59–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 110–317 

COLLEGE COST REDUCTION AND ACCESS ACT 

SEPTEMBER 6, 2007.—Ordered to be printed 

Mr. GEORGE MILLER of California, from the committee of 

conference, submitted the following 

CONFERENCE REPORT 

[To accompany H.R. 2669] 

The committee of conference on the disagreeing votes of the two 

Houses on the amendment of the Senate to the bill (H.R. 2669), to 

provide for reconciliation pursuant to section 601 of the concurrent 

resolution on the budget for fiscal year 2008, having met, after full 

and free conference, have agreed to recommend and do recommend 

to their respective Houses as follows: 

That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as 

follows: 

In lieu of the matter proposed to be inserted by the Senate 

amendment, insert the following: 

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. 


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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’’. (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. 


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‘‘(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.’’. 

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—


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‘‘(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). 

‘‘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). 


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‘‘(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 full-time 

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 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, exVerDate Aug 31 2005 01:53 Sep 08, 2007 Jkt 059006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6603 E:\HR\OC\HR317.XXX HR317

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cept 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. ‘‘(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 


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‘‘(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 

‘‘(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.’’. 


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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. 

‘‘(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. 


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‘‘(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: 

‘‘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 


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of such loan were used to 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 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); 


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‘‘(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 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); 

‘‘(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 


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

other procedures as are necessary to effectively implement incomebased 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)’’. 

(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 ‘‘income-sensitive 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. 


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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: 

‘‘(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).’’. 


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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 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)—


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(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 notfor-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.—

‘‘(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 of 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 to the requirements of clause (i)(II). 


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‘‘(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 forprofit 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 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, 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 notfor-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: 


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‘‘(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: 

‘‘(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), 


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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; 

‘‘(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. 

‘‘(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.’’. 


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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 

‘‘(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). 


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‘‘(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 

‘‘(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: 


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‘‘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 

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 


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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’’; 

(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 


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(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; 

(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 

(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; 


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‘‘(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;’’; 

(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: 


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‘‘(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: 

‘‘(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 


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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—

‘‘(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). 


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‘‘(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.— ‘‘(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 


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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 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 


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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).’’. 

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. 


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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 

organizations, 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 in-kind, 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 PAY- MENTS.— 

‘‘(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). 

‘‘(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 


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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 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. 


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‘‘(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 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 


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‘‘(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 high-need 

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 notfor-profit holder in the State in accordance with subsection 

(e), the holder shall clearly and prominently indicate 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, 


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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 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; 

‘‘(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, 


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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—

‘‘(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))); 


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‘‘(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—

‘‘(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 


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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 MINORITYSERVING 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; ‘‘(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; 


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‘‘(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 IS- LANDER-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 

‘‘(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 chilVerDate Aug 31 2005 01:53 Sep 08, 2007 Jkt 059006 PO 00000 Frm 00038 Fmt 6659 Sfmt 6603 E:\HR\OC\HR317.XXX HR317

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dren 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; 

‘‘(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 


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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.’’. And the Senate agree to the same. 

GEORGE MILLER, 

ROBERT E. ANDREWS, 

BOBBY SCOTT, 

RUBE ́ N HINOJOSA, 

JOHN F. TIERNEY, 

DAVID WU, 

SUSAN A. DAVIS, 

DANNY K. DAVIS, 

TIMOTHY BISHOP, 

MAZIE K. HIRONO, 

JASON ALTMIRE, 

JOHN YARMUTH, 

JOE COURTNEY, 

Managers on the Part of the House. 

TED KENNEDY, CHRIS DODD, TOM HARKIN, BARBARA A. MIKULSKI, JEFF BINGAMAN, 

PATTY MURRAY, 

JACK REED, 

HILLARY RODHAM CLINTON, 

BARACK OBAMA, 

BERNARD SANDERS, 

SHERROD BROWN, 

MICHAEL B. ENZI, 

LAMAR ALEXANDER, 

ORRIN G. HATCH, Managers on the Part of the Senate. 


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JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF 

CONFERENCE 

The managers on the part of the House and the Senate at the 

conference on the disagreeing votes of the two Houses on the 

amendment of the Senate to the bill (H.R. 2669), to provide for reconciliation pursuant to section 601 of the concurrent resolution on 

the budget for fiscal year 2008, submit the following joint statement to the House and the Senate in explanation of the effect of 

the action agreed upon by the managers and recommended in the 

accompanying conference report: 

The Senate amendment struck all of the House bill after the 

enacting clause and inserted a substitute text. 

