★

110TH CONGRESS 

1ST SESSION H. R. 2669 

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, 
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1 SECTION 1. SHORT TITLE. 

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

3 Act of 2007’’. 

4 SEC. 2. REFERENCES; EFFECTIVE DATE. 

5 (a) REFERENCES.—Except as otherwise expressly 

6 provided, whenever in this Act an amendment or repeal 

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

8 a section or other provision, the reference shall be consid9 ered to be made to a section or other provision of the 

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

11 (b) EFFECTIVE DATE.—Except as otherwise ex12 pressly provided therein, the amendments made by this 

13 Act shall be effective on October 1, 2007. 

14 TITLE I—INVESTING IN 

15 STUDENT AID 

16 PART A—INCREASING THE PURCHASING POWER 

17 OF PELL GRANTS 

18 SEC. 101. MANDATORY PELL GRANT INCREASES. 

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

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

21 2004’’ and inserting ‘‘fiscal year 2013’’. 

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

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

24 following new paragraph: 

25 ‘‘(9) ADDITIONAL FUNDS.— 
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1 ‘‘(A) IN GENERAL.—There are authorized 

2 to be appropriated, and there are appropriated, 

3 to carry out subparagraph (B) of this para4 graph (in addition to any other amounts appro5 priated to carry out this section and out of any 

6 money in the Treasury not otherwise appro7 priated) the following amounts: 

8 ‘‘(i) $840,000,000 for fiscal year 

9 2008; 

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

11 2009; 

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

13 2010; 

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

15 2011; 

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

17 2012; 

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

19 2013; 

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

21 2014; 

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

23 2015; 

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

25 2016; and 
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1 ‘‘(x) $2,570,000,000 for fiscal year 

2 2017. 

3 ‘‘(B) INCREASE IN FEDERAL PELL

4 GRANTS.—The amounts made available pursu5 ant to subparagraph (A) of this paragraph shall 

6 be used to increase the amount of the maximum 

7 Pell Grant for which a student shall be eligible 

8 during an award year, as specified in the last 

9 enacted appropriation Act applicable to that 

10 award year, by— 

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

12 2008–2009 and 2009–2010; 

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

14 and 

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

16 and each subsequent award year. 

17 ‘‘(C) USE OF FISCAL YEAR FUNDS FOR

18 AWARD YEARS.—The amounts made available 

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

20 available and remain available for use under 

21 subparagraph (B) for the award year that be22 gins in such fiscal year.’’. 

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

24 (20 U.S.C. 1070a(b)(2)(A)) is amended to read as follows: 
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1 ‘‘(2)(A) The amount of the Federal Pell Grant for 

2 a student eligible under this part shall be— 

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

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

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

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

7 and 

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

9 less an amount equal to the amount determined to 

10 be the expected family contribution with respect to 

11 that student for that year.’’. 

12 (d) TUITION SENSITIVITY.— 

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

14 1070a(b)) is further amended— 

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

16 (B) by redesignating paragraphs (4) 

17 through (9) as paragraphs (3) through (8), re18 spectively. 

19 (2) EFFECTIVE DATE.—The amendments made 

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

21 the date of enactment of this Act. 

22 (3) APPROPRIATION.—There shall be available 

23 to the Secretary, from funds not otherwise appro24 priated, $5,000,000 for the period beginning on the 

25 date of enactment of this Act and ending on October 
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1 1, 2008, to carry out the amendments made by 

2 paragraph (1) of this subsection. 

3 (e) MULTIPLE GRANTS.— 

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

5 401(b) (as redesignated by subsection (d)(1)(B)) is 

6 amended to read as follows: 

7 ‘‘(5) YEAR-ROUND PELL GRANTS.—The Sec8 retary is authorized, for students enrolled in a bac9 calaureate degree, associate’s degree, or certificate 

10 program of study at an eligible institution, to award 

11 such students not more than two Pell grants during 

12 an award year to permit such students to accelerate 

13 progress toward their degree or certificate objectives 

14 by enrolling in courses for more than 2 semesters, 

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

16 year.’’. 

17 (2) EFFECTIVE DATE.—The amendment made 

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

19 (f) ACADEMIC COMPETITIVENESS GRANTS.—Section 

20 401A (as amended by section 8003 of Public Law 109– 

21 171) is amended— 

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

23 except as part of a secondary school program of 

24 study’’ before the semicolon; 
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1 (2) by redesignating subsection (g) as sub2 section (h); and 

3 (3) by inserting after subsection (f) the fol4 lowing new subsection: 

5 ‘‘(g) DETERMINATION OF ACADEMIC YEAR.—Not6 withstanding section 481(a)(2), for the purpose of deter7 mining eligibility for a grant under this section, a student 

8 shall be considered to be enrolled or accepted for enroll9 ment in the first, second, third, or fourth academic year 

10 of a program of undergraduate education based on the 

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

12 of higher education at which the student is enrolled or ac13 cepted for enrollment.’’. 

14 (g) ELIGIBILITY FOR ACADEMIC COMPETITIVENESS

15 GRANTS.—Section 401A is further amended— 

16 (1) in subsection (c)— 

17 (A) by striking ‘‘full–time’’; and 

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

19 follows: 

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

21 including being enrolled or accepted for enrollment 

22 in a degree, certificate, or other eligible program 

23 leading to a recognized educational credential at an 

24 institution of higher education;’’; and 
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1 (2) in subsection (d), by adding at the end the 

2 following new paragraph: 

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

4 ENROLLMENT.—A grant awarded under this section 

5 to an eligible student who attends an eligible institu6 tion on a less than full-time (but at least half-time 

7 or more) basis shall be reduced in the same propor8 tion as would a Federal Pell Grant pursuant to sec9 tion 401(b)(2)(B).’’. 

10 SEC. 102. SUPPORT FOR WORKING STUDENTS. 

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

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

14 ‘‘(D) an income protection allowance of 

15 $3,750 (or a successor amount prescribed by 

16 the Secretary under section 478);’’. 

17 (b) INDEPENDENT STUDENTS WITHOUT DEPEND18 ENTS OTHER THAN A SPOUSE.—Clause (iv) of section 

19 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended 

20 to read as follows: 

21 ‘‘(iv) an income protection allowance 

22 of the following amount (or a successor 

23 amount prescribed by the Secretary under 

24 section 478)— 
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1 ‘‘(I) for single or separated stu2 dents, or married students where both 

3 are enrolled pursuant to subsection 

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

5 ‘‘(II) for married students where 

6 1 is enrolled pursuant to subsection 

7 (a)(2), $10,720;’’. 

8 (c) UPDATED TABLES AND AMOUNTS.—Section 

9 478(b) (20 U.S.C. 1087rr(b)) is amended— 

10 (1) in paragraph (1)— 

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

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

13 ‘‘(A) IN GENERAL.—For each’’; 

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

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

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

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

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

19 and inserting the following: 

20 ‘‘(B) SPECIAL RULE FOR 2007–2008 ACA21 DEMIC YEAR.—For the 2007–2008’’; and 

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

23 ‘‘(C) SPECIAL RULE FOR 2009–2010

24 THROUGH 2012–2013 ACADEMIC YEARS.—For 

25 the 2009–2010 academic year, and for each of 
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1 the 3 succeeding academic years, the Secretary 

2 shall revise the tables in accordance with this 

3 paragraph, except that, for the table in section 

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

5 by increasing the amounts contained in such 

6 table for the preceding academic year by 10 

7 percent.’’; and 

8 (2) in paragraph (2), by striking ‘‘shall be de9 veloped’’ and all that follows through the period at 

10 the end and inserting ‘‘shall be developed— 

11 ‘‘(A) for academic year 2008–2009, by in12 creasing each of the dollar amounts contained 

13 in such section as such section was in effect on 

14 the day before the date of enactment of the Col15 lege Cost Reduction Act of 2007 by a percent16 age equal to the estimated percentage increase 

17 in the Consumer Price Index (as defined in sec18 tion 478(f)) between December 2006 and the 

19 December next preceding the beginning of such 

20 academic year, and rounding the result to the 

21 nearest $10; 

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

23 2011 and 2011–2012, by increasing each of the 

24 amounts determined under this paragraph for 

25 the preceding academic year by 10 percent; and 
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1 ‘‘(C) for each academic year after 2012– 

2 2013, by increasing each of the dollar amounts 

3 determined under this paragraph for academic 

4 year 2012–2013 by a percentage equal to the 

5 estimated percentage increase in the Consumer 

6 Price Index (as defined in section 478(f)) be7 tween December 2011 and the December next 

8 preceding the beginning of such academic year, 

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

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

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

12 and the amendment made by subsection (c) shall take ef13 fect on July 1, 2008. 

14 SEC. 103. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO 

15 IMPROVEMENTS. 

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

17 U.S.C. 1087ss) is amended— 

18 (1) in subsection (b)— 

19 (A) in paragraph (1)(A)(i)— 

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

21 after the semicolon; 

22 (ii) by redesignating subclause (III) as 

23 subclause (IV); 

24 (iii) by inserting after subclause (II) 

25 the following: 
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1 ‘‘(III) 1 of whom is a dislocated 

2 worker; or’’; and 

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

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

5 inserting ‘‘24-month’’; and 

6 (B) in paragraph (1)(B)(i)— 

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

8 after the semicolon; 

9 (ii) by redesignating subclause (III) as 

10 subclause (IV); 

11 (iii) by inserting after subclause (II) 

12 the following: 

13 ‘‘(III) 1 of whom is a dislocated 

14 worker; or’’; and 

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

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

17 inserting ‘‘24-month’’; 

18 (2) in subsection (c)— 

19 (A) in paragraph (1)— 

20 (i) in subparagraph (A)— 

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

22 after the semicolon; 

23 (II) by redesignating clause (iii) 

24 as clause (iv); 
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1 (III) by inserting after clause (ii) 

2 the following: 

3 ‘‘(iii) 1 of whom is a dislocated work4 er; or’’; and 

5 (IV) in clause (iv) (as redesig6 nated by subclause (II)), by striking 

7 ‘‘12-month’’ and inserting ‘‘24- 

8 month’’; and 

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

10 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 

11 (B) in paragraph (2)— 

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) is a dislocated worker; or’’; and 

20 (IV) in clause (iv) (as redesig21 nated by subclause (II)), by striking 

22 ‘‘12-month’’ and inserting ‘‘24- 

23 month’’; and 

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

25 ‘‘$20,000’’ and inserting ‘‘$30,000’’; and 
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1 (C) in the flush matter following para2 graph (2)(B), by adding at the end the fol3 lowing: ‘‘The Secretary shall annually adjust 

4 the income level necessary to qualify an appli5 cant for the zero expected family contribution. 

6 The income level shall be adjusted according to 

7 increases in the Consumer Price Index, as de8 fined in section 478(f).’’; and 

9 (3) in subsection (d)— 

10 (A) by redesignating paragraphs (1) 

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

12 respectively and moving the margins of such 

13 subparagraphs 2 ems to the right; 

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

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

16 the following: 

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

18 ‘‘(1) DISLOCATED WORKER.—The term ‘dis19 located worker’ has the meaning given the term in 

20 section 101 of the Workforce Investment Act of 

21 1998 (29 U.S.C. 2801). 

22 ‘‘(2) MEANS-TESTED FEDERAL BENEFIT PRO23 GRAM.—The term’’. 

24 (b) DISCRETION OF STUDENT FINANCIAL AID AD25 MINISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) 
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1 is amended in the third sentence by inserting ‘‘a family 

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

3 101 of the Workforce Investment Act of 1998 (29 U.S.C. 

4 2801)),’’ after ‘‘recent unemployment of a family mem5 ber,’’. 

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

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

8 SEC. 104. DEFINITIONS. 

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

10 1087vv(a)(2)) is amended— 

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

12 ‘‘no portion’’; and 

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

14 qualified education benefit described in subsection 

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

16 after ‘‘1986,’’. 

17 (b) UNTAXED INCOME AND BENEFITS.—Section 

18 480(b) (20 U.S.C. 1087vv(b)) is amended to read as fol19 lows: 

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

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

22 means— 

23 ‘‘(A) child support received; 

24 ‘‘(B) workman’s compensation; 
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1 ‘‘(C) veteran’s benefits such as death pen2 sion, dependency, and indemnity compensation, 

3 but excluding veterans’ education benefits as 

4 defined in subsection (c); 

5 ‘‘(D) interest on tax-free bonds; 

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

7 (excluding rent subsidies for low-income hous8 ing) for military, clergy, and others (including 

9 cash payments and cash value of benefits); 

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

11 the student‘s behalf, except, for dependent stu12 dents, funds provided by the student’s parents; 

13 ‘‘(G) untaxed portion of pensions; 

14 ‘‘(H) payments to individual retirement ac15 counts and Keogh accounts excluded from in16 come for Federal income tax purposes; and 

17 ‘‘(I) any other untaxed income and bene18 fits, such as Black Lung Benefits, Refugee As19 sistance, railroad retirement benefits, or Job 

20 Training Partnership Act noneducational bene21 fits or benefits received through participation in 

22 employment and training activities under title I 

23 of the Workforce Investment Act of 1998 (29 

24 U.S.C. 2801 et seq.). 
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1 ‘‘(2) The term ‘untaxed income and benefits’ 

2 shall not include the amount of additional child tax 

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

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

5 is amended— 

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

7 considered an asset of a student for purposes of sec8 tion 475’’ and inserting ‘‘shall be considered an 

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

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

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

12 (3) by inserting after paragraph (3) the fol13 lowing: 

14 ‘‘(4) A qualified education benefit shall be con15 sidered an asset of the student for purposes of sec16 tion 476 and 477.’’. 

17 (d) OTHER FINANCIAL ASSISTANCE.—Section 

18 480(j)(2) (20 U.S.C. 1087vv(j)(2)) is amended by insert19 ing ‘‘, or a distribution that is not includable in gross in20 come under section 529 of such Code, under another pre21 paid tuition plan offered by a State, or under a Coverdell 

22 education savings account under section 530 of such 

23 Code,’’ after ‘‘1986’’. 

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

25 this section shall be effective on July 1, 2009. 
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1 PART B—MAKING STUDENT LOANS MORE 

2 AFFORDABLE 

3 SEC. 111. INTEREST RATE REDUCTIONS. 

4 (a) FFEL INTEREST RATES.— 

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

6 amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(4) REDUCED RATES FOR UNDERGRADUATE

9 SUBSIDIZED LOANS.—Notwithstanding subsection 

10 (h) and paragraph (1) of this subsection, with re11 spect to any loan to an undergraduate student made, 

12 insured, or guaranteed under this part (other than 

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

14 428H) for which the first disbursement is made on 

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

16 applicable rate of interest shall be as follows: 

17 ‘‘(A) For a loan for which the first dis18 bursement is made on or after July 1, 2006, 

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

20 unpaid principal balance of the loan. 

