will enroll in an institution

24 of higher education, including providing instruction

25 to students on topics such as the understanding of
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1 loan terms and conditions, the calculation of interest

2 rates, refinancing of debt, debt management, and fu3 ture savings for education, health care and long-term

4 care, and retirement.

5 ‘‘(3) GRANT PERIOD; RENEWABILITY.—Each

6 grant under this subsection shall be awarded for one

7 5-year period, and may not be renewed.

8 ‘‘(4) MATCHING REQUIREMENTS.—Each eligible

9 entity that receives a grant under this subsection shall

10 provide, from non-Federal sources, an amount (which

11 may be provided in cash or in kind) to carry out the

12 activities supported by the grant equal to 100 percent

13 of the amount received under the grant.

14 ‘‘(5) APPLICATIONS.—An eligible entity desiring

15 a grant under this subsection shall submit an appli16 cation to the Secretary at such time, in such manner,

17 and containing such information as the Secretary

18 may reasonably require. Such application shall in19 clude the following:

20 ‘‘(A) A detailed description of the eligible

21 entity’s plans for providing financial literacy

22 activities and the students and schools the grant

23 will target.

24 ‘‘(B) The eligible entity’s plan for using the

25 matching grant funds, including how the funds
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1 will be used to provide financial literacy pro2 grams to students.

3 ‘‘(C) A plan to ensure the viability of the

4 work of the eligible entity beyond the grant pe5 riod.

6 ‘‘(D) A detailed description of the activities

7 that carry out this subsection and that are con8 ducted by the eligible entity at the time of the

9 application, and how the matching grant funds

10 will assist the eligible entity with expanding and

11 enhancing such activities.

12 ‘‘(E) A description of the strategies that will

13 be used to target activities under the grant to

14 students in secondary school and enrolled in in15 stitutions of higher education who are histori16 cally underrepresented in institutions of higher

17 education and who may benefit from the activi18 ties of the eligible entity.

19 ‘‘(6) AUTHORIZATION AND APPROPRIATIONS.—

20 There are authorized to be appropriated, and there

21 are appropriated, $10,000,000 for each of the fiscal

22 years 2008 and 2009 to carry out this subsection.

23 ‘‘(e) SECONDARY SCHOOL GRADUATION AND COLLEGE

24 ENROLLMENT PROGRAM.—

25 ‘‘(1) DEFINITIONS.—In this subsection:
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1 ‘‘(A) ELIGIBLE LOCAL EDUCATIONAL AGEN2 CY.—

3 ‘‘(i) IN GENERAL.—The term ‘eligible

4 local educational agency’ means a local edu5 cational agency with a secondary school

6 graduation rate of 70 percent or less—

7 ‘‘(I) in the aggregate; or

8 ‘‘(II) applicable to 2 or more sub9 groups of secondary school students

10 served by the local educational agency

11 that are described in clause (ii).

12 ‘‘(ii) SUBGROUPS.—A subgroup re13 ferred to in clause (i)(II) is—

14 ‘‘(I) a subgroup of economically

15 disadvantaged students; or

16 ‘‘(II) a subgroup of students from

17 a major racial or ethnic group.

18 ‘‘(B) ELIGIBLE ENTITY.—The term ‘eligible

19 entity’ means a consortium of a nonprofit orga20 nization and an institution of higher education

21 with a demonstrated record of effectiveness in

22 raising secondary school graduation rates and

23 postsecondary enrollment rates.

24 ‘‘(2) PROGRAM ESTABLISHED.—From amounts

25 appropriated under paragraph (7), the Secretary
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1 shall award grants to eligible entities to enable the el2 igible entities to carry out activities that—

3 ‘‘(A) create models of excellence for academi4 cally rigorous secondary schools, including early

5 college secondary schools;

6 ‘‘(B) increase secondary school graduation

7 rates;

8 ‘‘(C) raise the rate of students who enroll in

9 an institution of higher education;

10 ‘‘(D) improve instruction and access to sup11 ports for struggling secondary school students;

12 ‘‘(E) create, implement, and utilize early

13 warning systems to help identify students at risk

14 of dropping out of secondary school; and

15 ‘‘(F) improve communication between par16 ents, students, and schools concerning require17 ments for secondary school graduation, postsec18 ondary education enrollment, and financial as19 sistance available for attending postsecondary

20 education.

21 ‘‘(3) USE OF FUNDS.—An eligible entity that re22 ceives a grant under this subsection shall use the

23 funds—

24 ‘‘(A) to implement a college-preparatory

25 curriculum for all students in a secondary school
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1 served by the eligible local educational agency

2 that is, at a minimum, aligned with a rigorous

3 secondary school program of study;

4 ‘‘(B) to implement accelerated academic

5 catch-up programs, for students who enter sec6 ondary school not meeting the proficient levels of

7 student academic achievement on the State aca8 demic assessments for mathematics, reading or

9 language arts, or science under section

10 1111(b)(3) of the Elementary and Secondary

11 Education Act of 1965, that enable such students

12 to meet the proficient levels of achievement and

13 remain on track to graduate from secondary

14 school on time with a regular secondary school

15 diploma;

16 ‘‘(C) to implement an early warning system

17 to quickly identify students at risk of dropping

18 out of secondary school, including systems that

19 track student absenteeism; and

20 ‘‘(D) to implement a comprehensive postsec21 ondary education guidance program that—

22 ‘‘(i) will ensure that all students are

23 regularly notified throughout the students’

24 time in secondary school of secondary school
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1 graduation requirements and postsecondary

2 education entrance requirements; and

3 ‘‘(ii) provides guidance and assistance

4 to students in applying to an institution of

5 higher education and in applying for Fed6 eral financial assistance and other State,

7 local, and private financial assistance and

8 scholarships.

