II 

Calendar No. 269 

110TH CONGRESS 

1ST SESSION H. R. 2669 

IN THE SENATE OF THE UNITED STATES 

JULY 16, 2007 

Received; read twice and placed on the calendar 

AN ACT 

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. 

4 This Act may be cited as the ‘‘College Cost Reduction 

5 Act of 2007’’. 

6 SEC. 2. REFERENCES; EFFECTIVE DATE. 

7 (a) REFERENCES.—Except as otherwise expressly 

8 provided, whenever in this Act an amendment or repeal 

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

10 a section or other provision, the reference shall be considVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 ered to be made to a section or other provision of the 

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

3 (b) EFFECTIVE DATE.—Except as otherwise ex4 pressly provided therein, the amendments made by this 

5 Act shall be effective on October 1, 2007. 

6 TITLE I—INVESTING IN 

7 STUDENT AID 

8 PART A—INCREASING THE PURCHASING POWER 

9 OF PELL GRANTS 

10 SEC. 101. MANDATORY PELL GRANT INCREASES. 

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

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

13 2004’’ and inserting ‘‘fiscal year 2013’’. 

14 (b) FUNDING FOR INCREASES.—Section 401(b) (20 

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

16 following new paragraph: 

17 ‘‘(9) ADDITIONAL FUNDS.— 

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

19 to be appropriated, and there are appropriated, 

20 to carry out subparagraph (B) of this para21 graph (in addition to any other amounts appro22 priated to carry out this section and out of any 

23 money in the Treasury not otherwise appro24 priated) the following amounts: 


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1 ‘‘(i) $840,000,000 for fiscal year 

2 2008; 

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

4 2009; 

5 ‘‘(iii) $1,340,000,000 for fiscal year 

6 2010; 

7 ‘‘(iv) $2,280,000,000 for fiscal year 

8 2011; 

9 ‘‘(v) $2,350,000,000 for fiscal year 

10 2012; 

11 ‘‘(vi) $2,400,000,000 for fiscal year 

12 2013; 

13 ‘‘(vii) $2,450,000,000 for fiscal year 

14 2014; 

15 ‘‘(viii) $2,510,000,000 for fiscal year 

16 2015; 

17 ‘‘(ix) $2,550,000,000 for fiscal year 

18 2016; and 

19 ‘‘(x) $2,570,000,000 for fiscal year 

20 2017. 

21 ‘‘(B) INCREASE IN FEDERAL PELL

22 GRANTS.—The amounts made available pursu23 ant to subparagraph (A) of this paragraph shall 

24 be used to increase the amount of the maximum 

25 Pell Grant for which a student shall be eligible 


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1 during an award year, as specified in the last 

2 enacted appropriation Act applicable to that 

3 award year, by— 

4 ‘‘(i) $200 for each of the award years 

5 2008–2009 and 2009–2010; 

6 ‘‘(ii) $300 for award year 2010–2011; 

7 and 

8 ‘‘(iii) $500 for award year 2011–2012 

9 and each subsequent award year. 

10 ‘‘(C) USE OF FISCAL YEAR FUNDS FOR

11 AWARD YEARS.—The amounts made available 

12 by subparagraph (A) for any fiscal year shall be 

13 available and remain available for use under 

14 subparagraph (B) for the award year that be15 gins in such fiscal year.’’. 

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

17 (20 U.S.C. 1070a(b)(2)(A)) is amended to read as follows: 

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

19 a student eligible under this part shall be— 

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

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

22 ‘‘(iii) $9,600 for academic year 2010–2011; 

23 ‘‘(iv) $10,600 for academic year 2011–2012; 

24 and 

25 ‘‘(v) $11,600 for academic year 2012–2013, 


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1 less an amount equal to the amount determined to 

2 be the expected family contribution with respect to 

3 that student for that year.’’. 

4 (d) TUITION SENSITIVITY.— 

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

6 1070a(b)) is further amended— 

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

8 (B) by redesignating paragraphs (4) 

9 through (9) as paragraphs (3) through (8), re10 spectively. 

11 (2) EFFECTIVE DATE.—The amendments made 

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

13 the date of enactment of this Act. 

14 (3) APPROPRIATION.—There shall be available 

15 to the Secretary, from funds not otherwise appro16 priated, $5,000,000 for the period beginning on the 

17 date of enactment of this Act and ending on October 

18 1, 2008, to carry out the amendments made by 

19 paragraph (1) of this subsection. 

20 (e) MULTIPLE GRANTS.— 

21 (1) AMENDMENT.—Paragraph (5) of section 

22 401(b) (as redesignated by subsection (d)(1)(B)) is 

23 amended to read as follows: 

24 ‘‘(5) YEAR-ROUND PELL GRANTS.—The Sec25 retary is authorized, for students enrolled in a bacVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 calaureate degree, associate’s degree, or certificate 

2 program of study at an eligible institution, to award 

3 such students not more than two Pell grants during 

4 an award year to permit such students to accelerate 

5 progress toward their degree or certificate objectives 

6 by enrolling in courses for more than 2 semesters, 

7 or 3 quarters, or the equivalent, in a given academic 

8 year.’’. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by paragraph (1) shall be effective July 1, 2009. 

11 (f) ACADEMIC COMPETITIVENESS GRANTS.—Section 

12 401A (as amended by section 8003 of Public Law 109– 

13 171) is amended— 

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

15 except as part of a secondary school program of 

16 study’’ before the semicolon; 

17 (2) by redesignating subsection (g) as sub18 section (h); and 

19 (3) by inserting after subsection (f) the fol20 lowing new subsection: 

21 ‘‘(g) DETERMINATION OF ACADEMIC YEAR.—Not22 withstanding section 481(a)(2), for the purpose of deter23 mining eligibility for a grant under this section, a student 

24 shall be considered to be enrolled or accepted for enroll25 ment in the first, second, third, or fourth academic year 


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1 of a program of undergraduate education based on the 

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

3 of higher education at which the student is enrolled or ac4 cepted for enrollment.’’. 

5 (g) ELIGIBILITY FOR ACADEMIC COMPETITIVENESS

6 GRANTS.—Section 401A is further amended— 

7 (1) in subsection (c)— 

8 (A) by striking ‘‘full–time’’; and 

9 (B) by amending paragraph (1) to read as 

10 follows: 

11 ‘‘(1) is an eligible student under section 484, 

12 including being enrolled or accepted for enrollment 

13 in a degree, certificate, or other eligible program 

14 leading to a recognized educational credential at an 

15 institution of higher education;’’; and 

16 (2) in subsection (d), by adding at the end the 

17 following new paragraph: 

18 ‘‘(3) ADJUSTMENT FOR LESS THAN FULL-TIME

19 ENROLLMENT.—A grant awarded under this section 

20 to an eligible student who attends an eligible institu21 tion on a less than full-time (but at least half-time 

22 or more) basis shall be reduced in the same propor23 tion as would a Federal Pell Grant pursuant to sec24 tion 401(b)(2)(B).’’. 


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1 SEC. 102. SUPPORT FOR WORKING STUDENTS. 

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

3 section 475(g)(2) (20 U.S.C. 1087oo)(g)(2)(D)) is amend4 ed to read as follows: 

5 ‘‘(D) an income protection allowance of 

6 $3,750 (or a successor amount prescribed by 

7 the Secretary under section 478);’’. 

8 (b) INDEPENDENT STUDENTS WITHOUT DEPEND9 ENTS OTHER THAN A SPOUSE.—Clause (iv) of section 

10 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended 

11 to read as follows: 

12 ‘‘(iv) an income protection allowance 

13 of the following amount (or a successor 

14 amount prescribed by the Secretary under 

15 section 478)— 

16 ‘‘(I) for single or separated stu17 dents, or married students where both 

18 are enrolled pursuant to subsection 

19 (a)(2), $6,690; and 

20 ‘‘(II) for married students where 

21 1 is enrolled pursuant to subsection 

22 (a)(2), $10,720;’’. 

23 (c) UPDATED TABLES AND AMOUNTS.—Section 

24 478(b) (20 U.S.C. 1087rr(b)) is amended— 

25 (1) in paragraph (1)— 


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

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

3 ‘‘(A) IN GENERAL.—For each’’; 

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

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

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

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

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

9 and inserting the following: 

10 ‘‘(B) SPECIAL RULE FOR 2007–2008 ACA11 DEMIC YEAR.—For the 2007–2008’’; and 

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

13 ‘‘(C) SPECIAL RULE FOR 2009–2010

14 THROUGH 2012–2013 ACADEMIC YEARS.—For 

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

16 the 3 succeeding academic years, the Secretary 

17 shall revise the tables in accordance with this 

18 paragraph, except that, for the table in section 

19 477(b)(4), the Secretary shall revise such table 

20 by increasing the amounts contained in such 

21 table for the preceding academic year by 10 

22 percent.’’; and 

23 (2) in paragraph (2), by striking ‘‘shall be de24 veloped’’ and all that follows through the period at 

25 the end and inserting ‘‘shall be developed— 


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1 ‘‘(A) for academic year 2008–2009, by in2 creasing each of the dollar amounts contained 

3 in such section as such section was in effect on 

4 the day before the date of enactment of the Col5 lege Cost Reduction Act of 2007 by a percent6 age equal to the estimated percentage increase 

7 in the Consumer Price Index (as defined in sec8 tion 478(f)) between December 2006 and the 

9 December next preceding the beginning of such 

10 academic year, and rounding the result to the 

11 nearest $10; 

12 ‘‘(B) for each of the academic years 2010– 

13 2011 and 2011–2012, by increasing each of the 

14 amounts determined under this paragraph for 

15 the preceding academic year by 10 percent; and 

16 ‘‘(C) for each academic year after 2012– 

17 2013, by increasing each of the dollar amounts 

18 determined under this paragraph for academic 

19 year 2012–2013 by a percentage equal to the 

20 estimated percentage increase in the Consumer 

21 Price Index (as defined in section 478(f)) be22 tween December 2011 and the December next 

23 preceding the beginning of such academic year, 

24 and rounding the result to the nearest $10.’’. 


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

2 subsections (a) and (b) shall take effect on July 1, 2009, 

3 and the amendment made by subsection (c) shall take ef4 fect on July 1, 2008. 

5 SEC. 103. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO 

6 IMPROVEMENTS. 

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

8 U.S.C. 1087ss) is amended— 

9 (1) in subsection (b)— 

10 (A) in paragraph (1)(A)(i)— 

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

12 after the semicolon; 

13 (ii) by redesignating subclause (III) as 

14 subclause (IV); 

15 (iii) by inserting after subclause (II) 

16 the following: 

17 ‘‘(III) 1 of whom is a dislocated 

18 worker; or’’; and 

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

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

21 inserting ‘‘24-month’’; and 

22 (B) in paragraph (1)(B)(i)— 

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

24 after the semicolon; 


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1 (ii) by redesignating subclause (III) as 

2 subclause (IV); 

3 (iii) by inserting after subclause (II) 

4 the following: 

5 ‘‘(III) 1 of whom is a dislocated 

6 worker; or’’; and 

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

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

9 inserting ‘‘24-month’’; 

10 (2) in subsection (c)— 

11 (A) in paragraph (1)— 

12 (i) in subparagraph (A)— 

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

14 after the semicolon; 

15 (II) by redesignating clause (iii) 

16 as clause (iv); 

17 (III) by inserting after clause (ii) 

18 the following: 

19 ‘‘(iii) 1 of whom is a dislocated work20 er; or’’; and 

21 (IV) in clause (iv) (as redesig22 nated by subclause (II)), by striking 

23 ‘‘12-month’’ and inserting ‘‘24- 

24 month’’; and 


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

2 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 

3 (B) in paragraph (2)— 

4 (i) in subparagraph (A)— 

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

6 after the semicolon; 

7 (II) by redesignating clause (iii) 

8 as clause (iv); 

9 (III) by inserting after clause (ii) 

10 the following: 

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

12 (IV) in clause (iv) (as redesig13 nated by subclause (II)), by striking 

14 ‘‘12-month’’ and inserting ‘‘24- 

15 month’’; and 

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

17 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 

18 (C) in the flush matter following para19 graph (2)(B), by adding at the end the fol20 lowing: ‘‘The Secretary shall annually adjust 

21 the income level necessary to qualify an appli22 cant for the zero expected family contribution. 

23 The income level shall be adjusted according to 

24 increases in the Consumer Price Index, as de25 fined in section 478(f).’’; and 


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1 (3) in subsection (d)— 

2 (A) by redesignating paragraphs (1) 

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

4 respectively and moving the margins of such 

5 subparagraphs 2 ems to the right; 

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

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

8 the following: 

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

10 ‘‘(1) DISLOCATED WORKER.—The term ‘dis11 located worker’ has the meaning given the term in 

12 section 101 of the Workforce Investment Act of 

13 1998 (29 U.S.C. 2801). 

14 ‘‘(2) MEANS-TESTED FEDERAL BENEFIT PRO15 GRAM.—The term’’. 

16 (b) DISCRETION OF STUDENT FINANCIAL AID AD17 MINISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) 

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

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

20 101 of the Workforce Investment Act of 1998 (29 U.S.C. 

21 2801)),’’ after ‘‘recent unemployment of a family mem22 ber,’’. 

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

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


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1 SEC. 104. DEFINITIONS. 

2 (a) TOTAL INCOME.—Section 480(a)(2) (20 U.S.C. 

3 1087vv(a)(2)) is amended— 

4 (1) by striking ‘‘and no portion’’ and inserting 

5 ‘‘no portion’’; and 

6 (2) by inserting ‘‘and no distribution from any 

7 qualified education benefit described in subsection 

8 (f)(3) that is not subject to Federal income tax,’’ 

9 after ‘‘1986,’’. 

10 (b) UNTAXED INCOME AND BENEFITS.—Section 

11 480(b) (20 U.S.C. 1087vv(b)) is amended to read as fol12 lows: 

13 ‘‘(b) UNTAXED INCOME AND BENEFITS.— 

14 ‘‘(1) The term ‘untaxed income and benefits’ 

15 means— 

16 ‘‘(A) child support received; 

17 ‘‘(B) workman’s compensation; 

18 ‘‘(C) veteran’s benefits such as death pen19 sion, dependency, and indemnity compensation, 

20 but excluding veterans’ education benefits as 

21 defined in subsection (c); 

22 ‘‘(D) interest on tax-free bonds; 

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

24 (excluding rent subsidies for low-income hous25 ing) for military, clergy, and others (including 

26 cash payments and cash value of benefits); 


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

2 the student‘s behalf, except, for dependent stu3 dents, funds provided by the student’s parents; 

4 ‘‘(G) untaxed portion of pensions; 

5 ‘‘(H) payments to individual retirement ac6 counts and Keogh accounts excluded from in7 come for Federal income tax purposes; and 

8 ‘‘(I) any other untaxed income and bene9 fits, such as Black Lung Benefits, Refugee As10 sistance, railroad retirement benefits, or Job 

11 Training Partnership Act noneducational bene12 fits or benefits received through participation in 

13 employment and training activities under title I 

14 of the Workforce Investment Act of 1998 (29 

15 U.S.C. 2801 et seq.). 

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

17 shall not include the amount of additional child tax 

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

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

20 is amended— 

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

22 considered an asset of a student for purposes of sec23 tion 475’’ and inserting ‘‘shall be considered an 

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


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

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

3 (3) by inserting after paragraph (3) the fol4 lowing: 

5 ‘‘(4) A qualified education benefit shall be con6 sidered an asset of the student for purposes of sec7 tion 476 and 477.’’. 