21 ‘‘(B) For a loan for which the first dis22 bursement is made on or after July 1, 2008, 

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

24 unpaid principal balance of the loan. 

25 ‘‘(C) For a loan for which the first dis26 bursement is made on or after July 1, 2009, 
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1 and before July 1, 2010, 5.44 percent on the 

2 unpaid principal balance of the loan. 

3 ‘‘(D) For a loan for which the first dis4 bursement is made on or after July 1, 2010, 

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

6 unpaid principal balance of the loan. 

7 ‘‘(E) For a loan for which the first dis8 bursement is made on or after July 1, 2011, 

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

10 unpaid principal balance of the loan. 

11 ‘‘(F) For a loan for which the first dis12 bursement is made on or after July 1, 2012 

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

14 unpaid principal balance of the loan.’’. 

15 (2) SPECIAL ALLOWANCE CROSS REFERENCE.— 

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

17 1086(b)(2)(I)(ii)(II)) is amended by striking ‘‘sec18 tion 427A(l)(1)’’ and inserting ‘‘section 427A(l)(1) 

19 or (l)(4)’’. 

20 (b) DIRECT LOAN INTEREST RATES.—Section 

21 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding 

22 at the end the following new subparagraph: 

23 ‘‘(D) REDUCED RATES FOR UNDER24 GRADUATE FDSL.—Notwithstanding the pre25 ceding paragraphs of this subsection, for Fed-
20 

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1 eral Direct Stafford Loans made to under2 graduate students for which the first disburse3 ment is made on or after July 1, 2006, and be4 fore July 1, 2013, the applicable rate of interest 

5 shall be as follows: 

6 ‘‘(i) For a loan for which the first dis7 bursement is made on or after July 1, 

8 2006, and before July 1, 2008, 6.80 per9 cent on the unpaid principal balance of the 

10 loan. 

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

12 disbursement is made on or after July 1, 

13 2008, and before July 1, 2009, 6.12 per14 cent on the unpaid principal balance of the 

15 loan. 

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

17 disbursement is made on or after July 1, 

18 2009, and before July 1, 2010, 5.44 per19 cent on the unpaid principal balance of the 

20 loan. 

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

22 disbursement is made on or after July 1, 

23 2010, and before July 1, 2011, 4.76 per24 cent on the unpaid principal balance of the 

25 loan. 
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1 ‘‘(v) For a loan for which the first 

2 disbursement is made on or after July 1, 

3 2011, and before July 1, 2012, 4.08 per4 cent on the unpaid principal balance of the 

5 loan. 

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

7 disbursement is made on or after July 1, 

8 2012, and before July 1, 2013, 3.40 per9 cent on the unpaid principal balance of the 

10 loan.’’. 

11 SEC. 112. INCREASES IN LOAN LIMITS. 

12 (a) INCREASE IN THIRD AND SUBSEQUENT YEAR

13 LIMITS.— 

14 (1) FEDERAL INSURANCE LIMITS.—Section 

15 425(a)(1)(A)(iii) (20 U.S.C. 1075(a)(1)(A)(iii)) is 

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

17 ‘‘$7,500’’. 

18 (2) GUARANTY LIMITS.—Section 

19 428(b)(1)(A)(iii)(I) (20 U.S.C. 1078(b)(1)(A)(iii)(I)) 

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

21 ‘‘$7,500’’. 

22 (b) INCREASE IN AGGREGATE LIMITS.— 

23 (1) FEDERAL INSURANCE LIMITS.—Section 

24 425(a)(2)(A) (20 U.S.C. 1075(a)(2)(A)(i)) is 

25 amended— 
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1 (A) in clause (i), by striking ‘‘$23,000’’ 

2 and inserting ‘‘$30,500’’; and 

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

4 and inserting ‘‘$73,000’’. 

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

6 (20 U.S.C. 1078(b)(1)(A)(iii)(I)) is amended— 

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

8 and inserting ‘‘$30,500’’; and 

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

10 and inserting ‘‘$73,000’’. 

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

12 this section shall be effective July 1, 2008. 

13 SEC. 113. REDUCTION OF LENDER SPECIAL ALLOWANCE 

14 PAYMENTS. 

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

16 amended— 

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

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

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

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

21 and (vi)’’; and 

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

23 clause: 

24 ‘‘(vi) REDUCTION FOR LOANS ON OR

25 AFTER OCTOBER 1, 2007.—With respect to 
23 

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1 a loan on which the applicable interest rate 

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

3 percentage to be added under clause 

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

5 payment pursuant to this subparagraph 

6 shall be the following: 

7 ‘‘(I) IN GENERAL AND PLUS

8 LOANS.—1.79 percent in the case of a 

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

10 which the first disbursement of prin11 cipal is made on or after October 1, 

12 2007. 

13 ‘‘(II) IN SCHOOL AND GRACE PE14 RIOD.—1.19 percent in the case of a 

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

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

18 2007. 

19 ‘‘(III) CONSOLIDATION LOANS.— 

20 2.09 percent in the case of a loan de21 scribed in clause (iv) made on or after 

22 October 1, 2007.’’. 
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1 SEC. 114. ELIMINATION OF EXCEPTIONAL PERFORMER 

2 STATUS FOR LENDERS. 

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

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

5 (20 U.S.C. 1078–9). 

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

7 is further amended— 

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

9 1078(c)(1))— 

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

11 (B) by redesignating subparagraphs (E) 

12 through (H) as subparagraphs (D) through 

13 (G), respectively; and 

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

15 1(b)(5)), by striking the matter following subpara16 graph (B). 

17 SEC. 115. REDUCTION OF LENDER INSURANCE PERCENT18 AGE. 

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

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

21 as follows: 

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

23 principal of loans insured under the program, 

24 except that— 

25 ‘‘(i) such program shall insure 100 

26 percent of the unpaid principal of loans 
25 

•HR 2669 EH1S 

1 made with funds advanced pursuant to sec2 tion 428(j) or 439(q); and 

3 ‘‘(ii) notwithstanding the preceding 

4 provisions of this subparagraph, such pro5 gram shall insure 100 percent of the un6 paid principal amount of exempt claims as 

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

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

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

10 on or after October 1, 2007. 

11 SEC. 116. GUARANTY AGENCY COLLECTION RETENTION. 

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

13 1078(c)(6)(A)(ii)) is amended to read as follows: 

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

15 such payments for use in accordance with 

16 section 422B, except that beginning Octo17 ber 1, 2007, this subparagraph shall be ap18 plied by substituting ‘16 percent’ for ‘23 

19 percent’.’’. 

20 SEC. 117. ACCOUNT MAINTENANCE FEES. 

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

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

23 SEC. 118. INCREASED LOAN FEES FROM LENDERS. 

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

25 1(d)(2)) is amended to read as follows: 
26 

•HR 2669 EH1S 

1 ‘‘(2) AMOUNT OF LOAN FEES.— 

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

3 fee which shall be deducted under paragraph 

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

5 borrower, shall be equal to— 

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

7 and (iii), 0.50 percent of the principal 

8 amount of the loan with respect to any 

9 loan under this part for which the first dis10 bursement was made on or after October 

11 1, 1993; 

12 ‘‘(ii) 1.0 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 any holder other 

17 than a holder described in subclause (I) or 

18 (II) of clause (iii); and 

19 ‘‘(iii) 0.0 percent of the principal 

20 amount of the loan with respect to any 

21 loan under this part for which the first dis22 bursement was made on or after October 

23 1, 2007, that is held by— 

24 ‘‘(I) any holder that, together 

25 with its affiliated holders, is des-
27 

•HR 2669 EH1S 

1 ignated by the Secretary annually as a 

2 small lender under subparagraph (B); 

3 or 

4 ‘‘(II) any holder that— 

5 ‘‘(aa) is a unit of a State or 

6 local government or a nonprofit 

7 private entity; and 

8 ‘‘(bb) is not owned in whole 

9 or in part by, or controlled or op10 erated by a for-profit entity. 

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

12 In determining which holders of eligible loans 

13 qualify as small lenders for purposes of sub14 paragraph (A)(iii)(I), the Secretary shall, using 

15 the most recently available data with respect to 

16 the total principal amount of eligible loans held 

17 by holders— 

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

19 (combined with their affiliated holders) in 

20 descending order by total principal amount 

21 of eligible loans held; 

22 ‘‘(ii) calculate the total principal 

23 amount of eligible loans held by all holders; 

24 and 
28 

•HR 2669 EH1S 

1 ‘‘(iii) identify the subset of consecu2 tively ranked holders under clause (i), 

3 starting with the lowest ranked holder, 

4 that together hold a total principal amount 

5 of such loans equal to 15 percent of the 

6 total amount calculated under clause (ii), 

7 but excluding the holder, if any, whose 

8 holdings when added cause the total hold9 ings of the subset to equal but not exceed 

10 such 15 percent of such total amount cal11 culated; and 

12 ‘‘(iv) designate as small lenders any 

13 holder identified as a member of the subset 

14 under clause (iii).’’. 

15 SEC. 119. MARKET-BASED DETERMINATION OF LENDER RE16 TURNS. 

17 (a) JOINT PLANNING STUDY TO SELECT AUCTION

18 MECHANISMS FOR TESTING.— 

19 (1) PLANNING STUDY.—The Secretaries of 

20 Education and Treasury jointly shall conduct a plan21 ning study, in consultation with the Office of Man22 agement and Budget, the Congressional Budget Of23 fice, the General Accounting Office, and other indi24 viduals and entities the Secretaries determines ap25 propriate, to— 
29 

•HR 2669 EH1S 

1 (A) examine the matters described in para2 graph (2) in order to determine which market3 based mechanisms for determining lender re4 turns on loans made, insured, or guaranteed 

5 under part B of title IV of the Higher Edu6 cation Act of 1965 (20 U.S.C. 1071 et seq.) 

7 shall be tested under the pilot programs de8 scribed in subsection (c); and 

9 (B) determine what related administrative 

10 and other changes will be required in order to 

11 ensure that high-quality services are provided 

12 under a successful implementation of market13 based determinations of lender returns for all 

14 loans made, insured, or guaranteed under such 

15 part. 

16 (2) MATTERS EXAMINED.—The planning study 

17 under this subsection shall examine— 

18 (A) whether it is most appropriate to auc19 tion existing loans under part B of title IV of 

20 such Act, to auction the rights to originate 

21 loans under such part, or whether the sale of 

22 securities backed by federally-owned student 

23 loan assets originated by banks acting as agents 

24 of the Federal Government would provide the 

25 most efficient market-based alternative; 
30 

•HR 2669 EH1S 

1 (B) matters related to efficient financial 

2 organization of any auctions or sales of loans 

3 under such part, including how loans and origi4 nation rights are bundled, the capital structure 

5 of any securitization plan, and issues related to 

6 servicing; and 

7 (C) how to ensure that statutory, regu8 latory, and administrative requirements do not 

9 impede separate management and ownership of 

10 loans or assets backed by loans under part B 

11 of title IV of such Act. 

12 (3) MECHANISMS.—In determining which mar13 ket-based mechanisms are the most promising mod14 els to test the pilot programs under subsection (b), 

15 the planning study shall take into account whether 

16 a particular market-based mechanism will— 

17 (A) ensure loan availability under part B 

18 of title IV of such Act to all eligible students 

19 at all participating institutions; 

20 (B) minimize administrative complexity for 

21 borrowers, institutions, lenders, and the Federal 

22 Government; and 

23 (C) reduce Federal costs if used on a pro24 gram-wide basis. 
31 

•HR 2669 EH1S 

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

2 planning study, together with a plan for implementa3 tion of one or more pilot programs using promising 

4 market-based approaches for determining lender re5 turns, shall be transmitted to Congress not later 

6 than 6 months after the date of enactment of this 

7 Act. 

8 (b) PILOT PROGRAMS TO BE TESTED.— 

9 (1) AUTHORIZATION.— 

10 (A) IN GENERAL.—Notwithstanding any 

11 other provision of law, after the report de12 scribed in subsection (a)(4) is transmitted to 

13 Congress, the Secretary of Education shall, in 

14 consultation with the Secretary of the Treasury, 

15 begin preparations necessary to carry out pilot 

16 programs meeting the requirements of this sub17 section in accordance with the implementation 

18 plan included in such report. 

19 (B) IMPLEMENTATION DATE.—The Sec20 retary of Education shall commence implemen21 tation of the pilot programs under this sub22 section not earlier than July 1, 2008. 

23 (C) DURATION AND LOAN VOLUME.—The 

24 pilot programs under this subsection shall be 

25 not more than two academic years in duration, 
32 

•HR 2669 EH1S 

1 and the Secretary of Education may use the 

2 pilot programs to determining the lender re3 turns for not more than— 

4 (i) 10 percent of the annual loan vol5 ume under part B of title IV of the Higher 

6 Education Act of 1965 during the first 

7 year of the pilot programs under this sub8 section; and 

9 (ii) 20 percent of the annual loan vol10 ume under part B of title IV of such Act 

11 during the second year of the pilot pro12 grams under this subsection. 

13 (2) VOLUNTARY PARTICIPATION.— 

14 (A) Participation in any auction-based 

15 pilot program under this subsection shall be vol16 untary for eligible institutions and eligible lend17 ers participating under part B of title IV of 

18 such Act prior to July 1, 2006. 

19 (B) All savings to the United States Treas20 ury generated by such auctions shall be distrib21 uted to institutions participating under this 

22 subsection on a basis proportionate to loan vol23 ume under such part for supplemental, need24 based financial aid, except that an institution 

25 that is operating as an eligible lender under 
33 

•HR 2669 EH1S 

1 section 435(d)(2) of such Act shall not be eligi2 ble for any such distribution. 

3 (3) INDEPENDENT EVALUATION.—The Govern4 ment Accountability Office shall conduct an inde5 pendent evaluation of the pilot programs under this 

6 subsection, which evaluation shall be completed, and 

7 the results of such submitted to the Secretary of 

8 Education, the Secretary of the Treasury, and Con9 gress, not later than 120 days after the termination 

10 of such pilot programs. 