The House recedes from its disagreement to the amendment of 

the Senate with an amendment that is a substitute for the House 

bill and the Senate amendment. The differences between the House 

bill, the Senate amendment, and the substitute agreed to in conference are noted below, except for clerical corrections, conforming 

changes made necessary by agreements reached by the conferees, 

and minor drafting and clarifying changes. 

SECTION 1. SHORT TITLE

The House bill’s short title is the ‘‘College Cost Reduction Act.’’

The Senate amendment provides that the Act may be cited as 

the ‘‘Higher Education Access Act of 2007’’ and that, unless otherwise indicated, references in the bill are made to the Higher Education Act of 1965. 

The House recedes with an amendment to provide a new short 

title of the ‘‘College Cost Reduction and Access Act.’’ The Conferees 

adopt the Senate amendment as amended by the House. 

TITLE I—GRANTS TO STUDENTS IN ATTENDANCE AT 

INSTITUTIONS OF HIGHER EDUCATION 

SECTION 101. TUITION SENSITIVITY

The House bill (Sec. 101) eliminates the Pell grant ‘‘tuition sensitivity’’ provision that prevents low-income students attending lowcost institutions, such as community colleges, to benefit fully from 

the Pell Grant. Authorizes and appropriates $5,000,000 for fiscal 

year 2008. 

The Senate amendment (Sec. 101) also eliminates the Pell 

grant ‘‘tuition sensitivity’’ provision and authorizes and appropriates $5,000,000 for fiscal year 2008. 

The House and the Senate recede with an amendment to authorize and appropriate $11,000,000 for fiscal year 2008 to ensure 

that all eligible students in award year 2007–2008 receive funding. 

The Conferees concur and adopt the amendment. 


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SECTION 102. MANDATORY PELL GRANT INCREASES

The House bill (Sec. 101) authorizes and appropriates new 

mandatory funding to increase the maximum Pell grant award, 

above the appropriated level, by: $200 in 2008–09; $200 in 2009–

10; $300 in 2010–11; $500 in 2011–12; and $500 in 2012 and each 

subsequent award year. 

The Senate amendment (Sec. 102) creates ‘‘Promise grants’’—

a new grant program for low-income, Pell-eligible students to be established in addition to the Pell grant program. Promise grants 

shall be awarded in the same way Pell grants are awarded, except 

that they shall be awarded only to students who are already eligible for Pell grants. Grants shall be awarded to those students with 

the greatest need, as determined under Section 471. Grants awarded under this subsection shall be used to supplement and not supplant other Federal, State and institutional grant funds. The Senate amendment authorizes and appropriates new mandatory funding to increase the maximum Pell grant award, above the appropriated level, by: $790 in 2008–09; $890 in 2009–10; $990 in 2010–

11; $1,090 in 2011–12; and $1,090 in 2012. 

The House and Senate recede with an amendment that provides new mandatory funding for Pell grants and makes the following increases in the Pell maximum under current law: 

$490 in 2008–2009 and 2009–2010; 

$690 in 2010–2011 and 2011–2012; and 

$1,090 in 2012–2013. 

The Conferees concur and adopt the amendment as proposed 

by both the House and the Senate. Combined with an appropriated 

level of $4,310, as it is in current law, the maximum Pell Grant 

award will reach $4,800 in the 2008–2009 academic year, $4,800 in 

the 2009–2010 academic year, $5,000 in the 2010–2011 academic 

year, $5,000 in the 2011–2012 academic year, and $5,400 in the 

2012–2013 academic year. 

The Conferees intend that in awarding the funds under this 

section, the Secretary shall determine the universe of students who 

are eligible to receive a Pell grant, without regard to this section, 

and award grants under this section only to such students. The 

Conferees further intend that the allocated funds for all academic 

years be distributed in the same manner as funds are awarded 

under the Pell grant program, in accordance with the eligibility determination, needs analysis formula and regulations used for the 

distribution of Pell grant awards from discretionary funds. The 

Conferees intend that students who receive a maximum Pell grant 

under the discretionary maximum award level will be eligible to receive the maximum award allowed under this section, and students 

who receive Pell grants that are less than the maximum under the 

discretionary funding would be eligible to receive grants under this 

section proportionate to the size of the Pell grant the student received under the discretionary funding level, in accordance with the 

Pell grant formula. 

The Conferees intend that the funding provided in this section 

be used to supplement, and in no way supplant, current or future 

discretionary funding for the Pell grant program or increases in 

such funding. 


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SECTION 103. UPWARD BOUND

The House bill (Sec. 412) restricts the Secretary’s use of funds 

for the purposes of evaluating and selecting participants of the Upward Bound program. The bill also provides an additional $228 

million to restore Upward Bound funding to unfunded programs 

from the FY07 competition. 