8 (d) OTHER FINANCIAL ASSISTANCE.—Section 

9 480(j)(2) (20 U.S.C. 1087vv(j)(2)) is amended by insert10 ing ‘‘, or a distribution that is not includable in gross in11 come under section 529 of such Code, under another pre12 paid tuition plan offered by a State, or under a Coverdell 

13 education savings account under section 530 of such 

14 Code,’’ after ‘‘1986’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

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

17 PART B—MAKING STUDENT LOANS MORE 

18 AFFORDABLE 

19 SEC. 111. INTEREST RATE REDUCTIONS. 

20 (a) FFEL INTEREST RATES.— 

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

22 amended by adding at the end the following new 

23 paragraph: 

24 ‘‘(4) REDUCED RATES FOR UNDERGRADUATE

25 SUBSIDIZED LOANS.—Notwithstanding subsection 


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1 (h) and paragraph (1) of this subsection, with re2 spect to any loan to an undergraduate student made, 

3 insured, or guaranteed under this part (other than 

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

5 428H) for which the first disbursement is made on 

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

7 applicable rate of interest shall be as follows: 

8 ‘‘(A) For a loan for which the first dis9 bursement is made on or after July 1, 2006, 

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

11 unpaid principal balance of the loan. 

12 ‘‘(B) For a loan for which the first dis13 bursement is made on or after July 1, 2008, 

14 and before July 1, 2009, 6.12 percent on the 

15 unpaid principal balance of the loan. 

16 ‘‘(C) For a loan for which the first dis17 bursement is made on or after July 1, 2009, 

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

19 unpaid principal balance of the loan. 

20 ‘‘(D) For a loan for which the first dis21 bursement is made on or after July 1, 2010, 

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

23 unpaid principal balance of the loan. 

24 ‘‘(E) For a loan for which the first dis25 bursement is made on or after July 1, 2011, 


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

2 unpaid principal balance of the loan. 

3 ‘‘(F) For a loan for which the first dis4 bursement is made on or after July 1, 2012 

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

6 unpaid principal balance of the loan.’’. 

7 (2) SPECIAL ALLOWANCE CROSS REFERENCE.— 

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

9 1086(b)(2)(I)(ii)(II)) is amended by striking ‘‘sec10 tion 427A(l)(1)’’ and inserting ‘‘section 427A(l)(1) 

11 or (l)(4)’’. 

12 (b) DIRECT LOAN INTEREST RATES.—Section 

13 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding 

14 at the end the following new subparagraph: 

15 ‘‘(D) REDUCED RATES FOR UNDER16 GRADUATE FDSL.—Notwithstanding the pre17 ceding paragraphs of this subsection, for Fed18 eral Direct Stafford Loans made to under19 graduate students for which the first disburse20 ment is made on or after July 1, 2006, and be21 fore July 1, 2013, the applicable rate of interest 

22 shall be as follows: 

23 ‘‘(i) For a loan for which the first dis24 bursement is made on or after July 1, 

25 2006, and before July 1, 2008, 6.80 perVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 cent on the unpaid principal balance of the 

2 loan. 

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

4 disbursement is made on or after July 1, 

5 2008, and before July 1, 2009, 6.12 per6 cent on the unpaid principal balance of the 

7 loan. 

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

9 disbursement is made on or after July 1, 

10 2009, and before July 1, 2010, 5.44 per11 cent on the unpaid principal balance of the 

12 loan. 

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

14 disbursement is made on or after July 1, 

15 2010, and before July 1, 2011, 4.76 per16 cent on the unpaid principal balance of the 

17 loan. 

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

19 disbursement is made on or after July 1, 

20 2011, and before July 1, 2012, 4.08 per21 cent on the unpaid principal balance of the 

22 loan. 

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

24 disbursement is made on or after July 1, 

25 2012, and before July 1, 2013, 3.40 perVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 cent on the unpaid principal balance of the 

2 loan.’’. 

3 SEC. 112. INCREASES IN LOAN LIMITS. 

4 (a) INCREASE IN THIRD AND SUBSEQUENT YEAR

5 LIMITS.— 

6 (1) FEDERAL INSURANCE LIMITS.—Section 

7 425(a)(1)(A)(iii) (20 U.S.C. 1075(a)(1)(A)(iii)) is 

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

9 ‘‘$7,500’’. 

10 (2) GUARANTY LIMITS.—Section 

11 428(b)(1)(A)(iii)(I) (20 U.S.C. 1078(b)(1)(A)(iii)(I)) 

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

13 ‘‘$7,500’’. 

14 (b) INCREASE IN AGGREGATE LIMITS.— 

15 (1) FEDERAL INSURANCE LIMITS.—Section 

16 425(a)(2)(A) (20 U.S.C. 1075(a)(2)(A)(i)) is 

17 amended— 

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

19 and inserting ‘‘$30,500’’; and 

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

21 and inserting ‘‘$73,000’’. 

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

23 (20 U.S.C. 1078(b)(1)(A)(iii)(I)) is amended— 

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

25 and inserting ‘‘$30,500’’; and 


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

2 and inserting ‘‘$73,000’’. 

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

4 this section shall be effective July 1, 2008. 

5 SEC. 113. REDUCTION OF LENDER SPECIAL ALLOWANCE 

6 PAYMENTS. 

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

8 amended— 

9 (1) in clause (i), by striking ‘‘clauses (ii), (iii), 

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

11 (2) in clause (v)(III), by striking ‘‘clauses (ii), 

12 (iii), and (iv)’’ and inserting ‘‘clauses (ii), (iii), (iv), 

13 and (vi)’’; and 

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

15 clause: 

16 ‘‘(vi) REDUCTION FOR LOANS ON OR

17 AFTER OCTOBER 1, 2007.—With respect to 

18 a loan on which the applicable interest rate 

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

20 percentage to be added under clause 

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

22 payment pursuant to this subparagraph 

23 shall be the following: 

24 ‘‘(I) IN GENERAL AND PLUS

25 LOANS.—1.79 percent in the case of a 


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

2 which the first disbursement of prin3 cipal is made on or after October 1, 

4 2007. 

5 ‘‘(II) IN SCHOOL AND GRACE PE6 RIOD.—1.19 percent in the case of a 

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

8 which the first disbursement of prin9 cipal is made on or after October 1, 

10 2007. 

11 ‘‘(III) CONSOLIDATION LOANS.— 

12 2.09 percent in the case of a loan de13 scribed in clause (iv) made on or after 

14 October 1, 2007.’’. 

15 SEC. 114. ELIMINATION OF EXCEPTIONAL PERFORMER 

16 STATUS FOR LENDERS. 

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

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

19 (20 U.S.C. 1078–9). 

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

21 is further amended— 

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

23 1078(c)(1))— 

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


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1 (B) by redesignating subparagraphs (E) 

2 through (H) as subparagraphs (D) through 

3 (G), respectively; and 

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

5 1(b)(5)), by striking the matter following subpara6 graph (B). 

7 SEC. 115. REDUCTION OF LENDER INSURANCE PERCENT8 AGE. 

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

10 428(b)(1) (20 U.S.C. 1078(b)(1)(G)) is amended to read 

11 as follows: 

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

13 principal of loans insured under the program, 

14 except that— 

15 ‘‘(i) such program shall insure 100 

16 percent of the unpaid principal of loans 

17 made with funds advanced pursuant to sec18 tion 428(j) or 439(q); and 

19 ‘‘(ii) notwithstanding the preceding 

20 provisions of this subparagraph, such pro21 gram shall insure 100 percent of the un22 paid principal amount of exempt claims as 

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


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

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

3 on or after October 1, 2007. 

4 SEC. 116. GUARANTY AGENCY COLLECTION RETENTION. 

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

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

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

8 such payments for use in accordance with 

9 section 422B, except that beginning Octo10 ber 1, 2007, this subparagraph shall be ap11 plied by substituting ‘16 percent’ for ‘23 

12 percent’.’’. 

13 SEC. 117. ACCOUNT MAINTENANCE FEES. 

14 Section 458(b) (20 U.S.C. 1087h(b)) is amended by 

15 striking ‘‘0.10 percent’’ and inserting ‘‘0.06 percent’’. 

16 SEC. 118. INCREASED LOAN FEES FROM LENDERS. 

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

18 1(d)(2)) is amended to read as follows: 

19 ‘‘(2) AMOUNT OF LOAN FEES.— 

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

21 fee which shall be deducted under paragraph 

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

23 borrower, shall be equal to— 

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

25 and (iii), 0.50 percent of the principal 


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1 amount of the loan with respect to any 

2 loan under this part for which the first dis3 bursement was made on or after October 

4 1, 1993; 

5 ‘‘(ii) 1.0 percent of the principal 

6 amount of the loan with respect to any 

7 loan under this part for which the first dis8 bursement was made on or after October 

9 1, 2007, that is held by any holder other 

10 than a holder described in subclause (I) or 

11 (II) of clause (iii); and 

12 ‘‘(iii) 0.0 percent of the principal 

13 amount of the loan with respect to any 

14 loan under this part for which the first dis15 bursement was made on or after October 

16 1, 2007, that is held by— 

17 ‘‘(I) any holder that, together 

18 with its affiliated holders, is des19 ignated by the Secretary annually as a 

20 small lender under subparagraph (B); 

21 or 

22 ‘‘(II) any holder that— 

23 ‘‘(aa) is a unit of a State or 

24 local government or a nonprofit 

25 private entity; and 


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1 ‘‘(bb) is not owned in whole 

2 or in part by, or controlled or op3 erated by a for-profit entity. 

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

5 In determining which holders of eligible loans 

6 qualify as small lenders for purposes of sub7 paragraph (A)(iii)(I), the Secretary shall, using 

8 the most recently available data with respect to 

9 the total principal amount of eligible loans held 

10 by holders— 

11 ‘‘(i) rank all holders of eligible loans 

12 (combined with their affiliated holders) in 

13 descending order by total principal amount 

14 of eligible loans held; 

15 ‘‘(ii) calculate the total principal 

16 amount of eligible loans held by all holders; 

17 and 

18 ‘‘(iii) identify the subset of consecu19 tively ranked holders under clause (i), 

20 starting with the lowest ranked holder, 

21 that together hold a total principal amount 

22 of such loans equal to 15 percent of the 

23 total amount calculated under clause (ii), 

24 but excluding the holder, if any, whose 

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1 ings of the subset to equal but not exceed 

2 such 15 percent of such total amount cal3 culated; and 

4 ‘‘(iv) designate as small lenders any 

5 holder identified as a member of the subset 

6 under clause (iii).’’. 

7 SEC. 119. MARKET-BASED DETERMINATION OF LENDER RE8 TURNS. 

9 (a) JOINT PLANNING STUDY TO SELECT AUCTION

10 MECHANISMS FOR TESTING.— 

11 (1) PLANNING STUDY.—The Secretaries of 

12 Education and Treasury jointly shall conduct a plan13 ning study, in consultation with the Office of Man14 agement and Budget, the Congressional Budget Of15 fice, the General Accounting Office, and other indi16 viduals and entities the Secretaries determines ap17 propriate, to— 

18 (A) examine the matters described in para19 graph (2) in order to determine which market20 based mechanisms for determining lender re21 turns on loans made, insured, or guaranteed 

22 under part B of title IV of the Higher Edu23 cation Act of 1965 (20 U.S.C. 1071 et seq.) 

24 shall be tested under the pilot programs de25 scribed in subsection (c); and 


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1 (B) determine what related administrative 

2 and other changes will be required in order to 

3 ensure that high-quality services are provided 

4 under a successful implementation of market5 based determinations of lender returns for all 

6 loans made, insured, or guaranteed under such 

7 part. 

8 (2) MATTERS EXAMINED.—The planning study 

9 under this subsection shall examine— 

10 (A) whether it is most appropriate to auc11 tion existing loans under part B of title IV of 

12 such Act, to auction the rights to originate 

13 loans under such part, or whether the sale of 

14 securities backed by federally-owned student 

15 loan assets originated by banks acting as agents 

16 of the Federal Government would provide the 

17 most efficient market-based alternative; 

18 (B) matters related to efficient financial 

19 organization of any auctions or sales of loans 

20 under such part, including how loans and origi21 nation rights are bundled, the capital structure 

22 of any securitization plan, and issues related to 

23 servicing; and 

24 (C) how to ensure that statutory, regu25 latory, and administrative requirements do not 


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1 impede separate management and ownership of 

2 loans or assets backed by loans under part B 

3 of title IV of such Act. 

4 (3) MECHANISMS.—In determining which mar5 ket-based mechanisms are the most promising mod6 els to test the pilot programs under subsection (b), 

7 the planning study shall take into account whether 

8 a particular market-based mechanism will— 

9 (A) ensure loan availability under part B 

10 of title IV of such Act to all eligible students 

11 at all participating institutions; 

12 (B) minimize administrative complexity for 

13 borrowers, institutions, lenders, and the Federal 

14 Government; and 

15 (C) reduce Federal costs if used on a pro16 gram-wide basis. 

17 (4) REPORT.—A report on the results of the 

18 planning study, together with a plan for implementa19 tion of one or more pilot programs using promising 

20 market-based approaches for determining lender re21 turns, shall be transmitted to Congress not later 

22 than 6 months after the date of enactment of this 

23 Act. 

24 (b) PILOT PROGRAMS TO BE TESTED.— 

25 (1) AUTHORIZATION.— 


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1 (A) IN GENERAL.—Notwithstanding any 

2 other provision of law, after the report de3 scribed in subsection (a)(4) is transmitted to 

4 Congress, the Secretary of Education shall, in 

5 consultation with the Secretary of the Treasury, 

6 begin preparations necessary to carry out pilot 

7 programs meeting the requirements of this sub8 section in accordance with the implementation 

9 plan included in such report. 

10 (B) IMPLEMENTATION DATE.—The Sec11 retary of Education shall commence implemen12 tation of the pilot programs under this sub13 section not earlier than July 1, 2008. 

14 (C) DURATION AND LOAN VOLUME.—The 

15 pilot programs under this subsection shall be 

16 not more than two academic years in duration, 

17 and the Secretary of Education may use the 

18 pilot programs to determining the lender re19 turns for not more than— 

20 (i) 10 percent of the annual loan vol21 ume under part B of title IV of the Higher 

22 Education Act of 1965 during the first 

23 year of the pilot programs under this sub24 section; and 


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1 (ii) 20 percent of the annual loan vol2 ume under part B of title IV of such Act 

3 during the second year of the pilot pro4 grams under this subsection. 

5 (2) VOLUNTARY PARTICIPATION.— 

6 (A) Participation in any auction-based 

7 pilot program under this subsection shall be vol8 untary for eligible institutions and eligible lend9 ers participating under part B of title IV of 

10 such Act prior to July 1, 2006. 

11 (B) All savings to the United States Treas12 ury generated by such auctions shall be distrib13 uted to institutions participating under this 

14 subsection on a basis proportionate to loan vol15 ume under such part for supplemental, need16 based financial aid, except that an institution 

17 that is operating as an eligible lender under 

18 section 435(d)(2) of such Act shall not be eligi19 ble for any such distribution. 

20 (3) INDEPENDENT EVALUATION.—The Govern21 ment Accountability Office shall conduct an inde22 pendent evaluation of the pilot programs under this 

23 subsection, which evaluation shall be completed, and 

24 the results of such submitted to the Secretary of 

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1 gress, not later than 120 days after the termination 

2 of such pilot programs. 