11 (c) PROGRAM-WIDE IMPLEMENTATION.—Notwith12 standing any other provision of part B of title IV of the 

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

14 beginning not less than 120 days after the independent 

15 evaluation described in subsection (b)(3) has been trans16 mitted to Congress, and succeeding academic years, the 

17 Secretary of Education is authorized to implement for all 

18 loans made under such part, a program-wide, market19 based system to determine returns to all lenders as the 

20 Secretary of Education determines appropriate, provided 

21 that— 

22 (1) the Secretary of Education, in consultation 

23 with the Secretary of the Treasury, has certified 

24 that the auction-based system that the Secretary of 
34 

•HR 2669 EH1S 

1 Education intends to implement on a program-wide 

2 basis would— 

3 (A) ensure loan availability under such 

4 part to all eligible students at all participating 

5 institutions; 

6 (B) minimize administrative complexity for 

7 borrowers, institutions, lenders, and the Federal 

8 Government, including the enhancement of the 

9 modernization of the student financial aid sys10 tem; and 

11 (C) reduce Federal costs when used on a 

12 program-wide basis; and 

13 (2) the Secretary of Education has notified 

14 Congress of the Secretary’s intent to implement a 

15 program-wide auction based system, and has pro16 vided a description of the structure of such auction17 based system, at least 120 days before implementing 

18 such system. 

19 (d) CONSULTATION.— 

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

21 study, pilot programs, and program-wide implemen22 tation phases described in this section, the Secretary 

23 of Education shall consult with representatives of in24 vestment banks, ratings agencies, lenders, institu25 tions of higher education, and students, as well as 
35 

•HR 2669 EH1S 

1 individuals or other entities with pertinent technical 

2 expertise. The Secretary of Education shall engage 

3 in such consultations using such methods as, and to 

4 the extent that, the Secretary determines appro5 priate to the time constraints associated with the 

6 study, programs, and implementation. 

7 (2) SERVICES OF OTHER FEDERAL AGEN8 CIES.—In carrying out the planning study and pilot 

9 programs described in this section, the Secretary of 

10 Education may use, on a reimbursable basis, the 

11 services (including procurement authorities and serv12 ices), equipment, personnel, and facilities of other 

13 agencies and instrumentalities of the Federal Gov14 ernment. 

15 SEC. 120. OTHER GUARANTY AGENCY REFORMS. 

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

17 (20 U.S.C. 1072b(c)) is amended— 

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

19 (5); 

20 (2) by redesignating paragraph (6) as para21 graph (7); and 

22 (3) by inserting after paragraph (5) the fol23 lowing new paragraph: 

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

25 Secretary in accordance with section 428(o); and’’. 
36 

•HR 2669 EH1S 

1 (b) DELINQUENCY PREVENTION FEE .—Section 428 

2 (20 U.S.C. 1078) is amended by adding at the end the 

3 following new subsection: 

4 ‘‘(o) DELINQUENCY PREVENTION FEE.— 

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

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

7 delinquency prevention fee equal to 0.0055 percent 

8 of the original principal amount of loans insured by 

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

10 period status, that are not in delinquency status as 

11 of the end of the previous month. 

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

13 the delinquency prevention fee, the term ‘not in de14 linquency status’ means the borrower is less than 60 

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

16 (c) MINIMUM LOAN PROCESSING AND ISSUANCE

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

18 1078(f)(1)(A)(ii)) is amended by inserting before the pe19 riod at the end the following: ‘‘, except that the total 

20 amount of such payments to each guaranty agency in any 

21 fiscal year shall equal at least $1,500,000’’. 
37 

•HR 2669 EH1S 

1 PART C—REWARDING SERVICE IN REPAYMENT 

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

3 NATIONAL NEED. 

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

5 read as follows: 

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

7 NATIONAL NEED. 

8 ‘‘(a) PROGRAM AUTHORIZED.— 

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

10 Secretary shall forgive, in accordance with this sec11 tion, the student loan obligation of a borrower in the 

12 amount specified in subsection (c), for any new bor13 rower after the date of enactment of the College 

14 Cost Reduction Act of 2007, who— 

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

16 national need described in subsection (b); and 

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

18 the borrower seeks forgiveness. 

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

20 provide loan forgiveness under paragraph (1), the 

21 Secretary is authorized to carry out a program— 

22 ‘‘(A) through the holder of the loan, to as23 sume the obligation to repay a qualified loan 

24 amount for a loan made, insured, or guaranteed 

25 under this part; and 
38 

•HR 2669 EH1S 

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

2 a loan made under part D of this title. 

3 ‘‘(3) REGULATIONS.—The Secretary is author4 ized to issue such regulations as may be necessary 

5 to carry out the provisions of this section. 

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

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

8 an area of national need if the individual is employed full9 time as any of the following: 

10 ‘‘(1) EARLY CHILDHOOD EDUCATORS.—An in11 dividual who is employed as an early childhood edu12 cator in an eligible preschool program or eligible 

13 early childhood education program in a low-income 

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

15 development, and education of infants, toddlers, or 

16 young children age 5 and under. 

17 ‘‘(2) NURSES.—An individual who is em18 ployed— 

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

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

21 an accredited school of nursing (as those terms 

22 are defined in section 801 of the Public Health 

23 Service Act (42 U.S.C. 296)). 
39 

•HR 2669 EH1S 

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

2 individual who has obtained a baccalaureate degree 

3 in a critical foreign language and is employed— 

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

5 as a teacher of a critical foreign language; or 

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

7 Government in a position that regularly re8 quires the use of such critical foreign language. 

9 ‘‘(4) LIBRARIANS.—An individual who is em10 ployed as a librarian in— 

11 ‘‘(A) a public library that serves a geo12 graphic area within which the public schools 

13 have a combined average of 30 percent or more 

14 of their total student enrollments composed of 

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

16 the Elementary and Secondary Education Act 

17 of 1965; or 

18 ‘‘(B) an elementary or secondary school 

19 which is in the school district of a local edu20 cational agency which is eligible in such year 

21 for assistance pursuant to title I of the Elemen22 tary and Secondary Education Act of 1965, and 

23 which for the purpose of this paragraph and for 

24 that year has been determined by the Secretary 

25 (pursuant to regulations and after consultation 
40 

•HR 2669 EH1S 

1 with the State educational agency of the State 

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

3 which the enrollment of children counted under 

4 section 1113(a)(5) of the Elementary and Sec5 ondary Education Act of 1965 exceeds 30 per6 cent of the total enrollment of that school. 

7 ‘‘(5) HIGHLY QUALIFIED TEACHERS: BILIN8 GUAL EDUCATION AND LOW-INCOME COMMU9 NITIES.—An individual who— 

10 ‘‘(A) is highly qualified as such term is de11 fined in section 9101 of the Elementary and 

12 Secondary Education Act of 1965; and 

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

14 of bilingual education; or 

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

16 or nonprofit private elementary or secondary 

17 school which is in the school district of a local 

18 educational agency which is eligible in such year 

19 for assistance pursuant to title I of the Elemen20 tary and Secondary Education Act of 1965, and 

21 which for the purpose of this paragraph and for 

22 that year has been determined by the Secretary 

23 (pursuant to regulations and after consultation 

24 with the State educational agency of the State 

25 in which the school is located) to be a school in 
41 

•HR 2669 EH1S 

1 which the enrollment of children counted under 

2 section 1113(a)(5) of the Elementary and Sec3 ondary Education Act of 1965 exceeds 40 per4 cent of the total enrollment of that school. 

5 ‘‘(6) CHILD WELFARE WORKERS.—An indi6 vidual who— 

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

8 or a related field with a focus on serving chil9 dren and families; and 

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

11 welfare services. 

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

13 individual who is a speech-language pathologist, who 

14 is employed in an eligible preschool program or an 

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

16 minimum, a graduate degree in speech-language pa17 thology, or communication sciences and disorders. 

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

19 engaged as a participant in a project under the Na20 tional and Community Service Act of 1990 (as such 

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

22 U.S.C. 12511)). 

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

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

25 defined in section 5421(e)(3) of Elementary and 
42 

•HR 2669 EH1S 

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

2 7245(e)(3)) in an elementary or secondary school 

3 which is in the school district of a local educational 

4 agency which is eligible in such year for assistance 

5 pursuant to title I of the Elementary and Secondary 

6 Education Act of 1965, and which for the purpose 

7 of this paragraph and for that year has been deter8 mined by the Secretary (pursuant to regulations and 

9 after consultation with the State educational agency 

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

11 school in which the enrollment of children counted 

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

13 Secondary Education Act of 1965 exceeds 30 per14 cent of the total enrollment of that school. 

15 ‘‘(10) PUBLIC SECTOR EMPLOYEES.—An indi16 vidual who is employed in public safety (including as 

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

18 law enforcement or public safety officer), emergency 

19 management (including as an emergency medical 

20 technician), public health, or public interest legal 

21 services (including prosecution or public defense or 

22 legal advocacy in low-income communities at a non23 profit organization). 

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

25 school, academic, or calendar year of full-time employment 
43 

•HR 2669 EH1S 

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

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

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

4 that is outstanding after the completion of each such 

5 school, academic, or calendar year of employment, as ap6 propriate, not to exceed $5,000 in the aggregate for any 

7 borrower. 

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

9 be construed to authorize the refunding of any repayment 

10 of a loan. 

11 ‘‘(e) SEGAL AMERICORPS EDUCATION AWARD AND

12 NATIONAL SERVICE AWARD RECIPIENTS.—A student bor13 rower who qualifies for the maximum education award 

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

15 Service Act of 1990 (42 U.S.C. 12601 et seq.) shall re16 ceive under this section the amount, if any, by which the 

17 maximum benefit available under this section exceeds the 

18 maximum education award available under such subtitle. 

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

20 borrower may receive a reduction of loan obligations under 

21 both this section and section 428J or 460. 

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

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

24 ‘critical foreign language’ includes the languages of 

25 Arabic, Korean, Japanese, Chinese, Pashto, Persian- 
44 

•HR 2669 EH1S 

1 Farsi, Serbian-Croatian, Russian, Portuguese, and 

2 any other language identified by the Secretary of 

3 Education, in consultation with the Defense Lan4 guage Institute, the Foreign Service Institute, and 

5 the National Security Education Program, as a crit6 ical foreign language need. 

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

8 term ‘early childhood educator’ means an early 

9 childhood educator who works directly with children 

10 in an eligible preschool program or eligible early 

11 childhood education program who has completed a 

12 baccalaureate or advanced degree in early childhood 

13 development, early childhood education, or in a field 

14 related to early childhood education. 

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

16 term ‘eligible preschool program’ means a program 

17 that provides for the care, development, and edu18 cation of infants, toddlers, or young children age 5 

19 and under, meets any applicable State or local gov20 ernment licensing, certification, approval, and reg21 istration requirements, and is operated by— 

22 ‘‘(A) a public or private school that is sup23 ported, sponsored, supervised, or administered 

24 by a local educational agency; 
45 

•HR 2669 EH1S 

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

2 grantee designated under the Head Start Act 

3 (42 U.S.C. 9831 et seq.); 

4 ‘‘(C) a nonprofit or community based orga5 nization; or 

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

7 home. 

8 ‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCATION

9 PROGRAM.—The term ‘eligible early childhood edu10 cation program’ means— 

11 ‘‘(A) a family child care program, center12 based child care program, State prekinder13 garten program, school program, or other out14 of-home early childhood development care pro15 gram, that— 

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

17 State; and 

18 ‘‘(ii) serves 2 or more unrelated chil19 dren who are not old enough to attend kin20 dergarten; 

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

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

23 seq.); or 
46 

•HR 2669 EH1S 

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

2 out under section 645A of the Head Start Act 

3 (42 U.S.C. 9840a). 

4 ‘‘(5) LOW-INCOME COMMUNITY.—In this sub5 section, the term ‘low-income community’ means a 

6 community in which 70 percent of households earn 

7 less than 85 percent of the State median household 

8 income. 

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

10 who meets all of the following: 

11 ‘‘(A) The nurse graduated from— 

12 ‘‘(i) an accredited school of nursing 

13 (as those terms are defined in section 801 

14 of the Public Health Service Act (42 

15 U.S.C. 296)); 

16 ‘‘(ii) a nursing center; or 

17 ‘‘(iii) an academic health center that 

18 provides nurse training. 

19 ‘‘(B) The nurse holds a valid and unre20 stricted license to practice nursing in the State 

21 in which the nurse practices in a clinical set22 ting. 

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

24 following: 
47 

•HR 2669 EH1S 

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

2 an equivalent degree. 

3 ‘‘(ii) A nursing degree from a colle4 giate school of nursing (as defined in sec5 tion 801 of the Public Health Service Act 

6 (42 U.S.C. 296)). 

7 ‘‘(iii) A nursing degree from an asso8 ciate degree school of nursing (as defined 

9 in section 801 of the Public Health Service 

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

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

12 school of nursing (as defined in section 

13 801 of the Public Health Service Act (42 

14 U.S.C. 296)). 

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

16 term ‘speech-language pathologist’ means a speech17 language pathologist who— 

18 ‘‘(A) has received, at a minimum, a grad19 uate degree in speech-language pathology or 

20 communication sciences and disorders from an 

21 institution of higher education accredited by an 

22 agency or association recognized by the Sec23 retary pursuant to section 496(a) of this Act; 

24 and 
48 

•HR 2669 EH1S 

1 ‘‘(B) provides speech-language pathology 

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

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

4 or exceeds the qualifications for a qualified 

5 speech-language pathologist under subsection 

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

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

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

9 otherwise appropriated, such sums as may be necessary 

10 to provide loan forgiveness in accordance with this section 

11 to each eligible individual.’’. 

12 SEC. 132. INCOME-CONTINGENT REPAYMENT FOR PUBLIC 

13 SECTOR EMPLOYEES. 

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

15 adding at the end the following: 

16 ‘‘(7) REPAYMENT PLAN FOR PUBLIC SECTOR

17 EMPLOYEES.— 

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

19 forgive the balance due on any loan made under 

20 this part or section 428C(b)(5) for a bor21 rower— 

22 ‘‘(i) who has made 120 payments on 

23 such loan pursuant to income-contingent 

24 repayment; and 
49 

•HR 2669 EH1S 

1 ‘‘(ii) who is employed, and was em2 ployed for the 10-year period in which the 

3 borrower made the 120 payments de4 scribed in clause (i), in a public sector job. 

5 ‘‘(B) PUBLIC SECTOR JOB.—In this para6 graph, the term ‘public sector job’ means a full7 time job in emergency management, govern8 ment, public safety, law enforcement, public 

9 health, education (including early childhood 

10 education), social work in a public child or fam11 ily service agency, public interest legal services 

12 (including prosecution or public defense or legal 

13 advocacy in low-income communities at a non14 profit organization), or at an organization that 

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

16 Revenue Code of 1986 and exempt from tax17 ation under section 501(a) of such Code. 

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

19 borrower who is repaying a loan made under this 

20 part pursuant to income-contingent repayment may 

21 choose, at any time, to terminate repayment pursu22 ant to income-contingent repayment and repay such 

23 loan under the standard repayment plan.’’. 
50 

•HR 2669 EH1S 

1 SEC. 133. INCOME-BASED REPAYMENT. 

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

3 1088 et seq.) is further amended by adding at the end 

4 the following: 

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

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

7 ‘‘(1) EXCEPTED PLUS LOAN.—The term ‘ex8 cepted PLUS loan’ means a loan under section 

9 428B, or a Federal Direct PLUS Loan, that is 

10 made, insured, or guaranteed on behalf of a depend11 ent student. 

