H. R. 2669 

One Hundred Tenth Congress 

of the 

United States of America 

AT THE FIRST SESSION 

Begun and held at the City of Washington on Thursday, 

the fourth day of January, two thousand and seven 

An Act 

To provide for reconciliation pursuant to section 601 of the concurrent resolution 

on the budget for fiscal year 2008. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE; REFERENCES. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘College Cost 

Reduction and Access Act’’. 

(b) REFERENCES.—Except as otherwise expressly provided, 

whenever in this Act an amendment or repeal is expressed in 

terms of an amendment to, or repeal of, a section or other provision, 

the reference shall be considered to be made to a section or other 

provision of the Higher Education Act of 1965 (20 U.S.C. 1001 

et seq.). 

(c) EFFECTIVE DATE.—Except as otherwise expressly provided, 

the amendments made by this Act shall be effective on October 

1, 2007. 

TITLE I—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF 

HIGHER EDUCATION 

SEC. 101. TUITION SENSITIVITY. 

(a) AMENDMENT.—Section 401(b) (20 U.S.C. 1070a(b)) is 

amended— 

(1) by striking paragraph (3); and 

(2) by redesignating paragraphs (4) through (9) as paragraphs (3) through (8), respectively. 

(b) EFFECTIVE DATE.—The amendments made by subsection 

(a) shall be effective with respect to determinations of Federal 

Pell Grant amounts for award years beginning on or after July 

1, 2007. 

(c) AUTHORIZATION AND APPROPRIATION OF FUNDS.—There is 

authorized to be appropriated, and there is appropriated, out of 

any money in the Treasury not otherwise appropriated, for the 

Department of Education to carry out the amendment made by 

subsection (a), $11,000,000 for fiscal year 2008. 

SEC. 102. MANDATORY PELL GRANT INCREASES. 

(a) EXTENSION OF AUTHORITY.—Section 401(a) (20 U.S.C. 

1070a(a)) is amended by striking ‘‘fiscal year 2004’’ and inserting 

‘‘fiscal year 2017’’. 
H. R. 2669—2 

(b) FUNDING FOR INCREASES.—Section 401(b) (20 U.S.C. 

1070a(b)) is amended by adding at the end the following new 

paragraph: 

‘‘(9) ADDITIONAL FUNDS.— 

‘‘(A) IN GENERAL.—There are authorized to be appropriated, and there are appropriated, to carry out subparagraph (B) of this paragraph (in addition to any other 

amounts appropriated to carry out this section and out 

of any money in the Treasury not otherwise appropriated) 

the following amounts— 

‘‘(i) $2,030,000,000 for fiscal year 2008; 

‘‘(ii) $2,090,000,000 for fiscal year 2009; 

‘‘(iii) $3,030,000,000 for fiscal year 2010; 

‘‘(iv) $3,090,000,000 for fiscal year 2011; 

‘‘(v) $5,050,000,000 for fiscal year 2012; 

‘‘(vi) $105,000,000 for fiscal year 2013; 

‘‘(vii) $4,305,000,000 for fiscal year 2014; 

‘‘(viii) $4,400,000,000 for fiscal year 2015; 

‘‘(ix) $4,600,000,000 for fiscal year 2016; and 

‘‘(x) $4,900,000,000 for fiscal year 2017. 

‘‘(B) INCREASE IN FEDERAL PELL GRANTS.—The amounts 

made available pursuant to subparagraph (A) of this paragraph shall be used to increase the amount of the maximum 

Federal Pell Grant for which a student shall be eligible 

during an award year, as specified in the last enacted 

appropriation Act applicable to that award year, by— 

‘‘(i) $490 for each of the award years 2008–2009 

and 2009–2010; 

‘‘(ii) $690 for each of the award years 2010–2011 

and 2011–2012; and 

‘‘(iii) $1,090 for award year 2012–2013. 

‘‘(C) ELIGIBILITY.—The Secretary shall only award an 

increased amount of a Federal Pell Grant under this section 

for any award year pursuant to the provisions of this 

paragraph to students who qualify for a Federal Pell Grant 

award under the maximum grant award enacted in the 

annual appropriation Act for such award year without 

regard to the provisions of this paragraph. 

‘‘(D) FORMULA OTHERWISE UNAFFECTED.—Except as 

provided in subparagraphs (B) and (C), nothing in this 

paragraph shall be construed to alter the requirements 

of this section, or authorize the imposition of additional 

requirements, for the determination and allocation of Federal Pell Grants under this section. 

‘‘(E) RATABLE INCREASES AND DECREASES.—The 

amounts specified in subparagraph (B) shall be ratably 

increased or decreased to the extent that funds available 

under subparagraph (A) exceed or are less than (respectively) the amount required to provide the amounts specified in subparagraph (B). 

‘‘(F) USE OF FISCAL YEAR FUNDS FOR AWARD YEARS.— 

The amounts made available by subparagraph (A) for any 

fiscal year shall be available and remain available for 

use under subparagraph (B) for the award year that begins 

in such fiscal year.’’. 
H. R. 2669—3 

SEC. 103. UPWARD BOUND. 

Section 402C is further amended by adding at the end the 

following new subsection: 

‘‘(f) ADDITIONAL FUNDS.— 

‘‘(1) AUTHORIZATION AND APPROPRIATION.—There are 

authorized to be appropriated, and there are appropriated to 

the Secretary, from funds not otherwise appropriated, 

$57,000,000 for each of the fiscal years 2008 through 2011 

to carry out paragraph (2), except that any amounts that remain 

unexpended for such purpose for each of such fiscal years 

may be available for technical assistance and administration 

costs for the Upward Bound program. The authority to award 

grants under this subsection shall expire at the end of fiscal 

year 2011. 

‘‘(2) USE OF FUNDS.—The amounts made available by paragraph (1) shall be available to provide assistance to all Upward 

Bound projects that did not receive assistance in fiscal year 

2007 and that have a grant score above 70. Such assistance 

shall be made available in the form of 4-year grants.’’. 

SEC. 104. TEACH GRANTS. 

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

adding at the end the following new subpart: 

‘‘Subpart 9—TEACH Grants 

‘‘SEC. 420L. DEFINITIONS. 

‘‘For the purposes of this subpart: 

‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligible institution’ 

means an institution of higher education, as defined in section 

102, that the Secretary determines— 

‘‘(A) provides high quality teacher preparation and 

professional development services, including extensive clinical experience as a part of pre-service preparation; 

‘‘(B) is financially sound; 

‘‘(C) provides pedagogical course work, or assistance 

in the provision of such coursework, including the monitoring of student performance, and formal instruction 

related to the theory and practices of teaching; and 

‘‘(D) provides supervision and support services to 

teachers, or assistance in the provision of such services, 

including mentoring focused on developing effective 

teaching skills and strategies. 

‘‘(2) POST-BACCALAUREATE.—The term ‘post-baccalaureate’ 

means a program of instruction for individuals who have completed a baccalaureate degree, that does not lead to a graduate 

degree, and that consists of courses required by a State in 

order for a teacher candidate to receive a professional certification or licensing credential that is required for employment 

as a teacher in an elementary school or secondary school in 

that State, except that such term shall not include any program 

of instruction offered by an eligible institution that offers a 

baccalaureate degree in education. 

‘‘(3) TEACHER CANDIDATE.—The term ‘teacher candidate’ 

means a student or teacher described in subparagraph (A) 

or (B) of section 420N(a)(2). 
H. R. 2669—4 

‘‘SEC. 420M. PROGRAM ESTABLISHED. 

‘‘(a) PROGRAM AUTHORITY.— ‘‘(1) PAYMENTS REQUIRED.—The Secretary shall pay to each 

eligible institution such sums as may be necessary to pay 

to each teacher candidate who files an application and agreement in accordance with section 420N, and who qualifies under 

paragraph (2) of section 420N(a), a TEACH Grant in the 

amount of $4,000 for each academic year during which that 

teacher candidate is in attendance at the institution. 

‘‘(2) REFERENCES.—Grants made under paragraph (1) shall 

be known as ‘Teacher Education Assistance for College and 

Higher Education Grants’ or ‘TEACH Grants’. 

‘‘(b) PAYMENT METHODOLOGY.— ‘‘(1) PREPAYMENT.—Not less than 85 percent of any funds 

provided to an eligible institution under subsection (a) shall 

be advanced to the eligible institution prior to the start of 

each payment period and shall be based upon an amount 

requested by the institution as needed to pay teacher candidates 

until such time as the Secretary determines and publishes 

in the Federal Register with an opportunity for comment, an 

alternative payment system that provides payments to institutions in an accurate and timely manner, except that this sentence shall not be construed to limit the authority of the Secretary to place an institution on a reimbursement system of 

payment. 

‘‘(2) DIRECT PAYMENT.—Nothing in this section shall be 

interpreted to prohibit the Secretary from paying directly to 

teacher candidates, in advance of the beginning of the academic 

term, an amount for which teacher candidates are eligible, 

in cases where the eligible institution elects not to participate 

in the disbursement system required by paragraph (1). 

‘‘(3) DISTRIBUTION OF GRANTS TO TEACHER CANDIDATES.— 

Payments under this subpart shall be made, in accordance 

with regulations promulgated by the Secretary for such purpose, 

in such manner as will best accomplish the purposes of this 

subpart. Any disbursement allowed to be made by crediting 

the teacher candidate’s account shall be limited to tuition and 

fees and, in the case of institutionally-owned housing, room 

and board. The teacher candidate may elect to have the institution provide other such goods and services by crediting the 

teacher candidate’s account. 

‘‘(c) REDUCTIONS IN AMOUNT.— 

‘‘(1) PART-TIME STUDENTS.—In any case where a teacher 

candidate attends an eligible institution on less than a fulltime basis (including a teacher candidate who attends an 

eligible institution on less than a half-time basis) during any 

academic year, the amount of a grant under this subpart for 

which that teacher candidate is eligible shall be reduced in 

proportion to the degree to which that teacher candidate is 

not attending on a full-time basis, in accordance with a schedule 

of reductions established by the Secretary for the purposes 

of this subpart, computed in accordance with this subpart. 

Such schedule of reductions shall be established by regulation 

and published in the Federal Register in accordance with section 482 of this Act. 

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

under this subpart, in combination with Federal assistance 
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and other student assistance, shall not exceed the cost of attendance (as defined in section 472) at the eligible institution at 

which that teacher candidate is in attendance. If, with respect 

to any teacher candidate for any academic year, it is determined 

that the amount of a TEACH Grant exceeds the cost of attendance for that year, the amount of the TEACH Grant shall 

be reduced until such grant does not exceed the cost of attendance at the eligible institution. 

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

‘‘(1) UNDERGRADUATE AND POST-BACCALAUREATE STUDENTS.—The period during which an undergraduate or postbaccalaureate student may receive grants under this subpart 

shall be the period required for the completion of the first 

undergraduate baccalaureate or post-baccalaureate course of 

study being pursued by the teacher candidate at the eligible 

institution at which the teacher candidate is in attendance, 

except that— 

‘‘(A) any period during which the teacher candidate 

is enrolled in a noncredit or remedial course of study as 

described in paragraph (3) shall not be counted for the 

purpose of this paragraph; and 

‘‘(B) the total amount that a teacher candidate may 

receive under this subpart for undergraduate or post-baccalaureate study shall not exceed $16,000. 

‘‘(2) GRADUATE STUDENTS.—The period during which a 

graduate student may receive grants under this subpart shall 

be the period required for the completion of a master’s degree 

course of study pursued by the teacher candidate at the eligible 

institution at which the teacher candidate is in attendance, 

except that the total amount that a teacher candidate may 

receive under this subpart for graduate study shall not exceed 

$8,000. 