3 (c) PROGRAM-WIDE IMPLEMENTATION.—Notwith4 standing any other provision of part B of title IV of the 

5 Higher Education Act of 1965, for the first academic year 

6 beginning not less than 120 days after the independent 

7 evaluation described in subsection (b)(3) has been trans8 mitted to Congress, and succeeding academic years, the 

9 Secretary of Education is authorized to implement for all 

10 loans made under such part, a program-wide, market11 based system to determine returns to all lenders as the 

12 Secretary of Education determines appropriate, provided 

13 that— 

14 (1) the Secretary of Education, in consultation 

15 with the Secretary of the Treasury, has certified 

16 that the auction-based system that the Secretary of 

17 Education intends to implement on a program-wide 

18 basis would— 

19 (A) ensure loan availability under such 

20 part to all eligible students at all participating 

21 institutions; 

22 (B) minimize administrative complexity for 

23 borrowers, institutions, lenders, and the Federal 

24 Government, including the enhancement of the 


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1 modernization of the student financial aid sys2 tem; and 

3 (C) reduce Federal costs when used on a 

4 program-wide basis; and 

5 (2) the Secretary of Education has notified 

6 Congress of the Secretary’s intent to implement a 

7 program-wide auction based system, and has pro8 vided a description of the structure of such auction9 based system, at least 120 days before implementing 

10 such system. 

11 (d) CONSULTATION.— 

12 (1) IN GENERAL.—As part of the planning 

13 study, pilot programs, and program-wide implemen14 tation phases described in this section, the Secretary 

15 of Education shall consult with representatives of in16 vestment banks, ratings agencies, lenders, institu17 tions of higher education, and students, as well as 

18 individuals or other entities with pertinent technical 

19 expertise. The Secretary of Education shall engage 

20 in such consultations using such methods as, and to 

21 the extent that, the Secretary determines appro22 priate to the time constraints associated with the 

23 study, programs, and implementation. 

24 (2) SERVICES OF OTHER FEDERAL AGEN25 CIES.—In carrying out the planning study and pilot 


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1 programs described in this section, the Secretary of 

2 Education may use, on a reimbursable basis, the 

3 services (including procurement authorities and serv4 ices), equipment, personnel, and facilities of other 

5 agencies and instrumentalities of the Federal Gov6 ernment. 

7 SEC. 120. OTHER GUARANTY AGENCY REFORMS. 

8 (a) AGENCY OPERATING FUNDS.—Section 422B(c) 

9 (20 U.S.C. 1072b(c)) is amended— 

10 (1) by striking ‘‘and’’ at the end of paragraph 

11 (5); 

12 (2) by redesignating paragraph (6) as para13 graph (7); and 

14 (3) by inserting after paragraph (5) the fol15 lowing new paragraph: 

16 ‘‘(6) the delinquency prevention fee paid by the 

17 Secretary in accordance with section 428(o); and’’. 

18 (b) DELINQUENCY PREVENTION FEE .—Section 428 

19 (20 U.S.C. 1078) is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(o) DELINQUENCY PREVENTION FEE.— 

22 ‘‘(1) AMOUNT OF FEE.—The Secretary shall 

23 pay to each guaranty agency, on a monthly basis, a 

24 delinquency prevention fee equal to 0.0055 percent 

25 of the original principal amount of loans insured by 


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1 the agency, other than loans in in-school or grace 

2 period status, that are not in delinquency status as 

3 of the end of the previous month. 

4 ‘‘(2) DEFINITION.—For the purpose of earning 

5 the delinquency prevention fee, the term ‘not in de6 linquency status’ means the borrower is less than 60 

7 days delinquent in making a required payment.’’. 

8 (c) MINIMUM LOAN PROCESSING AND ISSUANCE

9 FEES.—Section 428(f)(1)(A)(ii) (20 U.S.C. 

10 1078(f)(1)(A)(ii)) is amended by inserting before the pe11 riod at the end the following: ‘‘, except that the total 

12 amount of such payments to each guaranty agency in any 

13 fiscal year shall equal at least $1,500,000’’. 

14 PART C—REWARDING SERVICE IN REPAYMENT 

15 SEC. 131. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 

16 NATIONAL NEED. 

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

18 read as follows: 

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

20 NATIONAL NEED. 

21 ‘‘(a) PROGRAM AUTHORIZED.— 

22 ‘‘(1) LOAN FORGIVENESS AUTHORIZED.—The 

23 Secretary shall forgive, in accordance with this sec24 tion, the student loan obligation of a borrower in the 

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1 rower after the date of enactment of the College 

2 Cost Reduction Act of 2007, who— 

3 ‘‘(A) is employed full-time in an area of 

4 national need described in subsection (b); and 

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

6 the borrower seeks forgiveness. 

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

8 provide loan forgiveness under paragraph (1), the 

9 Secretary is authorized to carry out a program— 

10 ‘‘(A) through the holder of the loan, to as11 sume the obligation to repay a qualified loan 

12 amount for a loan made, insured, or guaranteed 

13 under this part; and 

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

15 a loan made under part D of this title. 

16 ‘‘(3) REGULATIONS.—The Secretary is author17 ized to issue such regulations as may be necessary 

18 to carry out the provisions of this section. 

19 ‘‘(b) AREAS OF NATIONAL NEED.—For purposes of 

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

21 an area of national need if the individual is employed full22 time as any of the following: 

23 ‘‘(1) EARLY CHILDHOOD EDUCATORS.—An in24 dividual who is employed as an early childhood edu25 cator in an eligible preschool program or eligible 


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1 early childhood education program in a low-income 

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

3 development, and education of infants, toddlers, or 

4 young children age 5 and under. 

5 ‘‘(2) NURSES.—An individual who is em6 ployed— 

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

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

9 an accredited school of nursing (as those terms 

10 are defined in section 801 of the Public Health 

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

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

13 individual who has obtained a baccalaureate degree 

14 in a critical foreign language and is employed— 

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

16 as a teacher of a critical foreign language; or 

17 ‘‘(B) in an agency of the United States 

18 Government in a position that regularly re19 quires the use of such critical foreign language. 

20 ‘‘(4) LIBRARIANS.—An individual who is em21 ployed as a librarian in— 

22 ‘‘(A) a public library that serves a geo23 graphic area within which the public schools 

24 have a combined average of 30 percent or more 

25 of their total student enrollments composed of 


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

2 the Elementary and Secondary Education Act 

3 of 1965; or 

4 ‘‘(B) an elementary or secondary school 

5 which is in the school district of a local edu6 cational agency which is eligible in such year 

7 for assistance pursuant to title I of the Elemen8 tary and Secondary Education Act of 1965, and 

9 which for the purpose of this paragraph and for 

10 that year has been determined by the Secretary 

11 (pursuant to regulations and after consultation 

12 with the State educational agency of the State 

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

14 which the enrollment of children counted under 

15 section 1113(a)(5) of the Elementary and Sec16 ondary Education Act of 1965 exceeds 30 per17 cent of the total enrollment of that school. 

18 ‘‘(5) HIGHLY QUALIFIED TEACHERS: BILIN19 GUAL EDUCATION AND LOW-INCOME COMMU20 NITIES.—An individual who— 

21 ‘‘(A) is highly qualified as such term is de22 fined in section 9101 of the Elementary and 

23 Secondary Education Act of 1965; and 

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

25 of bilingual education; or 


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1 ‘‘(ii) is employed as a teacher in a public 

2 or nonprofit private elementary or secondary 

3 school which is in the school district of a local 

4 educational agency which is eligible in such year 

5 for assistance pursuant to title I of the Elemen6 tary and Secondary Education Act of 1965, and 

7 which for the purpose of this paragraph and for 

8 that year has been determined by the Secretary 

9 (pursuant to regulations and after consultation 

10 with the State educational agency of the State 

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

12 which the enrollment of children counted under 

13 section 1113(a)(5) of the Elementary and Sec14 ondary Education Act of 1965 exceeds 40 per15 cent of the total enrollment of that school. 

16 ‘‘(6) CHILD WELFARE WORKERS.—An indi17 vidual who— 

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

19 or a related field with a focus on serving chil20 dren and families; and 

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

22 welfare services. 

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

24 individual who is a speech-language pathologist, who 

25 is employed in an eligible preschool program or an 


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

2 minimum, a graduate degree in speech-language pa3 thology, or communication sciences and disorders. 

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

5 engaged as a participant in a project under the Na6 tional and Community Service Act of 1990 (as such 

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

8 U.S.C. 12511)). 

9 ‘‘(9) SCHOOL COUNSELORS.—An individual who 

10 is employed as a school counselor (as such term is 

11 defined in section 5421(e)(3) of Elementary and 

12 Secondary Education Act of 1965 (20 U.S.C. 

13 7245(e)(3)) in an elementary or secondary school 

14 which is in the school district of a local educational 

15 agency which is eligible in such year for assistance 

16 pursuant to title I of the Elementary and Secondary 

17 Education Act of 1965, and which for the purpose 

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

20 after consultation with the State educational agency 

21 of the State in which the school is located) to be a 

22 school in which the enrollment of children counted 

23 under section 1113(a)(5) of the Elementary and 

24 Secondary Education Act of 1965 exceeds 30 per25 cent of the total enrollment of that school. 


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1 ‘‘(10) PUBLIC SECTOR EMPLOYEES.—An indi2 vidual who is employed in public safety (including as 

3 a first responder, firefighter, police officer, or other 

4 law enforcement or public safety officer), emergency 

5 management (including as an emergency medical 

6 technician), public health, or public interest legal 

7 services (including prosecution or public defense or 

8 legal advocacy in low-income communities at a non9 profit organization). 

10 ‘‘(c) QUALIFIED LOAN AMOUNT.—At the end of each 

11 school, academic, or calendar year of full-time employment 

12 in an area of national need described in subsection (b), 

13 not to exceed 5 years, the Secretary shall forgive not more 

14 than $1,000 of the student loan obligation of a borrower 

15 that is outstanding after the completion of each such 

16 school, academic, or calendar year of employment, as ap17 propriate, not to exceed $5,000 in the aggregate for any 

18 borrower. 

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

20 be construed to authorize the refunding of any repayment 

21 of a loan. 

22 ‘‘(e) SEGAL AMERICORPS EDUCATION AWARD AND

23 NATIONAL SERVICE AWARD RECIPIENTS.—A student bor24 rower who qualifies for the maximum education award 

25 under subtitle D of title I of the National and Community 


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1 Service Act of 1990 (42 U.S.C. 12601 et seq.) shall re2 ceive under this section the amount, if any, by which the 

3 maximum benefit available under this section exceeds the 

4 maximum education award available under such subtitle. 

5 ‘‘(f) INELIGIBILITY FOR DOUBLE BENEFITS.—No 

6 borrower may receive a reduction of loan obligations under 

7 both this section and section 428J or 460. 

8 ‘‘(g) DEFINITIONS.—In this section: 

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

10 ‘critical foreign language’ includes the languages of 

11 Arabic, Korean, Japanese, Chinese, Pashto, Persian12 Farsi, Serbian-Croatian, Russian, Portuguese, and 

13 any other language identified by the Secretary of 

14 Education, in consultation with the Defense Lan15 guage Institute, the Foreign Service Institute, and 

16 the National Security Education Program, as a crit17 ical foreign language need. 

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

19 term ‘early childhood educator’ means an early 

20 childhood educator who works directly with children 

21 in an eligible preschool program or eligible early 

22 childhood education program who has completed a 

23 baccalaureate or advanced degree in early childhood 

24 development, early childhood education, or in a field 

25 related to early childhood education. 


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

2 term ‘eligible preschool program’ means a program 

3 that provides for the care, development, and edu4 cation of infants, toddlers, or young children age 5 

5 and under, meets any applicable State or local gov6 ernment licensing, certification, approval, and reg7 istration requirements, and is operated by— 

8 ‘‘(A) a public or private school that is sup9 ported, sponsored, supervised, or administered 

10 by a local educational agency; 

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

12 grantee designated under the Head Start Act 

13 (42 U.S.C. 9831 et seq.); 

14 ‘‘(C) a nonprofit or community based orga15 nization; or 

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

17 home. 

18 ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCATION

19 PROGRAM.—The term ‘eligible early childhood edu20 cation program’ means— 

21 ‘‘(A) a family child care program, center22 based child care program, State prekinder23 garten program, school program, or other out24 of-home early childhood development care pro25 gram, that— 


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

2 State; and 

3 ‘‘(ii) serves 2 or more unrelated chil4 dren who are not old enough to attend kin5 dergarten; 

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

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

8 seq.); or 

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

10 out under section 645A of the Head Start Act 

11 (42 U.S.C. 9840a). 

12 ‘‘(5) LOW-INCOME COMMUNITY.—In this sub13 section, the term ‘low-income community’ means a 

14 community in which 70 percent of households earn 

15 less than 85 percent of the State median household 

16 income. 

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

18 who meets all of the following: 

19 ‘‘(A) The nurse graduated from— 

20 ‘‘(i) an accredited school of nursing 

21 (as those terms are defined in section 801 

22 of the Public Health Service Act (42 

23 U.S.C. 296)); 

24 ‘‘(ii) a nursing center; or 


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1 ‘‘(iii) an academic health center that 

2 provides nurse training. 

3 ‘‘(B) The nurse holds a valid and unre4 stricted license to practice nursing in the State 

5 in which the nurse practices in a clinical set6 ting. 

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

8 following: 

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

10 an equivalent degree. 

11 ‘‘(ii) A nursing degree from a colle12 giate school of nursing (as defined in sec13 tion 801 of the Public Health Service Act 

14 (42 U.S.C. 296)). 

15 ‘‘(iii) A nursing degree from an asso16 ciate degree school of nursing (as defined 

17 in section 801 of the Public Health Service 

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

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

20 school of nursing (as defined in section 

21 801 of the Public Health Service Act (42 

22 U.S.C. 296)). 

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

24 term ‘speech-language pathologist’ means a speech25 language pathologist who— 


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1 ‘‘(A) has received, at a minimum, a grad2 uate degree in speech-language pathology or 

3 communication sciences and disorders from an 

4 institution of higher education accredited by an 

5 agency or association recognized by the Sec6 retary pursuant to section 496(a) of this Act; 

7 and 

8 ‘‘(B) provides speech-language pathology 

9 services under section 1861(ll)(1) of the Social 

10 Security Act (42 U.S.C. 1395x(ll)(1), or meets 

11 or exceeds the qualifications for a qualified 

12 speech-language pathologist under subsection 

13 (ll)(3) of such section (42 U.S.C. 1395x(ll)(3)). 

14 ‘‘(h) PROGRAM FUNDING.—There shall be available 

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

16 otherwise appropriated, such sums as may be necessary 

17 to provide loan forgiveness in accordance with this section 

18 to each eligible individual.’’. 

19 SEC. 132. INCOME-CONTINGENT REPAYMENT FOR PUBLIC 

20 SECTOR EMPLOYEES. 

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

22 adding at the end the following: 

23 ‘‘(7) REPAYMENT PLAN FOR PUBLIC SECTOR

24 EMPLOYEES.— 


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

2 forgive the balance due on any loan made under 

3 this part or section 428C(b)(5) for a bor4 rower— 

5 ‘‘(i) who has made 120 payments on 

6 such loan pursuant to income-contingent 

7 repayment; and 

8 ‘‘(ii) who is employed, and was em9 ployed for the 10-year period in which the 

10 borrower made the 120 payments de11 scribed in clause (i), in a public sector job. 

12 ‘‘(B) PUBLIC SECTOR JOB.—In this para13 graph, the term ‘public sector job’ means a full14 time job in emergency management, govern15 ment, public safety, law enforcement, public 

16 health, education (including early childhood 

17 education), social work in a public child or fam18 ily service agency, public interest legal services 

19 (including prosecution or public defense or legal 

20 advocacy in low-income communities at a non21 profit organization), or at an organization that 

22 is described in section 501(c)(3) of the Internal 

23 Revenue Code of 1986 and exempt from tax24 ation under section 501(a) of such Code. 


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

2 borrower who is repaying a loan made under this 

3 part pursuant to income-contingent repayment may 

4 choose, at any time, to terminate repayment pursu5 ant to income-contingent repayment and repay such 

6 loan under the standard repayment plan.’’. 