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

13 term ‘partial financial hardship’, when used with re14 spect to a borrower, means that for such borrower— 

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

16 amount of loans made, insured, or guaranteed 

17 under part B or D (other than an excepted 

18 PLUS loan) to a borrower as calculated under 

19 the standard repayment plan under section 

20 428(b)(9)(A)(i) or 455(d)(1)(A); exceeds 

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

22 calculating the amount by which— 

23 ‘‘(i) the borrower’s, and the bor24 rower’s spouse’s (if applicable), adjusted 

25 gross income; exceeds 
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1 ‘‘(ii) 150 percent of the poverty line 

2 applicable to the borrower’s family size as 

3 determined under section 673(2) of the 

4 Community Services Block Grant Act (42 

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

6 ‘‘(b) INCOME-BASED REPAYMENT PROGRAM AU7 THORIZED.—Notwithstanding any other provision of this 

8 Act, the Secretary shall carry out a program under 

9 which— 

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

11 guaranteed under part B or D (other than an ex12 cepted PLUS loan) who has a partial financial hard13 ship may elect, during any period the borrower has 

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

15 aggregate monthly payment for all such loans not 

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

17 divided by 12; 

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

19 borrower’s monthly payment under this subsection 

20 first toward interest due on the loan and then to21 ward the principal of the loan; 

22 ‘‘(3) any interest due and not paid under para23 graph (2) shall be capitalized; 

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

25 paragraph (2) shall be deferred; 
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1 ‘‘(5) the amount of time the borrower makes 

2 monthly payments under paragraph (1) may exceed 

3 10 years; 

4 ‘‘(6) if the borrower no longer has a partial fi5 nancial hardship or no longer wishes to continue the 

6 election under this subsection, then— 

7 ‘‘(A) the maximum monthly payment re8 quired to be paid for all loans made to the bor9 rower under part B or D (other than an ex10 cepted PLUS loan) shall not exceed the month11 ly amount calculated under section 

12 428(b)(9)(A)(i) or 455(d)(1)(A) when the bor13 rower first made the election described in this 

14 subsection; and 

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

16 permitted to repay such loans may exceed 10 

17 years; 

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

19 outstanding balance of principal and interest due on 

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

21 under section 428B or a Federal Direct PLUS 

22 Loan) to a borrower who— 

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

24 hardship described in section 435(o) for a pe-
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1 riod of time prescribed by the Secretary, not to 

2 exceed 20 years; or 

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

4 income-based repayment under paragraph (1); 

5 and 

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

7 Secretary, not to exceed 20 years (including any 

8 period during which the borrower is in 

9 deferment due to an economic hardship de10 scribed in section 435(o)), meets 1 or more of 

11 the following requirements: 

12 ‘‘(I) has made reduced monthly pay13 ments under paragraph (1); 

14 ‘‘(II) has made monthly payments of 

15 not less than the monthly amount cal16 culated under section 428(b)(9)(A)(i) or 

17 455(d)(1)(A) when the borrower first made 

18 the election described in this subsection; 

19 ‘‘(III) has made payments under a 

20 standard repayment plan under section 

21 428(b)(9)(A)(i) or 455(d)(1)(A); 

22 ‘‘(IV) has made payments under an 

23 income-contingent repayment plan under 

24 section 455(d)(1)(D); and 
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1 ‘‘(8) a borrower who is repaying a loan made 

2 under this part pursuant to income-based repayment 

3 may elect, at any time, to terminate repayment pur4 suant to income-based repayment and repay such 

5 loan under the standard repayment plan.’’. 

6 (b) CONFORMING ICR AMENDMENT.—Section 

7 455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is amended by 

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

9 ‘‘PLUS loan’’. 

10 SEC. 134. DEFINITION OF ECONOMIC HARDSHIP. 

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

12 (1) in paragraph (1)— 

13 (A) in subparagraph (A)(ii)— 

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

15 poverty line for a family of 2’’ and insert16 ing ‘‘150 percent of the poverty line appli17 cable to the borrower’s family size’’; and 

18 (ii) by inserting ‘‘or’’ after the semi19 colon; 

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

21 (C) by redesignating subparagraph (C) as 

22 subparagraph (B); and 

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

24 inserting ‘‘(1)(B)’’. 
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1 SEC. 135. DEFERRALS. 

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

3 1077(a)(2)(C)(iii)) is amended by striking ‘‘not in excess 

4 of 3 years’’. 

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

6 (20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking 

7 ‘‘not in excess of 3 years’’. 

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

9 U.S.C. 1087e(f)(2)(D)) is amended by striking ‘‘not in ex10 cess of 3 years’’. 

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

12 1087dd(c)(2)(A)(iv)) is amended by striking ‘‘not in ex13 cess of 3 years’’. 

14 SEC. 136. MAXIMUM REPAYMENT PERIOD. 

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

16 1087e(e)) is amended by adding at the end the following: 

17 ‘‘(9) MAXIMUM REPAYMENT PERIOD.—In calcu18 lating the extended period of time for which an in19 come-contingent repayment plan under this sub20 section may be in effect for a borrower, the Sec21 retary shall include all time periods during which a 

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

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

24 included in the income-contingent repayment 

25 plan; and 
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1 ‘‘(B)(i) is in deferment due to an economic 

2 hardship described in section 435(o); 

3 ‘‘(ii) makes monthly payments under para4 graph (1) or (6) of section 493C(b); or 

5 ‘‘(iii) makes payments under a standard 

6 repayment plan described in section 

7 428(b)(9)(A)(i) or subsection (d)(1)(A).’’. 

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

9 (20 U.S.C. 1087e(d)(1)(C)) is amended by striking 

10 ‘‘428(b)(9)(A)(v)’’ and inserting ‘‘428(b)(9)(A)(iv)’’. 

11 SEC. 137. DEFERRAL OF LOAN REPAYMENT FOLLOWING AC12 TIVE DUTY. 

13 Part G of title IV is amended by inserting after sec14 tion 484B (20 U.S.C. 1091b) the following new section: 

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

16 ACTIVE DUTY. 

17 ‘‘(a) DEFERRAL OF LOAN REPAYMENT FOLLOWING

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

19 of a loan made under this title pursuant to section 

20 428(b)(1)(M)(iii), 455(f)(2)(C), or 464(c)(2)(A)(ii), a bor21 rower of a loan under this title who is a member of the 

22 National Guard or other reserve component of the Armed 

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

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

25 duty, and is currently enrolled, or was enrolled within six 
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1 months prior to the activation, in a program of instruction 

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

3 during the 13 months following the conclusion of such 

4 service, except that a deferment under this subsection 

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

6 status. 

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

8 481(d), in this section, the term ‘active duty’ has the 

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

10 United States Code, except that such term— 

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

12 attendance at a service school; but 

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

14 National Guard, active State duty.’’. 

15 PART D—SUSTAINING THE PERKINS LOAN 

16 PROGRAM 

17 SEC. 141. FEDERAL PERKINS LOANS. 

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

19 adding at the end the following new paragraphs: 

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

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

22 there shall be available to the Secretary for contribu23 tions to student loan funds established under part 

24 E, from funds not otherwise appropriated, 

25 $100,000,000 for each of the fiscal years 2008 
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1 through 2012. The sum of the amount made avail2 able under this subsection for any such fiscal year, 

3 plus the amount so appropriated for such fiscal year, 

4 shall, for purposes of allocations under section 462, 

5 be treated as the amount appropriated pursuant to 

6 section 461(b) for such fiscal year. 

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

8 student loan funds under this part shall expire at 

9 the end of fiscal year 2012.’’. 

10 TITLE II—REDUCING THE COST 

11 OF COLLEGE 

12 SEC. 201. CONSUMER INFORMATION AND PUBLIC AC13 COUNTABILITY IN HIGHER EDUCATION. 

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

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

16 ‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC17 COUNTABILITY IN HIGHER EDUCATION. 

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

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

20 section, the Commissioner of Education Statistics— 

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

22 college costs that are of greatest importance to pro23 spective students, enrolled students, and their fami24 lies, paying particular attention to low-income, non- 
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1 traditional student populations, and first-generation 

2 college students; 

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

4 expertise the informational needs of prospective col5 lege students and parents to— 

6 ‘‘(A) determine the relevance of particular 

7 data elements to prospective students, enrolled 

8 students, and families based upon the results of 

9 opinion research; and 

10 ‘‘(B) make recommendations regarding the 

11 inclusion of specific data items and the most ef12 fective and least burdensome methods of col13 lecting and reporting useful data from institu14 tions of higher education; and 

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

16 website— 

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

18 elements currently provided by institutions of 

19 higher education to the Secretary; 

20 ‘‘(B) includes clear and uniform informa21 tion determined to be relevant to prospective 

22 students, enrolled students, and families; 

23 ‘‘(C) provides comparable information, by 

24 ensuring that information is based on accepted 

25 criteria and common definitions; 
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1 ‘‘(D) includes a sorting function that per2 mits users to customize their search for and 

3 comparison of institutions of higher education 

4 based on the information identified through the 

5 process as prescribed in paragraph (1) as being 

6 of greatest relevance to choosing an institution 

7 of higher education. 

8 ‘‘(b) DATA COLLECTION.— 

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

10 Education Statistics shall continue to redesign the 

11 relevant parts of the Integrated Postsecondary Edu12 cation Data System to include additional data as re13 quired by this section and to continue to improve the 

14 usefulness and timeliness of data collected by such 

15 System in order to inform consumers about institu16 tions of higher education. 

17 ‘‘(2) COLLEGE CONSUMER PROFILE.—The Sec18 retary shall continue to publish on the COOL 

19 website, for each academic year and in accordance 

20 with standard definitions developed by the Commis21 sioner of Education Statistics (including definitions 

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

23 the day before the date of enactment of the College 

24 Cost Reduction Act of 2007), from at least all insti-
61 

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1 tutions of higher education participating in pro2 grams under title IV the following information: 

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

4 first-time, full-time undergraduate student. 

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

6 first-time, full-time undergraduate student. 

7 ‘‘(C) The cost of attendance for a first8 time, full-time undergraduate student, con9 sistent with the provisions of section 472. 

10 ‘‘(D) The average amount of financial as11 sistance (including grant assistance) received by 

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

13 ‘‘(E) The number and percentage of first14 time, full-time undergraduate students receiving 

15 financial assistance (including grant assistance) 

16 described in each clause of subparagraph (D). 

17 ‘‘(F) Student enrollment information, in18 cluding information on the number and percent19 age of full-time and part-time students, and the 

20 number and percentage of resident and non21 resident students. 

22 ‘‘(G) Faculty-to-student ratios. 

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

24 percentage of faculty who are full-time employ-
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1 ees of the institution and the percentage who 

2 are part-time. 

3 ‘‘(I) Graduation rates calculated pursuant 

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

5 disaggregated by gender, by each major racial 

6 and ethnic subgroup, and by income status, as 

7 measured by receipt of Federal Pell Grants or 

8 Federal subsidized student loans. 

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

10 education with information of interest to stu11 dents including mission, accreditation, student 

12 services (including services for students with 

13 disabilities), transfer of credit policies, any ar14 ticulation agreements entered into by the insti15 tution. 

16 ‘‘(K) The college affordability information 

17 elements specified in subsection (d). 

18 ‘‘(c) INFORMATION TO THE PUBLIC.—The Secretary 

19 shall work with public and private entities to promote 

20 broad public awareness, particularly among middle and 

21 high school students and their families, of the information 

22 made available under this section, including by distribu23 tion to students who participate in or receive benefits from 

24 means-tested federally funded education programs and 

25 other Federal programs determined by the Secretary. 
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1 ‘‘(d) COLLEGE AFFORDABILITY INFORMATION ELE2 MENTS.—The college affordability information elements 

3 required by subsection (b)(2)(K) shall include, for each in4 stitution submitting data— 

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

6 5 most recent academic years; and 

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

8 most recent academic year for which data are avail9 able. 

10 ‘‘(e) OUTCOMES AND ACTIONS.— 

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

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

13 sticker price at a percentage rate for any 3-year in14 terval ending on or after that date that exceeds two 

15 times the rate of change in the higher education 

16 price index over the same time period shall provide 

17 a report to the Secretary. Such report shall be pub18 lished by the Secretary on the COOL website, and 

19 shall include— 

20 ‘‘(A) a description of the factors contrib21 uting to the increase in the institution’s costs 

22 and in the tuition and fees charged to students; 

23 and 

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

25 increases are not within the exclusive control of 
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1 the institution, a description of the agency or 

2 instrumentality of State government or other 

3 entity that participates in such determinations 

4 and the authority exercised by such agency, in5 strumentality, or entity. 

6 ‘‘(2) CONSEQUENCES FOR 2-YEAR CONTINU7 ATION OF FAILURE.—If the Secretary determines 

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

9 has failed to reduce the subsequent increase in stick10 er price to equal to or below two times the rate of 

11 change in the higher education price index for 2 con12 secutive academic years subsequent to the 3-year in13 terval used under paragraph (1), the Secretary shall 

14 place the institution on affordability alert status. 

15 ‘‘(3) EXEMPTIONS.—Notwithstanding para16 graph (2), an institution shall not be placed on af17 fordability alert status if, for any 3-year interval for 

18 which sticker prices are computed under paragraph 

19 (1)— 

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

21 described in paragraph (5) to which the institu22 tion belongs, the sticker price of the institution 

23 is in the lowest quartile of institutions within 

24 such class, as determined by the Secretary, dur25 ing the last year of such 3-year interval; or 
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1 ‘‘(B) the institution has a percentage 

2 change in its sticker price computed under 

3 paragraph (1) that exceeds two times the rate 

4 of change in the higher education price index 

5 over the same time period, but the dollar 

6 amount of the sticker price increase is less than 

7 $500. 

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

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

10 an agency or instrumentality of State government or 

11 other entity participates in the determinations of tui12 tion and fee increases shall, prior to submitting any 

13 information to the Secretary under this subsection, 

14 submit such information to, and request the com15 ments and input of, such agency, instrumentality, or 

16 entity. With respect to any such institution, the Sec17 retary shall provide a copy of any communication by 

18 the Secretary with that institution to such agency, 

19 instrumentality, or entity. 

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

21 of this subsection, the classes of institutions shall be 

22 those sectors used by the Integrated Postsecondary 

23 Education Data System, based on whether the insti24 tution is public, nonprofit private, or for-profit pri-
66 

•HR 2669 EH1S 

1 vate, and whether the institution has a 4-year, 2- 

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

3 ‘‘(6) DATA REJECTION.—Nothing in this sub4 section shall be construed as allowing the Secretary 

5 to reject the data submitted by an individual institu6 tion of higher education. 