‘‘(3) REMEDIAL COURSE; STUDY ABROAD.—Nothing in this 

section shall be construed to exclude from eligibility courses 

of study which are noncredit or remedial in nature (including 

courses in English language acquisition) which are determined 

by the eligible institution to be necessary to help the teacher 

candidate be prepared for the pursuit of a first undergraduate 

baccalaureate or post-baccalaureate degree or certificate or, 

in the case of courses in English language instruction, to be 

necessary to enable the teacher candidate to utilize already 

existing knowledge, training, or skills. Nothing in this section 

shall be construed to exclude from eligibility programs of study 

abroad that are approved for credit by the home institution 

at which the teacher candidate is enrolled. 

‘‘SEC. 420N. APPLICATIONS; ELIGIBILITY. 

‘‘(a) APPLICATIONS; DEMONSTRATION OF ELIGIBILITY.— 

‘‘(1) FILING REQUIRED.—The Secretary shall periodically set 

dates by which teacher candidates shall file applications for 

grants under this subpart. Each teacher candidate desiring 

a grant under this subpart for any year shall file an application 

containing such information and assurances as the Secretary 

may determine necessary to enable the Secretary to carry out 

the functions and responsibilities of this subpart. 
H. R. 2669—6 

‘‘(2) DEMONSTRATION OF TEACH GRANT ELIGIBILITY.—Each 

application submitted under paragraph (1) shall contain such 

information as is necessary to demonstrate that— 

‘‘(A) if the applicant is an enrolled student— 

‘‘(i) the student is an eligible student for purposes 

of section 484; 

‘‘(ii) the student— 

‘‘(I) has a grade point average that is determined, under standards prescribed by the Secretary, to be comparable to a 3.25 average on 

a zero to 4.0 scale, except that, if the student 

is in the first year of a program of undergraduate 

education, such grade point average shall be determined on the basis of the student’s cumulative 

secondary school grade point average; or 

‘‘(II) displayed high academic aptitude by 

receiving a score above the 75th percentile on at 

least one of the batteries in an undergraduate, 

post-baccalaureate, or graduate school admissions 

test; and 

‘‘(iii) the student is completing coursework and 

other requirements necessary to begin a career in 

teaching, or plans to complete such coursework and 

requirements prior to graduating; or 

‘‘(B) if the applicant is a current or prospective teacher 

applying for a grant to obtain a graduate degree— 

‘‘(i) the applicant is a teacher or a retiree from 

another occupation with expertise in a field in which 

there is a shortage of teachers, such as mathematics, 

science, special education, English language acquisition, or another high-need subject; or 

‘‘(ii) the applicant is or was a teacher who is using 

high-quality alternative certification routes, such as 

Teach for America, to get certified. 

‘‘(b) AGREEMENTS TO SERVE.—Each application under subsection (a) shall contain or be accompanied by an agreement by 

the applicant that— 

‘‘(1) the applicant will— 

‘‘(A) serve as a full-time teacher for a total of not 

less than 4 academic years within 8 years after completing 

the course of study for which the applicant received a 

TEACH Grant under this subpart; 

‘‘(B) teach in a school described in section 465(a)(2)(A); 

‘‘(C) teach in any of the following fields— 

‘‘(i) mathematics; 

‘‘(ii) science; 

‘‘(iii) a foreign language; 

‘‘(iv) bilingual education; 

‘‘(v) special education; 

‘‘(vi) as a reading specialist; or 

‘‘(vii) another field documented as high-need by 

the Federal Government, State government, or local 

educational agency, and approved by the Secretary; 

‘‘(D) submit evidence of such employment in the form 

of a certification by the chief administrative officer of the 

school upon completion of each year of such service; and 
H. R. 2669—7 

‘‘(E) comply with the requirements for being a highly 

qualified teacher as defined in section 9101 of the 

Elementary and Secondary Education Act of 1965; and 

‘‘(2) in the event that the applicant is determined to have 

failed or refused to carry out such service obligation, the sum 

of the amounts of any TEACH Grants received by such 

applicant will be treated as a loan and collected from the 

applicant in accordance with subsection (c) and the regulations 

thereunder. 

‘‘(c) REPAYMENT FOR FAILURE TO COMPLETE SERVICE.—In the 

event that any recipient of a grant under this subpart fails or 

refuses to comply with the service obligation in the agreement 

under subsection (b), the sum of the amounts of any TEACH Grants 

received by such recipient shall, upon a determination of such 

a failure or refusal in such service obligation, be treated as a 

Federal Direct Unsubsidized Stafford Loan under part D of title 

IV, and shall be subject to repayment, together with interest thereon 

accruing from the date of the grant award, in accordance with 

terms and conditions specified by the Secretary in regulations under 

this subpart. 

‘‘SEC. 420O. PROGRAM PERIOD AND FUNDING. 

‘‘Beginning on July 1, 2008, there shall be available to the 

Secretary to carry out this subpart, from funds not otherwise appropriated, such sums as may be necessary to provide TEACH Grants 

in accordance with this subpart to each eligible applicant.’’. 

TITLE II—STUDENT LOAN BENEFITS, 

TERMS, AND CONDITIONS 

SEC. 201. INTEREST RATE REDUCTIONS. 

(a) FFEL INTEREST RATES.— 

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

adding at the end the following new paragraph: 

‘‘(4) REDUCED RATES FOR UNDERGRADUATE SUBSIDIZED

LOANS.—Notwithstanding subsection (h) and paragraph (1) of 

this subsection, with respect to any loan to an undergraduate 

student made, insured, or guaranteed under this part (other 

than a loan made pursuant to section 428B, 428C, or 428H) 

for which the first disbursement is made on or after July 

1, 2006, and before July 1, 2012, the applicable rate of interest 

shall be as follows: 

‘‘(A) For a loan for which the first disbursement is 

made on or after July 1, 2006, and before July 1, 2008, 

6.8 percent on the unpaid principal balance of the loan. 

‘‘(B) For a loan for which the first disbursement is 

made on or after July 1, 2008, and before July 1, 2009, 

6.0 percent on the unpaid principal balance of the loan. 

‘‘(C) For a loan for which the first disbursement is 

made on or after July 1, 2009, and before July 1, 2010, 

5.6 percent on the unpaid principal balance of the loan. 

‘‘(D) For a loan for which the first disbursement is 

made on or after July 1, 2010, and before July 1, 2011, 

4.5 percent on the unpaid principal balance of the loan. 
H. R. 2669—8 

‘‘(E) For a loan for which the first disbursement is 

made on or after July 1, 2011, and before July 1, 2012, 

3.4 percent on the unpaid principal balance of the loan.’’. 

(2) SPECIAL ALLOWANCE CROSS REFERENCE.—Section 

438(b)(2)(I)(ii)(II) (20 U.S.C. 1087–1(b)(2)(I)(ii)(II)) is amended 

by striking ‘‘section 427A(l)(1)’’ and inserting ‘‘section 427A(l)(1) 

or (l)(4)’’. 

(b) DIRECT LOAN INTEREST RATES.—Section 455(b)(7) (20 U.S.C. 

1087e(b)(7)) is amended by adding at the end the following new 

subparagraph: 

‘‘(D) REDUCED RATES FOR UNDERGRADUATE FDSL.—Notwithstanding the preceding paragraphs of this subsection 

and subparagraph (A) of this paragraph, for Federal Direct 

Stafford Loans made to undergraduate students for which 

the first disbursement is made on or after July 1, 2006, 

and before July 1, 2012, the applicable rate of interest 

shall be as follows: 

‘‘(i) For a loan for which the first disbursement 

is made on or after July 1, 2006, and before July 

1, 2008, 6.8 percent on the unpaid principal balance 

of the loan. 

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

is made on or after July 1, 2008, and before July 

1, 2009, 6.0 percent on the unpaid principal balance 

of the loan. 

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

is made on or after July 1, 2009, and before July 

1, 2010, 5.6 percent on the unpaid principal balance 

of the loan. 

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

is made on or after July 1, 2010, and before July 

1, 2011, 4.5 percent on the unpaid principal balance 

of the loan. 

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

is made on or after July 1, 2011, and before July 

1, 2012, 3.4 percent on the unpaid principal balance 

of the loan.’’. 

SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEMBERS OF 

THE ARMED FORCES. 

(a) FEDERAL FAMILY EDUCATION LOANS.—Section 

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

(1) in the matter preceding subclause (I), by striking ‘‘not 

in excess of 3 years’’; 

(2) in subclause (II), by striking ‘‘; or’’ and inserting a 

comma; and 

(3) by adding at the end the following: 

‘‘and for the 180-day period following the demobilization date for the service described in subclause (I) 

or (II); or’’. 

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

1087e(f)(2)(C)) is amended— 

(1) in the matter preceding clause (i), by striking ‘‘not 

in excess of 3 years’’; 

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

and 

(3) by adding at the end the following: 
H. R. 2669—9 

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

date for the service described in clause (i) or (ii); or’’. 

(c) PERKINS LOANS.—Section 464(c)(2)(A)(iii) (20 U.S.C. 

1087dd(c)(2)(A)(iii)) is amended— 

(1) in the matter preceding subclause (I), by striking ‘‘not 

in excess of 3 years’’; 

(2) in subclause (II), by striking the semicolon and inserting 

a comma; and 

(3) by adding at the end the following: 

‘‘and for the 180-day period following the demobilization date for 

the service described in subclause (I) or (II);’’. 

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

Reconciliation Act of 2005 (20 U.S.C. 1078 note) is amended by 

striking ‘‘loans for which’’ and all that follows through the period 

at the end and inserting ‘‘all loans under title IV of the Higher 

Education Act of 1965.’’. 

SEC. 203. INCOME-BASED REPAYMENT. 

(a) AMENDMENT.—Part G of title IV (20 U.S.C. 1088 et seq.) 

is amended by adding at the end the following: 

‘‘SEC. 493C. INCOME-BASED REPAYMENT. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) EXCEPTED PLUS LOAN.—The term ‘excepted PLUS loan’ 

means a loan under section 428B, or a Federal Direct PLUS 

Loan, that is made, insured, or guaranteed on behalf of a 

dependent student. 

‘‘(2) EXCEPTED CONSOLIDATION LOAN.—The term ‘excepted 

consolidation loan’ means a consolidation loan under section 

428C, or a Federal Direct Consolidation Loan, if the proceeds 

of such loan were used to the discharge the liability on an 

excepted PLUS loan. 