7 SEC. 133. INCOME-BASED REPAYMENT. 

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

9 1088 et seq.) is further amended by adding at the end 

10 the following: 

11 ‘‘SEC. 493C. INCOME-BASED REPAYMENT. 

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

13 ‘‘(1) EXCEPTED PLUS LOAN.—The term ‘ex14 cepted PLUS loan’ means a loan under section 

15 428B, or a Federal Direct PLUS Loan, that is 

16 made, insured, or guaranteed on behalf of a depend17 ent student. 

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

19 term ‘partial financial hardship’, when used with re20 spect to a borrower, means that for such borrower— 

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

22 amount of loans made, insured, or guaranteed 

23 under part B or D (other than an excepted 

24 PLUS loan) to a borrower as calculated under 


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1 the standard repayment plan under section 

2 428(b)(9)(A)(i) or 455(d)(1)(A); exceeds 

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

4 calculating the amount by which— 

5 ‘‘(i) the borrower’s, and the bor6 rower’s spouse’s (if applicable), adjusted 

7 gross income; exceeds 

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

9 applicable to the borrower’s family size as 

10 determined under section 673(2) of the 

11 Community Services Block Grant Act (42 

12 U.S.C. 9902(2)). 

13 ‘‘(b) INCOME-BASED REPAYMENT PROGRAM AU14 THORIZED.—Notwithstanding any other provision of this 

15 Act, the Secretary shall carry out a program under 

16 which— 

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

18 guaranteed under part B or D (other than an ex19 cepted PLUS loan) who has a partial financial hard20 ship may elect, during any period the borrower has 

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

22 aggregate monthly payment for all such loans not 

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

24 divided by 12; 


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

2 borrower’s monthly payment under this subsection 

3 first toward interest due on the loan and then to4 ward the principal of the loan; 

5 ‘‘(3) any interest due and not paid under para6 graph (2) shall be capitalized; 

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

8 paragraph (2) shall be deferred; 

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

10 monthly payments under paragraph (1) may exceed 

11 10 years; 

12 ‘‘(6) if the borrower no longer has a partial fi13 nancial hardship or no longer wishes to continue the 

14 election under this subsection, then— 

15 ‘‘(A) the maximum monthly payment re16 quired to be paid for all loans made to the bor17 rower under part B or D (other than an ex18 cepted PLUS loan) shall not exceed the month19 ly amount calculated under section 

20 428(b)(9)(A)(i) or 455(d)(1)(A) when the bor21 rower first made the election described in this 

22 subsection; and 

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

24 permitted to repay such loans may exceed 10 

25 years; 


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

2 outstanding balance of principal and interest due on 

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

4 under section 428B or a Federal Direct PLUS 

5 Loan) to a borrower who— 

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

7 hardship described in section 435(o) for a pe8 riod of time prescribed by the Secretary, not to 

9 exceed 20 years; or 

10 ‘‘(B)(i) makes the election to participate in 

11 income-based repayment under paragraph (1); 

12 and 

13 ‘‘(ii) for a period of time prescribed by the 

14 Secretary, not to exceed 20 years (including any 

15 period during which the borrower is in 

16 deferment due to an economic hardship de17 scribed in section 435(o)), meets 1 or more of 

18 the following requirements: 

19 ‘‘(I) has made reduced monthly pay20 ments under paragraph (1); 

21 ‘‘(II) has made monthly payments of 

22 not less than the monthly amount cal23 culated under section 428(b)(9)(A)(i) or 

24 455(d)(1)(A) when the borrower first made 

25 the election described in this subsection; 


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1 ‘‘(III) has made payments under a 

2 standard repayment plan under section 

3 428(b)(9)(A)(i) or 455(d)(1)(A); 

4 ‘‘(IV) has made payments under an 

5 income-contingent repayment plan under 

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

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

8 under this part pursuant to income-based repayment 

9 may elect, at any time, to terminate repayment pur10 suant to income-based repayment and repay such 

11 loan under the standard repayment plan.’’. 

12 (b) CONFORMING ICR AMENDMENT.—Section 

13 455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is amended by 

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

15 ‘‘PLUS loan’’. 

16 SEC. 134. DEFINITION OF ECONOMIC HARDSHIP. 

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

18 (1) in paragraph (1)— 

19 (A) in subparagraph (A)(ii)— 

20 (i) by striking ‘‘100 percent of the 

21 poverty line for a family of 2’’ and insert22 ing ‘‘150 percent of the poverty line appli23 cable to the borrower’s family size’’; and 

24 (ii) by inserting ‘‘or’’ after the semi25 colon; 


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

2 (C) by redesignating subparagraph (C) as 

3 subparagraph (B); and 

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

5 inserting ‘‘(1)(B)’’. 

6 SEC. 135. DEFERRALS. 

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

8 1077(a)(2)(C)(iii)) is amended by striking ‘‘not in excess 

9 of 3 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 

12 ‘‘not in excess of 3 years’’. 

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

14 U.S.C. 1087e(f)(2)(D)) is amended by striking ‘‘not in ex15 cess of 3 years’’. 

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

17 1087dd(c)(2)(A)(iv)) is amended by striking ‘‘not in ex18 cess of 3 years’’. 

19 SEC. 136. MAXIMUM REPAYMENT PERIOD. 

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

21 1087e(e)) is amended by adding at the end the following: 

22 ‘‘(9) MAXIMUM REPAYMENT PERIOD.—In calcu23 lating the extended period of time for which an in24 come-contingent repayment plan under this sub25 section may be in effect for a borrower, the SecVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 retary shall include all time periods during which a 

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

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

4 included in the income-contingent repayment 

5 plan; and 

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

7 hardship described in section 435(o); 

8 ‘‘(ii) makes monthly payments under para9 graph (1) or (6) of section 493C(b); or 

10 ‘‘(iii) makes payments under a standard 

11 repayment plan described in section 

12 428(b)(9)(A)(i) or subsection (d)(1)(A).’’. 

13 (b) TECHNICAL CORRECTION.—Section 455(d)(1)(C) 

14 (20 U.S.C. 1087e(d)(1)(C)) is amended by striking 

15 ‘‘428(b)(9)(A)(v)’’ and inserting ‘‘428(b)(9)(A)(iv)’’. 

16 SEC. 137. DEFERRAL OF LOAN REPAYMENT FOLLOWING AC17 TIVE DUTY. 

18 Part G of title IV is amended by inserting after sec19 tion 484B (20 U.S.C. 1091b) the following new section: 

20 ‘‘SEC. 484C. DEFERRAL OF LOAN REPAYMENT FOLLOWING 

21 ACTIVE DUTY. 

22 ‘‘(a) DEFERRAL OF LOAN REPAYMENT FOLLOWING

23 ACTIVE DUTY.—In addition to any deferral of repayment 

24 of a loan made under this title pursuant to section 

25 428(b)(1)(M)(iii), 455(f)(2)(C), or 464(c)(2)(A)(ii), a borVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 rower of a loan under this title who is a member of the 

2 National Guard or other reserve component of the Armed 

3 Forces of the United States, or a member of such Armed 

4 Forces in a retired status, is called or ordered to active 

5 duty, and is currently enrolled, or was enrolled within six 

6 months prior to the activation, in a program of instruction 

7 at an eligible institution, shall be eligible for a deferment 

8 during the 13 months following the conclusion of such 

9 service, except that a deferment under this subsection 

10 shall expire upon the borrower’s return to enrolled student 

11 status. 

12 ‘‘(b) ACTIVE DUTY.—Notwithstanding section 

13 481(d), in this section, the term ‘active duty’ has the 

14 meaning given such term in section 101(d)(1) of title 10, 

15 United States Code, except that such term— 

16 ‘‘(1) does not include active duty for training or 

17 attendance at a service school; but 

18 ‘‘(2) includes, in the case of members of the 

19 National Guard, active State duty.’’. 

20 PART D—SUSTAINING THE PERKINS LOAN 

21 PROGRAM 

22 SEC. 141. FEDERAL PERKINS LOANS. 

23 Section 461(b) (20 U.S.C. 1087aa(b)) is amended by 

24 adding at the end the following new paragraphs: 


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1 ‘‘(3) In addition to any amounts appropriated 

2 pursuant to paragraph (1) or (2) of this subsection, 

3 there shall be available to the Secretary for contribu4 tions to student loan funds established under part 

5 E, from funds not otherwise appropriated, 

6 $100,000,000 for each of the fiscal years 2008 

7 through 2012. The sum of the amount made avail8 able under this subsection for any such fiscal year, 

9 plus the amount so appropriated for such fiscal year, 

10 shall, for purposes of allocations under section 462, 

11 be treated as the amount appropriated pursuant to 

12 section 461(b) for such fiscal year. 

13 ‘‘(4) The authority to make contributions to 

14 student loan funds under this part shall expire at 

15 the end of fiscal year 2012.’’. 

16 TITLE II—REDUCING THE COST 

17 OF COLLEGE 

18 SEC. 201. CONSUMER INFORMATION AND PUBLIC AC19 COUNTABILITY IN HIGHER EDUCATION. 

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

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


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1 ‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC2 COUNTABILITY IN HIGHER EDUCATION. 

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

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

5 section, the Commissioner of Education Statistics— 

6 ‘‘(1) shall identify the data elements related to 

7 college costs that are of greatest importance to pro8 spective students, enrolled students, and their fami9 lies, paying particular attention to low-income, non10 traditional student populations, and first-generation 

11 college students; 

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

13 expertise the informational needs of prospective col14 lege students and parents to— 

15 ‘‘(A) determine the relevance of particular 

16 data elements to prospective students, enrolled 

17 students, and families based upon the results of 

18 opinion research; and 

19 ‘‘(B) make recommendations regarding the 

20 inclusion of specific data items and the most ef21 fective and least burdensome methods of col22 lecting and reporting useful data from institu23 tions of higher education; and 

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

25 website— 


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

2 elements currently provided by institutions of 

3 higher education to the Secretary; 

4 ‘‘(B) includes clear and uniform informa5 tion determined to be relevant to prospective 

6 students, enrolled students, and families; 

7 ‘‘(C) provides comparable information, by 

8 ensuring that information is based on accepted 

9 criteria and common definitions; 

10 ‘‘(D) includes a sorting function that per11 mits users to customize their search for and 

12 comparison of institutions of higher education 

13 based on the information identified through the 

14 process as prescribed in paragraph (1) as being 

15 of greatest relevance to choosing an institution 

16 of higher education. 

17 ‘‘(b) DATA COLLECTION.— 

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

19 Education Statistics shall continue to redesign the 

20 relevant parts of the Integrated Postsecondary Edu21 cation Data System to include additional data as re22 quired by this section and to continue to improve the 

23 usefulness and timeliness of data collected by such 

24 System in order to inform consumers about institu25 tions of higher education. 


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1 ‘‘(2) COLLEGE CONSUMER PROFILE.—The Sec2 retary shall continue to publish on the COOL 

3 website, for each academic year and in accordance 

4 with standard definitions developed by the Commis5 sioner of Education Statistics (including definitions 

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

7 the day before the date of enactment of the College 

8 Cost Reduction Act of 2007), from at least all insti9 tutions of higher education participating in pro10 grams under title IV the following information: 

11 ‘‘(A) The tuition and fees charged for a 

12 first-time, full-time undergraduate student. 

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

14 first-time, full-time undergraduate student. 

15 ‘‘(C) The cost of attendance for a first16 time, full-time undergraduate student, con17 sistent with the provisions of section 472. 

18 ‘‘(D) The average amount of financial as19 sistance (including grant assistance) received by 

20 a first-year, full-time undergraduate student. 

21 ‘‘(E) The number and percentage of first22 time, full-time undergraduate students receiving 

23 financial assistance (including grant assistance) 

24 described in each clause of subparagraph (D). 


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1 ‘‘(F) Student enrollment information, in2 cluding information on the number and percent3 age of full-time and part-time students, and the 

4 number and percentage of resident and non5 resident students. 

6 ‘‘(G) Faculty-to-student ratios. 

7 ‘‘(H) The total number of faculty and the 

8 percentage of faculty who are full-time employ9 ees of the institution and the percentage who 

10 are part-time. 

11 ‘‘(I) Graduation rates calculated pursuant 

12 to section 485(a)(1)(L), including rates 

13 disaggregated by gender, by each major racial 

14 and ethnic subgroup, and by income status, as 

15 measured by receipt of Federal Pell Grants or 

16 Federal subsidized student loans. 

17 ‘‘(J) A link to the institution of higher 

18 education with information of interest to stu19 dents including mission, accreditation, student 

20 services (including services for students with 

21 disabilities), transfer of credit policies, any ar22 ticulation agreements entered into by the insti23 tution. 

24 ‘‘(K) The college affordability information 

25 elements specified in subsection (d). 


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1 ‘‘(c) 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 ‘‘(d) COLLEGE AFFORDABILITY INFORMATION ELE10 MENTS.—The college affordability information elements 

11 required by subsection (b)(2)(K) shall include, for each in12 stitution submitting data— 

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

14 5 most recent academic years; and 

15 ‘‘(2) the net tuition of the institution for the 

16 most recent academic year for which data are avail17 able. 

18 ‘‘(e) OUTCOMES AND ACTIONS.— 

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

20 on June 30, 2011, an institution that increases its 

21 sticker price at a percentage rate for any 3-year in22 terval ending on or after that date that exceeds two 

23 times the rate of change in the higher education 

24 price index over the same time period shall provide 

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1 lished by the Secretary on the COOL website, and 

2 shall include— 

3 ‘‘(A) a description of the factors contrib4 uting to the increase in the institution’s costs 

5 and in the tuition and fees charged to students; 

6 and 

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

8 increases are not within the exclusive control of 

9 the institution, a description of the agency or 

10 instrumentality of State government or other 

11 entity that participates in such determinations 

12 and the authority exercised by such agency, in13 strumentality, or entity. 

14 ‘‘(2) CONSEQUENCES FOR 2-YEAR CONTINU15 ATION OF FAILURE.—If the Secretary determines 

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

17 has failed to reduce the subsequent increase in stick18 er price to equal to or below two times the rate of 

19 change in the higher education price index for 2 con20 secutive academic years subsequent to the 3-year in21 terval used under paragraph (1), the Secretary shall 

22 place the institution on affordability alert status. 

23 ‘‘(3) EXEMPTIONS.—Notwithstanding para24 graph (2), an institution shall not be placed on af25 fordability alert status if, for any 3-year interval for 


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1 which sticker prices are computed under paragraph 

2 (1)— 

3 ‘‘(A) with respect the class of institutions 

4 described in paragraph (5) to which the institu5 tion belongs, the sticker price of the institution 

6 is in the lowest quartile of institutions within 

7 such class, as determined by the Secretary, dur8 ing the last year of such 3-year interval; or 

9 ‘‘(B) the institution has a percentage 

10 change in its sticker price computed under 

11 paragraph (1) that exceeds two times the rate 

12 of change in the higher education price index 

13 over the same time period, but the dollar 

14 amount of the sticker price increase is less than 

15 $500. 

16 ‘‘(4) INFORMATION TO STATE AGENCIES.—Any 

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

18 an agency or instrumentality of State government or 

19 other entity participates in the determinations of tui20 tion and fee increases shall, prior to submitting any 

21 information to the Secretary under this subsection, 

22 submit such information to, and request the com23 ments and input of, such agency, instrumentality, or 

24 entity. With respect to any such institution, the Sec25 retary shall provide a copy of any communication by 


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1 the Secretary with that institution to such agency, 

2 instrumentality, or entity. 