7 ‘‘(f) FINES.—In addition to actions authorized in sec8 tion 487(c), the Secretary may impose a fine in an amount 

9 not to exceed $25,000 on an institution of higher edu10 cation for failing to provide the information required by 

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

12 to otherwise cooperate with the National Center for Edu13 cation Statistics regarding efforts to obtain data under 

14 subsection (c) and pursuant to the program participation 

15 agreement entered into under section 487. 

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

17 issue such regulations as may be necessary to carry out 

18 the provisions of this section. 

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

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

21 means the average tuition and fees charged to a full22 time undergraduate student by an institution of 

23 higher education for any academic year, minus the 

24 average grant amount received by such a student for 

25 such academic year. 
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1 ‘‘(2) STICKER PRICE.—The term ‘sticker price’ 

2 means the average published tuition and fees 

3 charged to a first-time, full-time, undergraduate stu4 dent by an institution of higher education for any 

5 academic year. 

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

7 term ‘higher education price index’ means a statis8 tical measure of change over time in the prices of a 

9 fixed market basket of goods and services purchased 

10 by colleges and universities through current fund 

11 educational and general expenditures (excluding ex12 penditures for research), as developed by the Bureau 

13 of Labor Statistics.’’. 

14 SEC. 202. COOPERATIVE EDUCATION REWARDS FOR INSTI15 TUTIONS THAT RESTRAIN TUITION IN16 CREASES. 

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

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

19 title: 

20 ‘‘TITLE VIII—RESTRAINING 

21 TUITION INCREASES 

22 ‘‘PART A—COOPERATIVE EDUCATION 

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

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

25 education’ means the provision of alternating or parallel 
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1 periods of academic study and public or private employ2 ment in order to give students work experiences related 

3 to their academic or occupational objectives and an oppor4 tunity to earn the funds necessary for continuing and com5 pleting their education. 

6 ‘‘SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RES7 ERVATIONS. 

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

9 the Secretary to carry out this title from funds not other10 wise appropriated $15,000,000 for each of the fiscal years 

11 2008 through 2012. 

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

13 for each such fiscal year— 

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

15 for carrying out grants to institutions of higher edu16 cation and combinations of such institutions de17 scribed in section 803(a)(1)(A) for cooperative edu18 cation under section 803; 

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

20 for carrying out grants to institutions of higher edu21 cation described in section 803(a)(1)(B) for coopera22 tive education under section 803; 

23 ‘‘(3) not more than 11 percent shall be avail24 able for demonstration projects under paragraph (1) 

25 of section 804(a); 
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1 ‘‘(4) not more than 11 percent shall be avail2 able for training and resource centers under para3 graph (2) of section 804(a); and 

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

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

6 ‘‘(c) AVAILABILITY OF APPROPRIATIONS.—Appro7 priations under this title shall not be available for the pay8 ment of compensation of students for employment by em9 ployers under arrangements pursuant to this title. 

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

11 shall expire at the end of fiscal year 2012. 

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

13 ‘‘(a) GRANTS AUTHORIZED.— 

14 ‘‘(1) IN GENERAL.—The Secretary is author15 ized— 

16 ‘‘(A) from the amount available under sec17 tion 802(b)(1) in each fiscal year and in accord18 ance with the provisions of this title, to make 

19 grants to institutions of higher education or 

20 combinations of such institutions that have not 

21 previously received a grant under this para22 graph to pay the Federal share of the cost of 

23 planning, establishing, expanding, or carrying 

24 out programs of cooperative education by such 

25 institutions or combinations of institutions; and 
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1 ‘‘(B) from the amount available under sec2 tion 802(b)(2) in each fiscal year and in accord3 ance with the provisions of this title, to make 

4 grants to institutions of higher education that 

5 are operating an existing cooperative education 

6 program (as determined by the Secretary) to 

7 pay the cost of planning, establishing, expand8 ing, or carrying out programs of cooperative 

9 education by such institutions. 

10 ‘‘(2) PROGRAM REQUIREMENT.—Cooperative 

11 education programs assisted under this section shall 

12 provide alternating or parallel periods of academic 

13 study and of public or private employment, giving 

14 students work experience related to their academic 

15 or occupational objectives and the opportunity to 

16 earn the funds necessary for continuing and com17 pleting their education. 

18 ‘‘(3) AMOUNT OF GRANTS.— 

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

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

21 of higher education or combination of such in22 stitutions in any fiscal year shall not exceed 

23 $500,000. 

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

25 and (iii), the Secretary shall award grants in 
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1 each fiscal year to each institution of higher 

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

3 has an application approved under subsection 

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

5 the amount reserved pursuant to section 

6 802(b)(2) for such fiscal year as the number of 

7 unduplicated students placed in cooperative 

8 education jobs during the preceding fiscal year 

9 (other than cooperative education jobs under 

10 section 804 and as determined by the Sec11 retary) by such institution of higher education 

12 bears to the total number of all such students 

13 placed in such jobs during the preceding fiscal 

14 year by all such institutions. 

15 ‘‘(ii) No institution of higher education 

16 shall receive a grant pursuant to paragraph 

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

18 exceeds 25 percent of such institution’s cooper19 ative education program’s personnel and oper20 ating budget for the preceding fiscal year. 

21 ‘‘(iii) The minimum annual grant amount 

22 which an institution of higher education is eligi23 ble to receive under paragraph (1)(B) is $1,000 

24 and the maximum annual grant amount is 

25 $75,000. 
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1 ‘‘(4) LIMITATION.—The Secretary shall not 

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

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

4 combination of such institution in any one fiscal 

5 year. 

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

7 shall be used exclusively— 

8 ‘‘(A) to expand the quality and participa9 tion of a cooperative education program; 

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

11 and 

12 ‘‘(C) for outreach to potential participants 

13 including underrepresented and nontraditional 

14 populations. 

15 ‘‘(b) APPLICATIONS.—Each institution of higher edu16 cation or combination of such institutions desiring to re17 ceive a grant under this section shall submit an application 

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

19 Secretary shall prescribe. Each such application shall— 

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

21 which a grant is authorized under this section; 

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

23 activities which will be performed by a nonprofit or24 ganization or institution other than the applicant, 
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1 and the compensation to be paid for such perform2 ance; 

3 ‘‘(3) provide that the applicant will expend dur4 ing such fiscal year for the purpose of such program 

5 or activities not less than the amount expended for 

6 such purpose during the previous fiscal year; 

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

8 carry out to assure, and contain a formal statement 

9 of the institution’s commitment which assures, that 

10 the applicant will continue the cooperative education 

11 program beyond the 5-year period of Federal assist12 ance described in subsection (c)(1) at a level which 

13 is not less than the total amount expended for such 

14 program during the first year such program was as15 sisted under this section; 

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

17 of higher education that provides a 2-year program 

18 which is acceptable for full credit toward a bach19 elor’s degree, the cooperative education program will 

20 be available to students who are certificate or asso21 ciate degree candidates and who carry at least one22 half the normal full-time academic workload; 

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

24 ‘‘(A) for each fiscal year for which the ap25 plicant receives a grant, make such reports with 
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1 respect to the impact of the cooperative edu2 cation program in the previous fiscal year as 

3 may be essential to ensure that the applicant is 

4 complying with the provisions of this section, 

5 including— 

6 ‘‘(i) the number of unduplicated stu7 dent applicants in the cooperative edu8 cation program; 

9 ‘‘(ii) the number of unduplicated stu10 dents placed in cooperative education jobs; 

11 ‘‘(iii) the number of employers who 

12 have hired cooperative education students; 

13 ‘‘(iv) the average income for students 

14 derived from working in cooperative edu15 cation jobs; and 

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

17 number of unduplicated students placed in 

18 cooperative education jobs in each fiscal 

19 year compared to the previous fiscal year; 

20 and 

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

22 ensure that the applicant is complying with the 

23 provisions of this title, including the notation of 

24 cooperative education employment on the stu25 dent’s transcript; 
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1 ‘‘(7) describe the extent to which programs in 

2 the academic discipline for which the application is 

3 made have had a favorable reception by public and 

4 private sector employers; 

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

6 is committed to extending cooperative education on 

7 an institution-wide basis for all students who can 

8 benefit; 

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

10 carry out to evaluate the applicant’s cooperative edu11 cation program at the end of the grant period; 

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

13 accounting procedures as may be necessary to assure 

14 proper disbursement of, and accounting for, Federal 

15 funds paid to the applicant under this title; 

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

17 underserved populations; and 

18 ‘‘(12) include such other information as is es19 sential to carry out the provisions of this title. 

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

21 ‘‘(1) DURATION OF GRANTS.—No individual in22 stitution of higher education may receive, individ23 ually or as a participant in a combination of such in24 stitutions— 
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1 ‘‘(A) a grant pursuant to subsection 

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

3 ‘‘(B) a grant pursuant to subsection 

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

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

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

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

8 the program or activities described in the appli9 cation in the first year the applicant receives a 

10 grant under this section; 

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

12 such year; 

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

14 such year; 

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

16 such year; and 

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

18 such year. 

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

20 the contrary notwithstanding, the Secretary shall not 

21 waive the provisions of this subsection. 

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

23 determines that a recipient of funds under this section has 

24 failed to maintain the fiscal effort described in subsection 
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1 (b)(3), then the Secretary may elect not to make grant 

2 payments under this section to such recipient. 

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

4 TRAINING AND RESOURCE CENTERS; AND RE5 SEARCH. 

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

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

8 grants and enter into contracts— 

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

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

11 demonstration projects designed to demonstrate or 

12 determine the feasibility or value of innovative meth13 ods of cooperative education; 

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

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

16 training and resource centers designed to— 

17 ‘‘(A) train personnel in the field of cooper18 ative education; 

19 ‘‘(B) improve materials used in cooperative 

20 education programs if such improvement is con21 ducted in conjunction with other activities de22 scribed in this paragraph; 

23 ‘‘(C) furnish technical assistance to institu24 tions of higher education to increase the poten25 tial of the institution to continue to conduct a 
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1 cooperative education program without Federal 

2 assistance; 

3 ‘‘(D) encourage model cooperative edu4 cation programs which furnish education and 

5 training in occupations in which there is a na6 tional need; 

7 ‘‘(E) support partnerships under which an 

8 institution carrying out a comprehensive cooper9 ative education program joins with one or more 

10 institutions of higher education in order to— 

11 ‘‘(i) assist the institutions other than 

12 the comprehensive cooperative education 

13 institution to develop and expand an exist14 ing program of cooperative education; or 

15 ‘‘(ii) establish and improve or expand 

16 comprehensive cooperative education pro17 grams; and 

18 ‘‘(F) encourage model cooperative edu19 cation programs in the fields of science and 

20 mathematics for women and minorities who are 

21 underrepresented in such fields; and 

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

23 year under section 802(b)(5), for the conduct of re24 search relating to cooperative education. 

25 ‘‘(b) ADMINISTRATIVE PROVISION.— 
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1 ‘‘(1) IN GENERAL.—To carry out this section, 

2 the Secretary may— 

3 ‘‘(A) make grants to or contracts with in4 stitutions of higher education, or combinations 

5 of such institutions; and 

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

7 other public or private nonprofit agencies or or8 ganizations, whenever such grants or contracts 

9 will make an especially significant contribution 

10 to attaining the objectives of this section. 

11 ‘‘(2) LIMITATION.— 

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

13 3 percent of the amount appropriated to carry 

14 out this section in each fiscal year to make 

15 grants or enter into contracts described in para16 graph (1)(A). 

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

18 than 3 percent of the amount appropriated to 

19 carry out this section in each fiscal year to 

20 make grants or enter into contracts described in 

21 paragraph (1)(B). 

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

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

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

25 increase the level of funds that would, in the absence of 
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1 such funds, be made available from non-Federal sources 

2 to carry out the activities supported by such grant or con3 tract, and in no case to supplant such funds from non4 Federal sources. 

5 ‘‘PART B—LOW TUITION 

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

7 ‘‘(a) REWARDS FOR LOW TUITION.— 

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

9 shall award grants on a competitive basis to institu10 tions of higher education that, for academic year 

11 2008–2009 or any succeeding academic year, have 

12 an annual net tuition increase (expressed as a per13 centage) for the most recent academic year for 

14 which satisfactory data is available that is equal to 

15 or less than the percentage change in the higher 

16 education price index for such academic year. 

17 ‘‘(2) USE OF FUNDS.—Funds awarded to an in18 stitution of higher education under paragraph (1) 

19 shall be distributed by the institution in the form of 

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

21 Federal Pell Grants, except that no student shall re22 ceive an amount under this section that would cause 

23 the amount of total financial aid received by such 

24 student to exceed the cost of attendance of the insti25 tution. 
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1 ‘‘(b) REWARDS FOR GUARANTEED TUITION.— 

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

3 education that the Secretary of Education deter4 mines complies with the requirements of paragraph 

5 (2) or (3) of this subsection, the Secretary shall pro6 vide to such institution a bonus amount. Such insti7 tution shall award the bonus amount first to stu8 dents who are eligible for Federal Pell Grants who 

9 were in attendance at the institution during the 

10 award year that such institution satisfied the eligi11 bility criteria for maintaining low tuition and fees, 

12 then to students who are eligible for Federal Pell 

13 Grants who were not in attendance at the institution 

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

15 aid. 

16 ‘‘(2) 4-YEAR INSTITUTIONS.—An institution of 

17 higher education that provides a program of instruc18 tion for which it awards a bachelor’s degree complies 

19 with the requirements of this paragraph if such in20 stitution guarantees that for any academic year be21 ginning on or after July 1, 2008, and for each of the 

22 4 succeeding continuous academic years, the net tui23 tion charged to an undergraduate student will not 

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

2 charged for an academic year at the time he or 

3 she first enrolled in the institution of higher 

4 education, plus 

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

7 the prior academic year, or the most recent 

8 prior academic year for which data is available, 

9 multiplied by the amount determined under 

10 subparagraph (A). 

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

12 institution of higher education that does not provide 

13 a program of instruction for which it awards a bach14 elor’s degree complies with the requirements of this 

15 paragraph if such institution guarantees that for 

16 any academic year (or the equivalent) beginning on 

17 or after July 1, 2008, and for each of the 1.5 suc18 ceeding continuous academic years, the net tuition 

19 charged to an undergraduate student will not ex20 ceed— 

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

22 charged for an academic year at the time he or 

23 she first enrolled in the institution of higher 

24 education, plus 
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1 ‘‘(B) the product of the percentage in2 crease in the higher education price index for 

3 the prior academic year, or the most recent 

4 prior academic year for which data is available, 

5 multiplied by the amount determined under 

6 subparagraph (A). 

