" ! HOUSE OF REPRESENTATIVES 109TH CONGRESS

1st Session 

REPORT

109–231 

COLLEGE ACCESS AND OPPORTUNITY ACT 

OF 2005 

R E P O R T 

OF THE

COMMITTEE ON EDUCATION AND THE 

WORKFORCE 

ON

H.R. 609 


E:\Seals\Congress.#13
COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005 

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

23–574 

" ! HOUSE OF REPRESENTATIVES 109TH CONGRESS

1st Session 

REPORT

2005

109–231 

COLLEGE ACCESS AND OPPORTUNITY ACT 

OF 2005 

R E P O R T 

OF THE

COMMITTEE ON EDUCATION AND THE 

WORKFORCE 

ON

H.R. 609 


E:\Seals\Congress.#13
23–574 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–231 

COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005 

SEPTEMBER 22, 2005.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. BOEHNER, from the Committee on Education and the 

Workforce, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 609] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Education and the Workforce, to whom was 

referred the bill (H.R. 609) to amend and extend the Higher Education Act of 1965, having considered the same, report favorably 

thereon with an amendment and recommend that the bill as 

amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

Act of 2005’’. 

(b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents. 

Sec. 2. References; effective date. 

TITLE I—GENERAL PROVISIONS 

Sec. 101. Definition of institution of higher education. 

‘‘Sec. 101. Definition of institution of higher education. 

‘‘Sec. 102. Institutions outside the United States. 

‘‘Sec. 123. Restrictions on funds for for-profit schools. 

Sec. 102. New borrower definition. 

Sec. 103. Student speech and association rights. 

Sec. 104. National Advisory Committee on Institutional Quality and Integrity. 

Sec. 105. Alcohol and drug abuse prevention. 

Sec. 106. Prior rights and obligations. 

Sec. 107. Limitation on Certain Uses of Funds. 

‘‘Sec. 124. Limitation on Certain Uses of Funds. 

Sec. 108. Consumer information and public accountability in higher education. 

‘‘Sec. 131. Consumer information and public accountability in higher education. 

Sec. 109. Databases of student information. 

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‘‘Sec. 132. Databases of student information prohibited. 

Sec. 110. Performance-based organization. 

TITLE II—TEACHER PREPARATION 

Sec. 201. Teacher quality enhancement grants. 

‘‘PART A—TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND PARTNERSHIPS

‘‘Sec. 201. Purposes; definitions. 

‘‘Sec. 202. State grants. 

‘‘Sec. 203. Partnership grants. 

‘‘Sec. 204. Teacher recruitment grants. 

‘‘Sec. 205. Administrative provisions. 

‘‘Sec. 206. Accountability and evaluation. 

‘‘Sec. 207. Accountability for programs that prepare teachers. 

‘‘Sec. 208. State functions. 

‘‘Sec. 209. General provisions. 

‘‘Sec. 210. Authorization of appropriations. 

Sec. 202. Preparing tomorrow’s teachers to use technology. 

Sec. 203. Centers of excellence. 

‘‘PART C—CENTERS OF EXCELLENCE

‘‘Sec. 231. Purposes; definitions. 

‘‘Sec. 232. Centers of excellence. 

‘‘Sec. 233. Authorization of appropriations. 

Sec. 204. Teacher incentive fund program. 

‘‘PART D—TEACHER INCENTIVE FUND PROGRAM

‘‘Sec. 241. Purpose; definitions. 

‘‘Sec. 242. Teacher incentive fund grants. 

‘‘Sec. 243. Evaluations. 

‘‘Sec. 244. Authorization of appropriations. 

Sec. 205. Transition. 

TITLE III—INSTITUTIONAL AID 

Sec. 301. Title III grants for American Indian Tribally Controlled Colleges and Universities. 

Sec. 302. Alaska Native and Native Hawaiian-serving institutions. 

Sec. 303. Grants to part B institutions. 

Sec. 304. Technical amendments. 

Sec. 305. Title III authorizations. 

TITLE IV—STUDENT ASSISTANCE 

PART A—GRANTS TO STUDENTS

Sec. 401. Pell Grants. ‘‘Sec. 401A. Pell Grants Plus: achievement grants for State scholars. 

Sec. 402. TRIO programs. 

Sec. 403. TRIO reform. 

‘‘Sec. 402G. Staff development activities. 

‘‘Sec. 402H. Evaluations. 

Sec. 404. GEARUP. 

Sec. 405. Federal Supplemental Educational Opportunity Grants. 

Sec. 406. LEAP. 

Sec. 407. HEP/CAMP program. 

Sec. 408. Robert C. Byrd Honors Scholarship Program. 

‘‘SUBPART 6—ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM

‘‘Sec. 419A. Robert C. Byrd mathematics and science honors scholarship program. 

‘‘Sec. 419B. Mathematics and science incentive program. 

‘‘Sec. 419C. Mathematics and science education coordinating council grants. 

‘‘Sec. 419D. Authorization of appropriations. 

Sec. 409. Child care access. 

Sec. 410. Learning anytime anywhere partnerships. 

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 421. Reauthorization of Federal Family Education Loan Program. 

Sec. 422. Loan limits. 

Sec. 423. Interest rates and special allowances. 

Sec. 424. Additional loan terms and conditions. 

Sec. 425. Consolidation loan changes. 

Sec. 426. Deferment of student loans for military service. 

Sec. 427. Loan forgiveness for service in areas of national need. 

‘‘Sec. 428K. Loan forgiveness for service in areas of national need. 

Sec. 428. Unsubsidized Stafford loans. 

Sec. 429. Elimination of termination dates from Taxpayer-Teacher Protection Act of 2004. 

Sec. 430. Additional administrative provisions. 

‘‘Sec. 428I. Special insurance and reinsurance rules for exceptional performance. 

PART C—FEDERAL WORK-STUDY PROGRAMS

Sec. 441. Authorization of appropriations. 

Sec. 442. Community service. 

Sec. 443. Allocation of funds. 

Sec. 444. Books and supplies. 

Sec. 445. Job location and development. 

Sec. 446. Work colleges. 

PART D—FEDERAL DIRECT LOAN PROGRAM

Sec. 451. Reauthorization of the Direct Loan Program. 

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PART E—FEDERAL PERKINS LOAN PROGRAM

Sec. 461. Reauthorization of program. 

Sec. 462. Loan terms and conditions. 

Sec. 463. Loan cancellation. 

Sec. 464. Technical amendments. 

PART F—NEED ANALYSIS

Sec. 471. Significantly simplifying the student aid application process. 

Sec. 472. Additional need analysis amendments. 

PART G—GENERAL PROVISIONS RELATING TO STUDENT FINANCIAL ASSISTANCE

Sec. 481. Definitions of academic year and eligible program. 

Sec. 482. Distance education. 

Sec. 483. Expanding information dissemination regarding eligibility for Pell Grants. 

Sec. 484. Student eligibility. 

Sec. 485. Institutional refunds. 

Sec. 486. Institutional and financial assistance information for students. 

Sec. 487. College access initiative. ‘‘Sec. 485D. College access initiative. 

Sec. 488. Distance education demonstration program. 

Sec. 489. College affordability demonstration program. ‘‘Sec. 486A. College affordability demonstration program. 

Sec. 490. Program participation agreements. 

Sec. 491. Additional technical and conforming amendments. 

PART H—PROGRAM INTEGRITY

Sec. 495. Accreditation. 

Sec. 496. Report to congress on prevention of fraud and abuse in student financial aid programs. ‘‘Sec. 499. Report to Congress on prevention of fraud and abuse in student financial aid programs. 

TITLE V—DEVELOPING INSTITUTIONS 

Sec. 501. Definitional changes. 

Sec. 502. Assurance of enrollment of needy students. 

Sec. 503. Additional amendments. 

Sec. 504. Postbaccalaureate opportunities for Hispanic Americans. 

‘‘PART B—PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS

‘‘Sec. 511. Purposes. 

‘‘Sec. 512. Program authority and eligibility. 

‘‘Sec. 513. Authorized activities. 

‘‘Sec. 514. Application and duration. 

Sec. 505. Authorization of appropriations. 

TITLE VI—TITLE VI AMENDMENTS 

Sec. 601. International and foreign language studies. 

Sec. 602. Business and international education programs. 

Sec. 603. Institute for International Public Policy. ‘‘Sec. 621. Program for foreign service professionals. 

Sec. 604. Evaluation, outreach, and dissemination. ‘‘Sec. 632. Evaluation, outreach, and dissemination. 

Sec. 605. Advisory Board. ‘‘Sec. 633. International Higher Education Advisory Board. 

Sec. 606. Recruiter access to students and student recruiting information; safety. ‘‘Sec. 634. Recruiter access to students and student recruiting information. 

‘‘Sec. 635. Student safety. 

Sec. 607. National study of foreign language heritage communities. ‘‘Sec. 636. National study of foreign language heritage communities. 

TITLE VII—TITLE VII AMENDMENTS 

Sec. 701. Javits fellowship program. 

Sec. 702. Graduate assistance in areas of national need. 

Sec. 703. Thurgood Marshall legal educational opportunity program. 

Sec. 704. Fund for the improvement of postsecondary education. 

Sec. 705. Urban community service. 

Sec. 706. Demonstration projects to ensure students with disabilities receive a quality higher education. 

TITLE VIII—CLERICAL AMENDMENTS 

Sec. 801. Clerical amendments. 

TITLE IX—AMENDMENTS TO OTHER EDUCATION LAWS 

PART A—EDUCATION OF THE DEAF ACT OF 1986 

Sec. 901. Laurent Clerc National Deaf Education Center. 

Sec. 902. Authority. 

Sec. 903. Agreement for the National Technical Institute for the Deaf. 

Sec. 904. Definitions. 

Sec. 905. Audit. 

Sec. 906. Reports. 

Sec. 907. Liaison for educational programs. 

Sec. 908. Federal endowment programs for Gallaudet University and the National Technical Institute for the 

Deaf. 

Sec. 909. Oversight and effect of agreements. 

Sec. 910. Authorization of appropriations. ‘‘Sec. 1. Short title. 

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PART B—ADDITIONAL EDUCATION LAWS

Sec. 921. Cancellation of Student Loan Indebtedness For Survivors of Victims of the September 11, 2001, Attacks. 

Sec. 922. Amendment to Higher Education Amendments of 1998. 

Sec. 923. Tribally Controlled College or University Assistance Act of 1978. 

Sec. 924. Navajo Community College Act. 

Sec. 925. Education Amendments of 1992. 

Sec. 926. Study of student learning outcomes and public accountability. 

Sec. 927. Study of minority graduation rates. 

Sec. 928. Study of education-related indebtedness of medical school graduates. 

Sec. 929. Study of adult learners. 

Sec. 930. Increase in college textbook prices. 

SEC. 2. REFERENCES; EFFECTIVE DATE. 

(a) 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.). 

(b) EFFECTIVE DATE.—Except as otherwise provided in this Act, the amendments 

made by this Act shall take effect on the date of enactment of this Act. 

TITLE I—GENERAL PROVISIONS 

SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION. 

(a) AMENDMENT.—Title I is amended by striking sections 101 and 102 (20 U.S.C. 

1001, 1002) and inserting the following: 

‘‘SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION. 

‘‘(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this Act, the term ‘institution of higher education’ means an educational institution in any State that— ‘‘(1) admits as regular students only individuals who— ‘‘(A) meet the requirements of section 484(d)(3), or have a certificate of 

graduation from a school providing secondary education, or the recognized 

equivalent of such a certificate; ‘‘(B) are beyond the age of compulsory school attendance in the State in 

which the institution is located; or ‘‘(C) will be dually enrolled in that institution and a secondary school; ‘‘(2) is legally authorized within such State to provide a program of education 

beyond secondary education; ‘‘(3)(A) is accredited by a nationally recognized accrediting agency or association; or ‘‘(B) if not so accredited, is a public or nonprofit institution that has been 

granted preaccreditation status by such an agency or association that has been 

recognized by the Secretary for the granting of preaccreditation status, and the 

Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time; and 

‘‘(4) meets either of the following criteria: 

‘‘(A) is a nonprofit, for-profit, or public institution that—

‘‘(i) provides an educational program for which the institution awards 

a bachelor’s, graduate, or professional degree; 

‘‘(ii) provides not less than a 2-year educational program which is acceptable for full credit towards such a degree; 

‘‘(iii) provides not less than a 1-year program of training that prepares students for gainful employment in a recognized occupation; or 

‘‘(iv) awards a degree that is acceptable for admission to graduate or 

professional degree programs, subject to the review and approval of the 

Secretary; or 

‘‘(B) is a nonprofit, for-profit, or public institution that provides an eligible program (as defined in section 481)—

‘‘(i) for which the institution awards a certificate; and 

‘‘(ii) that prepares students for gainful employment in a recognized 

occupation. 

‘‘(b) ADDITIONAL LIMITATIONS.—

‘‘(1) FOR-PROFIT POSTSECONDARY INSTITUTIONS.—

‘‘(A) DURATION OF ACCREDITATION.—A for-profit institution shall not be 

considered to be an institution of higher education unless such institution 

is accredited by a nationally recognized accrediting agency or association 

and such institution has been in existence for at least 2 years. 

‘‘(B) INSTITUTIONAL ELIGIBILITY ONLY FOR COMPETITIVE GRANTS.—For the 

purposes of any program providing grants to institutions for use by the inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00008 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
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stitution (and not for distribution among students), a for-profit institution 

shall not be considered to be an institution of higher education under this 

section if such grants are awarded on any basis other than competition on 

the merits of the grant proposal or application. 

‘‘(2) POSTSECONDARY VOCATIONAL INSTITUTIONS.—A nonprofit or public institution that meets the criteria of subsection (a)(4)(B) shall not be considered to 

be an institution of higher education unless such institution has been in existence for at least 2 years. 

‘‘(3) LIMITATIONS BASED ON MANAGEMENT.—An institution shall not be considered to meet the definition of an institution of higher education in this section 

if—

‘‘(A) the institution, or an affiliate of the institution that has the power, 

by contract or ownership interest, to direct or cause the direction of the 

management or policies of the institution, has filed for bankruptcy, except 

that this paragraph shall not apply to a nonprofit institution, the primary 

function of which is to provide health care educational services (or an affiliate of such an institution that has the power, by contract or ownership interest, to direct or cause the direction of the institution’s management or 

policies) that filed for bankruptcy under chapter 11 of title 11, United 

States Code, between July 1, 1998, and December 1, 1998; or 

‘‘(B) the institution, the institution’s owner, or the institution’s chief executive officer has been convicted of, or has pled nolo contendere or guilty to, 

a crime involving the acquisition, use, or expenditure of Federal, State, or 

local government funds, or has been judicially determined to have committed a crime involving the acquisition, use, or expenditure involving Federal, State, or local government funds. 

‘‘(4) LIMITATION ON COURSE OF STUDY OR ENROLLMENT.—An institution shall 

not be considered to meet the definition of an institution of higher education 

in subsection (a) if such institution—

‘‘(A) offers more than 50 percent of such institution’s courses by correspondence (excluding courses offered by telecommunications as defined in 

section 484(l)(4)), unless the institution is an institution that meets the definition in section 3(3)(C) of the Carl D. Perkins Vocational and Technical 

Education Act of 1998; 

‘‘(B) enrolls 50 percent or more of the institution’s students in correspondence courses (excluding courses offered by telecommunications as defined in 

section 484(l)(4)), unless the institution is an institution that meets the definition in section 3(3)(C) of the Carl D. Perkins Vocational and Technical 

Education Act of 1998, except that the Secretary, at the request of the institution, may waive the applicability of this subparagraph to the institution 

for good cause, as determined by the Secretary in the case of an institution 

of higher education that provides a 2- or 4-year program of instruction (or 

both) for which the institution awards an associate or baccalaureate degree, 

respectively; 

‘‘(C) has a student enrollment in which more than 25 percent of the students are incarcerated, except that the Secretary may waive the limitation 

contained in this subparagraph for an institution that provides a 2- or 4- 

year program of instruction (or both) for which the institution awards a 

bachelor’s degree, or an associate’s degree or a postsecondary certificate, respectively; or 

‘‘(D) has a student enrollment in which more than 50 percent of the students either do not meet the requirements of section 484(d)(3) or do not 

have a secondary school diploma or its recognized equivalent, and does not 

provide a 2- or 4-year program of instruction (or both) for which the institution awards an associate’s degree or a bachelor’s degree, respectively, except 

that the Secretary may waive the limitation contained in this subparagraph 

if an institution demonstrates to the satisfaction of the Secretary that the 

institution exceeds such limitation because the institution serves, through 

contracts with Federal, State, or local government agencies, significant 

numbers of students who do not meet the requirements of section 484(d)(3) 

or do not have a secondary school diploma or its recognized equivalent. 

‘‘(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section, the Secretary 

shall publish a list of nationally recognized accrediting agencies or associations that 

the Secretary determines, pursuant to subpart 2 of part H of title IV, to be reliable 

authority as to the quality of the education or training offered. 

‘‘(d) CERTIFICATION.—The Secretary shall certify, for the purposes of participation 

in title IV, an institution’s qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H of title IV. 

6 

‘‘(e) LOSS OF ELIGIBILITY.—An institution of higher education shall not be considered to meet the definition of an institution of higher education in this section for 

the purposes of participation in title IV if such institution is removed from eligibility 

for funds under title IV as a result of an action pursuant to part H of title IV. 

‘‘SEC. 102. INSTITUTIONS OUTSIDE THE UNITED STATES. 

‘‘(a) INSTITUTIONS OUTSIDE THE UNITED STATES.—

‘‘(1) IN GENERAL.—An institution outside the United States shall be considered to be an institution of higher education only for purposes of part B of title 

IV if the institution is comparable to an institution of higher education, as defined in section 101, is legally authorized by the education ministry (or comparable agency) of the country in which the school is located, and has been approved by the Secretary for purposes of that part. The Secretary shall establish 

criteria by regulation for that approval and that determination of comparability. 

An institution may not be so approved or determined to be comparable unless 

such institution is a public or nonprofit institution, except that, subject to paragraph (2)(B), a graduate medical school or veterinary school located outside the 

United States may be a for-profit institution. 

‘‘(2) MEDICAL AND VETERINARY SCHOOL CRITERIA.—In the case of a graduate 

medical or veterinary school outside the United States, such criteria shall include a requirement that a student attending such school outside the United 

States is ineligible for loans made, insured, or guaranteed under part B of title 

IV unless—

‘‘(A) in the case of a graduate medical school located outside the United 

States—

‘‘(i)(I) at least 60 percent of those enrolled in, and at least 60 percent 

of the graduates of, the graduate medical school outside the United 

States were not persons described in section 484(a)(5) in the year preceding the year for which a student is seeking a loan under part B of 

title IV; and 

‘‘(II) at least 60 percent of the individuals who were students or graduates of the graduate medical school outside the United States or Canada (both nationals of the United States and others) taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year 

for which a student is seeking a loan under part B of title IV; or 

‘‘(ii) the institution has a clinical training program that was approved 

by a State as of January 1, 1992; or 

‘‘(B) in the case of a veterinary school located outside the United States 

that is not a public or nonprofit institution, the institution’s students complete their clinical training at an approved veterinary school located in the 

United States. 

‘‘(b) ADVISORY PANEL.—

‘‘(1) IN GENERAL.—For the purpose of qualifying a foreign medical school as 

an institution of higher education only for purposes of part B of title IV, the 

Secretary shall publish qualifying criteria by regulation and establish an advisory panel of medical experts that shall—

‘‘(A) evaluate the standards of accreditation applied to applicant foreign 

medical schools; and 

‘‘(B) determine the comparability of those standards to standards for accreditation applied to United States medical schools. 

‘‘(2) FAILURE TO RELEASE INFORMATION.—The failure of an institution outside 

the United States to provide, release, or authorize release to the Secretary of 

such information as may be required by subsection (a)(2) shall render such institution ineligible for the purpose of part B of title IV.’’. 

(b) RESTRICTIONS ON FUNDS FOR FOR-PROFIT SCHOOLS.—Part B of title I is 

amended by inserting after section 122 (20 U.S.C. 1011k) the following new section: 

‘‘SEC. 123. RESTRICTIONS ON FUNDS FOR FOR-PROFIT SCHOOLS. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of this Act authorizing 

the use of funds by an institution of higher education that receives funds under this 

Act, none of the funds made available under this Act to a for-profit institution of 

higher education may be used for—

‘‘(1) construction, maintenance, renovation, repair, or improvement of classrooms, libraries, laboratories, or other facilities; 

‘‘(2) establishing, improving, or increasing an endowment fund; or 

‘‘(3) establishing or improving an institutional development office to strengthen or improve contributions from alumni and the private sector. 

7 

‘‘(b) EXCEPTION.—Subsection (a) shall not apply to funds received by the institution from the grant, loan, or work assistance that is awarded under title IV to the 

students attending such institution. ‘‘(c) INELIGIBILITY FOR CERTAIN PROGRAMS.—Notwithstanding section 101, a forprofit institution of higher education shall not be considered an eligible institution 

for the programs under titles III and V of this Act.’’. (c) CONFORMING AMENDMENTS.— (1) Section 114(a) (20 U.S.C. 1011c(a)) is amended by striking ‘‘(as defined in 

section 102)’’. (2) Section 435(a)(1) (20 U.S.C. 1085(a)(1)) is amended by striking ‘‘section 

102’’ and inserting ‘‘section 101’’. (3) Subsection (d) of section 484 (20 U.S.C. 1091(d)) is amended by striking 

the designation and heading of such subsection and inserting the following: ‘‘(d) SATISFACTION OF SECONDARY EDUCATION STANDARDS.—’’. (4) Section 486(b)(2) (20 U.S.C. 1093(b)(2)) is amended by striking ‘‘102(a)(3)(A), 102(a)(3)(B)’’ and inserting ‘‘101(b)(4)(A), 101(b)(4)(B)’’. (5) Section 487(c)(1)(A)(iii) (20 U.S.C. 1094(c)(1)(A)(iii)) is amended by striking ‘‘section 102(a)(1)(C)’’ and inserting ‘‘section 102’’. (6) Section 487(d) (20 U.S.C. 1094(d)) is amended by striking ‘‘section 102’’ and inserting ‘‘section 101’’. (7) Subsections (j) and (k) of section 496 (20 U.S.C. 1099b(j), (k)) are each 

amended by striking ‘‘section 102’’ and inserting ‘‘section 101’’. (8) Section 498(g)(3) (20 U.S.C. 1099c(g)(3)) is amended by striking ‘‘section 

102(a)(1)(C)’’ and inserting ‘‘section 102’’. (9) Section 498(i)(1) (20 U.S.C. 1099c(i)(1)) is amended by striking ‘‘section 

102’’ and inserting ‘‘section 101’’. (10) Section 498(j)(1) (20 U.S.C. 1099c) is amended by striking ‘‘except that 

such branch shall not be required to meet the requirements of sections 

102(b)(1)(E) and 102(c)(1)(C) prior to seeking such certification’’ and inserting ‘‘except that such branch shall not be required to be in existence for at least 

2 years prior to seeking such certification’’. (11) Section 498B(b) (20 U.S.C. 1099c–2(b)) is amended by striking ‘‘section 

102(a)(1)(C)’’ and inserting ‘‘section 102’’. (d) EFFECT ON OTHER LAWS.— (1) INCLUSION OF FOR-PROFIT INSTITUTIONS IN DEFINITION.—The inclusion of 

proprietary and for-profit institutions within the definition of the term ‘‘institution of higher education’’’ in section 101 of the Higher Education Act of 1965 

(20 U.S.C. 1001) pursuant to the amendment made by subsection (a) of this section shall not apply to any other provision of law (other than the Higher Education Act of 1965) enacted before the date of enactment of this Act that references section 101 of the Higher Education Act of 1965 (or that term as so defined), except as expressly provided by an amendment to, or other revision of 

the application of, such law enacted after such date of enactment. 

(2) INCLUSION OF FOR-PROFIT INSTITUTIONS AS TITLE III OR V ELIGIBLE INSTITUTION.—Any reference in any provision of law other than the Higher Education 

Act of 1965 to institutions of higher education that are eligible to participate 

in programs under title III or V of such Act (20 U.S.C. 1051 et. seq., 1101 et 

seq.) shall not be treated, as a consequence of the amendment to section 101 

of the Higher Education Act of 1965 (20 U.S.C. 1001) by subsection (a) of this 

section, as including a reference to a for-profit or proprietary institution of higher education, except as expressly provided by an amendment to, or other revision of the application of, such law enacted after such date of enactment. 

SEC. 102. NEW BORROWER DEFINITION. 

Paragraph (7) of section 103 (20 U.S.C. 1003) is amended to read as follows: 

‘‘(7) NEW BORROWER.—The term ‘new borrower’ when used with respect to any 

date for any loan under any provision of—

‘‘(A) part B or part D of title IV means an individual who on that date 

has no outstanding balance of principal or interest owing on any loan made, 

insured, or guaranteed under either of those parts; and 

‘‘(B) part E of title IV means an individual who on that date has no outstanding balance of principal or interest owing on any loan made under 

that part.’’. 

SEC. 103. STUDENT SPEECH AND ASSOCIATION RIGHTS. 

Section 112 (20 U.S.C. 1011a) is amended—

(1) by amending subsection (a) to read as follows: 

‘‘(a) PROTECTION OF RIGHTS.—

‘‘(1) It is the sense of Congress that no student attending an institution of 

higher education on a full- or part-time basis should, on the basis of participaVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00011 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
8 

tion in protected speech or protected association, be excluded from participation 

in, be denied the benefits of, or be subjected to discrimination or official sanction under any education program, activity, or division of the institution directly 

or indirectly receiving financial assistance under this Act, whether or not such 

program, activity, or division is sponsored or officially sanctioned by the institution; and 

‘‘(2) It is the sense of Congress that—

‘‘(A) the diversity of institutions and educational missions is one of the 

key strengths of American higher education; 

‘‘(B) individual colleges and universities have different missions and each 

institution should design its academic program in accordance with its educational goals; 

‘‘(C) within the context of its institutional mission, a college should promote intellectual pluralism and facilitate the free and open exchange of 

ideas; 

‘‘(D) students should not be intimidated, harassed, discouraged from 

speaking out, discriminated against, or subject to official sanction because 

of their personal political, ideological, or religious beliefs; and 

‘‘(E) students should be treated equally and fairly, including evaluation 

and grading, without regard to or consideration of their personal political 

views or ideological beliefs. 

‘‘(3) Nothing in paragraph (2) shall be construed to modify, change, or infringe 

upon any constitutionally protected religious liberty, freedom, expression, or association.’’; and 

(2) in subsection (b)(1), by inserting after ‘‘higher education’’ the following: ‘‘, 

if the imposition of such sanction is done objectively, fairly, and without regard 

to the student’s personal political, ideological, or religious beliefs’’. 

SEC. 104. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND INTEGRITY. 

(a) MEMBERSHIP.—Section 114(b) (20 U.S.C. 1011c(b)) is amended by adding at 

the end the following new sentence: ‘‘A member of the Committee may continue to 

serve after the expiration of a term until a successor has been appointed.’’. 

(b) EXTENSION.—Section 114(g) (20 U.S.C. 1011c(g)) is amended by striking ‘‘2004’’

and inserting ‘‘2012’’. 

SEC. 105. ALCOHOL AND DRUG ABUSE PREVENTION. 

Section 120(e)(5) (20 U.S.C. 1011i(e)(5)) is amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding fiscal years’’ and inserting ‘‘5 succeeding fiscal 

years’’. 

SEC. 106. PRIOR RIGHTS AND OBLIGATIONS. 

Section 121(a) (20 U.S.C. 1011j(a)) is amended by striking ‘‘1999 and for each of 

the 4’’ each place it appears and inserting ‘‘2006 and for each of the 5’’. 

SEC. 107. LIMITATION ON CERTAIN USES OF FUNDS. 

Part B of title I is further amended by adding after section 123 (as added by section 101(b) of this Act) the following new section: 

‘‘SEC. 124. LIMITATION ON CERTAIN USES OF FUNDS. 

‘‘No funds made available to carry out this Act may be used—

‘‘(1) for publicity or propaganda purposes not authorized by the Congress before the date of enactment of the College Access and Opportunity Act of 2005; 

or 

‘‘(2) unless authorized by law in effect on such date of enactment, to produce 

any prepackaged news story intended for broadcast or distribution unless such 

story includes a clear a notification contained within the text or audio of such 

story stating that the prepackaged news story was prepared or funded by the 

Department of Education.’’. 

SEC. 108. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER EDUCATION. 

Section 131 (20 U.S.C. 1015) is amended to read as follows: 

‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER EDUCATION. 

‘‘(a) PURPOSE.—It is the purpose of this section to—

‘‘(1) provide students and families with an easy-to-use, comprehensive webbased tool for researching and comparing institutions of higher education; 

‘‘(2) increase the transparency of college cost, price, and financial aid; and 

‘‘(3) raise public awareness of information available about postsecondary education, particularly among low-income families, non-traditional student populations, and first-generation college students. 

9 

‘‘(b) COLLEGE OPPORTUNITY ON-LINE (COOL) WEBSITE RE-DESIGN PROCESS.—In 

carrying out this section, the Secretary— ‘‘(1) shall identify the data elements that are of greatest importance to prospective students, enrolled students, and their families, paying particular attention to low-income, non-traditional student populations, and first-generation college students; ‘‘(2) shall convene a group of individuals with expertise in the collection and 

reporting of data related to institutions of higher education, the measurement 

of institutional compliance costs, consumer use of data related to institutions of 

higher education, general consumer marketing, and college intervention services 

to— ‘‘(A) determine the relevance of particular data elements to prospective 

students, enrolled students, and families; ‘‘(B) assess the cost-effectiveness of various ways in which institutions of 

higher education might produce the data desired by consumers; ‘‘(C) determine the general comparability of the data across institutions 

of higher education; ‘‘(D) make recommendations regarding the inclusion of specific data items 

and the most effective and least burdensome methods to institutions of 

higher education of collecting and reporting useful data; and ‘‘(3) shall assure that the redesigned COOL website—

‘‘(A) uses, to the extent practicable, data elements currently provided by 

institutions of higher education to the Secretary; 

‘‘(B) includes clear and uniform information determined to be relevant to 

prospective students, enrolled students, and families; 

‘‘(C) provides comparable information, by assuring that data is based on 

accepted criteria and common definitions; 

‘‘(D) includes a sorting function that permits users to customize their 

search for and comparison of institutions of higher education based on the 

information identified through the process as prescribed in paragraph (1) 

as being of greatest relevance to choosing an institution of higher education. 

‘‘(c) DATA COLLECTION.—

‘‘(1) DATA SYSTEM.—The Secretary shall continue to redesign the relevant 

parts of the Integrated Postsecondary Education Data System to include additional data as required by this section and to continue to improve the usefulness 

and timeliness of data collected by such systems in order to inform consumers 

about institutions of higher education. 

‘‘(2) COLLEGE CONSUMER PROFILE.—The Secretary shall publish, for each academic year and in accordance with standard definitions developed by the Commissioner of Education Statistics (including definitions developed under section 

131(a)(3)(A) as in effect on the day before the date of enactment of the College 

Access and Opportunity Act of 2005), from at least all institutions of higher 

education participating in programs under title IV the following information: 

‘‘(A) The tuition and fees charged for a first-time, full-time undergraduate 

student. 

‘‘(B) The room and board charges for such a student. 

‘‘(C) The cost of attendance for a first-time, full-time undergraduate student, consistent with the provisions of section 472. 

‘‘(D) The average amount of financial assistance received by a first-time 

full-time undergraduate student, including—

‘‘(i) each type of assistance or benefits described in 428(a)(2)(C)(ii); 

‘‘(ii) institutional and other assistance; and 

‘‘(iii) Federal loans under parts B, D, and E of title IV. 

‘‘(E) The number of first-time, full-time students receiving financial assistance described in each clause of subparagraph (D). 

‘‘(F) The average net price for first-time, full-time students receiving Federal, State, or institutional grant or loan assistance. 

‘‘(G) The institutional instructional expenditure per full-time equivalent 

student. 

‘‘(H) Student enrollment information, including information on the number and percentage of full-time and part-time students, the number and 

percentage of resident and non-resident students. 

‘‘(I) Faculty/student ratios. 

‘‘(J) Faculty information, including the total number of faculty and the 

percentage of faculty who are full-time employees of the institution and the 

percentage who are part-time. 

‘‘(K) Completion and graduation rates, identifying whether the completion 

or graduation rates are from a 2-year or 4-year program of instruction and, 

in the case of a 2-year program of instruction, the percentage of students 

10 

who transfer to 4-year institutions prior or subsequent to completion or 

graduation. 

‘‘(L) A link to the institution of higher education with information of interest to students including mission, accreditation, student services (including services for students with disabilities), transfer of credit policies and, 

if appropriate, placement rates and other measures of success in preparing 

students for entry into or advancement in the workforce. 

‘‘(M) Any additional information that the Secretary may require. 

‘‘(d) DATA DISSEMINATION.—The Secretary shall make available, at a minimum, 

the data collected pursuant to this section, including an institution’s college affordability index as calculated in accordance with subsection (e). Such data shall be 

made available in a manner that permits the review and comparison of data submissions of individual institutions of higher education. Such data shall be presented 

in a form that is easily accessible and understandable and allows parents and students to make informed decisions based on the prices for typical full-time undergraduate students and the institution’s rate of cost increase. The Secretary shall 

work with public and private entities to promote broad public awareness, particularly among middle and high school students and their families, of the information 

made available under this section, including by distribution to students who participate in or receive benefits from Federally funded education programs and other Federal programs determined by the Secretary. 

‘‘(e) COLLEGE AFFORDABILITY INDEX.—

‘‘(1) IN GENERAL.—The Secretary shall, on the basis of the data submitted 

under subsection (a), calculate a college affordability index for each institution 

of higher education submitting such data and shall make the index available 

in accordance with subsection (d) as soon as operationally possible on the Department’s college opportunity online Web site. Such index shall be presented 

in a manner so that the index for any institution is stated in a column or cell 

immediately adjacent to a column or cell containing the total tuition and fees 

of the institution. 

‘‘(2) CALCULATION OF INDEX.—The college affordability index shall be equal 

to—

‘‘(A) the percentage increase in the tuition and fees charged for a firsttime, full-time, full-year undergraduate student between the first of the 3 

most recent preceding academic years and the last of those 3 academic 

years; divided by 

‘‘(B) the percentage increase in the Consumer Price Index—All Urban 

Consumers (Current Series) from July of the first of those 3 academic years 

to July of the last of those 3 academic years. 

‘‘(f) OUTCOMES AND ACTIONS.—

‘‘(1) RESPONSE FROM INSTITUTION.—Effective on June 30, 2009, an institution 

that has a college affordability index that exceeds 2.0 for any 3-year interval 

ending on or after that date shall provide a report to the Secretary, in such a 

form, at such time, and containing such information as the Secretary may require. Such report shall include—

‘‘(A) an explanation of the factors contributing to the increase in the institution’s costs and in the tuition and fees charged to students; 

‘‘(B) a management plan stating the specific steps the institution is and 

will be taking to reduce its college affordability index; 

‘‘(C) an action plan, including a schedule, by which the institution will reduce increases in or stabilize, such costs and tuition and fees; and 

‘‘(D) if determinations of tuition and fee increases are not within the exclusive control of the institution, a description of the agency or instrumentality of State government or other entity that participates in such determinations and the authority exercised by such agency, instrumentality, or 

entity. 

‘‘(2) INFORMATION TO THE PUBLIC.—Upon receipt of the institution’s report 

and management plan under paragraph (1), the Secretary shall make the institution’s report required under paragraph (1) available to the public in accordance with subsection (b). 

‘‘(3) QUALITY-EFFICIENCY TASK FORCES.—

‘‘(A) REQUIRED.—Each institution subject to paragraph (1) that has a college affordability index that is in the highest 25 percent of such indexes of 

all institutions subject to paragraph (1) shall establish a quality-efficiency 

task force to review the operations of such institution. 

‘‘(B) MEMBERSHIP.—Such task force shall include administrators and 

business and civic leaders and may include faculty, students, trustees, parents of students, and alumni of such institution. 

11 

‘‘(C) FUNCTIONS.—Such task force shall analyze institutional operating 

costs in comparison with such costs at other institutions within the class 

of institutions. Such analysis should identify areas where, in comparison 

with other institutions in such class, the institution operates more expensively to produce a similar result. Any identified areas should then be targeted for in-depth analysis for cost reduction opportunities. 

‘‘(D) REPORT.—The results of the analysis by a quality-efficiency task 

force under this paragraph shall be included in the report to the Secretary 

under paragraph (1). 

‘‘(4) CONSEQUENCES FOR 2-YEAR CONTINUATION OF FAILURE.—If the Secretary 

determines that the institution has failed to comply with the management plan 

and action plan submitted by the institution under this subsection following the 

next 2 academic years that begin after the submission of such plans, and has 

failed to reduce the college affordability index below 2.0 for such 2 academic 

years, the Secretary—

‘‘(A) shall make available to the public a detailed report provided by the 

institution on all costs and expenditures, and on all tuition and fees 

charged to students, for such 2 academic years; 

‘‘(B) shall place the institution on an affordability alert status and shall 

make the information regarding the institution’s failure available in accordance with subsection (d); 

‘‘(C) shall notify the institution’s accrediting agency of the institution’s 

failure; and 

‘‘(D) may require the institution to submit to a review and audit by the 

Inspector General of the Department of Education to determine the cause 

of the institution’s failure. 

‘‘(5) INFORMATION TO STATE AGENCIES.—Any institution that reports under 

paragraph (1)(C) that an agency or instrumentality of State government or 

other entity participates in the determinations of tuition and fee increases shall, 

prior to submitting any information to the Secretary under this subsection, submit such information to, and request the comments and input of, such agency, 

instrumentality, or entity. With respect to any such institution, the Secretary 

shall provide a copy of any communication by the Secretary with that institution to such agency, instrumentality, or entity. 

‘‘(6) EXEMPTIONS.—

‘‘(A) RELATIVE PRICE EXEMPTION.—The Secretary shall, for any 3-year interval for which college affordability indexes are computed under paragraph 

(1), determine and publish the dollar amount that, for each class of institution described in paragraph (7) represents the maximum tuition and fees 

charged for a full-time undergraduate student in the least costly quartile 

of institutions within each such class during the last year of such 3-year 

interval. An institution that has a college affordability index computed 

under paragraph (1) that exceeds 2.0 for any such 3-year interval, but that, 

on average during such 3-year interval, charges less than such maximum 

tuition and fees shall not be subject to the actions required by subparagraph (B) or (C) of paragraph (1), or any action under paragraph (4), unless 

such institution, for a subsequent 3-year interval, charges more than such 

maximum tuition and fees. 

‘‘(B) DOLLAR INCREASE EXEMPTION.—An institution that has a college affordability index computed under paragraph (1) that exceeds 2.0 for any 3- 

year interval, but that exceeds such 2.0 by a dollar amount that is less than 

$500, shall not be subject to the actions required by subparagraph (B) or 

(C) of paragraph (1), or any action under paragraph (4), unless such institution has a college affordability index for a subsequent 3-year interval that 

exceeds 2.0 by more than such dollar amount. 

‘‘(7) CLASSES OF INSTITUTIONS.—For purposes of this subsection, the classes 

of institutions shall be those sectors used by the Integrated Postsecondary Education Data System, based on whether the institution is public, nonprofit private, or for-profit private, and whether the institution has a 4-year, 2-year, or 

less than 2-year program of instruction. 

‘‘(g) FINES.—In addition to actions authorized in section 487(c), the Secretary may 

impose a fine in an amount not to exceed $25,000 on an institution of higher education for failing to provide the information described in this section in a timely and 

accurate manner, or for failing to otherwise cooperate with the National Center for 

Education Statistics regarding efforts to obtain data on the cost and price of higher 

education under this section and pursuant to the program participation agreement 

entered into under section 487. 

‘‘(h) GAO STUDY AND REPORT.—

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‘‘(1) GAO STUDY.—The Comptroller General shall conduct a study of the policies and procedures implemented by institutions in increasing the affordability 

of postsecondary education. Such study shall include information with respect 

to— ‘‘(A) a list of those institutions that— ‘‘(i) have reduced their college affordability indexes; or 

‘‘(ii) are, as determined under subsection (f)(6)(A), within the least 

costly quartile of institutions within each class described in subsection 

(f)(7); ‘‘(B) policies implemented to stem the increase in tuition and fees and institutional costs; 

‘‘(C) the extent to which room and board costs and prices changed; 

‘‘(D) the extent to which other services were altered to affect tuition and 

fees; 

‘‘(E) the extent to which the institution’s policies affected student body demographics and time to completion; 

‘‘(F) what, if any, operational factors played a role in reducing tuition and 

fees; 

‘‘(G) the extent to which academic quality was affected, and how; 

‘‘(H) the extent to which policies and practices reducing costs and prices 

may be replicated from one institution to another; and 

‘‘(I) other information as necessary to determine best practices in increasing the affordability of postsecondary education. 

‘‘(2) INTERIM AND FINAL REPORTS.—The Comptroller General shall submit an 

interim and a final report regarding the findings of the study required by paragraph (1) to the appropriate authorizing committees of Congress. The interim 

report shall be submitted not later than July 31, 2011, and the final report shall 

be submitted not later than July 31, 2013. 

‘‘(i) STUDENT AID RECIPIENT SURVEY.—

‘‘(1) SURVEY REQUIRED.—The Secretary shall conduct a survey of student aid 

recipients under title IV on a regular cycle and State-by-State basis, but not 

less than once every 4 years—

‘‘(A) to identify the population of students receiving Federal student aid; 

‘‘(B) to describe the income distribution and other socioeconomic characteristics of federally aided students; 

‘‘(C) to describe the combinations of aid from State, Federal, and private 

sources received by students from all income groups; 

‘‘(D) to describe the debt burden of educational loan recipients and their 

capacity to repay their education debts, and the impact of such debt burden 

on career choices; 

‘‘(E) to describe the role played by the price of postsecondary education 

in the determination by students of what institution to attend; and 

‘‘(F) to describe how the increased costs of textbooks and other instructional materials affects the costs of postsecondary education to students. 

‘‘(2) SURVEY DESIGN.—The survey shall be representative of full-time and 

part-time, undergraduate, graduate, and professional and current and former 

students in all types of institutions, and designed and administered in consultation with the Congress and the postsecondary education community. 

‘‘(3) DISSEMINATION.—The Secretary shall disseminate the information resulting from the survey in both printed and electronic form. 

‘‘(j) REGULATIONS.—The Secretary is authorized to issue such regulations as may 

be necessary to carry out the provisions of this section.’’. 

SEC. 109. DATABASES OF STUDENT INFORMATION. 

Part C of title I is further amended by adding at the end the following new section: 

‘‘SEC. 132. DATABASES OF STUDENT INFORMATION PROHIBITED. 

‘‘(a) PROHIBITION.—Except as described in (b), nothing in this Act shall be construed to authorize the design, development, creation, implementation, or maintenance of a nationwide database of personally identifiable information on individuals 

receiving assistance, attending institutions receiving assistance, or otherwise involved in any studies or other collections of data under this Act, including a student 

unit record system, an education bar code system, or any other system that tracks 

individual students over time. 

‘‘(b) EXCEPTION.—The provisions of subsection (a) shall not affect the loan obligation enforcement activities described in section 485B of this Act.’’. 

SEC. 110. PERFORMANCE-BASED ORGANIZATION. 

Section 141 (20 U.S.C. 1018) is amended—

13 

(1) in subsection (a)(2)(B)—

(A) by inserting ‘‘unit’’ after ‘‘to reduce the’’; and 

(B) by inserting ‘‘and, to the extent practicable, the total costs of administering those programs’’ after ‘‘those programs’’; 

(2) in subsection (c)—

(A) in paragraph (1)(A), by striking ‘‘Each year’’ and inserting ‘‘Each fiscal 

year’’; 

(B) in paragraph (1)(B), by inserting ‘‘secondary markets, guaranty agencies,’’ after ‘‘lenders,’’; and 

(C) in paragraph (2)(B), by striking ‘‘Chief Financial Officer Act of 1990 

and’’ and inserting ‘‘Chief Financial Officers Act of 1990,’’ and by inserting 

before the period at the end the following: ‘‘, and other relevant statutes’’; 

and 

(3) in subsection (f)(3)(A), by striking ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (1)’’. 

TITLE II—TEACHER PREPARATION 

SEC. 201. TEACHER QUALITY ENHANCEMENT GRANTS. 

Part A of title II (20 U.S.C. 1021 et seq.) is amended to read as follows: 

‘‘PART A—TEACHER QUALITY ENHANCEMENT GRANTS 

FOR STATES AND PARTNERSHIPS 

‘‘SEC. 201. PURPOSES; DEFINITIONS. 

‘‘(a) PURPOSES.—The purposes of this part are to—

‘‘(1) improve student academic achievement; 

‘‘(2) improve the quality of the current and future teaching force by improving 

the preparation of prospective teachers and enhancing professional development 

activities; 

‘‘(3) hold institutions of higher education accountable for preparing highly 

qualified teachers; and 

‘‘(4) recruit qualified individuals, including minorities and individuals from 

other occupations, into the teaching force. 

‘‘(b) DEFINITIONS.—In this part: 

‘‘(1) ARTS AND SCIENCES.—The term ‘arts and sciences’ means—

‘‘(A) when referring to an organizational unit of an institution of higher 

education, any academic unit that offers one or more academic majors in 

disciplines or content areas corresponding to the academic subject matter 

areas in which teachers provide instruction; and 

‘‘(B) when referring to a specific academic subject matter area, the disciplines or content areas in which academic majors are offered by the arts 

and science organizational unit. 

‘‘(2) EXEMPLARY TEACHER.—The term ‘exemplary teacher’ has the meaning 

given such term in section 9101 of the Elementary and Secondary Education 

Act of 1965 (20 U.S.C. 7801). 

‘‘(3) HIGHLY QUALIFIED.—The term ‘highly qualified’ when used with respect 

to an individual means that the individual is highly qualified as determined 

under section 9101 of the Elementary and Secondary Education Act of 1965 (20 

U.S.C. 7801) or section 602 of the Individuals with Disabilities Education Act 

(20 U.S.C. 1401). 

‘‘(4) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term ‘high-need local educational agency’ means a local educational agency—

‘‘(A)(i)(I) that serves not fewer than 10,000 children from families with incomes below the poverty line; or 

‘‘(II) for which not less than 25 percent of the children served by the 

agency are from families with incomes below the poverty line; 

‘‘(ii) that is among those serving the highest number or percentage of children from families with incomes below the poverty line in the State, but 

this clause applies only in a State that has no local educational agency 

meeting the requirements of clause (i); or 

‘‘(iii) with a total of less than 600 students in average daily attendance 

at the schools that are served by the agency and all of whose schools are 

designated with a school locale code of 7, as determined by the Secretary; 

and 

14 

‘‘(B)(i) for which there is a high percentage of teachers not teaching in 

the academic subjects or grade levels that the teachers were trained to 

teach; or 

‘‘(ii) for which there is a high percentage of teachers with emergency, provisional, or temporary certification or licensing. 

‘‘(5) POVERTY LINE.—The term ‘poverty line’ means the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 

9902(2))) applicable to a family of the size involved. 

‘‘(6) PROFESSIONAL DEVELOPMENT.—The term ‘professional development’ has 

the meaning given such term in section 9101 of the Elementary and Secondary 

Education Act of 1965 (20 U.S.C. 7801). 

‘‘(7) SCIENTIFICALLY BASED READING RESEARCH.—The term ‘scientifically based 

reading research’ has the meaning given such term in section 1208 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6368). 

‘‘(8) SCIENTIFICALLY BASED RESEARCH.—The term ‘scientifically based research’ has the meaning given such term in section 9101 of the Elementary and 

Secondary Education Act of 1965 (20 U.S.C. 7801). 

‘‘(9) TEACHING SKILLS.—The term ‘teaching skills’ means skills that—

‘‘(A) are based on scientifically based research; 

‘‘(B) enable teachers to effectively convey and explain subject matter content; 

‘‘(C) lead to increased student academic achievement; and 

‘‘(D) use strategies that—

‘‘(i) are specific to subject matter; 

‘‘(ii) include ongoing assessment of student learning; 

‘‘(iii) focus on identification and tailoring of academic instruction to 

students’s specific learning needs; and 

‘‘(iv) focus on classroom management. 

‘‘SEC. 202. STATE GRANTS. 

‘‘(a) IN GENERAL.—From amounts made available under section 210(1) for a fiscal 

year, the Secretary is authorized to award grants under this section, on a competitive basis, to eligible States to enable the eligible States to carry out the activities 

described in subsection (d). 

‘‘(b) ELIGIBLE STATE.—

‘‘(1) DEFINITION.—In this part, the term ‘eligible State’ means—

‘‘(A) the Governor of a State; or 

‘‘(B) in the case of a State for which the constitution or law of such State 

designates another individual, entity, or agency in the State to be responsible for teacher certification and preparation activity, such individual, entity, or agency. 

‘‘(2) CONSULTATION.—The Governor or the individual, entity, or agency designated under paragraph (1)(B) shall consult with the Governor, State board of 

education, State educational agency, State agency for higher education, or State 

agency responsible for early childhood education and programs, as appropriate, 

with respect to the activities assisted under this section. 

‘‘(3) CONSTRUCTION.—Nothing in this subsection shall be construed to negate 

or supersede the legal authority under State law of any State agency, State entity, or State public official over programs that are under the jurisdiction of the 

agency, entity, or official. 

‘‘(c) APPLICATION.—To be eligible to receive a grant under this section, an eligible 

State shall submit an application to the Secretary that—

‘‘(1) meets the requirement of this section; 

‘‘(2) demonstrates that the State is in full compliance with sections 207 and 

208; 

‘‘(3) includes a description of how the eligible State intends to use funds provided under this section; 

‘‘(4) includes measurable objectives for the use of the funds provided under 

the grant; 

‘‘(5) demonstrates the State has submitted and is actively implementing a 

plan that meets the requirements of sections 1111(h)(1)(C)(viii) and 1119 of the 

Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311(h)(1)(C)(viii) 

and 6319); and 

‘‘(6) contains such other information and assurances as the Secretary may require. 

‘‘(d) USES OF FUNDS.—An eligible State that receives a grant under this section 

shall use the grant funds to reform teacher preparation requirements, to coordinate 

with State activities under section 2113(c) of the Elementary and Secondary EduVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00018 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
15 

cation Act of 1965 (20 U.S.C. 6613(c)), and to ensure that current and future teachers are highly qualified, by carrying out one or more of the following activities: ‘‘(1) REFORMS.—Ensuring that all teacher preparation programs in the State 

are preparing teachers who are highly qualified, are able to understand scientifically based research and its applicability, and are able to use advanced technology effectively in the classroom, including use for instructional techniques to 

improve student academic achievement, by assisting such programs— ‘‘(A) to retrain faculty; and 

‘‘(B) to design (or redesign) teacher preparation programs so they— ‘‘(i) are based on rigorous academic content, scientifically based research (including scientifically based reading research), and challenging 

State student academic content standards; and ‘‘(ii) promote strong teaching skills. ‘‘(2) CERTIFICATION OR LICENSURE REQUIREMENTS.—Reforming teacher certification (including recertification) or licensing requirements to ensure that— ‘‘(A) teachers have the subject matter knowledge and teaching skills in 

the academic subjects that the teachers teach that are necessary to help 

students meet challenging State student academic achievement standards; 

and ‘‘(B) such requirements are aligned with challenging State academic content standards. 

‘‘(3) ALTERNATIVES TO TRADITIONAL TEACHER PREPARATION AND STATE CERTIFICATION.—Providing prospective teachers with alternative routes to State certification and traditional preparation to become highly qualified teachers 

through—

‘‘(A) innovative approaches that reduce unnecessary barriers to State certification while producing highly qualified teachers, which may include articulation agreements between institutions of higher education; 

‘‘(B) programs that provide support to teachers during their initial years 

in the profession; and 

‘‘(C) alternative routes to State certification of teachers for qualified individuals, including mid-career professionals from other occupations, former 

military personnel, and recent college graduates with records of academic 

distinction. 

‘‘(4) INNOVATIVE PROGRAMS.—Planning and implementing innovative programs to enhance the ability of institutions of higher education to prepare highly qualified teachers, such as charter colleges of education or university and 

local educational agency partnership schools, that—

‘‘(A) permit flexibility in meeting State requirements as long as graduates, during their initial years in the profession, increase student academic achievement; 

‘‘(B) provide long-term data gathered from teachers’ performance over 

multiple years in the classroom on the ability to increase student academic 

achievement; 

‘‘(C) ensure high-quality preparation of teachers from underrepresented 

groups; and 

‘‘(D) create performance measures that can be used to document the effectiveness of innovative methods for preparing highly qualified teachers. 

‘‘(5) MERIT PAY.—Developing, or assisting local educational agencies in developing—

‘‘(A) merit-based performance systems that reward teachers who increase 

student academic achievement; and 

‘‘(B) strategies that provide differential and bonus pay in high-need local 

educational agencies to retain—

‘‘(i) principals; 

‘‘(ii) highly qualified teachers who teach in high-need academic subjects, such as reading, mathematics, and science; 

‘‘(iii) highly qualified teachers who teach in schools identified for 

school improvement under section 1116(b) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6316(b)); 

‘‘(iv) special education teachers; 

‘‘(v) teachers specializing in teaching limited English proficient children; and 

‘‘(vi) highly qualified teachers in urban and rural schools or districts. 

‘‘(6) TEACHER ADVANCEMENT.—Developing, or assisting local educational agencies in developing, teacher advancement and retention initiatives that promote 

professional growth and emphasize multiple career paths (such as paths to becoming a highly qualified mentor teacher or exemplary teacher) and pay differentiation. 

16 

‘‘(7) TEACHER REMOVAL.—Developing and implementing effective mechanisms 

to ensure that local educational agencies and schools are able to remove expeditiously incompetent or unqualified teachers consistent with procedures to ensure due process for the teachers. ‘‘(8) TECHNICAL ASSISTANCE.—Providing technical assistance to low-performing teacher preparation programs within institutions of higher education 

identified under section 208(a). ‘‘(9) TEACHER EFFECTIVENESS.—Developing— ‘‘(A) systems to measure the effectiveness of teacher preparation programs and professional development programs; and ‘‘(B) strategies to document gains in student academic achievement or increases in teacher mastery of the academic subjects the teachers teach as 

a result of such programs. ‘‘(10) TEACHER RECRUITMENT AND RETENTION.—Undertaking activities that— ‘‘(A) develop and implement effective mechanisms to ensure that local 

educational agencies and schools are able effectively to recruit and retain 

highly qualified teachers; or ‘‘(B) are described in section 204(d). ‘‘(11) EARLY CHILDHOOD EDUCATOR.—Developing strategies— ‘‘(A) to improve the qualifications of preschool teachers, which may include State certification for such teachers; 

‘‘(B) to improve and expand preschool teacher preparation programs; and 

‘‘(C) to reduce unnecessary burdens to the attainment of a bachelor’s degree in early childhood education and increase the number of bilingual 

early childhood educators, which may include developing articulation agreements between institutions of higher education. 