3 ‘‘(5) CLASSES OF INSTITUTIONS.—For purposes 

4 of this subsection, the classes of institutions shall be 

5 those sectors used by the Integrated Postsecondary 

6 Education Data System, based on whether the insti7 tution is public, nonprofit private, or for-profit pri8 vate, and whether the institution has a 4-year, 2- 

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

10 ‘‘(6) DATA REJECTION.—Nothing in this sub11 section shall be construed as allowing the Secretary 

12 to reject the data submitted by an individual institu13 tion of higher education. 

14 ‘‘(f) FINES.—In addition to actions authorized in sec15 tion 487(c), the Secretary may impose a fine in an amount 

16 not to exceed $25,000 on an institution of higher edu17 cation for failing to provide the information required by 

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

19 to otherwise cooperate with the National Center for Edu20 cation Statistics regarding efforts to obtain data under 

21 subsection (c) and pursuant to the program participation 

22 agreement entered into under section 487. 

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

24 issue such regulations as may be necessary to carry out 

25 the provisions of this section. 


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

2 ‘‘(1) NET TUITION.—The term ‘net tuition’ 

3 means the average tuition and fees charged to a full4 time undergraduate student by an institution of 

5 higher education for any academic year, minus the 

6 average grant amount received by such a student for 

7 such academic year. 

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

9 means the average published tuition and fees 

10 charged to a first-time, full-time, undergraduate stu11 dent by an institution of higher education for any 

12 academic year. 

13 ‘‘(3) HIGHER EDUCATION PRICE INDEX.—The 

14 term ‘higher education price index’ means a statis15 tical measure of change over time in the prices of a 

16 fixed market basket of goods and services purchased 

17 by colleges and universities through current fund 

18 educational and general expenditures (excluding ex19 penditures for research), as developed by the Bureau 

20 of Labor Statistics.’’. 


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1 SEC. 202. COOPERATIVE EDUCATION REWARDS FOR INSTI2 TUTIONS THAT RESTRAIN TUITION IN3 CREASES. 

4 The Higher Education Act of 1965 (20 U.S.C. 1001 

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

6 title: 

7 ‘‘TITLE VIII—RESTRAINING 

8 TUITION INCREASES 

9 ‘‘PART A—COOPERATIVE EDUCATION 

10 ‘‘SEC. 801. DEFINITION OF COOPERATIVE EDUCATION. 

11 ‘‘For the purpose of this title the term ‘cooperative 

12 education’ means the provision of alternating or parallel 

13 periods of academic study and public or private employ14 ment in order to give students work experiences related 

15 to their academic or occupational objectives and an oppor16 tunity to earn the funds necessary for continuing and com17 pleting their education. 

18 ‘‘SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RES19 ERVATIONS. 

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

21 the Secretary to carry out this title from funds not other22 wise appropriated $15,000,000 for each of the fiscal years 

23 2008 through 2012. 

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

25 for each such fiscal year— 


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

2 for carrying out grants to institutions of higher edu3 cation and combinations of such institutions de4 scribed in section 803(a)(1)(A) for cooperative edu5 cation under section 803; 

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

7 for carrying out grants to institutions of higher edu8 cation described in section 803(a)(1)(B) for coopera9 tive education under section 803; 

10 ‘‘(3) not more than 11 percent shall be avail11 able for demonstration projects under paragraph (1) 

12 of section 804(a); 

13 ‘‘(4) not more than 11 percent shall be avail14 able for training and resource centers under para15 graph (2) of section 804(a); and 

16 ‘‘(5) not more than 3 percent shall be available 

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

18 ‘‘(c) AVAILABILITY OF APPROPRIATIONS.—Appro19 priations under this title shall not be available for the pay20 ment of compensation of students for employment by em21 ployers under arrangements pursuant to this title. 

22 ‘‘(d) SUNSET.—The authority to carry out this title 

23 shall expire at the end of fiscal year 2012. 

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

25 ‘‘(a) GRANTS AUTHORIZED.— 


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1 ‘‘(1) IN GENERAL.—The Secretary is author2 ized— 

3 ‘‘(A) from the amount available under sec4 tion 802(b)(1) in each fiscal year and in accord5 ance with the provisions of this title, to make 

6 grants to institutions of higher education or 

7 combinations of such institutions that have not 

8 previously received a grant under this para9 graph to pay the Federal share of the cost of 

10 planning, establishing, expanding, or carrying 

11 out programs of cooperative education by such 

12 institutions or combinations of institutions; and 

13 ‘‘(B) from the amount available under sec14 tion 802(b)(2) in each fiscal year and in accord15 ance with the provisions of this title, to make 

16 grants to institutions of higher education that 

17 are operating an existing cooperative education 

18 program (as determined by the Secretary) to 

19 pay the cost of planning, establishing, expand20 ing, or carrying out programs of cooperative 

21 education by such institutions. 

22 ‘‘(2) PROGRAM REQUIREMENT.—Cooperative 

23 education programs assisted under this section shall 

24 provide alternating or parallel periods of academic 

25 study and of public or private employment, giving 


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1 students work experience related to their academic 

2 or occupational objectives and the opportunity to 

3 earn the funds necessary for continuing and com4 pleting their education. 

5 ‘‘(3) AMOUNT OF GRANTS.— 

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

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

8 of higher education or combination of such in9 stitutions in any fiscal year shall not exceed 

10 $500,000. 

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

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

13 each fiscal year to each institution of higher 

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

15 has an application approved under subsection 

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

17 the amount reserved pursuant to section 

18 802(b)(2) for such fiscal year as the number of 

19 unduplicated students placed in cooperative 

20 education jobs during the preceding fiscal year 

21 (other than cooperative education jobs under 

22 section 804 and as determined by the Sec23 retary) by such institution of higher education 

24 bears to the total number of all such students 


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1 placed in such jobs during the preceding fiscal 

2 year by all such institutions. 

3 ‘‘(ii) No institution of higher education 

4 shall receive a grant pursuant to paragraph 

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

6 exceeds 25 percent of such institution’s cooper7 ative education program’s personnel and oper8 ating budget for the preceding fiscal year. 

9 ‘‘(iii) The minimum annual grant amount 

10 which an institution of higher education is eligi11 ble to receive under paragraph (1)(B) is $1,000 

12 and the maximum annual grant amount is 

13 $75,000. 

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

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

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

17 combination of such institution in any one fiscal 

18 year. 

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

20 shall be used exclusively— 

21 ‘‘(A) to expand the quality and participa22 tion of a cooperative education program; 

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

24 and 


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1 ‘‘(C) for outreach to potential participants 

2 including underrepresented and nontraditional 

3 populations. 

4 ‘‘(b) APPLICATIONS.—Each institution of higher edu5 cation or combination of such institutions desiring to re6 ceive a grant under this section shall submit an application 

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

8 Secretary shall prescribe. Each such application shall— 

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

10 which a grant is authorized under this section; 

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

12 activities which will be performed by a nonprofit or13 ganization or institution other than the applicant, 

14 and the compensation to be paid for such perform15 ance; 

16 ‘‘(3) provide that the applicant will expend dur17 ing such fiscal year for the purpose of such program 

18 or activities not less than the amount expended for 

19 such purpose during the previous fiscal year; 

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

21 carry out to assure, and contain a formal statement 

22 of the institution’s commitment which assures, that 

23 the applicant will continue the cooperative education 

24 program beyond the 5-year period of Federal assist25 ance described in subsection (c)(1) at a level which 


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1 is not less than the total amount expended for such 

2 program during the first year such program was as3 sisted under this section; 

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

5 of higher education that provides a 2-year program 

6 which is acceptable for full credit toward a bach7 elor’s degree, the cooperative education program will 

8 be available to students who are certificate or asso9 ciate degree candidates and who carry at least one10 half the normal full-time academic workload; 

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

12 ‘‘(A) for each fiscal year for which the ap13 plicant receives a grant, make such reports with 

14 respect to the impact of the cooperative edu15 cation program in the previous fiscal year as 

16 may be essential to ensure that the applicant is 

17 complying with the provisions of this section, 

18 including— 

19 ‘‘(i) the number of unduplicated stu20 dent applicants in the cooperative edu21 cation program; 

22 ‘‘(ii) the number of unduplicated stu23 dents placed in cooperative education jobs; 

24 ‘‘(iii) the number of employers who 

25 have hired cooperative education students; 


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1 ‘‘(iv) the average income for students 

2 derived from working in cooperative edu3 cation jobs; and 

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

5 number of unduplicated students placed in 

6 cooperative education jobs in each fiscal 

7 year compared to the previous fiscal year; 

8 and 

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

10 ensure that the applicant is complying with the 

11 provisions of this title, including the notation of 

12 cooperative education employment on the stu13 dent’s transcript; 

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

15 the academic discipline for which the application is 

16 made have had a favorable reception by public and 

17 private sector employers; 

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

19 is committed to extending cooperative education on 

20 an institution-wide basis for all students who can 

21 benefit; 

22 ‘‘(9) describe the plans that the applicant will 

23 carry out to evaluate the applicant’s cooperative edu24 cation program at the end of the grant period; 


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

2 accounting procedures as may be necessary to assure 

3 proper disbursement of, and accounting for, Federal 

4 funds paid to the applicant under this title; 

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

6 underserved populations; and 

7 ‘‘(12) include such other information as is es8 sential to carry out the provisions of this title. 

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

10 ‘‘(1) DURATION OF GRANTS.—No individual in11 stitution of higher education may receive, individ12 ually or as a participant in a combination of such in13 stitutions— 

14 ‘‘(A) a grant pursuant to subsection 

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

16 ‘‘(B) a grant pursuant to subsection 

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

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

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

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

21 the program or activities described in the appli22 cation in the first year the applicant receives a 

23 grant under this section; 

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

25 such year; 


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

2 such year; 

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

4 such year; and 

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

6 such year. 

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

8 the contrary notwithstanding, the Secretary shall not 

9 waive the provisions of this subsection. 

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

11 determines that a recipient of funds under this section has 

12 failed to maintain the fiscal effort described in subsection 

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

14 payments under this section to such recipient. 

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

16 TRAINING AND RESOURCE CENTERS; AND RE17 SEARCH. 

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

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

20 grants and enter into contracts— 

21 ‘‘(1) from the amounts available in each fiscal 

22 year under section 802(b)(3), for the conduct of 

23 demonstration projects designed to demonstrate or 

24 determine the feasibility or value of innovative meth25 ods of cooperative education; 


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1 ‘‘(2) from the amounts available in each fiscal 

2 year under section 802(b)(4), for the conduct of 

3 training and resource centers designed to— 

4 ‘‘(A) train personnel in the field of cooper5 ative education; 

6 ‘‘(B) improve materials used in cooperative 

7 education programs if such improvement is con8 ducted in conjunction with other activities de9 scribed in this paragraph; 

10 ‘‘(C) furnish technical assistance to institu11 tions of higher education to increase the poten12 tial of the institution to continue to conduct a 

13 cooperative education program without Federal 

14 assistance; 

15 ‘‘(D) encourage model cooperative edu16 cation programs which furnish education and 

17 training in occupations in which there is a na18 tional need; 

19 ‘‘(E) support partnerships under which an 

20 institution carrying out a comprehensive cooper21 ative education program joins with one or more 

22 institutions of higher education in order to— 

23 ‘‘(i) assist the institutions other than 

24 the comprehensive cooperative education 


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1 institution to develop and expand an exist2 ing program of cooperative education; or 

3 ‘‘(ii) establish and improve or expand 

4 comprehensive cooperative education pro5 grams; and 

6 ‘‘(F) encourage model cooperative edu7 cation programs in the fields of science and 

8 mathematics for women and minorities who are 

9 underrepresented in such fields; and 

10 ‘‘(3) from the amounts available in each fiscal 

11 year under section 802(b)(5), for the conduct of re12 search relating to cooperative education. 

13 ‘‘(b) ADMINISTRATIVE PROVISION.— 

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

15 the Secretary may— 

16 ‘‘(A) make grants to or contracts with in17 stitutions of higher education, or combinations 

18 of such institutions; and 

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

20 other public or private nonprofit agencies or or21 ganizations, whenever such grants or contracts 

22 will make an especially significant contribution 

23 to attaining the objectives of this section. 

24 ‘‘(2) LIMITATION.— 


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

2 3 percent of the amount appropriated to carry 

3 out this section in each fiscal year to make 

4 grants or enter into contracts described in para5 graph (1)(A). 

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

7 than 3 percent of the amount appropriated to 

8 carry out this section in each fiscal year to 

9 make grants or enter into contracts described in 

10 paragraph (1)(B). 

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

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

13 provided only to supplement and, to the extent possible, 

14 increase the level of funds that would, in the absence of 

15 such funds, be made available from non-Federal sources 

16 to carry out the activities supported by such grant or con17 tract, and in no case to supplant such funds from non18 Federal sources. 

19 ‘‘PART B—LOW TUITION 

20 ‘‘SEC. 811. INCENTIVES AND REWARDS FOR LOW TUITION. 

21 ‘‘(a) REWARDS FOR LOW TUITION.— 

22 ‘‘(1) COMPETITIVE GRANTS.—The Secretary 

23 shall award grants on a competitive basis to institu24 tions of higher education that, for academic year 

25 2008–2009 or any succeeding academic year, have 


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1 an annual net tuition increase (expressed as a per2 centage) for the most recent academic year for 

3 which satisfactory data is available that is equal to 

4 or less than the percentage change in the higher 

5 education price index for such academic year. 

6 ‘‘(2) USE OF FUNDS.—Funds awarded to an in7 stitution of higher education under paragraph (1) 

8 shall be distributed by the institution in the form of 

9 need-based grant aid to students who are eligible for 

10 Federal Pell Grants, except that no student shall re11 ceive an amount under this section that would cause 

12 the amount of total financial aid received by such 

13 student to exceed the cost of attendance of the insti14 tution. 

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

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

17 education that the Secretary of Education deter18 mines complies with the requirements of paragraph 

19 (2) or (3) of this subsection, the Secretary shall pro20 vide to such institution a bonus amount. Such insti21 tution shall award the bonus amount first to stu22 dents who are eligible for Federal Pell Grants who 

23 were in attendance at the institution during the 

24 award year that such institution satisfied the eligi25 bility criteria for maintaining low tuition and fees, 


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1 then to students who are eligible for Federal Pell 

2 Grants who were not in attendance at the institution 

3 during such award year, in the form of need-based 

4 aid. 

5 ‘‘(2) 4-YEAR INSTITUTIONS.—An institution of 

6 higher education that provides a program of instruc7 tion for which it awards a bachelor’s degree complies 

8 with the requirements of this paragraph if such in9 stitution guarantees that for any academic year be10 ginning on or after July 1, 2008, and for each of the 

11 4 succeeding continuous academic years, the net tui12 tion charged to an undergraduate student will not 

13 exceed— 

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

15 charged for an academic year at the time he or 

16 she first enrolled in the institution of higher 

17 education, plus 

18 ‘‘(B) the product of the percentage in19 crease in the higher education price index for 

20 the prior academic year, or the most recent 

21 prior academic year for which data is available, 

22 multiplied by the amount determined under 

23 subparagraph (A). 