7 ‘‘(c) MAINTAINING AFFORDABLE TUITION.— 

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

9 of higher education has an increase in annual net 

10 tuition (expressed as a percentage), for the most re11 cent academic year for which satisfactory data is 

12 available, that is greater than the percentage in13 crease in the higher education price index for such 

14 academic year, the institution is required to submit 

15 to the Secretary the following information, within 6 

16 months of such determination— 

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

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

19 increase in net tuition and fees charged to stu20 dents, including identification of the major 

21 areas in the institution’s budget with the great22 est cost increases; 

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

24 990s submitted to the Internal Revenue Serv-
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1 ice, as required under section 6033 of the Inter2 nal Revenue Code of 1986; 

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

4 expenditures in the institution’s budget with the 

5 greatest increase for such academic year; and 

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

7 institution to reduce net tuition. 

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

9 shall compile the information submitted under this 

10 subsection and shall provide to the relevant author11 izing committees an annual report relating to such 

12 information. 

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

14 under this section, the Secretary shall give priority to in15 stitutions of higher education with the lowest annual net 

16 tuition increase for the most recent academic year for 

17 which satisfactory data is available, when compared with 

18 other institutions of higher education with annual net tui19 tion increases that are equal to or less than the higher 

20 education price index for such academic year. 

21 ‘‘(e) EXEMPTIONS.—An institution shall still be eligi22 ble to receive rewards under subsections (a) and (b), and 

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

24 year interval for which net tuition is computed under such 

25 subsections— 
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1 ‘‘(1) with respect to the class of institutions de2 scribed in section 131(d)(5) to which the institution 

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

4 lowest quartile of institutions within such class, as 

5 determined by the Secretary, during the last year of 

6 such 2-year interval; or 

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

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

9 that exceeds the rate of change in the higher edu10 cation price index (as defined in section 401B(d)) 

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

12 the net tuition increase is less than $500. 

13 ‘‘(f) DEFINITIONS.— 

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

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

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

17 term ‘higher education price index’ has the same 

18 meaning as provided in section 131(h). 

19 ‘‘(g) FUNDING.—There shall be available to the Sec20 retary to carry out this section, from funds not otherwise 

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

22 2008 through 2012. 

23 ‘‘(h) SUNSET.—The authority to carry out this sec24 tion shall expire at the end of fiscal year 2012.’’. 
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1 TITLE III—ENSURING A HIGHLY 

2 QUALIFIED TEACHER IN 

3 EVERY CLASSROOM 

4 PART A—TEACH GRANTS 

5 SEC. 301. TEACH GRANTS. 

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

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

8 ‘‘Subpart 9—TEACH Grants 

9 ‘‘SEC. 420L. PROGRAM ESTABLISHED. 

10 ‘‘(a) PROGRAM AUTHORITY.— 

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

12 shall pay to each eligible institution such sums as 

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

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

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

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

19 $4,000 for each academic year during which 

20 that student is in attendance at the institution; 

21 and 

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

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

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

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

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

5 ‘Teacher Education Assistance for College and 

6 Higher Education Grants’ or ‘TEACH Grants’; 

7 and 

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

9 Bonus TEACH Grants. 

10 ‘‘(b) PAYMENT METHODOLOGY.— 

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

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

14 prior to the start of each payment period and shall 

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

17 time as the Secretary determines and publishes in 

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

20 payments to institutions in an accurate and timely 

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

23 place an institution on a reimbursement system of 

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

3 from paying directly to students, in advance of the 

4 beginning of the academic term, an amount for 

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

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

10 made, in accordance with regulations promulgated 

11 by the Secretary for such purpose, in such manner 

12 as will best accomplish the purposes of this subpart. 

13 Any disbursement allowed to be made by crediting 

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

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

17 the institution provide other such goods and services 

18 by crediting the student’s account. 

19 ‘‘(c) REDUCTIONS IN AMOUNT.— 

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

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

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

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

2 proportion to the degree to which that student is not 

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

4 schedule of reductions established by the Secretary 

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

9 section 482 of this Act. 

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

11 grant awarded under this subpart, in combination 

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

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

17 Grant or a Bonus TEACH Grant exceeds the cost 

18 of attendance for that year, the amount of the 

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

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

23 ‘‘(1) UNDERGRADUATE AND POST-BACCA24 LAUREATE STUDENTS.—The period during which an 

25 undergraduate or post-baccalaureate student may re-
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1 ceive grants under this subpart shall be the period 

2 required for the completion of the first under3 graduate baccalaureate or post-baccalaureate course 

4 of study being pursued by that student at the insti5 tution at which the student is in attendance except 

6 that— 

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

8 is enrolled in a noncredit or remedial course of 

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

10 counted for the purpose of this paragraph; and 

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

12 receive under this subpart for undergraduate or 

13 post-baccalaureate study shall not exceed 

14 $16,000 with respect to a student who receives 

15 only TEACH Grants, and $18,000 with respect 

16 to a student who receives TEACH Grants and 

17 Bonus TEACH Grants. 

18 ‘‘(2) GRADUATE STUDENTS.—The period dur19 ing which a graduate student may receive grants 

20 under this subpart shall be the period required for 

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

22 being pursued by that student at the institution at 

23 which the student is in attendance, except that the 

24 total amount that a student may receive under this 

25 subpart for graduate study shall not exceed $8,000 
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1 with respect to a student who receives only TEACH 

2 Grants, and $10,000 with respect to a student who 

3 receives TEACH Grants and Bonus TEACH 

4 Grants. 

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

6 Nothing in this section shall exclude from eligibility 

7 courses of study which are noncredit or remedial in 

8 nature (including courses in English language acqui9 sition) which are determined by the institution to be 

10 necessary to help the student be prepared for the 

11 pursuit of a first undergraduate baccalaureate or 

12 post-baccalaureate degree or certificate or, in the 

13 case of courses in English language instruction, to 

14 be necessary to enable the student to utilize already 

15 existing knowledge, training, or skills. Nothing in 

16 this section shall exclude from eligibility programs of 

17 study abroad that are approved for credit by the 

18 home institution at which the student is enrolled. 

19 ‘‘SEC. 420M. ELIGIBILITY; APPLICATIONS. 

20 ‘‘(a) APPLICATIONS; DEMONSTRATION OF ELIGI21 BILITY.— 

22 ‘‘(1) FILING REQUIRED.—The Secretary shall 

23 from time to time set dates by which students shall 

24 file applications for grants under this subpart. Each 

25 student desiring a grant under this subpart for any 
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1 year shall file an application containing such infor2 mation and assurances as the Secretary may deem 

3 necessary to enable the Secretary to carry out the 

4 functions and responsibilities of this subpart. 

5 ‘‘(2) DEMONSTRATION OF TEACH GRANT ELIGI6 BILITY.—Each application submitted under para7 graph (1) for a TEACH Grant shall contain such in8 formation as is necessary to demonstrate that— 

9 ‘‘(A) if the applicant is an enrolled stu10 dent— 

11 ‘‘(i) the student is an eligible student 

12 for purposes of section 484; 

13 ‘‘(ii) the student— 

14 ‘‘(I) has a grade point average 

15 that is determined, under standards 

16 prescribed by the Secretary, to be 

17 comparable to a 3.25 average on a 

18 zero to 4.0 scale, except that, if the 

19 student is in the first year of a pro20 gram of undergraduate education, 

21 such grade point average shall be de22 termined on the basis of the student’s 

23 cumulative high school grade point av24 erage; or 
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1 ‘‘(II) displayed high academic ap2 titude by receiving a score above the 

3 75th percentile on at least one of the 

4 batteries in an undergraduate, post5 baccalaureate, or graduate school ad6 missions test; and 

7 ‘‘(iii) the student is completing 

8 coursework and other requirements nec9 essary to begin a career in teaching, or 

10 plans to complete such coursework and re11 quirements prior to graduating; or 

12 ‘‘(B) if the applicant is a current or pro13 spective teacher applying for a grant to obtain 

14 a graduate degree— 

15 ‘‘(i) the applicant is a teacher or a re16 tiree from another occupation with exper17 tise in a field in which there is a shortage 

18 of teachers, such as math, science, special 

19 education, English language acquisition, or 

20 another high-need subject; or 

21 ‘‘(ii) the applicant is or was a teacher 

22 who is using high-quality alternative cer23 tification routes, such as Teach for Amer24 ica, to get certified. 
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1 ‘‘(3) DEMONSTRATION OF BONUS TEACH GRANT

2 ELIGIBILITY.—Each application submitted under 

3 paragraph (1) for a Bonus TEACH Grant shall con4 tain such information as is necessary to demonstrate 

5 that the applicant is— 

6 ‘‘(A) eligible for, and has applied for, a 

7 TEACH Grant; and 

8 ‘‘(B) a student enrolled in a qualified 

9 teacher preparation program, as defined in sec10 tion 420N. 

11 ‘‘(b) AGREEMENTS TO SERVE.—Each application 

12 under subsection (a) shall contain or be accompanied by 

13 an agreement by the applicant that— 

14 ‘‘(1) the applicant will— 

15 ‘‘(A) serve as a full-time teacher for a total 

16 of not less than 4 academic years within 8 

17 years after completing the course of study for 

18 which the applicant received a TEACH Grant 

19 under this subpart; 

20 ‘‘(B) teach in a school described in section 

21 465(a)(2)(A); 

22 ‘‘(C) with respect to an applicant for— 

23 ‘‘(i) TEACH Grants, teach in any of 

24 the following fields: mathematics, science, 

25 a foreign language, bilingual education, or 
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1 special education, or as a reading spe2 cialist, or another field documented as 

3 high-need by the Federal Government, 

4 State government, or local education agen5 cy and approved by the Secretary; or 

6 ‘‘(ii) TEACH Grants and Bonus 

7 TEACH Grants, teach mathematics, 

8 science, or a science-related field; 

9 ‘‘(D) submit evidence of such employment 

10 in the form of a certification by the chief ad11 ministrative officer of the school upon comple12 tion of each year of such service; and 

13 ‘‘(E) comply with the requirements for 

14 being a highly qualified teacher as defined in 

15 section 9101 of the Elementary and Secondary 

16 Education Act of 1965; and 

17 ‘‘(2) in the event that the applicant is deter18 mined to have failed or refused to carry out such 

19 service obligation, the sum of the amounts of any 

20 TEACH Grants and Bonus TEACH Grants received 

21 by such applicant will be treated as a loan and col22 lected from the applicant in accordance with sub23 section (c) and the regulations thereunder. 

24 ‘‘(c) REPAYMENT FOR FAILURE TO COMPLETE

25 SERVICE.—In the event that any recipient of a grant 
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1 under this subpart fails or refuses to comply with the serv2 ice obligation in the agreement under subsection (b), the 

3 sum of the amounts of any TEACH Grants and Bonus 

4 TEACH Grants received by such recipient shall be treated 

5 as a Direct Loan under part D of title IV, and shall be 

6 subject to repayment, together with interest thereon ac7 cruing after the period of service, in accordance with terms 

8 and conditions specified by the Secretary in regulations 

9 under this subpart. 

10 ‘‘SEC. 420N. DEFINITIONS. 

11 ‘‘For the purposes of this subpart: 

12 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi13 ble institution’ means an institution of higher edu14 cation, as defined in section 102, that the Secretary 

15 determines— 

16 ‘‘(A) provides high quality teacher prepara17 tion and professional development services, in18 cluding extensive clinical experience as a part of 

19 pre-service preparation; 

20 ‘‘(B) is financially sound; 

21 ‘‘(C) provides pedagogical course work, or 

22 assistance in the provision of such coursework, 

23 including the monitoring of student perform24 ance, and formal instruction related to the the25 ory and practices of teaching; and 
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1 ‘‘(D) provides supervision and support 

2 services to teachers, or assistance in the provi3 sion of such services, including mentoring fo4 cused on developing effective teaching skills and 

5 strategies. 

6 ‘‘(2) QUALIFIED TEACHER PREPARATION PRO7 GRAM.—The term ‘qualified teacher preparation pro8 gram’ means a program for students and teachers 

9 described in subparagraph (A) or (B) of section 

10 420M(a)(2) (referred to jointly in this paragraph as 

11 ‘teacher candidates’) that— 

12 ‘‘(A) recruits and prepares teacher can13 didates who major in science, technology fields, 

14 special education, foreign language, engineer15 ing, or mathematics disciplines to become cer16 tified as elementary and secondary teachers in 

17 those disciplines, special education teachers, or 

18 teachers of English Language Learners, with 

19 the goals of improving teacher knowledge and 

20 effectiveness and increasing elementary and sec21 ondary student academic achievement; 

22 ‘‘(B) is implemented by an institution of 

23 higher education in partnership with high-need 

24 local educational agencies and schools; 
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1 ‘‘(C) offers a baccalaureate degree, post2 baccalaureate teacher credential, or graduate 

3 degree with a concurrent teacher certification to 

4 teacher candidates; 

5 ‘‘(D) is implemented in coordination with 

6 the faculty of the relevant departments of the 

7 institution of higher education; 

8 ‘‘(E) utilizes experienced teachers who 

9 have a demonstrated record of success in teach10 ing underserved students to instruct teacher 

11 candidates in the disciplines described in sub12 paragraph (A); 

13 ‘‘(F) provides teacher candidates with— 

14 ‘‘(i) support services, including men15 toring by experienced teachers who have a 

16 demonstrated record of success in teaching 

17 underserved students; 

18 ‘‘(ii) exposure to, and field experience 

19 in, the classroom within the first year of 

20 entering the qualified teacher preparation 

21 program; and 

22 ‘‘(iii) other related support practices 

23 while the teacher candidates are partici24 pating in the program, and after such can25 didates graduate from the institution of 
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1 higher education and are employed as 

2 teachers; 

3 ‘‘(G) participates in partnerships which in4 clude the institution of higher education and 

5 local educational agencies and charter districts 

6 to provide opportunities for teacher candidate 

7 field work; 

8 ‘‘(H) focuses on increasing the number of 

9 teachers in the disciplines described in subpara10 graph (A); and 

11 ‘‘(I) encourages individuals from underrep12 resented populations to enter into the teaching 

13 profession. 

14 ‘‘(3) POST-BACCALAUREATE.—The term ‘post15 baccalaureate’ means a program of instruction that 

16 does not lead to a graduate degree, and that consists 

17 of courses required by a State in order for the stu18 dent to receive a professional certification or licens19 ing credential that is required for employment as a 

20 teacher in an elementary school or secondary school 

21 in that State, except that such term shall not in22 clude any program of instruction offered by an insti23 tution of higher education that offers a bacca24 laureate degree in education. 
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1 ‘‘SEC. 420O. PROGRAM PERIOD AND FUNDING. 