‘‘(12) GIFTED AND TALENTED STUDENTS.—Incorporating the learning needs of 

gifted and talented students into the activities described in paragraph (1), (2), 

or (3) in order to ensure that new teachers possess the basic knowledge and 

skills necessary to meet the educational needs of gifted and talented students. 

‘‘(13) NEW-TEACHER MENTORING ON THE NEEDS OF GIFTED AND TALENTED STU- DENTS.— Establishing or expanding new-teacher mentoring and assessment 

programs (including induction and evaluation programs) that are a part of a licensure process which is designed to demonstrate that new teachers possess 

basic knowledge of the classroom indicators of giftedness, are able to identify 

student learning differences among gifted students, and are able to provide instruction to accommodate such differences. 

‘‘(14) SPECIAL EDUCATION, MATH, AND SCIENCE FACULTY.—Supporting the development of new special education, math, and science faculty positions in institutions of higher education dedicated to the preparation of highly qualified special education, math, and science teachers (as defined by section 9101 of the Elementary and Secondary Education Act or section 602 of the Individuals with 

Disabilities Education Act), with matching funds from institutions of higher 

education and a commitment to continue new faculty positions when Federal 

funding ends. 

‘‘(15) SUBJECT AREA EVALUATION.—Assessing the performance of teacher preparation programs within institutions of higher education in the State using an 

assessment which provides comparisons across such schools in the State based 

upon indicators including teacher candidate knowledge in subject areas in 

which such candidate has been prepared to teach. Such information shall be 

made publicly available and widely disseminated. 

‘‘(e) EVALUATION.—

‘‘(1) EVALUATION SYSTEM.—An eligible State that receives a grant under this 

section shall develop and utilize a system to evaluate annually the effectiveness 

of teacher preparation programs and professional development activities within 

the State in producing gains in—

‘‘(A) the teacher’s annual contribution to improving student academic 

achievement, as measured by State academic assessments required under 

section 1111(b)(3) of the Elementary and Secondary Education Act of 1965 

(20 U.S.C. 6311(b)(3)); and 

‘‘(B) teacher mastery of the academic subjects they teach, as measured by 

pre- and post-participation tests of teacher knowledge, as appropriate. 

‘‘(2) USE OF EVALUATION SYSTEM.—Such evaluation system shall be used by 

the State to evaluate—

‘‘(A) activities carried out using funds provided under this section; and 

‘‘(B) the quality of its teacher education programs. 

‘‘(3) PUBLIC REPORTING.—The State shall make the information described in 

paragraph (1) widely available through public means, such as posting on the 

Internet, distribution to the media, and distribution through public agencies. 

17 

‘‘SEC. 203. PARTNERSHIP GRANTS. 

‘‘(a) GRANTS.—From amounts made available under section 210(2) for a fiscal 

year, the Secretary is authorized to award grants under this section, on a competitive basis, to eligible partnerships to enable the eligible partnerships to carry out 

the activities described in subsections (d) and (e). ‘‘(b) DEFINITIONS.— ‘‘(1) ELIGIBLE PARTNERSHIPS.—In this part, the term ‘eligible partnership’ means an entity that— ‘‘(A) shall include— ‘‘(i) a partner institution; 

‘‘(ii) a school of arts and sciences; 

‘‘(iii) a high-need local educational agency; and 

‘‘(iv) a public or private educational organization; and ‘‘(B) may include a Governor, State educational agency, the State board 

of education, the State agency for higher education, an institution of higher 

education not described in subparagraph (A), a public charter school, a public or private elementary school or secondary school, a public or private educational organization, a business, a science-, mathematics-, or technologyoriented entity, a faith-based or community organization, a prekindergarten 

program, a teacher organization, an education service agency, a consortia 

of local educational agencies, or a nonprofit telecommunications entity. 

‘‘(2) PARTNER INSTITUTION.—In this section, the term ‘partner institution’

means an institution of higher education, the teacher training program of which 

demonstrates that—

‘‘(A) graduates from the teacher training program exhibit strong performance on State-determined qualifying assessments for new teachers 

through—

‘‘(i) demonstrating that the graduates of the program who intend to 

enter the field of teaching have passed all of the applicable State qualification assessments for new teachers, which shall include an assessment of each prospective teacher’s subject matter knowledge in the content area or areas in which the teacher intends to teach; or 

‘‘(ii) being ranked among the highest-performing teacher preparation 

programs in the State as determined by the State—

‘‘(I) using criteria consistent with the requirements for the State 

report card under section 207(a); and 

‘‘(II) using the State report card on teacher preparation required 

under section 207(a); or 

‘‘(B) the teacher training program requires all the students of the program to participate in intensive clinical experience, to meet high academic 

standards, and—

‘‘(i) in the case of secondary school candidates, to successfully complete an academic major in the subject area in which the candidate intends to teach or to demonstrate competence through a high level of 

performance in relevant content areas; and 

‘‘(ii) in the case of elementary school candidates, to successfully complete an academic major in the arts and sciences or to demonstrate 

competence through a high level of performance in core academic subject areas. 

‘‘(c) APPLICATION.—Each eligible partnership desiring a grant under this section 

shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require. Each such application 

shall—

‘‘(1) contain a needs assessment of all the partners with respect to teaching 

and learning and a description of how the partnership will coordinate with 

other teacher training or professional development programs, and how the activities of the partnership will be consistent with State, local, and other education reform activities that promote student academic achievement; 

‘‘(2) contain a resource assessment that describes the resources available to 

the partnership, the intended use of the grant funds, including a description of 

how the grant funds will be used in accordance with subsection (f), and the commitment of the resources of the partnership to the activities assisted under this 

part, including financial support, faculty participation, time commitments, and 

continuation of the activities when the grant ends; 

‘‘(3) contain a description of—

‘‘(A) how the partnership will meet the purposes of this part; 

‘‘(B) how the partnership will carry out the activities required under subsection (d) and any permissible activities under subsection (e); 

‘‘(C) the partnership’s evaluation plan pursuant to section 206(b); 

18 

‘‘(D) how faculty of the teacher preparation program at the partner institution will serve, over the term of the grant, with highly qualified teachers 

in the classrooms of the high-need local educational agency included in the 

partnership; 

‘‘(E) how the partnership will ensure that teachers, principals, and superintendents in private elementary and secondary schools located in the geographic areas served by an eligible partnership under this section will participate equitably in accordance with section 9501 of the Elementary and 

Secondary Education Act of 1965 (20 U.S.C. 7881); 

‘‘(F) how the partnership will design and implement a clinical program 

component that includes close supervision of student teachers by faculty of 

the teacher preparation program at the partner institution and mentor 

teachers; 

‘‘(G) how the partnership will design and implement an induction program to support all new teachers through the first 3 years of teaching that 

includes mentors who are trained and compensated by the partnership for 

their work with new teachers; and 

‘‘(H) how the partnership will collect, analyze, and use data on the retention of all teachers in schools located in the geographic areas served by the 

partnership to evaluate the effectiveness of its teacher support system; and 

‘‘(4) contain a certification from the high-need local educational agency included in the partnership that it has reviewed the application and determined 

that the grant proposed will comply with subsection (f). 

‘‘(d) REQUIRED USES OF FUNDS.—An eligible partnership that receives a grant 

under this section shall use the grant funds to reform teacher preparation requirements, to coordinate with State activities under section 2113(c) of the Elementary 

and Secondary Education Act of 1965 (20 U.S.C. 6613(c)), and to ensure that current 

and future teachers are highly qualified, by carrying out one or more of the following activities: 

‘‘(1) REFORMS.—Implementing reforms within teacher preparation programs 

to ensure that such programs are preparing teachers who are highly qualified, 

are able to understand scientifically based research and its applicability, and 

are able to use advanced technology effectively in the classroom, including use 

for instructional techniques to improve student academic achievement, by—

‘‘(A) retraining faculty; and 

‘‘(B) designing (or redesigning) teacher preparation programs so they—

‘‘(i) are based on rigorous academic content, scientifically based research (including scientifically based reading research), and challenging 

State student academic content standards; and 

‘‘(ii) promote strong teaching skills. 

‘‘(2) CLINICAL EXPERIENCE AND INTERACTION.—Providing sustained and highquality preservice and in-service clinical experience, including the mentoring of 

prospective teachers by exemplary teachers, substantially increasing interaction 

between faculty at institutions of higher education and new and experienced 

teachers, principals, and other administrators at elementary schools or secondary schools, and providing support for teachers, including preparation time 

and release time, for such interaction. 

‘‘(3) PROFESSIONAL DEVELOPMENT.—Creating opportunities for enhanced and 

ongoing professional development that improves the academic content knowledge of teachers in the subject areas in which the teachers are certified to teach 

or in which the teachers are working toward certification to teach, and that promotes strong teaching skills. 

‘‘(4) TEACHER PREPARATION.—Developing, or assisting local educational agencies in developing, professional development activities that—

‘‘(A) provide training in how to teach and address the needs of students 

with different learning styles, particularly students with disabilities, limited English proficient students, gifted and talented students, and students 

with special learning needs; and 

‘‘(B) provide training in methods of—

‘‘(i) improving student behavior in the classroom; and 

‘‘(ii) identifying early and appropriate interventions to help students 

described in subparagraph (A) learn. 

‘‘(e) ALLOWABLE USES OF FUNDS.—An eligible partnership that receives a grant 

under this section may use such funds to carry out the following activities: 

‘‘(1) ALTERNATIVES TO TRADITIONAL TEACHER PREPARATION AND STATE CERTIFICATION.—Providing prospective teachers with alternative routes to State certification and traditional preparation to become highly qualified teachers 

through—

19 

‘‘(A) innovative approaches that reduce unnecessary barriers to teacher 

preparation producing highly qualified teachers, which may include articulation agreements between institutions of higher education; ‘‘(B) programs that provide support during a teacher’s initial years in the 

profession; and ‘‘(C) alternative routes to State certification of teachers for qualified individuals, including mid-career professionals from other occupations, former 

military personnel, and recent college graduates with records of academic 

distinction. ‘‘(2) DISSEMINATION AND COORDINATION.—Broadly disseminating information 

on effective practices used by the partnership, and coordinating with the activities of the Governor, State board of education, State higher education agency, 

and State educational agency, as appropriate. ‘‘(3) MANAGERIAL AND LEADERSHIP SKILLS.—Developing and implementing 

professional development programs for principals and superintendents that enable them to be effective school leaders and prepare all students to meet challenging State academic content and student academic achievement standards. ‘‘(4) TEACHER RECRUITMENT.—Activities— ‘‘(A) to encourage students to become highly qualified teachers, such as 

extracurricular enrichment activities; and ‘‘(B) activities described in section 204(d). 

‘‘(5) CLINICAL EXPERIENCE IN SCIENCE, MATHEMATICS, AND TECHNOLOGY.—Creating opportunities for clinical experience and training, by participation in the 

business, research, and work environments with professionals, in areas relating 

to science, mathematics, and technology for teachers and prospective teachers, 

including opportunities for use of laboratory equipment, in order for the teacher 

to return to the classroom for at least 2 years and provide instruction that will 

raise student academic achievement. 

‘‘(6) COORDINATION WITH COMMUNITY COLLEGES.—Coordinating with community colleges to implement teacher preparation programs, including through distance learning or articulation agreements, for the purposes of allowing prospective teachers—

‘‘(A) to attain a bachelor’s degree and State certification or licensure; and 

‘‘(B) to become highly qualified teachers. 

‘‘(7) TEACHER MENTORING.—Establishing or implementing a teacher mentoring program that—

‘‘(A) includes minimum qualifications for mentors; 

‘‘(B) provides training and stipends for mentors; 

‘‘(C) provides mentoring programs for teachers in their first 3 years of 

teaching; 

‘‘(D) provides regular and ongoing opportunities for mentors and mentees 

to observe each other’s teaching methods in classroom settings during the 

school day; 

‘‘(E) establishes an evaluation and accountability plan for activities conducted under this paragraph that includes rigorous objectives to measure 

the impact of such activities; and 

‘‘(F) provides for a report to the Secretary on an annual basis regarding 

the partnership’s progress in meeting the objectives described in subparagraph (E). 

‘‘(8) COMPUTER SOFTWARE FOR MULTILINGUAL EDUCATION.—Training teachers 

to use computer software for multilingual education to address the needs of limited English proficient students. 

‘‘(9) GIFTED AND TALENTED STUDENTS.—Increasing the knowledge and skills 

of preservice teachers participating in activities under subsection (d) in the educational and related needs of gifted and talented students by, among other 

strategies, infusing teacher coursework with units on the characteristics of highability learners, using assessments to identify preexisting knowledge and skills 

among students, and developing teaching strategies that are driven by the 

learner’s progress. 

‘‘(10) REDUCING THE SHORTAGE OF HIGHLY QUALIFIED SPECIAL EDUCATION, 

MATH, AND SCIENCE TEACHERS.—Increasing the number of highly qualified special education, math, and science teachers (as defined by section 9101 of the Elementary and Secondary Education Act or section 602 of the Individuals with 

Disabilities Education Act) through such activities as recruitment, scholarships 

for tuition, and new teacher mentoring. 

‘‘(f) SPECIAL RULE.—At least 50 percent of the funds made available to an eligible 

partnership under this section shall be used directly to benefit the high-need local 

educational agency included in the partnership. Any entity described in subsection 

(b)(1)(A) may be the fiscal agent under this section. 

20 

‘‘(g) CONSTRUCTION.—Nothing in this section shall be construed to prohibit an eligible partnership from using grant funds to coordinate with the activities of more 

than one Governor, State board of education, State educational agency, local educational agency, or State agency for higher education. 

‘‘(h) SUPPLEMENT, NOT SUPPLANT.—Funds made available under this section shall 

be used to supplement, and not supplant, other Federal, State, and local funds that 

would otherwise be expended to carry out the purposes of this section. 

‘‘SEC. 204. TEACHER RECRUITMENT GRANTS. 

‘‘(a) PROGRAM AUTHORIZED.—From amounts made available under section 210(3) 

for a fiscal year, the Secretary is authorized to award grants, on a competitive basis, 

to eligible applicants to enable the eligible applicants to carry out activities described in subsection (d). 

‘‘(b) ELIGIBLE APPLICANT DEFINED.—In this part, the term ‘eligible applicant’

means—

‘‘(1) an eligible State described in section 202(b); or 

‘‘(2) an eligible partnership described in section 203(b). 

‘‘(c) APPLICATION.—Any eligible applicant desiring to receive a grant under this 

section shall submit an application to the Secretary at such time, in such form, and 

containing such information as the Secretary may require, including—

‘‘(1) a description of the assessment that the eligible applicant, and the other 

entities with whom the eligible applicant will carry out the grant activities, 

have undertaken to determine the most critical needs of the participating highneed local educational agencies; 

‘‘(2) a description of the activities the eligible applicant will carry out with the 

grant, including the extent to which the applicant will use funds to recruit minority students to become highly qualified teachers; and 

‘‘(3) a description of the eligible applicant’s plan for continuing the activities 

carried out with the grant, once Federal funding ceases. 

‘‘(d) USES OF FUNDS.—Each eligible applicant receiving a grant under this section 

shall use the grant funds—

‘‘(1)(A) to award scholarships to help students, such as individuals who have 

been accepted for their first year, or who are enrolled in their first or second 

year, of a program of undergraduate education at an institution of higher education, pay the costs of tuition, room, board, and other expenses of completing 

a teacher preparation program; 

‘‘(B) to provide support services, if needed to enable scholarship recipients—

‘‘(i) to complete postsecondary education programs; or 

‘‘(ii) to transition from a career outside of the field of education into a 

teaching career; and 

‘‘(C) for followup services provided to former scholarship recipients during the 

recipients first 3 years of teaching; or 

‘‘(2) to develop and implement effective mechanisms to ensure that high-need 

local educational agencies and schools are able effectively to recruit highly 

qualified teachers. 

‘‘(e) ADDITIONAL DISCRETIONARY USES OF FUNDS.—In addition to the uses described in subsection (d), each eligible applicant receiving a grant under this section 

may use the grant funds—

‘‘(1) to develop and implement effective mechanisms to recruit into the teaching profession employees from—

‘‘(A) high-demand industries, including technology industries; and 

‘‘(B) the fields of science, mathematics, and engineering; 

‘‘(2) to conduct outreach and coordinate with inner city and rural secondary 

schools to encourage students to pursue teaching as a career; 

‘‘(3) to develop and implement dual degree programs that enable students at 

institutions of higher education to earn two undergraduate degrees concurrently, one of such degrees being in education and the other in the subject matter of the student’s choosing; and 

‘‘(4) to recruit high achieving students, bilingual students, and other qualified 

candidates into early childhood education programs. 

‘‘(f) SERVICE REQUIREMENTS.—

‘‘(1) IN GENERAL.—The Secretary shall establish such requirements as the 

Secretary determines necessary to ensure that recipients of scholarships under 

this section who complete teacher education programs—

‘‘(A) subsequently teach in a high-need local educational agency for a period of time equivalent to—

‘‘(i) one year; increased by 

‘‘(ii) the period for which the recipient received scholarship assistance; or 

21 

‘‘(B) repay the amount of the scholarship. 

‘‘(2) USE OF REPAYMENTS.—The Secretary shall use any such repayments to 

carry out additional activities under this section. 

‘‘(g) PRIORITY.—The Secretary shall give priority under this section to eligible applicants who provide an assurance that they will recruit a high percentage of minority students to become highly qualified teachers. 

‘‘SEC. 205. ADMINISTRATIVE PROVISIONS. 

‘‘(a) DURATION; ONE-TIME AWARDS; PAYMENTS.—

‘‘(1) DURATION.—

‘‘(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—Grants awarded to eligible States and eligible applicants under this part shall be awarded for a 

period not to exceed 3 years. 

‘‘(B) ELIGIBLE PARTNERSHIPS.—Grants awarded to eligible partnerships 

under this part shall be awarded for a period of 5 years. 

‘‘(2) ONE-TIME AWARD.—An eligible partnership may receive a grant under 

each of sections 203 and 204, as amended by the College Access and Opportunity Act of 2005, only once. 

‘‘(3) PAYMENTS.—The Secretary shall make annual payments of grant funds 

awarded under this part. 

‘‘(b) PEER REVIEW.—

‘‘(1) PANEL.—The Secretary shall provide the applications submitted under 

this part to a peer review panel for evaluation. With respect to each application, 

the peer review panel shall initially recommend the application for funding or 

for disapproval. 

‘‘(2) PRIORITY.—In recommending applications to the Secretary for funding 

under this part, the panel shall—

‘‘(A) with respect to grants under section 202, give priority to eligible 

States that—

‘‘(i) have initiatives to reform State teacher certification requirements 

that are based on rigorous academic content, scientifically based research, including scientifically based reading research, and challenging 

State student academic content standards; 

‘‘(ii) have innovative reforms to hold institutions of higher education 

with teacher preparation programs accountable for preparing teachers 

who are highly qualified and have strong teaching skills; or 

‘‘(iii) have innovative efforts aimed at reducing the shortage of highly 

qualified teachers in high poverty urban and rural areas; and 

‘‘(B) with respect to grants under section 203—

‘‘(i) give priority to applications from broad-based eligible partnerships that involve businesses and community organizations; and 

‘‘(ii) take into consideration—

‘‘(I) providing an equitable geographic distribution of the grants 

throughout the United States; and 

‘‘(II) the potential of the proposed activities for creating improvement and positive change. 

‘‘(3) SECRETARIAL SELECTION.—The Secretary shall determine, based on the 

peer review process, which application shall receive funding and the amounts 

of the grants. In determining grant amounts, the Secretary shall take into account the total amount of funds available for all grants under this part and the 

types of activities proposed to be carried out. 

‘‘(c) MATCHING REQUIREMENTS.—

‘‘(1) STATE GRANTS.—Each eligible State receiving a grant under section 202 

or 204 shall provide, from non-Federal sources, an amount equal to 50 percent 

of the amount of the grant (in cash or in kind) to carry out the activities supported by the grant. 

‘‘(2) PARTNERSHIP GRANTS.—Each eligible partnership receiving a grant under 

section 203 or 204 shall provide, from non-Federal sources (in cash or in kind), 

an amount equal to 25 percent of the grant for the first year of the grant, 35 

percent of the grant for the second year of the grant, and 50 percent of the 

grant for each succeeding year of the grant. 

‘‘(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible State or eligible partnership that receives a grant under this part may not use more than 2 percent of 

the grant funds for purposes of administering the grant. 

‘‘SEC. 206. ACCOUNTABILITY AND EVALUATION. 

‘‘(a) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State that receives a 

grant under section 202 shall submit an annual accountability report to the Secretary and the authorizing committees. Such report shall include a description of 

22 

the degree to which the eligible State, in using funds provided under such section, 

has made substantial progress in meeting the following goals: 

‘‘(1) PERCENTAGE OF HIGHLY QUALIFIED TEACHERS.—Increasing the percentage 

of highly qualified teachers in the State as required by section 1119 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319) and section 602 

of the Individuals with Disabilities Act (20 U.S.C. 1401). 

‘‘(2) STUDENT ACADEMIC ACHIEVEMENT.—Increasing student academic achievement for all students, which may be measured through the use of value-added 

assessments, as defined by the eligible State. 

‘‘(3) RAISING STANDARDS.—Raising the State academic standards required to 

enter the teaching profession as a highly qualified teacher. 

‘‘(4) INITIAL CERTIFICATION OR LICENSURE.—Increasing success in the pass 

rate for initial State teacher certification or licensure, or increasing the numbers of qualified individuals being certified or licensed as teachers through alternative routes to certification and licensure. 

‘‘(5) DECREASING TEACHER SHORTAGES.—Decreasing shortages of highly qualified teachers in poor urban and rural areas. 

‘‘(6) INCREASING OPPORTUNITIES FOR RESEARCH-BASED PROFESSIONAL DEVELOPMENT.—Increasing opportunities for enhanced and ongoing professional development that—

‘‘(A) improves the academic content knowledge of teachers in the subject 

areas in which the teachers are certified or licensed to teach or in which 

the teachers are working toward certification or licensure to teach; and 

‘‘(B) promotes strong teaching skills. 

‘‘(7) TECHNOLOGY INTEGRATION.—Increasing the number of teachers prepared 

effectively to integrate technology into curricula and instruction and who use 

technology to collect, manage, and analyze data to improve teaching, learning, 

decisionmaking, and parental involvement for the purpose of increasing student 

academic achievement. 

‘‘(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each eligible partnership applying for 

a grant under section 203 shall establish, and include in the application submitted 

under section 203(c), an evaluation plan that includes strong performance objectives. 

The plan shall include objectives and measures for—

‘‘(1) increased student achievement for all students, as measured by the partnership; 

‘‘(2) increased teacher retention in the first 3 years of a teacher’s career; 

‘‘(3) increased success in the pass rate for initial State certification or licensure of teachers; 

‘‘(4) increased percentage of highly qualified teachers; and 

‘‘(5) increasing the number of teachers trained effectively to integrate technology into curricula and instruction and who use technology to collect, manage, 

and analyze data to improve teaching, learning, and decisionmaking for the purpose of improving student academic achievement. 

‘‘(c) REVOCATION OF GRANT.—

‘‘(1) REPORT.—Each eligible State or eligible partnership receiving a grant 

under section 202 or 203 shall report annually on the progress of the eligible 

State or eligible partnership toward meeting the purposes of this part and the 

goals, objectives, and measures described in subsections (a) and (b). 

‘‘(2) REVOCATION.—

‘‘(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—If the Secretary determines that an eligible State or eligible applicant is not making substantial 

progress in meeting the purposes, goals, objectives, and measures, as appropriate, by the end of the second year of a grant under this part, then the 

grant payment shall not be made for the third year of the grant. 

‘‘(B) ELIGIBLE PARTNERSHIPS.—If the Secretary determines that an eligible partnership is not making substantial progress in meeting the purposes, 

goals, objectives, and measures, as appropriate, by the end of the third year 

of a grant under this part, then the grant payments shall not be made for 

any succeeding year of the grant. 

‘‘(d) EVALUATION AND DISSEMINATION.—The Secretary shall evaluate the activities 

funded under this part and report annually the Secretary’s findings regarding the 

activities to the authorizing committees. The Secretary shall broadly disseminate 

successful practices developed by eligible States and eligible partnerships under this 

part, and shall broadly disseminate information regarding such practices that were 

found to be ineffective. 

‘‘SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS. 

‘‘(a) STATE REPORT CARD ON THE QUALITY OF TEACHER PREPARATION.—Each State 

that receives funds under this Act shall provide to the Secretary annually, in a uniVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00026 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
23 

form and comprehensible manner that conforms with the definitions and methods 

established by the Secretary, a State report card on the quality of teacher preparation in the State, both for traditional certification or licensure programs and for alternative certification or licensure programs, which shall include at least the following: 

‘‘(1) A description of the teacher certification and licensure assessments, and 

any other certification and licensure requirements, used by the State. 

‘‘(2) The standards and criteria that prospective teachers must meet in order 

to attain initial teacher certification or licensure and to be certified or licensed 

to teach particular subjects or in particular grades within the State. 

‘‘(3) A description of the extent to which the assessments and requirements 

described in paragraph (1) are aligned with the State’s standards and assessments for students. 

‘‘(4) The percentage of students who have completed at least 50 percent of the 

requirements for a teacher preparation program at an institution of higher education or alternative certification program and who have taken and passed each 

of the assessments used by the State for teacher certification and licensure, and 

the passing score on each assessment that determines whether a candidate has 

passed that assessment. 

‘‘(5) For students who have completed at least 50 percent of the requirements 

for a teacher preparation program at an institution of higher education or alternative certification program, and who have taken and passed each of the assessments used by the State for teacher certification and licensure, each such institution’s and each such program’s average raw score, ranked by teacher preparation program, which shall be made available widely and publicly. 

‘‘(6) A description of each State’s alternative routes to teacher certification, if 

any, and the number and percentage of teachers certified through each alternative certification route who pass State teacher certification or licensure assessments. 

‘‘(7) For each State, a description of proposed criteria for assessing the performance of teacher preparation programs in the State, including indicators of 

teacher candidate skills, academic content knowledge, and evidence of gains in 

student academic achievement. 

‘‘(8) For each teacher preparation program in the State, the number of students in the program, the number of minority students in the program, the average number of hours of supervised practice teaching required for those in the 

program, and the number of full-time equivalent faculty and students in supervised practice teaching. 

‘‘(b) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER PREPARATION.—

‘‘(1) REPORT CARD.—The Secretary shall provide to Congress, and publish and 

make widely available, a report card on teacher qualifications and preparation 

in the United States, including all the information reported in paragraphs (1) 

through (8) of subsection (a). Such report shall identify which eligible States received a grant under this part, and the States in which eligible partnerships 

receiving grants are located. Such report shall be published and made available 

annually. 

‘‘(2) REPORT TO CONGRESS.—The Secretary shall report to Congress—

‘‘(A) a comparison of States’ efforts to improve teaching quality; and 

‘‘(B) regarding the national mean and median scores on any standardized 

test that is used in more than one State for teacher certification or licensure. 

‘‘(3) SPECIAL RULE.—In the case of programs with fewer than 10 students who 

have completed at least 50 percent of the requirements for a teacher preparation program taking any single initial teacher certification or licensure assessment during an academic year, the Secretary shall collect and publish information with respect to an average pass rate on State certification or licensure assessments taken over a 3-year period. 

‘‘(c) COORDINATION.—The Secretary, to the extent practicable, shall coordinate the 

information collected and published under this part among States for individuals 

who took State teacher certification or licensure assessments in a State other than 

the State in which the individual received the individual’s most recent degree. 

‘‘(d) INSTITUTION AND PROGRAM REPORT CARDS ON QUALITY OF TEACHER PREPARATION.—

‘‘(1) REPORT CARD.—Each institution of higher education or alternative certification program that conducts a teacher preparation program that enrolls students receiving Federal assistance under this Act shall report annually to the 

State and the general public, in a uniform and comprehensible manner that 

conforms with the definitions and methods established by the Secretary, both 

24 

for traditional certification or licensure programs and for alternative certification or licensure programs, the following information: 

‘‘(A) PASS RATE.—(i) For the most recent year for which the information 

is available, the pass rate of each student who has completed at least 50 

percent of the requirements for the teacher preparation program on the 

teacher certification or licensure assessments of the State in which the institution is located, but only for those students who took those assessments 

within 3 years of receiving a degree from the institution or completing the 

program. 

‘‘(ii) A comparison of the institution or program’s pass rate for students 

who have completed at least 50 percent of the requirements for the teacher 

preparation program with the average pass rate for institutions and programs in the State. 

‘‘(iii) A comparison of the institution or program’s average raw score for 

students who have completed at least 50 percent of the requirements for 

the teacher preparation program with the average raw scores for institutions and programs in the State. 

‘‘(iv) In the case of programs with fewer than 10 students who have completed at least 50 percent of the requirements for a teacher preparation program taking any single initial teacher certification or licensure assessment 

during an academic year, the institution shall collect and publish information with respect to an average pass rate on State certification or licensure 

assessments taken over a 3-year period. 

‘‘(B) PROGRAM INFORMATION.—The number of students in the program, 

the average number of hours of supervised practice teaching required for 

those in the program, and the number of full-time equivalent faculty and 

students in supervised practice teaching. 

‘‘(C) STATEMENT.—In States that require approval or accreditation of 

teacher education programs, a statement of whether the institution’s program is so approved or accredited, and by whom. 

‘‘(D) DESIGNATION AS LOW-PERFORMING.—Whether the program has been 

designated as low-performing by the State under section 208(a). 

‘‘(2) REQUIREMENT.—The information described in paragraph (1) shall be reported through publications such as school catalogs and promotional materials 

sent to potential applicants, secondary school guidance counselors, and prospective employers of the institution’s program graduates, including materials sent 

by electronic means. 

‘‘(3) FINES.—In addition to the actions authorized in section 487(c), the Secretary may impose a fine not to exceed $25,000 on an institution of higher education for failure to provide the information described in this subsection in a 

timely or accurate manner. 

‘‘(e) DATA QUALITY.—Either—

‘‘(1) the Governor of the State; or 

‘‘(2) in the case of a State for which the constitution or law of such State designates another individual, entity, or agency in the State to be responsible for 

teacher certification and preparation activity, such individual, entity, or agency; 

shall attest annually, in writing, as to the reliability, validity, integrity, and accuracy of the data submitted pursuant to this section. 

‘‘SEC. 208. STATE FUNCTIONS. 

‘‘(a) STATE ASSESSMENT.—In order to receive funds under this Act, a State shall 

have in place a procedure to identify and assist, through the provision of technical 

assistance, low-performing programs of teacher preparation within institutions of 

higher education. Such State shall provide the Secretary an annual list of such lowperforming institutions that includes an identification of those institutions at risk 

of being placed on such list. Such levels of performance shall be determined solely 

by the State and may include criteria based upon information collected pursuant to 

this part. Such assessment shall be described in the report under section 207(a). A 

State receiving Federal funds under this title shall develop plans to close or reconstitute underperforming programs of teacher preparation within institutions of higher education. 

‘‘(b) TERMINATION OF ELIGIBILITY.—Any institution of higher education that offers 

a program of teacher preparation in which the State has withdrawn the State’s approval or terminated the State’s financial support due to the low performance of the 

institution’s teacher preparation program based upon the State assessment described in subsection (a)—

‘‘(1) shall be ineligible for any funding for professional development activities 

awarded by the Department of Education; and 

25 

‘‘(2) shall not be permitted to accept or enroll any student who receives aid 

under title IV of this Act in the institution’s teacher preparation program. 

‘‘SEC. 209. GENERAL PROVISIONS. 

‘‘(a) METHODS.—In complying with sections 207 and 208, the Secretary shall ensure that States and institutions of higher education use fair and equitable methods 

in reporting and that the reporting methods do not allow identification of individuals. ‘‘(b) SPECIAL RULE.—For each State in which there are no State certification or 

licensure assessments, or for States that do not set minimum performance levels on 

those assessments— ‘‘(1) the Secretary shall, to the extent practicable, collect data comparable to 

the data required under this part from States, local educational agencies, institutions of higher education, or other entities that administer such assessments 

to teachers or prospective teachers; and ‘‘(2) notwithstanding any other provision of this part, the Secretary shall use 

such data to carry out requirements of this part related to assessments or pass 

rates. ‘‘(c) LIMITATIONS.— ‘‘(1) FEDERAL CONTROL PROHIBITED.—Nothing in this part shall be construed 

to permit, allow, encourage, or authorize any Federal control over any aspect 

of any private, religious, or home school, whether or not a home school is treated as a private school or home school under State law. This section shall not 

be construed to prohibit private, religious, or home schools from participation 

in programs or services under this part. ‘‘(2) NO CHANGE IN STATE CONTROL ENCOURAGED OR REQUIRED.—Nothing in 

this part shall be construed to encourage or require any change in a State’s treatment of any private, religious, or home school, whether or not a home 

school is treated as a private school or home school under State law. ‘‘(3) NATIONAL SYSTEM OF TEACHER CERTIFICATION PROHIBITED.—Nothing in 

this part shall be construed to permit, allow, encourage, or authorize the Secretary to establish or support any national system of teacher certification. 

‘‘SEC. 210. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this part $300,000,000 for 

fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding 

fiscal years, of which— ‘‘(1) 45 percent shall be available for each fiscal year to award grants under 

section 202; ‘‘(2) 45 percent shall be available for each fiscal year to award grants under 

section 203; and ‘‘(3) 10 percent shall be available for each fiscal year to award grants under 

section 204.’’. 

SEC. 202. PREPARING TOMORROW’S TEACHERS TO USE TECHNOLOGY. 

(a) ELIGIBILITY.—Section 222(a)(3)(D) (20 U.S.C. 1042(a)(3)(D)) is amended by inserting ‘‘nonprofit telecommunications entity,’’ after ‘‘community-based organization,’’. (b) PERMISSIBLE USES OF FUNDS.—Section 223(b)(1)(E) of the Higher Education 

Act of 1965 (20 U.S.C. 1043(b)(1)(E)) is amended to read as follows: ‘‘(E) to use technology to collect, manage, and analyze data to improve 

teaching, learning, and decisionmaking for the purpose of increasing student academic achievement.’’. (c) AUTHORIZATION OF APPROPRIATIONS.—Section 224 (20 U.S.C. 1044) is amended 

by striking ‘‘each of fiscal years 2002 and 2003.’’ and inserting ‘‘fiscal year 2006 and 

each of the 5 succeeding fiscal years.’’. 

SEC. 203. CENTERS OF EXCELLENCE. 

Title II (20 U.S.C. 1021 et seq.) is amended by adding at the end the following: 

‘‘PART C—CENTERS OF EXCELLENCE 

‘‘SEC. 231. PURPOSES; DEFINITIONS. 

‘‘(a) PURPOSES.—The purposes of this part are— ‘‘(1) to help recruit and prepare teachers, including minority teachers, to meet 

the national demand for a highly qualified teacher in every classroom; and ‘‘(2) to increase opportunities for Americans of all educational, ethnic, class, 

and geographic backgrounds to become highly qualified teachers. 

‘‘(b) DEFINITIONS.—As used in this part: 

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

26 

‘‘(A) an institution of higher education that has a teacher preparation program that meets the requirements of section 203(b)(2) and that is—

‘‘(i) a part B institution (as defined in section 322); 

‘‘(ii) a Hispanic-serving institution (as defined in section 502); 

‘‘(iii) a Tribal College or University (as defined in section 316); 

‘‘(iv) an Alaska Native-serving institution (as defined in section 

317(b)); or 

‘‘(v) a Native Hawaiian-serving institution (as defined in section 

317(b)); 

‘‘(B) a consortium of institutions described in subparagraph (A); or 

‘‘(C) an institution described in subparagraph (A), or a consortium described in subparagraph (B), in partnership with any other institution of 

higher education, but only if the center of excellence established under section 232 is located at an institution described in subparagraph (A). 

‘‘(2) HIGHLY QUALIFIED.—The term ‘highly qualified’ when used with respect 

to an individual means that the individual is highly qualified as determined 

under section 9101 of the Elementary and Secondary Education Act of 1965 (20 

U.S.C. 7801) or section 602 of the Individuals with Disabilities Education Act 

(20 U.S.C. 1401). 

‘‘(3) SCIENTIFICALLY BASED READING RESEARCH.—The term ‘scientifically based 

reading research’ has the meaning given such term in section 1208 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6368). 

‘‘(4) SCIENTIFICALLY BASED RESEARCH.—The term ‘scientifically based research’ has the meaning given such term in section 9101 of the Elementary and 

Secondary Education Act of 1965 (20 U.S.C. 7801). 

‘‘SEC. 232. CENTERS OF EXCELLENCE. 

‘‘(a) PROGRAM AUTHORIZED.—From the amounts appropriated to carry out this 

part, the Secretary is authorized to award competitive grants to eligible institutions 

to establish centers of excellence. 

‘‘(b) USE OF FUNDS.—Grants provided by the Secretary under this part shall be 

used to ensure that current and future teachers are highly qualified, by carrying 

out one or more of the following activities: 

‘‘(1) Implementing reforms within teacher preparation programs to ensure 

that such programs are preparing teachers who are highly qualified, are able 

to understand scientifically based research, and are able to use advanced technology effectively in the classroom, including use for instructional techniques to 

improve student academic achievement, by—

‘‘(A) retraining faculty; and 

‘‘(B) designing (or redesigning) teacher preparation programs that—

‘‘(i) prepare teachers to close student achievement gaps, are based on 

rigorous academic content, scientifically based research (including scientifically based reading research), and challenging State student academic content standards; and 

‘‘(ii) promote strong teaching skills. 

‘‘(2) Providing sustained and high-quality preservice clinical experience, including the mentoring of prospective teachers by exemplary teachers, substantially increasing interaction between faculty at institutions of higher education 

and new and experienced teachers, principals, and other administrators at elementary schools or secondary schools, and providing support, including preparation time, for such interaction. 

‘‘(3) Developing and implementing initiatives to promote retention of highly 

qualified teachers and principals, including minority teachers and principals, including programs that provide—

‘‘(A) teacher or principal mentoring from exemplary teachers or principals; or 

‘‘(B) induction and support for teachers and principals during their first 

3 years of employment as teachers or principals, respectively. 

‘‘(4) Awarding scholarships based on financial need to help students pay the 

costs of tuition, room, board, and other expenses of completing a teacher preparation program. 

‘‘(5) Disseminating information on effective practices for teacher preparation 

and successful teacher certification and licensure assessment preparation strategies. 

‘‘(6) Activities authorized under sections 202, 203, and 204. 

‘‘(c) APPLICATION.—Any eligible institution desiring a grant under this section 

shall submit an application to the Secretary at such a time, in such a manner, and 

accompanied by such information the Secretary may require. 

27 

‘‘(d) MINIMUM GRANT AMOUNT.—The minimum amount of each grant under this 

part shall be $500,000. 

‘‘(e) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible institution that receives a grant under this part may not use more than 2 percent of the grant funds 

for purposes of administering the grant. 

‘‘(f) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out this part. 

‘‘SEC. 233. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this part $10,000,000 for 

fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding 

fiscal years.’’. 

SEC. 204. TEACHER INCENTIVE FUND PROGRAM. 

Title II (20 U.S.C. 1021 et seq.), as amended by section 203 of this Act, is further 

amended by adding at the end the following: 

‘‘PART D—TEACHER INCENTIVE FUND PROGRAM 

‘‘SEC. 241. PURPOSE; DEFINITIONS. 

‘‘(a) PURPOSE.—The purpose of this part is to assist States, local educational agencies, and non-profit or for-profit organizations to develop and implement, or expand, 

innovative compensation systems to provide financial rewards for teachers and principals who raise student academic achievement and close the achievement gap, especially in the highest-need local educational agencies. 

‘‘(b) DEFINITIONS.—For purposes of this part: 

‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible entity’ means—

‘‘(A) a local educational agency, including a charter school that is a local 

educational agency; 

‘‘(B) a State educational agency, or other State agency designated by the 

chief executive of the State; or 

‘‘(C) a partnership of—

‘‘(i) one or more agencies described in subparagraph (A) or (B), or 

both; and 

‘‘(ii) at least one non-profit or for-profit organization. 

‘‘(2) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term ‘high-need local educational agency’ has the meaning given that term in section 201. 

‘‘SEC. 242. TEACHER INCENTIVE FUND GRANTS. 

‘‘(a) PROGRAM AUTHORIZED.—

‘‘(1) IN GENERAL.—From the amounts appropriated to carry out this part, the 

Secretary is authorized to award competitive grants of up to 5 years in length 

to eligible entities to develop and implement, or expand, a comprehensive performance-based compensation system for teachers and principals for one or 

more local educational agencies. 

‘‘(2) COMPREHENSIVE PERFORMANCE-BASED COMPENSATION SYSTEMS.—A comprehensive performance-based compensation system developed and implemented, or expanded with funds under this part—

‘‘(A) shall differentiate levels of compensation primarily on the basis of 

increases in student academic achievement; and 

‘‘(B) may—

‘‘(i) differentiate levels of compensation on the basis of high-quality 

teachers’ and principals’ employment and success in hard-to-staff 

schools or high-need subject areas; and 

‘‘(ii) recognize teachers’ and principals’ skills and knowledge as demonstrated through—

‘‘(I) successful fulfillment of additional responsibilities or job 

functions; and 

‘‘(II) evidence of high achievement and mastery of content knowledge and teaching skills. 

‘‘(b) USE OF FUNDS.—A grantee shall use grant funds provided under this part 

only to design and implement, or expand, in collaboration with teachers, principals, 

other school administrators, and members of the public, a compensation system consistent with the requirements of this part. Authorized activities under this part may 

include the following: 

‘‘(1) Developing appraisal systems that reflect clear and fair measures of student academic achievement. 

28 

‘‘(2) Conducting outreach within the local educational agency (or agencies) or 

the State to gain input on how to construct the appraisal system and to develop 

support for it. ‘‘(3) Paying, as part of a comprehensive performance-based compensation system, bonuses and increased salaries to teachers and principals who raise student academic achievement, so long as the grantee uses an increasing share of 

non-Federal funds to pay these monetary rewards each year of the grant. ‘‘(4) Paying, as part of a comprehensive performance-based compensation system, additional bonuses to teachers who both raise student academic achievement and either teach in high-poverty schools or teach subjects that are difficult 

to staff, or both, so long as the grantee uses an increasing share of non-Federal 

funds to pay these monetary rewards each year of the grant. ‘‘(5) Paying, as part of a comprehensive performance-based compensation system, additional bonuses to principals who both raise student academic achievement and serve in high-poverty schools, so long as the grantee uses an increasing share of non-Federal funds to pay these monetary rewards each year of the 

grant. ‘‘(c) APPLICATIONS.—To be eligible to receive a grant under this part, an eligible 

entity shall submit an application that includes— ‘‘(1) a description of the local educational agency or local educational agencies 

to be served by the project, including such demographic information as the Secretary may request; ‘‘(2) information on student academic achievement and the quality of the 

teachers and principals in the local educational agency or agencies to be served 

by the project; ‘‘(3) a description of the performance-based teacher and principal compensation system that the applicant proposes to develop and implement or expand; ‘‘(4) a description of how the applicant will use grant funds under this part 

in each year of the grant; ‘‘(5) an explanation of how the applicant will meet the requirement in subsection (b)(3) and how the grantee will continue its performance-based compensation system after the grant ends; ‘‘(6) a description of the support and commitment from teachers, the community or local educational agency or agencies for the development and implementation, or expansion, of a performance-based teacher and principal compensation 

system; ‘‘(7) a description of how teacher, principal and student performance will be 

measured and the baseline measurement units; and ‘‘(8) a description, if applicable, of how the applicant will define the term ‘high-quality’ for the purposes of subsection (a)(2)(B)(i), through the use of measurable indicators, such as effectiveness in raising student academic achievement, or demonstrated mastery of subject matter knowledge. 

‘‘(d) PRIORITY.—The Secretary shall give priority to applications for projects that 

would establish comprehensive performance-based compensation systems in highneed local educational agencies. 

‘‘SEC. 243. EVALUATIONS. 

‘‘The Secretary shall conduct an independent evaluation of the program under this 

part and may use up to 1 percent of the funds made available under this part or 

$1,000,000, whichever is less, for any fiscal year for the cost of the evaluation. 

‘‘SEC. 244. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated to carry out this part $100,000,000 for 

fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding 

fiscal years.’’. 

SEC. 205. TRANSITION. 

The Secretary of Education shall take such actions as the Secretary determines 

to be appropriate to provide for the orderly implementation of this title. 

TITLE III—INSTITUTIONAL AID 

SEC. 301. TITLE III GRANTS FOR AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND 

UNIVERSITIES. 

(a) ELIGIBLE INSTITUTIONS.—Subsection (b) of section 316 (20 U.S.C. 1059c(b)) is 

amended to read as follows: 

‘‘(b) DEFINITIONS.—

‘‘(1) ELIGIBLE INSTITUTIONS.—For purposes of this section, Tribal Colleges and 

Universities are the following: 

29 

‘‘(A) any of the following institutions that qualify for funding under the 

Tribally Controlled College or University Assistance Act of 1978 or is listed 

in Equity in Educational Land Grant Status Act of 1994 (7 U.S.C. 301 

note): Bay Mills Community College; Blackfeet Community College; 

Cankdeska Cikana Community College; Chief Dull Knife College; College of 

Menominee Nation; Crownpoint Institute of Technology; Dine ́ College; D–

Q University; Fond du Lac Tribal and Community College; Fort Belknap 

College; Fort Berthold Community College; Fort Peck Community College; 

Haskell Indian Nations University; Institute of American Indian and Alaska Native Culture and Arts Development; Lac Courte Oreilles Ojibwa Community College; Leech Lake Tribal College; Little Big Horn College; Little 

Priest Tribal College; Nebraska Indian Community College; Northwest Indian College; Oglala Lakota College; Saginaw Chippewa Tribal College; Salish Kootenai College; Si Tanka University—Eagle Butte Campus; Sinte 

Gleska University; Sisseton Wahpeton Community College; Sitting Bull 

College; Southwestern Indian Polytechnic Institute; Stone Child College; 

Tohono O’Odham Community College; Turtle Mountain Community College; United Tribes Technical College; and White Earth Tribal and Community College; and 

‘‘(B) any other institution that meets the definition of tribally controlled 

college or university in section 2 of the Tribally Controlled College or University Assistance Act of 1978, and meets all other requirements of this section. 

‘‘(2) INDIAN.—The term ‘Indian’ has the meaning given the term in section 2 

of the Tribally Controlled College or University Assistance Act of 1978.’’. 

(b) DISTANCE LEARNING.—Subsection (c)(2) of such section is amended—

(1) by amending subparagraph (B) to read as follows: 

‘‘(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including 

purchase or rental of telecommunications technology equipment or services, 

and the acquisition of real property adjacent to the campus of the institution on which to construct such facilities;’’; 

(2) in subparagraph (C), by inserting before the semicolon at the end the following: ‘‘, or advanced degrees in tribal governance or tribal public policy’’; 

(3) in subparagraph (D), by inserting before the semicolon at the end the following: ‘‘, in tribal governance, or tribal public policy’’; 

(4) by striking ‘‘and’’ at the end of subparagraph (K); 

(5) by redesignating subparagraph (L) as subparagraph (M); and 

(6) by inserting after subparagraph (K) the following new subparagraph: 

‘‘(L) developing or improving facilities for Internet use or other distance 

learning academic instruction capabilities; and’’. 

(c) APPLICATION AND ALLOTMENT.—Subsection (d) of such section is amended to 

read as follows: 

‘‘(d) APPLICATION AND ALLOTMENT.—

‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligible to receive assistance under 

this section, a Tribal College or University shall be an eligible institution under 

section 312(b). 

‘‘(2) APPLICATION.—Any Tribal College or University desiring to receive assistance under this section shall submit an application to the Secretary at such 

time, and in such manner, as the Secretary may reasonably require. 

‘‘(3) ALLOTMENTS TO INSTITUTIONS.—

‘‘(A) ALLOTMENT: PELL GRANT BASIS.—From the amount appropriated to 

carry out this section for any fiscal year, the Secretary shall allot to each 

eligible institution a sum which bears the same ratio to one-half that 

amount as the number of Pell Grant recipients in attendance at such institution at the end of the award year preceding the beginning of that fiscal 

year bears to the total number of Pell Grant recipients at all eligible institutions. 

‘‘(B) ALLOTMENT: DEGREE AND CERTIFICATE BASIS.—From the amount appropriated to carry out this section for any fiscal year, the Secretary shall 

allot to each eligible institution a sum which bears the same ratio to onehalf that amount as the number of degrees or certificates awarded by such 

institution during the preceding academic year bears to the total number 

of degrees or certificates at all eligible institutions. 

‘‘(C) MINIMUM GRANT.—Notwithstanding subparagraphs (A) and (B), the 

amount allotted to each institution under this section shall not be less than 

$400,000. 

‘‘(4) SPECIAL RULES.—

30 

‘‘(A) CONCURRENT FUNDING.—For the purposes of this part, no Tribal College or University that is eligible for and receives funds under this section 

shall concurrently receive funds under other provisions of this part or part 

B. ‘‘(B) EXEMPTION.—Section 313(d) shall not apply to institutions that are 

eligible to receive funds under this section.’’. 

SEC. 302. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS. 

(a) DISTANCE LEARNING.—Section 317(c)(2) (20 U.S.C. 1059d(c)(2)) is amended— (1) by amending subparagraph (B) to read as follows: ‘‘(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including 

purchase or rental of telecommunications technology equipment or services, 

and the acquisition of real property adjacent to the campus of the institution on which to construct such facilities;’’; 

(2) in subparagraph (C), by inserting before the semicolon at the end the following: ‘‘, or advanced degrees in tribal governance or tribal public policy’’; 

(3) in subparagraph (D), by inserting before the semicolon at the end the following: ‘‘, in tribal governance, or tribal public policy’’; 

(4) by striking ‘‘and’’ at the end of subparagraph (G); 

(5) by striking the period at the end of subparagraph (H) and inserting a 

semicolon; and 

(6) by inserting after subparagraph (H) the following new subparagraph: ‘‘(I) development or improvement of facilities for Internet use or other distance learning academic instruction capabilities; and’’. (b) ENDOWMENT FUNDS.—Section 317(c) is further amended by adding at the end 

the following new paragraph: ‘‘(3) ENDOWMENT FUNDS.— ‘‘(A) IN GENERAL.—An Alaska Native or Native Hawaiian-serving institution may use not more than 20 percent of the grant funds provided under 

this section to establish or increase an endowment fund at the institution. ‘‘(B) MATCHING REQUIREMENT.—In order to be eligible to use grant funds 

in accordance with subparagraph (A), the institution shall provide to the 

endowment fund from non-Federal funds an amount equal to the Federal 

funds used in accordance with subparagraph (A), for the establishment or 

increase of the endowment fund. ‘‘(C) APPLICABILITY OF OTHER PROVISIONS.—The provisions of part C regarding the establishment or increase of an endowment fund, that the Secretary determines are not inconsistent with this paragraph, shall apply to 

funds used under subparagraph (A).’’. (c) APPLICATION PROCESS.—Section 317(d)(2) is amended by striking ‘‘Such application shall include—’’ and all that follows through ‘‘may require.’’. 

SEC. 303. GRANTS TO PART B INSTITUTIONS. 

(a) USE OF FUNDS.—

(1) FACILITIES AND EQUIPMENT.—

(A) UNDERGRADUATE INSTITUTIONS.—Paragraph (2) of section 323(a) (20 

U.S.C. 1062(a)) is amended to read as follows: 

‘‘(2) Construction, maintenance, renovation, and improvement in classrooms, 

libraries, laboratories, and other instructional facilities, including purchase or 

rental of telecommunications technology equipment or services, and the acquisition of real property adjacent to the campus of the institution on which to construct such facilities.’’. 

(B) GRADUATE AND PROFESSIONAL SCHOOLS.—Paragraph (2) of section 

326(c) is amended to read as follows: 

‘‘(2) construction, maintenance, renovation, and improvement in classrooms, 

libraries, laboratories, and other instructional facilities, including purchase or 

rental of telecommunications technology equipment or services, and the acquisition of real property adjacent to the campus of the institution on which to construct such facilities;’’. 

(2) OUTREACH AND COLLABORATION.—Paragraph (11) of section 323(a) is 

amended to read as follows: 

‘‘(11) Establishing community outreach programs and collaborative partnerships between part B institutions and local elementary or secondary schools. 

Such partnerships may include mentoring, tutoring, or other instructional opportunities that will boost student academic achievement and assist elementary 

and secondary school students in developing the academic skills and the interest to pursue postsecondary education.’’. 

(b) TECHNICAL ASSISTANCE.—Section 323 (20 U.S.C. 1062) is amended—

(1) by redesignating subsection (c) as subsection (d); and 

31 

(2) by inserting after subsection (b) the following new subsection: 

‘‘(c) TECHNICAL ASSISTANCE.—

‘‘(1) IN GENERAL.—An institution may not use more than 2 percent of the 

grant funds provided under this part to secure technical assistance services. 

‘‘(2) TECHNICAL ASSISTANCE SERVICES.—Technical assistance services may include assistance with enrollment management, financial management, and strategic planning. 

‘‘(3) REPORT.—The institution shall report to the Secretary on an annual 

basis, in such form as the Secretary requires, on the use of funds under this 

subsection.’’. 

(c) DISTANCE LEARNING.—Section 323(a)(2) (20 U.S.C. 1062(a)(2)) (as amended by 

subsection (a)(1)(A)) is further amended by inserting ‘‘development or improvement 

of facilities for Internet use or other distance learning academic instruction capabilities and’’ after ‘‘including’’. 

(d) MINIMUM GRANTS.—Section 324(d)(1) (20 U.S.C. 1063(d)(1)) is amended by inserting before the period at the end the following: ‘‘, except that, if the amount appropriated to carry out this part for any fiscal year exceeds the amount required 

to provide to each institution an amount equal to the total amount received by such 

institution under subsections (a), (b), and (c) for the preceding fiscal year, then the 

amount of such excess appropriation shall first be applied to increase the minimum 

allotment under this subsection to $750,000’’. 

(e) ELIGIBLE GRADUATE OR PROFESSIONAL SCHOOLS.—

(1) GENERAL AUTHORITY.—Section 326(a)(1) (20 U.S.C. 1063b(a)(1)) is amended—

(A) by inserting ‘‘(A)’’ after ‘‘subsection (e) that’’; 

(B) by inserting before the period at the end the following: ‘‘, (B) 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, and (C) according to such an agency or association, is in good 

standing’’. 

(2) ELIGIBLE INSTITUTIONS.—Section 326(e)(1) (20 U.S.C. 1063b(e)(1)) is 

amended—

(A) by striking ‘‘and’’ at the end of subparagraph (Q); 

(B) by striking the period at the end of subparagraph (R) and inserting 

a semicolon; and 

(C) by adding at the end the following new subparagraphs: 

‘‘(S) Alabama State University qualified graduate program; 

‘‘(T) Prairie View A & M University qualified graduate program; 

‘‘(U) Coppin State University qualified graduate program; and 

‘‘(V) Delaware State University qualified graduate program.’’. 