‘‘(3) PARTIAL FINANCIAL HARDSHIP.—The term ‘partial financial hardship’, when used with respect to a borrower, means 

that for such borrower— 

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

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

(other than an excepted PLUS loan or excepted consolidation loan) to a borrower as calculated under the standard 

repayment plan under section 428(b)(9)(A)(i) or 

455(d)(1)(A), based on a 10-year repayment period; exceeds 

‘‘(B) 15 percent of the result obtained by calculating, 

on at least an annual basis, the amount by which— 

‘‘(i) the borrower’s, and the borrower’s spouse’s 

(if applicable), adjusted gross income; exceeds 

‘‘(ii) 150 percent of the poverty line applicable to 

the borrower’s family size as determined under section 

673(2) of the Community Services Block Grant Act 

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

‘‘(b) INCOME-BASED REPAYMENT PROGRAM AUTHORIZED.—Notwithstanding any other provision of this Act, the Secretary shall 

carry out a program under which— 

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

under part B or D (other than an excepted PLUS loan or 

excepted consolidation loan) who has a partial financial hardship (whether or not the borrower’s loan has been submitted 

to a guaranty agency for default aversion or is already in 

default) may elect, during any period the borrower has the 
H. R. 2669—10 

partial financial hardship, to have the borrower’s aggregate 

monthly payment for all such loans not exceed the result 

described in subsection (a)(3)(B) divided by 12; 

‘‘(2) the holder of such a loan shall apply the borrower’s 

monthly payment under this subsection first toward interest 

due on the loan, next toward any fees due on the loan, and 

then toward the principal of the loan; 

‘‘(3) any interest due and not paid under paragraph (2)— 

‘‘(A) shall, on subsidized loans, be paid by the Secretary 

for a period of not more than 3 years after the date of 

the borrower’s election under paragraph (1), except that 

such period shall not include any period during which 

the borrower is in deferment due to an economic hardship 

described in section 435(o); and 

‘‘(B) be capitalized— 

‘‘(i) in the case of a subsidized loan, subject to 

subparagraph (A), at the time the borrower— 

‘‘(I) ends the election to make income-based 

repayment under this subsection; or 

‘‘(II) begins making payments of not less than 

the amount specified in paragraph (6)(A); or 

‘‘(ii) in the case of an unsubsidized loan, at the 

time the borrower— 

‘‘(I) ends the election to make income-based 

repayment under this subsection; or 

‘‘(II) begins making payments of not less than 

the amount specified in paragraph (6)(A); 

‘‘(4) any principal due and not paid under paragraph (2) 

shall be deferred; 

‘‘(5) the amount of time the borrower makes monthly payments under paragraph (1) may exceed 10 years; 

‘‘(6) if the borrower no longer has a partial financial hardship or no longer wishes to continue the election under this 

subsection, then— 

‘‘(A) the maximum monthly payment required to be 

paid for all loans made to the borrower under part B 

or D (other than an excepted PLUS loan or excepted consolidation loan) shall not exceed the monthly amount calculated under section 428(b)(9)(A)(i) or 455(d)(1)(A), based 

on a 10-year repayment period, when the borrower first 

made the election described in this subsection; and 

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

to repay such loans may exceed 10 years; 

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

balance of principal and interest due on all loans made under 

part B or D (other than a loan under section 428B or a Federal 

Direct PLUS Loan) to a borrower who— 

‘‘(A) at any time, elected to participate in income-based 

repayment under paragraph (1); and 

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

not to exceed 25 years, meets 1 or more of the following 

requirements— 

‘‘(i) has made reduced monthly payments under 

paragraph (1) or paragraph (6); 

‘‘(ii) has made monthly payments of not less than 

the monthly amount calculated under section 

428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year 
H. R. 2669—11 

repayment period, when the borrower first made the 

election described in this subsection; 

‘‘(iii) has made payments of not less than the payments required under a standard repayment plan 

under section 428(b)(9)(A)(i) or 455(d)(1)(A) with a 

repayment period of 10 years; 

‘‘(iv) has made payments under an income-contingent repayment plan under section 455(d)(1)(D); or 

‘‘(v) has been in deferment due to an economic 

hardship described in section 435(o); 

‘‘(8) a borrower who is repaying a loan made under part 

B or D pursuant to income-based repayment may elect, at 

any time, to terminate repayment pursuant to income-based 

repayment and repay such loan under the standard repayment 

plan; and 

‘‘(9) the special allowance payment to a lender calculated 

under section 438(b)(2)(I), when calculated for a loan in repayment under this section, shall be calculated on the principal 

balance of the loan and on any accrued interest unpaid by 

the borrower in accordance with this section. 

‘‘(c) ELIGIBILITY DETERMINATIONS.—The Secretary shall establish procedures for annually determining the borrower’s eligibility 

for income-based repayment, including verification of a borrower’s 

annual income and the annual amount due on the total amount 

of loans made, insured, or guaranteed under part B or D (other 

than an excepted PLUS loan or excepted consolidation loan), and 

such other procedures as are necessary to effectively implement 

income-based repayment under this section. The Secretary shall 

consider, but is not limited to, the procedures established in accordance with section 455(e)(1) or in connection with income sensitive 

repayment schedules under section 428(b)(9)(A)(iii) or 

428C(b)(1)(E).’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Section 428C (20 U.S.C. 1078–3) is amended— 

(A) in subsection (a)(3)(B)(i), by amending subclause 

(V) to read as follows: 

‘‘(V) an individual may obtain a subsequent 

consolidation loan under section 455(g) only— 

‘‘(aa) for the purposes of obtaining an 

income contingent repayment plan, and only 

if the loan has been submitted to the guaranty 

agency for default aversion; or 

‘‘(bb) for the purposes of using the public 

service loan forgiveness program under section 

455(m).’’; 

(B) in the first sentence of subsection (b)(5), by 

inserting ‘‘or chooses to obtain a consolidation loan for 

the purposes of using the public service loan forgiveness 

program offered under section 455(m),’’ after ‘‘from such 

a lender,’’; and 

(C) in the second sentence of such subsection, by 

inserting before the period the following: ‘‘, except that 

if a borrower intends to be eligible to use the public service 

loan forgiveness program under section 455(m), such loan 

shall be repaid using one of the repayment options 

described in section 455(m)(1)(A)’’. 
H. R. 2669—12 

(2) Section 428C (20 U.S.C. 1078–3) (as amended by paragraph (1) of this subsection) is amended— 

(A) in subsection (a)(3)(B)(i)(V)(aa)— 

(i) by striking ‘‘an income contingent repayment 

plan,’’ and inserting ‘‘income contingent repayment or 

income-based repayment,’’; and 

(ii) by inserting ‘‘or if the loan is already in default’’ 

before the semicolon; 

(B) in the first sentence of subsection (b)(5), by 

inserting ‘‘or income-based repayment terms’’ after ‘‘incomesensitive repayment terms’’; and 

(C) in the second sentence of such subsection, by 

inserting ‘‘, pursuant to income-based repayment under 

section 493C,’’ after ‘‘part D of this title’’. 

(3) Section 455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is 

amended by inserting ‘‘made on behalf of a dependent student’’ 

after ‘‘PLUS loan’’. 

(c) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section shall be effective on July 

1, 2009. 

(2) EXCEPTION.—The amendments made by subsection 

(b)(1) shall be effective on July 1, 2008. 

SEC. 204. DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE DUTY. 

Part G of title IV is further amended by adding after section 

493C (as added by section 203 of this Act) the following new 

section: 

‘‘SEC. 493D. DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE 

DUTY. 

‘‘(a) DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE

DUTY.—In addition to any deferral of repayment of a loan made 

under this title pursuant to section 428(b)(1)(M)(iii), 455(f)(2)(C), 

or 464(c)(2)(A)(iii), a borrower of a loan under this title who is 

a member of the National Guard or other reserve component of 

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

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

duty, and is enrolled, or was enrolled within six months prior 

to the activation, in a program of instruction at an eligible institution, shall be eligible for a deferment during the 13 months following 

the conclusion of such service, except that a deferment under this 

subsection shall expire upon the borrower’s return to enrolled student status. 

‘‘(b) ACTIVE DUTY.—Notwithstanding section 481(d), in this section, the term ‘active duty’ has the meaning given such term in 

section 101(d)(1) of title 10, United States Code, except that such 

term— 

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

at a service school; but 

‘‘(2) includes, in the case of members of the National Guard, 

active State duty.’’. 

SEC. 205. MAXIMUM REPAYMENT PERIOD. 

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

the end the following: 
H. R. 2669—13 

‘‘(7) MAXIMUM REPAYMENT PERIOD.—In calculating the 

extended period of time for which an income contingent repayment plan under this subsection may be in effect for a borrower, 

the Secretary shall include all time periods during which a 

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

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

in the income contingent repayment plan; and 

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

described in section 435(o); 

‘‘(ii) makes monthly payments under paragraph (1) 

or (6) of section 493C(b); 

‘‘(iii) makes monthly payments of not less than the 

monthly amount calculated under section 428(b)(9)(A)(i) 

or subsection (d)(1)(A), based on a 10-year repayment 

period, when the borrower first made the election described 

in section 493C(b)(1); 

‘‘(iv) makes payments of not less than the payments 

required under a standard repayment plan under section 

428(b)(9)(A)(i) or subsection (d)(1)(A) with a repayment 

period of 10 years; or 

‘‘(v) makes payments under an income contingent 

repayment plan under subsection (d)(1)(D).’’. 

TITLE III—FEDERAL FAMILY 

EDUCATION LOAN PROGRAM 

SEC. 301. GUARANTY AGENCY COLLECTION RETENTION. 

Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 1078(c)(6)(A)(ii)) 

is amended to read as follows: 

‘‘(ii) an amount equal to 24 percent of such payments for use in accordance with section 422B, except 

that— 

‘‘(I) beginning October 1, 2003 and ending September 30, 2007, this clause shall be applied by 

substituting ‘23 percent’ for ‘24 percent’; and 

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

shall be applied by substituting ‘16 percent’ for 

‘24 percent’.’’. 

SEC. 302. ELIMINATION OF EXCEPTIONAL PERFORMER STATUS FOR 

LENDERS. 

(a) ELIMINATION OF STATUS.—Part B of title IV (20 U.S.C. 

1071 et seq.) is amended by striking section 428I (20 U.S.C. 1078– 

9). 

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

amended— 

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

(A) by striking subparagraph (D); and 

(B) by redesignating subparagraphs (E) through (H) 

as subparagraphs (D) through (G), respectively; and 

(2) in section 438(b)(5) (20 U.S.C. 1087–1(b)(5)), by striking 

the matter following subparagraph (B). 

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

(a) and (b) shall be effective on October 1, 2007, except that section 

428I of the Higher Education Act of 1965 (as in effect on the 

day before the date of enactment of this Act) shall apply to eligible 
H. R. 2669—14 

lenders that received a designation under subsection (a) of such 

section prior to October 1, 2007, for the remainder of the year 

for which the designation was made. 

SEC. 303. REDUCTION OF LENDER INSURANCE PERCENTAGE. 

(a) AMENDMENT.—Subparagraph (G) of section 428(b)(1) (20 

U.S.C. 1078(b)(1)(G)) is amended to read as follows: 

‘‘(G) insures 95 percent of the unpaid principal of loans 

insured under the program, except that— 

‘‘(i) such program shall insure 100 percent of the 

unpaid principal of loans made with funds advanced 

pursuant to section 428(j) or 439(q); and 

‘‘(ii) notwithstanding the preceding provisions of 

this subparagraph, such program shall insure 100 percent of the unpaid principal amount of exempt claims 

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

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall be effective on October 1, 2012, and shall apply with respect 

to loans made on or after such date. 

SEC. 304. DEFINITIONS. 

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

(1) in subsection (o)(1)— 

(A) in subparagraph (A)(ii)— 

(i) by striking ‘‘100 percent of the poverty line 

for a family of 2’’ and inserting ‘‘150 percent of the 

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

and 

(ii) by inserting ‘‘or’’ after the semicolon; 

(B) by striking subparagraph (B); and 

(C) by redesignating subparagraph (C) as subparagraph (B); 

(2) in subsection (o)(2), by striking ‘‘(1)(C)’’ and inserting 

‘‘(1)(B)’’; and 

(3) by adding at the end the following: 

‘‘(p) ELIGIBLE NOT-FOR-PROFIT HOLDER.— ‘‘(1) DEFINITION.—Subject to the limitations in paragraph 

(2) and the prohibition in paragraph (3), the term ‘eligible 

not-for-profit holder’ means an eligible lender under subsection 

(d) (except for an eligible lender described in subsection 

(d)(1)(E)) that requests a special allowance payment under section 438(b)(2)(I)(vi)(II) or a payment under section 771 and 

that is— 

‘‘(A) a State, or a political subdivision, authority, 

agency, or other instrumentality thereof, including such 

entities that are eligible to issue bonds described in section 

1.103–1 of title 26, Code of Federal Regulations, or section 

144(b) of the Internal Revenue Code of 1986; 

‘‘(B) an entity described in section 150(d)(2) of such 

Code that has not made the election described in section 

150(d)(3) of such Code; 

‘‘(C) an entity described in section 501(c)(3) of such 

Code; or 

‘‘(D) a trustee acting as an eligible lender on behalf 

of a State, political subdivision, authority, agency, 

instrumentality, or other entity described in subparagraph 

(A), (B), or (C). 