2 ‘‘There shall be available to the Secretary to carry 

3 out this subpart, from funds not otherwise appropriated, 

4 such sums as may be necessary to provide TEACH Grants 

5 and Bonus TEACH Grants in accordance with this sub6 part to each eligible applicant.’’. 

7 PART B—CENTERS OF EXCELLENCE 

8 SEC. 311. CENTERS OF EXCELLENCE. 

9 Title II (20 U.S.C. 1021 et seq.) is amended by add10 ing at the end the following: 

11 ‘‘PART C—CENTERS OF EXCELLENCE 

12 ‘‘SEC. 231. DEFINITIONS. 

13 ‘‘As used in this part: 

14 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi15 ble institution’ means— 

16 ‘‘(A) an institution of higher education 

17 that has a teacher preparation program that 

18 meets the requirements of section 203(b)(2)and 

19 that is— 

20 ‘‘(i) a part B institution (as defined in 

21 section 322); 

22 ‘‘(ii) a Hispanic-serving institution (as 

23 defined in section 502); 

24 ‘‘(iii) a Tribal College or University 

25 (as defined in section 316); 
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1 ‘‘(iv) an Alaska Native-serving institu2 tion (as defined in section 317(b)); or 

3 ‘‘(v) a Native Hawaiian-serving insti4 tution (as defined in section 317(b)); 

5 ‘‘(B) a consortium of institutions described 

6 in subparagraph (A); or 

7 ‘‘(C) an institution described in subpara8 graph (A), or a consortium described in sub9 paragraph (B), in partnership with any other 

10 institution of higher education, but only if the 

11 center of excellence established under section 

12 232 is located at an institution described in 

13 subparagraph (A). 

14 ‘‘(2) HIGHLY QUALIFIED.—The term ‘highly 

15 qualified’ when used with respect to an individual 

16 means that the individual is highly qualified as de17 termined under section 9101 of the Elementary and 

18 Secondary Education Act of 1965 (20 U.S.C. 7801) 

19 or section 602 of the Individuals with Disabilities 

20 Education Act (20 U.S.C. 1401). 

21 ‘‘(3) SCIENTIFICALLY BASED READING RE22 SEARCH.—The term ‘scientifically based reading re23 search’ has the meaning given such term in section 

24 1208 of the Elementary and Secondary Education 

25 Act of 1965 (20 U.S.C. 6368). 
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1 ‘‘(4) SCIENTIFICALLY BASED RESEARCH.—The 

2 term ‘scientifically based research’ has the meaning 

3 given such term in section 9101 of the Elementary 

4 and Secondary Education Act of 1965 (20 U.S.C. 

5 7801). 

6 ‘‘SEC. 232. CENTERS OF EXCELLENCE. 

7 ‘‘(a) PROGRAM AUTHORIZED.—From the amounts 

8 appropriated to carry out this part, the Secretary is au9 thorized to award competitive grants to eligible institu10 tions to establish centers of excellence. 

11 ‘‘(b) USE OF FUNDS.—Grants provided by the Sec12 retary under this part shall be used to ensure that current 

13 and future teachers are highly qualified, by carrying out 

14 one or more of the following activities: 

15 ‘‘(1) Implementing reforms within teacher prep16 aration programs to ensure that such programs are 

17 preparing teachers who are highly qualified, are able 

18 to understand scientifically based research, and are 

19 able to use advanced technology effectively in the 

20 classroom, including use for instructional techniques 

21 to improve student academic achievement, by— 

22 ‘‘(A) retraining faculty; and 

23 ‘‘(B) designing (or redesigning) teacher 

24 preparation programs that— 
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1 ‘‘(i) prepare teachers to close student 

2 achievement gaps, are based on rigorous 

3 academic content, scientifically based re4 search (including scientifically based read5 ing research), and challenging State stu6 dent academic content standards; and 

7 ‘‘(ii) promote strong teaching skills. 

8 ‘‘(2) Providing sustained and high-quality 

9 preservice clinical experience, including the men10 toring of prospective teachers by exemplary teachers, 

11 substantially increasing interaction between faculty 

12 at institutions of higher education and new and ex13 perienced teachers, principals, and other administra14 tors at elementary schools or secondary schools, and 

15 providing support, including preparation time, for 

16 such interaction. 

17 ‘‘(3) Developing and implementing initiatives to 

18 promote retention of highly qualified teachers and 

19 principals, including minority teachers and prin20 cipals, including programs that provide— 

21 ‘‘(A) teacher or principal mentoring from 

22 exemplary teachers or principals; or 

23 ‘‘(B) induction and support for teachers 

24 and principals during their first 3 years of em25 ployment as teachers or principals, respectively. 
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1 ‘‘(4) Awarding scholarships based on financial 

2 need to help students pay the costs of tuition, room, 

3 board, and other expenses of completing a teacher 

4 preparation program. 

5 ‘‘(5) Disseminating information on effective 

6 practices for teacher preparation and successful 

7 teacher certification and licensure assessment prepa8 ration strategies. 

9 ‘‘(6) Activities authorized under sections 202, 

10 203, and 204. 

11 ‘‘(c) APPLICATION.—Any eligible institution desiring 

12 a grant under this section shall submit an application to 

13 the Secretary at such a time, in such a manner, and ac14 companied by such information as the Secretary may re15 quire. 

16 ‘‘(d) MINIMUM GRANT AMOUNT.—The minimum 

17 amount of each grant under this part shall be $500,000. 

18 ‘‘(e) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

19 An eligible institution that receives a grant under this part 

20 may not use more than 2 percent of the grant funds for 

21 purposes of administering the grant. 

22 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

23 such regulations as may be necessary to carry out this 

24 part. 
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1 ‘‘SEC. 233. APPROPRIATIONS. 

2 ‘‘There shall be available to the Secretary, from funds 

3 not otherwise appropriated, $50,000,000 for the period 

4 beginning with fiscal year 2008 and ending with fiscal 

5 year 2012, to carry out this part beginning with academic 

6 year 2008–2009, which shall remain available until ex7 pended. The authority to carry out this part shall expire 

8 at the end of fiscal year 2012.’’. 

9 TITLE IV—LEVERAGING FUNDS 

10 TO INCREASE COLLEGE ACCESS 

11 PART A—STRENGTHENING HISTORICALLY 

12 BLACK COLLEGES AND UNIVERSITIES AND 

13 MINORITY-SERVING INSTITUTIONS 

14 SEC. 401. INVESTMENT IN HISTORICALLY BLACK COL15 LEGES AND UNIVERSITIES AND MINORITY16 SERVING INSTITUTION. 

17 Title IV is amended by adding at the end the fol18 lowing new part: 

19 ‘‘PART I—STRENGTHENING HISTORICALLY 

20 BLACK COLLEGES AND UNIVERSITIES AND 

21 OTHER MINORITY-SERVING INSTITUTIONS 

22 ‘‘SEC. 499A. INVESTMENT IN HISTORICALLY BLACK COL23 LEGES AND UNIVERSITIES AND OTHER MI24 NORITY-SERVING INSTITUTION. 

25 ‘‘(a) ELIGIBLE INSTITUTION.—An institution of 

26 higher education is eligible to receive funds from the 
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1 amounts made available under this section if such institu2 tion is— 

3 ‘‘(1) a part B institution (as defined in section 

4 322 (20 U.S.C. 1061)); 

5 ‘‘(2) a Hispanic-serving institution (as defined 

6 in section 502 (20 U.S.C. 1101a)); 

7 ‘‘(3) a Tribal College or University (as defined 

8 in section 316 (20 U.S.C. 1059c)); 

9 ‘‘(4) an Alaska Native-serving institution or a 

10 Native Hawaiian-serving institution (as defined in 

11 section 317(b) (20 U.S.C. 1059d(b))); 

12 ‘‘(5) a Predominantly Black Institution (as de13 fined in subsection (c)); or 

14 ‘‘(6) an Asian and Pacific Islander-serving in15 stitution (as defined in subsection (c)). 

16 ‘‘(b) NEW INVESTMENT OF FUNDS.— 

17 ‘‘(1) IN GENERAL.—There shall be available to 

18 the Secretary to carry out this section, from funds 

19 not otherwise appropriated, $100,000,000 for each 

20 of the fiscal years 2008 through 2012. The authority 

21 to carry out this section shall expire at the end of 

22 fiscal year 2012. 

23 ‘‘(2) ALLOCATION AND ALLOTMENT.— 
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1 ‘‘(A) IN GENERAL.—Of the amounts made 

2 available under paragraph (1) for any fiscal 

3 year— 

4 ‘‘(i) 40 percent shall be available for 

5 allocation under subparagraph (B); 

6 ‘‘(ii) 40 percent shall be available for 

7 allocation under subparagraph (C); and 

8 ‘‘(iii) 20 percent shall be available for 

9 allocation under subparagraph (D). 

10 ‘‘(B) HSI STEM AND ARTICULATION PRO11 GRAMS.—The amount made available for alloca12 tion under this subparagraph by subparagraph 

13 (A)(i) for any fiscal year shall be available for 

14 Hispanic-serving Institutions for activities de15 scribed in section 503, with a priority given to 

16 applications that propose— 

17 ‘‘(i) to increase the number of His18 panic and other low income students at19 taining degrees in the fields of science, 

20 technology, engineering and mathematics; 

21 and 

22 ‘‘(ii) to develop model transfer and ar23 ticulation agreements between 2-year His24 panic-serving institutions and 4-year insti25 tutions in such fields. 
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1 ‘‘(C) ALLOCATION AND ALLOTMENT HBCUS

2 AND PBIS.—From the amount made available 

3 for allocation under this subparagraph by sub4 paragraph (A)(ii) for any fiscal year— 

5 ‘‘(i) $34,000,000 shall be available to 

6 eligible institutions described in subsection 

7 (a)(1) and shall be made available as 

8 grants under section 323 and allotted 

9 among such institutions under section 324, 

10 treating such amount, plus the amount ap11 propriated for such fiscal year in a regular 

12 or supplemental appropriation Act to carry 

13 out part B of title III, as the amount ap14 propriated to carry out part B of title III 

15 for purposes of allotments under section 

16 324, for use by such institutions with a 

17 priority for— 

18 ‘‘(I) activities described in para19 graphs (1), (2), (4), (5), and (10) of 

20 section 323(a); and 

21 ‘‘(II) other activities, consistent 

22 with the institution’s comprehensive 

23 plan and designed to increase the in24 stitution’s capacity to prepare stu25 dents for careers in the physical and 
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1 natural sciences, mathematics, com2 puter science and information tech3 nology and sciences, engineering, lan4 guage instruction in the less-com5 monly taught languages and inter6 national affairs, and nursing and al7 lied health professions; and 

8 ‘‘(ii) $6,000,000 shall be available to 

9 eligible institutions described in subsection 

10 (a)(5) and shall be available for a competi11 tive grant program to award 10 grants of 

12 $600,000 annually for programs in the fol13 lowing areas: science, technology, engineer14 ing, or mathematics (STEM); health edu15 cation; internationalization or 

16 globalization; teacher preparation; or im17 proving educational outcomes of African 

18 American males. 

19 ‘‘(D) ALLOCATION AND ALLOTMENT TO

20 OTHER MINORITY-SERVING INSTITUTIONS.— 

21 From the amount made available for allocation 

22 under this subparagraph by subparagraph 

23 (A)(iii) for any fiscal year (in this subpara24 graph referred to as the ‘allocable amount’)— 
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1 ‘‘(i) 60 percent of the allocable 

2 amount for such fiscal year shall be avail3 able to eligible institutions described in 

4 subsection (a)(3) and shall be made avail5 able as grants under section 316, treating 

6 such 60 percent of the allocable amount as 

7 part of the amount appropriated for such 

8 fiscal year in a regular or supplemental ap9 propriation Act to carry out such section, 

10 and using such 60 percent for purposes de11 scribed in subsection (c) of such section; 

12 ‘‘(ii) 30 percent of the allocable 

13 amount for such fiscal year shall be avail14 able to eligible institutions described in 

15 subsection (a)(4) and shall be made avail16 able as grants under section 317, treating 

17 such 30 percent of the allocable amount as 

18 part of the amount appropriated for such 

19 fiscal year in a regular or supplemental ap20 propriation Act to carry out such section 

21 and using such 60 percent for purposes de22 scribed in subsection (a) of such section; 

23 and 

24 ‘‘(iii) 10 percent of the allocable 

25 amount for such fiscal year shall be avail-
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1 able to eligible institutions described in 

2 subsection (a)(6) for activities described in 

3 section 311(c). 

4 ‘‘(c) DEFINITIONS.— 

5 ‘‘(1) PREDOMINANTLY BLACK INSTITUTION.— 

6 The term ‘Predominantly Black institution’ means 

7 an institution of higher education that— 

8 ‘‘(A) has an enrollment of needy under9 graduate students as required and defined by 

10 paragraph (2); 

11 ‘‘(B) has an average educational and gen12 eral expenditure which is low, per full-time 

13 equivalent undergraduate student in comparison 

14 with the average educational and general ex15 penditure per full-time equivalent under16 graduate student of institutions that offer simi17 lar instruction, except that the Secretary may 

18 apply the waiver requirements described in sec19 tion 392(b) to this subparagraph in the same 

20 manner as the Secretary applies the waiver re21 quirements to section 312(b)(1)(B); 

22 ‘‘(C) has an enrollment of undergraduate 

23 students— 

24 ‘‘(i) that is at least 40 percent Black 

25 American students; 
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1 ‘‘(ii) that is at least 1,000 under2 graduate students; 

3 ‘‘(iii) of which not less than 50 per4 cent of the undergraduate students en5 rolled at the institution are low-income in6 dividuals or first-generation college stu7 dents (as that term is defined in section 

8 402A(g)); and 

9 ‘‘(iv) of which not less than 50 per10 cent of the undergraduate students are en11 rolled in an educational program leading to 

12 a bachelor’s or associate’s degree that the 

13 institution is licensed to award by the 

14 State in which it is located; 

15 ‘‘(D) is legally authorized to provide, and 

16 provides within the State, an educational pro17 gram for which the institution of higher edu18 cation awards a bachelors degree, or in the case 

19 of a junior or community college, an associate’s 

20 degree; 

21 ‘‘(E) is accredited by a nationally recog22 nized accrediting agency or association deter23 mined by the Secretary to be a reliable author24 ity as to the quality of training offered, or is, 

25 according to such an agency or association, 
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1 making reasonable progress toward accredita2 tion; and 

3 ‘‘(F) is not receiving assistance under part 

4 B of title III. 

5 ‘‘(2) ENROLLMENT OF NEEDY STUDENTS.— 

6 The term ‘enrollment of needy students’ means the 

7 enrollment at an eligible institution with respect to 

8 which not less than 50 percent of the undergraduate 

9 students enrolled in an academic program leading to 

10 a degree— 

11 ‘‘(A) in the second fiscal year preceding 

12 the fiscal year for which the determination is 

13 made, were Federal Pell Grant recipients for 

14 such year; 

15 ‘‘(B) come from families that receive bene16 fits under a means-tested Federal benefits pro17 gram (as defined in paragraph (4)); 

18 ‘‘(C) attended a public or nonprofit private 

19 secondary school— 

20 ‘‘(i) that is in the school district of a 

21 local educational agency that was eligible 

22 for assistance under part A of title I of the 

23 Elementary and Secondary Education Act 

24 of 1965 for any year during which the stu25 dent attended such secondary school; and 
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1 ‘‘(ii) which for the purpose of this 

2 paragraph and for that year was deter3 mined by the Secretary (pursuant to regu4 lations and after consultation with the 

5 State educational agency of the State in 

6 which the school is located) to be a school 

7 in which the enrollment of children counted 

8 under section 1113(a)(5) of such Act ex9 ceeds 30 percent of the total enrollment of 

10 such school; or 

11 ‘‘(D) are first-generation college students 

12 (as that term is defined in section 402A(g)), 

13 and a majority of such first-generation college 

14 students are low-income individuals. 