(3) CONFORMING AMENDMENT.—Section 326(e)(3) (20 U.S.C. 1063b(e)(3)) is 

amended—

(A) by striking ‘‘1998’’ and inserting ‘‘2005’’; and 

(B) by striking ‘‘(Q) and (R)’’ and inserting ‘‘(S), (T), (U), and (V)’’. 

(f) PROFESSIONAL OR GRADUATE INSTITUTIONS.—Section 326(f) (20 U.S.C. 1063b(f)) 

is amended—

(1) in paragraph (1)—

(A) by striking ‘‘$26,600,000’’ and inserting ‘‘$54,500,000’’; and 

(B) by striking ‘‘(P)’’ and inserting ‘‘(R)’’; 

(2) in paragraph (2)—

(A) by striking ‘‘$26,600,000, but not in excess of $28,600,000’’ and inserting ‘‘$54,500,000, but not in excess of $58,500,000’’; and 

(B) by striking ‘‘subparagraphs (Q) and (R)’’ and inserting ‘‘subparagraphs 

(S), (T), (U), and (V)’’; and 

(3) in paragraph (3)—

(A) by striking ‘‘$28,600,000’’ and inserting ‘‘$58,500,000’’; and 

(B) by striking ‘‘(R)’’ and inserting ‘‘(V)’’. 

(g) HOLD HARMLESS.—Section 326(g) (20 U.S.C. 1063b(g)) is amended by striking 

‘‘1998’’ each place it appears and inserting ‘‘2005’’. 

SEC. 304. TECHNICAL AMENDMENTS. 

(a) AMENDMENTS.—Title III is further amended—

(1) in section 311(c) (20 U.S.C. 1057(c))—

(A) by redesignating paragraphs (7) through (12) as paragraphs (8) 

through (13), respectively; and 

(B) by inserting after paragraph (6) the following: 

‘‘(7) Education or counseling services designed to improve the financial literacy and economic literacy of students and, as appropriate, their parents.’’; 

32 

(2) in section 312(b)(1)(A) (20 U.S.C. 1058(b)(1)(A)), by striking ‘‘subsection 

(c)’’ and inserting ‘‘subsection (d)’’; 

(3) in section 312(b)(1)(F) (20 U.S.C. 1058(b)(1)(F)), by inserting ‘‘which is’’ before ‘‘located’’; 

(4) in section 312(b)(1) (20 U.S.C. 1058(b)(1)), by redesignating subparagraphs 

(E) and (F) as subparagraphs (F) and (G), respectively, and by inserting after 

subparagraph (D) the following new subparagraph: 

‘‘(E) which provides a program that is not less than a 2-year educational 

program that is acceptable for full credit toward a bachelor’s degree;’’; 

(5) in section 316(c)(2) (20 U.S.C. 1059c(c)(2))—

(A) by redesignating subparagraphs (G) through (M) (as redesignated by 

section 301(b)(2) of this Act) as subparagraphs (H) through (N), respectively; 

(B) by inserting after subparagraph (F) the following: 

‘‘(G) education or counseling services designed to improve the financial 

literacy and economic literacy of students and, as appropriate, their parents;’’; and 

(C) in subparagraph (N), as redesignated by subparagraph (A), by striking ‘‘subparagraphs (A) through (K)’’ and inserting ‘‘subparagraphs (A) 

through (M)’’; 

(6) in section 317(c)(2) (20 U.S.C. 1059d(c)(2)), by inserting after subparagraph (I) (as added by section 302(a)(6) of this Act) the following: 

‘‘(J) education or counseling services designed to improve the financial literacy and economic literacy of students and, as appropriate, their parents.’’; 

(7) in section 323(a) (20 U.S.C. 1062(a))—

(A) by striking ‘‘section 360(a)(2)’’ and inserting ‘‘section 399(a)(2)’’; 

(B) by redesignating paragraphs (7) through (12) as paragraphs (8) 

through (13), respectively; and 

(C) by inserting after paragraph (6) the following: 

‘‘(7) Education or counseling services designed to improve the financial literacy and economic literacy of students and, as appropriate, their parents.’’; 

(8) in section 324(d)(2) (20 U.S.C. 1063(d)(2)), by striking ‘‘section 

360(a)(2)(A)’’ and inserting ‘‘section 399(a)(2)(A)’’; 

(9) in section 326(e)(1) (20 U.S.C. 1063b(e)(1)), in the matter preceding subparagraph (A), by inserting a colon after ‘‘the following’’; 

(10) in section 327(b) (20 U.S.C. 1063c(b)), by striking ‘‘initial’’; 

(11) in section 342(5)(C) (20 U.S.C. 1066a(5)(C))—

(A) by inserting a comma after ‘‘equipment’’ the first place it appears; and 

(B) by striking ‘‘technology,,’’ and inserting ‘‘technology,’’; 

(12) in section 343(e) (20 U.S.C. 1066b(e)), by inserting after the subsection 

designation the following: ‘‘SALE OF QUALIFIED BONDS.—’’; 

(13) in section 351(a) (20 U.S.C. 1067a(a)), by striking ‘‘of 1979’’; 

(14) in section 391(b)(7)(E) (20 U.S.C. 1068(b)(7)(E)), by striking ‘‘subparagraph (E)’’ and inserting ‘‘subparagraph (D)’’; and 

(15) in section 396 (20 U.S.C. 1068e), by striking ‘‘section 360’’ and inserting 

‘‘section 399’’. 

(b) REPEAL.—Section 1024 (20 U.S.C. 1135b–3), as transferred by section 301(a)(5) 

of the Higher Education Amendments of 1998 (Public Law 105–244; 112 Stat. 1636), 

is repealed. 

SEC. 305. TITLE III AUTHORIZATIONS. 

Section 399(a) (20 U.S.C. 1068h(a)) is amended—

(1) by striking ‘‘1999’’ each place it appears and inserting ‘‘2006’’; 

(2) by striking ‘‘4 succeeding fiscal years’’ each place it appears and inserting 

‘‘5 succeeding fiscal years’’; 

(3) in paragraph (1)—

(A) by striking ‘‘$10,000,000’’ in subparagraph (B) and inserting 

‘‘$23,800,000’’; and 

(B) by striking ‘‘$5,000,000’’ in subparagraph (C) and inserting 

‘‘$11,900,000’’; 

(4) in paragraph (2)—

(A) by striking ‘‘$135,000,000’’ in subparagraph (A) and inserting 

‘‘$241,000,000’’; and 

(B) by striking ‘‘$35,000,000’’ in subparagraph (B) and inserting 

‘‘$59,000,000’’; and 

(5) in paragraph (4), by striking ‘‘$110,000’’ and inserting ‘‘$212,000’’. 

33 

TITLE IV—STUDENT ASSISTANCE 

PART A—GRANTS TO STUDENTS 

SEC. 401. PELL GRANTS. 

(a) EXTENSION OF AUTHORITY.—Section 401(a) (20 U.S.C. 1070a(a)) is amended by 

striking ‘‘2004’’ and inserting ‘‘2012’’. (b) DIRECT PAYMENT.—Section 401(a) (20 U.S.C. 1070a(a)) is further amended— (1) by striking paragraph (2); and 

(2) by redesignating paragraph (3) as paragraph (2). 

(c) MAXIMUM PELL GRANT INCREASE.— Paragraph (2)(A) of section 401(b) 20 

U.S.C. 1070a(b)(2)(A)) is amended to read as follows: ‘‘(2)(A) The amount of the Federal Pell Grant for a student eligible under this part shall be $6,000 for academic years 2006–2007 through 2012–2013, less an amount 

equal to the amount determined to be the expected family contribution with respect 

to that student for that year.’’. (d) TUITION SENSITIVITY.—Section 401(b) is further amended— (1) by striking paragraph (3); and 

(2) by redesignating paragraphs (4) through (8) as paragraphs (3) through (7), 

respectively. 

(e) MULTIPLE GRANTS.—Paragraph (5) of section 401(b) (as redesignated by subsection (d)(2)) is amended to read as follows: ‘‘(5) YEAR-ROUND PELL GRANTS.— ‘‘(A) IN GENERAL.—The Secretary shall, for students enrolled full time in 

a baccalaureate or associate’s degree program of study at an eligible institution, award such students two Pell grants during a single award year to 

permit such students to accelerate progress toward their degree objectives 

by enrolling in academic programs for 12 months rather than 9 months. ‘‘(B) LIMITATION.—The Secretary shall limit the awarding of additional 

Pell grants under this paragraph in a single award year to students attending— ‘‘(i) baccalaureate degree granting institutions that have a graduation 

rate as reported by the Integrated Postsecondary Education Data System for the 4 preceding academic years of at least 30 percent; or ‘‘(ii) two-year institutions that have a graduation rate as reported by 

the Integrated Postsecondary Education Data Systems, in at least one 

of the last 3 years for which data is available, that is above the average 

for the applicable year for the institution’s type and control. ‘‘(C) EVALUATION.—The Secretary shall conduct an evaluation of the program under this paragraph and submit to the Congress an evaluation report no later than October 1, 2011. ‘‘(D) REGULATIONS REQUIRED.—The Secretary shall promulgate regulations implementing this paragraph.’’. (f) INELIGIBILITY BASED ON INVOLUNTARY CIVIL COMMITMENT FOR SEXUAL OF- FENSES.—Paragraph (7) of section 401(b) (as redesignated by subsection (d)(2)) is 

amended by inserting before the period the following: ‘‘or who is subject to an involuntary civil commitment upon completion of a period of incarceration for a sexual 

offense (as determined under regulations of the Secretary)’’. (g) PELL GRANT ELIGIBILITY DURATION.—Section 401(c) (20 U.S.C. 1070a(c)) is 

amended— (1) in paragraph (1)— (A) by striking ‘‘The period’’ and inserting in lieu thereof ‘‘Subject to paragraph (5), the period’’; and 

(B) by striking the period at the end thereof and inserting ‘‘but shall be 

subject to the limitation described in paragraph (5).’’; and 

(2) by adding at the end the following new paragraph: ‘‘(5) The period during which a student may receive Federal Pell Grants shall not 

exceed the equivalent of 18 semesters or 27 quarters in duration (as determined by 

the Secretary by regulation), without regard to whether the student is enrolled on 

a full-time basis during any portion of that period, and including any period of time 

for which the student received Federal Pell Grants prior to the date of enactment 

of the College Access and Opportunity Act of 2005.’’. (h) ELIGIBILITY PERIOD.—Section 401(c)(2) (20 U.S.C. 1070a(c)(2)) is amended by 

inserting ‘‘, for not more than one academic year,’’ after ‘‘which are determined by 

the institution’’ in the first sentence. 

(i) PELL GRANTS PLUS: ACHIEVEMENT GRANTS FOR STATE SCHOLARS PROGRAM.—

(1) AMENDMENT.—Subpart 1 of part A of title IV is amended by inserting 

after section 401 (20 U.S.C. 1070a) the following new section: 

34 

‘‘SEC. 401A. PELL GRANTS PLUS: ACHIEVEMENT GRANTS FOR STATE SCHOLARS. 

‘‘(a) GRANTS AUTHORIZED.—From sums appropriated to carry out section 401, the 

Secretary shall establish a program to award Pell Grants Plus to students who—

‘‘(1) have successfully completed a rigorous high school program of study established by a State or local educational agency in consultation with a State coalition assisted by the Center for State Scholars; 

‘‘(2) are enrolled full-time in the first academic year of undergraduate education, and have not been previously enrolled in a program of undergraduate 

education; and 

‘‘(3) are eligible to receive Federal Pell Grants for the year in which the grant 

is awarded. 

‘‘(b) AMOUNT OF GRANTS.—

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

grant awarded under this section shall be $1,000. 

‘‘(2) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE.—A grant awarded 

under this section to any student, in combination with the Federal Pell Grant 

assistance and other student financial assistance available to such student, may 

not exceed the student’s cost of attendance. 

‘‘(c) SELECTION OF RECIPIENTS.—

‘‘(1) PROCEDURES ESTABLISHED BY REGULATION.—The Secretary shall establish 

by regulation procedures for the determination of eligibility of students for the 

grants awarded under this section. Such procedures shall include measures to 

ensure that eligibility is determined in a timely and accurate manner consistent 

with the requirements of section 482 and the submission of the financial aid 

form required by section 483. 

‘‘(2) REQUIRED INFORMATION.—Each eligible student desiring an award under 

this section shall submit at such time and in such manner such information as 

the Secretary may reasonably require. 

‘‘(3) CONTINUATION OF GRANT REQUIREMENTS.—In order for a student to continue to be eligible to receive an award under this section for the second year 

of undergraduate education, the eligible student must—

‘‘(A) maintain eligibility to receive a Federal Pell Grant for that year; 

‘‘(B) obtain a grade point average of at least 3.0 (or the equivalent as determined under regulations prescribed by the Secretary) for the first year 

of undergraduate education; and 

‘‘(C) be enrolled full-time and fulfill the requirements for satisfactory 

progress described in section 484(c). 

‘‘(d) EVALUATION, AND REPORTS.—The Secretary shall monitor the progress, retention, and completion rates of the students to whom awards are provided under this 

section. In doing so, the Secretary shall evaluate the impact of the Pell Grants Plus 

Program and report, not less than biennially, to the authorizing committees of the 

House of Representatives and the Senate.’’. 

(2) CONFORMING AMENDMENT.—Chapter 3 of subpart 2 of part A of title IV 

(20 U.S.C. 1070a–31 through 1070a–35) is repealed. 

SEC. 402. TRIO PROGRAMS. 

(a) DURATION OF GRANTS.—

(1) AMENDMENT.—Section 402A(b)(2) (20 U.S.C. 1070a–11(b)(2)) is amended to 

read as follows: 

‘‘(2) DURATION.—Grants or contracts awarded under this chapter shall be 

awarded for a period of 5 years, except that—

‘‘(A) grants under section 402G shall be awarded for a period of 2 years; 

and 

‘‘(B) grants under section 402H shall be awarded for a period determined 

by the Secretary.’’. 

(2) TRANSITION TO SYNCHRONOUS GRANT PERIODS.—Notwithstanding section 

402A(b)(2) of the Higher Education Act of 1965 (as in effect both prior to and 

after the amendment made by paragraph (1) of this subsection), the Secretary 

of Education may continue an award made before the date of enactment of this 

Act under section 402B, 402C, 402D, 402E, or 402F of such Act as necessary 

to permit all the awards made under such a section to expire at the end of the 

same fiscal year, and thereafter to expire at the end of 5 years as provided in 

the amendment made by paragraph (1) of this subsection. 

(b) MINIMUM GRANTS.—Section 402A(b)(3) (20 U.S.C. 1070a–11(b)(3)) is amended 

to read as follows: 

‘‘(3) MINIMUM GRANTS.—Unless the institution or agency requests a smaller 

amount, individual grants for programs authorized under this chapter shall be 

no less than $200,000, except that individual grants for programs authorized 

under section 402G shall be no less than $170,000.’’. 

35 

(c) PRIOR EXPERIENCE; NOVICE APPLICANTS.—Section 402A(c)(2) (20 U.S.C. 1070a– 11(c)(2)) is amended— (1) by striking ‘‘In making grants’’ and inserting ‘‘(A) Subject to subparagraph 

(B), in making grants’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(B) From the amount available under subsection (h) for a program under this 

chapter (other than a program under section 402G or 402H) for any fiscal year 

in which the Secretary conducts a competition for the award of grants or contracts under such program, the Secretary shall reserve 10 percent of such available amount for purposes of funding applications from novice applicants. If the 

Secretary determines that there are an insufficient number of qualified novice 

applicants to utilize the amount so reserved, the Secretary shall restore the unutilized remainder of the amount reserved for use by applicants qualifying 

under subparagraph (A).’’. (d) APPLICATION STATUS.—Section 402A(c) (20 U.S.C. 1070a–11(c)) is amended by 

striking paragraph (7). 

(e) DOCUMENTATION OF STATUS.—Section 402A(e) (20 U.S.C. 1070a–11(e)) is 

amended by striking ‘‘(g)(2)’’ each place it appears in paragraphs (1) and (2) and inserting ‘‘(i)(4)’’. (f) HOMELESS AND UNACCOMPANIED YOUTH.—Section 402A(e) is further amended 

by adding at the end the following new paragraph: 

‘‘(3) Notwithstanding this subsection and subsection (i)(4), individuals who are 

homeless or unaccompanied youth as defined in section 725 of the McKinney-Vento 

Homeless Assistance Act shall be eligible to participate in programs under sections 

402B, 402C, 402D, and 402F of this chapter.’’. 

(g) AUTHORIZATION OF APPROPRIATIONS.—Section 402A(f) (20 U.S.C. 1070a–11(f)) 

is amended by striking ‘‘$700,000,000 for fiscal year 1999, and such sums as may 

be necessary for each of the 4 succeeding fiscal years’’ and inserting ‘‘$836,500,000 

for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding 

fiscal years’’. 

(h) DEFINITION.—Section 402A(g) (20 U.S.C. 1070a–11(g)) is amended—

(1) in paragraph (3), by striking ‘‘by reason of such individual’s age’’; 

(2) by redesignating paragraphs (1) through (4) as paragraphs (3) through (6), 

respectively; and 

(3) by inserting before paragraph (3), as redesignated, the following: 

‘‘(1) DIFFERENT CAMPUS.—The term ‘different campus’ means an institutional 

site that—

‘‘(A) is geographically apart from the main campus of the institution; 

‘‘(B) is permanent in nature; and 

‘‘(C) offers courses in educational programs leading to a degree, certificate, or other recognized educational credential. 

‘‘(2) DIFFERENT POPULATION.—The term ‘different population’ means a group 

of individuals, with respect to whom an entity seeks to serve through an application for funding under this chapter, that—

‘‘(A) is separate and distinct from any other population that the entity 

seeks to serve through an application for funding under this chapter; or 

‘‘(B) while sharing some of the same needs as another population that the 

entity seeks to serve through an application for funding under this chapter, 

has distinct needs for specialized services.’’. 

(i) EDUCATION AND COUNSELING SERVICES.—Chapter 1 of subpart 2 of part A of 

title IV is further amended—

(1) in section 402B(b) (20 U.S.C. 1070a–12(b))—

(A) by redesignating paragraphs (3) through (10) as paragraphs (4) 

through (11), respectively; 

(B) by inserting after paragraph (2) the following: 

‘‘(3) education or counseling services designed to improve the financial literacy 

and economic literacy of students and, as appropriate, their parents;’’; and 

(C) in paragraph (11), as redesignated by subparagraph (A), by striking 

‘‘paragraphs (1) through (9)’’ and inserting ‘‘paragraphs (1) through (10)’’; 

(2) in section 402C (20 U.S.C. 1070a–13)—

(A) in subsection (b)—

(i) by redesignating paragraphs (2) through (12) as paragraphs (3) 

through (13), respectively; 

(ii) by inserting after paragraph (1) the following: 

‘‘(2) education or counseling services designed to improve the financial literacy 

and economic literacy of students and, as appropriate, their parents;’’; 

(iii) in paragraph (12), as redesignated by clause (i), by inserting ‘‘, 

specifically in the fields of math and science’’ after ‘‘postsecondary education’’; and 

36 

(iv) in paragraph (13), as redesignated by clause (i), by striking 

‘‘paragraphs (1) through (11)’’ and inserting ‘‘paragraphs (1) through 

(12)’’; and 

(B) in subsection (e), by striking ‘‘subsection (b)(10)’’ and inserting ‘‘subsection (b)(11)’’; 

(3) in section 402D(b) (20 U.S.C. 1070a–14(b))—

(A) by redesignating paragraphs (2) through (10) as paragraphs (3) 

through (11), respectively; 

(B) by inserting after paragraph (1) the following: 

‘‘(2) education or counseling services designed to improve the financial literacy 

and economic literacy of students and, as appropriate, their parents;’’; and 

(C) in paragraph (11), as redesignated by subparagraph (A), by striking 

‘‘paragraphs (1) through (9)’’ and inserting ‘‘paragraphs (1) through (10)’’; 

(4) in section 402E(b) (20 U.S.C. 1070a–15(b))—

(A) by redesignating paragraphs (7) and (8) as paragraphs (8) and (9), respectively; and 

(B) by inserting after paragraph (6) the following: 

‘‘(7) education or counseling services designed to improve the financial literacy 

and economic literacy of students and, as appropriate, their parents;’’; and 

(5) in section 402F(b) (20 U.S.C. 1070a–16(b))—

(A) by redesignating paragraphs (4) through (10) as paragraphs (5) 

through (11), respectively; 

(B) by inserting after paragraph (3) the following: 

‘‘(4) education or counseling services designed to improve the financial literacy 

and economic literacy of students and, as appropriate, their parents;’’; and 

(C) in paragraph (11), as redesignated by subparagraph (A), by striking 

‘‘paragraphs (1) through (9)’’ and inserting ‘‘paragraphs (1) through (10)’’. 

(j) MAXIMUM STIPENDS.—Section 402C(e) (20 U.S.C. 1070a–13(e)) is amended—

(1) by striking ‘‘$60’’ and inserting ‘‘$100’’; and 

(2) by striking ‘‘$40’’ and inserting ‘‘$60’’. 

(k) STUDENT SUPPORT SERVICES.—Section 402D(d)(6) (20 U.S.C. 1070a–14(d)(6)) is 

amended—

(1) by striking ‘‘and’’ at the end of subparagraph (A); 

(2) by striking the period at the end of subparagraph (B) and inserting ‘‘; 

and’’; and 

(3) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) working with other entities that serve low-income working adults to 

increase access to and successful progress in postsecondary education by 

low-income working adults seeking their first postsecondary degree or certificate.’’. 

(l) POSTBACCALAUREATE ACHIEVEMENT MAXIMUM STIPENDS.—Section 402E(e)(1) 

(20 U.S.C. 1070a–15(e)(1)) is amended by striking ‘‘$2,800’’ and inserting ‘‘$5,000’’. 

(m) EDUCATIONAL OPPORTUNITY CENTERS: APPLICATION APPROVAL.—Section 

402F(c) (20 U.S.C. 1070a–16(c)) is amended—

(1) by striking ‘‘and’’ at the end of paragraph (2); 

(2) by striking the period at the end of paragraph (3) and inserting ‘‘; and’’; 

and 

(3) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) consider the extent to which the proposed project would provide services 

to low-income working adults in the region to be served, in order to increase 

access to postsecondary education by low-income working adults.’’. 

SEC. 403. TRIO REFORM. 

(a) PERFORMANCE MEASURES.—Section 402A (20 U.S.C. 1070a-11) is amended—

(1) by redesignating subsections (c), (d), (e), (f), and (g) as subsections (d), (e), 

(g), (h), and (i), respectively; and 

(2) by inserting after subsection (b) the following new subsection: 

‘‘(c) PERFORMANCE MEASURES.—

‘‘(1) IN GENERAL.—The Secretary shall establish expected program outcomes 

and procedures for measuring, annually and for longer periods, the quality and 

effectiveness of programs operated under this chapter, and the impact of the 

services provided through the programs to support the attainment of higher 

education for students from disadvantaged backgrounds, low-income individuals, and prospective first-generation college students. 

‘‘(2) USE OF MEASURES.—The performance measures described in paragraph 

(1) shall be used to—

‘‘(A) assess the impact of the specific services provided by recipients of 

grants or contracts under this chapter and, to the extent the Secretary finds 

37 

appropriate, administrative and financial management practices of such 

programs; ‘‘(B) identify strengths and weaknesses in the provision of services provided by grantees under this chapter; ‘‘(C) identify project operations that may require training and technical 

assistance resources. ‘‘(3) ADDITIONAL MEASURES.—In addition to the performance measures in 

paragraph (1), each grant recipient may establish local performance measures.’’. (b) SELECTION.—Subsection (d) of such section (as redesignated by subsection 

(a)(1) of this section) is amended— (1) by redesignating paragraphs (2) through (6) as paragraphs (3) through (7), 

respectively; and 

(2) by inserting after paragraph (1) the following new paragraph: 

‘‘(2) SELECTION.— ‘‘(A) IN GENERAL.—In awarding grants from among qualified applicants, 

the Secretary shall consider the effectiveness of each applicant in providing 

services under this chapter, based on— ‘‘(i) the plan of such applicant to deliver program services and achieve 

expected program outcomes established by the Secretary; ‘‘(ii) the plan of such applicant to coordinate program services with 

other programs for disadvantaged students; and 

‘‘(iii) any prior experience of such applicant in achieving expected program outcomes under this chapter. 

‘‘(B) ADDITIONAL CRITERIA.—The Secretary may establish additional selection criteria as necessary to identify the most qualified applicants.’’. 

(c) PRIOR EXPERIENCE.—Paragraph (3) of such subsection (d) (as amended by section 402(c) and redesignated by subsection (b)(1) of this section) is amended—

(1) by striking subparagraph (A) and inserting ‘‘(A) In making grants under 

this chapter, the Secretary shall use the measures described in subsection (c)(1) 

to evaluate each applicant’s prior experience in achieving expected program outcomes under the particular program for which funds are sought.’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(C) The Secretary shall not give prior experience points to any current grantee that during the then most recent period for which funds were provided—

‘‘(i) failed to meet one or more expected program outcomes based on the 

performance measures described in subsection (c); or 

‘‘(ii) expended funds for indirect costs in an amount that exceeded 8 percent of the total grant award.’’. 

(d) ORDER OF AWARDS.—Paragraph (4) of such subsection (d) (as redesignated by 

subsection (b)(1) of this section) is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘under paragraph (4)’’ and inserting ‘‘under paragraph 

(5)’’; and 

(B) by stiking ‘‘with paragraph (2)’’ and inserting ‘‘with paragraph (3)’’; 

and 

(2) by amending subparagraph (B) to read as follows: 

‘‘(B) The Secretary shall not provide assistance to an entity if the Secretary 

has determined that such entity has involved the fraudulent use of public or 

private funds.’’. 

(e) TECHNICAL ASSISTANCE.—Paragraph (3) of subsection (e) of such section (as redesignated by subsection (a)(1) of this section) is amended to read as follows: 

‘‘(3) TECHNICAL ASSISTANCE.—The Secretary shall provide technical assistance 

to applicants for projects and programs authorized under this chapter. The Secretary shall give priority to serving programs and projects that serve geographic 

areas and eligible populations which have been underserved by the programs 

assisted under this chapter. Technical training activities shall include the provision of information on authorizing legislation, goals and objectives of the program, required activities, eligibility requirements, the application process and 

application deadlines, and assistance in the development of program proposals 

and the completion of program applications.’’. 

(f) RECORDKEEPING AND REPORTING.—Section 402A is further amended by inserting after subsection (e) of such section (as redesignated by subsection (a)(1) of this 

section) the following new subsection: 

‘‘(f) RECORDKEEPING AND REPORTING.—

‘‘(1) IN GENERAL.—The Secretary shall establish uniform reporting requirements and require each recipient of funds under this chapter to submit annually and in electronic form such information in such manner and form and at 

such time as the Secretary may require, except that reporting such information 

shall not reveal personally identifiable information about an individual student. 

38 

‘‘(2) REPORT TO CONGRESS.—At least once every 2-year period, the Secretary 

shall prepare and submit to the authorizing committees, a report on the services provided to students that shall include—

‘‘(A) a statement for the then most recently concluded fiscal year specifying—

‘‘(i) the amount of funds received by grantees to provide services 

under this chapter; and 

‘‘(ii) the amount of funds received by new grantees to provide services 

under this chapter; 

‘‘(B) a description of the specific services provided to students; 

‘‘(C) a summary of the overall success in achieving specific program outcomes or progress toward such outcomes; 

‘‘(D) a report of the number of students served by types of service received; 

‘‘(E) information summarizing the types of organizations that received 

funds under this chapter; and 

‘‘(F) a summary of the research and evaluation activities under section 

402H, including—

‘‘(i) a status report on ongoing activities; and 

‘‘(ii) results, conclusions, and recommendations of such activities 

available after the then most recent report.’’. 

(g) INCREASED MONITORING.—Subsection (h) of such section (as redesignated by 

subsection (a)(1) of this section) is amended by striking everything after the first 

sentence and inserting the following: ‘‘Of the amount appropriated under this chapter, the Secretary may use no more than one half of 1 percent of such amount to 

support the administration of the Federal TRIO programs including to increase the 

level of oversight monitoring, to support impact studies, program assessments and 

reviews, and to provide technical assistance to prospective applicants and current 

grantees.’’. 

(h) EXPECTED PROGRAM OUTCOME.—

(1) Section 402B (20 U.S.C. 1070a-12) is amended by adding at the end the 

following new subsection: 

‘‘(d) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing an applicant’s 

past performance under section 402A(c)(1), and prior experience under section 

402A(d)(3), the Secretary shall consider the college-going rate of the participants 

served by the program compared to that of other applicants eligible to receive consideration of prior experience.’’. 

(2) Section 402C (20 U.S.C. 1070a-12) is amended by adding at the end the 

following new subsection: 

‘‘(f) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing an applicant’s 

past performance under section 402A(c)(1), and prior experience under section 

402A(d)(3), the Secretary shall consider the college-going rate of the participants 

served by the program compared to that of other applicants eligible to receive consideration of prior experience.’’. 

(3) Section 402D (20 U.S.C. 1070a-12) is amended by adding at the end the 

following new subsection: 

‘‘(e) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing an applicant’s 

past performance under section 402A(c)(1), and prior experience under section 

402A(d)(3), the Secretary shall consider the college-going rate of the participants 

served by the program compared to that of other applicants eligible to receive consideration of prior experience.’’. 

(4) Section 402E (20 U.S.C. 1070a-12) is amended by striking subsection (f) 

and inserting the following: 

‘‘(f) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing an applicant’s 

past performance under section 402A(c)(1), and prior experience under section 

402A(d)(3), the Secretary shall consider the college-going rate of the participants 

served by the program compared to that of other applicants eligible to receive consideration of prior experience.’’. 

(5) Section 402F (20 U.S.C. 1070a-12) is amended by adding at the end the 

following new subsection: 

‘‘(d) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing an applicant’s 

past performance under section 402A(c)(1), and prior experience under section 

402A(d)(3), the Secretary shall consider the college-going rate of the participants 

served by the program compared to that of other applicants eligible to receive consideration of prior experience.’’. 

(i) STAFF DEVELOPMENT.—Section 402G (20 U.S.C. 1070a-17) is amended to read 

as follows: 

39 

‘‘SEC. 402G. STAFF DEVELOPMENT ACTIVITIES. 

‘‘(a) SECRETARY’S AUTHORITY.—For the purpose of improving the operation of the 

programs and projects authorized by this chapter, the Secretary is authorized to 

make grants to institutions of higher education and other public and private nonprofit institutions and organizations to provide training and technical assistance for 

staff and leadership personnel employed in, participating in, or preparing for employment in, such programs and projects. 

‘‘(b) CONTENTS OF TRAINING PROGRAMS.—Such training shall be provided to assist 

programs and projects in—

‘‘(1) achieving the expected program outcomes stated under this chapter or additional outcomes identified by individual programs or projects; 

‘‘(2) addressing any identified program weaknesses in the overall development, conduct, or administration of a grant or contract; 

‘‘(3) improving the quality of services provided to eligible students; or 

‘‘(4) additional areas in need of program improvement as identified by the 

Secretary or as requested by grantees in order to enhance program operations 

and outcomes. 

‘‘(c) CONSULTATION.—Grants for the purposes of this section shall be made only 

after consultation with regional and State professional associations of persons having special knowledge with respect to the needs and problems of such programs and 

projects.’’. 

(j) EVALUATIONS.—Section 402H (20 U.S.C. 1070a-18) is amended to read as follows: 

‘‘SEC. 402H. EVALUATIONS. 

‘‘(a) EVALUATIONS.—

‘‘(1) IN GENERAL.—For the purpose of improving the effectiveness of the programs and projects assisted under this chapter, the Secretary shall make grants 

to or enter into contracts with one or more organizations to—

‘‘(A) evaluate the effectiveness of the programs and projects assisted 

under this chapter; and 

‘‘(B) disseminate information on the impact of the programs in increasing 

the education level of participating students, as well as other appropriate 

measures. 

‘‘(2) ISSUES TO BE EVALUATED.—The evaluations described in paragraph (1) 

shall measure the effectiveness of programs under this chapter in—

‘‘(A) meeting the expected program outcomes stated under this chapter 

and all performance measures identified by the Secretary; 

‘‘(B) enhancing the access of low-income individuals and first-generation 

college students to postsecondary education; 

‘‘(C) preparing individuals and students for postsecondary education; 

‘‘(D) comparing the level of education completed by students who participate in the programs funded under this chapter with the level of education 

completed by students of similar backgrounds who do not participate in 

such programs; 

‘‘(E) comparing the retention rates, dropout rates, graduation rates, and 

college admission and completion rates of students who participate in the 

programs funded under this chapter with the rates of students of similar 

backgrounds who do not participate in such programs; and ‘‘(F) such other issues as the Secretary considers appropriate for inclusion 

in the evaluation. 

‘‘(3) PROGRAM METHODS.—Such evaluations shall also investigate the effectiveness of alternative and innovative methods within Federal TRIO programs 

of increasing access to, and retention of, students in postsecondary education. 

‘‘(b) RESULTS.—The Secretary shall submit to the authorizing committees—

‘‘(1) an annual interim report on the progress and preliminary results of the 

evaluation of each program funded under this chapter no later than 2 years following the date of enactment of the College Access and Opportunity Act of 2005; 

and 

‘‘(2) a final report not later than 3 years following the date of enactment of 

such Act. 

‘‘(c) PUBLIC AVAILABILITY.—All reports and underlying data gathered pursuant to 

this section shall be made available to the public upon request, in a timely manner 

following submission of the applicable reports under subsection (b), except that any 

personally identifiable information on students participating in any TRIO program 

shall not be disclosed or made available to the public.’’. 

SEC. 404. GEARUP. 

(a) DURATION OF AWARDS.—Section 404A(b) (20 U.S.C. 1070a–21(b)) is amended—

40 

(1) in paragraph (2)(B), by striking ‘‘Higher Education Amendments of 1998’’

and inserting ‘‘College Access and Opportunity Act of 2005’’; and 

(2) by adding at the end thereof the following new paragraph: 

‘‘(3) DURATION.—An award made by the Secretary under this chapter to an 

eligible entity described in paragraph (1) or (2) of subsection (c) shall be for the 

period of 6 years.’’. 

(b) CONTINUING ELIGIBILITY.—Section 404A (20 U.S.C. 1070a–21) is amended by 

adding at the end the following new subsection: 

‘‘(d) CONTINUING ELIGIBILITY.—An eligible entity shall not cease to be an eligible 

entity upon the expiration of any grant under this chapter (including a continuation 

award).’’. 

(c) CONTINUITY OF SERVICE.—

(1) COHORT APPROACH.—Section 404B(g)(1)(B) (20 U.S.C. 1070a–22(g)(1)(B)) is 

amended by inserting ‘‘and provide the option of continued services through the 

student’s first year of attendance at an eligible institution of higher education’’

after ‘‘grade level’’. 

(2) EARLY INTERVENTION.—Section 404D (20 U.S.C. 1070a–24) is amended—

(A) in subsection (b)(2)(A), by inserting ‘‘and students in the first year of 

attendance at an eligible institution of higher education’’ after ‘‘grade 12’’; 

and 

(B) in subsection (c), by inserting ‘‘, and may consider students in their 

first year of attendance at an eligible institution,’’ after ‘‘grade 12’’. 

(d) COORDINATION.—Section 404C(a)(2) (20 U.S.C. 1070a–23(a)(2)) is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (A); 

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

(3) by inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) describe activities for coordinating, complementing, and enhancing 

services under this chapter provided by other eligible entities in the State; 

and’’. 

(e) EDUCATION AND COUNSELING SERVICES.—Section 404D(b)(2)(A)(ii) (20 U.S.C. 

1070a–24(b)(2)(A)(ii)) is amended by striking ‘‘and academic counseling’’ and inserting ‘‘academic counseling, and financial literacy and economic literacy education or 

counseling’’. 

(f) HOMELESS AND UNACCOMPANIED YOUTH.—Section 404D is further amended by 

adding at the end the following new subsection: 

‘‘(e) HOMELESS AND UNACCOMPANIED YOUTH.—Notwithstanding any other provision of this chapter, individuals who are homeless or unaccompanied youth as defined in section 725 of the McKinney-Vento Homeless Assistance Act shall be eligible to participate in programs under this section.’’. 

(g) REAUTHORIZATION.—Section 404H (20 U.S.C. 1070a–28) is amended by striking ‘‘$200,000,000 for fiscal year 1999 and such sums as may be necessary for each 

of the 4 succeeding fiscal years’’ and inserting ‘‘$306,500,000 for fiscal year 2006 and 

such sums as may be necessary for each of the 5 succeeding fiscal years’’. 

SEC. 405. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 413A(b)(1) (20 U.S.C. 

1070b(b)(1)) is amended by striking ‘‘$675,000,000 for fiscal year 1999 and such 

sums as may be necessary for the 4 succeeding fiscal years’’ and inserting 

‘‘$779,000,000 for fiscal year 2006 and such sums as may be necessary for the 5 succeeding fiscal years’’. 

(b) PRIORITY OF AWARDS.—Paragraph (2) of section 413C(c) (20 U.S.C. 1070b2(c)(2)) is amended to read as follows: 

‘‘(2) In carrying out paragraph (1) of this subsection, each institution of higher 

education shall, in the agreement made under section 487, assure that the selection 

procedures—

‘‘(A) will give a priority for supplemental grants under this subpart to students who receive Pell Grants and meet the requirements of section 484; and 

‘‘(B) will award no more than 10 percent of each institution’s allocation received under section 413D to students who did not receive Federal Pell Grants 

in a prior year.’’. 

(c) PHASEOUT OF ALLOCATION BASED ON PREVIOUS ALLOCATIONS.—

(1) AMENDMENT.—Subsection (a) of section 413D (20 U.S.C. 1070b–3(a)) is 

amended to read as follows: 

‘‘(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—

‘‘(1) BASE GUARANTEE.—From the amount appropriated pursuant to section 

413A(b) for each fiscal year after fiscal year 2007, the Secretary shall, subject 

to paragraph (2), first allocate to each eligible institution an amount equal to 

the following percentage of the amount such institution received under subVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00044 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
41 

section (a) of this section for fiscal year 2007 (as such subsection was in effect 

with respect to allocations for such fiscal year): ‘‘(A) 80 percent for fiscal years 2008 and 2009; 

‘‘(B) 60 percent for fiscal years 2010 and 2011; 

‘‘(C) 40 percent for fiscal years 2012 and 2013; 

‘‘(D) 20 percent for fiscal years 2014 and 2015; and 

‘‘(E) 0 percent for fiscal year 2016 and any succeeding fiscal year. ‘‘(2) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIATIONS.— ‘‘(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for 

any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each 

such institution shall be ratably reduced. ‘‘(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are 

appropriated for any such fiscal year, such reduced amounts shall be increased on the same basis as they were reduced (until the amount allocated 

equals the amount required to be allocated under this subsection). ‘‘(3) ADDITIONAL ALLOCATIONS FOR CERTAIN INSTITUTIONS.— ‘‘(A) ALLOCATIONS PERMITTED.—Notwithstanding any other provision of 

this section, the Secretary may allocate an amount equal to not more than 

10 percent of the amount by which the amount appropriated in any fiscal 

year to carry out this subpart exceeds $700,000,000 among eligible institutions described in subparagraph (B). ‘‘(B) ELIGIBLE INSTITUTIONS.—An otherwise eligible institution may receive a portion of the allocation described in subparagraph (A) if— ‘‘(i) not less than 10 percent of the students attending the institution 

receive Federal Pell Grants; and ‘‘(ii)(I) in the case of an institution that offers programs of at least 

4 years in duration, if its graduation rate for Federal Pell Grant recipients attending the institution and graduating within the period of time 

equal to normal duration of the longest undergraduate program offered 

by the institution, as measured from the first day of their enrollment, 

exceeds the median rate for the class of institution (as defined in section 131(f)(5)(C)); or ‘‘(II) in the case of an institution that offers programs of at least 2, 

but less than 4, years in duration, if its rate for Federal Pell Grant recipients attending the institution and graduating or transferring to an 

institution that offers programs of at least 4 years in duration within 

the period of time equal to the normal duration of the program offered, 

as measured from the first day of their enrollment, exceeds the median 

rate for the class of institution (as defined in section 131(f)(5)(C)).’’. (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply 

with respect to any amounts appropriated under section 413A(b) of the Higher 

Education Act of 1965 (20 U.S.C. 1070b(b)) for fiscal year 2008 or any succeeding fiscal year. 

(d) BOOKS AND SUPPLIES.—Section 413D(c)(3)(D) (20 U.S.C. 1070–3(c)(3)(D)) is 

amended by striking ‘‘$450’’ and inserting ‘‘$600’’. 

SEC. 406. LEAP. 

Section 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

SEC. 407. HEP/CAMP PROGRAM. 

Section 418A (20 U.S.C. 1070d–2) is amended—

(1) in subsection (b)(1)(B)(i), by inserting ‘‘, or whose spouse’’ after ‘‘themselves’’; 

(2) in subsection (b)(3)(B), by inserting ‘‘, including preparation for college entrance exams’’ after ‘‘program’’; 

(3) in subsection (b)(8), by inserting ‘‘, including child care and transportation’’

after ‘‘supportive services’’; 

(4) by striking ‘‘and’’ at the end of subsection (b)(7), by striking the period at 

the end of subsection (b)(8) and inserting ‘‘; and’’, and by adding at the end of 

subsection (b) the following new paragraph: 

‘‘(9) follow-up activity and reporting requirements, except that not more than 

2 percent of the funds provided under this section may be used for such purposes.’’; 

(5) in subsection (c)(1)(A), by inserting ‘‘, or whose spouse’’ after ‘‘themselves’’; 

(6) in subsection (c)(1)(B), by striking clause (i) and inserting the following: 

‘‘(i) personal, academic, career, and economic education or personal finance counseling as an ongoing part of the program;’’; 

42 

(7) in subsection (c)(2)(B), by inserting ‘‘(including mentoring and guidance of 

such students)’’ after ‘‘services’’; 

(8) in subsection (c)(2), by striking ‘‘and’’ at the end of subparagraph (A), by 

striking the period at the end of subparagraph (B) and inserting ‘‘; and’’, and 

by adding at the end of subsection (c)(2) the following new subparagraph: 

‘‘(C) for students in any program that does not award a bachelor’s degree, encouraging the transfer to, and persistence in, such a program, and monitoring 

the rate of such transfer, persistence, and completion.’’; 

(9) in subsection (e), by striking ‘‘section 402A(c)(1)’’ and inserting ‘‘section 

402A(c)(2)’’; and 

(10) in subsection (h)—

(A) in paragraph (1), by striking ‘‘$15,000,000 for fiscal year 1999 and 

such sums as may be necessary for each of the 4 succeeding fiscal years’’

and inserting ‘‘$24,000,000 for fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years’’; and 

(B) in paragraph (2), by striking ‘‘$5,000,000 for fiscal year 1999 and such 

sums as may be necessary for each of the 4 succeeding fiscal years’’ and 

inserting ‘‘$16,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years’’. 

SEC. 408. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM. 

Subpart 6 of part A of title IV is amended to read as follows: 

‘‘Subpart 6—Robert C. Byrd Honors Scholarship Program 

‘‘SEC. 419A. ROBERT C. BYRD MATHEMATICS AND SCIENCE HONORS SCHOLARSHIP PROGRAM. 

‘‘(a) PURPOSE.—The purpose of this section is to award scholarships to students 

who are enrolled in studies leading to baccalaureate and advanced degrees in physical, life, or computer sciences, mathematics, and engineering. 

‘‘(b) DEFINITIONS.—As used in this section—

‘‘(1) the term ‘computer science’ means the branch of knowledge or study of 

computers, including such fields of knowledge or study as computer hardware, 

computer software, computer engineering, information systems, and robotics; 

‘‘(2) the term ‘eligible student’ means a student who—

‘‘(A) is a citizen of the United States; 

‘‘(B) is selected by the managing agent to receive a scholarship; 

‘‘(C) is enrolled full-time in an institution of higher education, other than 

a United States service academy; and 

‘‘(D) has shown a commitment to and is pursuing a major in studies leading to a baccalaureate, masters, or doctoral degree (or a combination thereof) in physical, life, or computer sciences, mathematics, or engineering; 

‘‘(3) the term ‘engineering’ means the science by which the properties of matter and the sources of energy in nature are made useful to humanity in structures, machines, and products, as in the construction of engines, bridges, buildings, mines, and chemical plants, including such fields of knowledge or study 

as aeronautical engineering, chemical engineering, civil engineering, electrical 

engineering, industrial engineering, materials engineering, manufacturing engineering, and mechanical engineering; 

‘‘(4) the term ‘life sciences’ means the branch of knowledge or study of living 

things, including such fields of knowledge or study as biology, biochemistry, biophysics, microbiology, genetics, physiology, botany, zoology, ecology, and behavioral biology, except that the term does not encompass social psychology or the 

health professions; 

‘‘(5) the term ‘managing agent’ means an entity to which an award is made 

under subsection (c) to manage a program of Mathematics and Science Honors 

Scholarships; 

‘‘(6) the term ‘mathematics’ means the branch of knowledge or study of numbers and the systematic treatment of magnitude, relationships between figures 

and forms, and relations between quantities expressed symbolically, including 

such fields of knowledge or study as statistics, applied mathematics, and operations research; and 

‘‘(7) the term ‘physical sciences’ means the branch of knowledge or study of 

the material universe, including such fields of knowledge or study as astronomy, 

atmospheric sciences, chemistry, earth sciences, ocean sciences, physics, and 

planetary sciences. 

‘‘(c) AWARD.—

‘‘(1)(A) From funds authorized under section 419D to carry out this section, 

the Secretary is authorized, through a grant or cooperative agreement, to make 

43 

an award to a private, non-profit organization, other than an institution of higher education or system of institutions of higher education, to manage, through 

a public and private partnership, a program of Mathematics and Science Honors 

Scholarships under this section. 

‘‘(B) The award under subparagraph (A) shall be for a five-year period. 

‘‘(2)(A) One hundred percent of the funds awarded under paragraph (1)(A) for 

any fiscal year shall be obligated and expended solely on scholarships to eligible 

students. 

‘‘(B) No Federal funds shall be used to provide more than 50 percent of the 

cost of any scholarship to an eligible student. 

‘‘(C) The maximum scholarship award shall be the difference between an eligible student’s cost of attendance minus any non-loan based aid such student 

receives. 

‘‘(3)(A) The secretary may establish—

‘‘(i) eligibility criteria for applicants for managing agent, including criteria 

regarding financial and administrative capability; and 

‘‘(ii) operational standards for the managing agent, including management and performance requirements, such as audit, recordkeeping, record 

retention, and reporting procedures and requirements. 

‘‘(B) The Secretary, as necessary, may review and revise any criteria, standards, and rules established under this paragraph and, through the agreement 

with the managing agent, see that any revisions are implemented. 

‘‘(4) If the managing agent fails to meet the requirements of this section the 

Secretary may terminate the award to the managing agent. 

‘‘(5) The Secretary shall conduct outreach efforts to help raise awareness of 

the Mathematics and Science Honors Scholarships. 

‘‘(d) DUTIES OF THE MANAGING AGENT.—The managing agent shall—

‘‘(1) develop criteria to award Mathematics and Science Honors Scholarships 

based on established measurements available to secondary students who wish 

to pursue degrees in physical, life, or computer sciences, mathematics, and engineering; 

‘‘(2) establish a Mathematics and Science Honors Scholarship Fund in a separate, named account that clearly discloses the amount of Federal and non-Federal funds deposited in the account and used for scholarships under this section; 

‘‘(3) solicit funds for scholarships and for the administration of the program 

from non-Federal sources; 

‘‘(4) solicit applicants for scholarships; 

‘‘(5) from the amounts in the Fund, award scholarships to eligible students 

and transfer such funds to the institutions of higher education that they attend; 

and 

‘‘(6) annually submit to the Secretary a financial audit and a report on the 

progress of the program, and such other documents as the Secretary may require to determine the effective management of the program. 

‘‘(e) APPLICATIONS.—

‘‘(1) Any eligible entity that desires to be the managing agent under this section shall submit an application to the Secretary, in such form and containing 

such information, as the Secretary may require. 

‘‘(2) Each application shall include a description of—

‘‘(A) how the applicant meets or will meet requirements established under 

subsections (c)(3)(A) and (d); 

‘‘(B) how the applicant will solicit funds for scholarships and for the administration of the program from non-Federal sources; 

‘‘(C) how the applicant will provide nationwide outreach to inform students about the program and to encourage students to pursue degrees in 

physical, life, or computer sciences, mathematics, and engineering; 

‘‘(D) how the applicant will solicit applications for scholarships, including 

how the applicant will balance efforts in urban and rural areas; 

‘‘(E) the selection criteria based on established measurements available to 

secondary students the applicant will use to award scholarships and to 

renew those awards; 

‘‘(F) how the applicant will inform the institution of higher education chosen by the recipient of the name and scholarship amount of the recipient; 

‘‘(G) what procedures and assurances the applicant and the institution of 

higher education that the recipient attends will use to verify student eligibility, attendance, degree progress, and academic performance and to deliver and account for payments to such institution; 

‘‘(H) the management (including audit and accounting) procedures the applicant will use for the program; 

44 

‘‘(I) the human, financial, and other resources that the applicant will need 

and use to manage the program; ‘‘(J) how the applicant will evaluate the program and report to the Secretary annually; and ‘‘(K) a description of how the entity will coordinate with, complement, and 

build on similar public and private mathematics and science programs. ‘‘(f) SCHOLARSHIP RECIPIENTS.— ‘‘(1) A student receiving a scholarship under this section shall be known as a ‘Byrd Mathematics and Science Honors Scholar’. ‘‘(2) Any student desiring to receive a scholarship under this section shall submit an application to the managing agent in such form, and containing such information, as the managing agent may require. ‘‘(3) Any student that receives a scholarship under this section shall enter into 

an agreement with the managing agent to complete 5 consecutive years of service to begin no later than 12 months following completion of the final degree 

in a position related to physical, life, or computer sciences, mathematics, or engineering as defined under this section. ‘‘(4) If any student that receives a scholarship under this section fails to earn 

at least a baccalaureate degree in physical, life, or computer sciences, mathematics, or engineering as defined under this section, the student shall repay to 

the managing agent the amount of any financial assistance paid to such student. 

‘‘(5) If any student that receives a scholarship under this section fails to meet 

the requirements of paragraph (3), the student shall repay to the managing 

agent the amount of any financial assistance paid to such student. 

‘‘(6)(A) Scholarships shall be awarded for only one academic year of study at 

a time. 

‘‘(B)(i) A scholarship shall be renewable on an annual basis for the established 

length of the academic program if the student awarded the scholarship remains 

eligible. 

‘‘(ii) The managing agent may condition renewal of a scholarship on measures 

of academic progress and achievement, with the approval of the Secretary. 

‘‘(C)(i) If a student fails to either remain eligible or meet established measures 

of academic progress and achievement, the managing agent shall instruct the 

student’s institution of higher education to suspend payment of the student’s 

scholarship. 

‘‘(ii) A suspension of payment shall remain in effect until the student is able 

to demonstrate to the satisfaction of the managing agent that he or she is again 

eligible and meets the established measures of academic progress and achievement. 

‘‘(iii) A student’s eligibility for a scholarship shall be terminated if a suspension period exceeds 12 months. 

‘‘(D)(i)(I) A student awarded a scholarship may, in a manner and under the 

terms established by, and with the approval of, the managing agent, postpone 

or interrupt his or her enrollment at an institution of higher education for up 

to 12 months. 

‘‘(II) Such a postponement or interruption shall not be considered a suspension for purposes of subparagraph (C). 

‘‘(ii) Neither a student nor the student’s institution of higher education shall 

receive the student’s scholarship payments during the period of postponement 

or interruption, but such payments shall resume upon enrollment or reenrollment. 

‘‘(iii) In exceptional circumstances, such as serious injury or illness or the necessity to care for family members, the student’s postponement or interruption 

may, upon notification and approval of the managing agent, be extended beyond 

the 12 month period described in clause (i)(I). 

‘‘(g) RESPONSIBILITIES OF INSTITUTION OF HIGHER EDUCATION.—

‘‘(1) The managing agent shall require any institution of higher education 

that enrolls a student who receives a scholarship under this section to annually 

provide an assurance, prior to making any payment, that the student—

‘‘(A) is eligible in accordance with subsection (b)(2); and 

‘‘(B) has provided the institution with a written commitment to attend, or is 

attending, classes and is satisfactorily meeting the institution’s academic criteria for enrollment in its program of study. 

‘‘(2)(A) The managing agent shall provide the institution of higher education 

with payments from the Fund for selected recipients in at least two installments. 

‘‘(B) An institution of higher education shall return prorated amounts of any 

scholarship payment to the managing agent, who shall deposit it in to the Fund, 

45 

if a recipient declines a scholarship, does not attend courses, transfers to another institution of higher education, or becomes ineligible for a scholarship. 

‘‘SEC. 419B. MATHEMATICS AND SCIENCE INCENTIVE PROGRAM. 

‘‘(a) PROGRAM.—

‘‘(1) IN GENERAL.—The Secretary is authorized to carry out a program of assuming the obligation to pay, pursuant to the provisions of this section, the interest on a loan made, insured, or guaranteed under part B or D of this title. 

‘‘(2) ELIGIBILITY.—The Secretary may assume interest payments under paragraph (1) only for a borrower who—

‘‘(A) has submitted an application in compliance with subsection (d); 

‘‘(B) obtained one or more loans described in paragraph (1) as an undergraduate student; 

‘‘(C) is a new borrower (within the meaning of section 103(7) of this Act) 

on or after the date of enactment of the College Access and Opportunity Act 

of 2005; 

‘‘(D) is a highly qualified teacher of science, technology, engineering or 

mathematics at an elementary or secondary school in a high need local educational agency, or is a mathematics, science, or engineering professional; 

and 

‘‘(E) enters into an agreement with the Secretary to complete 5 consecutive years of service in a position described in subparagraph (D), starting 

on the date of the agreement. 

‘‘(3) PRIOR INTEREST LIMITATIONS.—The Secretary shall not make any payments for interest that—

‘‘(A) accrues prior to the beginning of the repayment period on a loan in 

the case of a loan made under section 428H or a Federal Direct Unsubsidized Stafford Loan; or 

‘‘(B) has accrued prior to the signing of an agreement under paragraph 

(2)(E). 

‘‘(4) INITIAL SELECTION.—In selecting participants for the program under this 

section, the Secretary—

‘‘(A) shall choose among eligible applicants on the basis of—

‘‘(i) the national security, homeland security, and economic security 

needs of the United States, as determined by the Secretary, in consultation with other Federal agencies, including the Departments of 

Labor, Defense, Homeland Security, Commerce, and Energy, the Central Intelligence Agency, and the National Science Foundation; and 

‘‘(ii) the academic record or job performance of the applicant; and 

‘‘(B) may choose among eligible applicants on the basis of—

‘‘(i) the likelihood of the applicant to complete the 5-year service obligation; 

‘‘(ii) the likelihood of the applicant to remain in science, mathematics, 

or engineering after the completion of the service requirement; or 

‘‘(iii) other relevant criteria determined by the Secretary. 