‘‘(2) LIMITATIONS.— 
H. R. 2669—15 

‘‘(A) EXISTING ON DATE OF ENACTMENT.— 

‘‘(i) IN GENERAL.—An eligible lender shall not be 

an eligible not-for-profit holder under this Act unless 

such lender— 

‘‘(I) was a State, political subdivision, 

authority, agency, instrumentality, or other entity 

described in paragraph (1)(A), (B), or (C) that was, 

on the date of the enactment of the College Cost 

Reduction and Access Act, acting as an eligible 

lender under subsection (d) (other than an eligible 

lender described in subsection (d)(1)(E)); or 

‘‘(II) is a trustee acting as an eligible lender 

under this Act on behalf of such a State, political 

subdivision, authority, agency, instrumentality, or 

other entity described in subclause (I) of this 

clause. 

‘‘(ii) EXCEPTION.—Notwithstanding clause (i), a 

State may elect, in accordance with regulations of the 

Secretary, to waive the requirements this subparagraph for a new not-for-profit holder determined by 

the State to be necessary to carry out a public purpose 

of such State, except that a State may not make such 

election with respect the requirements of clause (i)(II). 

‘‘(B) NO FOR-PROFIT OWNERSHIP OR CONTROL.—No political subdivision, authority, agency, instrumentality, or 

other entity described in paragraph (1)(A), (B), or (C) shall 

be an eligible not-for-profit holder under this Act if such 

entity is owned or controlled, in whole or in part, by a 

for-profit entity. 

‘‘(C) SOLE OWNERSHIP OF LOANS AND INCOME.—No 

State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), 

or (C) shall be an eligible not-for-profit holder under this 

Act with respect to any loan, or income from any loan, 

unless the State, political subdivision, authority, agency, 

instrumentality, or other entity described in paragraph 

(1)(A), (B), or (C) is the sole owner of the beneficial interest 

in such loan and the income from such loan. 

‘‘(D) TRUSTEE COMPENSATION LIMITATIONS.—A trustee 

described in paragraph (1)(D) shall not receive compensation as consideration for acting as an eligible lender on 

behalf of an entity described in described in paragraph 

(1)(A), (B), or (C) in excess of reasonable and customary 

fees. 

‘‘(E) RULE OF CONSTRUCTION.—For purposes of subparagraphs (B), (C), and (D) of this paragraph, a State, 

political subdivision, authority, agency, instrumentality, or 

other entity described in paragraph (1)(A), (B), or (C) shall 

not— 

‘‘(i) be deemed to be owned or controlled, in whole 

or in part, by a for-profit entity, or 

‘‘(ii) lose its status as the sole owner of a beneficial 

interest in a loan and the income from a loan by 

that political subdivision, authority, agency, 

instrumentality, or other entity, 

by granting a security interest in, or otherwise pledging 

as collateral, such loan, or the income from such loan, 
H. R. 2669—16 

to secure a debt obligation in the operation of an arrangement described in paragraph (1)(D). 

‘‘(3) PROHIBITION.—In the case of a loan for which the 

special allowance payment is calculated under section 

438(b)(2)(I)(vi)(II) and that is sold by the eligible not-for-profit 

holder holding the loan to an entity that is not an eligible 

not-for-profit holder under this Act, the special allowance payment for such loan shall, beginning on the date of the sale, 

no longer be calculated under section 438(b)(2)(I)(vi)(II) and 

shall be calculated under section 438(b)(2)(I)(vi)(I) instead. 

‘‘(4) REGULATIONS.—Not later than 1 year after the date 

of enactment of the College Cost Reduction and Access Act, 

the Secretary shall promulgate regulations in accordance with 

the provisions of this subsection.’’. 

SEC. 305. SPECIAL ALLOWANCES. 

(a) REDUCTION OF LENDER SPECIAL ALLOWANCE PAYMENTS.— 

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

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

and inserting ‘‘the following clauses’’; 

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

(iv)’’ and inserting ‘‘clauses (ii), (iii), (iv), and (vi)’’; and 

(3) by adding at the end the following: 

‘‘(vi) REDUCTION FOR LOANS DISBURSED ON OR

AFTER OCTOBER 1, 2007.—With respect to a loan on 

which the applicable interest rate is determined under 

section 427A(l) and for which the first disbursement 

of principal is made on or after October 1, 2007, the 

special allowance payment computed pursuant to this 

subparagraph shall be computed— 

‘‘(I) for loans held by an eligible lender not 

described in subclause (II)— 

‘‘(aa) by substituting ‘1.79 percent’ for 

‘2.34 percent’ each place the term appears in 

this subparagraph; 

‘‘(bb) by substituting ‘1.19 percent’ for 

‘1.74 percent’ in clause (ii); 

‘‘(cc) by substituting ‘1.79 percent’ for ‘2.64 

percent’ in clause (iii); and 

‘‘(dd) by substituting ‘2.09 percent’ for 

‘2.64 percent’ in clause (iv); and 

‘‘(II) for loans held by an eligible not-for-profit 

holder— 

‘‘(aa) by substituting ‘1.94 percent’ for 

‘2.34 percent’ each place the term appears in 

this subparagraph; 

‘‘(bb) by substituting ‘1.34 percent’ for 

‘1.74 percent’ in clause (ii); 

‘‘(cc) by substituting ‘1.94 percent’ for ‘2.64 

percent’ in clause (iii); and 

‘‘(dd) by substituting ‘2.24 percent’ for 

‘2.64 percent’ in clause (iv).’’. 

(b) INCREASED LOAN FEES FROM LENDERS.—Paragraph (2) of 

section 438(d) (20 U.S.C. 1087–1(d)(2)) is amended to read as follows: 
H. R. 2669—17 

‘‘(2) AMOUNT OF LOAN FEES.—The amount of the loan fee 

which shall be deducted under paragraph (1), but which may 

not be collected from the borrower, shall be equal to— 

‘‘(A) except as provided in subparagraph (B), 0.50 percent of the principal amount of the loan with respect to 

any loan under this part for which the first disbursement 

was made on or after October 1, 1993; and 

‘‘(B) 1.0 percent of the principal amount of the loan 

with respect to any loan under this part for which the 

first disbursement was made on or after October 1, 2007.’’. 

SEC. 306. ACCOUNT MAINTENANCE FEES. 

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

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

TITLE IV—LOAN FORGIVENESS 

SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES. 

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

at the end the following: 

‘‘(m) REPAYMENT PLAN FOR PUBLIC SERVICE EMPLOYEES.— ‘‘(1) IN GENERAL.—The Secretary shall cancel the balance 

of interest and principal due, in accordance with paragraph 

(2), on any eligible Federal Direct Loan not in default for 

a borrower who— 

‘‘(A) has made 120 monthly payments on the eligible 

Federal Direct Loan after October 1, 2007, pursuant to 

any one or a combination of the following— 

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

plan under section 493C; 

‘‘(ii) payments under a standard repayment plan 

under subsection (d)(1)(A), based on a 10-year repayment period; 

‘‘(iii) monthly payments under a repayment plan 

under subsection (d)(1) or (g) of not less than the 

monthly amount calculated under subsection (d)(1)(A), 

based on a 10-year repayment period; or 

‘‘(iv) payments under an income contingent repayment plan under subsection (d)(1)(D); and 

‘‘(B)(i) is employed in a public service job at the time 

of such forgiveness; and 

‘‘(ii) has been employed in a public service job during 

the period in which the borrower makes each of the 120 

payments described in subparagraph (A). 

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

of the employment period described in paragraph (1), the Secretary shall cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation, 

on the eligible Federal Direct Loans made to the borrower 

under this part. 

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

‘‘(A) ELIGIBLE FEDERAL DIRECT LOAN.—The term 

‘eligible Federal Direct Loan’ means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct 

Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan. 
H. R. 2669—18 

‘‘(B) PUBLIC SERVICE JOB.—The term ‘public service 

job’ means— 

‘‘(i) a full-time job in emergency management, 

government, military service, public safety, law 

enforcement, public health, public education (including 

early childhood education), social work in a public child 

or family service agency, public interest law services 

(including prosecution or public defense or legal 

advocacy in low-income communities at a nonprofit 

organization), public child care, public service for 

individuals with disabilities, public service for the 

elderly, public library sciences, school-based library 

sciences and other school-based services, or at an 

organization that is described in section 501(c)(3) of 

the Internal Revenue Code of 1986 and exempt from 

taxation under section 501(a) of such Code; or 

‘‘(ii) teaching as a full-time faculty member at a 

Tribal College or University as defined in section 316(b) 

and other faculty teaching in high-needs areas, as 

determined by the Secretary.’’. 

TITLE V—FEDERAL PERKINS LOANS 

SEC. 501. DISTRIBUTION OF LATE COLLECTIONS. 

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

‘‘March 31, 2012’’ and inserting ‘‘October 1, 2012’’. 

TITLE VI—NEED ANALYSIS 

SEC. 601. SUPPORT FOR WORKING STUDENTS. 

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

475(g)(2) (20 U.S.C. 1087oo(g)(2)(D)) is amended to read as follows: 

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

amount (or a successor amount prescribed by the Secretary 

under section 478)— 

‘‘(i) for academic year 2009–2010, $3,750; 

‘‘(ii) for academic year 2010–2011, $4,500; 

‘‘(iii) for academic year 2011–2012, $5,250; and 

‘‘(iv) for academic year 2012–2013, $6,000;’’. 

(b) INDEPENDENT STUDENTS WITHOUT DEPENDENTS OTHER

THAN A SPOUSE.—Clause (iv) of section 476(b)(1)(A) (20 U.S.C. 

1087pp(b)(1)(A)) is amended to read as follows: 

‘‘(iv) an income protection allowance of the following amount (or a successor amount prescribed by 

the Secretary under section 478)— 

‘‘(I) for single or separated students, or married students where both are enrolled pursuant 

to subsection (a)(2)— 

‘‘(aa) for academic year 2009–2010, $7,000; 

‘‘(bb) for academic year 2010–2011, $7,780; 

‘‘(cc) for academic year 2011–2012, $8,550; 

and 

‘‘(dd) for academic year 2012–2013, $9,330; 

and 
H. R. 2669—19 

‘‘(II) for married students where 1 is enrolled 

pursuant to subsection (a)(2)— 

‘‘(aa) for academic year 2009–2010, 

$11,220; 

‘‘(bb) for academic year 2010–2011, 

$12,460; 

‘‘(cc) for academic year 2011–2012, 

$13,710; and 

‘‘(dd) for academic year 2012–2013, 

$14,960;’’. 

(c) INDEPENDENT STUDENTS WITH DEPENDENTS OTHER THAN

A SPOUSE.—Paragraph (4) of section 477(b) (20 U.S.C. 1087qq(b)) 

is amended to read as follows: 

‘‘(4) INCOME PROTECTION ALLOWANCE.—The income protection allowance is determined by the tables described in subparagraphs (A) through (D) (or a successor table prescribed by 

the Secretary under section 478). 