9 ‘‘(4) GRANT PERIOD; RENEWABILITY.—Each

10 grant under this subsection shall be awarded for one

11 5-year period, and may not be renewed.

12 ‘‘(5) MATCHING REQUIREMENTS.—Each eligible

13 entity that receives a grant under this subsection shall

14 provide, from non-Federal sources, an amount (which

15 may be provided in cash or in-kind) to carry out the

16 activities supported by the grant equal to 100 percent

17 of the amount received under the grant.

18 ‘‘(6) APPLICATIONS.—An eligible entity desiring

19 a grant under this subsection shall submit an appli20 cation to the Secretary at such time, in such manner,

21 and containing such information as the Secretary

22 may reasonably require.

23 ‘‘(7) AUTHORIZATION AND APPROPRIATIONS.—

24 There are authorized to be appropriated, and there
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1 are appropriated, $25,000,000 for each of the fiscal

2 years 2008 and 2009 to carry out this subsection.’’.

3 SEC. 702. INNOCENT CHILD PROTECTION.

4 (a) IN GENERAL.—It shall be unlawful for any author5 ity, military or civil, of the United States, a State, or any

6 district, possession, commonwealth or other territory under

7 the authority of the United States, to carry out a sentence

8 of death on a woman while she carries a child in utero.

9 (b) DEFINITION.—In this section, the term ‘‘child in

10 utero’’ means a member of the species homo sapiens, at any

11 stage of development, who is carried in the womb.

12 TITLE VIII—OTHER MATTERS

13 SEC. 801. SENSE OF SENATE ON THE DETAINEES AT GUAN14 TANAMO BAY, CUBA.

15 (a) FINDINGS.—The Senate makes the following find16 ings:

17 (1) During the War on Terror, senior members

18 of al Qaeda have been captured by the United States

19 military and intelligence personnel and their allies.

20 (2) Many such senior members of al Qaeda have

21 since been transferred to the detention facility at

22 Guantanamo Bay, Cuba.

23 (3) These senior al Qaeda members detained at

24 Guantanamo Bay include Khalid Sheikh Mohammed,

25 who was the mastermind behind the terrorist attacks
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1 of September 11, 2001, which killed approximately

2 3,000 innocent people.

3 (4) These senior al Qaeda members detained at

4 Guantanamo Bay also include Majid Khan, who was

5 tasked to develop plans to poison water reservoirs in6 side the United States, was responsible for conducting

7 a study on the feasibility of a potential gas station

8 bombing campaign inside the United States, and was

9 integral in recommending Iyman Farris, who plotted

10 to destroy the Brooklyn Bridge, to be an operative for

11 al Qaeda inside the United States.

12 (5) These senior al Qaeda members detained at

13 Guantanamo Bay also include Abd al-Rahim al14 Nashiri, who was an al Qaeda operations chief for the

15 Arabian Peninsula and who, at the request of Osama

16 bin Laden, orchestrated the attack on the U.S.S. Cole,

17 which killed 17 United States sailors.

18 (6) These senior al Qaeda members detained at

19 Guantanamo Bay also include Ahmed Khalfan

20 Ghailani, who played a major role in the East Afri21 can Embassy Bombings, which killed more than 250

22 people.

23 (7) The Department of Defense has estimated

24 that of the approximately 415 detainees who have

25 been released or transferred from the detention facility
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1 at Guantanamo Bay, at least 29 have subsequently

2 taken up arms against the United States and its al3 lies.

4 (8) Osama bin Laden, the leader of al Qaeda,

5 said in his 1998 fatwa against the United States,

6 that ‘‘[t]he ruling to kill the Americans and their al7 lies—civilians and military—is an individual duty

8 for every Muslim who can do it in any country in

9 which it is possible to do it’’.

10 (9) In the same fatwa, bin Laden said, ‘‘[w]e—

11 with God’s help—call on every Muslim who believes

12 in God and wishes to be rewarded to comply with

13 God’s order to kill the Americans and plunder their

14 money wherever and whenever they find it’’.

15 (10) It is safer for American citizens if captured

16 members of al Qaeda and other terrorist organiza17 tions are not housed on American soil where they

18 could more easily carry out their mission to kill inno19 cent civilians.

20 (b) SENSE OF SENATE.—It is the sense of the Senate

21 that detainees housed at Guantanamo Bay, Cuba, including

22 senior members of al Qaeda, should not be released into
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1 American society, nor should they be transferred stateside

2 into facilities in American communities and neighborhoods.

Attest:

Secretary.
110TH CONGRESS

1ST SESSION H. R. 2669

AMENDMENT