‘‘(5) AVAILABILITY SUBJECT TO APPROPRIATIONS.—Loan interest payments 

under this section shall be subject to the availability of appropriations. If the 

amount appropriated for any fiscal year is not sufficient to provide interest payments on behalf of all qualified applicants, the Secretary shall give priority to 

those individuals on whose behalf interest payments were made during the preceding fiscal year. 

‘‘(6) REGULATIONS.—The Secretary is authorized to prescribe such regulations 

as may be necessary to carry out the provisions of this section. 

‘‘(b) DURATION AND AMOUNT OF INTEREST PAYMENTS.—The period during which 

the Secretary shall pay interest on behalf of a student borrower who is selected 

under subsection (a) is the period that begins on the effective date of the agreement 

under subsection (a)(2)(E), continues after successful completion of the service obligation, and ends on the earlier of—

‘‘(1) the completion of the repayment period of the loan; 

‘‘(2) payment by the Secretary of a total of $5,000 on behalf of the borrower; 

‘‘(3) if the borrower ceases to fulfill the service obligation under such agreement prior to the end of the 5-year period, as soon as the borrower is determined to have ceased to fulfill such obligation in accordance with regulations 

of the Secretary; or 

‘‘(4) 6 months after the end of any calendar year in which the borrower’s gross 

income equals or exceeds 4 times the national per capita disposable personal 

income (current dollars) for such calendar year, as determined on the basis of 

the National Income and Product Accounts Tables of the Bureau of Economic 

46 

Analysis of the Department of Commerce, as determined in accordance with 

regulations prescribed by the Secretary. 

‘‘(c) REPAYMENT TO ELIGIBLE LENDERS.—Subject to the regulations prescribed by 

the Secretary by regulation under subsection (a)(6), the Secretary shall pay to each 

eligible lender or holder for each payment period the amount of the interest that 

accrues on a loan of a student borrower who is selected under subsection (a). 

‘‘(d) APPLICATION FOR REPAYMENT.—

‘‘(1) IN GENERAL.—Each eligible individual desiring loan interest payment 

under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, and containing such information as the 

Secretary may require. 

‘‘(2) FAILURE TO COMPLETE SERVICE AGREEMENT.—Such application shall contain an agreement by the individual that, if the individual fails to complete the 

5 consecutive years of service required by subsection (a)(2)(E), the individual 

agrees to repay the Secretary the amount of any interest paid by the Secretary 

on behalf of the individual. 

‘‘(e) TREATMENT OF CONSOLIDATION LOANS.—A consolidation loan made under section 428C of this Act, or a Federal Direct Consolidation Loan made under part D 

of title IV of this Act, may be a qualified loan for the purpose of this section only 

to the extent that such loan amount was used by a borrower who otherwise meets 

the requirements of this section to repay—

‘‘(1) a loan made under section 428 or 428H of this Act; or 

‘‘(2) a Federal Direct Stafford Loan, or a Federal Direct Unsubsidized Stafford 

Loan, made under part D of title IV of this Act. 

‘‘(f) PREVENTION OF DOUBLE BENEFITS.—No borrower may, for the same service, 

receive a benefit under both this section and—

‘‘(1) any loan forgiveness program under title IV of this Act; or 

‘‘(2) subtitle D of title I of the National and Community Service Act of 1990 

(42 U.S.C. 12601 et seq.). 

‘‘(g) DEFINITIONS.—As used in this section—

‘‘(1) the term ‘high need local educational agency’ has the same meaning given 

such term in section 201(b)(4); and 

‘‘(2) the term ‘mathematics, science, or engineering professional’ means a person who—

‘‘(A) holds a baccalaureate, masters, or doctoral degree (or a combination 

thereof) in science, mathematics, or engineering; and 

‘‘(B) works in a field the Secretary determines is closely related to that 

degree, which shall include working as a professor at a two- or four-year 

institution of higher education. 

‘‘SEC. 419C. MATHEMATICS AND SCIENCE EDUCATION COORDINATING COUNCIL GRANTS. 

‘‘(a) PURPOSES.—The purposes of this section include—

‘‘(1) supporting programs that encourage students to enroll in and successfully 

complete baccalaureate and advanced degrees in science, technology, engineering, and mathematics; 

‘‘(2) achieving the common objective of organizing, leading, and implementing 

State-based reform agendas that support the continuing improvement of mathematics and science education; and 

‘‘(3) improving collaboration in a State among the State educational agency, 

2-year and 4-year institutions of higher education, and the business community 

through the development or improvement of a coordinating council. 

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

‘‘(1) the term ‘eligible State’ means—

‘‘(A) the Governor of a State; or 

‘‘(B) in the case of a State for which the constitution or laws of the State 

designate an individual, entity, or agency in the State, other than the Governor, to be responsible for coordination among segments of the State’s educational systems, such individual, entity, or agency. 

‘‘(2) the term ‘mathematics and science education coordinating council’ means 

an organization that is charged by a State with coordinating mathematics and 

science education in the State. Such a council shall be composed of education, 

business, and community leaders working together to increase student participation and academic achievement in mathematics and science. 

‘‘(c) STATE GRANTS.—From amounts made available under section 419D for this 

section, the Secretary is authorized to use not more than $5,000,000 to award grants 

on a competitive basis to eligible States for the purpose of carrying out activities 

described in subsection (d). 

‘‘(d) USES OF FUNDS.—An eligible State that receives a grant under this section 

is authorized to use grant funds to carry out one or more of the following activities: 

47 

‘‘(1) In a State in which a mathematics and science education coordinating 

council does not exist, planning and establishing such a council. 

‘‘(2) In a State in which such a council exists, reforming or expanding the activities of the council, including implementing State-based reform agendas that 

support the continuing improvement of mathematics and science education, and 

support services that lead to better teacher recruitment and training, increased 

student academic achievement, and increased student enrollment and degree attainment in science, technology, engineering, and mathematics. 

‘‘(3) Coordinating with activities under part B of title II of the Elementary 

and Secondary Education Act of 1965 and with title II of this Act, especially 

as it pertains to the recruitment and preparation of highly qualified mathematics and science teachers. 

‘‘(e) APPLICATION.—To be eligible to receive a grant under this section, an eligible 

State shall submit an application to the Secretary that—

‘‘(1) describes the activities the State will carry out with the funds; 

‘‘(2) contains a plan for continuing such activities once Federal funding ceases; 

and 

‘‘(3) contains such other information and assurances as the Secretary may require. 

‘‘(f) CONSULTATION.—The Governor of a State, or the individual, entity, or agency 

in the State described in subsection (b)(1)(B), shall consult with the State board of 

education, State educational agency, and the State agency for higher education, as 

appropriate, with respect to the activities assisted under this section. In the case 

of an individual, entity, or agency described in subsection (b)(1)(B), such consultation shall also include the Governor. 

‘‘(g) CONSTRUCTION.—Nothing in this section shall be construed to negate or supersede the legal authority under State law of any State agency, State entity, or 

State public official over programs that are under the jurisdiction of the agency, entity, or official. 

‘‘(h) ADMINISTRATIVE PROVISIONS.—

‘‘(1) IN GENERAL.—

‘‘(A) Grants awarded under this section shall be awarded for a period not 

to exceed 5 years. 

‘‘(B) A grantee may receive a grant under this part only once. 

‘‘(C) Payments of grant funds under this section shall be annual. 

‘‘(2) SECRETARIAL SELECTIONS.—The Secretary shall determine which applications receive funds under this section, and the amount of the grant. In determining grant amounts, the Secretary shall take into account the total amount 

of funds available for all grants under this section and the nature of each grant 

proposal, including whether funds are being sought to assist in the creation of 

a new State mathematics and science education coordinating council or to extend the work of an existing council. The Secretary shall also take into account 

the equitable geographic distribution of grants throughout the United States. 

‘‘(3) MATCHING REQUIREMENT.—Each eligible State receiving a grant under 

this section shall provide, from non-Federal sources, an amount equal to 50 percent of the amount of the grant (in cash or in kind) to carry out the activities 

supported by the grant. 

‘‘(i) ACCOUNTABILITY AND EVALUATION.—

‘‘(1) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State that receives a 

grant under this section shall submit an annual accountability report to the 

Secretary. Such report shall include a description of the degree to which the eligible State, in using grant funds, has made substantial progress in meeting its 

objectives. 

‘‘(2) EVALUATION AND DISSEMINATION.—The Secretary shall evaluate the activities funded under this section and report the Secretary’s findings regarding 

such activities to the authorizing committees. The Secretary shall broadly disseminate successful practices developed by eligible States under this section, 

and shall broadly disseminate information regarding such practices that were 

found to be ineffective. 

‘‘(3) REVOCATION.—If the Secretary determines that an eligible State is not 

making substantial progress in meeting the purposes, objectives, and measures, 

as appropriate, required under this section by the end of the second year of a 

grant, then the grant payment shall not be made for the third year and subsequent years of the grant. 

‘‘SEC. 419D. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated $41,000,000 for fiscal year 2006 and 

such sums as may be necessary for each of the 5 succeeding fiscal years to carry 

out this subpart.’’. 

48 

SEC. 409. CHILD CARE ACCESS. 

Section 419N(g) (20 U.S.C. 1070e(g)) is amended— (1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

SEC. 410. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 

(a) REPEAL.—Subpart 8 of part A of title IV (20 U.S.C. 1070f—1070f–6) is repealed. 

(b) CONFORMING AMENDMENT.—Section 400(b) (20 U.S.C. 1070(b)) is amended by 

striking ‘‘through 8’’ and inserting ‘‘through 7’’. 

PART B—FEDERAL FAMILY EDUCATION LOAN 

PROGRAM 

SEC. 421. REAUTHORIZATION OF FEDERAL FAMILY EDUCATION LOAN PROGRAM. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 421(b)(5) (20 U.S.C. 1071(b)(5)) 

is amended by striking ‘‘an administrative cost allowance’’ and inserting ‘‘a loan 

processing and issuance fee’’. (b) EXTENSION OF AUTHORITY.— (1) FEDERAL INSURANCE LIMITATIONS.—Section 424(a) (20 U.S.C. 1074(a)) is 

amended— (A) by striking ‘‘2004’’ and inserting ‘‘2012’’; and 

(B) by striking ‘‘2008’’ and inserting ‘‘2016’’. (2) GUARANTEED LOANS.—Section 428(a)(5) (20 U.S.C. 1078(a)(5)) is amended— (A) by striking ‘‘2004’’ and inserting ‘‘2012’’; and 

(B) by striking ‘‘2008’’ and inserting ‘‘2016’’. (3) CONSOLIDATION LOANS.—Section 428C(e) (20 U.S.C. 1078–3(e)) is amended 

by striking ‘‘2004’’ and inserting ‘‘2012’’. 

SEC. 422. LOAN LIMITS. 

(a) FEDERAL INSURANCE LIMITS.—Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is 

amended— (1) in clause (i)(I), by striking ‘‘$2,625’’ and inserting ‘‘$3,500’’; and 

(2) in clause (ii)(I), by striking ‘‘$3,500’’ and inserting ‘‘$4,500’’. 

(b) GUARANTEE LIMITS.—Section 428(b)(1)(A) (20 U.S.C. 1078(b)(1)(A)) is amended—

(1) in clause (i)(I), by striking ‘‘$2,625’’ and inserting ‘‘$3,500’’; and 

(2) in clause (ii)(I), by striking ‘‘$3,500’’ and inserting ‘‘$4,500’’. 

(c) COUNTING OF CONSOLIDATION LOANS AGAINST LIMITS.—Section 428C(a)(3)(B) 

(20 U.S.C. 1078–3(a)(3)(B)) is amended by adding at the end the following new 

clause: 

‘‘(ii) Loans made under this section shall, to the extent used to pay off the 

outstanding principal balance on loans made under this title, excluding capitalized interest, be counted against the applicable limitations on aggregate indebtedness contained in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, and 

464(a)(2)(B).’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to any loan made, insured, or guaranteed under part B or part D of title IV 

of the Higher Education Act of 1965 for which the first disbursement of principal 

is made on or after July 1, 2007. 

SEC. 423. INTEREST RATES AND SPECIAL ALLOWANCES. 

(a) FFEL INTEREST RATES.—Section 427A (20 U.S.C. 1077a(k)) is amended—

(1) in subsection (k)—

(A) by striking ‘‘, AND BEFORE JULY 1, 2006’’ in the heading of such subsection; and 

(B) by striking ‘‘, and before July 1, 2006,’’ each place it appears other 

than paragraph (4); 

(2) by striking subsection (l); and 

(3) by redesignating subsections (m) and (n) as subsections (l) and (m), respectively. 

(b) DIRECT LOAN INTEREST RATES.—Section 455(b) (20 U.S.C. 1087e(b)) is amended—

(1) in paragraph (6)—

(A) by striking ‘‘, AND BEFORE JULY 1, 2006’’ in the heading of such paragraph; and 

(B) by striking ‘‘, and before July 1, 2006,’’ each place it appears other 

than subparagraph (D); 

49 

(2) by striking paragraph (7); and 

(3) by redesignating paragraphs (8) and (9) as paragraphs (7) and (8), respectively. 

(c) CONSOLIDATION LOAN INTEREST RATES.—

(1) FFEL LOANS.—Section 427A(k) (20 U.S.C. 1077a(k)) is further amended—

(A) in the heading of paragraph (4), by inserting ‘‘BEFORE JULY 1, 2006’’

after ‘‘LOANS’’; 

(B) by redesignating paragraph (5) as paragraph (6); and 

(C) by inserting after paragraph (4) the following: 

‘‘(5) CONSOLIDATION LOANS ON OR AFTER JULY 1, 2006.—

‘‘(A) BORROWER ELECTION.—With respect to any consolidation loan under 

section 428C for which the application is received by an eligible lender on 

or after July 1, 2006, the applicable rate of interest shall, at the election 

of the borrower at the time of application for the loan, be either at the rate 

determined under subparagraph (B) or the rate determined under subparagraph (C). 

‘‘(B) VARIABLE RATE.—Except as provided in subparagraph (D), the rate 

determined under this subparagraph shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding 

June 1 and, for such 12-month period, not be more than—

‘‘(i) the bond equivalent rate of 91-day Treasury bills auctioned at the 

final auction held prior to such June 1; plus 

‘‘(ii) 2.3 percent, 

except that such rate shall not exceed 8.25 percent. 

‘‘(C) FIXED RATE.—Except as provided in subparagraph (D), the rate determined under this subparagraph shall be determined for the duration of 

the term of the loan on the July 1 that is or precedes the date on which 

the application is received by an eligible lender, and shall be, for such duration, not more than—

‘‘(i) the bond equivalent rate of 91-day Treasury bills auctioned at the 

final auction held prior to the June 1 immediately preceding such July 

1; plus 

‘‘(ii) 3.3 percent, 

except that such rate shall not exceed 8.25 percent. 

‘‘(D) CONSOLIDATION OF PLUS LOANS.—In the case of any such consolidation loan that is used to repay loans each of which was made under section 

428B or was a Federal Direct PLUS Loan (or both), the rates determined 

under clauses (B) and (C) shall be determined—

‘‘(i) by substituting ‘3.1 percent’ for ‘2.3 percent’; 

‘‘(ii) by substituting ‘4.1 percent’ for ‘3.3 percent’; and 

‘‘(iii) by substituting ‘9.0 percent’ for ‘8.25 percent’.’’. 

(2) DIRECT LOANS.—Section 455(b)(6) (20 U.S.C. 1087e(b)(6)) is further amended—

(A) in the heading of subparagraph (D), by inserting ‘‘BEFORE JULY 1, 

2006’’ after ‘‘LOANS’’

(B) by redesignating subparagraph (E) as subparagraph (F); and 

(C) by inserting after subparagraph (D) the following: 

‘‘(E) CONSOLIDATION LOANS ON OR AFTER JULY 1, 2006.—

‘‘(i) BORROWER ELECTION.—Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct Consolidation Loan for which the application is received by an eligible lender on 

or after July 1, 2006, the applicable rate of interest shall, at the election of the borrower at the time of application for the loan, be either 

at the rate determined under clause (ii) or the rate determined under 

clause (iii). 

‘‘(ii) VARIABLE RATE.—Except as provided in clause (iv), the rate determined under this clause shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding 

June 1 and, for such 12-month period, be equal to—

‘‘(I) the bond equivalent rate of 91-day Treasury bills auctioned 

at the final auction held prior to such June 1; plus 

‘‘(II) 2.3 percent, 

except that such rate shall not exceed 8.25 percent. 

‘‘(iii) FIXED RATE.—Except as provided in clause (iv), the rate determined under this clause shall be determined for the duration of the 

term of the loan on the July 1 that is or precedes the date on which 

the application is received by an eligible lender, and shall be, for such 

duration, equal to—

50 

‘‘(I) the bond equivalent rate of 91-day Treasury bills auctioned 

at the final auction held prior to the June 1 immediately preceding 

such July 1; plus 

‘‘(II) 3.3 percent, 

except that such rate shall not exceed 8.25 percent. 

‘‘(iv) CONSOLIDATION OF PLUS LOANS.—In the case of any such Federal Direct Consolidation Loan that is used to repay loans each of 

which was made under section 428B or was a Federal Direct PLUS 

Loan (or both), the rates determined under clauses (ii) and (iii) shall 

be determined—

‘‘(I) by substituting ‘3.1 percent’ for ‘2.3 percent’; 

‘‘(II) by substituting ‘4.1 percent’ for ‘3.3 percent’; and 

‘‘(III) by substituting ‘9.0 percent’ for ‘8.25 percent’.’’. 

(d) CONSOLIDATION LOAN CONFORMING AMENDMENT.—Section 428C(c)(1)(A)(ii) (20 

U.S.C. 1078–3(c)(1)(A)(ii)) is amended by striking ‘‘section 427A(l)(3)’’ and inserting 

‘‘section 427A(k)(5)’’. 

(e) CONFORMING AMENDMENTS FOR SPECIAL ALLOWANCES.—

(1) AMENDMENT.—Subparagraph (I) of section 438(b)(2) (20 U.S.C. 1087–

1(b)(2)) is amended—

(A) by striking clause (ii) and inserting the following: 

‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In the case of any loan for which 

the first disbursement is made on or after January 1, 2000, and for 

which the applicable interest rate is described in section 427A(k)(2), 

clause (i)(III) of this subparagraph shall be applied by substituting 

‘1.74 percent’ for ‘2.34 percent’.’’; 

(B) in clause (iii)—

(i) by striking ‘‘or (l)(2)’’; and 

(ii) by striking ‘‘, subject to clause (v) of this subparagraph’’; 

(C) in clause (iv)—

(i) by striking ‘‘or (l)(3)’’ and inserting ‘‘or (k)(5)’’; and 

(ii) by striking ‘‘, subject to clause (vi) of this subparagraph’’; and 

(D) by striking clauses (v), (vi), and (vii) and inserting the following: 

‘‘(v) RECAPTURE OF EXCESS INTEREST.—

‘‘(I) EXCESS CREDITED.—With respect to a loan on which the applicable interest rate is determined under section 427A(k) and for 

which the first disbursement of principal is made on or after July 

1, 2006, if the applicable interest rate for any 3-month period exceeds the special allowance support level applicable to such loan 

under this subparagraph for such period, then an adjustment shall 

be made by calculating the excess interest in the amount computed 

under subclause (II) of this clause, and by crediting the excess interest to the Government not less often than annually. 

‘‘(II) CALCULATION OF EXCESS.—The amount of any adjustment of 

interest on a loan to be made under this subsection for any quarter 

shall be equal to—

‘‘(aa) the applicable interest rate minus the special allowance 

support level determined under this subparagraph; multiplied 

by 

‘‘(bb) the average daily principal balance of the loan (not including unearned interest added to principal) during such calendar quarter; divided by 

‘‘(cc) four. 

‘‘(III) SPECIAL ALLOWANCE SUPPORT LEVEL.—For purposes of this 

clause, the term ‘special allowance support level’ means, for any 

loan, a number expressed as a percentage equal to the sum of the 

rates determined under subclauses (I) and (III) of clause (i), and 

applying any substitution rules applicable to such loan under 

clauses (ii), (iii), and (iv) in determining such sum.’’. 

(2) EFFECTIVE DATE.—The amendments made by this subsection shall not 

apply with respect to any special allowance payment made under section 438 

of the Higher Education Act of 1965 (20 U.S.C 1087–1) before July 1, 2006. 

SEC. 424. ADDITIONAL LOAN TERMS AND CONDITIONS. 

(a) FEDERAL DEFAULT FEES.—

(1) IN GENERAL.—Subparagraph (H) of section 428(b)(1) (20 U.S.C. 

1078(b)(1)(H)) is amended to read as follows: 

‘‘(H) provides—

‘‘(i) for loans for which the first disbursement of principal is made before July, 1, 2006, for the collection of a single insurance premium 

51 

equal to not more than 1.0 percent of the principal amount of the loan, 

by deduction proportionately from each installment payment of the proceeds of the loan to the borrower, and insures that the proceeds of the 

premium will not be used for incentive payments to lenders; or ‘‘(ii) for loans for which the first disbursement of principal is made 

on or after July 1, 2006, for the collection and deposit into the Federal 

Student Loan Reserve Fund under section 422A of a Federal default fee 

of 1.0 percent of the principal amount of such loan, which shall be deducted proportionately from each installment payment of the proceeds 

of the loan to the borrower prior to payment to the borrower, and insures that the proceeds of the Federal default fee will not be used for 

incentive payments to lenders;’’. (2) UNSUBSIDIZED LOANS.—Section 428H(h) (20 U.S.C. 1078–8(h)) is amended 

by adding at the end the following new sentence: ‘‘In lieu of the insurance premium authorized under the preceding sentence, and effective for loans for which 

the first disbursement of principal is made on or after July 1, 2006, each State 

or nonprofit private institution or organization having an agreement with the 

Secretary under section 428(b)(1) shall collect and deposit into the Federal Student Loan Reserve Fund under section 422A a Federal default fee of 1.0 percent 

of the principal amount of the loan, obtained by deduction proportionately from 

each installment payment of the proceeds of the loan to the borrower.’’. 

(3) VOLUNTARY FLEXIBLE AGREEMENTS.—Section 428A(a)(1) (20 U.S.C. 1078–

1(a)(1)) is amended—

(A) by striking ‘‘or’’ at the end of subparagraph (A); 

(B) by striking the period at the end of subparagraph (B) and inserting 

‘‘; or’’; and 

(C) by adding at the end the following new subparagraph: 

‘‘(C) the Federal default fee required by section 428(b)(1)(H) and the second sentence of section 428H(h).’’. 

(b) DISBURSEMENT.—Section 428(b)(1)(N) (20 U.S.C. 1078(b)(1)(N)(ii)) is amended—

(1) in clause (i), by inserting ‘‘(including an eligible foreign institution, except 

as provided in clause (ii))’’ after ‘‘institution’’; and 

(2) in clause (ii), by striking ‘‘or at an eligible foreign institution’’. 

(c) REPAYMENT PLANS.—

(1) FFEL LOANS.—Section 428(b)(9)(A) (20 U.S.C. 1078(b)(9)(A)) is amended—

(A) by inserting before the semicolon at the end of clause (ii) the following: ‘‘, and the Secretary may not restrict the proportions or ratios by 

which such payments may be graduated with the informed agreement of 

the borrower’’; 

(B) by striking ‘‘and’’ at the end of clause (iii); 

(C) by redesignating clause (iv) as clause (v); and 

(D) by inserting after clause (iii) the following new clause: 

‘‘(iv) a delayed repayment plan under which the borrower makes 

scheduled payments for not more than 2 years that are annually not 

less than the amount of interest due or $600, whichever is greater, and 

then makes payments in accordance with clause (i), (ii), or (iii); and’’. 

(2) DIRECT LOANS.—Section 455(d)(1) (20 U.S.C. 1087e(d)(1)) is amended—

(A) by redesignating subparagraph (D) as subparagraph (E); and 

(B) by striking subparagraphs (A), (B), and (C) and inserting the following: 

‘‘(A) a standard repayment plan, consistent with subsection (a)(1) of this 

section and with section 428(b)(9)(A)(i); 

‘‘(B) a graduated repayment plan, consistent with section 428(b)(9)(A)(ii); 

‘‘(C) an extended repayment plan, consistent with section 428(b)(9)(A)(v), 

except that the borrower shall annually repay a minimum amount determined by the Secretary in accordance with section 428(b)(1)(L); 

‘‘(D) a delayed repayment plan under which the borrower makes scheduled payments for not more than 2 years that are annually not less than 

the amount of interest due or $600, whichever is greater, and then makes 

payments in accordance with subparagraph (A), (B), or (C); and’’. 

(d) ORIGINATION FEES.—

(1) FFEL PROGRAM.—Paragraph (2) of section 438(c) (20 U.S.C. 1087–1(c)) is 

amended—

(A) by striking the designation and heading of such paragraph and inserting the following: 

‘‘(2) AMOUNT OF ORIGINATION FEES.—

‘‘(A) IN GENERAL.—’’; and 

(B) by adding at the end the following new subparagraph: 

52 

‘‘(B) SUBSEQUENT REDUCTIONS.—Subparagraph (A) shall be applied to 

loans made under this part (other than loans made under sections 428C 

and 439(o))— ‘‘(i) by substituting ‘2.0 percent’ for ‘3.0 percent’ with respect to loans 

for which the first disbursement of principal is made on or after July 

1, 2006, and before July 1, 2007; ‘‘(ii) by substituting ‘1.5 percent’ for ‘3.0 percent’ with respect to loans 

for which the first disbursement of principal is made on or after July 

1, 2007, and before July 1, 2008; ‘‘(iii) by substituting ‘1.0 percent’ for ‘3.0 percent’ with respect to 

loans for which the first disbursement of principal is made on or after 

July 1, 2008, and before July 1, 2009; ‘‘(iv) by substituting ‘0.5 percent’ for ‘3.0 percent’ with respect to 

loans for which the first disbursement of principal is made on or after 

July 1, 2009, and before July 1, 2010; and ‘‘(v) by substituting ‘0.0 percent’ for ‘3.0 percent’ with respect to loans 

for which the first disbursement of principal is made on or after July 

1, 2010.’’. (2) DIRECT LOAN PROGRAM.—Subsection (c) of section 455 (20 U.S.C. 1087e(c)) 

is amended to read as follows: ‘‘(c) LOAN FEE.—

‘‘(1) IN GENERAL.—The Secretary shall charge the borrower of a loan made 

under this part an origination fee of 4.0 percent of the principal amount of loan. 

‘‘(2) SUBSEQUENT REDUCTION.—Paragraph (1) shall be applied to loans made 

under this part, other than consolidation loans and PLUS loans—

‘‘(A) by substituting ‘not more or less than 3.0 percent’ for ‘4.0 percent’

with respect to loans for which the first disbursement of principal is made 

on or after July 1, 2006, and before July 1, 2007; 

‘‘(B) by substituting ‘not more or less than 2.5 percent’ for ‘4.0 percent’

with respect to loans for which the first disbursement of principal is made 

on or after July 1, 2007, and before July 1, 2008; 

‘‘(C) by substituting ‘not more or less than 2.0 percent’ for ‘4.0 percent’

with respect to loans for which the first disbursement of principal is made 

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

‘‘(D) by substituting ‘not more or less than 1.5 percent’ for ‘4.0 percent’

with respect to loans for which the first disbursement of principal is made 

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

‘‘(E) by substituting ‘not more or less than 1.0 percent’ for ‘4.0 percent’

with respect to loans for which the first disbursement of principal is made 

on or after July 1, 2010. 

‘‘(3) WAIVERS AND REPAYMENT INCENTIVES PROHIBITED.—Beginning with loans 

made on or after July 1, 2006, the Secretary is prohibited—

‘‘(A) from waiving any amount of the loan fee prescribed under this section as part of a repayment incentive in section 455(b)(7); and 

‘‘(B) from providing any repayment incentive before the borrower enters 

repayment.’’. 

(e) FIXED RATE OFFSET CHARGE.—

(1) FFEL CONSOLIDATION LOANS.—Section 438(c) (20 U.S.C. 1087–1(c)) is further amended—

(A) in paragraph (1)(A), by inserting after ‘‘paragraph (2) of this subsection’’ the following: ‘‘and the amount the lender is authorized to collect 

as a fixed rate offset charge in accordance with paragraph (9) of this subsection’’; 

(B) in paragraph (1)(B)—

(i) by inserting ‘‘and the fixed rate offset charge’’ after ‘‘origination 

fee’’; and 

(ii) by inserting ‘‘and fixed rate offset charges’’ after ‘‘origination 

fees’’; 

(C) in paragraphs (3) and (4), by inserting ‘‘and fixed rate offset charge’’

after ‘‘origination fee’’ each place it appears; 

(D) in paragraph (5)—

(i) by inserting ‘‘or fixed rate offset charge’’ after ‘‘origination fee’’; 

and 

(ii) by inserting ‘‘or fixed rate offset charges’’ after ‘‘origination fees’’; 

(E) in paragraph (7), by inserting ‘‘and fixed rate offset charges’’ after 

‘‘origination fees’’; and 

(F) by adding at the end the following new paragraph: 

‘‘(9) FIXED RATE OFFSET CHARGES FOR CONSOLIDATION LOANS.—For any loan 

under section 428C for which the borrower elects to take a fixed rate under secVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00056 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
53 

tion 427A(k)(5)(C), the lender is authorized to collect a fixed rate offset charge 

in an amount not to exceed 0.5 percent of the principal amount of the loan. 

Such amount may be added to the principal amount of the loan for repayment 

by the borrower.’’. 

(2) DIRECT LOANS.—Section 455(c) (20 U.S.C. 1087e(c)), as amended by subsection (d)(2) of this section, is further amended by adding at the end the following new paragraph: 

‘‘(4) FIXED RATE OFFSET CHARGES FOR CONSOLIDATION LOANS.—For any Federal Direct Consolidation Loan for which the borrower elects to take a fixed rate 

under section 455(b)(6)(E)(iii), the Secretary shall collect a fixed rate offset 

charge in an amount not to exceed 0.5 percent of the principal amount of the 

loan. Such amount may be added to the principal amount of the loan for repayment by the borrower. Such amount is not subject to the requirements of paragraph (3) of this subsection.’’. 

SEC. 425. CONSOLIDATION LOAN CHANGES. 

(a) CROSS-CONSOLIDATION BETWEEN PROGRAMS.—Section 428C (20 U.S.C. 1078–

3) is amended—

(1) in subsection (a)(3)(B)(i)—

(A) by inserting ‘‘or under section 455(g)’’ after ‘‘under this section’’ both 

places it appears; 

(B) by inserting ‘‘under both sections’’ after ‘‘terminates’’

(C) by striking ‘‘and’’ at the end of subclause (III); 

(D) by striking the period at the end of subclause (IV) and inserting ‘‘; 

and’’; and 

(E) by adding at the end the following new subclause: 

‘‘(V) an individual may obtain a subsequent consolidation loan under section 455(g) only 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.’’; and 

(2) in subsection (b)(5), by striking the first sentence and inserting the following: ‘‘In the event that a lender with an agreement under subsection (a)(1) 

of this section denies a consolidation loan application submitted to it by an eligible borrower under this section, or denies an application submitted to it by such 

a borrower for a consolidation loan with income-sensitive repayment terms, the 

Secretary shall offer any such borrower who applies for it, a direct consolidation 

loan. The Secretary shall offer such a loan to a borrower who has defaulted, for 

the purpose of resolving the default.’’. 

(b) REPEAL OF IN-SCHOOL CONSOLIDATION.—

(1) DEFINITION OF REPAYMENT PERIOD.—Section 428(b)(7)(A) (20 U.S.C. 

1078(b)(7)(A)) is amended by striking ‘‘shall begin—’’ and all that follows 

through ‘‘earlier date.’’ and inserting the following: ‘‘shall begin the day after 

6 months after the date the student ceases to carry at least one-half the normal 

full-time academic workload (as determined by the institution).’’. 

(2) CONFORMING CHANGE TO ELIGIBLE BORROWER DEFINITION.—Section 

428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078–3(a)(3)(A)(ii)(I)) is amended by inserting ‘‘as 

determined under section 428(b)(7)(A)’’ after ‘‘repayment status’’. 

(c) ADDITIONAL AMENDMENTS.—Section 428C (20 U.S.C. 1078–3) is amended—

(1) in subsection (a)(3), by striking subparagraph (C); and 

(2) in subsection (b)(1)—

(A) by striking everything after ‘‘under this section’’ the first place it appears in subparagraph (A) and inserting the following: ‘‘and that, if all the 

borrower’s loans under this part are held by a single holder, the borrower 

has notified such holder that the borrower is seeking to obtain a consolidation loan under this section;’’; 

(B) by striking ‘‘(i) which’’ and all that follows through ‘‘and (ii)’’ in subparagraph (C); 

(C) by striking ‘‘and’’ at the end of subparagraph (E); 

(D) by redesignating subparagraph (F) as subparagraph (G); and 

(E) by inserting after subparagraph (E) the following new subparagraph: 

‘‘(F) that the lender of the consolidation loan shall, upon application for 

such loan, provide the borrower with a clear and conspicuous notice of at 

least the following information: 

‘‘(i) the effects of consolidation on total interest to be paid, fees to be 

paid, and length of repayment; 

‘‘(ii) the effects of consolidation on a borrower’s underlying loan benefits, including loan forgiveness, cancellation, deferment, and reduced interest rates on those underlying loans; 

54 

‘‘(iii) the ability of the borrower to prepay the loan, pay on a shorter 

schedule, and to change repayment plans; 

‘‘(iv) that borrower benefit programs may vary among different loan 

holders, and a description of how the borrower benefits may vary 

among different loan holders; 

‘‘(v) the tax benefits for which borrowers may be eligible; 

‘‘(vi) the consequences of default; and 

‘‘(vii) that by making the application the applicant is not obligated to 

agree to take the consolidation loan; and’’. 

(d) EFFECTIVE DATE FOR SINGLE HOLDER AMENDMENT.—The amendment made by 

subsection (c)(2)(A) shall apply with respect to any loan made under section 428C 

of the Higher Education Act of 1965 (20 U.S.C. 1078–3) for which the application 

is received by an eligible lender on or after July 1, 2006. 

(e) CONFORMING AMENDMENTS TO DIRECT LOAN PROGRAM.—Section 455 (20 

U.S.C. 1087e) is amended 

(1) in subsection (a)(1) by inserting ‘‘428C,’’ after ‘‘428B,’’; 

(2) in subsection (a)(2)—

(A) by striking ‘‘and’’ at the end of subparagraph (B); 

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

(C) by inserting after subparagraph (B) the following: 

‘‘(C) section 428C shall be known as ‘Federal Direct Consolidation Loans’; 

and ’’; and 

(3) in subsection (g)—

(A) by striking the second sentence; and 

(B) by adding at the end the following new sentences: ‘‘To be eligible for 

a consolidation loan under this part, a borrower must meet the eligibility 

criteria set forth in section 428C(a)(3). The Secretary, upon application for 

such a loan, shall comply with the requirements applicable to a lender 

under section 428C(b)(1)(F).’’. 

SEC. 426. DEFERMENT OF STUDENT LOANS FOR MILITARY SERVICE. 

(a) FEDERAL FAMILY EDUCATION LOANS.—Section 428(b)(1)(M) (20 U.S.C. 

1078(b)(1)(M)) is amended—

(1) by striking ‘‘or’’ at the end of clause (ii); 

(2) by redesignating clause (iii) as clause (iv); and 

(3) by inserting after clause (ii) the following new clause: 

‘‘(iii) not in excess of 3 years during which the borrower—

‘‘(I) is serving on active duty during a war or other military operation or national emergency; or 

‘‘(II) is performing qualifying National Guard duty during a war 

or other military operation or national emergency; or’’. 

(b) DIRECT LOANS.—Section 455(f)(2) (20 U.S.C. 1087e(f)(2)) is amended—

(1) by redesignating subparagraph (C) as subparagraph (D); and 

(2) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) not in excess of 3 years during which the borrower—

‘‘(i) is serving on active duty during a war or other military operation 

or national emergency; or 

‘‘(ii) is performing qualifying National Guard duty during a war or 

other military operation or national emergency; or’’. 

(c) PERKINS LOANS.—Section 464(c)(2)(A) (20 U.S.C. 1087dd(c)(2)(A)) is amended—

(1) by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; 

and 

(2) by inserting after clause (ii) the following new clause: 

‘‘(iii) not in excess of 3 years during which the borrower—

‘‘(I) is serving on active duty during a war or other military operation or 

national emergency; or 

‘‘(II) is performing qualifying National Guard duty during a war or other 

military operation or national emergency;’’. 

(d) DEFINITIONS.—Section 481 (20 U.S.C. 1088) is amended by adding at the end 

the following new subsection: 

‘‘(d) DEFINITIONS FOR MILITARY DEFERMENTS.—For purposes of parts B, D, and E 

of this title: 

‘‘(1) ACTIVE DUTY.—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 does 

not include active duty for training or attendance at a service school. 

‘‘(2) MILITARY OPERATION.—The term ‘military operation’ means a contingency 

operation as such term is defined in section 101(a)(13) of title 10, United States 

Code. 

55 

‘‘(3) NATIONAL EMERGENCY.—The term ‘national emergency’ means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by 

the President by reason of terrorist attacks. 

‘‘(4) SERVING ON ACTIVE DUTY.—The term ‘serving on active duty during a war 

or other military operation or national emergency’ means service by an individual who is—

‘‘(A) a Reserve of an Armed Force ordered to active duty under section 

12301(a), 12301(g), 12302, 12304, or 12306 of title 10, United States Code, 

or any retired member of an Armed Force ordered to active duty under section 688 of such title, for service in connection with a war or other military 

operation or national emergency, regardless of the location at which such 

active duty service is performed; and 

‘‘(B) any other member of an Armed Force on active duty in connection 

with such emergency or subsequent actions or conditions who has been assigned to a duty station at a location other than the location at which such 

member is normally assigned. 

‘‘(5) QUALIFYING NATIONAL GUARD DUTY.—The term ‘qualifying National 

Guard duty during a war or other military operation or national emergency’

means service as a member of the National Guard on full-time National Guard 

duty (as defined in section 101(d)(5) of title 10, United States Code) under a 

call to active service authorized by the President or the Secretary of Defense 

for a period of more than 30 consecutive days under section 502(f) of title 32, 

United States Code, in connection with a war, other military operation, or a national emergency declared by the President and supported by Federal funds.’’. 

(e) RULE OF CONSTRUCTION.—Nothing in the amendments made by this section 

shall be construed to authorize any refunding of any repayment of a loan. 

(f) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993, 

to an individual who is a new borrower (within the meaning of section 103 of the 

Higher Education Act of 1965 (20 U.S.C. 1003)) on or after such date. 

SEC. 427. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED. 

Section 428K (20 U.S.C. 1078–11) is amended to read as follows: 

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

‘‘(a) PURPOSES.—The purposes of this section are—

‘‘(1) to encourage highly trained individuals to enter and continue in service 

in areas of national need; and 

‘‘(2) to reduce the burden of student debt for Americans who dedicate their 

careers to service in areas of national need. 

‘‘(b) PROGRAM AUTHORIZED.—

‘‘(1) IN GENERAL.—The Secretary is authorized to carry out a program of assuming the obligation to repay, pursuant to paragraphs (2) of subsection (c) and 

subsection (d), a qualified loan amount for a loan made, insured, or guaranteed 

under this part or part D (other than loans made under section 428B and 428C 

and comparable loans made under part D), for any new borrower after the date 

of enactment of the College Access and Opportunity Act of 2005, who—

‘‘(A) has been employed full-time for at least 5 consecutive complete 

school, academic, or calendar years, as appropriate, in an area of national 

need described in subsection (c); and 

‘‘(B) is not in default on a loan for which the borrower seeks forgiveness. 

‘‘(2) AWARD BASIS.—Loan repayment under this section shall be on a firstcome, first-served basis pursuant to the designation under subsection (c) and 

subject to the availability of appropriations. 

‘‘(3) REGULATIONS.—The Secretary is authorized to issue such regulations as 

may be necessary to carry out the provisions of this section. 

‘‘(c) AREAS OF NATIONAL NEED.—

‘‘(1) STATUTORY CATEGORIES.—For purposes of this section, an individual shall 

be treated as employed in an area of national need if the individual is employed 

full time and is any of the following: 

‘‘(A) EARLY CHILDHOOD EDUCATORS.—An individual who is employed as 

an early childhood educator in an eligible preschool program or child care 

facility in a low-income community, and who is involved directly in the care, 

development and education of infants, toddlers, or young children through 

age five. 

‘‘(B) NURSES.—An individual who is employed—

‘‘(i) as a nurse in a clinical setting; or 

56 

‘‘(ii) as a member of the nursing faculty at an accredited school of 

nursing (as those terms are defined in section 801 of the Public Health 

Service Act (42 U.S.C. 296)). ‘‘(C) FOREIGN LANGUAGE SPECIALISTS.—An individual who has obtained a 

baccalaureate degree in a critical foreign language and is employed— ‘‘(i) in an elementary or secondary school as a teacher of a critical foreign language; or ‘‘(ii) in an agency of the United States Government in a position that 

regularly requires the use of such critical foreign language. ‘‘(D) LIBRARIANS.—An individual who is employed full-time as a libarian 

in— ‘‘(i) a public library that serves a geographic area within which the 

public schools have a combined average of 30 percent or more of their 

total student enrollments composed of children counted under section 

1113(a)(5) of the Elementary and Secondary Education Act of 1965; or ‘‘(ii) an elementary or secondary school which is in the school district 

of a local educational agency which is eligible in such year for assistance pursuant to title I of the Elementary and Secondary Education 

Act of 1965, and which for the purpose of this paragraph and for that 

year has been determined by the Secretary (pursuant to regulations 

and after consultation with the State educational agency of the State 

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

of children counted under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965 exceeds 30 percent of the total enrollment of that school. 

‘‘(E) HIGHLY QUALIFIED TEACHERS: BILINGUAL EDUCATION AND LOW-IN- COME COMMUNITIES.—An individual who—

‘‘(i) is highly qualified as such term is defined in section 9101 of the 

Elementary and Secondary Education Act of 1965; and 

‘‘(ii)(I) is employed as a full-time teacher of bilingual education; or 

‘‘(II) is employed as a teacher for service in a public or nonprofit private elementary or secondary school which is in the school district of 

a local educational agency which is eligible in such year for assistance 

pursuant to title I of the Elementary and Secondary Education Act of 

1965, and which for the purpose of this paragraph and for that year 

has been determined by the Secretary (pursuant to regulations and 

after consultation with the State educational agency of the State in 

which the school is located) to be a school in which the enrollment of 

children counted under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965 exceeds 40 percent of the total enrollment of that school. 

‘‘(F) FIRST RESPONDERS IN LOW-INCOME COMMUNITIES.—An individual 

who—

‘‘(i) is employed as a firefighter, police officer, or emergency medical 

technician; and 

‘‘(ii) serves as such in a low-income community. 

‘‘(G) CHILD WELFARE WORKERS.—An individual who—

‘‘(i) has obtained a degree in social work or a related field with a 

focus on serving children and families; and 

‘‘(ii) is employed in public or private child welfare services. 

‘‘(H) SPEECH-LANGUAGE PATHOLOGISTS.—An individual who is a speechlanguage pathologist, who is employed in an eligible preschool program or 

an elementary or secondary school, and who has, at a minimum, a graduate 

degree in speech-language pathology, or communication sciences and disorders. 

‘‘(I) ADDITIONAL AREAS OF NATIONAL NEED.—An individual who is employed in an area designated by the Secretary under paragraph (2) and has 

completed a baccalaureate or advanced degree related to such area. 

‘‘(2) DESIGNATION OF AREAS OF NATIONAL NEED.—After consultation with appropriate Federal, State, and community-based agencies and organizations, the 

Secretary shall designate areas of national need. In making such designations, 

the Secretary shall take into account the extent to which—

‘‘(A) the national interest in the area is compelling; 

‘‘(B) the area suffers from a critical lack of qualified personnel; and 

‘‘(C) other Federal programs support the area concerned. 

‘‘(d) QUALIFIED LOAN AMOUNT.—The Secretary shall repay not more than $5,000 

in the aggregate of the loan obligation on a loan made under section 428 or 428H 

that is outstanding after the completion of the fifth consecutive school, academic, 

or calendar year, as appropriate, described in subsection (b)(1). 

57 

‘‘(e) CONSTRUCTION.—Nothing in this section shall be construed to authorize the 

refunding of any repayment of a loan made under section 428 or 428H. 

‘‘(f) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS.—No student borrower may, for the same service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 

12601 et seq.). 

‘‘(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may receive a reduction 

of loan obligations under both this section and section 428J or 460. 

‘‘(h) DEFINITIONS.—In this section 

‘‘(1) CHILD CARE FACILITY.—The term ‘child care facility’ means a facility, including a home, that—

‘‘(A) provides for the education and care of children from birth through 

age 5; and 

‘‘(B) meets any applicable State or local government licensing, certification, approval, or registration requirements. 

‘‘(2) CRITICAL FOREIGN LANGUAGE.—The term ‘critical foreign language’ includes the languages of Arabic, Korean, Japanese, Chinese, Pashto, PersianFarsi, Serbian-Croatian, Russian, Portuguese, and any other language identified 

by the Secretary of Education, in consultation with the Defense Language Institute, the Foreign Service Institute, and the National Security Education Program, as a critical foreign language need. 

‘‘(3) EARLY CHILDHOOD EDUCATOR.—The term ‘early childhood educator’

means an early childhood educator employed in an eligible preschool program 

who has completed a baccalaureate or advanced degree in early childhood development, early childhood education, or in a field related to early childhood education. 

‘‘(4) ELIGIBLE PRESCHOOL PROGRAM.—The term ‘eligible preschool program’

means a program that provides for the care, development, and education of infants, toddlers, or young children through age 5, meets any applicable State or 

local government licensing, certification, approval, and registration requirements, and is operated by—

‘‘(A) a public or private school that may be supported, sponsored, supervised, or administered by a local educational agency; 

‘‘(B) a Head Start agency serving as a grantee designated under the Head 

Start Act (42 U.S.C. 9831 et seq.); 

‘‘(C) a nonprofit or community based organization; or 

‘‘(D) a child care program, including a home. 

‘‘(5) LOW-INCOME COMMUNITY.—In this subsection, the term ‘low-income community’ means a community in which 70 percent of households earn less than 

85 percent of the State median household income. 

‘‘(6) NURSE.—The term ‘nurse’ means a nurse who meets all of the following: 

‘‘(A) The nurse graduated from—

‘‘(i) an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)); 

‘‘(ii) a nursing center; or 

‘‘(iii) an academic health center that provides nurse training. 

‘‘(B) The nurse holds a valid and unrestricted license to practice nursing 

in the State in which the nurse practices in a clinical setting. 

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

‘‘(i) A graduate degree in nursing, or an equivalent degree. 

‘‘(ii) A nursing degree from a collegiate school of nursing (as defined 

in section 801 of the Public Health Service Act (42 U.S.C. 296)). 

‘‘(iii) A nursing degree from an associate degree school of nursing (as 

defined in section 801 of the Public Health Service Act (42 U.S.C. 296)). 

‘‘(iv) A nursing degree from a diploma school of nursing (as defined 

in section 801 of the Public Health Service Act (42 U.S.C. 296)). 

‘‘(7) SPEECH-LANGUAGE PATHOLOGIST.—The term ‘speech-language pathologist’

means a speech-language pathologist who meets all of the following: 

‘‘(A) the speech-language pathologist has received, at a minimum, a graduate degree in speech-language pathology or communication sciences and 

disorders from an institution of higher education accredited by an agency 

or association recognized by the Secretary pursuant to section 496(a) of this 

Act; and 

‘‘(B) the speech-language pathologist meets or exceeds the qualifications 

as defined in section 1861(ll) of the Social Security Act (42 U.S.C. 1395x). 

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to carry out this section such sums as may be necessary for fiscal year 2006 and 

such sums as may be necessary for each of the 5 succeeding fiscal years.’’. 

58 

SEC. 428. UNSUBSIDIZED STAFFORD LOANS. 

(a) AMENDMENT.—Section 428H(d)(2)(C) (20 U.S.C. 1078–8(d)(2)(C)) is amended 

by striking ‘‘$10,000’’ and inserting ‘‘$12,000’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to loans 

for which the first disbursement of principal is made on or after July 1, 2007. 

SEC. 429. ELIMINATION OF TERMINATION DATES FROM TAXPAYER-TEACHER PROTECTION 

ACT OF 2004. 

(a) EXTENSION OF LIMITATIONS ON SPECIAL ALLOWANCE FOR LOANS FROM THE

PROCEEDS OF TAX EXEMPT ISSUES.—Section 438(b)(2)(B) (20 U.S.C. 1087–1(b)(2)(B)) 

is amended—

(1) in clause (iv), by striking ‘‘and before January 1, 2006,’’; and 

(2) in clause (v)(II)—

(A) by striking ‘‘and before January 1, 2006,’’ each place it appears in divisions (aa) and (bb); and 

(B) by striking ‘‘, and before January 1, 2006’’ in division (cc). 

(b) ADDITIONAL LIMITATION ON SPECIAL ALLOWANCE FOR LOANS FROM THE PROCEEDS OF TAX EXEMPT ISSUES.—Section 438(b)(2)(B) (20 U.S.C 1087–1(b)(2)(B)) is 

further amended by adding at the end thereof the following new clause: 

‘‘(vi) Notwithstanding clauses (i), (ii), and (v), the quarterly rate of the special 

allowance shall be the rate determined under subparagraph (A), (E), (F), (G), 

(H), or (I) of this paragraph, as the case may be, for a holder of loans—

‘‘(I) that were made or purchased on or after October 1, 2005; or 

‘‘(II) that were not earning a quarterly rate of special allowance determined under clauses (i) or (ii) of subparagraph (B) of this paragraph (20 

U.S.C. 1087–1(b)(2)(b)) as of October 1, 2005.’’. 

(c) ELIMINATION OF EFFECTIVE DATE LIMITATION ON HIGHER TEACHER LOAN FORGIVENESS BENEFITS.—Paragraph (3) of section 3(b) of the Taxpayer-Teacher Protection Act of 2004 (20 U.S.C. 1078–10, note) is repealed. 

(d) ADDITIONAL CHANGES TO TEACHER LOAN FORGIVENESS PROVISIONS.—

(1) FFEL PROVISIONS.—Section 428J (20 U.S.C. 1078–10) is amended—

(A) in subsection (b)(1)(B), by inserting after ‘‘1965’’ the following: ‘‘, or 

meets the requirements of subsection (g)(3)’’; 

(B) in subsection (c)(3)—

(i) by striking ‘‘and’’ at the end of subparagraph (A); 

(ii) by striking the period at the end of subparagraph (B) and inserting ‘‘; and’’; and 

(iii) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) an elementary or secondary school teacher who primarily teaches 

reading—

‘‘(i) who meets the requirements of subsection (b); 

‘‘(ii) who has obtained a separate reading instruction credential from 

the State in which the teacher is employed; and 

‘‘(iii) who is certified by the chief administrative officer of the public 

or nonprofit private elementary or secondary school in which the borrower is employed to teach reading—

‘‘(I) as being proficient in teaching the essential components of 

reading instruction as defined in section 1208 of the Elementary 

and Secondary Education Act of 1965; and 

‘‘(II) as having such credential.’’; and 

(C) in subsection (g), by adding at the end the following new paragraph: 

‘‘(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher 

in a private school and is exempt from State certification requirements (unless 

otherwise applicable under State law), may, in lieu of the requirement of subsection (a)(1)(B), have such employment treated as qualifying employment 

under this section if such individual is permitted to and does satisfy rigorous 

subject knowledge and skills tests by taking competency tests in the applicable 

grade levels and subject areas. For such purposes, the competency tests taken 

by such a private school teacher must be recognized by 5 or more States for the 

purpose of fulfilling the highly qualified teacher requirements under section 

9101 of the Elementary and Secondary Education Act of 1965, and the score 

achieved by such teacher on each test must equal or exceed the average passing 

score of those 5 States.’’. 

(2) DIRECT LOAN PROVISIONS.—Section 460 (20 U.S.C. 1087j) is amended—

(A) in subsection (b)(1)(A)(ii), by inserting after ‘‘1965’’ the following: ‘‘, or 

meets the requirements of subsection (g)(3)’’; 

(B) in subsection (c)(3)—

(i) by striking ‘‘and’’ at the end of subparagraph (A); 

59 

(ii) by striking the period at the end of subparagraph (B) and inserting ‘‘; and’’; and 

(iii) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) an elementary or secondary school teacher who primarily teaches 

reading—

‘‘(i) who meets the requirements of subsection (b); 

‘‘(ii) who has obtained a separate reading instruction credential from 

the State in which the teacher is employed; and 

‘‘(iii) who is certified by the chief administrative officer of the public 

or nonprofit private elementary or secondary school in which the borrower is employed to teach reading—

‘‘(I) as being proficient in teaching the essential components of 

reading instruction as defined in section 1208 of the Elementary 

and Secondary Education Act of 1965; and 

‘‘(II) as having such credential.’’; and 

(C) in subsection (g), by adding at the end the following new paragraph: 

‘‘(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher 

in a private school and is exempt from State certification requirements (unless 

otherwise applicable under State law), may, in lieu of the requirement of subsection (a)(1)(A)(ii), have such employment treated as qualifying employment 

under this section if such individual is permitted to and does satisfy rigorous 

subject knowledge and skills tests by taking competency tests in the applicable 

grade levels and subject areas. For such purposes, the competency tests taken 

by such a private school teacher must be recognized by 5 or more States for the 

purpose of fulfilling the highly qualified teacher requirements under section 

9101 of the Elementary and Secondary Education Act of 1965, and the score 

achieved by such teacher on each test must equal or exceed the average passing 

score of those 5 States.’’. 

SEC. 430. ADDITIONAL ADMINISTRATIVE PROVISIONS. 

(a) TREATMENT OF EXEMPT CLAIMS.—

(1) INSURANCE COVERAGE.—Section 428(b)(1)(G) (20 U.S.C. 1078(b)(1)(G)) is 

amended by inserting before the semicolon at the end the following: ‘‘and 100 

percent of the unpaid principal amount of exempt claims as defined in subsection (c)(1)(G)’’. 

(2) TREATMENT.—Section 428(c)(1) (20 U.S.C. 1078(c)(1)) is amended—

(A) by redesignating subparagraph (G) as subparagraph (I), and moving 

such subparagraph 2 em spaces to the left; and 

(B) by inserting after subparagraph (F) the following new subparagraph: 

‘‘(G)(i) Notwithstanding any other provisions of this section, in the case of exempt claims, the Secretary shall apply the provisions of—

‘‘(I) the fourth sentence of subparagraph (A) by substituting ‘100 percent’

for ‘95 percent’; 

‘‘(II) subparagraph (B)(i) by substituting ‘100 percent’ for ‘85 percent’; and 

‘‘(III) subparagraph (B)(ii) by substituting ‘100 percent’ for ‘75 percent’. 

‘‘(ii) For purposes of clause (i) of this subparagraph, the term ‘exempt claims’

means claims with respect to loans for which it is determined that the borrower 

(or the student on whose behalf a parent has borrowed), without the lender’s 

or the institution’s knowledge at the time the loan was made, provided false or 

erroneous information or took actions that caused the borrower or the student 

to be ineligible for all or a portion of the loan or for interest benefits thereon.’’. 