‘‘(A) ACADEMIC YEAR 2009–2010.—For academic year 

2009–2010, the income protection allowance is determined 

by the following table: 

‘‘Income Protection Allowance 

Family 

Size 

Number in College 

(including 

student) 

1 2 3 4 5 

For each 

additional 

subtract: 

2 $17,720 $14,690 

3 22,060 19,050 $16,020 

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

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

6 37,600 34,570 31,570 28,520 25,520 $3,020 

For each 

additional 

add: 4,240 4,240 4,240 4,240 4,240 

‘‘(B) ACADEMIC YEAR 2010–2011.—For academic year 

2010–2011, the income protection allowance is determined 

by the following table: 

‘‘Income Protection Allowance 

Family 

Size 

Number in College 

(including 

student) 

1 2 3 4 5 

For each 

additional 

subtract: 

2 $19,690 $16,330 

3 24,510 21,160 $17,800 

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

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

6 41,780 38,410 35,080 31,690 28,350 $3,350 

For each 

additional 

add: 4,710 4,710 4,710 4,710 4,710 
H. R. 2669—20 

‘‘(C) ACADEMIC YEAR 2011–2012.—For academic year 

2011–2012, the income protection allowance is determined 

by the following table: 

‘‘Income Protection Allowance 

Family 

Size 

Number in College 

(including 

student) 

1 2 3 4 5 

For each 

additional 

subtract: 

2 $21,660 $17,960 

3 26,960 23,280 $19,580 

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

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

6 45,950 42,250 38,580 34,860 31,190 $3,690 

For each 

additional 

add: 5,180 5,180 5,180 5,180 5,180 

‘‘(D) ACADEMIC YEAR 2012–2013.—For academic year 

2012–2013, the income protection allowance is determined 

by the following table: 

‘‘Income Protection Allowance 

Family 

Size 

Number in College 

(including 

student) 

1 2 3 4 5 

For each 

additional 

subtract: 

2 $23,630 $19,590 

3 29,420 25,400 $21,360 

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

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

6 50,130 46,100 42,090 38,030 34,020 $4,020 

For each 

additional 

add: 5,660 5,660 5,660 5,660 5,660 ’’. 

(d) UPDATED TABLES AND AMOUNTS.—Section 478(b) (20 U.S.C. 

1087rr(b)) is amended— 

(1) by striking paragraph (1) and inserting the following: 

‘‘(1) REVISED TABLES.— 

‘‘(A) IN GENERAL.—For each academic year after academic year 2008–2009, the Secretary shall publish in the 

Federal Register a revised table of income protection allowances for the purpose of sections 475(c)(4) and 477(b)(4), 

subject to subparagraphs (B) and (C). 

‘‘(B) TABLE FOR INDEPENDENT STUDENTS.— ‘‘(i) ACADEMIC YEARS 2009–2010 THROUGH 2012– 2013.—For each of the academic years 2009–2010 

through 2012–2013, the Secretary shall not develop 

a revised table of income protection allowances under 

section 477(b)(4) and the table specified for such academic year under subparagraphs (A) through (D) of 

such section shall apply. 

‘‘(ii) OTHER ACADEMIC YEARS.—For each academic 

year after academic year 2012–2013, the Secretary 
H. R. 2669—21 

shall develop the revised table of income protection 

allowances by increasing each of the dollar amounts 

contained in the table of income protection allowances 

under section 477(b)(4)(D) by a percentage equal to 

the estimated percentage increase in the Consumer 

Price Index (as determined by the Secretary) between 

December 2011 and the December next preceding the 

beginning of such academic year, and rounding the 

result to the nearest $10. 

‘‘(C) TABLE FOR PARENTS.—For each academic year 

after academic year 2008–2009, the Secretary shall develop 

the revised table of income protection allowances under 

section 475(c)(4) by increasing each of the dollar amounts 

contained in the table by a percentage equal to the estimated percentage increase in the Consumer Price Index 

(as determined by the Secretary) between December 1992 

and the December next preceding the beginning of such 

academic year, and rounding the result to the nearest 

$10.’’; and 

(2) in paragraph (2), by striking ‘‘shall be developed’’ and 

all that follows through the period at the end and inserting 

‘‘shall be developed for each academic year after academic year 

2012–2013, by increasing each of the dollar amounts contained 

in such section for academic year 2012–2013 by a percentage 

equal to the estimated percentage increase in the Consumer 

Price Index (as determined by the Secretary) between December 

2011 and the December next preceding the beginning of such 

academic year, and rounding the result to the nearest $10.’’. 

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

shall be effective on July 1, 2009. 

SEC. 602. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO IMPROVEMENTS. 

(a) SIMPLIFIED NEEDS TEST.—Section 479 (20 U.S.C. 1087ss) 

is amended— 

(1) in subsection (b)— 

(A) in paragraph (1)(A)(i)— 

(i) in subclause (II), by striking ‘‘or’’ after the semicolon; 

(ii) by redesignating subclause (III) as subclause 

(IV); 

(iii) by inserting after subclause (II) the following: 

‘‘(III) 1 of whom is a dislocated worker; or’’; 

and 

(iv) in subclause (IV) (as redesignated by clause 

(ii)), by striking ‘‘12-month’’ and inserting ‘‘24-month’’; 

and 

(B) in paragraph (1)(B)(i)— 

(i) in subclause (II), by striking ‘‘or’’ after the semicolon; 

(ii) by redesignating subclause (III) as subclause 

(IV); 

(iii) by inserting after subclause (II) the following: 

‘‘(III) 1 of whom is a dislocated worker; or’’; 

and 

(iv) in subclause (IV) (as redesignated by clause 

(ii)), by striking ‘‘12-month’’ and inserting ‘‘24-month’’; 
H. R. 2669—22 

(2) in subsection (c)— 

(A) in paragraph (1)— 

(i) in subparagraph (A)— 

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

semicolon; 

(II) by redesignating clause (iii) as clause (iv); 

(III) by inserting after clause (ii) the following: 

‘‘(iii) 1 of whom is a dislocated worker; or’’; and 

(IV) in clause (iv) (as redesignated by subclause (II)), by striking ‘‘12-month’’ and inserting 

‘‘24-month’’; and 

(ii) in subparagraph (B), by striking ‘‘$20,000’’ and 

inserting ‘‘$30,000’’; and 

(B) in paragraph (2)— 

(i) in subparagraph (A)— 

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

semicolon; 

(II) by redesignating clause (iii) as clause (iv); 

(III) by inserting after clause (ii) the following: 

‘‘(iii) 1 of whom is a dislocated worker; or’’; and 

(IV) in clause (iv) (as redesignated by subclause (II)), by striking ‘‘12-month’’ and inserting 

‘‘24-month’’; and 

(ii) in subparagraph (B), by striking ‘‘$20,000’’ and 

inserting ‘‘$30,000’’; and 

(C) in the flush matter following paragraph (2)(B), 

by adding at the end the following: ‘‘The Secretary shall 

annually adjust the income level necessary to qualify an 

applicant for the zero expected family contribution. The 

income level shall be adjusted according to increases in 

the Consumer Price Index, as defined in section 478(f).’’; 

and 

(3) in subsection (d)— 

(A) by redesignating paragraphs (1) through (6) as 

subparagraphs (A) through (F), respectively and moving 

the margins of such subparagraphs 2 ems to the right; 

and 

(B) by striking ‘‘(d) DEFINITION’’ and all that follows 

through ‘‘the term’’ and inserting the following: 

‘‘(d) DEFINITIONS.—In this section: 

‘‘(1) DISLOCATED WORKER.—The term ‘dislocated worker’ 

has the meaning given the term in section 101 of the Workforce 

Investment Act of 1998 (29 U.S.C. 2801). 

‘‘(2) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The 

term’’. 

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

shall be effective on July 1, 2009. 

SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS. 

(a) AMENDMENTS.—The third sentence of section 479A(a) (20 

U.S.C. 1087tt(a)) is amended— 

(1) by inserting ‘‘or an independent student’’ after ‘‘family 

member’’; 

(2) by inserting ‘‘a family member who is a dislocated 

worker (as defined in section 101 of the Workforce Investment 

Act of 1998),’’ before ‘‘the number of parents’’; and 
H. R. 2669—23 

(3) by inserting ‘‘a change in housing status that results 

in an individual being homeless (as defined in section 103 

of the McKinney-Vento Homeless Assistance Act),’’ after ‘‘under 

section 487,’’. 

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

shall take effect on July 1, 2009. 

SEC. 604. DEFINITIONS. 

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

(1) in subsection (a)(2)— 

(A) by striking ‘‘and no portion’’ and inserting ‘‘no 

portion’’; and 

(B) by inserting ‘‘and no distribution from any qualified 

education benefit described in subsection (f)(3) that is not 

subject to Federal income tax,’’ after ‘‘1986,’’; 

(2) by striking subsection (b) and inserting the following: 

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

‘‘(A) child support received; 

‘‘(B) workman’s compensation; 

‘‘(C) veteran’s benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ 

education benefits as defined in subsection (c); 

‘‘(D) interest on tax-free bonds; 

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

rent subsidies for low-income housing) for military, clergy, 

and others (including cash payments and cash value of 

benefits); 

‘‘(F) cash support or any money paid on the student‘s 

behalf, except, for dependent students, funds provided by 

the student’s parents; 

‘‘(G) untaxed portion of pensions; 

‘‘(H) payments to individual retirement accounts and 

Keogh accounts excluded from income for Federal income 

tax purposes; and 

‘‘(I) any other untaxed income and benefits, such as 

Black Lung Benefits, Refugee Assistance, or railroad retirement benefits, or benefits received through participation 

in employment and training activities under title I of the 

Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.). 

‘‘(2) The term ‘untaxed income and benefits’ shall not 

include the amount of additional child tax credit claimed for 

Federal income tax purposes.’’; 

(3) in subsection (d)— 

(A) by redesignating paragraphs (1), (2), (3) through 

(6), and (7) as subparagraphs (A), (B), (D) through (G), 

and (I), respectively, and indenting appropriately; 

(B) by striking ‘‘The term’’ and inserting the following: 

‘‘(1) DEFINITION.—The term’’; 

(C) by striking subparagraph (B) (as redesignated by 

subparagraph (A)) and inserting the following: 

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

court, at any time when the individual is 13 years of 

age or older; 

‘‘(C) is an emancipated minor or is in legal guardianship as determined by a court of competent jurisdiction 

in the individual’s State of legal residence;’’; 
H. R. 2669—24 

(D) in subparagraph (G) (as redesignated by subparagraph (A)), by striking ‘‘or’’ after the semicolon; 

(E) by inserting after subparagraph (G) (as redesignated by subparagraph (A)) the following: 

‘‘(H) has been verified during the school year in which 

the application is submitted as either an unaccompanied 

youth who is a homeless child or youth (as such terms 

are defined in section 725 of the McKinney-Vento Homeless 

Assistance Act), or as unaccompanied, at risk of homelessness, and self-supporting, by— 

‘‘(i) a local educational agency homeless liaison, 

designated pursuant to section 722(g)(1)(J)(ii) of the 

McKinney-Vento Homeless Assistance Act; 

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

Runaway and Homeless Youth Act or a designee of 

the director; 

‘‘(iii) the director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless 

Assistance Act (relating to emergency shelter grants) 

or a designee of the director; or 

‘‘(iv) a financial aid administrator; or’’; and 

(F) by adding at the end the following: 

‘‘(2) SIMPLIFYING THE DEPENDENCY OVERRIDE PROCESS.— 

A financial aid administrator may make a determination of 

independence under paragraph (1)(I) based upon a documented 

determination of independence that was previously made by 

another financial aid administrator under such paragraph in 

the same award year.’’; 

(4) in subsection (e)— 

(A) in paragraph (3), by striking ‘‘and’’ after the semicolon; 

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

end and inserting ‘‘; and’’; and 

(C) by adding at the end the following: 

‘‘(5) special combat pay.’’; 

(5) in subsection (f), by striking paragraph (3) and inserting 

the following: 

‘‘(3) A qualified education benefit shall be considered an 

asset of— 

‘‘(A) the student if the student is an independent student; or 

‘‘(B) the parent if the student is a dependent student, 

regardless of whether the owner of the account is the 

student or the parent.’’; 

(6) in subsection (j)— 

(A) in paragraph (2), by inserting ‘‘, or a distribution 

that is not includable in gross income under section 529 

of such Code, under another prepaid tuition plan offered 

by a State, or under a Coverdell education savings account 

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

(B) by adding at the end the following: 

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

shall not be treated as estimated financial assistance for purposes of section 471(3).’’; and 

(7) by adding at the end the following: 
H. R. 2669—25 

‘‘(n) SPECIAL COMBAT PAY.—The term ‘special combat pay’ 

means pay received by a member of the Armed Forces because 

of exposure to a hazardous situation.’’. 