The Senate amendment contains no similar provision. 

The Senate recedes with an amendment to strike the provision 

that restricts the Secretary’s use of funds for the purposes of evaluating and selecting participants of the Upward Bound Program. 

The Conferees adopt the provision in the House bill as amended by 

the Senate. 

SECTION 104. TEACH GRANTS

The House bill (Sec. 301) creates new TEACH Grants that provide up-front pre-paid tuition assistance of $4,000/year (with a 

maximum of $16,000) for high-achieving graduate and undergraduate students who commit to teaching a high-need subject in 

a high-need school for four years. Bonus grants are provided to students who are enrolled in a qualified teacher education program 

and teach in a science or mathematics field. 

The Senate amendment contains no similar provision. 

The Senate recedes with an amendment striking the bonus 

grants in the House proposal. The Conferees adopt the provision in 

the House bill as amended by the Senate. 

The Conferees intend that the Department of Education may 

operate this program through a pre-existing office, and does not require the creation of a new office. 

TITLE II—STUDENT LOAN BENEFITS, TERMS, AND 

CONDITIONS 

SECTION 201. INTEREST RATE REDUCTIONS

The House bill (Sec. 111) reduces interest rates on subsidized 

Stafford loans for undergraduates to 6.12 percent on July 1, 2008; 

5.44 percent on July 1, 2009; 4.76 percent on July 1, 2010; 4.08 

percent on July 1, 2011 and 3.4 percent on July 1, 2012. 

The Senate amendment contains no similar provision. 

The Senate recedes with an amendment, to reduce interest 

rates on subsidized Stafford loans for undergraduates to 6.0 percent on July 1, 2008; 5.6 percent on July 1, 2009; 4.5 percent on 

July 1, 2010; and 3.4 percent on July 1, 2011. The Conferees adopt 

the provision in the House bill as amended by the Senate. 

SECTION 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEMBERS OF

THE ARMED FORCES

The Senate amendment (Sec. 202) eliminates a three-year limitation on the period for which certain members of the armed forces 

may receive deferments on their student loan payments. It allows 

deferments until 180 days after such member is demobilized. It 

also provides that such benefits are available regardless of when 

the student loan was originated. As in current law, members of the 

armed forces who qualify for this deferment are limited to those 


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who are serving on active duty or performing qualifying National 

Guard duty during a war or other military operation in a national 

emergency. 

The House bill contains no similar provision. 

The House recedes. 

SECTION 203. INCOME-BASED REPAYMENT

The House bill (Sec. 133) builds on the tenets of the Income 

Contingent Repayment program by guaranteeing that all borrowers’ loan payments will be limited to 15 percent of their discretionary income, or 15 percent of the amount by which a borrower’s 

adjusted gross income exceeds 150 percent of the poverty line, divided by 12. Under this section, unpaid interest and principal are 

capitalized and any outstanding loan balance is forgiven after 20 

years of repayment. 

In the Senate amendment, unpaid interest on subsidized loans 

is paid or forgiven by the Secretary and outstanding loan balance 

is forgiven after 25 years of repayment. The amendment provides 

that borrowers repaying loans according to income-contingent repayment or income-sensitive repayment plans prior to enactment of 

this Act shall have the option of continuing to repay under the 

terms and conditions of those programs as they existed prior to enactment of this Act or may elect to use the income-based repayment plan created by this section. 

The House and Senate recede with an amendment adopting 

the structure of the House proposal, and requiring the Secretary to 

pay any unpaid interest on subsidized loans for up to three years. 

The amendment also provides for loan forgiveness of unpaid principal balances after 25 years of repayment in the income-based repayment program. The Conferees adopt the provision as proposed 

by both the House and the Senate. 

SECTION 204. DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE

DUTY

The House bill (Sec. 137) allows active duty members of the 

armed services, including members of the National Guard or other 

reserve component of the armed forces who were enrolled in college 

or left college within six months of deployment to receive extended 

repayment on loan terms of up to 13 months upon return from active duty. 

The Senate amendment contains no similar provision. 

The Senate recedes. 

SECTION 205. MAXIMUM REPAYMENT PERIOD

The House bill (Sec. 136) amends provisions concerning the 

maximum repayment period in the income-contingent repayment 

program. 

The Senate amendment contains no similar provision. 

The Senate recedes. 


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TITLE III—FEDERAL FAMILY EDUCATION LOAN 

PROGRAM 

SECTION 301. GUARANTY AGENCY COLLECTION RETENTION

The House bill (Sec. 116) reduces the percentage which guaranty agencies shall be allowed to retain from payments made 

through collections on defaulted loans from 23 percent to 16 percent. 