(b) REDUCTION OF INSURANCE/REINSURANCE PERCENTAGE.—

(1) INSURANCE PERCENTAGE REDUCTION.—Section 428(b)(1)(G) as amended by 

subsection (a)(1) is further amended by inserting after the matter inserted by 

such subsection the following: ‘‘, except, for any loan for which the first disbursement of principal is made on or after July 1, 2006, the preceding provisions of this subparagraph shall be applied by substituting ‘96 percent’ for ‘98 

percent’ ’’. 

(2) REINSURANCE PERCENTAGE REDUCTION.—Section 428(c)(1) as amended by 

subsection (a)(2) is further amended by adding after subparagraph (G) as added 

by such subsection the following new subparagraph: 

‘‘(H) Notwithstanding subparagraphs (A) and (B), but subject to subparagraphs (E) and (F), in the case of a loan for which the first disbursement of 

principal is made on or after July 1, 2006, the Secretary shall apply—

‘‘(i) the fourth sentence of subparagraph (A) by substituting ‘93 percent’

for ‘95 percent’; 

‘‘(ii) subparagraph (B)(i) by substituting ‘83 percent’ for ‘85 percent’; and 

‘‘(iii) subparagraph (B)(ii) by substituting ‘73 percent’ for ‘75 percent’.’’. 

60 

(3) INCREASE INSURANCE FOR EXCEPTIONAL PERFORMANCE.—Section 428I (20 

U.S.C. 1078–9) is amended to read as follows: 

‘‘SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL PERFORMANCE. 

‘‘(a) DESIGNATION OF LENDERS AND SERVICERS.—

‘‘(1) IN GENERAL.—Whenever the Secretary determines that an eligible lender 

or servicer meets the performance measures required by paragraph (2), the Secretary shall designate that eligible lender or servicer, as the case may be, for 

exceptional performance. The Secretary shall notify each appropriate guaranty 

agency of the eligible lenders and servicers designated under this section. 

‘‘(2) PERFORMANCE MEASURES.—

‘‘(A) In determining whether to award a lender or servicer the exceptional 

performance designation, the Secretary shall require that the lender or 

servicer be performing at or above the 95 percentile of the industry, and 

demonstrate improved performance against the lender’s or service’s average 

of the last 3 years on the factors described in subparagraph (B). 

‘‘(B) The factors on which the Secretary shall require improvement shall 

include—

‘‘(i) delinquency rates; 

‘‘(ii) the rate at which delinquent accounts are restored to good standing; 

‘‘(iii) default rates; 

‘‘(iv) the rate of rejected claims; and 

‘‘(v) any other such measures as determined by the Secretary. 

‘‘(C) In addition, the Secretary shall not make any award of such a designation unless the consequence of the designation is cost-neutral to the 

Federal Government. 

‘‘(3) ADDITIONAL INFORMATION ON LENDERS AND SERVICERS.—Each appropriate 

guaranty agency shall provide the Secretary with such other information in its 

possession regarding an eligible lender or servicer desiring designation as may 

relate to the Secretary’s determination under paragraph (1), including but not 

limited to any information suggesting that the application of a lender or 

servicer for designation should not be approved. 

‘‘(4) DETERMINATIONS BY THE SECRETARY.—

‘‘(A) The Secretary shall designate an eligible lender or servicer for exceptional performance if the eligible lender or servicer meets the performance 

measures required by paragraph (2). 

‘‘(B) The Secretary shall make the determination under paragraph (1) 

based upon the documentation submitted by the eligible lender or servicer 

as specified in regulation, such other information as provided by any guaranty agency under paragraph (3), and any information in the possession of 

the Secretary or submitted by any other agency or office of the Federal Government. 

‘‘(C) The Secretary shall inform the eligible lender or servicer and the appropriate guaranty agency that its application for designation as an exceptional performance lender or servicer has been approved or disapproved. 

‘‘(5) TRANSITION.—

‘‘(A) Any eligible lender or servicer designated for exceptional performance as of the day before the date of enactment of the College Access and 

Opportunity Act of 2005 shall continue to be so designated, and subject to 

the requirements of this section as in effect on that day (including revocation), until the performance standards described in paragraph (2) are established. 

‘‘(B) The Secretary shall not designate any additional eligible lenders or 

servicers for exceptional performance until those performance standards are 

established. 

‘‘(b) PAYMENT TO LENDERS AND SERVICERS.—A guaranty agency shall pay, to each 

eligible lender or servicer (as agent for an eligible lender) designated under subsection (a), 98 percent of the unpaid principal and interest of all loans for which 

claims are submitted for payment by that eligible lender or servicer for the one-year 

period following the receipt by the guaranty agency of the notification of designation 

under this section, or until the guaranty agency receives notice from the Secretary 

that the designation of the lender or servicer under subsection (a)(2) has been revoked. 

‘‘(c) REVOCATION AUTHORITY.—

‘‘(1) The Secretary shall revoke the designation of a lender or a servicer under 

subsection (a) if the Secretary determines that the lender or servicer has failed 

to meet the performance standards required by subsection (a)(2). 

61 

‘‘(2) Notwithstanding any other provision of this section, a designation under 

subsection (a) may be revoked at any time by the Secretary, in the Secretary’s discretion, if the Secretary determines that the eligible lender or servicer has 

failed to meet the criteria and performance standards established by the Secretary in regulation, or if the Secretary believes the lender or servicer may have 

engaged in fraud in securing designation under subsection (a), or is failing to 

service loans in accordance with program regulations. ‘‘(d) DOCUMENTATION.—Nothing in this section shall restrict or limit the authority 

of guaranty agencies to require the submission of claims documentation evidencing 

servicing performed on loans, except that the guaranty agency may not require 

greater documentation than that required for lenders and servicers not designated 

under subsection (a). ‘‘(e) SPECIAL RULE.—Reimbursements made by the Secretary on loans submitted 

for claim by an eligible lender or loan servicer designated for exceptional performance under this section shall not be subject to additional review by the Secretary 

or repurchase by the guaranty agency for any reason other than a determination 

by the Secretary that the eligible lender or loan servicer engaged in fraud or other 

purposeful misconduct in obtaining designation for exceptional performance. ‘‘(f) LIMITATION.—Nothing in this section shall be construed to affect the processing of claims on student loans of eligible lenders not subject to this section. ‘‘(g) CLAIMS.—A lender or servicer designated under subsection (a) failing to service loans or otherwise comply with applicable program regulations shall be considered in violation of section 3729 of title 31, United States Code. 

‘‘(h) TERMINATION.—The Secretary may terminate the designation of lenders and 

servicers under this section if he determines that termination would be in the fiscal 

interest of the United States. 

‘‘(i) DEFINITIONS.—As used in this section—

‘‘(1) the term ‘eligible loan’ means a loan made, insured, or guaranteed under 

this part; and 

‘‘(2) the term ‘servicer’ means an entity servicing and collecting student loans 

that—

‘‘(A) has substantial experience in servicing and collecting consumer loans 

or student loans; 

‘‘(B) has an independent financial audit annually which is furnished to 

the Secretary and any other parties designated by the Secretary; 

‘‘(C) has business systems which are capable of meeting the requirements 

of this part; 

‘‘(D) has adequate personnel who are knowledgeable about the student 

loan programs authorized by this part; and 

‘‘(E) does not have any owner, majority shareholder, director, or officer of 

the entity who has been convicted of a felony.’’. 

(4) EFFECTIVE DATE OF AMENDMENTS.—The amendments made by this subsection shall apply with respect to loans for which the first disbursement of 

principal is made on or after July 1, 2006. 

(c) DOCUMENTATION OF FORBEARANCE AGREEMENTS.—Section 428(c) (20 U.S.C. 

1078(c)) is further amended—

(1) in paragraph (3)(A)(i), by striking ‘‘in writing’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(10) DOCUMENTATION OF FORBEARANCE AGREEMENTS.—For the purposes of 

paragraph (3), the terms of forbearance agreed to by the parties shall be documented by confirming the agreement of the borrower by notice to the borrower 

from the lender, and by recording the terms in the borrower’s file.’’. 

(d) CONSOLIDATION OF DEFAULTED LOANS.—Section 428(c) (20 U.S.C. 1078(c)) is 

further amended—

(1) in paragraph (2)(A)—

(A) by inserting ‘‘(i)’’ after ‘‘including’’; and 

(B) by inserting before the semicolon at the end the following: ‘‘and (ii) 

requirements establishing procedures to preclude consolidation lending 

from being an excessive proportion of guaranty agency recoveries on defaulted loans under this part’’; 

(2) in paragraph (2)(D), by striking ‘‘paragraph (6)’’ and inserting ‘‘paragraph 

(6)(A)’’; and 

(3) in paragraph (6)—

(A) by inserting ‘‘(A)’’ before ‘‘For the purpose of paragraph (2)(D),’’; 

(B) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; and 

(C) by adding at the end the following new subparagraphs: 

‘‘(B) A guaranty agency shall—

‘‘(i) on or after October 1, 2006—

62 

‘‘(I) not charge the borrower collection costs in an amount in excess of 

18.5 percent of the outstanding principal and interest of a defaulted loan 

that is paid off through consolidation by the borrower under this title; and 

‘‘(II) remit to the Secretary a portion of the collection charge under subclause (I) equal to 8.5 percent of the outstanding principal and interest of 

such defaulted loan; and 

‘‘(ii) on and after October 1, 2009, remit to the Secretary the entire amount 

charged under clause (i)(I) with respect to each defaulted loan that is paid off 

with excess consolidation proceeds. 

‘‘(C) For purposes of subparagraph (B), the term ‘excess consolidation proceeds’

means, with respect to any guaranty agency for any Federal fiscal year beginning 

on or after October 1, 2009, the proceeds of consolidation of defaulted loans under 

this title that exceed 45 percent of the agency’s total collections on defaulted loans 

in such Federal fiscal year.’’. 

(e) VOLUNTARY FLEXIBLE AGREEMENTS.—Section 428A (20 U.S.C. 1078–1) is 

amended—

(1) in subsection (a)(1)(B), by striking ‘‘unless the Secretary’’ and all that follows through ‘‘designated guarantor’’; 

(2) by striking paragraph (2) of subsection (a); 

(3) in paragraph (4)(B) of subsection (a), by striking ‘‘and any waivers provided to other guaranty agencies under paragraph (2)’’; 

(4) by redesignating paragraphs (3) and (4) of subsection (a) as paragraphs 

(2) and (3), respectively; and 

(5) by striking paragraph (3) of subsection (c) and inserting the following: 

‘‘(3) NOTICE TO INTERESTED PARTIES.—Once the Secretary reaches a tentative 

agreement in principle under this section, the Secretary shall publish in the 

Federal Register a notice that invites interested parties to comment on the proposed agreement. The notice shall state how to obtain a copy of the tentative 

agreement in principle and shall give interested parties no less than 30 days 

to provide comments. The Secretary may consider such comments prior to providing the notices pursuant to paragraph (2).’’. 

(f) FRAUD: REPAYMENT REQUIRED.—Section 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is 

amended—

(1) by striking ‘‘and’’ at the end of subparagraph (A); 

(2) by striking the period at the end of subparagraph (B) and inserting ‘‘; 

and’’; and 

(3) by adding at the end the following new subparagraph: 

‘‘(C) if either of the parents has been convicted of, or has pled nolo 

contendere or guilty to, a crime involving fraud in obtaining funds under 

this title, such parent has completed the repayment of such funds to the 

Secretary, or to the holder in the case of a loan under this title obtained 

by fraud.’’. 

(g) DEFAULT REDUCTION PROGRAM.—Section 428F(a)(1) (20 U.S.C. 1078–6(a)(1)) is 

amended—

(1) in subparagraph (A), by striking ‘‘consecutive payments for 12 months’’

and inserting ‘‘9 payments made within 20 days of the due date during 10 consecutive months’’; 

(2) by redesignating subparagraph (C) as subparagraph (D); and 

(3) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) A guaranty agency may charge the borrower and retain collection 

costs in an amount not to exceed 18.5 percent of the outstanding principal 

and interest at the time of sale of a loan rehabilitated under subparagraph 

(A).’’. 

(h) FINANCIAL AND ECONOMIC LITERACY.—

(1) DEFAULT REDUCTION PROGRAM.—Section 428F is further amended by adding at the end the following: 

‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where appropriate, each program described under subsection (b) shall include making available financial and economic 

education materials for the borrower.’’. 

(2) PROGRAM ASSISTANCE FOR BORROWERS.—Section 432(k)(1) (20 U.S.C. 

1082(k)(1)) is amended by striking ‘‘and offering’’ and all that follows through 

the period and inserting ‘‘, offering loan repayment matching provisions as part 

of employee benefit packages, and providing employees with financial and economic education and counseling.’’. (i) CREDIT BUREAU ORGANIZATION AGREEMENTS.—Section 430A(a) (20 U.S.C. 

1080a(a)) is amended by striking ‘‘agreements with credit bureau organizations’’ and 

inserting ‘‘an agreement with each national credit bureau organization (as described 

in section 603(p) of the Fair Credit Reporting Act)’’. 

63 

(j) UNIFORM ADMINISTRATIVE AND CLAIMS PROCEDURE.—Section 432(l)(1)(H) (20 

U.S.C. 1082(l)(1)(H)) is amended by inserting ‘‘and anticipated graduation date’’ after ‘‘status change’’. (k) DEFAULT REDUCTION MANAGEMENT.—Section 432 is further amended— (1) by striking subsection (n); and 

(2) by redesignating subsections (o) and (p) as subsections (n) and (o), respectively. 

(l) SCHOOLS AS LENDERS.—Paragraph (2) of section 435(d) (20 U.S.C. 1085(d)(2)) 

is amended to read as follows: ‘‘(2) REQUIREMENTS FOR ELIGIBLE INSTITUTIONS.— ‘‘(A) IN GENERAL.—To be an eligible lender under this part, an eligible institution—

‘‘(i) shall employ at least one person whose full-time responsibilities 

are limited to the administration of programs of financial aid for students attending such institution; ‘‘(ii) shall not be a home study school; 

‘‘(iii) shall not— ‘‘(I) make a loan to any undergraduate student; 

‘‘(II) make a loan other than a loan under section 428 or 428H 

to a graduate or professional student; or ‘‘(III) make a loan to a borrower who is not enrolled at that institution; 

‘‘(iv) shall award any contract for financing, servicing, or administration of loans under this title on a competitive basis; 

‘‘(v) shall offer loans which carry an origination fee or an interest 

rate, or both, that are less than such fee or rate authorized under the 

provisions of this title; 

‘‘(vi) shall not have a cohort default rate (as defined in section 

435(m)) greater than 10 percent; 

‘‘(vii) shall, for any year for which the institution engages in activities 

as an eligible lender, provide for a compliance audit conducted in accordance with section 428(b)(1)(U)(iii)(I), and the regulations thereunder, and submit the results of such audit to the Secretary; and 

‘‘(viii) shall use any proceeds from special allowance payments and 

interest payments from borrowers, interest subsidies received from the 

Department of Education, and any proceeds from the sale or other disposition of loans, for need-based grant programs. 

‘‘(B) ADMINISTRATIVE EXPENSES.—An eligible lender under subparagraph 

(A) shall be permitted to use a portion of the proceeds described in subparagraph (A)(viii) for reasonable and direct administrative expenses. 

‘‘(C) SUPPLEMENT, NOT SUPPLANT.—An eligible lender under subparagraph (A) shall ensure that the proceeds described in subparagraph (A)(viii) 

are used to supplement, and not to supplant, non-Federal funds that would 

otherwise be used for need-based grant programs.’’. 

(m) DISABILITY DETERMINATIONS.—Section 437(a) (20 U.S.C. 1087(a)) is amended 

by adding at the end the following new sentence: ‘‘In making such determination 

of permanent and total disability, the Secretary shall provide that a borrower who 

has been certified as permanently and totally disabled by the Department of Veterans Affairs or the Social Security Administration shall not be required to present 

further documentation for purposes of this title.’’. 

(n) TREATMENT OF FALSELY CERTIFIED BORROWERS.—Section 437(c)(1) (20 U.S.C. 

1087(c)(1)) is amended by inserting ‘‘or parent’s eligibility’’ after ‘‘such student’s eligibility’’. 

(o) PERFECTION OF SECURITY INTERESTS.—Section 439(d) (20 U.S.C. 1087–2(d)) is 

amended—

(1) by striking paragraph (3); and 

(2) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively. 

(p) ADDITIONAL TECHNICAL AMENDMENTS.—

(1) Section 428(a)(2)(A) (20 U.S.C. 1078(a)(2)(A)) is amended—

(A) by striking ‘‘and’’ at the end of subclause (II) of clause (i); and 

(B) by moving the margin of clause (iii) two ems to the left. 

(2) Section 428(a)(3)(A)(v) (20 U.S.C. 1078(a)(3)(A)(v)) is amended—

(A) by striking ‘‘or’’ at the end of subclause (I); 

(B) by striking the period at the end of subclause (II) and inserting ‘‘; or’’; 

and 

(C) by adding after subclause (II) the following new subclause: 

‘‘(III) in the case of a loan disbursed through an escrow agent, 3 days before the first disbursement of the loan.’’. 

64 

(3) Section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is amended by striking ‘‘45 

days’’ in the last sentence and inserting ‘‘30 days’’. (4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is amended by striking ‘‘21 days’’ in the third sentence and inserting ‘‘10 days’’. (5) Section 428G(e) (20 U.S.C. 1078–7(e)) is amended by striking ‘‘, made to 

a student to cover the cost of attendance at an eligible institution outside the 

United States,’’. (6) Section 428H(e) (20 U.S.C. 1078–8(e)) is amended by striking paragraph 

(6) and inserting the following: ‘‘(6) TIME LIMITS ON BILLING INTEREST.—A lender may not receive interest on 

a loan under this section from a borrower for any period that precedes the dates 

described in section 428(a)(3)(A)(v).’’. (7) Section 432(m)(1)(B) (20 U.S.C. 1082(m)(1)(B)) is amended— (A) in clause (i), by inserting ‘‘and’’ after the semicolon at the end; and 

(B) in clause (ii), by striking ‘‘; and’’ and inserting a period. 

(8) Section 438(b)(4)(B) (20 U.S.C. 1087–1(b)(4)(B)) is amended by striking ‘‘shall be computed’’ and all that follows through ‘‘to the loan’’ and inserting ‘‘described in subparagraph (A) shall be computed using the interest rate described 

in section 3902(a) of title 31, United States Code,’’. 

PART C—FEDERAL WORK-STUDY PROGRAMS 

SEC. 441. AUTHORIZATION OF APPROPRIATIONS. 

Section 441(b) (42 U.S.C. 2751(b)) is amended— (1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

SEC. 442. COMMUNITY SERVICE. 

Section 441(c)(1) (42 U.S.C. 2751(c)(1)) is amended by striking ‘‘that are open and 

accessible to the community’’. 

SEC. 443. ALLOCATION OF FUNDS. 

(a) PHASEOUT OF ALLOCATION BASED ON PREVIOUS ALLOCATIONS.—Subsection (a) 

of section 442 (42 U.S.C. 2752(a)) is amended to read as follows: ‘‘(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.— ‘‘(1) BASE GUARANTEE.—From the amount appropriated pursuant to section 

441(b) for each fiscal year after fiscal year 2007, the Secretary shall, subject to 

paragraph (2), first allocate to each eligible institution an amount equal to the 

following percentage of the amount such institution received under subsection 

(a) of this section for fiscal year 2007 (as such subsection was in effect with respect to allocations for such fiscal year): ‘‘(A) 80 percent for fiscal years 2008 and 2009; 

‘‘(B) 60 percent for fiscal years 2010 and 2011; 

‘‘(C) 40 percent for fiscal years 2012 and 2013; 

‘‘(D) 20 percent for fiscal years 2014 and 2015; and 

‘‘(E) 0 percent for fiscal year 2016 and any succeeding fiscal year. 

‘‘(2) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIATIONS.—

‘‘(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for 

any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each 

such institution shall be ratably reduced. 

‘‘(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are 

appropriated for any such fiscal year, such reduced amounts shall be increased on the same basis as they were reduced (until the amount allocated 

equals the amount required to be allocated under this subsection). 

‘‘(3) ADDITIONAL ALLOCATIONS FOR CERTAIN INSTITUTIONS.—

‘‘(A) ALLOCATIONS PERMITTED.—Notwithstanding any other provision of 

this section, the Secretary may allocate an amount equal to not more than 

10 percent of the amount by which the amount appropriated in any fiscal 

year to carry out this part exceeds $700,000,000 among eligible institutions 

described in subparagraph (B). 

‘‘(B) ELIGIBLE INSTITUTIONS.—An otherwise eligible institution may receive a portion of the allocation described in subparagraph (A) if—

‘‘(i) not less than 10 percent of the students attending the institution 

receive Federal Pell Grants; and 

‘‘(ii)(I) in the case of an institution that offers programs of at least 

4 years in duration, if its graduation rate for Federal Pell Grant recipients attending the institution and graduating within the period of time 

equal to normal duration of the longest undergraduate program offered 

65 

by the institution, as measured from the first day of their enrollment, 

exceeds the median rate for the class of institution (as defined in section 131(f)(5)(C)); or ‘‘(II) in the case of an institution that offers programs of at least 2, 

but less than 4, years in duration, if its rate for Federal Pell Grant recipients attending the institution and graduating or transferring to an 

institution that offers programs of at least 4 years in duration within 

the period of time equal to the normal duration of the program offered, 

as measured from the first day of their enrollment, exceeds the median 

rate for the class of institution (as defined in section 131(f)(5)(C)).’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with 

respect to any amounts appropriated under section 441(b) of the Higher Education 

Act of 1965 (42 U.S.C. 2751(b)) for fiscal year 2008 or any succeeding fiscal year. 

SEC. 444. BOOKS AND SUPPLIES. 

Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is amended by striking ‘‘$450’’ and 

inserting ‘‘$600’’. 

SEC. 445. JOB LOCATION AND DEVELOPMENT. 

Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amended—

(1) by striking ‘‘10 percent or $50,000’’ and inserting ‘‘15 percent or $75,000’’; 

and 

(2) by inserting before the period at the end the following: ‘‘, except that not 

less than one-third of such amount shall be specifically allocated to locate and 

develop community service jobs’’. 

SEC. 446. WORK COLLEGES. 

Section 448 (42 U.S.C. 2756b) is amended—

(1) by striking ‘‘work-learning’’ each place it appears and inserting ‘‘worklearning-service’’; 

(2) by amending subparagraph (C) of subsection (e)(1) to read as follows: 

‘‘(C) requires all resident students, including at least one-half of all students who are enrolled on a full-time basis, to participate in a comprehensive work-learning-service program for at least 5 hours each week, or at 

least 80 hours during each period of enrollment, unless the student is engaged in an institutionally organized or approved study abroad or 

externship program; and’’; 

(3) by amending paragraph (2) of subsection (e) to read as follows: 

‘‘(2) the term ‘comprehensive student work-learning-service program’—

‘‘(A) means a student work-learning-service program that is an integral 

and stated part of the institution’s educational philosophy and program; 

‘‘(B) requires participation of all resident students for enrollment and 

graduation; 

‘‘(C) includes learning objectives, evaluation, and a record of work performance as part of the student’s college record; 

‘‘(D) provides programmatic leadership by college personnel at levels comparable to traditional academic programs; 

‘‘(E) recognizes the educational role of work-learning-service supervisors; 

and 

‘‘(F) includes consequences for nonperformance or failure in the worklearning-service program similar to the consequences for failure in the regular academic program.’’; and 

(4) in subsection (f), by striking ‘‘1999 and such sums as may be necessary 

for each of the 4 succeeding fiscal years’’ and inserting ‘‘2006 and such sums 

as may be necessary for the 5 succeeding fiscal years’’. 

PART D—FEDERAL DIRECT LOAN PROGRAM 

SEC. 451. REAUTHORIZATION OF THE DIRECT LOAN PROGRAM. 

(a) ADMINISTRATIVE EXPENSES.—Section 458(a)(1) (20 U.S.C. 1087h(a)(1)) is 

amended by striking ‘‘$617,000,000’’ and all that follows through ‘‘fiscal year 2003’’

and inserting ‘‘$820,000,000 in fiscal year 2006, $833,000,000 in fiscal year 2007, 

$847,000,000 in fiscal year 2008, $862,000,000 in fiscal year 2009, and $878,000,000 

in fiscal year 2010, and $894,000,000 in fiscal year 2011’’. 

(b) CALCULATION BASIS.—Subsection (b) of section 458 (20 U.S.C. 1087h(b)) is 

amended by striking ‘‘shall be calculated—’’ and all that follows through the end of 

such subsection and inserting ‘‘shall be calculated on the basis of 0.10 percent of 

the original principal amount of outstanding loans on which insurance was issued 

under part B.’’. 

66 

(c) SPECIAL RULES: FEE CAP.—Section 458(c)(1) (20 U.S.C. 1087h(c)(1)) is amended 

by striking subparagraphs (A) through (E) and inserting the following: 

‘‘(A) for fiscal year 2006, shall not exceed $220,000,000; 

‘‘(B) for fiscal year 2007, shall not exceed $233,000,000; 

‘‘(C) for fiscal year 2008, shall not exceed $247,000,000; 

‘‘(D) for fiscal year 2009, shall not exceed $262,000,000; 

‘‘(E) for fiscal year 2010, shall not exceed $278,000,000; and 

‘‘(F) for fiscal year 2011, shall not exceed $294,000,000.’’. 

(d) INCOME CONTINGENT REPAYMENT.—Section 455(e)(2) (20 U.S.C. 1087e(e)(2)) is 

amended by striking ‘‘and files a Federal income tax return jointly with the borrower’s spouse’’. 

PART E—FEDERAL PERKINS LOAN PROGRAM 

SEC. 461. REAUTHORIZATION OF PROGRAM. 

(a) PROGRAM AUTHORIZATION.—

(1) AUTHORIZATION OF APPROPRIATIONS.—Section 461(b) (20 U.S.C. 1087aa(b)) 

is amended—

(A) in paragraph (1)—

(i) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(ii) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’; and 

(B) in paragraph (2), by striking ‘‘2003’’ each place it appears and inserting ‘‘2012’’. 

(2) FEDERAL CAPITAL CONTRIBUTION RECOVERY.—Section 466 (20 U.S.C. 

1087ff) is amended—

(A) by striking ‘‘2004’’ each place it appears in subsections (a) and (c) and 

inserting ‘‘2012’’; and 

(B) in subsection (a), by striking ‘‘2003’’ each place it appears and inserting ‘‘2011’’. 

(b) PHASEOUT OF ALLOCATION BASED ON PREVIOUS ALLOCATIONS.—

(1) AMENDMENT.—Subsection (a) of section 462 (20 U.S.C. 1087bb(a)) is 

amended to read as follows: 

‘‘(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—

‘‘(1) BASE GUARANTEE.—From the amount appropriated pursuant to section 

461(b) for each fiscal year after fiscal year 2007, the Secretary shall, subject to 

paragraphs (2) and (3), first allocate to each eligible institution an amount 

equal to—

‘‘(A) 100 percent of the amount such institution received under subsection 

(a) of this section for fiscal year 2007 (as such subsection was in effect with 

respect to allocations for such fiscal year), multiplied by 

‘‘(B) the institution’s default penalty, as determined under subsection (e), 

except that if the institution has a cohort default rate in excess of the applicable maximum cohort default rate under subsection (f), the institution may 

not receive an allocation under this paragraph. 

‘‘(2) PHASE OUT.—For each of the fiscal years after fiscal year 2007, paragraph 

(1) shall be applied by substituting for ‘100 percent’: 

‘‘(A) ‘80 percent’ for fiscal years 2008 and 2009; 

‘‘(B) ‘60 percent’ for fiscal years 2010 and 2011; 

‘‘(C) ‘40 percent’ for fiscal years 2012 and 2013; 

‘‘(D) ‘20 percent’ for fiscal years 2014 and 2015; and 

‘‘(E) ‘0 percent’ for fiscal year 2016 and any succeeding fiscal year. 

‘‘(3) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIATIONS.—

‘‘(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for 

any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each 

such institution shall be ratably reduced. 

‘‘(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are 

appropriated for any such fiscal year, such reduced amounts shall be increased on the same basis as they were reduced (until the amount allocated 

equals the amount required to be allocated under this subsection).’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply 

with respect to any amounts appropriated under section 461(b) of the Higher 

Education Act of 1965 (20 U.S.C. 1087bb(b)) for fiscal year 2008 or any succeeding fiscal year. 

(c) BOOKS AND SUPPLIES.—Section 462(c)(4)(D) (20 U.S.C. 1087bb(c)(4)(D)) is 

amended by striking ‘‘$450’’ and inserting ‘‘$600’’. 

67 

SEC. 462. LOAN TERMS AND CONDITIONS. 

(a) LOAN LIMITS.—Section 464(a) (20 U.S.C. 1087dd(a)) is amended—

(1) in paragraph (2)(A)—

(A) by striking ‘‘$4,000’’ in clause (i) and inserting ‘‘$5,500’’; and 

(B) by striking ‘‘$6,000’’ in clause (ii) and inserting ‘‘$8,000’’; and 

(2) in paragraph (2)(B)—

(A) by striking ‘‘$40,000’’ in clause (i) and inserting ‘‘$60,000’’; 

(B) by striking ‘‘$20,000’’ in clause (ii) and inserting ‘‘$27,500’’; and 

(C) by striking ‘‘$8,000’’ in clause (iii) and inserting ‘‘$11,000’’. 

(b) FORBEARANCE.—Section 464(e) (20 U.S.C. 1087dd(e)) is amended by striking 

‘‘, upon written request,’’. 

(c) SPECIAL REPAYMENT RULE.—Paragraph (2) of section 464(f) is amended to read 

as follows: 

‘‘(2) No compromise repayment of a defaulted loan as authorized by paragraph (1) 

may be made unless agreed to by the Secretary.’’. 

(d) REHABILITATION.—Section 464(h)(1)(A) (20 U.S.C. 1087dd(h)(1)(A)) is amended 

by striking ‘‘12 ontime’’ and inserting ‘‘9 on-time’’. 

SEC. 463. LOAN CANCELLATION. 

Section 465(a)(3)(A) (20 U.S.C. 1087ee(a)(3)(A)) is amended—

(1) by inserting ‘‘(D),’’ after ‘‘subparagraph (A), (C),’’ in clause (i); 

(2) by inserting ‘‘or’’ after the semicolon at the end of clause (ii); 

(3) by striking clause (iii); and 

(4) by redesignating clause (iv) as clause (iii). 

SEC. 464. TECHNICAL AMENDMENTS. 

Part E is further amended as follows: 

(1) Section 462(g)(1)(E)(i)(I) (20 U.S.C. 1087bb(g)(1)(E)(i)(I)) is amended by inserting ‘‘monthly’’ after ‘‘consecutive’’. 

(2) Section 463(a)(4)(A) (20 U.S.C. 1087cc(a)(4)(A)) is amended by striking 

‘‘the Secretary may’’ and inserting ‘‘the Secretary shall’’. 

(3) Section 464(c)(1)(D) (20 U.S.C. 1087dd(c)(1)(D)) is amended by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively. 

(4) Section 465(a)(2) (20 U.S.C. 1087ee(a)(2)) is amended in subparagraph (A), 

by striking ‘‘section 111(c)’’ and inserting ‘‘section 1113(a)(5)’’. 

(5) Section 467(b) (20 U.S.C. 1087gg(b)) is amended by striking ‘‘(5)(A), 

(5)(B)(i), or (6)’’ and inserting ‘‘(4)(A), (4)(B), or (5)’’. 

(6) Section 469(c) (20 U.S.C. 1087ii(c)) is amended—

(A) by striking ‘‘sections 602 and 632’’ and inserting ‘‘sections 602(3) and 

632(5)’’; 

(B) by striking ‘‘qualified professional provider of early intervention services’’ and inserting ‘‘early intervention services’’; and 

(C) by striking ‘‘section 672(2)’’ and inserting ‘‘section 632(4)’’. 

PART F—NEED ANALYSIS 

SEC. 471. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID APPLICATION PROCESS. 

(a) EXPANDING THE AUTO-ZERO AND FURTHER SIMPLIFYING THE SIMPLIFIED NEEDS

TEST.—

(1) SIMPLIFIED NEEDS TEST.—Section 479 (20 U.S.C. 1087ss) is amended—

(A) in subsection (b)—

(i) in paragraph (1)—

(I) by striking clause (i) of subparagraph (A) and inserting the 

following: 

‘‘(i) the student’s parents file, or are eligible to file, a form described 

in paragraph (3) or certify that they are not required to file an income 

tax return, and the student files, or is eligible to file, such a form or 

certifies that the student is not required to file an income tax return, 

or the student’s parents, or the student, received benefits at some time 

during the previous 12-month period under a means-tested Federal 

benefit program as defined under subsection (d); and’’; and 

(II) by striking clause (i) of subparagraph (B) and inserting the 

following: 

‘‘(i) the student (and the student’s spouse, if any) files, or is eligible 

to file, a form described in paragraph (3) or certifies that the student 

(and the student’s spouse, if any) is not required to file an income tax 

return, or the student (and the student’s spouse, if any) received benefits at some time during the previous 12-month period under a meansVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00071 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
68 

tested Federal benefit program as defined under subsection (d); and’’; 

and 

(ii) in paragraph (3), by striking ‘‘A student or family files a form described in this subsection, or subsection (c), as the case may be, if the 

student or family, respectively, files’’ and inserting ‘‘In the case of an 

independent student, the student, or in the case of a dependent student, the parent, files a form described in this subsection, or subsection 

(c), as the case may be, if the student or parent, as appropriate, files’’; 

(B) in subsection (c)— (i) in paragraph (1), by striking subparagraph (A) and inserting the 

following: ‘‘(A) the student’s parents file, or are eligible to file, a form described in 

subsection (b)(3) or certify that they are not required to file an income tax 

return, and the student files, or is eligible to file, such a form or certifies 

that the student is not required to file an income tax return, or the student’s parents, or the student, received benefits at some time during the 

previous 12-month period under a means-tested Federal benefit program as 

defined in subsection (d); and’’; and 

(ii) in paragraph (2), by striking subparagraph (A) and inserting the 

following: ‘‘(A) the student (and the student’s spouse, if any) files, or is eligible to 

file, a form described in subsection (b)(3) or certifies that the student (and 

the student’s spouse, if any) is not required to file an income tax return, 

or the student (and the student’s spouse, if any) received benefits at some 

time during the previous 12-month period under a means-tested Federal 

benefit program as defined in subsection (d); and’’; and 

(C) by adding at the end the following new subsections: 

‘‘(d) DEFINITION OF MEANS-TESTED FEDERAL BENEFIT PROGRAM.—For the purposes of this section, the term ‘means-tested Federal benefit program’ means a mandatory spending program of the Federal Government, other than a program under 

this title, in which eligibility for the program’s benefits, or the amount of such benefits, or both, are determined on the basis of income or resources of the individual 

or family seeking the benefit, and may include such programs as the supplemental 

security income program under title XVI of the Social Security Act, the food stamp 

program under the Food Stamp Act of 1977, the free and reduced price school lunch 

program established under the Richard B. Russell National School Lunch Act, the 

temporary assistance to needy families program established under part A of title IV 

of the Social Security Act, and the women, infants and children program established 

under Section 17 of the Child Nutrition Act of 1966, and other programs identified 

by the Secretary. 

‘‘(e) REPORTING REQUIREMENTS.—The Secretary shall regularly evaluate the impact of the eligibility guidelines in subsections (b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and 

(c)(2)(A) of this section. In particular, the Secretary shall evaluate whether, under 

the definition of means-tested Federal benefit programs in subsection (d), the Simplified Needs Test continues to be targeted to the maximum number of low- and 

moderate-income students.’’. 

(b) IMPROVEMENTS TO PAPER AND ELECTRONIC FORMS.—

(1) COMMON FINANCIAL AID FORM DEVELOPMENT AND PROCESSING.—Section 

483(a) (20 U.S.C. 1090(a)) is amended—

(A) by striking paragraphs (1), (2), and (5); 

(B) by redesignating paragraphs (3), (4), (6), and (7), as paragraphs (9), 

(10), (11), and (12), respectively; 

(C) by inserting before paragraph (9), as redesignated by subparagraph 

(B), the following: 

‘‘(1) IN GENERAL.—The Secretary, in cooperation with representatives of agencies and organizations involved in student financial assistance, shall produce, 

distribute, and process free of charge common financial reporting forms as described in this subsection to be used for application and reapplication to determine the need and eligibility of a student for financial assistance under parts 

A through E (other than subpart 4 of part A). These forms shall be made available to applicants in both paper and electronic formats and shall be referred to 

as the ‘Free Application for Federal Student Aid’ or the ‘FAFSA’ . 

‘‘(2) EARLY ESTIMATES.—

‘‘(A) IN GENERAL.—The Secretary shall permit applicants to complete such 

forms as described in this subsection in the 4 years prior to enrollment in 

order to obtain a non-binding estimate of the family contribution, as defined 

in section 473. The estimate shall clearly and conspicuously indicate that 

it is only an estimate of family contribution, and may not reflect the actual 

family contribution of the applicant that shall be used to determine the 

69 

grant, loan, or work assistance that the applicant may receive under this 

title when enrolled in a program of postsecondary education. Such applicants shall be permitted to update information submitted on forms described in this subsection using the process required under paragraph 

(5)(A). ‘‘(B) EVALUATION.—Two years after the early estimates are implemented 

under this paragraph and from data gathered from the early estimates, the 

Secretary shall evaluate the differences between initial, non-binding early 

estimates and the final financial aid award made available under this title. ‘‘(C) REPORT.—The Secretary shall provide a report to the authorizing 

committees on the results of the evaluation. ‘‘(3) PAPER FORMAT.— ‘‘(A) IN GENERAL.—The Secretary shall produce, distribute, and process 

common forms in paper format to meet the requirements of paragraph (1). 

The Secretary shall develop a common paper form for applicants who do not 

meet the requirements of subparagraph (B). ‘‘(B) EZ FAFSA.— ‘‘(i) IN GENERAL.—The Secretary shall develop and use a simplified 

paper application form, to be known as the ‘EZ FAFSA’, to be used for 

applicants meeting the requirements of section 479(c). ‘‘(ii) REDUCED DATA REQUIREMENTS.—The form under this subparagraph shall permit an applicant to submit, for financial assistance purposes, only the data elements required to make a determination of 

whether the applicant meets the requirements under section 479(c). 

‘‘(iii) STATE DATA.—The Secretary shall include on the form under 

this subparagraph such data items as may be necessary to award State 

financial assistance, as provided under paragraph (6), except that the 

Secretary shall not include a State’s data if that State does not permit 

its applicants for State assistance to use the form under this subparagraph. 

‘‘(iv) FREE AVAILABILITY AND PROCESSING.—The provisions of paragraph (7) shall apply to the form under this subparagraph, and the 

data collected by means of the form under this subparagraph shall be 

available to institutions of higher education, guaranty agencies, and 

States in accordance with paragraph (9). 

‘‘(v) TESTING.—The Secretary shall conduct appropriate field testing 

on the form under this subparagraph. 

‘‘(C) PROMOTING THE USE OF ELECTRONIC FAFSA.—

‘‘(i) IN GENERAL.—The Secretary shall make an effort to encourage 

applicants to utilize the electronic forms described in paragraph (4). 

‘‘(ii) MAINTENANCE OF THE FAFSA IN A PRINTABLE ELECTRONIC FILE.—

The Secretary shall maintain a version of the paper forms described in 

subparagraphs (A) and (B) in a printable electronic file that is easily 

portable. The printable electronic file will be made easily accessible and 

downloadable to students on the same website used to provide students 

with the electronic application forms described in paragraph (4) of this 

subsection. The Secretary shall enable students to submit a form created under this subparagraph that is downloaded and printed from an 

electronic file format in order to meet the filing requirements of this 

section and in order to receive aid from programs under this title. 

‘‘(iii) REPORTING REQUIREMENT.—The Secretary shall report annually 

to Congress on the impact of the digital divide on students completing 

applications for title IV aid described under this paragraph and paragraph (4). The Secretary will also report on the steps taken to eliminate 

the digital divide and phase out the paper form described in subparagraph (A) of this paragraph. The Secretary’s report will specifically address the impact of the digital divide on the following student populations: dependent students, independent students without dependents, 

and independent students with dependents other than a spouse. 

‘‘(4) ELECTRONIC FORMAT.—

‘‘(A) IN GENERAL.—The Secretary shall produce, distribute, and process 

common forms in electronic format to meet the requirements of paragraph 

(1). The Secretary shall develop common electronic forms for applicants who 

do not meet the requirements of subparagraph (C) of this paragraph. 

‘‘(B) STATE DATA.—The Secretary shall include on the common electronic 

forms space for information that needs to be submitted from the applicant 

to be eligible for State financial assistance, as provided under paragraph 

(6), except the Secretary shall not require applicants to complete data required by any State other than the applicant’s State of residence. 

70 

‘‘(C) SIMPLIFIED APPLICATIONS: FAFSA ON THE WEB.— ‘‘(i) IN GENERAL.—The Secretary shall develop and use a simplified 

electronic application form to be used by applicants meeting the requirements under subsection (c) of section 479 and an additional, separate simplified electronic application form to be used by applicants 

meeting the requirements under subsection (b) of section 479. ‘‘(ii) REDUCED DATA REQUIREMENTS.—The simplified electronic application forms shall permit an applicant to submit for financial assistance purposes, only the data elements required to make a determination of whether the applicant meets the requirements under subsection 

(b) or (c) of section 479. ‘‘(iii) STATE DATA.—The Secretary shall include on the simplified electronic application forms such data items as may be necessary to award 

state financial assistance, as provided under paragraph (6), except that 

the Secretary shall not require applicants to complete data required by 

any State other than the applicant’s State of residence. ‘‘(iv) AVAILABILITY AND PROCESSING.—The data collected by means of 

the simplified electronic application forms shall be available to institutions of higher education, guaranty agencies, and States in accordance 

with paragraph (9). ‘‘(v) TESTING.—The Secretary shall conduct appropriate field testing 

on the forms developed under this subparagraph. 

‘‘(D) USE OF FORMS.—Nothing in this subsection shall be construed to prohibit the use of the forms developed by the Secretary pursuant to this paragraph by an eligible institution, eligible lender, guaranty agency, State 

grant agency, private computer software provider, a consortium thereof, or 

such other entities as the Secretary may designate. 

‘‘(E) PRIVACY.—The Secretary shall ensure that data collection under this 

paragraph complies with section 552a of title 5, United States Code, and 

that any entity using the electronic version of the forms developed by the 

Secretary pursuant to this paragraph shall maintain reasonable and appropriate administrative, technical, and physical safeguards to ensure the integrity and confidentiality of the information, and to protect against security threats, or unauthorized uses or disclosures of the information provided 

on the electronic version of the forms. Data collected by such electronic 

version of the forms shall be used only for the application, award, and administration of aid awarded under this title, State aid, or aid awarded by 

eligible institutions or such entities as the Secretary may designate. No 

data collected by such electronic version of the forms shall be used for making final aid awards under this title until such data have been processed 

by the Secretary or a contractor or designee of the Secretary, except as may 

be permitted under this title. 

‘‘(F) SIGNATURE.—Notwithstanding any other provision of this Act, the 

Secretary may permit an electronic form under this paragraph to be submitted without a signature, if a signature is subsequently submitted by the 

applicant. 

‘‘(5) STREAMLINING.—

‘‘(A) STREAMLINED REAPPLICATION PROCESS.—

‘‘(i) IN GENERAL.—The Secretary shall develop streamlined reapplication forms and processes, including both paper and electronic reapplication processes, consistent with the requirements of this subsection, for 

an applicant who applies for financial assistance under this title—

‘‘(I) in the academic year succeeding the year in which such applicant first applied for financial assistance under this title; or 

‘‘(II) in any succeeding academic years. 

‘‘(ii) MECHANISMS FOR REAPPLICATION.—The Secretary shall develop 

appropriate mechanisms to support reapplication. 

‘‘(iii) IDENTIFICATION OF UPDATED DATA.—The Secretary shall determine, in cooperation with States, institutions of higher education, agencies, and organizations involved in student financial assistance, the 

data elements that can be updated from the previous academic year’s 

application. 

‘‘(iv) REDUCED DATA AUTHORIZED.—Nothing in this title shall be construed as limiting the authority of the Secretary to reduce the number 

of data elements required of reapplicants. 

‘‘(v) ZERO FAMILY CONTRIBUTION.—Applicants determined to have a 

zero family contribution pursuant to section 479(c) shall not be required to provide any financial data in a reapplication form, except that 

which is necessary to determine eligibility under such section. 

71 

‘‘(B) REDUCTION OF DATA ELEMENTS.— ‘‘(i) REDUCTION ENCOURAGED.—Of the number of data elements on 

the FAFSA on the date of enactment of the College Access and Opportunity Act of 2005 (including questions on the FAFSA for the purposes 

described in paragraph (6)), the Secretary, in cooperation with representatives of agencies and organizations involved in student financial 

assistance, shall continue to reduce the number of such data elements 

following the date of enactment. Reductions of data elements under 

paragraph (3)(B), (4)(C), or (5)(A)(iv) shall not be counted towards the 

reduction referred to in this paragraph unless those data elements are 

reduced for all applicants. ‘‘(ii) REPORT.—The Secretary shall annually report to the House of 

Representatives and the Senate on the progress made of reducing data 

elements. ‘‘(6) STATE REQUIREMENTS.— ‘‘(A) IN GENERAL.—The Secretary shall include on the forms developed 

under this subsection, such State-specific data items as the Secretary determines are necessary to meet State requirements for State need-based financial aid under section 415C, except as provided in paragraphs (3)(B)(iii) and 

(4)(C)(iii) of this subsection. Such items shall be selected in consultation 

with State agencies in order to assist in the awarding of State financial assistance in accordance with the terms of this subsection, except as provided 

in paragraphs (3)(B)(iii) and (4)(C)(iii) of this subsection. The number of 

such data items shall not be less than the number included on the form on 

October 7, 1998, unless a State notifies the Secretary that the State no 

longer requires those data items for the distribution of State need-based financial aid. 

‘‘(B) ANNUAL REVIEW.—The Secretary shall conduct an annual review 

process to determine which forms and data items the States require to 

award State need-based financial aid and other application requirements 

that the States may impose. 

‘‘(C) STATE USE OF SIMPLIFIED FORMS.—The Secretary shall encourage 

States to take such steps as necessary to encourage the use of simplified 

application forms, including those described in paragraphs (3)(B) and (4)(C), 

to meet the requirements under subsection (b) or (c) of section 479. 

‘‘(D) FEDERAL REGISTER NOTICE.—The Secretary shall publish on an annual basis a notice in the Federal Register requiring State agencies to inform the Secretary—

‘‘(i) if the State agency is unable to permit applicants to utilize the 

simplified application forms described in paragraphs (3)(B) and (4)(C); 

and 

‘‘(ii) of the State-specific data that the State agency requires for delivery of State need-based financial aid. 

‘‘(E) STATE NOTIFICATION TO THE SECRETARY.—

‘‘(i) IN GENERAL.—Each State agency shall notify the Secretary—

‘‘(I) whether the State permits an applicant to file a form described in paragraph (3)(B) or paragraph (4)(C) of this subsection 

for purposes of determining eligibility for State need-based financial aid; and 

‘‘(II) the State-specific data that the State agency requires for delivery of State need-based financial aid. 

‘‘(ii) ACCEPTANCE OF FORMS.—In the event that a State does not permit an applicant to file a form described in paragraph (3)(B) or paragraph (4)(C) of this subsection for purposes of determining eligibility for 

State need-based financial aid—

‘‘(I) the State shall notify the Secretary if the State is not permitted to do so because of either State law or because of agency 

policy; and 

‘‘(II) the notification under subclause (I) shall include an estimate of the program cost to permit applicants to complete simplified application forms under paragraphs (3)(B) and paragraph 

(4)(C) of this subsection. 

‘‘(iii) LACK OF NOTIFICATION BY THE STATE.—If a State does not notify 

the Secretary pursuant to clause (i), the Secretary shall—

‘‘(I) permit residents of that State to complete simplified application forms under paragraphs (3)(B) and paragraph (4)(C) of this 

subsection; and 

‘‘(II) not require any resident of that State to complete any data 

previously required by that State under this section. 

72 

‘‘(7) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORMS PROHIBITED.—

‘‘(A) FEES PROHIBITED.—The FAFSA, in whatever form (including the EZ–

FAFSA, paper, electronic, simplified, or reapplication), shall be produced, 

distributed, and processed by the Secretary and no parent or student shall 

be charged a fee for the collection, processing, or delivery of financial aid 

through the use of the FAFSA. The need and eligibility of a student for financial assistance under parts A through E of this title (other than under 

subpart 4 of part A) may only be determined by using the FAFSA developed 

by the Secretary pursuant to this subsection. No student may receive assistance under parts A through E of this title (other than under subpart 

4 of part A), except by use of the FAFSA developed by the Secretary pursuant to this subsection. No data collected on a form for which a fee is 

charged shall be used to complete the FAFSA. 

‘‘(B) NOTICE.—Any entity that provides to students or parents, or charges 

students or parents for, any value-added services with respect to or in connection with the FAFSA, such as completion of the FAFSA, submission of 

the FAFSA, or tracking of the FAFSA for a student, shall provide to students and parents clear and conspicuous notice that—

‘‘(i) the FAFSA is a free Federal student aid application; 

‘‘(ii) the FAFSA can be completed without professional assistance; 

and 

‘‘(iii) includes the current Internet address for the FAFSA on the Department’s web site. 

‘‘(8) APPLICATION PROCESSING CYCLE.—The Secretary shall enable students to 

submit a form created under this subsection in order to meet the filing requirements of this section and in order to receive aid from programs under this title 

and shall initiate the processing of applications under this subsection as early 

as practicable prior to January 1 of the student’s planned year of enrollment.’’. 

(2) MASTER CALENDAR.—Section 482(a)(1)(B) (20 U.S.C. 1089) is amended to 

read as follows: 

‘‘(B) by March 1: proposed modifications, updates, and notices pursuant 

to sections 478, 479(c)(2)(C), and 483(a)(6) published in the Federal Register;’’. 

(c) INCREASING ACCESS TO TECHNOLOGY.—Section 483 (20 U.S.C. 1090) is further 

amended by adding at the end the following: 

‘‘(f) ADDRESSING THE DIGITAL DIVIDE.—The Secretary shall utilize savings accrued 

by moving more applicants to the electronic forms described in subsection (a)(4) to 

improve access to the electronic forms described in subsection (a)(4) for applicants 

meeting the requirements of section 479(c).’’. 

(d) EXPANDING THE DEFINITION OF AN INDEPENDENT STUDENT.—Section 480(d) (20 

U.S.C.1087vv(d)) is amended by striking paragraph (2) and inserting the following: 

‘‘(2) is an orphan, in foster care, or a ward of the court, or was in foster care 

or a ward of the court until the individual reached the age of 18;’’. 

SEC. 472. ADDITIONAL NEED ANALYSIS AMENDMENTS. 

(a) INCOME PROTECTION ALLOWANCE FOR DEPENDENT STUDENTS.——

(1) AMENDMENT.—Section 475(g)(2)(D) (20 U.S.C. 1087oo(g)(2)(D)) is amended 

by striking ‘‘$2,200’’ and inserting ‘‘$3,000’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply 

with respect to determinations of need for periods of enrollment beginning on 

or after July 1, 2006. 

(b) EMPLOYMENT EXPENSE ALLOWANCE.—Section 478(h) (20 U.S.C. 1087rr(h)) is 

amended—

(1) by striking ‘‘476(b)(4)(B),’’; and 

(2) by striking ‘‘meals away from home, apparel and upkeep, transportation, 

and housekeeping services’’ and inserting ‘‘food away from home, apparel, transportation, and household furnishings and operations’’. 

(c) DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.—Section 479A(a) (20 

U.S.C. 1087tt(a)) is amended—

(1) by striking ‘‘(a) IN GENERAL.—’’ and inserting the following: 

‘‘(a) AUTHORITY TO MAKE ADJUSTMENTS.—

‘‘(1) ADJUSTMENTS FOR SPECIAL CIRCUMSTANCES.—’’; 

(2) by inserting before ‘‘Special circumstances may’’ the following: 

‘‘(2) SPECIAL CIRCUMSTANCES DEFINED.—’’; 

(3) by inserting ‘‘a student’s status as a ward of the court at any time prior 

to attaining 18 years of age, a student’s status as an individual who was adopted at or after age 13, a student’s status as a homeless or unaccompanied youth 

(as defined in section 725 of the McKinney-Vento Homeless Assistance Act),’’

after ‘‘487,’’; 

73 

(4) by inserting before ‘‘Adequate documentation’’ the following: ‘‘(3) DOCUMENTATION AND USE OF SUPPLEMENTARY INFORMATION.—’’; and 

(5) by inserting before ‘‘No student’’ the following: ‘‘(4) FEES FOR SUPPLEMENTARY INFORMATION PROHIBITED.—’’. (d) TREATING ACTIVE DUTY MEMBERS OF THE ARMED FORCES AS INDEPENDENT

STUDENTS.—Section 480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by inserting before the semicolon at the end the following: ‘‘or is currently serving on active duty 

in the Armed Forces for other than training purposes’’. (e) EXCLUDABLE INCOME.—Section 480(e) (20 U.S.C. 1087vv(e)) is amended— (1) by striking ‘‘and’’ at the end of paragraph (3); 

(2) by striking the period at the end of paragraph (4) and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following new paragraph: 

‘‘(5) any part of any distribution from a qualified tuition program established 

under section 529 of the Internal Revenue Code of 1986 that is not includable 

in gross income under such section 529.’’. (f) TREATMENT OF SAVINGS PLANS.— (1) AMENDMENT.—Section 480(f) (20 U.S.C. 1087vv(f)) is amended— (A) in paragraph (1), by inserting ‘‘qualified tuition programs established 

under section 529 of the Internal Revenue Code of 1986 (26 U.S.C. 529), 

except as provided in paragraph (2),’’ after ‘‘tax shelters,’’; 

(B) by redesignating paragraph (2) as paragraph (3); and 

(C) by inserting after paragraph (1) the following new paragraph: ‘‘(2) A qualified tuition program shall not be considered an asset of a dependent 

student under section 475 of this part. The value of a qualified tuition program for 

purposes of determining the assets of parents or independent students shall be— ‘‘(A) the refund value of any tuition credits or certificates purchased under 

section 529 of the Internal Revenue Code of 1986 (26 U.S.C. 529) on behalf of 

a beneficiary; or ‘‘(B) the current balance of any account which is established under such section for the purpose of meeting the qualified higher education expenses of the 

designated beneficiary of the account.’’. (2) CONFORMING AMENDMENT.—Section 480(j) (20 U.S.C. 1087vv(j)) is amended— (A) by striking ‘‘; TUITION PREPAYMENT PLANS’’ in the heading of such 

subsection; 

(B) by striking paragraph (2); 

(C) in paragraph (3), by inserting ‘‘, or a distribution that is not includable in gross income under section 529 of such Code,’’ after ‘‘1986’’; and 

(D) by redesignating paragraph (3) as paragraph (2). 