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

shall be effective on July 1, 2009. 

TITLE VII—COMPETITIVE LOAN 

AUCTION PILOT PROGRAM 

SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM. 

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

at the end the following: 

‘‘PART I—COMPETITIVE LOAN AUCTION PILOT 

PROGRAM 

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

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ELIGIBLE FEDERAL PLUS LOAN.—The term ‘eligible Federal PLUS Loan’ means a loan described in section 428B made 

to a parent of a dependent student who is a new borrower 

on or after July 1, 2009. 

‘‘(2) ELIGIBLE LENDER.—The term ‘eligible lender’ has the 

meaning given the term in section 435. 

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

program under which the Secretary establishes a mechanism for 

an auction of eligible Federal PLUS Loans in accordance with 

this subsection. The pilot program shall meet the following requirements: 

‘‘(1) PLANNING AND IMPLEMENTATION.—During the period 

beginning on the date of enactment of this section and ending 

on June 30, 2009, the Secretary shall plan and implement 

the pilot program under this subsection. During the planning 

and implementation, the Secretary shall consult with other 

Federal agencies with knowledge of, and experience with, auction programs, including the Federal Communication Commission and the Department of the Treasury. 

‘‘(2) ORIGINATION AND DISBURSEMENT; APPLICABILITY OF

SECTION 428B.—Beginning on July 1, 2009, the Secretary shall 

arrange for the origination and disbursement of all eligible 

Federal PLUS Loans in accordance with the provisions of this 

subsection and the provisions of section 428B that are not 

inconsistent with this subsection. 

‘‘(3) LOAN ORIGINATION MECHANISM.—The Secretary shall 

establish a loan origination auction mechanism that meets 

the following requirements: 

‘‘(A) AUCTION FOR EACH STATE.—The Secretary administers an auction under this paragraph for each State, 

under which eligible lenders compete to originate eligible 

Federal PLUS Loans under this paragraph at all institutions of higher education within such State. 

‘‘(B) PREQUALIFICATION PROCESS.—The Secretary establishes a prequalification process for eligible lenders desiring 

to participate in an auction under this paragraph that 

contains, at a minimum— 
H. R. 2669—26 

‘‘(i) a set of borrower benefits and servicing requirements each eligible lender shall meet in order to 

participate in such an auction; and 

‘‘(ii) an assessment of each such eligible lender’s 

capacity, including capital capacity, to participate effectively. 

‘‘(C) TIMING AND ORIGINATION.—Each State auction 

takes place every 2 years, and the eligible lenders with 

the winning bids for the State are the only eligible lenders 

permitted to originate eligible Federal PLUS Loans made 

under this paragraph for the cohort of students at the 

institutions of higher education within the State until the 

students graduate from or leave the institutions of higher 

education. 

‘‘(D) BIDS.—Each eligible lender’s bid consists of the 

amount of the special allowance payment (after the application of section 438(b)(2)(I)(v)) the eligible lender proposes 

to accept from the Secretary with respect to the eligible 

Federal PLUS Loans made under this paragraph in lieu 

of the amount determined under section 438(b)(2)(I). 

‘‘(E) MAXIMUM BID.—The maximum bid allowable 

under this paragraph shall not exceed the amount of the 

special allowance payable on eligible Federal PLUS Loans 

made under this paragraph computed under section 

438(b)(2)(I) (other than clauses (ii), (iii), (iv), and (vi) of 

such section), except that for purposes of the computation 

under this subparagraph, section 438(b)(2)(I)(i)(III) shall 

be applied by substituting ‘1.79 percent’ for ‘2.34 percent’. 

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

auction shall be the 2 bids containing the lowest and the 

second lowest proposed special allowance payments, subject 

to subparagraph (E). 

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

lender having a winning bid under subparagraph (F) enters 

into an agreement with the Secretary under which the 

eligible lender— 

‘‘(i) agrees to originate eligible Federal PLUS 

Loans under this paragraph to each borrower who— 

‘‘(I) seeks an eligible Federal PLUS Loan 

under this paragraph to enable a dependent student to attend an institution of higher education 

within the State; 

‘‘(II) is eligible for an eligible Federal PLUS 

Loan; and 

‘‘(III) elects to borrow from the eligible lender; 

and 

‘‘(ii) agrees to accept a special allowance payment 

(after the application of section 438(b)(2)(I)(v)) from 

the Secretary with respect to the eligible Federal PLUS 

Loans originated under clause (i) in the amount proposed in the second lowest winning bid described in 

subparagraph (F) for the applicable State auction. 

‘‘(H) SEALED BIDS; CONFIDENTIALITY.—All bids are 

sealed and the Secretary keeps the bids confidential, 

including following the announcement of the winning bids. 

‘‘(I) ELIGIBLE LENDER OF LAST RESORT.— 
H. R. 2669—27 

‘‘(i) IN GENERAL.—In the event that there is no 

winning bid under subparagraph (F), the students at 

the institutions of higher education within the State 

that was the subject of the auction shall be served 

by an eligible lender of last resort, as determined by 

the Secretary. 

‘‘(ii) DETERMINATION OF ELIGIBLE LENDER OF LAST

RESORT.—Prior to the start of any auction under this 

paragraph, eligible lenders that desire to serve as an 

eligible lender of last resort shall submit an application 

to the Secretary at such time and in such manner 

as the Secretary may determine. Such application shall 

include an assurance that the eligible lender will meet 

the prequalification requirements described in 

subparagraph (B). 

‘‘(iii) GEOGRAPHIC LOCATION.—The Secretary shall 

identify an eligible lender of last resort for each State. 

‘‘(iv) NOTIFICATION TIMING.—The Secretary shall 

not identify any eligible lender of last resort until 

after the announcement of all the winning bids for 

a State auction for any year. 

‘‘(v) MAXIMUM SPECIAL ALLOWANCE.—The Secretary is authorized to set a special allowance payment 

that shall be payable to a lender of last resort for 

a State under this subparagraph, which special allowance payment shall be kept confidential, including following the announcement of winning bids. The Secretary shall set such special allowance payment so 

that it incurs the lowest possible cost to the Federal 

Government, taking into consideration the lowest bid 

that was submitted in an auction for such State and 

the lowest bid submitted in a similar State, as determined by the Secretary. 

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

guarantees the eligible Federal PLUS Loans made under 

this paragraph against losses resulting from the default 

of a parent borrower in an amount equal to 99 percent 

of the unpaid principal and interest due on the loan. 

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

loan fee under section 438(d) with respect to an eligible 

Federal Plus Loan originated under this paragraph. 

‘‘(L) CONSOLIDATION.— 

‘‘(i) IN GENERAL.—An eligible lender who is permitted to originate eligible Federal PLUS Loans for 

a borrower under this paragraph shall have the option 

to consolidate such loans into 1 loan. 

‘‘(ii) NOTIFICATION.—In the event a borrower with 

eligible Federal PLUS Loans made under this paragraph wishes to consolidate the loans, the borrower 

shall notify the eligible lender who originated the loans 

under this paragraph. 

‘‘(iii) LIMITATION ON ELIGIBLE LENDER OPTION TO

CONSOLIDATE.—The option described in clause (i) shall 

not apply if— 

‘‘(I) the borrower includes in the notification 

in clause (ii) verification of consolidation terms 

and conditions offered by an eligible lender other 
H. R. 2669—28 

than the eligible lender described in clause (i); 

and 

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

such notification from the borrower, the eligible 

lender described in clause (i) does not agree to 

match such terms and conditions, or provide more 

favorable terms and conditions to such borrower 

than the offered terms and conditions described 

in subclause (I). 

‘‘(iv) CONSOLIDATION OF ADDITIONAL LOANS.—If a 

borrower has a Federal Direct PLUS Loan or a loan 

made on behalf of a dependent student under section 

428B and seeks to consolidate such loan with an 

eligible Federal PLUS Loan made under this paragraph, then the eligible lender that originated the borrower’s loan under this paragraph may include in the 

consolidation under this subparagraph a Federal Direct 

PLUS Loan or a loan made on behalf of a dependent 

student under section 428B, but only if— 

‘‘(I) in the case of a Federal Direct PLUS Loan, 

the eligible lender agrees, not later than 10 days 

after the borrower requests such consolidation 

from the lender, to match the consolidation terms 

and conditions that would otherwise be available 

to the borrower if the borrower consolidated such 

loans in the loan program under part D; or 

‘‘(II) in the case of a loan made on behalf 

of a dependent student under section 428B, the 

eligible lender agrees, not later than 10 days after 

the borrower requests such consolidation from the 

lender, to match the consolidation terms and conditions offered by an eligible lender other than the 

eligible lender that originated the borrower’s loans 

under this paragraph. 

‘‘(v) SPECIAL ALLOWANCE ON CONSOLIDATION LOANS

THAT INCLUDE LOANS MADE UNDER THIS PARAGRAPH.— 

The applicable special allowance payment for loans 

consolidated under this paragraph shall be equal to 

the lesser of— 

‘‘(I) the weighted average of the special allowance payment on such loans, except that in calculating such weighted average the Secretary shall 

exclude any Federal Direct PLUS Loan included 

in the consolidation; or 

‘‘(II) the result of— 

‘‘(aa) the average of the bond equivalent 

rates of the quotes of the 3-month commercial 

paper (financial) rates in effect for each of 

the days in such quarter as reported by the 

Federal Reserve in Publication H–15 (or its 

successor) for such 3-month period; plus 

‘‘(bb) 1.59 percent. 

‘‘(vi) INTEREST PAYMENT REBATE FEE.—Any loan 

under section 428C consolidated under this paragraph 

shall not be subject to the interest payment rebate 

fee under section 428C(f).’’. 
H. R. 2669—29 

TITLE VIII—PARTNERSHIP GRANTS 

SEC. 801. COLLEGE ACCESS CHALLENGE GRANT PROGRAM. 

Title VII (20 U.S.C. 1133 et seq.) is amended by adding at 

the end the following new part: 

‘‘PART E—COLLEGE ACCESS CHALLENGE 

GRANT PROGRAM 

‘‘SEC. 771. COLLEGE ACCESS CHALLENGE GRANT PROGRAM. 

‘‘(a) AUTHORIZATION AND APPROPRIATION.—There are authorized 

to be appropriated, and there are appropriated, to carry out this 

section $66,000,000 for each of the fiscal years 2008 and 2009. 

The authority to award grants under this section shall expire at 

the end of fiscal year 2009. 

‘‘(b) PROGRAM AUTHORIZED.— ‘‘(1) GRANTS AUTHORIZED.—From amounts appropriated 

under subsection (a), the Secretary shall award grants, from 

allotments under subsection (c), to States (and to philanthropic 

organization, as appropriate under paragraph (3)) having 

applications approved under subsection (d), to enable the State 

(or philanthropic organization) to pay the Federal share of 

the costs of carrying out the activities and services described 

in subsection (f). 

‘‘(2) FEDERAL SHARE; NON-FEDERAL SHARE.— 

‘‘(A) FEDERAL SHARE.—The amount of the Federal 

share under this section for a fiscal year shall be equal 

to 2⁄3 of the costs of the activities and services described 

in subsection (f) that are carried out under the grant. 

‘‘(B) NON-FEDERAL SHARE.—The amount of the nonFederal share under this section shall be equal to 1⁄3 of 

the costs of the activities and services described in subsection (f). The non-Federal share may be in cash or inkind, and may be provided from State resources, contributions from private organizations, or both. 

‘‘(3) REDUCTION FOR FAILURE TO PAY NON-FEDERAL SHARE.— If a State fails to provide the full non-Federal share required 

under this subsection, the Secretary shall reduce the amount 

of the grant payment under this section proportionately, and 

may award the proportionate reduction amount of the grant 

directly to a philanthropic organization, as defined in subsection 

(i), to carry out this section. 