The Senate amendment (Sec. 302) contains the same provision. 

The Conferees adopt the language of the identical provisions in 

both the House and Senate. 

SECTION 302. ELIMINATION OF EXCEPTIONAL PERFORMER STATUS FOR

LENDERS

The House bill (Sec. 114) eliminates the provision that allows 

lenders designated as ‘‘exceptional performers’’ to receive 99 percent insurance on defaulted loans if they are in full compliance 

with due diligence requirements. 

The Senate amendment (Sec. 303) also eliminates the provision 

that allows lenders designated as ‘‘exceptional performers.’’ The 

Senate amendment makes the change effective October 1, 2007, except that lenders designated as exceptional performers as of that 

date shall be allowed to continue such designation for the remainder of the year for which the designation was made. 

The House recedes. 

In a July 26, 2007 report concerning the exceptional performer 

designation, the Government Accountability Office (GAO) found 

that the designation has not materially affected loan servicing, and 

that default claims have not declined as a result. In addition, GAO 

found that providing an extra 2 percent reimbursement rate for default claims serviced by exceptional performers is not in the fiscal 

interest of the federal government, because lenders are being paid 

a premium to perform due diligence activities that are already required of all lenders. Accordingly, GAO recommended that the exceptional performer designation be eliminated. The Conferees concur with the GAO recommendation and adopt the Senate amendment. 

SEC. 303. REDUCTION OF LENDER INSURANCE PERCENTAGE

The House bill (Sec. 115) reduces the insurance rate from 97 

percent to 95 percent of the unpaid principal of such loans. 

The Senate amendment (Sec. 301) maintains the level of insurance paid by the Federal government on defaulted loans guaranteed under title IV, currently set at 97 percent. 

The House recedes with an amendment to reduce the lender 

insurance rate in 2013 to 95 percent. The Conferees adopt the Senate amendment as amended by the House. 

SECTION 304. DEFINITIONS

Economic hardship 

The House bill (Sec. 134) changes the definition of economic 

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rowers, based on income less than 150 percent of the poverty level 

for the borrower’s family size. 

The Senate amendment (Sec. 304) changes part of the definition of economic hardship to income less than 150 percent of the 

poverty level for the borrower’s family size. 

The Senate recedes. 

Eligible not-for-profit holder 

The House bill (Sec. 118) defines a not-for-profit holder for the 

purposes of determining which lenders qualify for the elimination 

of the origination fee. As such not-for-profit holders are defined as 

any holder that is a unit of a state or local government or a nonprofit private entity; and is not owned in whole or in part by, or 

controlled, by a for-profit entity. 

The Senate amendment (Sec. 304) establishes a definition of eligible not-for-profit holder for the purposes of determining the special allowance payment for which a lender is eligible. Eligible notfor-profit holder means an eligible lender that is a State, or a political subdivision, authority, agency or other instrumentality thereof, 

or an entity with not-for-profit status under the tax code, or a 

trustee acting as an eligible lender on behalf of one of these entities. The amendment establishes that no eligible not-for-profit holder shall be owned or controlled, in whole or in part, by a for-profit 

entity, and that if an eligible not-for-profit holder sells loans on 

which the Secretary is paying the higher special allowance payment designated for eligible not-for-profit holders described in Section 305 of the Senate amendment, to a for-profit entity or an entity that is not an eligible not-for-profit holder, such loans shall from 

the date of sale instead receive the special allowance payment designated for other such lenders, as described in Section 305. The 

Senate amendment requires that the Secretary promulgate regulations implementing this provision no later than one year after the 

date of enactment. 

The House recedes with an amendment (1) clarifying that an 

eligible not-for-profit holder will not be considered to be owned or 

controlled by a for-profit entity if an eligible lender trustee merely 

holds the loan in trust for the eligible not-for-profit holder and does 

not receive any benefit from the loan beyond reasonable and customary fees; and (2) specifying that a not-for-profit entity on whose 

behalf a trustee is acting as an eligible lender will not be deemed 

owned or controlled by a for-profit entity, as a result of granting 

a security interest in, or otherwise pledging as collateral, loans or 

the income from a loan to secure a debt obligation in the operation 

of the trustee relationship. The amendment also specifies that an 

eligible not-for-profit holder must have been in operation and serving as an eligible lender on the date of enactment of the College 

Cost Reduction and Access Act, and that a trustee, in order to be 

an eligible not-for-profit lender, must be a trustee acting on behalf 

of such an eligible lender. The amendment specifies that a state 

may elect to waive this requirement for a new eligible not-for-profit 

holder determined by the State to be necessary to fill a public purpose, except that a State may not waive any of the requirements 

related to trustees. 