(g) TREATMENT OF FAMILY OWNERSHIP OF SMALL BUSINESSES.—Section 480(f)(3) 

of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(3)), as redesignated by 

subsection (f) of this section, is amended—

(1) in subparagraph (A), by striking ‘‘or’’; 

(2) in subparagraph (B), by striking the period at the end and inserting ‘‘; or’’; 

and 

(3) by adding at the end the following new subparagraph: 

‘‘(C) a small business with not more than 100 full-time or full-time equivalent 

employees (or any part of such a small business) that is owned and controlled 

by the family.’’. 

(h) DESIGNATED ASSISTANCE.—Section 480(j) (20 U.S.C. 1087vv(j)) is amended by 

adding after paragraph (2) (as redesignated by subsection (f)(2)(D) of this section) 

the following new paragraph: 

‘‘(3) Notwithstanding paragraph (1) and section 472, assistance not received under 

this title may be excluded from both estimated financial assistance and cost of attendance, if that assistance is designated by the State providing that assistance to 

offset a specific component of the cost of attendance. If that assistance is excluded 

from either estimated financial assistance or cost of attendance, it shall be excluded 

from both.’’. 

PART G—GENERAL PROVISIONS RELATING TO 

STUDENT FINANCIAL ASSISTANCE 

SEC. 481. DEFINITIONS OF ACADEMIC YEAR AND ELIGIBLE PROGRAM. 

(a) ACADEMIC YEAR.—Paragraph (2) of section 481(a) (20 U.S.C. 1088(a)) is 

amended to read as follows: 

‘‘(2)(A) For the purpose of any program under this title, the term ‘academic year’

shall—

74 

‘‘(i) require a minimum of 30 weeks of instructional time for a course of study 

that measures its program length in credit hours; or 

‘‘(ii) require a minimum of 26 weeks of instructional time for a course of study 

that measures its program length in clock hours; and 

‘‘(iii) require an undergraduate course of study to contain an amount of instructional time whereby a full-time student is expected to complete at least—

‘‘(I) 24 semester or trimester hours or 36 quarter credit hours in a course 

of study that measures its program length in credit hours; or 

‘‘(II) 900 clock hours in a course of study that measures its program 

length in clock hours. 

‘‘(B) The Secretary may reduce such minimum of 30 weeks to not less than 26 

weeks for good cause, as determined by the Secretary on a case-by-case basis, in 

the case of an institution of higher education that provides a 2-year or 4-year program of instruction for which the institution awards an associate or baccalaureate 

degree.’’. 

(b) ELIGIBLE PROGRAM.—Section 481(b) (20 U.S.C. 1088(b)) is amended by adding 

at the end the following new paragraph: 

‘‘(3) For purposes of this title, an eligible program includes an instructional program that utilizes direct assessment of student learning, or recognizes the direct assessment of student learning, in lieu of credit hours or clock hours as the measure 

of student learning. In the case of a program being determined eligible for the first 

time under this paragraph, such determination shall be made by the Secretary before such program is considered to be eligible. The Secretary shall provide an annual report to Congress identifying the programs made eligible under this paragraph.’’. 

SEC. 482. DISTANCE EDUCATION. 

(a) DISTANCE EDUCATION: ELIGIBLE PROGRAM.—Section 481(b) (20 U.S.C. 1088(b)) 

is amended by adding after paragraph (3) (as added by section 481(b) of this Act) 

the following new paragraph: 

‘‘(4) An otherwise eligible program that is offered in whole or in part through telecommunications is eligible for the purposes of this title if the program is offered by 

an institution, other than a foreign institution, that has been evaluated and determined (before or after the date of enactment of this paragraph) to have the capability to effectively deliver distance education programs by an accrediting agency or 

association that—

‘‘(A) is recognized by the Secretary under subpart 2 of Part H; and 

‘‘(B) has evaluation of distance education programs within the scope of its recognition, as described in section 496(n)(3).’’. 

(b) CORRESPONDENCE COURSES.—Section 484(l)(1) (20 U.S.C. 1091(l)(1)) is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘for a program of study of 1 year or longer’’; and 

(B) by striking ‘‘unless the total’’ and all that follows through ‘‘courses at 

the institution’’; and 

(2) by amending subparagraph (B) to read as follows: 

‘‘(B) EXCEPTION.—Subparagraph (A) does not apply to an institution or 

school described in section 3(3)(C) of the Carl D. Perkins Vocational and 

Technical Education Act of 1998.’’. 

SEC. 483. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR PELL 

GRANTS. 

Section 483(a) (20 U.S.C. 1090(a)) (as amended by section 471(b)) is further 

amended by adding at the end the following new paragraph: 

‘‘(13) EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR

PELL GRANTS.—The Secretary shall make special efforts, in conjunction with 

State efforts, to notify students and their parents who qualify for a free lunch 

under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 

seq.), the Food Stamps program, or such other programs as the Secretary shall 

determine, of their potential eligibility for a maximum Pell Grant, and shall disseminate such informational materials as the Secretary deems appropriate.’’. 

SEC. 484. STUDENT ELIGIBILITY. 

(a) FRAUD: REPAYMENT REQUIRED.—Section 484(a) (20 U.S.C. 1091(a)) is amended—

(1) by striking the period at the end of paragraph (5) and inserting ‘‘; and’’; 

and 

(2) by adding at the end the following new paragraph: 

‘‘(6) if the student has been convicted of, or has pled nolo contendere or guilty 

to, a crime involving fraud in obtaining funds under this title, have completed 

75 

the repayment of such funds to the Secretary, or to the holder in the case of 

a loan under this title obtained by fraud.’’. 

(b) TECHNICAL AMENDMENT.—Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is amended 

by inserting ‘‘or parent (on behalf of a student)’’ after ‘‘student’’. 

(c) LOAN INELIGIBILITY BASED ON INVOLUNTARY CIVIL COMMITMENT FOR SEXUAL

OFFENSES.—Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is further amended by inserting 

before the period the following: ‘‘, and no student who is subject to an involuntary 

civil commitment upon completion of a period of incarceration for a sexual offense 

(as determined under regulations of the Secretary) is eligible to receive a loan under 

this title’’. 

(d) FREELY ASSOCIATED STATES.—Section 484(j) (20 U.S.C. 1091(j)) is amended by 

inserting ‘‘and shall be eligible only for assistance under subpart 1 of part A thereafter,’’ after ‘‘part C,’’. 

(e) VERIFICATION OF INCOME DATE.—Paragraph (1) of section 484(q) (20 U.S.C. 

1091(q)) is amended to read as follows: 

‘‘(1) CONFIRMATION WITH IRS.—The Secretary of Education, in cooperation 

with the Secretary of the Treasury, is authorized to confirm with the Internal 

Revenue Service the information specified in section 6103(l)(13) of the Internal 

Revenue Code of 1986 reported by applicants (including parents) under this title 

on their Federal income tax returns for the purpose of verifying the information 

reported by applicants on student financial aid applications.’’. 

(f) SUSPENSION OF ELIGIBILITY FOR DRUG OFFENSES.—Section 484(r)(1) (20 U.S.C. 

1091(r)(1)) is amended by striking everything preceding the table and inserting the 

following: 

‘‘(1) IN GENERAL.—A student who is convicted of any offense under any Federal or State law involving the possession or sale of a controlled substance for 

conduct that occurred during a period of enrollment for which the student was 

receiving any grant, loan, or work assistance under this title shall not be eligible to receive any grant, loan, or work assistance under this title from the date 

of that conviction for the period of time specified in the following table:’’. 

SEC. 485. INSTITUTIONAL REFUNDS. 

Section 484B (20 U.S.C. 1091b) is amended—

(1) in subsection (a)(1), by inserting ‘‘subpart 4 of part A or’’ after ‘‘received 

under’’; 

(2) in subsection (a)(2), by striking ‘‘takes a leave’’ and by inserting ‘‘takes one 

or more leaves’’; 

(3) in subsection (a)(3)(B)(ii), by inserting ‘‘(as determined in accordance with 

subsection (d))’’ after ‘‘student has completed’’; 

(4) in subsection (a)(4), by amending subparagraph (A) to read as follows: 

‘‘(A) IN GENERAL.—After determining the eligibility of the student for a 

late disbursement or post-withdrawal disbursement (as required in regulations prescribed by the Secretary), the institution of higher education shall 

contact the borrower and obtain confirmation that the loan funds are still 

required by the borrower. In making such contact, the institution shall explain to the borrower the borrower’s obligation to repay the funds following 

any such disbursement. The institution shall document in the borrower’s 

file the result of such contact and the final determination made concerning 

such disbursement.’’; 

(5) in subsection (b)(1), by inserting ‘‘no later than 45 days from the determination of withdrawal’’ after ‘‘return’’; 

(6) in subsection (b)(2), by amending subparagraph (C) to read as follows: 

‘‘(C) GRANT OVERPAYMENT REQUIREMENTS.—

‘‘(i) IN GENERAL.—Notwithstanding subparagraphs (A) and (B), a student shall only be required to return grant assistance in the amount 

(if any) by which—

‘‘(I) the amount to be returned by the student (as determined 

under subparagraphs (A) and (B)), exceeds 

‘‘(II) 50 percent of the total grant assistance received by the student under this title for the payment period or period of enrollment. 

‘‘(ii) MINIMUM.—A student shall not be required to return amounts 

of $50 or less.’’; 

(7) in subsection (b)(2), by adding at the end the following new subparagraph: 

‘‘(D) WAIVERS OF PELL GRANT REPAYMENT BY STUDENTS AFFECTED BY DISASTERS.—The Secretary may waive the amounts that students are required 

to return under this section with respect to Pell grants if the withdrawals 

on which the returns are based are withdrawals by students—

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‘‘(i) who were residing in, employed in, or attending an institution of 

higher education that is located in an area in which the President has 

declared that a major disaster exists, in accordance with section 401 of 

the Robert T. Stafford Disaster Relief and Emergency Assistance Act 

(42 U.S.C. 5170); 

‘‘(ii) whose attendance was interrupted because of the impact of the 

disaster on the student or the institution; and 

‘‘(iii) whose withdrawal ended within the academic year during which 

the designation occurred or during the next succeeding academic year.’’; 

and 

(8) in subsection (d), by striking ‘‘(a)(3)(B)(i)’’ and inserting ‘‘(a)(3)(B)’’. 

SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR STUDENTS. 

(a) INFORMATION DISSEMINATION ACTIVITIES.—Section 485(a)(1) (20 U.S.C. 

1092(a)(1)) is amended—

(1) by amending the second sentence to read as follows: ‘‘The information required by this section shall be produced and be made publicly available to an 

enrolled student and to any prospective student, through appropriate publications, mailings, electronic media, and the reports required by the institution’s 

accrediting agency under section 496(c)(9).’’; 

(2) by amending subparagraph (G) to read as follows: 

‘‘(G) the academic programs of the institution, including—

‘‘(i) the current degree programs and other educational and training programs; 

‘‘(ii) the institution’s educational mission and goals; 

‘‘(iii) the instructional, laboratory, and other physical plant facilities 

which relate to the academic programs; and 

‘‘(iv) the faculty and other instructional personnel;’’; 

(3) by striking subparagraph (L) and inserting the following: 

‘‘(L) a summary of student outcomes for full-time undergraduate students, including—

‘‘(i) the completion or graduation rates of certificate- or degree-seeking 

undergraduate students entering such institutions; and 

‘‘(ii) any other student outcome data, qualitative or quantitative, including data regarding distance education, deemed by the institution to be appropriate to its stated educational mission and goals, and, when applicable, 

licensing and placement rates for professional and vocational programs;’’; 

(4) by inserting before the semicolon at the end of subparagraph (J) the following: ‘‘, and the process for students to register complaints with the accrediting agencies or associations’’; 

(5) in subparagraph (M), by striking ‘‘guaranteed student loans under part B 

of this title or direct student loans under part E of this title, or both,’’ and inserting ‘‘student loans under part B, D, or E of this title’’; 

(6) by striking ‘‘and’’ at the end of subparagraph (N); 

(7) by striking the period at the end of subparagraph (O) and inserting a 

semicolon; and 

(8) by adding at the end the following new subparagraphs: 

‘‘(P) the penalties contained in subsection 484(r) regarding suspension of eligibility for drug related offenses; 

‘‘(Q) the policies of the institution regarding the acceptance or denial of academic credit earned at another institution of higher education, which shall include a statement that such decisions will not be based solely on the source of 

accreditation of a sending institution, provided that the sending institution is 

accredited by an agency or association that is recognized by the Secretary pursuant to section 496 to be a reliable authority as to the quality of the education 

or training offered, and except that nothing in this subparagraph shall be construed to—

‘‘(i) authorize an officer or employee of the Department to exercise any 

direction, supervision, or control over the curriculum, program of instruction, administration, or personnel of any institution of higher education, or 

over any accrediting agency or association; 

‘‘(ii) limit the application of the General Education Provisions Act; or 

‘‘(iii) create any legally enforceable right; and’’. 

(b) ADDITIONAL AMENDMENTS.—Section 485(a) is further amended by striking 

paragraph (6) and inserting the following: 

‘‘(6) Each institution may provide supplemental information to enrolled and prospective students showing the completion or graduation rate for students described 

in paragraph (4). For the purpose of this paragraph, the definitions provided in the 

Integrated Postsecondary Education Data System shall apply. 

77 

‘‘(7) Each eligible institution participating in any program under this title may 

publicly report to currently enrolled and prospective students the voluntary information collected by the National Survey of Student Engagement (NSSE), the Community College Survey of Student Engagement (CCSSE), or other instruments that provide evidence of student participation in educationally purposeful activities. The information shall be produced and made available in a uniform and comprehensible 

manner, through appropriate publications, mailings, and electronic media, and may 

be included in reports required by the institution’s accrediting agency.’’. (c) EXIT COUNSELING.—Section 485(b) (20 U.S.C. 1092(b)) is amended by adding 

at the end the following new paragraph: ‘‘(3) Each eligible institution shall, during the exit interview required by this subsection, provide to a borrower of a loan made under part B, D, or E a clear and 

conspicuous notice describing the effect of using a consolidation loan to discharge 

the borrower’s student loans, including— ‘‘(A) the effects of consolidation on total interest to be paid, fees to be paid, 

and length of repayment; ‘‘(B) the effects of consolidation on a borrower’s underlying loan benefits, including loan forgiveness, cancellation, and deferment; ‘‘(C) the ability for the borrower to prepay the loan, pay on a shorter schedule, 

and to change repayment plans, and that borrower benefit programs may vary 

among different loan holders; 

‘‘(D) the tax benefits for which the borrower may be eligible; and 

‘‘(E) the consequences of default.’’. 

(d) CAMPUS CRIME INFORMATION.—Section 485(f)(1) (20 U.S.C. 1092(f)(1)) is 

amended by inserting ‘‘, other than a foreign institution of higher education,’’ after 

‘‘under this title’’. 

(e) DISCLOSURE OF FIRE SAFETY OF CAMPUS BUILDINGS.—Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is further amended—

(1) in subsection (a)(1), by adding after subparagraph (Q) (as added by subsection (a)(8) of this section) the following new subparagraph: 

‘‘(R) the fire safety report prepared by the institution pursuant to subsection 

(h).’’; and 

(2) by adding at the end the following new subsection: 

‘‘(h) DISCLOSURE OF FIRE SAFETY STANDARDS AND MEASURES.—

‘‘(1) ANNUAL FIRE SAFETY REPORTS REQUIRED.—Each institution participating 

in any program under this title shall, beginning in the first academic year that 

begins after the date of enactment of the College Access and Opportunity Act 

of 2005, and each year thereafter, prepare, publish, and distribute, through appropriate publications (including the Internet) or mailings, to all current students and employees, and to any applicant for enrollment or employment upon 

request, an annual fire safety report. Such reports shall contain at least the following information with respect to the campus fire safety practices and standards of that institution: 

‘‘(A) A statement that identifies each institution-owned or controlled student housing facility, and whether or not such facility is equipped with a 

fire sprinkler system or other fire safety system, or has fire escape planning 

or protocols. 

‘‘(B) Statistics for each such facility concerning the occurrence of fires and 

false alarms in such facility during the 2 preceding calendar years for 

which data are available. 

‘‘(C) For each such occurrence in each such facility, a summary of the 

human injuries or deaths, structural or property damage, or combination 

thereof. 

‘‘(D) Information regarding rules on portable electrical appliances, smoking and open flames (such as candles), regular mandatory supervised fire 

drills, and planned and future improvements in fire safety. 

‘‘(E) Information about fire safety education and training provided to students, faculty, and staff. 

‘‘(F) Information concerning fire safety at any housing facility owned or 

controlled by a fraternity, sorority, or student group that is recognized by 

the institution, including—

‘‘(i) information reported to the institution under paragraph (4); and 

‘‘(ii) a statement concerning whether and how the institution works 

with recognized student fraternities and sororities, and other recognized student groups owning or controlling housing facilities, to make 

each building and property owned or controlled by such fraternities, sororities, and groups more fire safe. 

‘‘(2) FRATERNITIES, SORORITIES, AND OTHER GROUPS.—Each institution participating in a program under this title shall request each fraternity and sorority 

78 

that is recognized by the institution, and any other student group that is recognized by the institution and that owns or controls housing facilities, to collect 

and report to the institution the information described in subparagraphs (A) 

through (E) of paragraph (1), as applied to the fraternity, sorority, or recognized 

student group, respectively, for each building and property owned or controlled 

by the fraternity, sorority, or group, respectively. 

‘‘(3) CURRENT INFORMATION TO CAMPUS COMMUNITY.—Each institution participating in any program under this title shall make, keep, and maintain a log, 

written in a form that can be easily understood, recording all on-campus fires, 

including the nature, date, time, and general location of each fire and all false 

fire alarms. All entries that are required pursuant to this paragraph shall, except where disclosure of such information is prohibited by law, be open to public 

inspection, and each such institution shall make annual reports to the campus 

community on such fires and false fire alarms in a manner that will aid the 

prevention of similar occurrences. 

‘‘(4) REPORTS TO THE SECRETARY.—On an annual basis, each institution participating in any program under this title shall submit to the Secretary a copy 

of the statistics required to be made available under paragraph (1)(B). The Secretary shall—

‘‘(A) review such statistics; 

‘‘(B) make copies of the statistics submitted to the Secretary available to 

the public; and 

‘‘(C) in coordination with nationally recognized fire organizations and representatives of institutions of higher education, identify exemplary fire safety policies, procedures, and practices and disseminate information concerning those policies, procedures, and practices that have proven effective 

in the reduction of campus fires. 

‘‘(5) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed 

to authorize the Secretary to require particular policies, procedures, or practices 

by institutions of higher education with respect to fire safety. 

‘‘(6) DEFINITIONS.—In this subsection, the term ‘campus’ has the meaning provided in subsection (f)(6).’’. 

SEC. 487. COLLEGE ACCESS INITIATIVE. 

Part G is further amended by inserting after section 485C (20 U.S.C. 1092c) the 

following new section: 

‘‘SEC. 485D. COLLEGE ACCESS INITIATIVE. 

‘‘(a) STATE-BY-STATE INFORMATION.—The Secretary shall direct each guaranty 

agency with which the Secretary has an agreement under section 428(c) to provide 

to the Secretary the information necessary for the development of web links and access for students and families to a comprehensive listing of the postsecondary education opportunities, programs, publications, Internet Web sites, and other services 

available in the States for which such agency serves as the designated guarantor. 

‘‘(b) GUARANTY AGENCY ACTIVITIES.—

‘‘(1) PLAN AND ACTIVITY REQUIRED.—Each guaranty agency with which the 

Secretary has an agreement under section 428(c) shall develop a plan and undertake the activity necessary to gather the information required under subsection (a) and to make such information available to the public and to the Secretary in a form and manner as prescribed by the Secretary. 

‘‘(2) ACTIVITIES.—Each guaranty agency shall undertake such activities as are 

necessary to promote access to postsecondary education for students through 

providing information on college planning, career preparation, and paying for 

college. The guaranty agency shall publicize such information and coordinate 

such activities with other entities that either provide or distribute such information in the States for which such guaranty agency serves as the designated 

guarantor. 

‘‘(3) FUNDING.—The activities required by this section may be funded from the 

guaranty agency’s operating account established pursuant to section 422B and, 

to the extent funds remain, from earnings on the restricted account established 

pursuant to section 422(h)(4). 

‘‘(c) ACCESS TO INFORMATION.—

‘‘(1) SECRETARY’S RESPONSIBILITY.—The Secretary shall ensure the availability 

of the information provided by the guaranty agencies in accordance with this 

section to students, parents, and other interested individuals, through web links 

or other methods prescribed by the Secretary. 

‘‘(2) GUARANTY AGENCY RESPONSIBILITY.—The guaranty agencies shall ensure 

that the information required by this section is available without charge in 

printed format for students and parents requesting such information. 

79 

‘‘(3) PUBLICITY.—Within 270 days after the date of enactment of the College 

Access and Opportunity Act of 2005, the Secretary and guaranty agencies shall 

publicize the availability of the information required by this section, with special emphasis on ensuring that populations that are traditionally underrepresented in postsecondary education are made aware of the availability of such 

information.’’. 

SEC. 488. DISTANCE EDUCATION DEMONSTRATION PROGRAM. 

(a) ELIGIBLE APPLICANTS.—Section 486(b)(3) (20 U.S.C. 1093(b)(3)) is amended—

(1) in subparagraph (B), by striking ‘‘section 102(a)(1)(C)’’ and inserting ‘‘section 102’’; and 

(2) in subparagraph (C), by striking ‘‘subsection (a) of section 102, other than 

the requirement of paragraph (3)(A) or (3)(B) of such subsection,’’ and inserting 

‘‘section 101, other than the requirements of subparagraph (A) or (B) of subsection (b)(4) of such section’’. 

(b) SELECTION.—Section 486(d)(1) (20 U.S.C. 1093(d)(1)) is amended—

(1) by striking ‘‘the third year’’ and inserting ‘‘subsequent years’’; 

(2) by striking ‘‘35 institutions’’ and inserting ‘‘100 institutions’’; and 

(3) by adding at the end the following new sentence: ‘‘Not more than 5 of such 

institutions, systems, or consortia may be accredited, degree-granting correspondence schools.’’. 

SEC. 489. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM. 

Part G of title IV is amended by inserting after section 486 (20 U.S.C. 1093) the 

following new section: 

‘‘SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM. 

‘‘(a) PURPOSE.—It is the purpose of this section—

‘‘(1) to provide, through a college affordability demonstration program, for increased innovation in the delivery of higher education and student financial aid 

in a manner resulting in reduced costs for students as well as the institution 

by employing one or more strategies including accelerating degree or program 

completion, increasing availability of, and access to, distance components of education delivery, engaging in collaborative arrangements with other institutions 

and organizations, and other alternative methodologies; and 

‘‘(2) to help determine—

‘‘(A) the most effective means of delivering student financial aid as well 

as quality education; 

‘‘(B) the specific statutory and regulatory requirements that should be altered to provide for more efficient and effective delivery of student financial 

aid, as well as access to high quality distance education programs, resulting 

in a student more efficiently completing postsecondary education; and 

‘‘(C) the most effective methods of obtaining and managing institutional 

resources. 

‘‘(b) DEMONSTRATION PROGRAM AUTHORIZED.—

‘‘(1) IN GENERAL.—In accordance with the purposes described in subsection (a) 

and the provisions of subsection (d), the Secretary is authorized to select not 

more than 100 institutions of higher education, including those applying as part 

of systems or consortia of such institutions, for voluntary participation in the 

College Affordability Demonstration Program in order to enable participating 

institutions to carry out such purposes by providing programs of postsecondary 

education, and making available student financial assistance under this title to 

students enrolled in those programs, in a manner that would not otherwise 

meet the requirements of this title. 

‘‘(2) WAIVERS.—The Secretary is authorized to waive for any institutions of 

higher education, or any system or consortia of institutions of higher education, 

selected for participation in the College Affordability Demonstration Program, 

any requirements of this Act or the regulations thereunder as deemed necessary 

by the Secretary to meet the purpose described in subsection (a)(1), and shall 

make a determination that the waiver can reasonably be expected to result in 

reduced costs to students or institutions without an increase in Federal program 

costs. The Secretary may not waive under this paragraph the maximum award 

amounts for an academic year or loan period. 

‘‘(3) ELIGIBLE APPLICANTS.—

‘‘(A) ELIGIBLE INSTITUTIONS.—Except as provided in subparagraph (B), 

only an institution of higher education that is eligible to participate in programs under this title shall be eligible to participate in the demonstration 

program authorized under this section. 

80 

‘‘(B) PROHIBITION.—An institution of higher education described in section 

102 shall not be eligible to participate in the demonstration program authorized under this section. ‘‘(c) APPLICATION.— ‘‘(1) IN GENERAL.—Each institution or system of institutions desiring to participate in the demonstration program under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may 

require. ‘‘(2) CONTENTS OF APPLICATIONS.—Each application for the college affordability demonstration program shall include at least the following: ‘‘(A) a description of the institution or system or consortium of institutions and what quality assurance mechanisms are in place to insure the integrity of the Federal financial aid programs; ‘‘(B) a description of the innovation or innovations being proposed and the 

affected programs and students, including— ‘‘(i) a description of any collaborative arrangements with other institutions or organizations to reduce costs; ‘‘(ii) a description of any expected economic impact of participation in 

the program within the community in which the institution is located; 

and ‘‘(iii) a description of any means the institution will employ to reduce 

the costs of instructional materials, such as textbooks; 

‘‘(C) a description of each regulatory or statutory requirement for which 

waivers are sought, with a reason for each waiver; 

‘‘(D) a description of the expected outcomes of the program changes proposed, including the estimated reductions in costs both for the institution 

and for students; 

‘‘(E) a description of the quality assurance mechanisms in place to ensure 

the integrity of the Federal financial aid programs; 

‘‘(F) an assurance from each institution in a system or consortium of a 

commitment to fulfill its role as described in the application; 

‘‘(G) an assurance that the participating institution or system of institutions will offer full cooperation with the ongoing evaluations of the demonstration program provided for in this section; and 

‘‘(H) any other information or assurances the Secretary may require. 

‘‘(d) SELECTION.—In selecting institutions to participate in the demonstration program under this section, the Secretary shall take into account—

‘‘(1) the number and quality of applications received, determined on the basis 

of the contents required by subsection (c)(2); 

‘‘(2) the Department’s capacity to oversee and monitor each institution’s participation; 

‘‘(3) an institution’s—

‘‘(A) financial responsibility; 

‘‘(B) administrative capability; 

‘‘(C) program or programs being offered via distance education, if applicable; 

‘‘(D) student completion rates; and 

‘‘(E) student loan default rates; and 

‘‘(4) the participation of a diverse group of institutions with respect to size, 

mission, and geographic distribution. 

‘‘(e) NOTIFICATION.—The Secretary shall make available to the public and to the 

authorizing committees a list of institutions selected to participate in the demonstration program authorized by this section. Such notice shall include a listing of 

the specific statutory and regulatory requirements being waived for each institution 

and a description of the innovations being demonstrated. 

‘‘(f) EVALUATIONS AND REPORTS.—

‘‘(1) EVALUATION.—The Secretary shall evaluate the demonstration program 

authorized under this section on a biennial basis. Such evaluations specifically 

shall review—

‘‘(A) the extent to which expected outcomes, including the estimated reductions in cost, were achieved; 

‘‘(B) the number and types of students participating in the programs offered, including the progress of participating students toward recognized 

certificates or degrees and the extent to which participation in such programs increased; 

‘‘(C) issues related to student financial assistance associated with the innovations undertaken; 

‘‘(D) effective technologies and alternative methodologies for delivering 

student financial assistance; 

81 

‘‘(E) the extent of the cost savings to the institution, the student, and the 

Federal Government by virtue of the waivers provided, and an estimate as 

to future cost savings for the duration of the demonstration program; 

‘‘(F) the extent to which students saved money by virtue of completing 

their postsecondary education sooner; 

‘‘(G) the extent to which the institution reduced its tuition and fees and 

its costs by virtue of participation in the demonstration program; 

‘‘(H) the extent to which any collaborative arrangements with other institutions or organizations have reduced the participating institution’s costs; 

and 

‘‘(I) the extent to which statutory or regulatory requirements not waived 

under the demonstration program present difficulties for students or institutions. 

‘‘(2) POLICY ANALYSIS.—The Secretary shall review current policies and identify those policies that present impediments to the implementation of innovations that result in cost savings and in expanding access to education. 

‘‘(3) REPORTS.—The Secretary shall provide a report to the authorizing committees on a biennial basis regarding—

‘‘(A) the demonstration program authorized under this section; 

‘‘(B) the results of the evaluations conducted under paragraph (1); 

‘‘(C) the cost savings to the Federal Government by the demonstration 

program authorized by this section; and 

‘‘(D) recommendations for changes to increase the efficiency and effective 

delivery of financial aid. 

‘‘(g) OVERSIGHT.—In conducting the demonstration program authorized under this 

section, the Secretary shall, on a continuing basis—

‘‘(1) ensure compliance of institutions or systems of institutions with the requirements of this title (other than the sections and regulations that are waived 

under subsection (b)(2)); 

‘‘(2) provide technical assistance to institutions in their application to and 

participation in the demonstration program; 

‘‘(3) monitor fluctuations in the student population enrolled in the participating institutions or systems of institutions; 

‘‘(4) monitor changes in financial assistance provided at the institution; and 

‘‘(5) consult with appropriate accrediting agencies or associations and appropriate State regulatory authorities. 

‘‘(h) TERMINATION OF AUTHORITY.—The authority of the Secretary under this section shall cease to be effective on October 1, 2011.’’. 

SEC. 490. PROGRAM PARTICIPATION AGREEMENTS. 

(a) REFUND POLICIES.—Section 487(a) (20 U.S.C. 1094(a)) is amended—

(1) in paragraph (16), by inserting ‘‘or other Federal, State, or local government funds’’ after ‘‘funds under this title’’ each place it appears; 

(2) in paragraph (22), by striking ‘‘refund policy’’ and inserting ‘‘policy on the 

return of title IV funds’’; and 

(3) in paragraph (23)—

(A) by moving subparagraph (C) 2 em spaces to the left; and 

(B) by adding after such subparagraph the following new subparagraph: 

‘‘(D) An institution shall be considered in compliance with the requirements 

of subparagraph (A) for any student to whom the institution electronically 

transmits a message containing a voter registration form acceptable for use in 

the State in which the institution is located, or an Internet address where such 

a form can be downloaded, provided such information is in an electronic message devoted to voter registration.’’. 

(b) ENFORCING THE 90/10 RULE.—

(1) AMENDMENT.—Section 487(a) (20 U.S.C. 1094(a)) is further amended by 

adding at the end the following new paragraph: 

‘‘(24) The institution will, as calculated in accordance with subsection (f)(1), 

have at least 10 percent of its revenues from sources other than funds provided 

under this title, or will be subject to the sanctions described in subsection 

(f)(2).’’. 

(2) IMPLEMENTATION.—Section 487 is further amended by adding at the end 

the following new subsection: 

‘‘(f) IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.—

‘‘(1) CALCULATION.—In carrying out subsection (a)(24), an institution shall use 

the cash basis of accounting and count the following funds toward the 10 percent of revenues from sources of funds other than funds provided under this 

title: 

82 

‘‘(A) funds used by students to pay tuition, fees, and other institutional 

charges from sources other than funds provided under this title as long as 

the institution can reasonably demonstrate that such funds were used for 

such purposes; 

‘‘(B) institutional funds used to satisfy matching-fund requirements for 

programs under this title; 

‘‘(C) funds from savings plans for educational expenses established pursuant to the Internal Revenue Code of 1986; 

‘‘(D) funds paid by a student, or on behalf of a student by a party other 

than the institution, for an education or training program that is not eligible for funds under this title, so long as the program is approved or licensed 

by the appropriate State agency or an accrediting agency recognized by the 

Secretary; and 

‘‘(E) institutional aid, as follows: 

‘‘(i) in the case of institutional loans, only the amount of loan repayments received during the fiscal year; and 

‘‘(ii) in the case of institutional scholarships, only those provided by 

the institution in the form of monetary aid or tuition discounts based 

upon the academic achievements or financial need of students, disbursed during the fiscal year from an established restricted account, 

and only to the extent that the funds in that account represent designated funds from an outside source or from income earned on those 

funds. 

‘‘(2) SANCTIONS.—An institution that fails to meet the requirements of subsection (a)(24) for 3 consecutive years shall become ineligible to participate in 

the programs authorized by this title. In addition to such other means of enforcing the requirements of this title as may be available to the Secretary, if an 

institution fails to meet the requirements of subsection (a)(24) in any year, the 

Secretary may impose one or more of the following sanctions on the institution: 

‘‘(A) Place the institution on provisional certification in accordance with 

section 498(h) until the institution demonstrates, to the satisfaction of the 

Secretary, that it is in compliance with subsection (a)(24). 

‘‘(B) Require such other increased monitoring and reporting requirements 

as the Secretary determines necessary until the institution demonstrates, 

to the satisfaction of the Secretary, that it is in compliance with subsection 

(a)(24). 

‘‘(3) PUBLICATION ON COOL WEBSITE.—The Secretary shall identify, on the College Opportunities On-Line website under section 131(b), any institution that 

fails to meet the requirements of subsection (a)(24) in any year as an institution 

that is failing to meet the minimum non-Federal source of revenue requirements of that subsection.’’. 

(c) REPORTS ON DISCIPLINARY PROCEEDINGS.—

(1) AMENDMENT.—Section 487(a) (20 U.S.C. 1094(a)) is further amended by 

adding after paragraph (24), as added by subsection (b) of this section, the following new paragraph: 

‘‘(25) The institution will disclose to the alleged victim of any crime of violence 

(as that term is defined in section 16 of title 18), or a nonforcible sex offense, 

the final results of any disciplinary proceeding conducted by such institution 

against a student who is the alleged perpetrator of such crime or offense with 

respect to such crime or offense. If the alleged victim of such crime or offense 

is deceased, the next of kin of such victim shall be treated as the alleged victim 

for purposes of this paragraph.’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply 

with respect to any disciplinary proceeding conducted by such institution on or 

after one year after the date of enactment of this Act. 

(d) AUDIT REQUIREMENTS.—Section 487(c)(1)(A)(i) (20 U.S.C. 1094(c)(1)(A)(i)) is 

amended by inserting before the semicolon at the end the following: ‘‘, except that 

the Secretary may modify the requirements of this clause with respect to institutions of higher education that are foreign institutions, and may waive such requirements with respect to a foreign institution whose students receive less than 

$500,000 in loans under this title during the award year preceding the audit period’’. 

SEC. 491. ADDITIONAL TECHNICAL AND CONFORMING AMENDMENTS. 

Part G is further amended as follows: 

(1) Section 483(d) (20 U.S.C. 1090(d)) is amended by striking ‘‘that is authorized under section 685(d)(2)(C)’’ and inserting ‘‘, or another appropriate provider 

of technical assistance and information on postsecondary educational services, 

that is supported under section 663’’. 

83 

(2) Section 484 (20 U.S.C. 1091) is amended— (A) in subsection (a)(4), by striking ‘‘certification,,’’ and inserting ‘‘certification,’’; and 

(B) in subsection (b)(2)— (i) in the matter preceding subparagraph (A), by striking ‘‘section 

428A’’ and inserting ‘‘section 428H’’; 

(ii) in subparagraph (A), by inserting ‘‘and’’ after the semicolon at the 

end thereof; 

(iii) in subparagraph (B), by striking ‘‘; and’’ and inserting a period; 

and 

(iv) by striking subparagraph (C). 

(3) Section 484A(b)(2) (20 U.S.C. 1091a(b)(2)) is amended by striking ‘‘part B 

of this title’’ and inserting ‘‘part B, D, or E of this title’’. (4) Section 485B(a) (20 U.S.C. 1092b(a)) is amended— (A) by redesignating paragraphs (6) through (10) as paragraphs (7) 

through (11), respectively; 

(B) by redesignating the paragraph (5) (as added by section 2008 of Public Law 101–239) as paragraph (6); and 

(C) in paragraph (5) (as added by section 204(3) of the National Community Service Act of 1990 (Public Law 101–610))— (i) by striking ‘‘(22 U.S.C. 2501 et seq.)),’’ and inserting ‘‘(22 U.S.C. 

2501 et seq.),’’; and 

(ii) by striking the period at the end thereof and inserting a semicolon. 

(5) Section 487A(b) (20 U.S.C. 1094a(b)) is amended—

(A) in paragraph (1)—

(i) by striking ‘‘Higher Education Amendments of 1998’’ and inserting 

‘‘College Access and Opportunity Act of 2005’’; and 

(ii) by striking the second sentence; 

(B) in paragraph (2)—

(i) by striking ‘‘1993 through 1998’’ and inserting ‘‘1998 through 

2004’’; 

(ii) by striking ‘‘(as such section’’ and all that follows through 

‘‘Amendments of 1998)’’; and 

(iii) by striking ‘‘Higher Education Amendments of 1998.’’ and inserting ‘‘College Access and Opportunity Act of 2005.’’; and 

(C) in paragraph (3)(A)—

(i) by striking ‘‘Upon the submission’’ and all that follows through 

‘‘limited number of additional institutions for voluntary participation’’

and inserting ‘‘The Secretary is authorized to continue the voluntary 

participation of institutions participating as of July 1, 2005,’’; and 

(ii) by inserting before the period at the end the following: ‘‘, and 

shall continue the participation of any such institution unless the Secretary determines that such institution’s participation has not been 

successful in carrying out the purposes of this section’’. 

(6) Section 491(c) (20 U.S.C. 1098(c)) is amended by adding at the end the 

following new paragraph: 

‘‘(3) The appointment of members under subparagraphs (A) and (B) of paragraph 

(1) shall be effective upon publication of the appointment in the Congressional 

Record.’’. 

(7) Section 491(h)(1) (20 U.S.C. 1098(h)(1)) is amended by striking ‘‘the rate 

authorized for GS–18 of the General Schedule’’ and inserting ‘‘the maximum 

rate payable under section 5376 of such title’’. 

(8) Section 491(k) (20 U.S.C. 1098(k)) is amended by striking ‘‘2004’’ and inserting ‘‘2011’’. 

(9) Section 493A (20 U.S.C. 1098c) is repealed. 

(10) Section 498 (20 U.S.C. 1099c) is amended—

(A) in subsection (c)(2), by striking ‘‘for profit,’’ and inserting ‘‘for-profit,’’; 

and 

(B) in subsection (d)(1)(B), by inserting ‘‘and’’ after the semicolon at the 

end thereof. 

PART H—PROGRAM INTEGRITY 

SEC. 495. ACCREDITATION. 

(a) STANDARDS FOR ACCREDITATION.—Section 496(a) (20 U.S.C. 1099b(a)) is 

amended—

(1) in paragraph (3)—

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(A) by inserting ‘‘or’’ after the semicolon at the end of subparagraph (A); 

(B) by striking subparagraph (B); and 

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

(2) in paragraph (4)— (A) by inserting ‘‘(A)’’ after ‘‘(4)’’; 

(B) by inserting after ‘‘consistently applies and enforces standards’’ the 

following: ‘‘that consider the stated missions of institutions of higher education, including such missions as inculcation of religious values, and’’; 

(C) by inserting ‘‘and’’ after the semicolon at the end thereof; and 

(D) by adding at the end the following new subparagraph: ‘‘(B) if such agency or association already has or seeks to include within its 

scope of recognition the evaluation of the quality of institutions or programs offering distance education, such agency or association shall, in addition to meeting the other requirements of this subpart, demonstrate to the Secretary that— ‘‘(i) the accreditation agency’s or association’s standards effectively address the quality of an institution’s distance education programs in the 

areas identified in paragraph (5) of this subsection, except that the agency 

or association shall not be required to have separate standards, procedures, 

or policies for the evaluation of distance education institutions or programs 

in order to meet the requirements of this subparagraph; and ‘‘(ii) the agency or association requires that an institution that offers distance education programs to have processes by which it establishes that the 

student who registers in a distance education course or program is the 

same student who participates, completes academic work, and receives academic credit;’’; 

(3) in paragraph (5)—

(A) by amending subparagraph (A) to read as follows: 

‘‘(A) success with respect to student achievement in relation to the institution’s mission, including, as appropriate, consideration of student academic achievement as determined by the institution (in accordance with 

standards of the accrediting agency or association), retention, course and 

program completion, State licensing examinations, and job placement rates, 

and other student performance information selected by the institution, particularly that information used by the institution to evaluate or strengthen 

its programs;’’; and 

(B) by amending subparagraph (E) to read as follows: 

‘‘(E) fiscal, administrative capacity, as appropriate to the specified scale 

of operations, and, for an agency or association where its approval for such 

institution determines eligibility for student assistance under this title, 

board governance, within the context of the institution’s mission;’’; 

(4) by striking paragraph (6) and inserting the following: 

‘‘(6) such an agency or association shall establish and apply review procedures 

throughout the accrediting process, including evaluation and withdrawal proceedings that comply with due process that provides for—

‘‘(A) adequate specification of requirements and deficiencies at the institution of higher education or program being examined; 

‘‘(B) an opportunity for a written response by any such institution to be 

included in the evaluation and withdrawal proceedings; 

‘‘(C) upon the written request of an institution, an opportunity for the institution to appeal any adverse action at a hearing prior to such action becoming final before an appeals panel that—

‘‘(i) shall not include current members of the agency or association’s 

underlying decision-making body that made the adverse decision; and 

‘‘(ii) is subject to a conflict of interest of policy; and 

‘‘(D) the right to representation by counsel for an such institution;’’; and 

(5) by striking paragraph (8) and inserting the following: 

‘‘(8) such agency or association shall make available to the public and submit 

to the Secretary and the State licensing or authorizing agency, together with 

the comments of the affected institution, a summary of agency or association 

actions, involving—

‘‘(A) final denial, withdrawal, suspension, or termination of accreditation; 

and 

‘‘(B) any other final adverse action taken with respect to an institution.’’. 

(b) OPERATING PROCEDURES.—Section 496(c) (20 U.S.C. 1099b(c)) is amended—

(1) by inserting ‘‘(including those regarding distance education)’’ before the 

semicolon at the end of paragraph (1); 

(2) by striking ‘‘and’’ at the end of paragraph (5); 

(3) by striking the period at the end of paragraph (6) and inserting a semicolon; and 

85 

(4) by inserting after paragraph (6) the following new paragraphs: 

‘‘(7) ensures that its onsite comprehensive reviews for accreditation or reaccreditation include evaluation of the substance of the information required in 

subparagraph (H) of section 485(a)(1); 

‘‘(8) confirms as a part of its review for accreditation or reaccreditation that 

the institution has transfer policies—

‘‘(A) that are publicly disclosed; and 

‘‘(B) that do not deny transfer of credit based solely on the accreditation 

of the sending institution as long as the association or agency is recognized 

by the Secretary pursuant to section 496; 

‘‘(9) develops a brief summary, available to the public, of final adverse actions 

in accordance with the requirements of subsection (a)(8); 

‘‘(10) monitors the enrollment growth of distance education to ensure that an 

institution experiencing signficant growth has the capacity to serve its students 

effectively; 

‘‘(11) discloses publicly, on the agency’s website or through other similar dissemination—

‘‘(A) a list of the individuals who comprised the evaluation teams during 

the prior calendar year for each agency or association and the title and institutional affiliation of such individuals, although such list shall not be required to identify those individuals who comprised the evaluation team 

used for any specific institution; 

‘‘(B) a description of the agency’s or association’s process for selecting, 

preparing, and evaluating such individuals; and 

‘‘(C) any statements related to the accreditation responsibilities of such 

individuals; and 

‘‘(12) reviews the record of student complaints resulting from the student information process described in section 485(a)(1)(J).’’. 

(c) LIMITATION, SUSPENSION, AND TERMINATION OF RECOGNITION.—Section 496(l) 

is amended by adding at the end the following new paragraph: 

‘‘(3) The Secretary shall provide an annual report to Congress on the status of any 

agency or association for which the Secretary has limited, suspended or terminated 

recognition under this subsection.’’. 

(d) PROGRAM REVIEW AND DATA.—Section 498A(b) (20 U.S.C. 1099c–1(b)) is 

amended—

(1) by striking ‘‘and’’ at the end of paragraph (4); 

(2) by striking the period at the end of paragraph (5) and inserting a semicolon; and 

(3) by adding at the end the following new paragraphs: 

‘‘(6) provide to the institution adequate opportunity to review and respond to 

any program review report or audit finding and underlying materials related 

thereto before any final program review or audit determination is reached; 

‘‘(7) review and take into consideration the institution’s response in any final 

program review or audit determination, and include in the final determination—

‘‘(A) a written statement addressing the institution’s response and stating 

the basis for such final determination; and 

‘‘(B) a copy of the institution’s statement in response, appropriately redacted to protect confidential information; 

‘‘(8) maintain and preserve at all times the confidentiality of any program review report or audit finding until the requirements of paragraphs (6) and (7) 

are met, and until a final program review or audit determination has been 

issued, except to the extent required to comply with paragraph (5), provided, 

however, that the Secretary shall promptly disclose any and all program review 

reports and audit findings to the institution under review; and 

‘‘(9) require that the authority to approve or issue any program review report 

or audit finding, preliminary or otherwise, that contains any finding, determination, or proposed assessment that exceeds or may exceed $500,000 in liabilities 

shall not be delegated to any official beyond the Chief Operating Officer of Federal Student Aid.’’. 

SEC. 496. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND ABUSE IN STUDENT FINANCIAL AID PROGRAMS. 

Title IV is amended by adding at the end the following new section: 

‘‘SEC. 499. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND ABUSE IN STUDENT FINANCIAL AID PROGRAMS. 

‘‘(a) PURPOSE.—It is the purpose of this section to require the Secretary to commission a nonpartisan, comprehensive study on the prevention of fraud and abuse 

86 

in title IV student financial aid programs, and to report the results of such study 

to Congress. 

‘‘(b) SCOPE OF REPORT.—The study under this section shall thoroughly identify 

and address the following: 

‘‘(1) The impact of fraud and abuse in title IV student financial aid programs 

upon students and taxpayers, and the nature of such fraud and abuse. 

‘‘(2) The effectiveness of existing policies and requirements under this Act 

that were put in place to prevent fraud and abuse in title IV student financial 

aid programs, and how such policies and requirements should be improved. 

‘‘(3) The extent to which existing protections against fraud and abuse under 

this Act are adequately enforced, and how enforcement should be strengthened. 

‘‘(4) Areas in which additional information is needed to assess the effectiveness of current protections and enforcement against fraud and abuse. 

‘‘(5) Existing policies and requirements under this Act aimed at fraud and 

abuse that are ineffective, hinder innovation, or could be eliminated without reducing effectiveness. 

‘‘(6) New policies and enforcement, particularly those suited for the current 

higher education marketplace, needed to protect against fraud and abuse in 

title IV student financial aid programs. 

‘‘(7) The extent to which States are implementing regulations to protect students from fraud and abuse, and whether changes to Federal law will preempt 

such regulations. 

‘‘(c) REPORT.—Not later than December 31, 2007, the Secretary, after an opportunity for both the Secretary and the Inspector General of the Department of Education to review the results of the study, shall transmit to Congress a report on the 

study conducted under this section. Such report shall—

‘‘(1) include clear and specific recommendations for legislative and regulatory 

actions that are likely to significantly reduce the fraud and abuse in title IV 

student financial aid programs identified under subsection (b); and 

‘‘(2) include both the Secretary’s and the Inspector General’s comments on the 

report.’’. 

TITLE V—DEVELOPING INSTITUTIONS 

SEC. 501. DEFINITIONAL CHANGES. 

Section 502(a) (20 U.S.C. 1101a(a)) is amended—

(1) in paragraph (5)—

(A) by inserting ‘‘and’’ after the semicolon at the end of subparagraph (A); 

(B) by inserting ‘‘at the end of the award year immediately preceding the 

date of application’’ after ‘‘Hispanic students’’ in subparagraph (B); 

(C) by striking ‘‘; and’’ at the end of subparagraph (B) and inserting a period; and 

(D) by striking subparagraph (C); and 

(2) by striking paragraph (7). 

SEC. 502. ASSURANCE OF ENROLLMENT OF NEEDY STUDENTS. 

Section 511(c) (20 U.S.C. 1103(c)) is amended—

(1) by striking paragraph (2); 

(2) by redesignating paragraphs (3) through (7) as paragraphs (2) through (6); 

and 

(3) by inserting after paragraph (6) as so redesignated the following new paragraph: 

‘‘(7) contain such assurances as the Secretary may require that the institution 

has an enrollment of needy students as required by section 502(b);’’. 

SEC. 503. ADDITIONAL AMENDMENTS. 

Title V is further amended—

(1) in section 502(a)(2)(A) (20 U.S.C. 1101a(a)(2)(A)), by redesignating clauses 

(v) and (vi) as clauses (vi) and (vii), respectively, and inserting after clause (iv) 

the following new clause: 

‘‘(v) which provides a program of not less than 2 years that is acceptable for full credit toward a bachelor’s degree;’’; 

(2) in section 503(b) (20 U.S.C. 1101b(b))—

(A) by amending paragraph (2) to read as follows: 

‘‘(2) Construction, maintenance, renovation, and improvement in classrooms, 

libraries, laboratories, and other instructional facilities, including purchase or 

rental of telecommunications technology equipment or services, and the acquisiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00090 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
87 

tion of real property adjacent to the campus of the institution on which to construct such facilities.’’; 

(B) by amending paragraph (12) to read as follows: ‘‘(12) Establishing community outreach programs and collaborative partnerships between Hispanic-serving institutions and local elementary or secondary 

schools. Such partnerships may include mentoring, tutoring, or other instructional opportunities that will boost student academic achievement and assist elementary and secondary school students in developing the academic skills and 

the interest to pursue postsecondary education.’’; 

(C) by redesignating paragraphs (5) through (14) as paragraphs (6) 

through (15), respectively; and 

(D) by inserting after paragraph (4) the following: ‘‘(5) Education or counseling services designed to improve the financial literacy and economic literacy of students and, as appropriate, their parents.’’; 

(3) in section 504(a) (20 U.S.C. 1101c(a))— (A) by striking the following: ‘‘(a) AWARD PERIOD.— ‘‘(1) IN GENERAL.—The Secretary’’ and inserting the following: ‘‘(a) AWARD PERIOD.—The Secretary’’; and 

(B) by striking paragraph (2); and 

(4) in section 514(c) (20 U.S.C. 1103c(c)), by striking ‘‘section 505’’ and inserting ‘‘section 504’’. 

SEC. 504. POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS. 

(a) ESTABLISHMENT OF PROGRAM.—Title V is amended— (1) by redesignating part B as part C; 

(2) by redesignating sections 511 through 518 as sections 521 through 528, 

respectively; and 

(3) by inserting after section 505 (20 U.S.C. 1101d) the following new part: 

‘‘PART B—PROMOTING POSTBACCALAUREATE 

OPPORTUNITIES FOR HISPANIC AMERICANS 

‘‘SEC. 511. PURPOSES. 

‘‘The purposes of this part are—

‘‘(1) to expand postbaccalaureate educational opportunities for, and improve 

the academic attainment of, Hispanic students; and 

‘‘(2) to expand the postbaccalaureate academic offerings and enhance the program quality in the institutions that are educating the majority of Hispanic college students and helping large numbers of Hispanic and low-income students 

complete postsecondary degrees. 

‘‘SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY. 

‘‘(a) PROGRAM AUTHORIZED.—Subject to the availability of funds appropriated to 

carry out this part, the Secretary shall award competitive grants to Hispanic-serving institutions determined by the Secretary to be making substantive contributions 

to graduate educational opportunities for Hispanic students. 

‘‘(b) ELIGIBILITY.—For the purposes of this part, an ‘eligible institution’ means an 

institution of higher education that—

‘‘(1) is an eligible institution under section 502(a)(2); and 

‘‘(2) offers a postbaccalaureate certificate or degree granting program. 

‘‘SEC. 513. AUTHORIZED ACTIVITIES. 

‘‘Grants awarded under this part shall be used for one or more of the following 

activities: 

‘‘(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes. 

‘‘(2) Construction, maintenance, renovation, and improvement of classrooms, 

libraries, laboratories, and other instructional facilities, including purchase or 

rental of telecommunications technology equipment or services. 

‘‘(3) Purchase of library books, periodicals, technical and other scientific journals, microfilm, microfiche, and other educational materials, including telecommunications program materials. 

‘‘(4) Support for needy postbaccalaureate students including outreach, academic support services, mentoring, scholarships, fellowships, and other financial 

assistance to permit the enrollment of such students in postbaccalaureate certificate and degree granting programs. 

‘‘(5) Support of faculty exchanges, faculty development, faculty research, curriculum development, and academic instruction. 

88 

‘‘(6) Creating or improving facilities for Internet or other distance learning 

academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services. 

‘‘(7) Collaboration with other institutions of higher education to expand 

postbaccalaureate certificate and degree offerings. 

‘‘(8) Other activities proposed in the application submitted pursuant to section 

514 that—

‘‘(A) contribute to carrying out the purposes of this part; and 

‘‘(B) are approved by the Secretary as part of the review and acceptance 

of such application. 

‘‘SEC. 514. APPLICATION AND DURATION. 

‘‘(a) APPLICATION.—Any eligible institution may apply for a grant under this part 

by submitting an application to the Secretary at such time and in such manner as 

determined by the Secretary. Such application shall demonstrate how the grant 

funds will be used to improve postbaccalaureate education opportunities in programs and professions in which Hispanic Americans are underrepresented. 

‘‘(b) DURATION.—Grants under this part shall be awarded for a period not to exceed 5 years. 

‘‘(c) LIMITATION.—The Secretary shall not award more than one grant under this 

part in any fiscal year to any Hispanic-serving institution.’’. 

(b) COOPERATIVE ARRANGEMENTS.—Section 524(a) (as redesignated by subsection 

(a)(2)) (20 U.S.C. 1103c(a)) is amended by inserting ‘‘and section 513’’ after ‘‘section 

503’’. 

SEC. 505. AUTHORIZATION OF APPROPRIATIONS. 

Subsection (a) of section 528 (as redesignated by section 504(a)(2) of this Act) (20 

U.S.C. 1103g) is amended to read as follows: 

‘‘(a) AUTHORIZATIONS.—

‘‘(1) PART A.—There are authorized to be appropriated to carry out part A and 

part C of this title $96,000,000 for fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years. 

‘‘(2) PART B.—There are authorized to be appropriated to carry out part B of 

this title $59,000,000 for fiscal year 2006 and such sums as may be necessary 

for each of the 5 succeeding fiscal years.’’. 

TITLE VI—TITLE VI AMENDMENTS 

SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES. 