‘‘(4) TEMPORARY INELIGIBILITY FOR SUBSEQUENT PAYMENTS.— 

‘‘(A) IN GENERAL.—The Secretary shall determine a 

grantee to be temporarily ineligible to receive a grant payment under this section for a fiscal year if— 

‘‘(i) the grantee fails to submit an annual report 

pursuant to subsection (h) for the preceding fiscal year; 

or 

‘‘(ii) the Secretary determines, based on information in such annual report, that the grantee is not 

effectively meeting the conditions described under subsection (g) and the goals of the application under subsection (d). 
H. R. 2669—30 

‘‘(B) REINSTATEMENT.—If the Secretary determines that 

a grantee is ineligible under subparagraph (A), the Secretary may enter into an agreement with the grantee setting forth the terms and conditions under which the grantee 

may regain eligibility to receive payments under this section. 

‘‘(c) DETERMINATION OF ALLOTMENT.— 

‘‘(1) AMOUNT OF ALLOTMENT.—Subject to paragraph (2), 

in making grant payments to grantees under this section, the 

allotment to each grantee for a fiscal year shall be equal to 

the sum of— 

‘‘(A) the amount that bears the same relation to 50 

percent of the amount appropriated under subsection (a) 

for such fiscal year as the number of residents in the 

State aged 5 through 17 who are living below the poverty 

line applicable to the resident’s family size (as determined 

under section 673(2) of the Community Service Block Grant 

Act) bears to the total number of such residents in all 

States; and 

‘‘(B) the amount that bears the same relation to 50 

percent of the amount appropriated under subsection (a) 

for such fiscal year as the number of residents in the 

State aged 15 through 44 who are living below the poverty 

line applicable to the individual’s family size (as determined 

under section 673(2) of the Community Service Block Grant 

Act) bears to the total number of such residents in all 

States. 

‘‘(2) MINIMUM AMOUNT.—The allotment for each State 

under this section for a fiscal year shall not be an amount 

that is less than 0.5 percent of the total amount appropriated 

under subsection (a) for such fiscal year. 

‘‘(d) SUBMISSION AND CONTENTS OF APPLICATION.— 

‘‘(1) IN GENERAL.—For each fiscal year for which a grantee 

desires a grant payment under subsection (b), the State agency 

with jurisdiction over higher education, or another agency designated by the Governor or chief executive of the State to 

administer the program under this section, or a philanthropic 

organization, in accordance with subsection (b)(3), shall submit 

an application to the Secretary at such time, in such manner, 

and containing the information described in paragraph (2). 

‘‘(2) APPLICATION.—An application submitted under paragraph (1) shall include the following: 

‘‘(A) A description of the grantee’s capacity to administer the grant under this section and report annually 

to the Secretary on the activities and services described 

in subsection (f). 

‘‘(B) A description of the grantee’s plan for using the 

grant funds to meet the requirements of subsections (f) 

and (g), including plans for how the grantee will make 

special efforts to— 

‘‘(i) provide such benefits to students in the State 

that are underrepresented in postsecondary education; 

or 

‘‘(ii) in the case of a philanthropic organization 

that operates in more than one State, provide benefits 

to such students in each such State for which the 
H. R. 2669—31 

philanthropic organization is receiving grant funds 

under this section. 

‘‘(C) A description of how the grantee will provide 

or coordinate the provision of the non-Federal share from 

State resources or private contributions. 

‘‘(D) A description of— 

‘‘(i) the structure that the grantee has in place 

to administer the activities and services described in 

subsection (f); or 

‘‘(ii) the plan to develop such administrative 

capacity. 

‘‘(e) SUBGRANTS TO NONPROFIT ORGANIZATIONS.—A State 

receiving a payment under this section may elect to make a 

subgrant to one or more nonprofit organizations in the State, 

including an eligible not-for-profit holder (as defined in section 

435(p) of the Higher Education Act of 1965, as amended by section 

303 of this Act), or a partnership of such organizations, to carry 

out activities or services described in subsection (f), if the nonprofit 

organization or partnership— 

‘‘(1) was in existence on the day before the date of the 

enactment of this Act; and 

‘‘(2) as of such day, was participating in activities and 

services related to increasing access to higher education, such 

as those activities and services described in subsection (f). 

‘‘(f) ALLOWABLE USES.— 

‘‘(1) IN GENERAL.—Subject to paragraph (3), a grantee may 

use a grant payment under this section only for the following 

activities and services, pursuant to the conditions under subsection (g): 

‘‘(A) Information for students and families regarding— 

‘‘(i) the benefits of a postsecondary education; 

‘‘(ii) postsecondary education opportunities; 

‘‘(iii) planning for postsecondary education; and 

‘‘(iv) career preparation. 

‘‘(B) Information on financing options for postsecondary 

education and activities that promote financial literacy and 

debt management among students and families. 

‘‘(C) Outreach activities for students who may be at 

risk of not enrolling in or completing postsecondary education. 

‘‘(D) Assistance in completion of the Free Application 

for Federal Student Aid or other common financial 

reporting form under section 483(a) of the Higher Education Act of 1965. 

‘‘(E) Need-based grant aid for students. 

‘‘(F) Professional development for guidance counselors 

at middle schools and secondary schools, and financial aid 

administrators and college admissions counselors at institutions of higher education, to improve such individuals’ 

capacity to assist students and parents with— 

‘‘(i) understanding— 

‘‘(I) entrance requirements for admission to 

institutions of higher education; and 

‘‘(II) State eligibility requirements for Academic Competitiveness Grants or National SMART 

Grants under section 401A, and other financial 
H. R. 2669—32 

assistance that is dependent upon a student’s 

coursework; 

‘‘(ii) applying to institutions of higher education; 

‘‘(iii) applying for Federal student financial assistance and other State, local, and private student financial assistance and scholarships; 

‘‘(iv) activities that increase students’ ability to 

successfully complete the coursework required for a 

postsecondary degree, including activities such as 

tutoring or mentoring; and 

‘‘(v) activities to improve secondary school students’ 

preparedness for postsecondary entrance examinations. 

‘‘(G) Student loan cancellation or repayment (as 

applicable), or interest rate reductions, for borrowers who 

are employed in a high-need geographical area or a highneed profession in the State, as determined by the State. 

‘‘(2) PROHIBITED USES.—Funds made available under this 

section shall not be used to promote any lender’s loans. 

‘‘(3) USE OF FUNDS FOR ADMINISTRATIVE PURPOSES.—A 

grantee may use not more than 6 percent of the total amount 

of the sum of the Federal share provided under this section 

and the non-Federal share required under this section for 

administrative purposes relating to the grant under this section. 

‘‘(g) SPECIAL CONDITIONS.— ‘‘(1) AVAILABILITY TO STUDENTS AND FAMILIES.—A grantee 

receiving a grant payment under this section shall— 

‘‘(A) make the activities and services described in subparagraphs (A) through (F) of subsection (f)(1) that are 

funded under the payment available to all qualifying students and families in the State; 

‘‘(B) allow students and families to participate in the 

activities and services without regard to— 

‘‘(i) the postsecondary institution in which the student enrolls; 

‘‘(ii) the type of student loan the student receives; 

‘‘(iii) the servicer of such loan; or 

‘‘(iv) the student’s academic performance; 

‘‘(C) not charge any student or parent a fee or additional charge to participate in the activities or services; 

and 

‘‘(D) in the case of an activity providing grant aid, 

not require a student to meet any condition other than 

eligibility for Federal financial assistance under title IV 

of the Higher Education Act of 1965, except as provided 

for in the loan cancellation or repayment or interest rate 

reductions described in subsection (f)(1)(G). 

‘‘(2) PRIORITY.—A grantee receiving a grant payment under 

this section shall, in carrying out any activity or service 

described in subsection (f)(1) with the grant funds, prioritize 

students and families who are living below the poverty line 

applicable to the individual’s family size (as determined under 

section 673(2) of the Community Service Block Grant Act). 

‘‘(3) DISCLOSURES.— 

‘‘(A) ORGANIZATIONAL DISCLOSURES.—In the case of a 

State that has chosen to make a payment to an eligible 

not-for-profit holder in the State in accordance with subsection (e), the holder shall clearly and prominently indicate 
H. R. 2669—33 

the name of the holder and the nature of the holder’s 

work in connection with any of the activities carried out, 

or any information or services provided, with such funds. 

‘‘(B) INFORMATIONAL DISCLOSURES.—Any information 

about financing options for higher education provided 

through an activity or service funded under this section 

shall— 

‘‘(i) include information to students and the students’ parents of the availability of Federal, State, 

local, institutional, and other grants and loans for postsecondary education; and 

‘‘(ii) present information on financial assistance 

for postsecondary education that is not provided under 

title IV of the Higher Education Act of 1965 in a 

manner that is clearly distinct from information on 

student financial assistance under such title. 

‘‘(4) COORDINATION.—A grantee receiving a grant payment 

under this section shall attempt to coordinate the activities 

carried out with the grant payment with any existing activities 

that are similar to such activities, and with any other entities 

that support the existing activities in the State. 

‘‘(h) REPORT.—A grantee receiving a payment under this section 

shall prepare and submit an annual report to the Secretary on 

the activities and services carried out under this section, and on 

the implementation of such activities and services. The report shall 

include— 

‘‘(1) each activity or service that was provided to students 

and families over the course of the year; 

‘‘(2) the cost of providing each activity or service; 

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

of students who received each activity or service; and 

‘‘(4) the total contributions from private organizations 

included in the grantee’s non-Federal share for the fiscal year. 

‘‘(i) DEFINITIONS.—In this section: 

‘‘(1) PHILANTHROPIC ORGANIZATION.—The term ‘philanthropic organization’ means a non-profit organization— 

‘‘(A) that does not receive funds under title IV of the 

Higher Education Act of 1965 or under the Elementary 

and Secondary Education Act of 1965; 

‘‘(B) that is not a local educational agency or an institution of higher education; 

‘‘(C) that has a demonstrated record of dispersing grant 

aid to underserved populations to ensure access to, and 

participation in, higher education; 

‘‘(D) that is affiliated with an eligible consortia (as 

defined in paragraph (2)) to carry out this section; and 

‘‘(E) the primary purpose of which is to provide financial aid and support services to students from underrepresented populations to increase the number of such students who enter and remain in college. 

‘‘(2) ELIGIBLE CONSORTIA.—The term ‘eligible consortia’ 

means a partnership of 2 or more entities that have agreed 

to work together to carry out this section that— 

‘‘(A) includes— 

‘‘(i) a philanthropic organization, which serves as 

the manager of the consortia; 
H. R. 2669—34 

‘‘(ii) a State that demonstrates a commitment to 

ensuring the creation of a Statewide system to address 

the issues of early intervention and financial support 

for eligible students to enter and remain in college; 

and 

‘‘(iii) at the discretion of the philanthropic 

organization described in clause (i), additional partners, including other non-profit organizations, government entities (including local municipalities, school districts, cities, and counties), institutions of higher education, and other public or private programs that provide mentoring or outreach programs; and 

‘‘(B) conducts activities to assist students with entering 

and remaining in college, which may include— 

‘‘(i) providing need-based grants to students; 

‘‘(ii) providing early notification to low-income students of their potential eligibility for Federal financial 

aid (which may include assisting students and families 

with filling out FAFSA forms), as well as other financial aid and other support available from the eligible 

consortia; 

‘‘(iii) encouraging increased student participation 

in higher education through mentoring or outreach 

programs; and 

‘‘(iv) conducting marketing and outreach efforts 

that are designed to— 

‘‘(I) encourage full participation of students 

in the activities of the consortia that carry out 

this section; and 

‘‘(II) provide the communities impacted by the 

activities of the consortia with a general knowledge 

about the efforts of the consortia. 

‘‘(3) GRANTEE.—The term ‘grantee’ means— 

‘‘(A) a State awarded a grant under this section; or 

‘‘(B) with respect to such a State that has failed to 

meet the non-Federal share requirement of subsection (b), 

a philanthropic organization awarded the proportionate 

reduction amount of such a grant under subsection (b)(3).’’. 