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

25 institution of higher education that does not provide 


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1 a program of instruction for which it awards a bach2 elor’s degree complies with the requirements of this 

3 paragraph if such institution guarantees that for 

4 any academic year (or the equivalent) beginning on 

5 or after July 1, 2008, and for each of the 1.5 suc6 ceeding continuous academic years, the net tuition 

7 charged to an undergraduate student will not ex8 ceed— 

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

10 charged for an academic year at the time he or 

11 she first enrolled in the institution of higher 

12 education, plus 

13 ‘‘(B) the product of the percentage in14 crease in the higher education price index for 

15 the prior academic year, or the most recent 

16 prior academic year for which data is available, 

17 multiplied by the amount determined under 

18 subparagraph (A). 

19 ‘‘(c) MAINTAINING AFFORDABLE TUITION.— 

20 ‘‘(1) INSTITUTION REPORTS.—If an institution 

21 of higher education has an increase in annual net 

22 tuition (expressed as a percentage), for the most re23 cent academic year for which satisfactory data is 

24 available, that is greater than the percentage in25 crease in the higher education price index for such 


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1 academic year, the institution is required to submit 

2 to the Secretary the following information, within 6 

3 months of such determination— 

4 ‘‘(A) a report on the factors contributing 

5 to the increase in the institution’s costs and the 

6 increase in net tuition and fees charged to stu7 dents, including identification of the major 

8 areas in the institution’s budget with the great9 est cost increases; 

10 ‘‘(B) the institution’s 3 most recent Form 

11 990s submitted to the Internal Revenue Serv12 ice, as required under section 6033 of the Inter13 nal Revenue Code of 1986; 

14 ‘‘(C) a description of the major areas of 

15 expenditures in the institution’s budget with the 

16 greatest increase for such academic year; and 

17 ‘‘(D) voluntary actions being taken by the 

18 institution to reduce net tuition. 

19 ‘‘(2) REPORT TO CONGRESS.—The Secretary 

20 shall compile the information submitted under this 

21 subsection and shall provide to the relevant author22 izing committees an annual report relating to such 

23 information. 

24 ‘‘(d) PRIORITY.—In awarding incentives and rewards 

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1 stitutions of higher education with the lowest annual net 

2 tuition increase for the most recent academic year for 

3 which satisfactory data is available, when compared with 

4 other institutions of higher education with annual net tui5 tion increases that are equal to or less than the higher 

6 education price index for such academic year. 

7 ‘‘(e) EXEMPTIONS.—An institution shall still be eligi8 ble to receive rewards under subsections (a) and (b), and 

9 will not be penalized under subsection (c) if, for any 2- 

10 year interval for which net tuition is computed under such 

11 subsections— 

12 ‘‘(1) with respect to the class of institutions de13 scribed in section 131(d)(5) to which the institution 

14 belongs, the net tuition of the institution is in the 

15 lowest quartile of institutions within such class, as 

16 determined by the Secretary, during the last year of 

17 such 2-year interval; or 

18 ‘‘(2) the institution has a percentage change in 

19 its net tuition computed under subsection (a) or (c) 

20 that exceeds the rate of change in the higher edu21 cation price index (as defined in section 401B(d)) 

22 over the same time period, but the dollar amount of 

23 the net tuition increase is less than $500. 

24 ‘‘(f) DEFINITIONS.— 


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1 ‘‘(1) NET TUITION.—The term ‘net tuition’ has 

2 the same meaning as provided in section 131(h). 

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

4 term ‘higher education price index’ has the same 

5 meaning as provided in section 131(h). 

6 ‘‘(g) FUNDING.—There shall be available to the Sec7 retary to carry out this section, from funds not otherwise 

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

9 2008 through 2012. 

10 ‘‘(h) SUNSET.—The authority to carry out this sec11 tion shall expire at the end of fiscal year 2012.’’. 

12 TITLE III—ENSURING A HIGHLY 

13 QUALIFIED TEACHER IN 

14 EVERY CLASSROOM 

15 PART A—TEACH GRANTS 

16 SEC. 301. TEACH GRANTS. 

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

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

19 ‘‘Subpart 9—TEACH Grants 

20 ‘‘SEC. 420L. PROGRAM ESTABLISHED. 

21 ‘‘(a) PROGRAM AUTHORITY.— 

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

23 shall pay to each eligible institution such sums as 

24 may be necessary to pay to each eligible student (de25 fined in accordance with section 484) who files an 


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1 application and agreement in accordance with sec2 tion 420M, and who qualifies— 

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

4 420M(a), a TEACH Grant in the amount of 

5 $4,000 for each academic year during which 

6 that student is in attendance at the institution; 

7 and 

8 ‘‘(B) under paragraphs (2) and (3) of sec9 tion 420M(a), a Bonus TEACH Grant in the 

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

11 the TEACH Grant under subparagraph (A)) 

12 for each academic year during which that stu13 dent so qualifies. 

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

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

16 ‘Teacher Education Assistance for College and 

17 Higher Education Grants’ or ‘TEACH Grants’; 

18 and 

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

20 Bonus TEACH Grants. 

21 ‘‘(b) PAYMENT METHODOLOGY.— 

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

23 of any funds provided to an institution under sub24 section (a) shall be advanced to eligible institutions 

25 prior to the start of each payment period and shall 


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1 be based upon an amount requested by the institu2 tion as needed to pay eligible students until such 

3 time as the Secretary determines and publishes in 

4 the Federal Register with an opportunity for com5 ment, an alternative payment system that provides 

6 payments to institutions in an accurate and timely 

7 manner, except that this sentence shall not be con8 strued to limit the authority of the Secretary to 

9 place an institution on a reimbursement system of 

10 payment. 

11 ‘‘(2) DIRECT PAYMENT.—Nothing in this sec12 tion shall be interpreted to prohibit the Secretary 

13 from paying directly to students, in advance of the 

14 beginning of the academic term, an amount for 

15 which they are eligible, in cases where the eligible in16 stitution elects not to participate in the disburse17 ment system required by paragraph (1). 

18 ‘‘(3) DISTRIBUTION OF GRANTS TO STU19 DENTS.—Payments under this subpart shall be 

20 made, in accordance with regulations promulgated 

21 by the Secretary for such purpose, in such manner 

22 as will best accomplish the purposes of this subpart. 

23 Any disbursement allowed to be made by crediting 

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

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1 ing, room and board. The student may elect to have 

2 the institution provide other such goods and services 

3 by crediting the student’s account. 

4 ‘‘(c) REDUCTIONS IN AMOUNT.— 

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

6 where a student attends an institution of higher edu7 cation on less than a full-time basis (including a stu8 dent who attends an institution of higher education 

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

10 year, the amount of a grant under this subpart for 

11 which that student is eligible shall be reduced in 

12 proportion to the degree to which that student is not 

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

14 schedule of reductions established by the Secretary 

15 for the purposes of this subpart, computed in ac16 cordance with this subpart. Such schedule of reduc17 tions shall be established by regulation and pub18 lished in the Federal Register in accordance with 

19 section 482 of this Act. 

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

21 grant awarded under this subpart, in combination 

22 with Federal assistance and other student assist23 ance, shall not exceed the cost of attendance (as de24 fined in section 472) at the institution at which that 

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1 dent, it is determined that the amount of a TEACH 

2 Grant or a Bonus TEACH Grant exceeds the cost 

3 of attendance for that year, the amount of the 

4 TEACH Grant or Bonus TEACH Grant, respec5 tively, shall be reduced until such grant does not ex6 ceed the cost of attendance at such institution. 

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

8 ‘‘(1) UNDERGRADUATE AND POST-BACCA9 LAUREATE STUDENTS.—The period during which an 

10 undergraduate or post-baccalaureate student may re11 ceive grants under this subpart shall be the period 

12 required for the completion of the first under13 graduate baccalaureate or post-baccalaureate course 

14 of study being pursued by that student at the insti15 tution at which the student is in attendance except 

16 that— 

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

18 is enrolled in a noncredit or remedial course of 

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

20 counted for the purpose of this paragraph; and 

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

22 receive under this subpart for undergraduate or 

23 post-baccalaureate study shall not exceed 

24 $16,000 with respect to a student who receives 

25 only TEACH Grants, and $18,000 with respect 


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1 to a student who receives TEACH Grants and 

2 Bonus TEACH Grants. 

3 ‘‘(2) GRADUATE STUDENTS.—The period dur4 ing which a graduate student may receive grants 

5 under this subpart shall be the period required for 

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

7 being pursued by that student at the institution at 

8 which the student is in attendance, except that the 

9 total amount that a student may receive under this 

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

11 with respect to a student who receives only TEACH 

12 Grants, and $10,000 with respect to a student who 

13 receives TEACH Grants and Bonus TEACH 

14 Grants. 

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

16 Nothing in this section shall exclude from eligibility 

17 courses of study which are noncredit or remedial in 

18 nature (including courses in English language acqui19 sition) which are determined by the institution to be 

20 necessary to help the student be prepared for the 

21 pursuit of a first undergraduate baccalaureate or 

22 post-baccalaureate degree or certificate or, in the 

23 case of courses in English language instruction, to 

24 be necessary to enable the student to utilize already 

25 existing knowledge, training, or skills. Nothing in 


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1 this section shall exclude from eligibility programs of 

2 study abroad that are approved for credit by the 

3 home institution at which the student is enrolled. 

4 ‘‘SEC. 420M. ELIGIBILITY; APPLICATIONS. 

5 ‘‘(a) APPLICATIONS; DEMONSTRATION OF ELIGI6 BILITY.— 

7 ‘‘(1) FILING REQUIRED.—The Secretary shall 

8 from time to time set dates by which students shall 

9 file applications for grants under this subpart. Each 

10 student desiring a grant under this subpart for any 

11 year shall file an application containing such infor12 mation and assurances as the Secretary may deem 

13 necessary to enable the Secretary to carry out the 

14 functions and responsibilities of this subpart. 

15 ‘‘(2) DEMONSTRATION OF TEACH GRANT ELIGI16 BILITY.—Each application submitted under para17 graph (1) for a TEACH Grant shall contain such in18 formation as is necessary to demonstrate that— 

19 ‘‘(A) if the applicant is an enrolled stu20 dent— 

21 ‘‘(i) the student is an eligible student 

22 for purposes of section 484; 

23 ‘‘(ii) the student— 

24 ‘‘(I) has a grade point average 

25 that is determined, under standards 


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1 prescribed by the Secretary, to be 

2 comparable to a 3.25 average on a 

3 zero to 4.0 scale, except that, if the 

4 student is in the first year of a pro5 gram of undergraduate education, 

6 such grade point average shall be de7 termined on the basis of the student’s 

8 cumulative high school grade point av9 erage; or 

10 ‘‘(II) displayed high academic ap11 titude by receiving a score above the 

12 75th percentile on at least one of the 

13 batteries in an undergraduate, post14 baccalaureate, or graduate school ad15 missions test; and 

16 ‘‘(iii) the student is completing 

17 coursework and other requirements nec18 essary to begin a career in teaching, or 

19 plans to complete such coursework and re20 quirements prior to graduating; or 

21 ‘‘(B) if the applicant is a current or pro22 spective teacher applying for a grant to obtain 

23 a graduate degree— 

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1 tise in a field in which there is a shortage 

2 of teachers, such as math, science, special 

3 education, English language acquisition, or 

4 another high-need subject; or 

5 ‘‘(ii) the applicant is or was a teacher 

6 who is using high-quality alternative cer7 tification routes, such as Teach for Amer8 ica, to get certified. 

9 ‘‘(3) DEMONSTRATION OF BONUS TEACH GRANT

10 ELIGIBILITY.—Each application submitted under 

11 paragraph (1) for a Bonus TEACH Grant shall con12 tain such information as is necessary to demonstrate 

13 that the applicant is— 

14 ‘‘(A) eligible for, and has applied for, a 

15 TEACH Grant; and 

16 ‘‘(B) a student enrolled in a qualified 

17 teacher preparation program, as defined in sec18 tion 420N. 

19 ‘‘(b) AGREEMENTS TO SERVE.—Each application 

20 under subsection (a) shall contain or be accompanied by 

21 an agreement by the applicant that— 

22 ‘‘(1) the applicant will— 

23 ‘‘(A) serve as a full-time teacher for a total 

24 of not less than 4 academic years within 8 

25 years after completing the course of study for 


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1 which the applicant received a TEACH Grant 

2 under this subpart; 

3 ‘‘(B) teach in a school described in section 

4 465(a)(2)(A); 

5 ‘‘(C) with respect to an applicant for— 

6 ‘‘(i) TEACH Grants, teach in any of 

7 the following fields: mathematics, science, 

8 a foreign language, bilingual education, or 

9 special education, or as a reading spe10 cialist, or another field documented as 

11 high-need by the Federal Government, 

12 State government, or local education agen13 cy and approved by the Secretary; or 

14 ‘‘(ii) TEACH Grants and Bonus 

15 TEACH Grants, teach mathematics, 

16 science, or a science-related field; 

17 ‘‘(D) submit evidence of such employment 

18 in the form of a certification by the chief ad19 ministrative officer of the school upon comple20 tion of each year of such service; and 

21 ‘‘(E) comply with the requirements for 

22 being a highly qualified teacher as defined in 

23 section 9101 of the Elementary and Secondary 

24 Education Act of 1965; and 


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1 ‘‘(2) in the event that the applicant is deter2 mined to have failed or refused to carry out such 

3 service obligation, the sum of the amounts of any 

4 TEACH Grants and Bonus TEACH Grants received 

5 by such applicant will be treated as a loan and col6 lected from the applicant in accordance with sub7 section (c) and the regulations thereunder. 

8 ‘‘(c) REPAYMENT FOR FAILURE TO COMPLETE

9 SERVICE.—In the event that any recipient of a grant 

10 under this subpart fails or refuses to comply with the serv11 ice obligation in the agreement under subsection (b), the 

12 sum of the amounts of any TEACH Grants and Bonus 

13 TEACH Grants received by such recipient shall be treated 

14 as a Direct Loan under part D of title IV, and shall be 

15 subject to repayment, together with interest thereon ac16 cruing after the period of service, in accordance with terms 

17 and conditions specified by the Secretary in regulations 

18 under this subpart. 

19 ‘‘SEC. 420N. DEFINITIONS. 

20 ‘‘For the purposes of this subpart: 

21 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi22 ble institution’ means an institution of higher edu23 cation, as defined in section 102, that the Secretary 

24 determines— 


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1 ‘‘(A) provides high quality teacher prepara2 tion and professional development services, in3 cluding extensive clinical experience as a part of 

4 pre-service preparation; 

5 ‘‘(B) is financially sound; 

6 ‘‘(C) provides pedagogical course work, or 

7 assistance in the provision of such coursework, 

8 including the monitoring of student perform9 ance, and formal instruction related to the the10 ory and practices of teaching; and 

11 ‘‘(D) provides supervision and support 

12 services to teachers, or assistance in the provi13 sion of such services, including mentoring fo14 cused on developing effective teaching skills and 

15 strategies. 