(a) FINDINGS AND PURPOSES.—Section 601 (20 U.S.C. 1121) is amended—

(1) in subsection (a)—

(A) by striking ‘‘post-Cold War’’ in paragraph (3); 

(B) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively; and 

(C) by inserting after paragraph (3) the following new paragraph: 

‘‘(4) The events and aftermath of September 11, 2001, have underscored the 

need for the Nation to strengthen and enhance American knowledge of international relations, world regions, and foreign languages. Homeland security and 

effective United States engagement abroad depend upon an increased number 

of Americans who have received such training and are willing to serve their Nation.’’; 

(2) in subsection (b)(1)—

(A) by striking ‘‘; and’’ at the end of subparagraph (D) and inserting ‘‘, 

including through linkages overseas with institutions of higher education 

and relevant organizations that contribute to the educational programs assisted under this part;’’; 

(B) by inserting ‘‘and’’ after the semicolon at the end of subparagraph (E); 

(C) by inserting after such subparagraph (E) the following new subparagraph: 

‘‘(F) to assist the national effort to educate and train citizens to participate 

in the efforts of homeland security;’’; and 

(3) in subsection (b)(3)—

(A) by inserting ‘‘reinforce and’’ before ‘‘coordinate’’; and 

(B) by inserting ‘‘, and international business and trade competitiveness’’

before the period. 

(b) GRADUATE AND UNDERGRADUATE LANGUAGE AND AREA CENTERS AND PROGRAMS.—Section 602(a) (20 U.S.C. 1122(a)) is amended—

(1) in paragraph (1), by striking subparagraph (A) and inserting the following: 

89 

‘‘(A) IN GENERAL.—The Secretary is authorized to make grants to institutions of higher education or consortia of such institutions for the purpose 

of establishing, strengthening, and operating— ‘‘(i) comprehensive foreign language and area or international studies 

centers and programs; and ‘‘(ii) a diverse network of undergraduate foreign language and area 

or international studies centers and programs.’’; 

(2) in paragraph (2)— (A) by striking ‘‘and’’ at the end of subparagraph (G); 

(B) by striking the period at the end of subparagraph (H) and inserting 

a semicolon; and 

(C) by inserting after subparagraph (H) the following new subparagraphs: 

‘‘(I) supporting instructors of the less commonly taught languages; 

‘‘(J) widely disseminating materials developed by the center or program 

to local educational agencies and public and private elementary and secondary education schools, and institutions of higher education, presented 

from diverse perspectives and reflective of a wide range of views on the subject matter, except that no more than 50 percent of funds awarded to an 

institution of higher education or consortia of such institutions for purposes 

under this title may be associated with the costs of dissemination; and ‘‘(K) projects that support in students an understanding of science and 

technology in coordination with foreign language proficiency.’’; and 

(3) in paragraph (4)—

(A) by amending subparagraph (B) to read as follows: 

‘‘(B) Partnerships or programs of linkage and outreach with 2-year and 

4-year colleges and universities, including colleges of education and teacher 

professional development programs.’’; 

(B) in subparagraph (C), by striking ‘‘Programs of linkage or outreach’’

and inserting ‘‘Partnerships or programs of linkage and outreach’’; 

(C) in subparagraph (E)—

(i) by striking ‘‘foreign area’’ and inserting ‘‘area studies’’; 

(ii) by striking ‘‘of linkage and outreach’’; and 

(iii) by striking ‘‘(C), and (D)’’ and inserting ‘‘(D), and (E)’’; 

(D) by redesignating subparagraphs (C), (D), and (E) as subparagraphs 

(D), (E), and (F), respectively; and 

(E) by inserting after subparagraph (B) the following new subparagraph: 

‘‘(C) Partnerships with local educational agencies and public and private 

elementary and secondary education schools that are designed to increase 

student academic achievement in foreign language and knowledge of world 

regions, and to facilitate the wide dissemination of materials related to area 

studies, foreign languages, and international studies that are reflective of 

a wide range of views on the subject matter.’’. 

(c) LANGUAGE RESOURCE CENTERS.—Section 603(c) (20 U.S.C. 1123(c)) is amended 

by inserting ‘‘reflect the purposes of this part and’’ after ‘‘shall’’. 

(d) UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS.—Section 604 (20 U.S.C. 1124) is amended—

(1) in subsection (a)(1), by striking ‘‘combinations’’ each place it appears and 

inserting ‘‘consortia’’; 

(2) in subsection (a)(2)—

(A) in subparagraph (B)(ii), by striking ‘‘teacher training’’ and inserting 

‘‘teacher professional development’’; 

(B) by redesignating subparagraphs (I) through (M) as subparagraphs (J) 

through (N), respectively; 

(C) by inserting after subparagraph (H) the following new subparagraph: 

‘‘(I) the provision of grants for educational programs abroad that are 

closely linked to the program’s overall goals and have the purpose of promoting foreign language fluency and knowledge of world regions, except 

that not more than 10 percent of a grant recipient’s funds may be used for 

this purpose;’’; and 

(D) in subparagraph (M)(ii) (as redesignated by subparagraph (B) of this 

paragraph), by striking ‘‘elementary and secondary education institutions’’

and inserting ‘‘local educational agencies and public and private elementary 

and secondary education schools’’; 

(3) in subsection (a)(4)(B), by inserting ‘‘that demonstrates a need for a waiver 

or reduction’’ before the period at the end; 

(4) in subsection (a)(6), by inserting ‘‘reflect the purposes of this part and’’

after ‘‘shall’’; 

(5) in subsection (a)(8), by striking ‘‘may’’ and inserting ‘‘shall’’; and 

(6) by striking subsection (c). 

90 

(e) RESEARCH; STUDIES; ANNUAL REPORT.—Section 605(a) (20 U.S.C. 1125(a)) is 

amended by inserting before the period at the end of the first sentence the following: 

‘‘, including the systematic collection, analysis, and dissemination of data’’. 

(f) TECHNOLOGICAL INNOVATION AND COOPERATION FOR FOREIGN INFORMATION ACCESS.—Section 606 (20 U.S.C. 1126) is amended—

(1) in subsection (a)—

(A) by striking ‘‘or consortia of such institutions or libraries’’ and inserting ‘‘museums, or consortia of such entities’’; 

(B) by striking ‘‘new’’; and 

(C) by inserting ‘‘from foreign sources’’ after ‘‘disseminate information’’; 

(2) in subsection (b)—

(A) by inserting ‘‘acquire and’’ before ‘‘facilitate access’’ in paragraph (1); 

(B) by striking ‘‘new means of’’ in paragraph (3) and inserting ‘‘new 

means and standards for’’; 

(C) by striking ‘‘and’’ at the end of paragraph (6); 

(D) by striking the period at the end of paragraph (7) and by inserting 

a semicolon; and 

(E) by inserting after paragraph (7) the following new paragraphs: 

‘‘(8) to establish linkages between grant recipients under subsection (a) with 

libraries, museums, organizations, or institutions of higher education located 

overseas to facilitate carrying out the purposes of this section; and 

‘‘(9) to carry out other activities deemed by the Secretary to be consistent with 

the purposes of this section.’’; and 

(3) by adding at the end the following new subsection: 

‘‘(e) SPECIAL RULE.—The Secretary may waive or reduce the required non-Federal 

share for institutions that—

‘‘(1) are eligible to receive assistance under part A or B of title III or under 

title V; and 

‘‘(2) have submitted a grant application under this section that demonstrates 

a need for a waiver or reduction.’’. 

(g) SELECTION OF GRANT RECIPIENTS.—Section 607(b) (20 U.S.C. 1127(b)) is 

amended—

(1) by striking ‘‘objectives’’ and inserting ‘‘missions’’; and 

(2) by adding at the end the following new sentence: ‘‘In keeping with the purposes of this part, the Secretary shall take into account the degree to which activities of centers, programs, and fellowships at institutions of higher education 

address national interests, generate and disseminate information, and foster debate on international issues from diverse perspectives.’’. 

(h) EQUITABLE DISTRIBUTION.—Section 608(a) (20 U.S.C. 1128(a)) is amended by 

adding at the end the following new sentence: ‘‘Grants made under section 602 shall 

also reflect the purposes of this part.’’. 

(i) AUTHORIZATION OF APPROPRIATIONS.—Section 610 (20 U.S.C. 1128b) is amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

(j) CONFORMING AMENDMENTS.—

(1) Sections 603(a), 604(a)(5), and 612 (20 U.S.C. 1123(a), 1124(a)(5), 1130–

1) are each amended by striking ‘‘combinations’’ each place it appears and inserting ‘‘consortia’’. 

(2) Section 612 (20 U.S.C. 1130–1) is amended by striking ‘‘combination’’ each 

place it appears and inserting ‘‘consortium’’. 

SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS. 

(a) CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.—Section 612 (20 U.S.C. 

1130–1) is amended—

(1) in subsection (c)(1)(D), by inserting ‘‘(including those that are eligible to 

receive assistance under part A or B of title III or under title V)’’ after ‘‘other 

institutions of higher education’’; and 

(2) in subsection (e), by adding at the end the following new paragraph: 

‘‘(5) SPECIAL RULE.—The Secretary may waive or reduce the required nonFederal share for institutions that—

‘‘(A) are eligible to receive assistance under part A or B of title III or 

under title V; and 

‘‘(B) have submitted a grant application under this section that demonstrates a need for a waiver or reduction.’’. 

(b) EDUCATION AND TRAINING PROGRAMS.—Section 613 (20 U.S.C. 1130a) is 

amended by adding at the end the following new subsection: 

‘‘(e) SPECIAL RULE.—The Secretary may waive or reduce the required non-Federal 

share for institutions that—

91 

‘‘(1) are eligible to receive assistance under part A or B of title III or under 

title V; and 

‘‘(2) have submitted a grant application under this section that demonstrates 

a need for a waiver or reduction.’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 614 (20 U.S.C. 1130b) is amended—

(1) by striking ‘‘1999’’ each place it appears and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ each place it appears and inserting ‘‘5 succeeding’’. 

SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY. 

(a) FOREIGN SERVICE PROFESSIONAL DEVELOPMENT.—Section 621 (20 U.S.C. 1131) 

is amended—

(1) by striking the heading of such section and inserting the following: 

‘‘SEC. 621. PROGRAM FOR FOREIGN SERVICE PROFESSIONALS.’’; 

(2) by striking the second sentence of subsection (a) and inserting the following: ‘‘The Institute shall conduct a program to enhance the international 

competitiveness of the United States by increasing the participation of underrepresented populations in the international service, including private international voluntary organizations and the foreign service of the United States.’’; 

and 

(3) in subsection (b)(1), by striking subparagraphs (A) and (B) and inserting 

the following: 

‘‘(A) A Tribally Controlled College or University or Alaska Native or Native Hawaiian-serving institution eligible for assistance under title III, an 

institution eligible for assistance under part B of title III, or a Hispanicserving institution eligible for assistance under title V. 

‘‘(B) An institution of higher education which serves substantial numbers 

of underrepresented students.’’. 

(b) INSTITUTIONAL DEVELOPMENT.—Section 622 (20 U.S.C. 1131–1) is amended by 

inserting before the period at the end of subsection (a) the following: ‘‘and promote 

collaboration with colleges and universities that receive funds under this title’’. 

(c) STUDY ABROAD PROGRAM.—Section 623(a) (20 U.S.C. 1131a(a)) is amended by 

inserting after ‘‘1978,’’ the following: ‘‘Alaska Native-serving, Native Hawaiian-serving, and Hispanic-serving institutions,’’. 

(d) ADVANCED DEGREE IN INTERNATIONAL RELATIONS.—Section 624 (20 U.S.C. 

1131b) is amended—

(1) by striking ‘‘MASTERS’’ in the heading of such section and inserting ‘‘ADVANCED’’; 

(2) by striking ‘‘a masters degree in international relations’’ and inserting ‘‘an 

advanced degree in international relations, international affairs, international 

economics, or other academic areas related to the Institute fellow’s career objectives’’; and 

(3) by striking ‘‘The masters degree program designed by the consortia’’ and 

inserting ‘‘The advanced degree study program shall be designed by the consortia, consistent with the fellow’s career objectives, and’’. 

(e) INTERNSHIPS.—Section 625 (20 U.S.C. 1131c) is amended—

(1) in subsection (a), by inserting after ‘‘1978,’’ the following: ‘‘Alaska Nativeserving, Native Hawaiian-serving, and Hispanic-serving institutions,’’; 

(2) in subsection (b)—

(A) by inserting ‘‘and’’ after the semicolon at the end of paragraph (2); 

(B) by striking ‘‘; and’’ at the end of paragraph (3) and inserting a period; 

and 

(C) by striking paragraph (4); and 

(3) by amending subsection (c) to read as follows: 

‘‘(c) RALPH J. BUNCHE FELLOWS.—In order to assure the recognition and commitment of individuals from underrepresented student populations who demonstrate 

special interest in international affairs and language study, eligible students who 

participate in the internship programs authorized under (a) and (b) shall be known 

as the ‘Ralph J. Bunche Fellows’.’’. 

(f) REPORT.—Section 626 (20 U.S.C. 1131d) is amended by striking ‘‘annually prepare a report’’ and inserting ‘‘prepare a report biennially’’. 

(g) AUTHORIZATION OF APPROPRIATIONS.—Section 628 (20 U.S.C. 1131f) is amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

92 

SEC. 604. EVALUATION, OUTREACH, AND DISSEMINATION. 

Part D of title VI is amended by inserting after section 631 (20 U.S.C. 1132) the 

following new section: 

‘‘SEC. 632. EVALUATION, OUTREACH, AND DISSEMINATION. 

‘‘The Secretary may use not more than one percent of the funds made available 

for this title for program evaluation, national outreach, and information dissemination activities.’’. 

SEC. 605. ADVISORY BOARD. 

Part D of title VI is amended by inserting after section 632 (as added by section 

604) the following new section: 

‘‘SEC. 633. INTERNATIONAL HIGHER EDUCATION ADVISORY BOARD. 

‘‘(a) ESTABLISHMENT AND PURPOSE.—

‘‘(1) ESTABLISHMENT.—There is established in the Department an independent 

International Higher Education Advisory Board (hereafter in this section referred to as the ‘International Advisory Board’). The International Advisory 

Board shall provide advice, counsel, and recommendations to the Secretary and 

the Congress on international education issues for higher education. 

‘‘(2) PURPOSE.—The purpose of the International Advisory Board is—

‘‘(A) to provide expertise in the area of national needs for proficiency in 

world regions, foreign languages, international affairs, and international 

business; 

‘‘(B) to make recommendations that will promote the excellence of international education programs and result in the growth and development of 

such programs at the postsecondary education level that will reflect diverse 

perspectives and a wide range of views on world regions, foreign language, 

international affairs, and international business; and 

‘‘(C) to advise the Secretary and the Congress with respect to needs for 

expertise in government, the private sector, and education in order to enhance America’s understanding of, and engagement in, the world. 

‘‘(b) INDEPENDENCE OF INTERNATIONAL ADVISORY BOARD.—In the exercise of its 

functions, powers, and duties, the International Advisory Board shall be independent of the Secretary and the other offices and officers of the Department. Except as provided in this subsection and subsection (f), the recommendations of the 

International Advisory Board shall not be subject to review or approval by any officer of the Federal Government. Nothing in this title shall be construed to authorize 

the International Advisory Board to mandate, direct, or control an institution of 

higher education’s specific instructional content, curriculum, or program of instruction or instructor. The International Advisory Board is authorized to assess a sample of activities supported under this title, using materials that have been submitted 

to the Department of Education by grant recipients under this title, in order to provide recommendations to the Secretary and the Congress for the improvement of 

programs under the title and to ensure programs meet the purposes of the title to 

promote the study of and expertise in foreign language and world regions, especially 

with respect to diplomacy, national security, and international business and trade 

competitiveness. The recommendations of the International Advisory Board may address any area in need of improvement, except that any recommendation of specific 

legislation to Congress shall be made only if the President deems it necessary and 

expedient. 

‘‘(c) MEMBERSHIP.—

‘‘(1) APPOINTMENT.—The International Advisory Board shall have 7 members 

of whom—

‘‘(A) 3 members shall be appointed by the Secretary; 

‘‘(B) 2 members shall be appointed by the Speaker of the House of Representatives, upon the recommendation of the Majority Leader and the Minority Leader; and 

‘‘(C) 2 members shall be appointed by the President pro tempore of the 

Senate, upon the recommendation of the Majority Leader and the Minority 

Leader. 

‘‘(2) REPRESENTATION.—Two of the members appointed by the Secretary under 

paragraph (1)(A) shall be appointed to represent Federal agencies that have diplomacy, national security, international commerce, or other international activity responsibilities, after consultation with the heads of such agencies. The 

members of the International Advisory Board shall also include (but not be limited to) persons with international expertise representing States, institutions of 

higher education, cultural organizations, educational organizations, international business, local education agencies, students, and private citizens with 

expertise in international concerns. 

93 

‘‘(3) QUALIFICATION.—Members of the International Advisory Board shall be 

individuals who have technical qualifications, professional standing, experience 

working in international affairs or foreign service or international business occupations, or demonstrated knowledge in the fields of higher education and 

international education, including foreign languages, world regions, or international affairs. 

‘‘(d) FUNCTIONS OF THE INTERNATIONAL ADVISORY BOARD.—

‘‘(1) IN GENERAL.—The International Advisory Board shall provide recommendations in accordance with subsection (b) regarding improvement of programs under this title to the Secretary and the Congress for their review. The 

International Advisory Board may—

‘‘(A) review and comment upon the regulations for grants under this title; 

‘‘(B) assess a sample of activities supported under this title based on the 

purposes and objectives of this title, using materials that have been submitted to the Department of Education by grant recipients under this title, 

in order to provide recommendations for improvement of the programs 

under this title; 

‘‘(C) make recommendations that will assist the Secretary and the Congress to improve the programs under this title to better reflect the national 

needs related to foreign languages, world regions, diplomacy, national security, and international business and trade competitiveness, including an assessment of the national needs and the training provided by the institutions 

of higher education that receive a grant under this title for expert and nonexpert level foreign language training; 

‘‘(D) make recommendations to the Secretary and the Congress regarding 

such studies, surveys, and analyses of international education that will provide feedback about the programs under this title and assure that their relative authorized activities reflect diverse perspectives and a wide range of 

views on world regions, foreign languages, diplomacy, national security, and 

international business and trade competitiveness; 

‘‘(E) make recommendations that will strengthen the partnerships between local educational agencies, public and private elementary and secondary education schools, and grant recipients under this title to ensure 

that the research and knowledge about world regions, foreign languages, 

and international affairs is widely disseminated to local educational agencies; 

‘‘(F) make recommendations on how institutions of higher education that 

receive a grant under this title can encourage students to serve the Nation 

and meet national needs in an international affairs, international business, 

foreign language, or national security capacity; 

‘‘(G) make recommendations on how linkages between institutions of 

higher education and public and private organizations that are involved in 

international education, international business and trade competitiveness, 

language training, and international research capacities may fulfill the 

manpower and information needs of United States businesses; and 

‘‘(H) make recommendations to the Secretary and the Congress about opportunities for underrepresented populations in the areas of foreign language study, diplomacy, international business and trade competitiveness, 

and international economics, in order to effectively carry out the activities 

of the Institute under part C. 

‘‘(2) HEARINGS.—The International Advisory Board shall provide for public 

hearing and comment regarding the matter contained in the recommendations 

described in paragraph (1), prior to the submission of those recommendations 

to the Secretary and the Congress. 

‘‘(e) OPERATIONS OF THE COMMITTEE.—

‘‘(1) TERMS.—Each member of the International Advisory Board shall be appointed for a term of 3 years, except that, of the members first appointed (A) 

4 shall be appointed for a term of 3 years, and (B) 3 shall be appointed for a 

term of 4 years, as designated at the time of appointment by the Secretary. A 

member of the International Advisory Board may be reappointed to successive 

terms on the International Advisory Board. 

‘‘(2) VACANCIES.—Any member appointed to fill a vacancy occurring prior to 

the expiration of the term of a predecessor shall be appointed only for the remainder of such term. A member of the International Advisory Board shall, 

upon the Secretary’s request, continue to serve after the expiration of a term 

until a successor has been appointed. 

‘‘(3) NO GOVERNMENTAL MEMBERS.—Except for the members appointed by the 

Secretary under subsection (c)(1)(A), no officers or full-time employees of the 

94 

Federal Government shall serve as members of the International Advisory 

Board. ‘‘(4) MEETINGS.—The International Advisory Board shall meet not less than 

once each year. The International Advisory Board shall hold additional meetings at the call of the Chair or upon the written request of not less than 3 voting members of the International Advisory Board. ‘‘(5) QUORUM.—A majority of the voting members of the International Advisory Board serving at the time of a meeting shall constitute a quorum. ‘‘(6) CHAIR.—The International Advisory Board shall elect a Chairman or 

Chairwoman from among the members of the International Advisory Board. ‘‘(f) SUBMISSION TO DEPARTMENT FOR COMMENT.—The International Advisory 

Board shall submit its proposed recommendations to the Secretary of Education for 

comment for a period not to exceed 30 days in each instance. ‘‘(g) PERSONNEL AND RESOURCES.— ‘‘(1) COMPENSATION AND EXPENSE.—Members of the International Advisory 

Board shall serve without pay for such service. Members of the International 

Advisory Board who are officers or employees of the United States may not receive additional pay, allowances, or benefits by reason of their service on the 

International Advisory Board. Members of the International Advisory Board 

may each receive reimbursement for travel expenses incident to attending International Advisory Board meetings, including per diem in lieu of subsistence, as 

authorized by section 5703 of title 5, United States Code, for persons in the 

Government service employed intermittently. 

‘‘(2) PERSONNEL.—The International Advisory Board may appoint such personnel as may be determined necessary by the Chairman without regard to the 

provisions of title 5, United States Code, governing appointments in the competitive service, and may be paid without regard to the provisions of chapter 

51 and subchapter III of chapter 53 of such title relating to classification and 

General Schedule pay rates, but no individual so appointed shall be paid in excess of the maximum rate payable under section 5376 of such title. The International Advisory Board may appoint not more than one full-time equivalent, 

nonpermanent, consultant without regard to the provisions of title 5, United 

States Code. The International Advisory Board shall not be required by the Secretary to reduce personnel to meet agency personnel reduction goals. 

‘‘(3) CONSULTATION.—In carrying out its duties under the Act, the International Advisory Board shall consult with other Federal agencies, representatives of State and local governments, and private organizations to the extent 

feasible. 

‘‘(4) ASSISTANCE FROM OTHER AGENCIES.—

‘‘(A) INFORMATION.—The International Advisory Board is authorized to 

secure directly from any executive department, bureau, agency, board, commission, office, independent establishment, or instrumentality information, 

suggestions, estimates, and statistics for the purpose of this section and 

each such department, bureau, agency, board, commission, office, independent establishment, or instrumentality is authorized and directed, to the 

extent permitted by law, to furnish such information, suggestions, estimates, and statistics directly to the International Advisory Board, upon request made by the Chairman for the purpose of providing expertise in the 

area of national needs for the proficiency in world regions, foreign languages, and international affairs. 

‘‘(B) SERVICES AND PERSONNEL.—The head of each Federal agency shall, 

to the extent not prohibited by law, consult with the International Advisory 

Board in carrying out this section. The International Advisory Board is authorized to utilize, with their consent, the services, personnel, information, 

and facilities of other Federal, State, local, and private agencies with or 

without reimbursement, for the purpose of providing expertise in the area 

of national needs for the proficiency in world regions, foreign languages, 

and international affairs. 

‘‘(5) CONTRACTS; EXPERTS AND CONSULTANTS.—The International Advisory 

Board may enter into contracts for the acquisition of information, suggestions, 

estimates, and statistics for the purpose of this section. The International Advisory Board is authorized to obtain the services of experts and consultants without regard to section 3109 of title 5, United States Code and to set pay in accordance with such section. 

‘‘(h) TERMINATION.—Notwithstanding the sunset and charter provisions of the 

Federal Advisory Committee Act (5 U.S.C. App. I) or any other statute or regulation, 

the International Advisory Board shall be authorized through September 30, 2012. 

‘‘(i) FUNDS.—The Secretary shall use not more than one-half of the funds available 

to the Secretary under section 632 to carry out this section.’’. 

95 

SEC. 606. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING INFORMATION; 

SAFETY. 

Part D of title VI is amended by inserting after section 633 (as added by section 

605) the following new sections: 

‘‘SEC. 634. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING INFORMATION. 

‘‘Each institution of higher education that receives a grant under this title shall 

assure that— ‘‘(1) recruiters of the United States Government and agencies thereof are 

given the same access to students as is provided generally to other institutions 

of higher education and prospective employers of those students for the purpose 

of recruiting for graduate opportunities or prospective employment; and 

‘‘(2) no undue restrictions are placed upon students that seek employment 

with the United States Government or any agency thereof. 

‘‘SEC. 635. STUDENT SAFETY. 

‘‘Applicants seeking funds under this title to support student travel and study 

abroad shall submit as part of their grant application a description of safety policies 

and procedures for students participating in the program while abroad.’’. 

SEC. 607. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES. 

Part D of title VI is further amended by inserting after section 635 (as added by 

section 606) the following new section: 

‘‘SEC. 636. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES. 

‘‘(a) STUDY.—The Secretary of Education, in consultation with the International 

Advisory Board, shall conduct a study to identify foreign language heritage communities, particularly such communities that include speakers of languages that are 

critical to the national security of the United States. 

‘‘(b) FOREIGN LANGUAGE HERITAGE COMMUNITY.—For purposes of this section, the 

term ‘foreign language heritage community’ means a community of residents or citizens of the United States who are native speakers of, or who have partial fluency 

in, a foreign language. 

‘‘(c) REPORT.—Not later than one year after the date of the enactment of this Act, 

the Secretary of Education shall submit a report to the Congress on the results of 

the study conducted under this section.’’. 

TITLE VII—TITLE VII AMENDMENTS 

SEC. 701. JAVITS FELLOWSHIP PROGRAM. 

(a) AUTHORITY AND TIMING OF AWARDS.—Section 701(a) (20 U.S.C. 1132a(a)) is 

amended by inserting after the second sentence the following: ‘‘For purposes of the 

exception in the preceding sentence, a master’s degree in fine arts shall be considered a terminal degree.’’. 

(b) INTERRUPTIONS OF STUDY.—Section 701(c) (20 U.S.C. 1134(c)) is amended by 

adding at the end the following new sentence: ‘‘In the case of other exceptional circumstances, such as active duty military service or personal or family member illness, the institution of higher education may also permit the fellowship recipient to 

interrupt periods of study for the duration of the tour of duty (in the case of military 

service) or not more than 12 months (in any other case), but without payment of 

the stipend.’’. 

(c) ALLOCATION OF FELLOWSHIPS.—Section 702(a)(1) (20 U.S.C. 1134a(a)(1)) is 

amended—

(1) in the first sentence, by inserting ‘‘from diverse geographic regions’’ after 

‘‘higher education’’; and 

(2) by adding at the end the following new sentence: ‘‘The Secretary shall also 

assure that at least one representative appointed to the Board represents an 

institution that is eligible for a grant under title III or V of this Act.’’. 

(d) STIPENDS.—Section 703 (20 U.S.C. 1134b(a)) is amended—

(1) in subsection (a)—

(A) by striking ‘‘1999–2000’’ and inserting ‘‘2006–2007’’; 

(B) by striking ‘‘shall be set’’ and inserting ‘‘may be set’’; and 

(C) by striking ‘‘Foundation graduate fellowships’’ and inserting ‘‘Foundation Graduate Research Fellowship Program on February 1 of such academic year’’; and 

(2) in subsection (b), by amending paragraph (1)(A) to read as follows: 

‘‘(1) IN GENERAL.—(A) The Secretary shall (in addition to stipends paid to individuals under this subpart) pay to the institution of higher education, for each 

individual awarded a fellowship under this subpart at such institution, an instiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00099 Fmt 6659 Sfmt 6621 E:\HR\OC\HR231.XXX HR231
96 

tutional allowance. Except as provided in subparagraph (B), such allowance 

shall be, for 2006–2007 and succeeding academic years, the same amount as the 

institutional payment made for 2005–2006 adjusted for 2006–2007 and annually 

thereafter in accordance with inflation as determined by the Department of Labor’s Consumer Price Index for All Urban Consumers for the previous calendar 

year.’’. (e) AUTHORIZATION OF APPROPRIATIONS.—Section 705 (20 U.S.C. 1134d) is amended by striking ‘‘fiscal year 1999 and such sums as may be necessary for each of the 

4 succeeding fiscal years’’ and inserting ‘‘fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years’’. 

SEC. 702. GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED. 

(a) DESIGNATION OF AREAS OF NATIONAL NEED; PRIORITY.—Section 712 (20 U.S.C. 

1135a) is amended— (1) in the last sentence of subsection (b)— (A) by striking ‘‘and an assessment’’ and inserting ‘‘an assessment’’; and 

(B) by inserting before the period at the end the following: ‘‘, and the priority described in subsection (c) of this section’’; and 

(2) by adding at the end the following new subsection: ‘‘(c) PRIORITY.—The Secretary shall establish a priority for grants in order to prepare individuals for the professoriate who will train highly-qualified elementary and 

secondary math and science teachers, special education teachers, and teachers who 

provide instruction for limited English proficient individuals. Such grants shall offer 

program assistance and graduate fellowships for— ‘‘(1) post-baccalaureate study related to teacher preparation and pedagogy in 

math and science for students who have completed a master’s degree or are pursuing a doctorate of philosophy in math and science; ‘‘(2) post-baccalaureate study related to teacher preparation and pedagogy in 

special education and English language acquisition and academic proficiency for 

limited English proficient individuals; and ‘‘(3) support of dissertation research in the fields of math, science, special education, or second language pedagogy and second language acquisition.’’. (b) COLLABORATION REQUIRED FOR CERTAIN APPLICATIONS.—Section 713(b) (20 

U.S.C. 1135b) is amended— (1) by striking ‘‘and’’ at the end of paragraph (9); 

(2) by redesignating paragraph (10) as paragraph (11); and 

(3) by inserting after paragraph (9) the following new paragraph: 

‘‘(10) in the case of an application for a grant by a department, program, or 

unit in education or teacher preparation, contain assurances that such department, program, or unit collaborates with departments, programs, or units in all 

content areas to assure a successful combination of training in both teaching 

and such content; and’’. 

(c) STIPENDS.—Section 714(b) (20 U.S.C. 1135c(b)) is amended—

(1) by striking ‘‘1999–2000’’ and inserting ‘‘2006–2007’’; 

(2) by striking ‘‘shall be set’’ and inserting ‘‘may be set’’; and 

(3) by striking ‘‘Foundation graduate fellowships’’ and inserting ‘‘Foundation 

Graduate Research Fellowship Program on February 1 of such academic year’’. 

(d) ADDITIONAL ASSISTANCE.—Section 715(a)(1) (20 U.S.C. 1135d(a)(1)) is amended—

(1) by striking ‘‘1999–2000’’ and inserting ‘‘2006–2007’’; 

(2) by striking ‘‘1998–1999’’ and inserting ‘‘2005–2006’’; and 

(3) by inserting ‘‘for All Urban Consumers’’ after ‘‘Price Index’’. 

(e) AUTHORIZATION OF APPROPRIATIONS.—Section 716 (20 U.S.C. 1135e) is amended by striking ‘‘fiscal year 1999 and such sums as may be necessary for each of the 

4 succeeding fiscal years’’ and inserting ‘‘fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years’’. 

(f) TECHNICAL AMENDMENTS.—Section 714(c) (20 U.S.C. 1135c(c)) is amended—

(1) by striking ‘‘section 716(a)’’ and inserting ‘‘section 715(a)’’; and 

(2) by striking ‘‘section 714(b)(2)’’ and inserting ‘‘section 713(b)(2)’’. 

SEC. 703. THURGOOD MARSHALL LEGAL EDUCATIONAL OPPORTUNITY PROGRAM. 

(a) CONTRACT AND GRANT PURPOSES.—Section 721(c) (20 U.S.C. 1136(c)) is amended—

(1) by amending paragraph (2) to read as follows: 

‘‘(2) to prepare such students for study at accredited law schools and assist 

them with the development of analytical skills and study methods to enhance 

their success and promote completion of law school;’’; 

(2) by striking ‘‘and’’ at the end of paragraph (4); 

(3) by striking the period at the end of paragraph (5) and inserting ‘‘; and’’; 

and 

97 

(4) by adding at the end the following new paragraph: 

‘‘(6) to award Thurgood Marshall Fellowships to eligible law school students—

‘‘(A) who participated in summer institutes authorized by subsection (d) 

and who are enrolled in an accredited law school; or 

‘‘(B) who are eligible law school students who have successfully completed 

a comparable summer institute program certified by the Council on Legal 

Educational Opportunity.’’. 

(b) SERVICES PROVIDED.—Section 721(d)(1)(D) (20 U.S.C. 1136(d)(1)(D)) is amended by inserting ‘‘in analytical skills and study methods’’ after ‘‘courses’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 721(h) (20 U.S.C. 1136(h)) is 

amended by striking ‘‘1999 and each of the 4 succeeding fiscal years’’ and inserting 

‘‘2006 and each of the 5 succeeding fiscal years’’. 

(d) GENERAL PROVISIONS.—Subsection (e) of section 731 (20 U.S.C. 1137(e)) is repealed. 

SEC. 704. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION. 

(a) CONTRACT AND GRANT PURPOSES.—Section 741(a) (20 U.S.C. 1138(a)) is 

amended—

(1) by amending paragraph (1) to read as follows: 

‘‘(1) the encouragement of the reform and improvement of, and innovation in, 

postsecondary education and the provision of educational opportunity for all, especially for the non-traditional student populations;’’; 

(2) in paragraph (2), by inserting before the semicolon at the end the following: ‘‘for postsecondary students, especially institutions, programs, and joint 

efforts that provide academic credit for programs’’; 

(3) by amending paragraph (3) to read as follows: 

‘‘(3) the establishment of institutions and programs based on the technology 

of communications, including delivery by distance education;’’; 

(4) by amending paragraph (6) to read as follows: 

‘‘(6) the introduction of institutional reforms designed to expand individual 

opportunities for entering and reentering postsecondary institutions and pursuing programs of postsecondary study tailored to individual needs;’’; 

(5) by striking ‘‘and’’ at the end of paragraph (7); 

(6) by striking the period at the end of paragraph (8) and inserting a semicolon; and 

(7) by adding at the end the following new paragraphs: 

‘‘(9) the provision of support and assistance to programs implementing integrated education reform services in order to improve secondary school graduation and college attendance and completion rates for disadvantaged students, 

and to programs that reduce postsecondary remediation rates, and improve degree attainment rates, for low-income students and former high school dropouts; 

and 

‘‘(10) the assessment, in partnership with a public or private nonprofit institution or agency, of the performance of teacher preparation programs within institutions of higher education in a State, using an assessment which provides comparisons across such schools within the State based upon indicators including 

teacher candidate knowledge in subject areas in which such candidate has been 

prepared to teach. ’’. 

(b) PROHIBITION.—Section 741 (20 U.S.C. 1138) is further amended by adding at 

the end the following new subsection: 

‘‘(c) PROHIBITION.—No funds made available under this part may be used to provide financial assistance to students who do not meet the requirements of section 

484(a)(5).’’. 

(c) AREAS OF NATIONAL NEED.—Section 744(c) (20 U.S.C. 1138c(c)) is amended—

(1) by amending paragraph (2) to read as follows: 

‘‘(2)(A) Development of partnerships between local educational agencies and 

institutions of higher education to establish or expand existing dual enrollment 

programs at institutions of higher education that allow high school students to 

earn high school and transferable college credit. 

‘‘(B) Development of consortia of institutions of higher education to create 

dual enrollment programs including academic and student support agreements 

and comprehensive articulation agreements that would allow for the seamless 

and timeless acquisition of college credits and the transfer of postsecondary academic credits between such institutions, particularly from 2-year to 4-year institutions of higher education.’’; and 

(2) by striking paragraph (4) and inserting the following: 

‘‘(4) International cooperation, partnerships, or student exchange among postsecondary educational institutions in the United States and abroad. 

98 

‘‘(5) Establishment of academic programs including graduate and undergraduate courses, seminars and lectures, support of research, and development 

of teaching materials for the purpose of supporting faculty and academic programs that teach traditional American history (including significant constitutional, political, intellectual, economic, diplomatic, and foreign policy trends, 

issues, and documents; the history, nature, and development of democratic institutions of which American democracy is a part; and significant events and 

individuals in the history of the United States). 

‘‘(6) Support for planning, applied research, training, resource exchanges or 

technology transfers, the delivery of services, or other activities the purpose of 

which is to design and implement programs to enable institutions of higher education to work with private and civic organizations to assist communities to 

meet and address their pressing and severe problems, including economic development, community infrastructure and housing, crime prevention, education, 

healthcare, self-sufficiency, and workforce preparation. Such activities may include support for the development of coordinated curriculum and internship opportunities for students in disadvantaged communities.’’. 

(d) AUTHORIZATION OF APPROPRIATIONS.—Section 745 (20 U.S.C. 1138d) is amended by striking ‘‘$30,000,000 for fiscal year 1999 and such sums as may be necessary 

for each of the 4 succeeding fiscal years’’ and inserting ‘‘$40,000,000 for fiscal year 

2006 and such sums as may be necessary for each of the 5 succeeding fiscal years’’

. 

SEC. 705. URBAN COMMUNITY SERVICE. 

Part C of title VII (20 U.S.C. 1139 et seq.) is repealed. 

SEC. 706. DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES RECEIVE A 

QUALITY HIGHER EDUCATION. 

(a) SERVING ALL STUDENTS WITH DISABILITIES.—Section 762(a) (20 U.S.C. 

1140a(a)) is amended by striking ‘‘students with learning disabilities’’ and inserting 

‘‘students with disabilities’’. 

(b) AUTHORIZED ACTIVITIES.—

(1) AMENDMENT.—Section 762(b)(2) is amended—

(A) in subparagraph (A), by inserting ‘‘in order to improve retention and 

completion’’ after ‘‘disabilities’’; 

(B) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and 

(E), respectively; 

(C) by inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) EFFECTIVE TRANSITION PRACTICES.—The development of innovative, 

effective, and efficient teaching methods and strategies to ensure the 

smooth transition of students with disabilities from high school to postsecondary education.’’; and 

(D) by inserting after subparagraph (C) (as redesignated by subparagraph 

(B) of this paragraph) the following new subparagraph: 

‘‘(D) DISTANCE LEARNING.—The development of innovative, effective, and 

efficient teaching methods and strategies to provide faculty and administrators with the ability to provide accessible distance education programs or 

classes that would enhance access of students with disabilities to higher 

education, including the use of electronic communication for instruction and 

advisement.’’. 

(2) CONFORMING AMENDMENT.—Section 762(b)(3) is amended by striking ‘‘subparagraphs (A) through (C)’’ and inserting ‘‘subparagraphs (A) through (E)’’. 

(c) APPLICATIONS.—Section 763 (20 U.S.C. 1140b) is amended—

(1) by amending paragraph (1) to read as follows: 

‘‘(1) a description of how such institution plans to address the activities allowed under this part;’’; 

(2) by striking ‘‘and’’ at the end of paragraph (2); 

(3) by striking the period at the end of paragraph (3) and inserting ‘‘; and’’; 

and 

(4) by adding at the end the following new paragraph: 

‘‘(4) a description of the extent to which an institution will work to replicate 

the best practices of institutions of higher education with demonstrated success 

in serving students with disabilities.’’. 

(d) AUTHORIZATION OF APPROPRIATIONS.—Section 765 (20 U.S.C. 1140d) is amended by striking ‘‘fiscal year 1999 and such sums as may be necessary for each of the 

4 succeeding fiscal years’’ and inserting ‘‘fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years’’. 

99 

TITLE VIII—CLERICAL AMENDMENTS 

SEC. 801. CLERICAL AMENDMENTS. 

(a) DEFINITION.—Section 103 (20 U.S.C. 1003) (as amended by section 102) is further amended—

(1) by redesignating paragraphs (1) through (16) as paragraphs (2) through 

(17), respectively; and 

(2) by inserting before paragraph (2) (as so redesignated) the following new 

paragraph: 

‘‘(1) AUTHORIZING COMMITTEES.—The term ‘authorizing committees’ means the 

Committee on Health, Education, Labor, and Pensions of the Senate and the 

Committee on Education and the Workforce of the House of Representatives.’’. 

(b) COMMITTEES.—

(1) The following provisions are each amended by striking ‘‘Committee on 

Labor and Human Resources of the Senate and the Committee on Education 

and the Workforce of the House of Representatives’’ and inserting ‘‘authorizing 

committees’’: 

(A) Section 428(g) (20 U.S.C. 1078(g)). 

(B) Section 428A(a)(3) (20 U.S.C. 1078–1(a)(3)), as redesignated by section 

430(e)(4). 

(C) Section 428A(c)(2) (20 U.S.C. 1078–1(c)(2)). 

(D) Section 428A(c)(5) (20 U.S.C. 1078–1(c)(5)). 

(E) Section 455(b)(7)(B) (20 U.S.C. 1087e(b)(7)(B)), as redesignated by section 423(b)(3). 

(F) Section 483(c) (20 U.S.C. 1090(c)). 

(G) Section 486(e) (20 U.S.C. 1093(e)). 

(H) Section 486(f)(3)(A) (20 U.S.C. 1093(f)(3)(A)). 

(I) Section 486(f)(3)(B) (20 U.S.C. 1093(f)(3)(B)). 

(J) Section 487A(a)(5) (20 U.S.C. 1094a(a)(5)). 

(K) Section 487A(b)(2) (20 U.S.C. 1094a(b)(2)). 

(L) Section 487A(b)(3)(B) (20 U.S.C. 1094a(b)(3)(B)). 

(M) Section 498B(d)(1) (20 U.S.C. 1099c–2(d)(1)). 

(N) Section 498B(d)(2) (20 U.S.C. 1099c–2(d)(2)). 

(2) The following provisions are each amended by striking ‘‘Committee on 

Education and the Workforce of the House of Representatives and the Committee on Labor and Human Resources of the Senate’’ and inserting ‘‘authorizing committees’’: 

(A) Section 141(d)(4)(B) (20 U.S.C. 1018(d)(4)(B)). 

(B) Section 428(n)(4) (20 U.S.C. 1078(n)(4)). 

(C) Section 437(c)(1) (20 U.S.C. 1087(c)(1)). 

(D) Section 485(f)(5)(A) (20 U.S.C. 1092(f)(5)(A)). 

(E) Section 485(g)(4)(B) (20 U.S.C. 1092(g)(4)(B)). 

(3) Section 401(f)(3) (20 U.S.C. 1070a(f)(3)) is amended by striking ‘‘Committee on Appropriations and the Committee on Labor and Human Resources 

of the Senate and the Committee on Appropriations and the Committee on Education and the Workforce of the House of Representatives’’ and inserting ‘‘Committees on Appropriations of the Senate and House of Representatives and the 

authorizing committees’’. 

(4) Section 428(c)(9)(K) (20 U.S.C. 1078(c)(9)(K)) is amended by striking 

‘‘House Committee on Education and the Workforce and the Senate Committee 

on Labor and Human Resources’’ and inserting ‘‘authorizing committees’’. 

(5) Section 432(f)(1)(C) (20 U.S.C. 1082(f)(1)(C)) is amended by striking ‘‘Committee on Education and the Workforce of the House of Representatives or the 

Committee on Labor and Human Resources of the Senate’’ and inserting ‘‘either 

of the authorizing committees’’. 

(6) Section 439(d)(1)(E)(iii) (20 U.S.C. 1087–2(d)(1)(E)(iii)) is amended by 

striking ‘‘Chairman and the Ranking Member on the Committee on Labor and 

Human Resources of the Senate and the Chairman and the Ranking Member 

of the Committee on Education and Labor of the House of Representatives’’ and 

inserting ‘‘chairpersons and ranking minority members of the authorizing committees’’. 

(7) Paragraphs (3) and (8)(C) of section 439(r) (20 U.S.C. 1087–2(r)) are each 

amended by striking ‘‘Chairman and ranking minority member of the Committee on Labor and Human Resources of the Senate, the Chairman and ranking minority member of the Committee on Education and Labor of the House 

of Representatives,’’ and inserting ‘‘chairpersons and ranking minority members 

of the authorizing committees’’. 

100 

(8) Paragraphs (5)(B) and (10) of section 439(r) (20 U.S.C. 1087–2(r)) are each 

amended by striking ‘‘Chairman and ranking minority member of the Senate 

Committee on Labor and Human Resources and to the Chairman and ranking 

minority member of the House Committee on Education and Labor’’ and inserting ‘‘chairpersons and ranking minority members of the authorizing committees’’. 

(9) Section 439(r)(6)(B) (20 U.S.C. 1087–2(r)(6)(B)) is amended by striking 

‘‘Chairman and ranking minority member of the Committee on Labor and 

Human Resources of the Senate and to the Chairman and ranking minority 

member of the Committee on Education and Labor of the House of Representatives’’ and inserting ‘‘chairpersons and ranking minority members of the authorizing committees’’. 

(10) Section 439(s)(2)(A) (20 U.S.C. 1087–2(s)(2)(A)) is amended by striking 

‘‘Chairman and Ranking Member of the Committee on Labor and Human Resources of the Senate and the Chairman and Ranking Member of the Committee on Economic and Educational Opportunities of the House of Representatives’’ and inserting ‘‘chairpersons and ranking minority members of the authorizing committees’’. 

(11) Section 439(s)(2)(B) (20 U.S.C. 1087–2(s)(2)(B)) is amended by striking 

‘‘Chairman and Ranking Minority Member of the Committee on Labor and 

Human Resources of the Senate and Chairman and Ranking Minority Member 

of the Committee on Economic and Educational Opportunities of the House of 

Representatives’’ and inserting ‘‘chairpersons and ranking minority members of 

the authorizing committees’’. 

(12) Section 482(d) (20 U.S.C. 1089(d)) is amended by striking ‘‘Committee on 

Labor and Human Resources of the Senate and the Committee on Education 

and Labor of the House of Representatives’’ and inserting ‘‘authorizing committees’’. 

(c) ADDITIONAL CLERICAL AMENDMENTS.—

(1) Clauses (i) and (ii) of section 425(a)(2)(A) (20 U.S.C. 1075(a)(2)(A)) are 

each amended by striking ‘‘428A or 428B’’ and inserting ‘‘428B or 428H’’. 

(2) Section 428(a)(2)(E) (20 U.S.C. 1078(a)(2)(E)) is amended by striking 

‘‘428A or’’. 

(3) Clauses (i) and (ii) of section 428(b)(1)(B) (20 U.S.C. 1078(b)(1)(B)) are 

each amended by striking ‘‘428A or 428B’’ and inserting ‘‘428B or 428H’’. 

(4) Section 428(b)(1)(Q) (20 U.S.C. 1078(b)(1)(Q)) is amended by striking ‘‘sections 428A and 428B’’ and inserting ‘‘section 428B or 428H’’. 

(5) Section 428(b)(7)(C) (20 U.S.C. 1078(b)(7)(C)) is amended by striking 

‘‘428A, 428B,’’ and inserting ‘‘428B’’. 

(6) Section 428G(c)(2) (20 U.S.C. 1078–7(c)(2)) is amended by striking ‘‘428A’’

and inserting ‘‘428H’’. 

(7) The heading for section 433(e) (20 U.S.C. 1083(e)) is amended by striking 

‘‘SLS LOANS AND’’. 

(8) Section 433(e) (20 U.S.C. 1083(e)) is amended by striking ‘‘428A, 428B,’’

and inserting ‘‘428B’’. 

(9) Section 435(a)(3) (20 U.S.C. 1085(a)(3)) is amended—

(A) by inserting ‘‘or’’ at the end of subparagraph (A); 

(B) by striking subparagraph (B); and 

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

(10) Section 435(d)(1)(G) (20 U.S.C. 1085(d)(1)(G)) is amended by striking 

‘‘428A(d), 428B(d), 428C,’’ and inserting ‘‘428B(d), 428C, 428H,’’. 

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

(A) in paragraph (1)(A), by striking ‘‘, 428A,’’; and 

(B) in paragraph (2)(D), by striking ‘‘428A’’ each place it appears and inserting ‘‘428H’’. 

(12) Section 438(b)(2)(D)(ii) (20 U.S.C. 1087–1(b)(2)(D)(ii)) is amended by 

striking ‘‘division (i) of this subparagraph’’ and inserting ‘‘clause (i) of this subparagraph’’. 

(13) Section 438(c)(6) (20 U.S.C. 1087–1(c)(6)) is amended—

(A) by striking ‘‘SLS AND PLUS’’ in the heading and inserting ‘‘PLUS’’; and 

(B) by striking ‘‘428A or’’. 

(14) Section 438(c)(7) (20 U.S.C. 1087–1(c)(7)) is amended by striking ‘‘428A 

or’’. 

(15) Nothing in the amendments made by this subsection shall be construed 

to alter the terms, conditions, and benefits applicable to Federal supplemental 

loans for students (‘‘SLS loans’’) under section 428A as in effect prior to July 

1, 1994 (20 U.S.C. 1078–1). 

101 

TITLE IX—AMENDMENTS TO OTHER 

EDUCATION LAWS 

PART A—EDUCATION OF THE DEAF ACT OF 1986 

SEC. 901. LAURENT CLERC NATIONAL DEAF EDUCATION CENTER. 

(a) GENERAL AUTHORITY.—Section 104(a)(1)(A) of the Education of the Deaf Act 

of 1986 (20 U.S.C. 4304(a)(1)(A)) is amended by inserting after ‘‘maintain and operate’’ the following: ‘‘, at the Laurent Clerc National Deaf Education Center,’’. (b) ADMINISTRATIVE REQUIREMENTS.— (1) IN GENERAL.—Section 104(b) of the Education of the Deaf Act of 1986 (20 

U.S.C. 4304(b)) is amended— (A) in the matter preceding subparagraph (A) of paragraph (1), by striking ‘‘elementary and secondary education programs’’ and inserting ‘‘Laurent 

Clerc National Deaf Education Center’’; and 

(B) in paragraph (2), by striking ‘‘elementary and secondary education 

programs’’ and inserting ‘‘Laurent Clerc National Deaf Education Center’’. (2) ACADEMIC CONTENT STANDARDS, ACHIEVEMENT STANDARDS, AND ASSESS- MENTS.—Section 104(b) of the Education of the Deaf Act of 1986 (20 U.S.C. 

4304(b)) is amended by adding at the end the following new paragraph: ‘‘(5) The University, in consultation with the Secretary and consistent with the 

mission of the elementary and secondary programs operated at the Laurent Clerc 

National Deaf Education Center, shall— ‘‘(A) not later than the beginning of the 2007–2008 school year, adopt and implement academic content standards, academic achievement standards, and academic assessments as described in paragraphs (1) and (3) of section 1111(b) of 

the Elementary and Secondary Education Act of 1965 for such Center; ‘‘(B) develop adequate yearly progress standards for such Center as described 

in section 1111(b)(2)(C) of such Act; and ‘‘(C) publicly report the results of such assessments, except in such case in 

which such reporting would not yield statistically reliable information or would 

reveal personally identifiable information about an individual student.’’. 

SEC. 902. AUTHORITY. 

Section 111 of the Education of the Deaf Act of 1986 (20 U.S.C. 4331) is amended 

by striking ‘‘the institution of higher education with which the Secretary has an 

agreement under this part’’ and inserting ‘‘the Rochester Institute of Technology’’. 

SEC. 903. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF. 

(a) GENERAL AUTHORITY.—Section 112(a) of the Education of the Deaf Act of 1986 

(20 U.S.C. 4332(a)) is amended— (1) in paragraph (1)— (A) in the first sentence— (i) by striking ‘‘an institution of higher education’’ and inserting ‘‘the 

Rochester Institute of Technology, Rochester, New York,’’; and 

(ii) by striking ‘‘of a’’ and inserting ‘‘of the’’; and 

(B) by striking the second sentence; and 

(2) in paragraph (2)—

(A) in the matter preceding subparagraph (A), by striking ‘‘the institution 

of higher education with which the Secretary has an agreement under this 

section’’ and inserting ‘‘the Rochester Institute of Technology’’; and 

(B) in subparagraph (B), by striking ‘‘the institution’’ and inserting ‘‘the 

Rochester Institute of Technology’’. 

(b) PROVISIONS OF AGREEMENT.—Section 112(b) of the Education of the Deaf Act 

of 1986 (20 U.S.C. 4332(b)) is amended—

(1) in paragraph (2), by striking ‘‘or other governing body of the institution’’

and inserting ‘‘of the Rochester Institute of Technology’’; and 

(2) in paragraph (3)—

(A) by striking ‘‘or other governing body of the institution’’ and inserting 

‘‘of the Rochester Institute of Technology’’; 

(B) by striking ‘‘the institution of higher education under the agreement 

with the Secretary’’ and inserting ‘‘the Rochester Institute of Technology by 

the National Technical Institute for the Deaf’’; and 

(C) by striking ‘‘Committee on Education and Labor of the House of Representatives and to the Committee on Labor and Human Resources of the 

Senate’’ and inserting ‘‘Committee on Education and the Workforce of the 

House of Representatives and to the Committee on Health, Education, 

Labor, and Pensions of the Senate’’. 

102 

(c) LIMITATION.—Section 112(c) of the Education of the Deaf Act of 1986 (20 

U.S.C. 4332(c)) is amended in paragraphs (1) and (2) by striking ‘‘institution’’ each 

place it appears and inserting ‘‘Rochester Institute of Technology’’. 

SEC. 904. DEFINITIONS. 

Section 201 of the Education of the Deaf Act of 1986 (20 U.S.C. 4351) is amended—

(1) by striking paragraph (3); 

(2) by redesignating paragraphs (4) through (7) as paragraphs (3) through (6), 

respectively; and 

(3) by adding at the end the following new paragraph: 

‘‘(7) The term ‘RIT’ means the Rochester Institute of Technology.’’. 

SEC. 905. AUDIT. 

(a) GOVERNMENT ACCOUNTABILITY OFFICE AUTHORITY.—Section 203(a) of the Education of the Deaf Act of 1986 (20 U.S.C. 4353(a)) is amended—

(1) in the heading, by striking ‘‘GENERAL ACCOUNTING OFFICE’’ and inserting 

‘‘GOVERNMENT ACCOUNTABILITY OFFICE’’; and 

(2) in the matter following paragraph (2), by striking ‘‘General Accounting Office’’ and inserting ‘‘Government Accountability Office’’. 

(b) INDEPENDENT FINANCIAL AND COMPLIANCE AUDIT.—Section 203(b)(1) of the 

Education of the Deaf Act of 1986 (20 U.S.C. 4353(b)(1)) is amended by striking the 

second sentence and inserting the following: ‘‘NTID shall have an annual independent financial and compliance audit made of RIT programs and activities, including NTID programs and activities.’’. 

(c) COMPLIANCE.—Section 203(b)(2) of the Education of the Deaf Act of 1986 (20 

U.S.C. 4353(b)(2)) is amended by striking ‘‘sections’’ and all that follows through 

‘‘section 207’’ and inserting ‘‘sections 102(b), 105(b)(4), 112(b)(5), 203(c), 207(b)(2), 

subsections (c) through (f) of section 207’’. 

(d) SUBMISSION OF AUDITS.—Section 203(b)(3) of the Education of the Deaf Act of 

1986 (20 U.S.C. 4353(b)(3)) is amended—

(1) by inserting after ‘‘Secretary’’ the following: ‘‘and the Committee on Education and the Workforce of the House of Representatives and the Committee 

on Health, Education, Labor, and Pensions of the Senate’’; and 

(2) by striking ‘‘or the institution authorized to establish and operate the 

NTID under section 112(a)’’ and inserting ‘‘or RIT’’. 