SEC. 802. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND 

UNIVERSITIES AND MINORITY-SERVING INSTITUTIONS. 

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

after part I (as added by section 701 of this Act) the following 

new part: 

‘‘PART J—STRENGTHENING HISTORICALLY 

BLACK COLLEGES AND UNIVERSITIES AND 

OTHER MINORITY-SERVING INSTITUTIONS 

‘‘SEC. 499A. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND 

UNIVERSITIES AND OTHER MINORITY-SERVING INSTITUTIONS. 

‘‘(a) ELIGIBLE INSTITUTION.—An institution of higher education 

is eligible to receive funds from the amounts made available under 

this section if such institution is— 
H. R. 2669—35 

‘‘(1) a part B institution (as defined in section 322 (20 

U.S.C. 1061)); 

‘‘(2) a Hispanic-serving institution (as defined in section 

502 (20 U.S.C. 1101a)); 

‘‘(3) a Tribal College or University (as defined in section 

316 (20 U.S.C. 1059c)); 

‘‘(4) an Alaska Native-serving institution or a Native 

Hawaiian-serving institution (as defined in section 317(b) (20 

U.S.C. 1059d(b))); 

‘‘(5) a Predominantly Black Institution (as defined in subsection (c)); 

‘‘(6) an Asian American and Native American Pacific 

Islander-serving institution (as defined in subsection (c)); or 

‘‘(7) a Native American-serving nontribal institution (as 

defined in subsection (c)). 

‘‘(b) NEW INVESTMENT OF FUNDS.— 

‘‘(1) IN GENERAL.—There shall be available to the Secretary 

to carry out this section, from funds not otherwise appropriated, 

$255,000,000 for each of the fiscal years 2008 and 2009. The 

authority to award grants under this section shall expire at 

the end of fiscal year 2009. 

‘‘(2) ALLOCATION AND ALLOTMENT.— 

‘‘(A) IN GENERAL.—Of the amounts made available 

under paragraph (1) for each fiscal year— 

‘‘(i) $100,000,000 shall be available for allocation 

under subparagraph (B); 

‘‘(ii) $100,000,000 shall be available for allocation 

under subparagraph (C); and 

‘‘(iii) $55,000,000 shall be available for allocation 

under subparagraph (D). 

‘‘(B) HSI STEM AND ARTICULATION PROGRAMS.—The 

amount made available for allocation under this subparagraph by subparagraph (A)(i) for any fiscal year shall be 

available for Hispanic-serving Institutions for activities 

described in section 503, with a priority given to applications that propose— 

‘‘(i) to increase the number of Hispanic and other 

low income students attaining degrees in the fields 

of science, technology, engineering, or mathematics; 

and 

‘‘(ii) to develop model transfer and articulation 

agreements between 2-year Hispanic-serving institutions and 4-year institutions in such fields. 

‘‘(C) ALLOCATION AND ALLOTMENT HBCUS AND PBIS.— 

From the amount made available for allocation under this 

subparagraph by subparagraph (A)(ii) for any fiscal year— 

‘‘(i) 85 percent shall be available to eligible institutions described in subsection (a)(1) and shall be made 

available as grants under section 323 and allotted 

among such institutions under section 324, treating 

such amount, plus the amount appropriated for such 

fiscal year in a regular or supplemental appropriation 

Act to carry out part B of title III, as the amount 

appropriated to carry out part B of title III for purposes 

of allotments under section 324, for use by such institutions with a priority for— 
H. R. 2669—36 

‘‘(I) activities described in paragraphs (1), (2), 

(4), (5), and (10) of section 323(a); and 

‘‘(II) other activities, consistent with the 

institution’s comprehensive plan and designed to 

increase the institution’s capacity to prepare students for careers in the physical or natural 

sciences, mathematics, computer science or 

information technology or sciences, engineering, 

language instruction in the less-commonly taught 

languages or international affairs, or nursing or 

allied health professions; and 

‘‘(ii) 15 percent shall be available to eligible institutions described in subsection (a)(5) and shall be available for a competitive grant program to award 25 

grants of $600,000 annually for programs in any of 

the following areas: 

‘‘(I) science, technology, engineering, or mathematics (STEM); 

‘‘(II) health education; 

‘‘(III) internationalization or globalization; 

‘‘(IV) teacher preparation; or 

‘‘(V) improving educational outcomes of African American males. 

‘‘(D) ALLOCATION AND ALLOTMENT TO OTHER MINORITY- SERVING INSTITUTIONS.—From the amount made available 

for allocation under this subparagraph by subparagraph 

(A)(iii) for any fiscal year— ‘‘(i) $30,000,000 for such fiscal year shall be available to eligible institutions described in subsection 

(a)(3) and shall be made available as grants under 

section 316, treating such $30,000,000 as part of the 

amount appropriated for such fiscal year in a regular 

or supplemental appropriation Act to carry out such 

section, and using such $30,000,000 for purposes 

described in subsection (c) of such section; 

‘‘(ii) $15,000,000 for such fiscal year shall be available to eligible institutions described in subsection 

(a)(4) and shall be made available as grants under 

section 317, treating such $15,000,000 as part of the 

amount appropriated for such fiscal year in a regular 

or supplemental appropriation Act to carry out such 

section and using such $15,000,000 for purposes 

described in subsection (c) of such section; 

‘‘(iii) $5,000,000 for such fiscal year shall be available to eligible institutions described in subsection 

(a)(6) for activities described in section 311(c); and 

‘‘(iv) $5,000,000 for such fiscal year shall be available to eligible institutions described in subsection 

(a)(7)— 

‘‘(I) to plan, develop, undertake, and carry out 

activities to improve and expand such institutions’ 

capacity to serve Native Americans, which may 

include— 

‘‘(aa) the purchase, rental, or lease of scientific or laboratory equipment for educational 

purposes, including instructional and research 

purposes; 
H. R. 2669—37 

‘‘(bb) renovation and improvement in 

classroom, library, laboratory, and other 

instructional facilities; 

‘‘(cc) support of faculty exchanges, faculty 

development, and faculty fellowships to assist 

faculty in attaining advanced degrees in the 

faculty’s field of instruction; 

‘‘(dd) curriculum development and academic instruction; 

‘‘(ee) the purchase of library books, 

periodicals, microfilm, and other educational 

materials; 

‘‘(ff) funds and administrative management, and acquisition of equipment for use 

in strengthening funds management; 

‘‘(gg) the joint use of facilities such as 

laboratories and libraries; and 

‘‘(hh) academic tutoring and counseling 

programs and student support services; and 

‘‘(II) to which the Secretary, to the extent possible and consistent with a competitive process 

under which such grants are awarded, allocates 

funds under this clause to ensure maximum and 

equitable distribution among all such eligible 

institutions. 

‘‘(c) DEFINITIONS.— ‘‘(1) ASIAN AMERICAN.—The term ‘Asian American’ has the 

meaning given the term ‘Asian’ in the Office of Management 

and Budget’s Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity as published on 

October 30, 1997 (62 Fed. Reg. 58789). 

‘‘(2) ASIAN AMERICAN AND NATIVE AMERICAN PACIFIC

ISLANDER-SERVING INSTITUTION.—The term ‘Asian American 

and Native American Pacific Islander-serving institution’ means 

an institution of higher education that— 

‘‘(A) is an eligible institution under section 312(b); and 

‘‘(B) at the time of application, has an enrollment of 

undergraduate students that is at least 10 percent Asian 

American and Native American Pacific Islander students. 

‘‘(3) ENROLLMENT OF NEEDY STUDENTS.—The term ‘enrollment of needy students’ means the enrollment at an institution 

of higher education with respect to which not less than 50 

percent of the undergraduate students enrolled in an academic 

program leading to a degree— 

‘‘(A) in the second fiscal year preceding the fiscal year 

for which the determination is made, were Federal Pell 

Grant recipients for such year; 

‘‘(B) come from families that receive benefits under 

a means-tested Federal benefit program (as defined in paragraph (5)); 

‘‘(C) attended a public or nonprofit private secondary 

school— 

‘‘(i) that is in the school district of a local educational agency that was eligible for assistance under 

part A of title I of the Elementary and Secondary 

Education Act of 1965 for any year during which the 

student attended such secondary school; and 
H. R. 2669—38 

‘‘(ii) which for the purpose of this paragraph and 

for that year was determined by the Secretary (pursuant to regulations and after consultation with the State 

educational agency of the State in which the school 

is located) to be a school in which the enrollment 

of children counted under a measure of poverty 

described in section 1113(a)(5) of such Act exceeds 

30 percent of the total enrollment of such school; or 

‘‘(D) are first-generation college students (as that term 

is defined in section 402A(g)), and a majority of such firstgeneration college students are low-income individuals. 

‘‘(4) LOW-INCOME INDIVIDUAL.—The term ‘low-income individual’ has the meaning given such term in section 402A(g). 

‘‘(5) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The term 

‘means-tested Federal benefit program’ means a program of 

the Federal Government, other than a program under title 

IV, in which eligibility for the programs’ benefits or the amount 

of such benefits are determined on the basis of income or 

resources of the individual or family seeking the benefit. 

‘‘(6) NATIVE AMERICAN.—The term ‘Native American’ means 

an individual who is of a tribe, people, or culture that is 

indigenous to the United States. 

‘‘(7) NATIVE AMERICAN PACIFIC ISLANDER.—The term ‘Native 

American Pacific Islander’ means any descendant of the 

aboriginal people of any island in the Pacific Ocean that is 

a territory or possession of the United States. 

‘‘(8) NATIVE AMERICAN-SERVING NONTRIBAL INSTITUTION.— The term ‘Native American-serving nontribal institution’ means 

an institution of higher education that— 

‘‘(A) at the time of application— 

‘‘(i) has an enrollment of undergraduate students 

that is not less than 10 percent Native American students; and 

‘‘(ii) is not a Tribal College or University (as 

defined in section 316); and 

‘‘(B) submits to the Secretary such enrollment data 

as may be necessary to demonstrate that the institution 

is described in subparagraph (A), along with such other 

information and data as the Secretary may by regulation 

require. 

‘‘(9) PREDOMINANTLY BLACK INSTITUTION.—The term 

‘Predominantly Black institution’ means an institution of higher 

education that— 

‘‘(A) has an enrollment of needy students as defined 

by paragraph (3); 

‘‘(B) has an average educational and general expenditure which is low, per full-time equivalent undergraduate 

student in comparison with the average educational and 

general expenditure per full-time equivalent undergraduate 

student of institutions of higher education that offer similar 

instruction, except that the Secretary may apply the waiver 

requirements described in section 392(b) to this subparagraph in the same manner as the Secretary applies the 

waiver requirements to section 312(b)(1)(B); 

‘‘(C) has an enrollment of undergraduate students— 

‘‘(i) that is at least 40 percent Black American 

students; 
H. R. 2669—39 

‘‘(ii) that is at least 1,000 undergraduate students; 

‘‘(iii) of which not less than 50 percent of the 

undergraduate students enrolled at the institution are 

low-income individuals or first-generation college students (as that term is defined in section 402A(g)); 

and 

‘‘(iv) of which not less than 50 percent of the undergraduate students are enrolled in an educational program leading to a bachelor’s or associate’s degree that 

the institution is licensed to award by the State in 

which the institution is located; 

‘‘(D) is legally authorized to provide, and provides 

within the State, an educational program for which the 

institution of higher education awards a bachelor’s degree, 

or in the case of a junior or community college, an associate’s degree; 

‘‘(E) is accredited by a nationally recognized accrediting 

agency or association determined by the Secretary to be 

a reliable authority as to the quality of training offered, 

or is, according to such an agency or association, making 

reasonable progress toward accreditation; and 

‘‘(F) is not receiving assistance under part B of title 

III.’’. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.