15 ‘‘(3) LOW-INCOME INDIVIDUAL.—The term 

16 ‘low-income individual’ has the meaning given such 

17 term in section 402A(g). 

18 ‘‘(4) MEANS-TESTED FEDERAL BENEFIT PRO19 GRAM.—The term ‘means-tested Federal benefit pro20 gram’ means a program of the Federal Government, 

21 other than a program under title IV, in which eligi22 bility for the programs’ benefits, or the amount of 

23 such benefits, or both, are determined on the basis 

24 of income or resources of the individual or family 

25 seeking the benefit. 
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1 ‘‘(5) ASIAN AMERICAN AND PACIFIC ISLANDER2 SERVING INSTITUTION.—The term ‘Asian American 

3 and Pacific Islander-serving institution’ means an 

4 institution of higher education that— 

5 ‘‘(A) is an eligible institution under section 

6 312(b); and 

7 ‘‘(B) at the time of application, has an en8 rollment of undergraduate students that is at 

9 least 10 percent Asian American and Pacific Is10 lander students. 

11 ‘‘(6) ASIAN AMERICAN.—The term ‘Asian 

12 American’ has the meaning given the term ‘Asian’ in 

13 the Office of Management and Budget’s Standards 

14 for Maintaining, Collecting, and Presenting Federal 

15 Data on Race and Ethnicity as published on October 

16 30, 1997 (62 Fed. Reg. 58789). 

17 ‘‘(7) PACIFIC ISLANDER.—The term ‘Pacific Is18 lander’ has the meaning given the term ‘Native Ha19 waiian’ or ‘Other Pacific Islander’ in such Standards 

20 for Maintaining, Collecting, and Presenting Federal 

21 Data on Race and Ethnicity. 

22 ‘‘(d) TERMINATION OF AUTHORITY.—The authority 

23 to carry out this section expires at the end of fiscal year 

24 2012.’’. 
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1 PART B—COLLEGE ACCESS CHALLENGE GRANTS 

2 SEC. 411. COLLEGE ACCESS CHALLENGE GRANTS. 

3 (a) CHALLENGE GRANT PROGRAM ESTABLISHED.— 

4 (1) PROGRAM ESTABLISHED.—The Secretary 

5 shall establish a program to award matching grants 

6 to increase the number of eligible students from un7 derserved populations who enter and complete col8 lege by providing grants to philanthropic organiza9 tions who are members of eligible consortia to carry 

10 out the activities of the consortia to achieve this pur11 pose, including— 

12 (A) providing need-based grants to eligible 

13 students; 

14 (B) providing support to eligible students 

15 through school- or institution-based mentoring 

16 programs; and 

17 (C) conducting outreach programs to en18 courage eligible students to pursue higher edu19 cation. 

20 (2) GRANT PERIOD; RENEWABILITY.—Grants 

21 under this section shall be awarded for one 5-year 

22 period, and may not be renewed. 

23 (3) GRANT AMOUNTS.— 

24 (A) IN GENERAL.—A grant awarded under 

25 this part for a given fiscal year to a philan-
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1 thropic organization shall be in an amount 

2 equal to the lesser of— 

3 (i) 200 percent of the amount of char4 itable gifts received in the preceding fiscal 

5 year by the eligible consortia, including 

6 charitable gifts received by the individual 

7 members of the consortia with which the 

8 philanthropic organization is associated; or 

9 (ii) the maximum grant amount estab10 lished by the Secretary by regulation, pur11 suant to subsection (f). 

12 (B) GIFTS PROVIDED IN CASH OR IN13 KIND.—For the purposes of subparagraph (A), 

14 the charitable gifts received by an eligible con15 sortia and its members may be provided in cash 

16 or in-kind, including physical non-cash con17 tributions of monetary value such as property, 

18 facilities, and equipment, but excluding services. 

19 (b) USES OF GRANT.— 

20 (1) IN GENERAL.—A philanthropic organization 

21 receiving a grant under this section shall— 

22 (A) provide grants to eligible students; and 

23 (B) distribute grants to members of the 

24 consortia with which the philanthropic organiza25 tion is affiliated, in accordance with the plan 
118 

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1 described in subsection (c)(2)(A), to fund the 

2 activities of such consortia in accordance with 

3 the application under subsection (c). 

4 (2) LIMITATION.—Not more than 15 percent of 

5 the funds made available annually through a grant 

6 under this section may be used for administrative 

7 purposes. 

8 (c) APPLICATIONS.—A philanthropic organization de9 siring a grant under this section shall submit an applica10 tion to the Secretary at such time, in such manner, and 

11 containing such information as the Secretary may require. 

12 Such application shall include the following: 

13 (1) A description of an eligible consortia that 

14 meets the requirements of subsection (d), with which 

15 the philanthropic organization is affiliated, in ac16 cordance with subsection (g). 

17 (2) A detailed description of— 

18 (A) the philanthropic organization’s plans 

19 for distributing the matching grant funds 

20 among the members of the eligible consortia; 

21 and 

22 (B) the eligible consortia’s plans for using 

23 the matching grant funds, including how the 

24 funds will be used to provide financial aid, men-
119 

•HR 2669 EH1S 

1 toring, and outreach programs to eligible stu2 dents. 

3 (3) A plan to ensure the viability of the eligible 

4 consortia and the work of the consortia beyond the 

5 grant period. 

6 (4) A detailed description of the activities that 

7 carry out this section that are conducted by the eli8 gible consortia at the time of the application, and 

9 how the matching grant funds will assist the eligible 

10 consortia with expanding and enhancing such activi11 ties. 

12 (5) A description of the organizational structure 

13 that will be used to administer the activities carried 

14 out under the plan, including a description of the 

15 system used to track the participation of students 

16 who receive grants to degree completion. 

17 (6) A description of the strategies that will be 

18 used to identify eligible students who are enrolled in 

19 secondary school and who may benefit from the ac20 tivities of the eligible consortia. 

21 (d) ELIGIBLE CONSORTIA.—An eligible consortia 

22 with which a philanthropic organization is affiliated for 

23 the program under this section shall— 
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1 (1) be a partnership of mulitple entities that 

2 have agreed to work together to carry out this sec3 tion, including— 

4 (A) such philanthropic organization, which 

5 shall serve as the manager of the consortia; 

6 (B) a State that demonstrates a commit7 ment to ensuring the creation of a Statewide 

8 system to address the issues of early interven9 tion and financial support for eligible students 

10 to enter and remain in college; and 

11 (C) at the discretion of the philanthropic 

12 organization described in subparagraph (A), ad13 ditional partners, including other non-profit or14 ganizations, government entities (including local 

15 municipalities, school districts, cities, and coun16 ties), institutions of higher education, and other 

17 public or private programs that provide men18 toring or outreach programs; and 

19 (2) conduct activities to assist eligible students 

20 with entering and remaining in college, which in21 clude— 

22 (A) providing need-based grants to eligible 

23 students; 

24 (B) providing early notification to low-in25 come students of their potential eligibility for 
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1 Federal financial aid (which may include assist2 ing students and families with filling out 

3 FAFSA forms), as well as financial aid and 

4 other support available from the eligible con5 sortia; 

6 (C) encouraging increased eligible student 

7 participation in higher education through men8 toring or outreach programs; and 

9 (D) conducting marketing and outreach ef10 forts that are designed to— 

11 (i) encourage full participation of eli12 gible students in the activities of the con13 sortia that carry out this section; and 

14 (ii) provide the communities impacted 

15 by the activities of the consortia with a 

16 general knowledge about the efforts of the 

17 consortia. 

18 (e) REGULATIONS.—The Secretary shall promulgate 

19 regulations to carry out this section. Such regulations 

20 shall include— 

21 (1) the maximum grant amount that may be 

22 awarded to a philanthropic organization under this 

23 section; 

24 (2) the minimum amount of chartable gifts an 

25 eligible consortia (including its members) shall re-
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•HR 2669 EH1S 

1 ceive in a fiscal year for the philanthropic organiza2 tion affiliated with such consortia to be eligible for 

3 a grant under this section. 

4 (f) DEFINITIONS.—For the purposes of this section: 

5 (1) ELIGIBLE STUDENT.—The term ‘‘eligible 

6 student’’ means an individual who— 

7 (A) is a member of an underserved popu8 lation; 

9 (B) is enrolled— 

10 (i) in a secondary school pursuing a 

11 high school diploma; or 

12 (ii) in an institution of higher edu13 cation or is planning to attend an institu14 tion of higher education; and 

15 (C) either— 

16 (i) is receiving, or has received, finan17 cial assistance or support services from the 

18 consortium; or 

19 (ii) meets 2 or more of the following 

20 criteria: 

21 (I) Has an expected family con22 tribution equal to zero (as described 

23 in section 479 of the Higher Edu24 cation Act of 1965) or a comparable 

25 alternative based upon the State’s ap-
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•HR 2669 EH1S 

1 proved criteria in section 415C(b)(4) 

2 of such Act. 

3 (II) Has qualified for a free 

4 lunch, or at the State’s discretion a 

5 reduced price lunch, under the school 

6 lunch program established under the 

7 Richard B. Russell National School 

8 Lunch Act. 

9 (III) Qualifies for the State’s 

10 maximum need-based undergraduate 

11 award. 

12 (IV) Is participating in, or has 

13 participated in, a Federal, State, in14 stitutional, or community mentoring 

15 or outreach program, as recognized by 

16 the eligible consortia carrying out ac17 tivities under this section. 

18 (2) PHILANTHROPIC ORGANIZATION.—The term 

19 ‘‘philanthropic organization’’ means a non-profit or20 ganization— 

21 (A) that does not receive funds under title 

22 IV of the Higher Education Act of 1965 or 

23 under the Elementary and Secondary Education 

24 Act of 1965; 
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1 (B) that is not a local educational agency 

2 or an institution of higher education; 

3 (C) that has a demonstrated record of dis4 persing grant aid to underserved populations to 

5 ensure access to, and participation in, higher 

6 education; 

7 (D) that is affiliated with an eligible con8 sortia (as defined in subsection (d)) to carry 

9 out this section; and 

10 (E) the primary purpose of which is to 

11 provide financial aid and support services to 

12 students from underrepresented populations to 

13 increase the number of such students who enter 

14 and remain in college. 

15 (3) STATE.—The term ‘‘State’’ means each of 

16 the several States of the United States, the District 

17 of Columbia, and Puerto Rico. 

18 (4) UNDERSERVED POPULATION.—The term 

19 ‘‘underserved population’’ means a group of individ20 uals who traditionally have not been well represented 

21 in the general population of students who pursue 

22 and successfully complete a higher education degree. 

23 (g) PROGRAM FUNDING.— 

24 (1) IN GENERAL.—There shall be available to 

25 the Secretary to carry out this section, from funds 
125 

•HR 2669 EH1S 

1 not otherwise appropriated, $300,000,000 for the 

2 period beginning with fiscal year 2008 and ending 

3 with fiscal year 2012. 

4 (2) USE OF EXCESS FUNDS.—If, at the end of 

5 a fiscal year, the funds available for awarding grants 

6 under this section exceed the amount necessary to 

7 make such grants, then all of the excess funds shall 

8 remain available for the subsequent fiscal year, and 

9 shall be used to award grants under section 401 of 

10 the Higher Education Act of 1965 (20 U.S.C. 

11 1070a) for such subsequent fiscal year. 

12 (h) SUNSET.—The authority to carry out this section 

13 shall expire at the end of fiscal year 2012. 

14 PART C—UPWARD BOUND 

15 SEC. 412. UPWARD BOUND. 

16 (a) ABSOLUTE PRIORITY PROHIBITED IN UPWARD

17 BOUND PROGRAM.—Section 402C (20 U.S.C. 1070a–13) 

18 is amended by adding at the end the following new sub19 section: 

20 ‘‘(f) ABSOLUTE PRIORITY PROHIBITED IN UPWARD

21 BOUND PROGRAM.—Except as otherwise expressly pro22 vided by amendment to this section, the Secretary shall 

23 not implement or enforce, and shall rescind, the absolute 

24 priority for Upward Bound Program participant selection 

25 and evaluation published by the Department of Education 
126 

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1 in the Federal Register on September 22, 2006 (71 Fed. 

2 Reg. 55447 et seq.).’’. 

3 (b) ADDITIONAL FUNDS.—Section 402C is further 

4 amended by adding after subsection (f) (as added by sub5 section (a)) the following new subsection: 

6 ‘‘(g) ADDITIONAL FUNDS.— 

7 ‘‘(1) AUTHORIZATION AND APPROPRIATION.— 

8 There are authorized to be appropriated, and there 

9 are appropriated to the Secretary, from funds not 

10 otherwise appropriated, $57,000,000 for each of the 

11 fiscal years 2008 through 2011 to carry out para12 graph (2), except that any amounts that remain un13 expended for such purpose for each of such fiscal 

14 years may be available for technical assistance and 

15 administration costs for the Upward Bound pro16 gram. 

17 ‘‘(2) USE OF FUNDS.—The amounts made 

18 available by paragraph (1) shall be available to pro19 vide assistance to all Upward Bound projects that 

20 did not receive assistance in fiscal year 2007 and 

21 that have a grant score above 70. Such assistance 
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1 shall be made available in the form of 4-year 

2 grants.’’. 

Passed the House of Representatives July 11, 2007. 

Attest: 

Clerk. 
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