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The Conferees adopt the Senate amendment as amended by 

the House. 

SECTION 305. SPECIAL ALLOWANCES

Reduction of lender special allowance payments 

The House bill (Sec. 113) reduces the special allowance payment rate for lenders, which is currently set for student loans at 

the Commercial Paper (CP) lending rate plus 1.74 percent while 

borrowers are in school or in a grace period, and CP plus 2.34 percent while borrowers are in repayment, and is currently set for 

PLUS loans at CP plus 2.64 percent, and for consolidation loans at 

CP plus 2.64 percent (less the 1.05 percent annual rebate fee). The 

House bill reduces these payment rates by 0.55 percentage points 

(or 55 basis points) for loans held by all lenders and equalizes the 

special allowance payment rate for Stafford and PLUS loans. 

The Senate amendment (Sec. 305) reduces these payments for 

loans held by for-profit lenders by 0.50 percentage points (or 50 

basis points), and by 0.35 percentage points (35 basis points) for 

loans held by not-for-profit lenders and equalizes the SAP rate for 

Stafford and PLUS loans. 

The House recedes with an amendment that reduces the SAP 

payments by 40 basis points for non-profit lenders and by 55 basis 

points for all other lenders. The amendment also equalizes the SAP 

rate for Stafford and PLUS loans. The Conferees adopt the Senate 

amendment as amended by the House. 

Increased loan fees from lenders 

The House bill (Sec. 118) increases the fee the Secretary shall 

collect under Section 438(d) of title IV on each loan disbursed from 

0.50 percent to 1 percent for certain for-profit lenders. The fee is 

eliminated for non-profit lenders and small lenders, defined as 

those that collectively hold the lowest 15 percent of total loan volume. 

The Senate amendment (Sec. 305) increases the fee the Secretary shall collect from all lenders under Section 438(d) of title IV 

on each loan disbursed from 0.50 percent to 1 percent. 

The House recedes. 

SECTION 306. ACCOUNT MAINTENANCE FEES

The House bill (Sec. 117) reduces account maintenance fees 

from 0.1 percent to 0.06 percent. 

The Senate amendment (Sec. 402) changes the method by 

which account maintenance fees are calculated from a calculation 

based on the total amount of loan principal to a per-loan basis. 

The Senate recedes. 

TITLE IV—LOAN FORGIVENESS 

SECTION 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES

The House bill (Sec. 132) amends the current Income-Contingent Repayment program in the Direct Loan program to provide 

loan forgiveness for public sector employees. The change provides 

that the Secretary shall forgive the remaining loan balance on a 


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loan under part D of title IV for a borrower who has been employed 

in a public sector job and has made payments on such loan for a 

period of ten years. 

The Senate amendment (Sec. 401) creates a new loan forgiveness plan for public service employees. The plan provides that the 

Secretary shall forgive the remaining loan balance for a borrower 

who has been employed in a public sector job and has made payments on such loan for a period of ten years (which need not be 

consecutive). Such borrowers shall be eligible to have 1⁄10 of the remaining loan balance forgiven for each of the ten years in which 

the borrower earned $65,000 or less. 

The House recedes with an amendment to modify the defini- tion of public service employees and eliminate the $65,000 income 

cap. 

The Conferees adopt the Senate amendment as amended by 

the House. 

TITLE V—FEDERAL PERKINS LOANS 

SECTION 501. DISTRIBUTION OF LATE COLLECTIONS

The House bill (Sec. 141) provides $100 million per year for the 

Perkins Loan Federal Contribution program for fiscal years 2008– 

2012. 

The Senate amendment (Sec. 501) postpones the date on which 

institutions must return late collections on Perkins loans to the 

Secretary to September 30, 2012. 

The House recedes. 

TITLE VI—NEED ANALYSIS 

SECTION 601. SUPPORT FOR WORKING STUDENTS

The House bill (Sec. 102) includes provisions to increase students’ eligibility for student aid, including the Pell grant, through 

phased-in increases in the Income Protection Allowance for all students. The protected income for unmarried independent students 

without dependents will be $6,690 by 2009. For dependent students 

the protected income will be $3,750 by 2009. These amounts will 

increase by 10 percent each year until 2012. 