16 ‘‘(2) QUALIFIED TEACHER PREPARATION PRO17 GRAM.—The term ‘qualified teacher preparation pro18 gram’ means a program for students and teachers 

19 described in subparagraph (A) or (B) of section 

20 420M(a)(2) (referred to jointly in this paragraph as 

21 ‘teacher candidates’) that— 

22 ‘‘(A) recruits and prepares teacher can23 didates who major in science, technology fields, 

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1 tified as elementary and secondary teachers in 

2 those disciplines, special education teachers, or 

3 teachers of English Language Learners, with 

4 the goals of improving teacher knowledge and 

5 effectiveness and increasing elementary and sec6 ondary student academic achievement; 

7 ‘‘(B) is implemented by an institution of 

8 higher education in partnership with high-need 

9 local educational agencies and schools; 

10 ‘‘(C) offers a baccalaureate degree, post11 baccalaureate teacher credential, or graduate 

12 degree with a concurrent teacher certification to 

13 teacher candidates; 

14 ‘‘(D) is implemented in coordination with 

15 the faculty of the relevant departments of the 

16 institution of higher education; 

17 ‘‘(E) utilizes experienced teachers who 

18 have a demonstrated record of success in teach19 ing underserved students to instruct teacher 

20 candidates in the disciplines described in sub21 paragraph (A); 

22 ‘‘(F) provides teacher candidates with— 

23 ‘‘(i) support services, including men24 toring by experienced teachers who have a 


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1 demonstrated record of success in teaching 

2 underserved students; 

3 ‘‘(ii) exposure to, and field experience 

4 in, the classroom within the first year of 

5 entering the qualified teacher preparation 

6 program; and 

7 ‘‘(iii) other related support practices 

8 while the teacher candidates are partici9 pating in the program, and after such can10 didates graduate from the institution of 

11 higher education and are employed as 

12 teachers; 

13 ‘‘(G) participates in partnerships which in14 clude the institution of higher education and 

15 local educational agencies and charter districts 

16 to provide opportunities for teacher candidate 

17 field work; 

18 ‘‘(H) focuses on increasing the number of 

19 teachers in the disciplines described in subpara20 graph (A); and 

21 ‘‘(I) encourages individuals from underrep22 resented populations to enter into the teaching 

23 profession. 

24 ‘‘(3) POST-BACCALAUREATE.—The term ‘post25 baccalaureate’ means a program of instruction that 


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1 does not lead to a graduate degree, and that consists 

2 of courses required by a State in order for the stu3 dent to receive a professional certification or licens4 ing credential that is required for employment as a 

5 teacher in an elementary school or secondary school 

6 in that State, except that such term shall not in7 clude any program of instruction offered by an insti8 tution of higher education that offers a bacca9 laureate degree in education. 

10 ‘‘SEC. 420O. PROGRAM PERIOD AND FUNDING. 

11 ‘‘There shall be available to the Secretary to carry 

12 out this subpart, from funds not otherwise appropriated, 

13 such sums as may be necessary to provide TEACH Grants 

14 and Bonus TEACH Grants in accordance with this sub15 part to each eligible applicant.’’. 

16 PART B—CENTERS OF EXCELLENCE 

17 SEC. 311. CENTERS OF EXCELLENCE. 

18 Title II (20 U.S.C. 1021 et seq.) is amended by add19 ing at the end the following: 

20 ‘‘PART C—CENTERS OF EXCELLENCE 

21 ‘‘SEC. 231. DEFINITIONS. 

22 ‘‘As used in this part: 

23 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi24 ble institution’ means— 


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1 ‘‘(A) an institution of higher education 

2 that has a teacher preparation program that 

3 meets the requirements of section 203(b)(2)and 

4 that is— 

5 ‘‘(i) a part B institution (as defined in 

6 section 322); 

7 ‘‘(ii) a Hispanic-serving institution (as 

8 defined in section 502); 

9 ‘‘(iii) a Tribal College or University 

10 (as defined in section 316); 

11 ‘‘(iv) an Alaska Native-serving institu12 tion (as defined in section 317(b)); or 

13 ‘‘(v) a Native Hawaiian-serving insti14 tution (as defined in section 317(b)); 

15 ‘‘(B) a consortium of institutions described 

16 in subparagraph (A); or 

17 ‘‘(C) an institution described in subpara18 graph (A), or a consortium described in sub19 paragraph (B), in partnership with any other 

20 institution of higher education, but only if the 

21 center of excellence established under section 

22 232 is located at an institution described in 

23 subparagraph (A). 

24 ‘‘(2) HIGHLY QUALIFIED.—The term ‘highly 

25 qualified’ when used with respect to an individual 


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1 means that the individual is highly qualified as de2 termined under section 9101 of the Elementary and 

3 Secondary Education Act of 1965 (20 U.S.C. 7801) 

4 or section 602 of the Individuals with Disabilities 

5 Education Act (20 U.S.C. 1401). 

6 ‘‘(3) SCIENTIFICALLY BASED READING RE7 SEARCH.—The term ‘scientifically based reading re8 search’ has the meaning given such term in section 

9 1208 of the Elementary and Secondary Education 

10 Act of 1965 (20 U.S.C. 6368). 

11 ‘‘(4) SCIENTIFICALLY BASED RESEARCH.—The 

12 term ‘scientifically based research’ has the meaning 

13 given such term in section 9101 of the Elementary 

14 and Secondary Education Act of 1965 (20 U.S.C. 

15 7801). 

16 ‘‘SEC. 232. CENTERS OF EXCELLENCE. 

17 ‘‘(a) PROGRAM AUTHORIZED.—From the amounts 

18 appropriated to carry out this part, the Secretary is au19 thorized to award competitive grants to eligible institu20 tions to establish centers of excellence. 

21 ‘‘(b) USE OF FUNDS.—Grants provided by the Sec22 retary under this part shall be used to ensure that current 

23 and future teachers are highly qualified, by carrying out 

24 one or more of the following activities: 


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1 ‘‘(1) Implementing reforms within teacher prep2 aration programs to ensure that such programs are 

3 preparing teachers who are highly qualified, are able 

4 to understand scientifically based research, and are 

5 able to use advanced technology effectively in the 

6 classroom, including use for instructional techniques 

7 to improve student academic achievement, by— 

8 ‘‘(A) retraining faculty; and 

9 ‘‘(B) designing (or redesigning) teacher 

10 preparation programs that— 

11 ‘‘(i) prepare teachers to close student 

12 achievement gaps, are based on rigorous 

13 academic content, scientifically based re14 search (including scientifically based read15 ing research), and challenging State stu16 dent academic content standards; and 

17 ‘‘(ii) promote strong teaching skills. 

18 ‘‘(2) Providing sustained and high-quality 

19 preservice clinical experience, including the men20 toring of prospective teachers by exemplary teachers, 

21 substantially increasing interaction between faculty 

22 at institutions of higher education and new and ex23 perienced teachers, principals, and other administra24 tors at elementary schools or secondary schools, and 


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1 providing support, including preparation time, for 

2 such interaction. 

3 ‘‘(3) Developing and implementing initiatives to 

4 promote retention of highly qualified teachers and 

5 principals, including minority teachers and prin6 cipals, including programs that provide— 

7 ‘‘(A) teacher or principal mentoring from 

8 exemplary teachers or principals; or 

9 ‘‘(B) induction and support for teachers 

10 and principals during their first 3 years of em11 ployment as teachers or principals, respectively. 

12 ‘‘(4) Awarding scholarships based on financial 

13 need to help students pay the costs of tuition, room, 

14 board, and other expenses of completing a teacher 

15 preparation program. 

16 ‘‘(5) Disseminating information on effective 

17 practices for teacher preparation and successful 

18 teacher certification and licensure assessment prepa19 ration strategies. 

20 ‘‘(6) Activities authorized under sections 202, 

21 203, and 204. 

22 ‘‘(c) APPLICATION.—Any eligible institution desiring 

23 a grant under this section shall submit an application to 

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1 companied by such information as the Secretary may re2 quire. 

3 ‘‘(d) MINIMUM GRANT AMOUNT.—The minimum 

4 amount of each grant under this part shall be $500,000. 

5 ‘‘(e) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

6 An eligible institution that receives a grant under this part 

7 may not use more than 2 percent of the grant funds for 

8 purposes of administering the grant. 

9 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

10 such regulations as may be necessary to carry out this 

11 part. 

12 ‘‘SEC. 233. APPROPRIATIONS. 

13 ‘‘There shall be available to the Secretary, from funds 

14 not otherwise appropriated, $50,000,000 for the period 

15 beginning with fiscal year 2008 and ending with fiscal 

16 year 2012, to carry out this part beginning with academic 

17 year 2008–2009, which shall remain available until ex18 pended. The authority to carry out this part shall expire 

19 at the end of fiscal year 2012.’’. 


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1 TITLE IV—LEVERAGING FUNDS 

2 TO INCREASE COLLEGE ACCESS 

3 PART A—STRENGTHENING HISTORICALLY 

4 BLACK COLLEGES AND UNIVERSITIES AND 

5 MINORITY-SERVING INSTITUTIONS 

6 SEC. 401. INVESTMENT IN HISTORICALLY BLACK COL7 LEGES AND UNIVERSITIES AND MINORITY8 SERVING INSTITUTION. 

9 Title IV is amended by adding at the end the fol10 lowing new part: 

11 ‘‘PART I—STRENGTHENING HISTORICALLY 

12 BLACK COLLEGES AND UNIVERSITIES AND 

13 OTHER MINORITY-SERVING INSTITUTIONS 

14 ‘‘SEC. 499A. INVESTMENT IN HISTORICALLY BLACK COL15 LEGES AND UNIVERSITIES AND OTHER MI16 NORITY-SERVING INSTITUTION. 

17 ‘‘(a) ELIGIBLE INSTITUTION.—An institution of 

18 higher education is eligible to receive funds from the 

19 amounts made available under this section if such institu20 tion is— 

21 ‘‘(1) a part B institution (as defined in section 

22 322 (20 U.S.C. 1061)); 

23 ‘‘(2) a Hispanic-serving institution (as defined 

24 in section 502 (20 U.S.C. 1101a)); 


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1 ‘‘(3) a Tribal College or University (as defined 

2 in section 316 (20 U.S.C. 1059c)); 

3 ‘‘(4) an Alaska Native-serving institution or a 

4 Native Hawaiian-serving institution (as defined in 

5 section 317(b) (20 U.S.C. 1059d(b))); 

6 ‘‘(5) a Predominantly Black Institution (as de7 fined in subsection (c)); or 

8 ‘‘(6) an Asian and Pacific Islander-serving in9 stitution (as defined in subsection (c)). 

10 ‘‘(b) NEW INVESTMENT OF FUNDS.— 

11 ‘‘(1) IN GENERAL.—There shall be available to 

12 the Secretary to carry out this section, from funds 

13 not otherwise appropriated, $100,000,000 for each 

14 of the fiscal years 2008 through 2012. The authority 

15 to carry out this section shall expire at the end of 

16 fiscal year 2012. 

17 ‘‘(2) ALLOCATION AND ALLOTMENT.— 

18 ‘‘(A) IN GENERAL.—Of the amounts made 

19 available under paragraph (1) for any fiscal 

20 year— 

21 ‘‘(i) 40 percent shall be available for 

22 allocation under subparagraph (B); 

23 ‘‘(ii) 40 percent shall be available for 

24 allocation under subparagraph (C); and 


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1 ‘‘(iii) 20 percent shall be available for 

2 allocation under subparagraph (D). 

3 ‘‘(B) HSI STEM AND ARTICULATION PRO4 GRAMS.—The amount made available for alloca5 tion under this subparagraph by subparagraph 

6 (A)(i) for any fiscal year shall be available for 

7 Hispanic-serving Institutions for activities de8 scribed in section 503, with a priority given to 

9 applications that propose— 

10 ‘‘(i) to increase the number of His11 panic and other low income students at12 taining degrees in the fields of science, 

13 technology, engineering and mathematics; 

14 and 

15 ‘‘(ii) to develop model transfer and ar16 ticulation agreements between 2-year His17 panic-serving institutions and 4-year insti18 tutions in such fields. 

19 ‘‘(C) ALLOCATION AND ALLOTMENT HBCUS

20 AND PBIS.—From the amount made available 

21 for allocation under this subparagraph by sub22 paragraph (A)(ii) for any fiscal year— 

23 ‘‘(i) $34,000,000 shall be available to 

24 eligible institutions described in subsection 

25 (a)(1) and shall be made available as 


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1 grants under section 323 and allotted 

2 among such institutions under section 324, 

3 treating such amount, plus the amount ap4 propriated for such fiscal year in a regular 

5 or supplemental appropriation Act to carry 

6 out part B of title III, as the amount ap7 propriated to carry out part B of title III 

8 for purposes of allotments under section 

9 324, for use by such institutions with a 

10 priority for— 

11 ‘‘(I) activities described in para12 graphs (1), (2), (4), (5), and (10) of 

13 section 323(a); and 

14 ‘‘(II) other activities, consistent 

15 with the institution’s comprehensive 

16 plan and designed to increase the in17 stitution’s capacity to prepare stu18 dents for careers in the physical and 

19 natural sciences, mathematics, com20 puter science and information tech21 nology and sciences, engineering, lan22 guage instruction in the less-com23 monly taught languages and inter24 national affairs, and nursing and al25 lied health professions; and 


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1 ‘‘(ii) $6,000,000 shall be available to 

2 eligible institutions described in subsection 

3 (a)(5) and shall be available for a competi4 tive grant program to award 10 grants of 

5 $600,000 annually for programs in the fol6 lowing areas: science, technology, engineer7 ing, or mathematics (STEM); health edu8 cation; internationalization or 

9 globalization; teacher preparation; or im10 proving educational outcomes of African 

11 American males. 

12 ‘‘(D) ALLOCATION AND ALLOTMENT TO

13 OTHER MINORITY-SERVING INSTITUTIONS.— 

14 From the amount made available for allocation 

15 under this subparagraph by subparagraph 

16 (A)(iii) for any fiscal year (in this subpara17 graph referred to as the ‘allocable amount’)— 

18 ‘‘(i) 60 percent of the allocable 

19 amount for such fiscal year shall be avail20 able to eligible institutions described in 

21 subsection (a)(3) and shall be made avail22 able as grants under section 316, treating 

23 such 60 percent of the allocable amount as 

24 part of the amount appropriated for such 

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1 propriation Act to carry out such section, 

2 and using such 60 percent for purposes de3 scribed in subsection (c) of such section; 

4 ‘‘(ii) 30 percent of the allocable 

5 amount for such fiscal year shall be avail6 able to eligible institutions described in 

7 subsection (a)(4) and shall be made avail8 able as grants under section 317, treating 

9 such 30 percent of the allocable amount as 

10 part of the amount appropriated for such 

11 fiscal year in a regular or supplemental ap12 propriation Act to carry out such section 

13 and using such 60 percent for purposes de14 scribed in subsection (a) of such section; 

15 and 

16 ‘‘(iii) 10 percent of the allocable 

17 amount for such fiscal year shall be avail18 able to eligible institutions described in 

19 subsection (a)(6) for activities described in 

20 section 311(c). 