The Senate amendment (Sec. 601) also increases the Income 

Protection Allowance in the following ways: (1) for dependent students, it increases the amount of the income protection allowance 

to $3,750 for the 2009–2010 academic year; $4,500 for the 2010– 

2011 academic year; $5,250 for the 2011–2012 academic year; and 

$6,000 for the 2012–2013 academic year; (2) for independent students without dependents other than a spouse, who are single, separated, or married with both spouses enrolled, it increases the 

amount of the income protection allowance to $7,000 for the 2009– 

2010 academic year; $7,780 for the 2010–2011 academic year; 

$8,550 for the 2011–2012 academic year; and $9,330 for the 2012– 

2013 academic year. For independent students without dependents 

other than a spouse, who are married and whose spouse is not enrolled, it increases the amount of the income protection allowance 

to $11,220 for the 2009–2010 academic year; $12,460 for the 2010– 

2011 academic year; $13,710 for the 2011–2012 academic year; and 


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$14,690 for the 2012–2013 academic year. For independent students with dependents other than a spouse, it increases the 

amount of the income protection allowance as specified by the tables contained in this section, for a total increase of 50 percent over 

four years. Under this section, for all students, the income protection allowance reverts to current law after the 2012–2013 academic 

year. 

The House recedes with an amendment to continue the 

changes beyond the 2012–2013 academic year. The Conferees adopt 

the Senate amendment as amended by the House. 

SECTION 602. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO

IMPROVEMENTS

Simplified needs test 

The House bill (Sec. 103) extends the time that an individual 

who has participated in a federal means-tested benefit program can 

qualify for a simplified needs test to 24 months from 12 months, 

and allows dislocated workers to be eligible for the simplified application form. 

The Senate amendment contains no similar provision. 

The Senate recedes. 

Automatic zero 

The House bill (Sec. 103) increases the family income level 

under which a student is automatically eligible for the maximum 

Pell grant, or the ‘‘auto-zero,’’ from the current level of $20,000 to 

$30,000 and indexes this level to the Consumer Price Index (CPI). 

The Senate amendment (Sec. 602) also increases the family income level under which a student is automatically eligible for the 

maximum Pell grant to $30,000. 

The Senate recedes. 

SECTION 603. DISCRETION OF STUDENT FINANCIAL AID

ADMINISTRATORS

The House bill (Sec. 104) allows financial aid administrators to 

use discretion in calculating the expected student or family contribution in cases where a family member is a dislocated worker (as 

defined in section 101 of the Workforce Investment Act of 1998). 

The Senate amendment (Sec. 603) clarifies and expands the 

conditions under which financial aid administrators may use discretion in calculating the expected student or family contribution to 

include an independent student’s loss of employment or a change 

in a student’s housing status that results in homelessness. The 

Senate amendment (Sec. 605) authorizes and appropriates 

$10,000,000 for fiscal year 2008 to pay for the estimated increased 

cost in the Pell program for award year 2007–2008 resulting from 

the amendments made by sections 603 and 604. 

Both the House and Senate recede with an amendment to 

change the effective date to July 1, 2009. The Conferees concur and 

adopt the amendment as proposed by the House and Senate. 


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SECTION 604. DEFINITIONS

The House bill (Sec. 104) clarifies definitions for dislocated 

workers and means-tested federal benefits. The House bill amends 

the provisions concerning untaxed income and benefits in current 

law. Specifically, the bill excludes TANF (welfare benefits), Earned 

Income Tax Credits, and Social Security from the income calculation in the needs analysis. The House bill clarifies the asset calculation in this section of the bill to ensure that 529 plans are 

counted as the asset of the parent for independent students. 

The Senate amendment (Sec. 604) makes changes to the definition of independent student. It expands the definition of independent students to include: individuals in foster care anytime 

after age 13; emancipated minors or individuals in legal 

guardianships as determined by an appropriate court in such an individual’s State of legal residence; and any individual who has been 

adequately verified as an unaccompanied youth who is a homeless 

child or youth, as defined in the McKinney-Vento Homeless Assistance Act. It clarifies that financial aid administrators may make 

determinations regarding a student’s independent status based on 

a documented determination of independence by another financial 

aid administrator in the same year. 

Both the House and Senate recede with an amendment clarifying that foster students do not lose their independent student 

status during non-school terms with regard to housing and other 

benefits. The Conferees concur and adopt the amendment as proposed by the House and Senate. 

TITLE VII—COMPETITIVE LOAN AUCTION PILOT 

PROGRAM 

SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM

The House bill (Sec. 119) requires a study by the Secretaries 

of Education and Treasury with the Congressional Budget Office, 

the Office of Management and Budget, and the Government Accountability Office to identify and select among the best mechanisms for a loan auction. 