21 ‘‘(c) DEFINITIONS.— 

22 ‘‘(1) PREDOMINANTLY BLACK INSTITUTION.— 

23 The term ‘Predominantly Black institution’ means 

24 an institution of higher education that— 


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1 ‘‘(A) has an enrollment of needy under2 graduate students as required and defined by 

3 paragraph (2); 

4 ‘‘(B) has an average educational and gen5 eral expenditure which is low, per full-time 

6 equivalent undergraduate student in comparison 

7 with the average educational and general ex8 penditure per full-time equivalent under9 graduate student of institutions that offer simi10 lar instruction, except that the Secretary may 

11 apply the waiver requirements described in sec12 tion 392(b) to this subparagraph in the same 

13 manner as the Secretary applies the waiver re14 quirements to section 312(b)(1)(B); 

15 ‘‘(C) has an enrollment of undergraduate 

16 students— 

17 ‘‘(i) that is at least 40 percent Black 

18 American students; 

19 ‘‘(ii) that is at least 1,000 under20 graduate students; 

21 ‘‘(iii) of which not less than 50 per22 cent of the undergraduate students en23 rolled at the institution are low-income in24 dividuals or first-generation college stuVerDate Aug 31 2005 03:04 Jul 17, 2007 Jkt 059200 PO 00000 Frm 00111 Fmt 6652 Sfmt 6201 E:\BILLS\H2669.PCS H2669

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1 dents (as that term is defined in section 

2 402A(g)); and 

3 ‘‘(iv) of which not less than 50 per4 cent of the undergraduate students are en5 rolled in an educational program leading to 

6 a bachelor’s or associate’s degree that the 

7 institution is licensed to award by the 

8 State in which it is located; 

9 ‘‘(D) is legally authorized to provide, and 

10 provides within the State, an educational pro11 gram for which the institution of higher edu12 cation awards a bachelors degree, or in the case 

13 of a junior or community college, an associate’s 

14 degree; 

15 ‘‘(E) is accredited by a nationally recog16 nized accrediting agency or association deter17 mined by the Secretary to be a reliable author18 ity as to the quality of training offered, or is, 

19 according to such an agency or association, 

20 making reasonable progress toward accredita21 tion; and 

22 ‘‘(F) is not receiving assistance under part 

23 B of title III. 

24 ‘‘(2) ENROLLMENT OF NEEDY STUDENTS.— 

25 The term ‘enrollment of needy students’ means the 


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1 enrollment at an eligible institution with respect to 

2 which not less than 50 percent of the undergraduate 

3 students enrolled in an academic program leading to 

4 a degree— 

5 ‘‘(A) in the second fiscal year preceding 

6 the fiscal year for which the determination is 

7 made, were Federal Pell Grant recipients for 

8 such year; 

9 ‘‘(B) come from families that receive bene10 fits under a means-tested Federal benefits pro11 gram (as defined in paragraph (4)); 

12 ‘‘(C) attended a public or nonprofit private 

13 secondary school— 

14 ‘‘(i) that is in the school district of a 

15 local educational agency that was eligible 

16 for assistance under part A of title I of the 

17 Elementary and Secondary Education Act 

18 of 1965 for any year during which the stu19 dent attended such secondary school; and 

20 ‘‘(ii) which for the purpose of this 

21 paragraph and for that year was deter22 mined by the Secretary (pursuant to regu23 lations and after consultation with the 

24 State educational agency of the State in 

25 which the school is located) to be a school 


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1 in which the enrollment of children counted 

2 under section 1113(a)(5) of such Act ex3 ceeds 30 percent of the total enrollment of 

4 such school; or 

5 ‘‘(D) are first-generation college students 

6 (as that term is defined in section 402A(g)), 

7 and a majority of such first-generation college 

8 students are low-income individuals. 

9 ‘‘(3) LOW-INCOME INDIVIDUAL.—The term 

10 ‘low-income individual’ has the meaning given such 

11 term in section 402A(g). 

12 ‘‘(4) MEANS-TESTED FEDERAL BENEFIT PRO13 GRAM.—The term ‘means-tested Federal benefit pro14 gram’ means a program of the Federal Government, 

15 other than a program under title IV, in which eligi16 bility for the programs’ benefits, or the amount of 

17 such benefits, or both, are determined on the basis 

18 of income or resources of the individual or family 

19 seeking the benefit. 

20 ‘‘(5) ASIAN AMERICAN AND PACIFIC ISLANDER21 SERVING INSTITUTION.—The term ‘Asian American 

22 and Pacific Islander-serving institution’ means an 

23 institution of higher education that— 

24 ‘‘(A) is an eligible institution under section 

25 312(b); and 


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1 ‘‘(B) at the time of application, has an en2 rollment of undergraduate students that is at 

3 least 10 percent Asian American and Pacific Is4 lander students. 

5 ‘‘(6) ASIAN AMERICAN.—The term ‘Asian 

6 American’ has the meaning given the term ‘Asian’ in 

7 the Office of Management and Budget’s Standards 

8 for Maintaining, Collecting, and Presenting Federal 

9 Data on Race and Ethnicity as published on October 

10 30, 1997 (62 Fed. Reg. 58789). 

11 ‘‘(7) PACIFIC ISLANDER.—The term ‘Pacific Is12 lander’ has the meaning given the term ‘Native Ha13 waiian’ or ‘Other Pacific Islander’ in such Standards 

14 for Maintaining, Collecting, and Presenting Federal 

15 Data on Race and Ethnicity. 

16 ‘‘(d) TERMINATION OF AUTHORITY.—The authority 

17 to carry out this section expires at the end of fiscal year 

18 2012.’’. 

19 PART B—COLLEGE ACCESS CHALLENGE GRANTS 

20 SEC. 411. COLLEGE ACCESS CHALLENGE GRANTS. 

21 (a) CHALLENGE GRANT PROGRAM ESTABLISHED.— 

22 (1) PROGRAM ESTABLISHED.—The Secretary 

23 shall establish a program to award matching grants 

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1 lege by providing grants to philanthropic organiza2 tions who are members of eligible consortia to carry 

3 out the activities of the consortia to achieve this pur4 pose, including— 

5 (A) providing need-based grants to eligible 

6 students; 

7 (B) providing support to eligible students 

8 through school- or institution-based mentoring 

9 programs; and 

10 (C) conducting outreach programs to en11 courage eligible students to pursue higher edu12 cation. 

13 (2) GRANT PERIOD; RENEWABILITY.—Grants 

14 under this section shall be awarded for one 5-year 

15 period, and may not be renewed. 

16 (3) GRANT AMOUNTS.— 

17 (A) IN GENERAL.—A grant awarded under 

18 this part for a given fiscal year to a philan19 thropic organization shall be in an amount 

20 equal to the lesser of— 

21 (i) 200 percent of the amount of char22 itable gifts received in the preceding fiscal 

23 year by the eligible consortia, including 

24 charitable gifts received by the individual 


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1 members of the consortia with which the 

2 philanthropic organization is associated; or 

3 (ii) the maximum grant amount estab4 lished by the Secretary by regulation, pur5 suant to subsection (f). 

6 (B) GIFTS PROVIDED IN CASH OR IN7 KIND.—For the purposes of subparagraph (A), 

8 the charitable gifts received by an eligible con9 sortia and its members may be provided in cash 

10 or in-kind, including physical non-cash con11 tributions of monetary value such as property, 

12 facilities, and equipment, but excluding services. 

13 (b) USES OF GRANT.— 

14 (1) IN GENERAL.—A philanthropic organization 

15 receiving a grant under this section shall— 

16 (A) provide grants to eligible students; and 

17 (B) distribute grants to members of the 

18 consortia with which the philanthropic organiza19 tion is affiliated, in accordance with the plan 

20 described in subsection (c)(2)(A), to fund the 

21 activities of such consortia in accordance with 

22 the application under subsection (c). 

23 (2) LIMITATION.—Not more than 15 percent of 

24 the funds made available annually through a grant 


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1 under this section may be used for administrative 

2 purposes. 

3 (c) APPLICATIONS.—A philanthropic organization de4 siring a grant under this section shall submit an applica5 tion to the Secretary at such time, in such manner, and 

6 containing such information as the Secretary may require. 

7 Such application shall include the following: 

8 (1) A description of an eligible consortia that 

9 meets the requirements of subsection (d), with which 

10 the philanthropic organization is affiliated, in ac11 cordance with subsection (g). 

12 (2) A detailed description of— 

13 (A) the philanthropic organization’s plans 

14 for distributing the matching grant funds 

15 among the members of the eligible consortia; 

16 and 

17 (B) the eligible consortia’s plans for using 

18 the matching grant funds, including how the 

19 funds will be used to provide financial aid, men20 toring, and outreach programs to eligible stu21 dents. 

22 (3) A plan to ensure the viability of the eligible 

23 consortia and the work of the consortia beyond the 

24 grant period. 


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1 (4) A detailed description of the activities that 

2 carry out this section that are conducted by the eli3 gible consortia at the time of the application, and 

4 how the matching grant funds will assist the eligible 

5 consortia with expanding and enhancing such activi6 ties. 

7 (5) A description of the organizational structure 

8 that will be used to administer the activities carried 

9 out under the plan, including a description of the 

10 system used to track the participation of students 

11 who receive grants to degree completion. 

12 (6) A description of the strategies that will be 

13 used to identify eligible students who are enrolled in 

14 secondary school and who may benefit from the ac15 tivities of the eligible consortia. 

16 (d) ELIGIBLE CONSORTIA.—An eligible consortia 

17 with which a philanthropic organization is affiliated for 

18 the program under this section shall— 

19 (1) be a partnership of mulitple entities that 

20 have agreed to work together to carry out this sec21 tion, including— 

22 (A) such philanthropic organization, which 

23 shall serve as the manager of the consortia; 

24 (B) a State that demonstrates a commit25 ment to ensuring the creation of a Statewide 


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1 system to address the issues of early interven2 tion and financial support for eligible students 

3 to enter and remain in college; and 

4 (C) at the discretion of the philanthropic 

5 organization described in subparagraph (A), ad6 ditional partners, including other non-profit or7 ganizations, government entities (including local 

8 municipalities, school districts, cities, and coun9 ties), institutions of higher education, and other 

10 public or private programs that provide men11 toring or outreach programs; and 

12 (2) conduct activities to assist eligible students 

13 with entering and remaining in college, which in14 clude— 

15 (A) providing need-based grants to eligible 

16 students; 

17 (B) providing early notification to low-in18 come students of their potential eligibility for 

19 Federal financial aid (which may include assist20 ing students and families with filling out 

21 FAFSA forms), as well as financial aid and 

22 other support available from the eligible con23 sortia; 


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1 (C) encouraging increased eligible student 

2 participation in higher education through men3 toring or outreach programs; and 

4 (D) conducting marketing and outreach ef5 forts that are designed to— 

6 (i) encourage full participation of eli7 gible students in the activities of the con8 sortia that carry out this section; and 

9 (ii) provide the communities impacted 

10 by the activities of the consortia with a 

11 general knowledge about the efforts of the 

12 consortia. 

13 (e) REGULATIONS.—The Secretary shall promulgate 

14 regulations to carry out this section. Such regulations 

15 shall include— 

16 (1) the maximum grant amount that may be 

17 awarded to a philanthropic organization under this 

18 section; 

19 (2) the minimum amount of chartable gifts an 

20 eligible consortia (including its members) shall re21 ceive in a fiscal year for the philanthropic organiza22 tion affiliated with such consortia to be eligible for 

23 a grant under this section. 

24 (f) DEFINITIONS.—For the purposes of this section: 


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1 (1) ELIGIBLE STUDENT.—The term ‘‘eligible 

2 student’’ means an individual who— 

3 (A) is a member of an underserved popu4 lation; 

5 (B) is enrolled— 

6 (i) in a secondary school pursuing a 

7 high school diploma; or 

8 (ii) in an institution of higher edu9 cation or is planning to attend an institu10 tion of higher education; and 

11 (C) either— 

12 (i) is receiving, or has received, finan13 cial assistance or support services from the 

14 consortium; or 

15 (ii) meets 2 or more of the following 

16 criteria: 

17 (I) Has an expected family con18 tribution equal to zero (as described 

19 in section 479 of the Higher Edu20 cation Act of 1965) or a comparable 

21 alternative based upon the State’s ap22 proved criteria in section 415C(b)(4) 

23 of such Act. 

24 (II) Has qualified for a free 

25 lunch, or at the State’s discretion a 


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1 reduced price lunch, under the school 

2 lunch program established under the 

3 Richard B. Russell National School 

4 Lunch Act. 

5 (III) Qualifies for the State’s 

6 maximum need-based undergraduate 

7 award. 

8 (IV) Is participating in, or has 

9 participated in, a Federal, State, in10 stitutional, or community mentoring 

11 or outreach program, as recognized by 

12 the eligible consortia carrying out ac13 tivities under this section. 

14 (2) PHILANTHROPIC ORGANIZATION.—The term 

15 ‘‘philanthropic organization’’ means a non-profit or16 ganization— 

17 (A) that does not receive funds under title 

18 IV of the Higher Education Act of 1965 or 

19 under the Elementary and Secondary Education 

20 Act of 1965; 

21 (B) that is not a local educational agency 

22 or an institution of higher education; 

23 (C) that has a demonstrated record of dis24 persing grant aid to underserved populations to 


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1 ensure access to, and participation in, higher 

2 education; 

3 (D) that is affiliated with an eligible con4 sortia (as defined in subsection (d)) to carry 

5 out this section; and 

6 (E) the primary purpose of which is to 

7 provide financial aid and support services to 

8 students from underrepresented populations to 

9 increase the number of such students who enter 

10 and remain in college. 

11 (3) STATE.—The term ‘‘State’’ means each of 

12 the several States of the United States, the District 

13 of Columbia, and Puerto Rico. 

14 (4) UNDERSERVED POPULATION.—The term 

15 ‘‘underserved population’’ means a group of individ16 uals who traditionally have not been well represented 

17 in the general population of students who pursue 

18 and successfully complete a higher education degree. 

19 (g) PROGRAM FUNDING.— 

20 (1) IN GENERAL.—There shall be available to 

21 the Secretary to carry out this section, from funds 

22 not otherwise appropriated, $300,000,000 for the 

23 period beginning with fiscal year 2008 and ending 

24 with fiscal year 2012. 


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1 (2) USE OF EXCESS FUNDS.—If, at the end of 

2 a fiscal year, the funds available for awarding grants 

3 under this section exceed the amount necessary to 

4 make such grants, then all of the excess funds shall 

5 remain available for the subsequent fiscal year, and 

6 shall be used to award grants under section 401 of 

7 the Higher Education Act of 1965 (20 U.S.C. 

8 1070a) for such subsequent fiscal year. 

9 (h) SUNSET.—The authority to carry out this section 

10 shall expire at the end of fiscal year 2012. 

11 PART C—UPWARD BOUND 

12 SEC. 412. UPWARD BOUND. 

13 (a) ABSOLUTE PRIORITY PROHIBITED IN UPWARD

14 BOUND PROGRAM.—Section 402C (20 U.S.C. 1070a–13) 

15 is amended by adding at the end the following new sub16 section: 

17 ‘‘(f) ABSOLUTE PRIORITY PROHIBITED IN UPWARD

18 BOUND PROGRAM.—Except as otherwise expressly pro19 vided by amendment to this section, the Secretary shall 

20 not implement or enforce, and shall rescind, the absolute 

21 priority for Upward Bound Program participant selection 

22 and evaluation published by the Department of Education 

23 in the Federal Register on September 22, 2006 (71 Fed. 

24 Reg. 55447 et seq.).’’. 


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1 (b) ADDITIONAL FUNDS.—Section 402C is further 

2 amended by adding after subsection (f) (as added by sub3 section (a)) the following new subsection: 

4 ‘‘(g) ADDITIONAL FUNDS.— 

5 ‘‘(1) AUTHORIZATION AND APPROPRIATION.— 

6 There are authorized to be appropriated, and there 

7 are appropriated to the Secretary, from funds not 

8 otherwise appropriated, $57,000,000 for each of the 

9 fiscal years 2008 through 2011 to carry out para10 graph (2), except that any amounts that remain un11 expended for such purpose for each of such fiscal 

12 years may be available for technical assistance and 

13 administration costs for the Upward Bound pro14 gram. 

15 ‘‘(2) USE OF FUNDS.—The amounts made 

16 available by paragraph (1) shall be available to pro17 vide assistance to all Upward Bound projects that 

18 did not receive assistance in fiscal year 2007 and 

19 that have a grant score above 70. Such assistance 

20 shall be made available in the form of 4-year 

21 grants.’’. 

Passed the House of Representatives July 11, 2007. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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Calendar No. 269 

110TH CONGRESS 

1ST SESSION H. R. 2669 

AN ACT 

To provide for reconciliation pursuant to section 

for fiscal year 2008. 601 of the concurrent resolution on the budget 

JULY 16, 2007 

Received; read twice and placed on the calendar 


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