Based on the information from the study, a pilot program shall 

be implemented by the Secretary of Education using 10 percent of 

loan volume under Part B in the first year of the pilot study and 

20 percent the second year of the pilot study. 

The Senate amendment (Sec. 801) establishes a new competitive loan auction pilot program. The Secretary is directed to carry 

out a pilot program to establish a mechanism for the auction of all 

eligible PLUS loans. Such loans are loans made to parents of dependent students. The Secretary shall administer one auction for 

each state, in which eligible lenders shall compete to originate all 

eligible PLUS loans at institutions of higher education within the 

state. 

The House recedes. 

The Conferees believe this loan auction pilot should be closely 

evaluated by the Secretary of Education in consultation with the 

Secretary of Treasury, the Office of Management and Budget, the 

Congressional Budget Office, and the Comptroller General. AddiVerDate Aug 31 2005 01:53 Sep 08, 2007 Jkt 059006 PO 00000 Frm 00050 Fmt 6601 Sfmt 6601 E:\HR\OC\HR317.XXX HR317

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tionally, the Conferees believe the evaluation should consider the 

extent of the savings generated through the pilot program; the 

number of lenders participating in the pilot program and the extent 

to which the pilot program generated competition among lenders; 

and the effect of transition to and operation of the pilot program 

on the feasibility of using other market mechanisms to operate the 

loan programs. 

The Conferees intend to include an evaluation of the loan auction and other market mechanisms during reauthorization of the 

Higher Education Act which we are committed to moving forward 

in this session. 

TITLE VIII—PARTNERSHIP GRANTS 

SECTION 801. COLLEGE ACCESS CHALLENGE GRANTS

The House bill (Sec. 411) establishes ‘‘College Access Challenge 

Grants,’’ which leverage federal funds to increase the number of 

students from underserved populations who enter and complete college through matching grants to philanthropic organizations. The 

federal government will provide a 2 to 1 match for private and 

other public funds for these purposes. The philanthropic organizations will work with states, institutions of higher education, and 

local education agencies and other organizations to raise funds and 

provide outreach and student support programs. 

The Senate amendment (Sec. 801) establishes a College Access 

Partnership Grant program, to make payments to States to assist 

them in carrying out specified activities to increase college access 

for low-income students in the state. The federal share of the 

matching grant is 2⁄3 and the state share is 1⁄3. Activities may be 

carried out under this grant by state agencies or not-for-profit organizations that the state designates, including not-for-profit lenders, 

and must be made available to all qualifying students in the state, 

with priority given to students and families living below the poverty line. The amendment provides that authority to carry out this 

section shall expire on September 30, 2009. 

The House recedes with an amendment changing the name of 

the program to ‘‘College Access Challenge Grants’’ and incorporating a House provision allowing philanthropic organizations to 

apply to the Secretary for a grant in the case where a state does 

not meet the matching requirements or chooses not to apply for a 

grant. The Conferees adopt the Senate amendment as amended by 

the House. 

The Conferees intend that states, entities, or organizations 

providing activities under the College Access Challenge Grants program created by this Act coordinate such activities with existing 

state partnership programs designed to increase college access, particularly the state’s Leveraging Educational Assistance Partnership 

program (LEAP) under title IV, Part A, Subpart 4, if a state has 

such a program. 


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SECTION 802. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND

UNIVERSITIES AND MINORITY SERVING INSTITUTIONS

The House bill (Sec. 401) provides a total $500 million over the 

next five years to the following designated institutions with the following amounts: 

$200 million to Hispanic-Serving Institutions to be distributed to the institutions in the same competitive manner as is 

done under title V of the Higher Education Act, and for uses 

under title V with priority to those applications that will increase the number of low-income students attaining degrees in 

the fields of science, technology, engineering, or math and to 

applications that develop model transfer articulation agreements. 

$170 million to Historically Black Colleges and Universities to be distributed for use through some of the activities 

described in section 323(a) of the Higher Education Act including the purchase of laboratory equipment, the funding of instruction, the purchase of materials, and the establishment or 

enhancement of a teacher education program. Additionally, 

funds may be used in a manner consistent with the institution’s comprehensive plan and designed to increase the institution’s capacity to prepare students for careers in the physical 

and natural sciences, math, computer science, information 

technology, engineering, language instruction and other specified areas. 

$30 million to Predominately Black Institutions to award 

50 grants of $600,000 for programs in the fields of science, 

technology, engineering, health education, teacher education, 

or programs that improve the educational outcomes of African 

American males. 

$60 million to Tribal Colleges and Universities to be distributed in the manner that the funds are used under current 

law in section 316 of the Higher Education Act including the 

purchase of laboratory equipment, the funding of instruction, 

the purchase of materials, or the establishment or enhancement of teacher education and outreach programs. 

$30 million to Alaska/Hawaiian Native Institutions to be 

distributed in the manner that the funds are used under current law in section 317 of the Higher Education Act including 

the purchase of laboratory equipment, the funding of instruction, the purchase of materials, and the creation of academic 

tutoring programs. 

$10 million to Asian American and Pacific Islander Institutions to be distributed to institutions as defined in this section, and used in a manner that may include the purchase of 

laboratory equipment, the funding of instruction, the purchase 

of materials, and the creation of tutoring programs. 

The House bill defines the following for the purposes of distributing funds: 

Predominately Black Institutions as institutions that have an 

enrollment of financially needy undergraduate students; an enrollment of undergraduate students at least 40% of whom are Black; 

and, that has at least 1,000 undergraduate students of whom not 


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less than 50% enrolled at the institution are low-income or first 

generation and registered in a BA or AA program leading to a degree. 

Asian and Pacific Islander-serving institution as institutions 

that have an enrollment of undergraduate students that is at least 

10% Asian American and Pacific Islander and has a significant enrollment of financially needy students. 

The Senate amendment contains no similar provision. 

The Senate recedes with an amendment that $255 million 

shall be authorized in each of 2008 and 2009, for a total investment 

of $510 million. The amendment adds $10 million for Native American Serving, Nontribal Institutions to be distributed to institutions 

as defined in this section, and used in a manner that may include 

the purchase of laboratory equipment, the funding of instruction, 

the purchase of materials, and the creation of tutoring programs. 

The Conferees agree to the House bill as amended by the Senate. 

The amendment defines Native American Serving, Nontribal 

Institutions for the purposes of distributing funds at institutions 

that have an enrollment of undergraduate students that is at least 

10% Native American and is not a Tribal College or University. 

These institutions, which serve groups who were historically 

denied access to postsecondary education because of discrimination, 

have an important role in higher education. They help to preserve 

cultural traditions and to ensure a diverse pool of qualified professionals in the nation’s economy. At the same time, they offer affordable, high quality college education to thousands of students as 

well as provide much needed job training. These institutions also 

provide crucial support services and add hope to communities that 

have high rates of poverty and unemployment. Today, a high quality education greatly depends on the technology and resources 

available to students. The Conferees recognize that HBCUs, HSIs, 

and other Minority Serving Institutions (MSIs) do not have sufficient financial ability to provide these opportunities and satisfy the 

unique needs of these schools without Federal assistance. 

MSIs have an important role in providing equal educational 

opportunities to qualified minority students. According to the Institute for Higher Education Policy, approximately 2.3 million students, or about one-third of all African Americans, American Indians/Alaska Natives, and Hispanics in all higher education institutions in the United States and Puerto Rico, were enrolled at 

HBCUs, HSIs, TCUs, Alaska and Hawaiian Native institutions. 

These numbers have grown rapidly in recent years—in fact, enrollment at these institutions—accelerated by 66 percent from 1995 to 

2003, compared to only 20 percent at all postsecondary institutions. 

The importance of these unique institutions is underscored by 

the fact that they provide postsecondary educational opportunities 

specifically tailored to students who traditionally have been denied 

access to adequately funded elementary and secondary schools, especially low-income, educationally disadvantaged students. The 

Conferees believe that this section offers an opportunity to help 

these institutions fulfill their missions to assist students to meet 

their educational goals. 


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COMPLIANCE WITH HOUSE RULE XXI 

Pursuant to clause 9 of rule XXI of the Rules of the House of 

Representatives, this conference report contains no congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of rule XXI. 

GEORGE MILLER, ROBERT E. ANDREWS, BOBBY SCOTT, RUBE ́ N HINOJOSA, JOHN F. TIERNEY, DAVID WU, 

SUSAN A. DAVIS, 

DANNY K. DAVIS, 

TIMOTHY BISHOP, 

MAZIE K. HIRONO, 

JASON ALTMIRE, 

JOHN YARMUTH, JOE COURTNEY, 

Managers on the Part of the House. 

TED KENNEDY, 

CHRIS DODD, 

TOM HARKIN, 

BARBARA A. MIKULSKI, 

JEFF BINGAMAN, 

PATTY MURRAY, 

JACK REED, 

HILLARY RODHAM CLINTON, 

BARACK OBAMA, 

BERNARD SANDERS, 

SHERROD BROWN, 

MICHAEL B. ENZI, 

LAMAR ALEXANDER, 

ORRIN G. HATCH, 

Managers on the Part of the Senate. 

Æ 


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