(e) LIMITATIONS REGARDING EXPENDITURE OF FUNDS.—Section 203(c)(2)(A) of the 

Education of the Deaf Act of 1986 (20 U.S.C. 4353(c)(2)(A)) is amended in the fifth 

sentence by striking ‘‘the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate’’ and 

inserting ‘‘the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the 

Senate’’. 

SEC. 906. REPORTS. 

(a) TECHNICAL AMENDMENTS.—Section 204 of the Education of the Deaf Act of 

1986 (20 U.S.C. 4354) is amended in the matter preceding paragraph (1)—

(1) by striking ‘‘or other governing body of the institution of higher education 

with which the Secretary has an agreement under section 112’’ and inserting 

‘‘of RIT’’; and 

(2) by striking ‘‘Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate’’

and inserting ‘‘Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of 

the Senate’’. 

(b) CONTENTS OF REPORT.—Section 204 of the Education of the Deaf Act of 1986 

(20 U.S.C. 4354) is amended—

(1) in paragraph (2)(C), by striking ‘‘upon graduation/completion’’ and inserting ‘‘within one year of graduation/completion’’; and 

(2) in paragraph (3)(B), by striking ‘‘of the institution of higher education with 

which the Secretary has an agreement under section 112, including specific 

schedules and analyses for all NTID funds, as required under section 203’’ and 

inserting ‘‘of RIT programs and activities’’. 

SEC. 907. LIAISON FOR EDUCATIONAL PROGRAMS. 

Section 206(a) of the Education of the Deaf Act of 1986 (20 U.S.C. 4356(a)) is 

amended by striking ‘‘Not later than 30 days after the date of enactment of this Act, 

the’’ and inserting ‘‘The’’. 

103 

SEC. 908. FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET UNIVERSITY AND THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF. 

Section 207(a)(2) of the Education of the Deaf Act of 1986 (20 U.S.C. 4357(a)(2)) 

is amended by striking ‘‘or other governing body of the institution of higher education with which the Secretary has an agreement under section 112’’ and inserting 

‘‘of RIT’’. 

SEC. 909. OVERSIGHT AND EFFECT OF AGREEMENTS. 

Section 208(a) of the Education of the Deaf Act of 1986 (20 U.S.C. 4359(a)) is 

amended—

(1) by striking ‘‘the institution of higher education with which the Secretary 

has an agreement under part B of title I’’ and inserting ‘‘RIT’’; and 

(2) by striking ‘‘Committee on Labor and Human Resources of the Senate and 

the Committee on Education and the Workforce of the House of Representatives’’ and inserting ‘‘Committee on Education and the Workforce of the House 

of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate’’. 

SEC. 910. AUTHORIZATION OF APPROPRIATIONS. 

(a) MONITORING AND EVALUATION ACTIVITIES.—Section 205(c) of the Education of 

the Deaf Act of 1986 (20 U.S.C. 4355(c)) is amended by striking ‘‘fiscal years 1998 

through 2003’’ and inserting ‘‘fiscal years 2006 through 2011’’. 

(b) FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET UNIVERSITY AND THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.—Section 207(h) of the Education of the 

Deaf Act of 1986 (20 U.S.C. 4357(h)) is amended in paragraphs (1) and (2) by striking ‘‘fiscal years 1998 through 2003’’ each place it appears and inserting ‘‘fiscal 

years 2006 through 2011’’. 

(c) GENERAL AUTHORIZATION OF APPROPRIATIONS.—Section 212 of the Education 

of the Deaf Act of 1986 (20 U.S.C. 4360a) is amended—

(1) in the matter preceding paragraph (1) in subsection (a), by striking ‘‘fiscal 

years 1998 through 2003’’ and inserting ‘‘fiscal years 2006 through 2011’’; and 

(2) in subsection (b), by striking ‘‘fiscal years 1998 through 2003’’ and inserting ‘‘fiscal years 2006 through 2011’’. 

(d) SHORT TITLE.—

(1) IN GENERAL.—The Education of the Deaf Act of 1986 (20 U.S.C. 4301 note) 

is amended by striking the matter preceding title I and inserting the following: 

‘‘SECTION 1. SHORT TITLE. 

‘‘This Act may be cited as the ‘Gallaudet University and National Technical Institute for the Deaf Act’.’’. 

(2) OTHER REFERENCES.— Any reference in a law, regulation, document, or 

other record of the United States to the Education of the Deaf Act of 1986 shall 

be deemed to be a reference to the Gallaudet University and National Technical 

Institute for the Deaf Act. 

PART B—ADDITIONAL EDUCATION LAWS 

SEC. 921. CANCELLATION OF STUDENT LOAN INDEBTEDNESS FOR SURVIVORS OF VICTIMS OF 

THE SEPTEMBER 11, 2001, ATTACKS. 

(a) DEFINITIONS.—For purposes of this section: 

(1) ELIGIBLE PUBLIC SERVANT.—The term ‘‘eligible public sesrvant’’ means an 

individual who, as determined in accordance with regulations of the Secretary—

(A) served as a police officer, firefighter, other safety or rescue personnel, 

or as a member of the Armed Forces; and 

(B) died (or dies) or became (or becomes) permanently and totally disabled due to injuries suffered in the terrorist attack on September 11, 2001. 

(2) ELIGIBLE VICTIM.—The term ‘‘eligible victim’’ means an individual who, as 

determined in accordance with regulations of the Secretary, died (or dies) or became (or becomes) permanently and totally disabled due to injuries suffered in 

the terrorist attack on September 11, 2001. 

(3) ELIGIBLE PARENT.—The term ‘‘eligible parent’’ means the parent of an eligible victim if—

(A) the parent owes a Federal student loan that is a consolidation loan 

that was used to repay a PLUS loan incurred on behalf of such eligible victim; or 

(B) the parent owes a Federal student loan that is a PLUS loan incurred 

on behalf of an eligible victim. 

(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Education. 

104 

(5) FEDERAL STUDENT LOAN.—The term ‘‘Federal student loan’’ means any 

loan made, insured, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965. 

(b) RELIEF FROM INDEBTEDNESS.—

(1) IN GENERAL.—The Secretary shall provide for the discharge or cancellation 

of—

(A) the Federal student loan indebtedness of the spouse of an eligible 

public servant, as determined in accordance with regulations of the Secretary, including any consolidation loan that was used jointly by the eligible 

public servant and his or her spouse to repay the Federal student loans of 

the spouse and the eligible public servant; 

(B) the portion incurred on behalf of the eligible victim (other than an 

eligible public servant), of a Federal student loan that is a consolidation 

loan that was used jointly by the eligible victim and his or her spouse, as 

determined in accordance with regulations of the Secretary, to repay the 

Federal student loans of the eligible victim and his or her spouse; 

(C) the portion of the consolidation loan indebtedness of an eligible parent 

that was incurred on behalf of an eligible victim; and 

(D) the PLUS loan indebtedness of an eligible parent that was incurred 

on behalf of an eligible victim. 

(2) METHOD OF DISCHARGE OR CANCELLATION.—A loan required to be discharged or canceled under paragraph (1) shall be discharged or canceled by the 

method used under section 437(a), 455(a)(1), or 464(c)(1)(F) of the Higher Education Act of 1965 (20 U.S.C. 1087(a), 1087e(a)(1), 1087dd(c)(1)(F)), whichever 

is applicable to such loan. 

(c) FACILITATION OF CLAIMS.—The Secretary shall—

(1) establish procedures for the filing of applications for discharge or cancellation under this section by regulations that shall be prescribed and published 

within 90 days after the date of enactment of this Act and without regard to 

the requirements of section 553 of title 5, United States Code; and 

(2) take such actions as may be necessary to publicize the availability of discharge or cancellation of Federal student loan indebtedness under this section. 

(d) AVAILABILITY OF FUNDS FOR PAYMENTS.—Funds available for the purposes of 

making payments to lenders in accordance with section 437(a) for the discharge of 

indebtedness of deceased or disabled individuals shall be available for making payments under section 437(a) to lenders of loans as required by this section. 

(e) APPLICABLE TO OUTSTANDING DEBT.—The provisions of this section shall be applied to discharge or cancel only Federal student loans (including consolidation 

loans) on which amounts were owed on September 11, 2001. Nothing in this section 

shall be construed to authorize any refunding of any repayment of a loan. 

SEC. 922. AMENDMENT TO HIGHER EDUCATION AMENDMENTS OF 1998. 

(a) REPEALS OF EXPIRED AND EXECUTED PROVISIONS.—The following provisions of 

the Higher Education Amendments of 1998 are repealed: 

(1) STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT LOAN PROGRAMS.—

Section 801 (20 U.S.C. 1018 note). 

(2) STUDY OF FEASIBILITY OF ALTERNATE FINANCIAL INSTRUMENTS FOR DETERMINING LENDER YIELDS.—Section 802. 

(3) STUDENT RELATED DEBT STUDY.—Section 803 (20 U.S.C. 1015 note). 

(4) STUDY OF OPPORTUNITIES FOR PARTICIPATION IN ATHLETIC PROGRAMS.—Section 805 (20 U.S.C. 1001 note). 

(5) COMMUNITY SCHOLARSHIP MOBILIZATION.—Part C of title VIII (20 U.S.C. 

1070 note). 

(6) INCARCERATED YOUTH.—Part D of title VIII (20 U.S.C. 1151). 

(7) IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, AND

TECHNOLOGY IN EAST ASIA.—Part F of title VIII (42 U.S.C. 1862 note). 

(8) WEB-BASED EDUCATION COMMISSION.—Part J of title VIII. 

(b) EXTENSIONS OF AUTHORIZATIONS AND STUDIES.—

(1) TRANSFER OF CREDIT.—Section 804(b) of such Act (20 U.S.C. 1099b note) 

is amended—

(A) by striking ‘‘one year after the date of enactment of this Act’’ and inserting ‘‘September 30, 2007’’; and 

(B) by inserting ‘‘and policies of institutions of higher education’’ after 

‘‘agencies or associations’’. 

(2) COHORT DEFAULT RATE STUDY.—Section 806 of such Act is amended—

(A) in subsection (a), by striking ‘‘higher education at which less’’ and inserting ‘‘higher education. The study shall also review the effect of cohort 

default rates specifically on institutions of higher education at which less’’; 

and 

105 

(B) in subsection (c), by striking ‘‘September 30, 1999,’’ and inserting 

‘‘September 30, 2007,’’. 

(3) VIOLENCE AGAINST WOMEN.—Section 826 of such Act (20 U.S.C. 1152) is 

amended—

(A) in subsection (g), by striking ‘‘for each of the fiscal years 2001 through 

2005’’ and inserting ‘‘fiscal year 2006 and each of the 5 succeeding fiscal 

years’’; and 

(B) by redesignating subsections (f) and (g) as subsections (e) and (f), respectively. 

(4) UNDERGROUND RAILROAD.—Subsection (c) of section 841 (20 U.S.C. 

1153(c)) is amended to read as follows: 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated 

to carry out this section $3,000,000 for fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years.’’. 

(c) DISBURSEMENT OF STUDENT LOANS.—Section 422(d) of the Higher Education 

Amendments of 1998 (Public Law 105–244; 112 Stat. 1696) is amended by adding 

at the end the following new sentence: ‘‘Such amendments shall also be effective on 

and after July 1, 2006.’’. 

SEC. 923. TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY ASSISTANCE ACT OF 1978. 

(a) TITLE I AUTHORIZATION.—Section 110(a) of the Tribally Controlled Community 

College or University Assistance Act of 1978 (25 U.S.C. 1810(a)) is amended—

(1) by striking ‘‘1999’’ each place it appears and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ each place it appears and inserting ‘‘5 succeeding’’. 

(b) TITLE III REAUTHORIZATION.—Section 306(a) of the Tribally Controlled Community College or University Assistance Act of 1978 (25 U.S.C. 1836(a)) is amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

(c) TITLE IV REAUTHORIZATION.—Section 403 of the Tribal Economic Development 

and Technology Related Education Assistance Act of 1990 (25 U.S.C. 1852) is 

amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

(d) ADDITIONAL AMENDMENTS.—The Tribally Controlled Community College or 

University Assistance Act of 1978 is further amended—

(1) in section 2(a)(6) (25 U.S.C. 1801(a)(6)), by striking ‘‘in the field of Indian 

education’’ and inserting ‘‘in the field of Tribal Colleges and Universities and 

Indian higher education’’; 

(2) in section 2(b), by striking paragraph (5) and inserting the following: 

‘‘(5) Eligible credits earned in a continuing education program shall be determined as one credit for every 10 contact hours for institutions on a quarter system, and 15 contact hours for institutions on a semester system, of participation 

in an organized continuing education experience under responsible sponsorship, 

capable direction, and qualified instruction, as described in the criteria established by the International Association for Continuing Education and Training, 

and may not exceed 20 percent of an institution’s total Indian student count.’’; 

and 

(3) in section 103 (25 U.S.C. 1804), by striking ‘‘and’’ at the end of paragraph 

(2), by striking the period at the end of paragraph (3) and inserting ‘‘; and’’, and 

by inserting after paragraph (3) the following new paragraph: 

‘‘(4) has been accredited by a nationally recognized accrediting agency or association determined by the Secretary of Education 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.’’. 

SEC. 924. NAVAJO COMMUNITY COLLEGE ACT. 

Section 5(a)(1) of the Navajo Community College Act (25 U.S.C. 640c–1(a)(1)) is 

amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

SEC. 925. EDUCATION AMENDMENTS OF 1992. 

Section 1543(d) of the Education Amendments of 1992 (20 U.S.C. 1070 note) is 

amended—

(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; and 

(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’. 

106 

SEC. 926. STUDY OF STUDENT LEARNING OUTCOMES AND PUBLIC ACCOUNTABILITY. 

(a) STUDY REQUIRED.—The Secretary shall provide for the conduct a study of the 

best practices of States in assessing undergraduate postsecondary student learning, 

particularly as such practices relate to public accountability systems. 

(b) CHARACTERISTICS OF THE ASSOCIATION.—Such study shall be conducted by an 

association or organization with specific expertise and knowledge in state practices 

and access to necessary state officials (in this section referred to as the ‘‘association’’). The association responsible for the study under this section shall be a national, non-partisan or bi-partisan entity representing States or State officials with 

expertise in evaluative and qualitative policy research for best practice models, the 

capacity to convene experts, and to formulate policy recommendations. 

(c) REQUIRED SUBJECTS OF STUDY.—In performing the study, the association shall, 

at a minimum, examine the following: 

(1) The current status of institutional and state efforts to embed student 

learning assessments into the state-level public accountability frameworks. 

(2) The extent to which there is commonality among educators and accrediting agencies on learning standards for the associates and bachelors degrees. 

(3) The reliability, rigor, and generalizability of available instruments to assess general education at the undergraduate level. 

(4) Roles and responsibilities for public accountability for student learning. 

(d) CONSULTATION.—

(1) NATIONAL COMMITTEE.—The association shall establish and consult with 

a national committee. The committee shall meet not less than twice a year to 

review the research, identify best practice models, and review recommendations. 

(2) MEMBERSHIP.—The national advisory committee shall consist of a representative of the Secretary of Education and individuals with expertise in—

(A) State accountability systems; 

(B) student learning assessments; 

(C) student flow data; 

(D) transitions between K–12 and higher education; and 

(E) Federal higher education policy. 

(3) ADDITIONAL EXPERTISE.—The association may augment this committee 

with other expertise, as appropriate. 

(e) CONGRESSIONAL CONSULTATION.—The association shall consult on a regular 

basis with the Committee on Education and the Workforce of the House of Representatives and the Committee on Health Education Labor and Pensions of the 

Senate in carrying out the study required by this section. 

(f) REPORT.—The association shall, not later than two years after the date of enactment of this Act, prepare and submit a report on the study required by this section to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate. 

SEC. 927. STUDY OF MINORITY GRADUATION RATES. 

(a) STUDY REQUIRED.—The Secretary of Education shall—

(1) commission a national study on the decreasing numbers of underrepresented minority males, particularly African American males, entering and 

graduating from colleges and universities; and 

(2) make specific recommendations to the Congress on new approaches to increase minority male graduation rates and the number of minority males going 

into careers where the population is underrepresented. 

(b) SUBMISSION OF REPORT.—Not later than one year after the date of the enactment this Act, the Secretary shall submit a report on the study required by subsection (a)(1), together with the recommendations required by subsection (a)(2), to 

the Committee on Health, Education, Labor and Pensions of the Senate and the 

Committee on Education and the Workforce of the House of Representatives. 

SEC. 928. STUDY OF EDUCATION-RELATED INDEBTEDNESS OF MEDICAL SCHOOL GRADUATES. 

(a) STUDY REQUIRED.—The Secretary of Education shall conduct a study to evaluate the higher education-related indebtedness of medical school graduates in the 

United States at the time of graduation. 

(b) DEADLINE.—Not later than one year after the date of enactment of this Act, 

the Secretary shall submit a report on the study required by subsection (a) to the 

Committee on Education and the Workforce of the House of Representatives and the 

Committee on Health, Education, Labor and Pensions of the Senate, and shall make 

the report widely available to the public. Additional reports may be periodically prepared and released as necessary. 

SEC. 929. STUDY OF ADULT LEARNERS. 

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dressing the needs of this specific population in terms of outreach, accessibility, financing, and student support services, including online education. The Secretary 

shall submit a report on the study to the Committee on Education and the Workforce of the House of Representatives that includes recommendations on measures 

the Federal Government can take to address the needs in regards to education and 

job training for the aging population and the changing demographics of our country. 

SEC. 930. INCREASE IN COLLEGE TEXTBOOK PRICES. 

(a) FINDINGS.—The Committee on Education and the Workforce of the House of 

Representatives makes the following findings: 

(1) The rising costs of higher education are making a postsecondary education 

inaccessible for many individuals. 

(2) The rise in college textbook pricing contributes to the overall costs of higher education, and many factors have contributed to the rise in textbook pricing. 

(b) SENSE OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE.—It is the 

sense of the Committee on Education and the Workforce of the House of Representatives that in order to make a higher education more accessible for all students, the 

following should occur to make college textbooks more affordable for students: 

(1) The Congress encourages textbook publishers to provide students with the 

option of buying materials such as textbooks, CD-ROMs, access to websites, and 

workbooks, ‘‘a la carte’’ or ‘‘unbundled’’. 

(2) Textbook publishers should work with faculty to understand the cost to 

students of purchasing the recommended textbooks. 

(3) College bookstores should work with faculty to review timelines and processes for ordering and stocking selected textbooks, and disclose textbook costs 

to faculty and students. 

(4) Colleges and universities should be encouraged to implement numerous 

options to address textbook affordability. 

PURPOSE

H.R. 609, the College Access and Opportunity Act, reauthorizes 

the Higher Education Act of 1965 by expanding college access for 

low- and middle-income students. The bill reauthorizes the teacher 

training programs, student aid programs, programs that assist minority serving institutions, graduate study programs, international 

and foreign language programs, and various provisions that support and enhance student access and institutional accountability. 

The bill includes comprehensive reforms that prioritize student access and strengthen accountability to empower students and parents, the consumers of higher education. 

COMMITTEE ACTION

On May 24, 2001, the Chairman of the Education and the Workforce Committee and the Chairman of the Subcommittee on 21st 

Century Competitiveness, along with the Ranking Members, invited interested parties to provide the Committee with proposals, 

suggestions and ideas for improvements to the expiring Higher 

Education Act. The initiative was called ‘‘Upping the Effectiveness 

of Our Federal Student Aid Programs (FED UP).’’ As part of the 

Committee’s successful ‘‘FED UP’’ project, an email address and 

web site were developed to allow individuals, organizations, higher 

education institutions, lenders and citizens to contact the Committee with ease and efficiency. The Committee considered over 

3,000 submissions from individuals and more than 100 organizations on this initiative, as part of the reauthorization process. 

The Committee on Education and the Workforce and the Subcommittees on 21st Century Competitiveness and Select Education 

held a total of 35 hearings in Washington, D.C. and across the 

country, as well as a series of site visits to many institutions of 

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higher education in preparation for and as part of the reauthorization of the Higher Education Act. 

107TH CONGRESS

Hearings—First session 

On Monday, April 23, 2001, the Committee on Education and the 

Workforce, Subcommittee on Select Education, held a field hearing 

in Oklahoma City, Oklahoma, on ‘‘Responding to the Needs of Historically Black Colleges and Universities in the 21st Century.’’ The 

purpose of the hearing was to examine the unique role of Historically Black Colleges and Universities (HBCUs) and their role in the 

higher education system. Testifying before the Subcommittee were 

Dr. Ernest L. Holloway, President, Langston University, Langston, 

Oklahoma; Dr. Henry Ponder, Chief Executive Officer and President, National Association for Equal Opportunity in Higher Education, Silver Spring, Maryland; Dr. Trudie Kibbe Reed, President, 

Philander Smith College, Little Rock, Arkansas; Dr. Lawrence A. 

Davis, Jr., Chancellor, University of Arkansas at Pine Bluff, Pine 

Bluff, Arkansas; and Dr. Joseph Simmons, Executive Vice President, Lincoln University, Jefferson City, Missouri. 

On Wednesday, June 20, 2001, the Committee on Education and 

the Workforce, Subcommittee on 21st Century Competitiveness, 

held a hearing in Washington, D.C., on ‘‘H.R. 1992, the Internet 

Equity and Education Act of 2001.’’ The purpose of the hearing was 

to hear testimony on the provisions in H.R. 1992 introduced by 

Representative Johnny Isakson (R–GA) on May 24, 2001. Testifying before the Subcommittee were Dr. Stanley Ikenberry, President, American Council on Education, Washington, D.C.; Dr. Richard Gowan, President, South Dakota School of Mines and Technology, Rapid City, South Dakota; Dr. Joseph DiGregorio, Vice Provost for Distance Learning, Continuing Education and Outreach, 

Georgia Institute of Technology, Atlanta, Georgia; Ms. Lorraine 

Lewis, Inspector General, U.S. Department of Education, Washington, D.C.; and Mr. Omer Waddles, Executive Vice President, 

ITT Educational Services, Inc., Indianapolis, Indiana. 

On Monday, July 16, 2001, the Committee on Education and the 

Workforce, Subcommittee on Select Education, held a field hearing 

in Wilberforce, Ohio, on ‘‘Responding to the Needs of Historically 

Black Colleges and Universities in the 21st Century.’’ The purpose 

of the hearing was to examine the unique role of Historically Black 

Colleges and Universities (HBCUs) and their role in the higher 

education system. Testifying before the Subcommittee were Dr. 

John L. Henderson, President, Wilberforce University, Wilberforce, 

Ohio; Dr. John W. Garland, President, Central State University, 

Wilberforce, Ohio; Dr. W. Clinton Pettus, President, Cheyney University of Pennsylvania, Cheyney, Pennsylvania; and Dr. Marjorie 

Harris, President, Lewis College of Business, Detroit, Michigan. 

On Wednesday, October 31, 2001, the Committee on Education 

and the Workforce, Subcommittees on 21st Century Competitiveness and Select Education, jointly held a hearing in Washington, 

D.C., on ‘‘Tracking International Students in Higher Education—

Policy Options and Implications for Students.’’ The purpose of the 

hearing was to examine the issues related to international students 

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fying before the Subcommittees on the first panel were Ms. Mary 

Ryan, Assistant Secretary of State for Consular Affairs, U.S. Department of State, Washington, D.C.; and Mr. Michael Becraft, Acting Deputy Commissioner, Immigration and Naturalization Service, Washington, D.C. Testifying before the Subcommittees on the 

second panel were Dr. David Ward, President, American Council on 

Education, Washington, D.C.; Dr. Gail Short Hanson, Vice President of Student Services, American University, Washington D.C.; 

and Ms. Julia Beatty, President, United States Student Association, Washington, D.C. 

Second session 

On Wednesday, February 13, 2002, the Committee on Education 

and the Workforce, Subcommittees on 21st Century Competitiveness and Select Education, jointly held a hearing in Washington, 

D.C., on ‘‘Responding to the Needs of Historically Black Colleges 

and Universities in the 21st Century.’’ The purpose of the hearing 

was to examine the unique role played by Historically Black Colleges and Universities (HBCUs) and to examine the unique issues 

these institutions face. Testifying before the Subcommittees were 

Dr. William B. DeLauder, President, Delaware State University, 

Dover, Delaware; Dr. Frederick S. Humphries, Chief Executive Officer and President, National Association for Equal Opportunity in 

Higher Education, Silver Spring, Maryland; Dr. Shirley A.R. Lewis, 

President, Paine College, Augusta, Georgia; and Mr. Christopher 

Elders, student and Rhodes Scholar, Morehouse College, Atlanta, 

Georgia. 

On Tuesday, July 16, 2002, the Committee on Education and the 

Workforce held a hearing in Washington, D.C., on ‘‘Access to Higher Education for Low-Income Students: A Review of the Advisory 

Committee on Student Financial Assistance Report.’’ The purpose 

of the hearing was to consider the issue of access to postsecondary 

education, specifically for low-income students, by examining two 

reports released by the Advisory Committee on Student Financial 

Assistance, entitled Empty Promises—The Myth of College Access 

in America (July 2002) and Access Denied (February 2001). Testifying before the Committee were Dr. Juliet Garcia, Chairperson, 

Advisory Committee on Student Financial Assistance, Washington, 

D.C.; Mr. Lawrence E. Gladieux, Education and Public Policy Consultant, Potomac Falls, Virginia; Dr. Shirley A.R. Lewis, President, 

Paine College, Augusta, Georgia; and Ms. Elizabeth Sengkhammee, 

student, University of Wisconsin-Milwaukee, Milwaukee, Wisconsin. 

On Thursday, September 19, 2002, the Committee on Education 

and the Workforce, Subcommittees on 21st Century Competitiveness and Select Education held a joint hearing in Washington, 

D.C., on ‘‘Responding to the Needs of Historically Black Colleges 

and Universities in the 21st Century.’’ The purpose of the hearing 

was to continue efforts to learn about the unique role that Historically Black Colleges and Universities (HBCUs) play in providing 

postsecondary education to students. Testifying before the Subcommittees were Dr. Michael L. Lomax, President, Dillard University, New Orleans, Louisiana; Dr. Marie McDemmond, President, 

Norfolk State University, Norfolk, Virginia; Dr. Willis B. McLeod, 

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lina; Dr. Elson S. Floyd, President, Western Michigan State University, Kalamazoo, Michigan; and Mr. Steve Stephens, II, President, Student Governing Association, Langston University, 

Langston, Oklahoma. 

On Tuesday, September 24, 2002, the Committee on Education 

and the Workforce, Subcommittees on 21st Century Competitiveness and Select Education held a joint hearing in Washington, 

D.C., on ‘‘Homeland Security: Tracking International Students in 

Higher Education—Progress & Issues Since 9–11.’’ The purpose of 

the hearing was to learn about the implementation of the Student 

Exchange and Visitor Information System (SEVIS); the issues still 

outstanding in having SEVIS fully operational; and the interaction 

between institutions of higher education, the Immigration and Naturalization Service (INS) and the U.S. Department of State. Testifying before the Subcommittees were Mr. Glenn A. Fine, Inspector 

General, U.S. Department of Justice, Washington, D.C.; Ms. Janis 

Sposato, Assistant Deputy Executive, Associate Commissioner for 

Immigration Services Division, Immigration and Naturalization 

Service, Washington, D.C.; Mr. Stephen A. Edson, Acting Managing 

Director, Directorate of Visa Services, Bureau of Consular Affairs, 

U.S. Department of State, Washington, D.C.; and Dr. David Ward, 

President, American Council on Education, Washington, D.C. 

On Tuesday, October 1, 2002, the Committee on Education and 

the Workforce, Subcommittee on 21st Century Competitiveness 

held a hearing in Washington, D.C., on ‘‘Assuring Quality and Accountability in Postsecondary Education: Assessing the Role of Accreditation.’’ The purpose of the hearing was to learn more about 

the accreditation process, how regional and national accreditors 

interact, and the specific roles and responsibilities of accrediting 

agencies. Testifying before the Subcommittee were Dr. Judith S. 

Eaton, President, Council for Higher Education Accreditation, 

Washington, D.C.; Dr. Charles M. Cook, Director, Commission of 

Institutions of Higher Education, New England Association of 

Schools and Colleges, Bedford, Massachusetts; Dr. Laura Palmer 

Noone, President, University of Phoenix, Phoenix, Arizona; the 

Honorable Hank Brown, President and Chief Executive Officer, 

Daniels Fund, Greeley, Colorado; and Dr. Linwood Rose, President, 

James Madison University, Harrisonburg, Virginia. 

On Thursday, October 3, 2002, the Committee on Education and 

the Workforce held a hearing in Washington, D.C., on ‘‘The Rising 

Price of a Quality Postsecondary Education: Fact or Fiction?’’ The 

purpose of this hearing was to examine the effects that increasing 

costs of a postsecondary education have on students and families. 

Testifying before the Committee were Dr. Robert A. Corrigan, 

President, San Francisco State University, San Francisco, California; Dr. Richard M. Freeland, President, Northeastern University, Boston, Massachusetts; Dr. C.D. Mote, Jr., Professor of Engineering (testifying on behalf of Dr. William Kirwan, President, University of Maryland), Glenn L. Martin Institute, College Park, 

Maryland; and Dr. Gordon Winston, Economics Professor, Williams 

College, Williamstown, Massachusetts. 

On Wednesday, October 9, 2002, the Committee on Education 

and the Workforce, Subcommittee on 21st Century Competitiveness 

held a hearing in Washington, D.C., on ‘‘Training Tomorrow’s 

Teachers: Ensuring a Quality Postsecondary Education.’’ The purVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00114 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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pose of the hearing was to examine the effectiveness of the competitive grant programs authorized under title II of the Higher 

Education Act and also to examine the accountability provisions for 

teacher preparation programs under the Act. Testifying before the 

Subcommittee were Ms. Cornelia M. Ashby, Director of Education, 

Workforce and Income Security Issues, U.S. Government Accountability Office, Washington, D.C.; Mr. Wendell Cave, Division of 

Testing, Research and Internship, Education Professional Standards Board, Frankfort, Kentucky; Mr. Steven Brandick, Director of 

the Career Ladder Office, Los Angeles Unified School District, Los 

Angeles, California; Mr. Kurt Landgraf, President & Chief Executive Officer, Educational Testing Service, Princeton, New Jersey; 

and Dr. Allen Mori, Dean of the Charter College of Education, California State University, Los Angeles, California. 

Legislative action—First session 

On May 24, 2001, Representatives Johnny Isakson (R–GA), John 

Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Mike Castle 

(R–DE), and Bob Goodlatte (R–VA) introduced H.R. 1992, the 

Internet Equity and Education Act of 2001, to amend the Higher 

Education Act and repeal the 50 percent rule for telecommunications and make additional reforms regarding distance education. 

On June 28, 2001, the Subcommittee on 21st Century Competitiveness considered H.R. 1992 in legislative session and reported it 

favorably, as amended, to the Committee on Education and the 

Workforce by voice vote. The Subcommittee considered and adopted 

by voice vote the following amendments to H.R. 1992: • Representative Isakson (R–GA) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation. Specifically, the amendment clarified provisions 

dealing with incentive compensation and third-party service 

providers. • Representative Wu (D–OR) offered an amendment to require a study and a report on the effect of the provisions enacted by H.R. 1992. 

On August 1, 2001, the Committee on Education and the Workforce considered H.R. 1992 in legislative session and reported it favorably, as amended, to the House of Representatives by a vote of 

31–10. The Committee considered and adopted by voice vote the 

following amendments to H.R. 1992: 

• Representative Isakson (R–GA) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation. Specifically, the amendment made modifications to 

the 50 percent rule for telecommunications. Additionally, the 

amendment modified the 12–hour rule to require non-traditional programs that provide less than 12 scheduled hours of 

instruction to notify the Secretary of Education. 

• Representative Miller (D–CA) offered an amendment to 

authorize the Learning Anytime Anywhere Partnership Grants 

at $30 million, an increase from the current law authorization 

of $10 million. 

Legislative action—Second session 

On July 11, 2002, Representatives Lindsey Graham (R–SC), John 

Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Todd Platts 

112 

(R–PA), James Greenwood (R–PA), Johnny Isakson (R–GA), Charlie Norwood (R–GA), John Cooksey (R–LA), Sam Graves (R–MO), 

Van Hilleary (R–TN), Todd Tiahrt (R–KS), Richard Burr (R–NC), 

Ileana Ros-Lehtinen (R–FL) introduced H.R. 5091, the Canceling 

Loans to Allow School Systems to Attract Classroom Teachers Act 

(CLASS ACT), which amended the Higher Education Act to provide 

discretionary loan forgiveness of up to $17,500 for math, science 

and special education teachers. 

On Thursday, September 5, 2002, the Committee on Education 

and the Workforce considered H.R. 5091 in legislative session and 

reported favorably, as amended to the House of Representatives by 

voice vote. The Committee considered and adopted by voice vote 

the following amendments to H.R. 5091: 

• Representative Graham (R–SC) offered a substitute 

amendment to make technical and clarifying changes to the 

legislation. 

• Representative Kind (D–WI) offered an amendment to 

have the Secretary of Education notify local educational agencies eligible to participate in the Small Rural Achievement Program of the benefits provided by the teacher loan forgiveness 

program within H.R. 5091, and to encourage those agencies to 

notify their teachers of the program. 

• Representative Holt (D–NJ) offered an amendment to set 

a priority for teacher loan forgiveness for those teachers teaching math or science, or special education teachers. 

• Representative Miller (D–CA) offered an amendment to set 

a priority for teacher loan forgiveness for those teachers employed in local educational agencies that are determined by the 

State educational agency to have failed to make progress toward annual increases in the employment of highly qualified 

teachers as required by the Elementary and Secondary Act of 

1965, for two consecutive years. 

• Representative McCarthy (D–NY) offered an amendment 

to provide loan forgiveness for spouses of victims who died or 

became permanently and totally disabled as a result of the terrorist attacks on September 11, 2001. The amendment also 

provided for forgiveness of the consolidation loan debt of surviving spouses who consolidated their loans together with the 

victim, as well as parent loans if the child on whose behalf the 

loan was taken died or become totally and permanently disabled as a result of the September 11th attacks. 

108TH CONGRESS

Hearings—First session 

On Tuesday, May 13, 2003, the Committee on Education and the 

Workforce held a hearing in Washington, D.C., on ‘‘The State of 

American Higher Education: What Are Parents, Students and Taxpayers Getting for Their Money?’’ The purpose of the hearing was 

to learn what institutions of higher education can and should be 

doing to assure the American public that the investment in higher 

education by a student, parent or taxpayer is one that will produce 

results and assist with lifelong career pursuits. Testifying before 

the Committee were Mr. Charles Miller, Chairman, University of 

Texas System, Board of Regents, Houston, Texas; Dr. Frank NewVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00116 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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man, Director, The Futures Project, Brown University, Providence, 

Rhode Island; and Dr. Mary Ellen Duncan, President, Howard 

Community College, Columbia, Maryland. 

On Tuesday, May 20, 2003, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

hearing in Washington, D.C., on ‘‘America’s Teacher Colleges: Are 

They Making the Grade?’’ The purpose of the hearing was to discuss whether teacher colleges and other teacher preparation programs are producing a competent cadre of teachers. Testifying before the Subcommittee were Mrs. Lisa Graham Keegan, Chief Executive Officer, Education Leaders Council, Washington, D.C.; Ms. 

Kati Haycock, Director, The Education Trust, Washington, D.C.; 

Dr. Arthur E. Wise, President, National Council for Accreditation 

of Teacher Education, Washington, D.C.; Dr. Louanne Kennedy, 

Provost & Vice President for Academic Affairs, California State 

University—Northridge, Northridge, California; Dr. Jerry Robbins, 

Dean, College of Education, Eastern Michigan University, Ypsilanti, Michigan; and Dr. Joyce R. Coppin, Chief Executive, Division 

of Human Resources, New York City Department of Education, 

Brooklyn, New York. 

On Thursday, June 19, 2003, the Committee on Education and 

the Workforce, Subcommittee on Select Education, held a hearing 

in Washington, D.C., on ‘‘International Programs in Higher Education and Questions about Bias.’’ The purpose of the hearing was 

to learn how programs authorized under title VI of the Higher 

Education Act can provide innovative ways to help bridge the international knowledge gap and also to learn about the merits of, and 

concern for, Federal support given to some of the international education programs that have been questioned in regard to their 

teachings. Testifying before the Subcommittee were Dr. Foster 

Roden, Professor, University of North Texas, College of Business, 

Denton, Texas; Dr. Stanley Kurtz, Research Fellow, Hoover Institution, Contributing Editor, National Review Online, Washington, 

D.C.; Dr. Terry Hartle, Senior Vice President, American Council on 

Education, Washington, D.C.; Ms. Vivian Stewart, Vice President 

for Education, Asia Society, New York, New York; and Dr. Gilbert 

W. Merkx, Vice Provost for International Affairs, Duke University, 

Durham, North Carolina. 

On Thursday, July 10, 2003, the Committee on Education and 

the Workforce, Subcommittee on 21st Century Competitiveness, 

held a hearing in Washington, D.C., on ‘‘Affordability in Higher 

Education: We Know There’s a Problem; What’s the Solution?’’ The 

purpose of the hearing was to examine the effects of ever-rising college tuition and debate some of the possible solutions to this problem. Testifying before the Subcommittee were Dr. Sandy Baum, 

Professor, Skidmore College, Saratoga Springs, New York; Mr. 

Scott Ross, Executive Director, Florida Student Association, Tallahassee, Florida; Dr. Carol Twigg, Executive Director, Center for 

Academic Transformation, Troy, New York; Dr. Rolf Wegenke, 

President, Wisconsin Association of Independent Colleges and Universities, Madison, Wisconsin; and Dr. Patrick Kirby, Vice President and Dean of Enrollment Services, Westminster College, Fulton, Missouri. 

On Tuesday, July 15, 2003, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

114 

hearing in Washington, D.C., on ‘‘Expanding Access to College in 

America: How the Higher Education Act Can Put College Within 

Reach.’’ The purpose of this hearing was to examine the college access programs that currently exist at a national, state and local 

level; to hear recommendations for improvements in these programs; and to learn what provisions in the law may currently prohibit some postsecondary institutions from accessing resources that 

would enable them to work more closely with various student populations. Testifying before the Subcommittee were Dr. Richard 

Fonte ́, President, Austin Community College, Austin, Texas; Ms. 

Teri Flack, Deputy Commissioner, Texas Higher Education Coordinating Board, Austin, Texas; Mr. Mark Dreyfus, President, ECPI 

College of Technology, Virginia Beach, Virginia; Ms. Christina 

Milano, Executive Director, National College Access Network, 

Cleveland, Ohio; and Dr. Arnold Mitchem, President, Council for 

Opportunity in Education, Washington, D.C. 

On Tuesday, July 22, 2003, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

hearing in Washington, D.C., on ‘‘Consolidation Loans: What’s Best 

for Past Borrowers, Future Students & U.S. Taxpayers?’’ The purpose of the hearing was to learn how the consolidation loan program fits into the mission of the Higher Education Act by increasing access and affordability to students pursuing postsecondary 

education, and to learn more about whether the program is fair for 

all borrowers. The first panel testifying before the Subcommittee 

included The Honorable Ralph Regula (R–OH), U.S. House of Representatives, Chairman, Subcommittee on Labor, Health and 

Human Services, and Education, Committee on Appropriations, 

Washington, D.C., and The Honorable Rosa DeLauro (D–CT), U.S. 

House of Representatives, Member, Subcommittee on Labor, 

Health and Human Services, and Education, Committee on Appropriations, Washington, D.C. The second panel testifying before the 

Subcommittee included Ms. Rebecca Wasserman, Vice President, 

United States Student Association, Washington, D.C.; Ms. June 

McCormack, Executive Vice President, Sallie Mae, Fishers, Indiana; Mr. Paul Wozniak, Managing Director and Manager, Education Loan Group, UBS Financial Services, Inc., New York, New 

York; Dr. Dallas Martin, President, National Association of Student 

Financial Aid Administrators, Washington, D.C.; and Mr. Barry 

Morrow, Chief Executive Officer, Collegiate Funding Services, 

Fredericksburg, Virginia. 

On Tuesday, September 9, 2003, the Committee on Education 

and the Workforce, Subcommittee on Select Education, held a hearing in Washington, D.C., on ‘‘Beyond Baccalaureate: Graduate Programs in the Higher Education Act.’’ The purpose of the hearing 

was to learn about the various graduate programs authorized 

under title VII of the Higher Education Act and to hear suggestions 

for the reauthorization of these programs. Testifying before the 

Subcommittee were Dr. Earl Lewis, Dean of the Graduate School, 

Rackham School of Graduate Studies, University of Michigan, Ann 

Arbor, Michigan; Mr. Daniel Hall, Vice President of University Relations, University of Louisville, Louisville, Kentucky; Dr. William 

B. Allen, Department of Political Science, Michigan State University, East Lansing, Michigan; and Dr. Blandina ‘‘Bambi’’ Cardenas, 

115 

Associate Professor and Dean of Education, University of Texas— San Antonio, San Antonio, Texas. 

On Thursday, September 11, 2003, the Committee on Education 

and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on ‘‘H.R. 3039, the Expanding Opportunities in Higher Education Act of 2003.’’ The purpose of the hearing was to hear testimony regarding the provisions 

in H.R. 3039, introduced by Representative Tom Cole (R–OK) on 

September 9, 2003. Testifying before the Subcommittee were Dr. 

Donald E. Heller, Associate Professor, Center for the Study of 

Higher Education Policy, The Pennsylvania State University, University Park, Pennsylvania; Dr. Antonio Flores, President and 

Chief Executive Officer, Hispanic Association of Colleges and Universities, San Antonio, Texas; Mr. George Chin, University Director 

for Financial Aid, City University of New York, New York, New 

York; and Mr. David G. Moore, Chairman and Chief Executive Officer, Corinthian Colleges, Inc., Santa Ana, California. 

On Tuesday, September 23, 2003, the Committee on Education 

and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., on ‘‘The College Cost Crisis Report: Are Institutions Accountable Enough to Students and 

Parents?’’ The purpose of the hearing was to examine the findings 

in the report, to discuss the broad issue of affordability in higher 

education, and to hear possible solutions on how best to address 

the problem of increasing college costs. Testifying before the Subcommittee were Dr. Valerie F. Lewis, President, State Higher Education Executive Officers, Denver, Colorado; Dr. F. King Alexander, 

President, Murray State University, Murray, Kentucky; Mr. Jamie 

P. Merisotis, President, Institute for Higher Education Policy, 

Washington, D.C.; and Ms. Jessica Hanson, Student, Florida State 

University, Tallahassee, Florida. 

On Monday, October 6, 2003, the Committee on Education and 

the Workforce, Subcommittee on Select Education, held a field 

hearing in Edinburg, Texas, on ‘‘Expanding Opportunities in Higher Education: Honoring the Contributions of America’s Hispanic 

Serving Institutions.’’ The purpose of the field hearing was to learn 

about expanding educational opportunities for students at Hispanic 

Serving Institutions (HSIs). The first panel to testify before the 

Subcommittee included Dr. Miguel Neva ́ rez, President, University 

of Texas—Pan-American, Edinburg, Texas; Dr. Rumaldo Jua ́ rez, 

President, University of Texas A&M—Kingsville, Kingsville, Texas; 

Dr. John Brockman, President, Coastal Bend Community College, 

Beeville, Texas. The second panel to testify before the Subcommittee included Dr. Juliet Garcia, President, University of 

Texas—Brownsville, Brownsville, Texas; Dr. Shirley Reed, President, South Texas Community College, McAllen, Texas; and Ms. 

Ariana De La Garza, Student Representative, University of 

Texas—Pan-American, Mission, Texas. 

Second session 

On Wednesday, March 17, 2004, the Committee on Education 

and the Workforce held a hearing in Washington, D.C., on ‘‘Fiscal 

Responsibility and Federal Consolidation Loans: Examining Cost 

Implications for Taxpayers, Students, and Borrowers.’’ The purpose 

of the hearing was to examine the consolidation loan program and 

116 

how student lending issues fit within the broader goal of expanding 

access to low- and middle-income students pursing a postsecondary 

education. Testifying before the Committee were Ms. Cornelia M. 

Ashby, U.S. Government Accountability Office, Director, Education, 

Workforce and Income Security, Washington, D.C.; Mr. Titus M. 

Hamlett, Student, University of Maryland, Baltimore, Maryland; 

Dr. Tom S. Neubig, National Director, Quantitative Economics and 

Statistics, Ernst and Young LLP, Washington, D.C.; and Dr. Robert 

Shapiro, Chairman, Sonecon, LLP, and Senior Fellow, Brookings 

Institution and Progressive Policy Institute, Washington, D.C. 

On Wednesday, May 12, 2004, the Committee on Education and 

the Workforce held a hearing in Washington, D.C., on ‘‘H.R. 4283, 

the College Access and Opportunity Act of 2004.’’ The purpose of 

this hearing was to examine the provisions in H.R. 4283 and to 

provide an opportunity for Members of Congress to hear about provisions in the bill. Testifying before the Committee were Mr. Jim 

Boyle, President, College Parents of America, Washington, D.C.; 

Dr. Dallas Martin, President, National Association of Federal Student Aid Administrators, Washington, D.C.; Ms. Rebecca 

Wasserman, President, United States Student Association, Washington, D.C.; Dr. Charles Reed, Chancellor, California State University System, Long Beach, California; and Mr. Michael Grayer, 

Recent Graduate, Virginia College, Jackson, Mississippi. 

On Wednesday, June 16, 2004, the Committee on Education and 

the Workforce held a hearing in Washington, D.C., on ‘‘H.R. 4283, 

the College Access & Opportunity Act: Are Students at Proprietary 

Institutions Treated Equitably Under Current Law?’’ The purpose 

of this hearing was to examine issues facing students attending eligible proprietary institutions of higher education. Testifying before 

the Committee was Dr. Dwight Smith, President and Chief Executive Officer, Sophisticated Systems, Inc., Columbus, Ohio; Mr. Andrew Rosen, President and Chief Operations Officer, Kaplan Inc., 

President, Kaplan College, Boca Raton, Florida; Dr. Alice Letteney, 

Director, University of New Mexico—Valencia, Los Lunas, New 

Mexico; Mr. Barmak Nassirian, Associate Director, American Association of Collegiate Registrars and Admissions Officers, Washington, D.C.; and Mr. David Moore, Chairman and Chief Executive 

Officer, Corinthian Colleges Inc., Santa Ana, California. 

On Tuesday, June 22, 2004, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

hearing in Washington, D.C., on ‘‘H.R. 4283, the College Access & 

Opportunity Act: Does Accreditation Provide Students and Parents 

Accountability and Quality?’’ The purpose of this hearing was to examine issues related to accountability in higher education and 

those sections within the bill that deal with the accreditation process for institutions, and also the recognition of accreditors by the 

U.S. Department of Education. Testifying before the Subcommittee 

were Dr. Thomas Dary Erwin, Associate Vice President of Academic Affairs for Assessment and Program Evaluation, James 

Madison University, Harrisonburg, Virginia; Dr. James Davis, 

President, Shenandoah University, Winchester, Virginia; Dr. Stephen Crow, Executive Director, Higher Learning Commission, 

North Central Association of Colleges and Schools, Chicago, Illinois; Dr. Jerry Martin, Chairman, American Council of Trustees 

and Alumni, Washington, D.C.; and Dr. Arthur Keiser, Immediate 

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Past Chairman, Accrediting Commission of Career Schools and Colleges of Technology, Ft. Lauderdale, Florida. 

On Tuesday, July 13, 2004, the Committee on Education and the 

Workforce held a hearing in Washington, D.C., on ‘‘H.R. 4283, the 

College Access and Opportunity Act: Increasing the Focus on Graduation Rates and Student Outcomes.’’ The purpose of this hearing 

was to examine issues regarding college graduation rates and the 

findings of a report issued by The Education Trust entitled, ‘‘A 

Matter of Degrees: Improving Graduation Rates in Four-Year Colleges and Universities.’’ Testifying before the Committee were Dr. 

Richard Nault, Vice President for Student Affairs, Miami University, Oxford, Ohio; Dr. Paul Lingenfelter, Executive Director, State 

Higher Education Executive Officers, Denver, Colorado; Mr. Ross 

Wiener, Policy Director, The Education Trust, Washington, D.C.; 

and Dr. William Law, President, Tallahassee Community College, 

Tallahassee, Florida. 

On Tuesday, July 20, 2004, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

hearing in Washington, D.C., entitled, ‘‘Are College Textbooks 

Priced Fairly?’’ The purpose of this hearing was to examine the 

issue of the high cost of textbooks on college campuses and the effect on a student’s overall cost of higher education. Testifying before the Subcommittee were Ms. Merriah Fairchild, Higher Education Director, California Student Public Interest Research Group, 

Sacramento, California; Mr. Marc L. Fleischaker, Legal Counsel, 

National Association of College Stores, Arent Fox LLC, Washington, D.C.; Mr. John Isley, Executive Vice President, Publishing, 

Planning and Business, Pearson Higher Education and Professional Publishing, Boston, Massachusetts; Mr. Virgil Monroe, Manager, Textbook Services, University of Wisconsin—River Falls, 

River Falls, Wisconsin. 

On Thursday, September 23, 2004, the Committee on Education 

and the Workforce, Subcommittee on 21st Century Competitiveness, held a hearing in Washington, D.C., entitled, ‘‘Are Current 

Safeguards Protecting Taxpayers against Diploma Mills?’’ The purpose of this hearing was to examine issues related to diploma mills 

and their impact on the credibility of the higher education system 

and to also hear from witnesses about the challenge and complexity 

involved in defining a diploma mill. Testifying before the Subcommittee were Mr. Allen Ezell, Retired Agent, Federal Bureau of 

Investigations, Apollo Beach, Florida; Ms. Jean Avnet Morse, Executive Director, Middle States Commission on Higher Education, 

Philadelphia, Pennsylvania; and Mr. Robert Cramer, Managing Director, Office of Special Investigations, Government Accountability 

Office, Washington, D.C. 

Legislative action—First session 

On January 29, 2003, Representatives Joe Wilson (R–SC), John 

Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Johnny 

Isakson (R–GA), Todd Platts (R–PA), James Greenwood (R–PA), 

Patrick Tiberi (R–OH), Tom Cole (R–OK), Mark Souder (R–IN), 

Richard Baker (R–LA), Sam Graves (R–MO) and Heather Wilson 

(R–NM) introduced H.R. 438, the Teacher Recruitment and Retention Act of 2003, which amended the Higher Education Act to proVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00121 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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vide up to $17,500 in loan forgiveness for math, science and special 

education teachers. 

On May 22, 2003, Representatives Phil Gingrey (R–GA), John 

Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), and Joe Wilson (R–SC) introduced H.R. 2211, the Ready to Teach Act of 2003, 

to reauthorize teacher preparation provisions under title II of the 

Higher Education Act through fiscal year 2008. 

On June 4, 2003, the Subcommittee on 21st Century Competitiveness considered H.R. 438 in legislative session and reported it 

favorably, as amended, to the Committee on Education and the 

Workforce by voice vote. The Subcommittee considered and adopted 

by voice vote the following amendment to H.R. 438: 

• Representative McKeon (R–CA) offered a substitute amendment to make technical and clarifying changes to the legislation. Specifically, the amendment requires all teachers seeking 

increased loan forgiveness to be highly qualified under the No 

Child Left Behind Act. 

On June 4, 2003, the Subcommittee on 21st Century Competitiveness considered H.R. 2211 in legislative session and reported it 

favorably, as amended, to the Committee on Education and the 

Workforce by voice vote. The Subcommittee considered and adopted 

by voice vote the following amendments to H.R. 2211: 

• Representative Gingrey (R–GA) offered a substitute amendment that made technical and clarifying changes to the legislation. In addition, the substitute amended authorized activities 

to: include faith-based and community organizations; benefit 

high poverty and rural local educational agencies; increase 

teacher retention; allow funds to be used to develop strategies 

to improve qualifications of pre-kindergarten teachers; ensure 

that teachers in private elementary and secondary schools are 

able to participate equitably in partnerships; provide training 

in how to teach limited English proficient students; and ensure 

that partnership activities focus on the needs of teachers in the 

classroom. 

• Representative McKeon (R–CA) offered an amendment that 

made technical and clarifying changes to the legislation. In addition, it ensured that urban and rural school teachers are included in State grant retention strategies and clarified that 

State and institutional reporting requirements are intended for 

students that take assessments used by the State for teacher 

certification or licensure. 

• Representatives Burns (R–GA), Owens (D–NY), and Hinojosa 

(D–TX) offered an amendment to authorize grants for the creation of Centers of Excellence at high quality (as determined 

by the State) minority serving institutions. In general, the purposes of this amendment are to: (1) increase teacher recruitment at minority serving institutions; and (2) make institutional improvements to teacher preparation programs at minority serving institutions. Under the amendment, grants are 

competitively awarded to high quality teacher preparation programs at eligible institutions which include: Historically Black 

Colleges or Universities, Hispanic-Serving Institutions, Tribally Controlled Colleges or Universities, Alaska Native-Serving 

Institutions, or Native Hawaiian-Serving Institutions. 

119 

• Representative Kind (D–WI) offered an amendment to reinstate a current law provision that allows partnership grant 

funds to be used for managerial and leadership activities that 

include superintendents. 

• Representative Hinojosa (D–TX) offered an amendment to 

add teachers of limited English proficient students to the allowable list of educators that could benefit from merit pay initiatives. 

• Representative Tierney (D–MA) offered an amendment to 

allow current teachers to participate in authorized clinical experience partnership grant activities. 

• Representative Holt (D–NJ) offered an amendment to allow 

teachers to use partnership grant funds to gain clinical experience in science, math, and technology (as long as such teachers 

commit to an additional two years in the classroom). 

• Representative Wu (D–OR) offered an amendment to allow 

teacher recruitment grants to be used to recruit employees 

from high demand industries, including technology industries, 

into the teaching profession. 

On June 10, 2003, the Committee on Education and the Workforce considered H.R. 2211 in legislative session and reported it favorably, as amended, to the House of Representatives by voice vote. 

The Committee considered and adopted by voice vote the following 

amendments to H.R. 2211: • Representative Gingrey (R–GA) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation. In addition, the substitute amendment: adds a definition of ‘‘teaching skills’’ to the Act that is based on scientifically based research; requires evaluation of State grant activities that are based on teacher effectiveness (as measured by increased student academic achievement) and teacher mastery of 

academic subjects they teach; clarifies language to ensure that 

at least 50 percent of partnership funds are used to directly 

benefit partner local educational agencies; allows partnership 

grants to be used to coordinate activities with community colleges to implement teacher preparation programs; increases 

the minimum service requirements for students that receive 

scholarships under the teacher recruitment grant program; requires the Governor of a State to attest to the reliability of 

State data reported to the Secretary of Education; and maintains the original authorization level of $300 million for Part 

A activities and authorizes $10 million for teacher preparation 

Centers of Excellence authorized under Part C. 

• Representative Van Hollen (D–MD) and Representative 

Woolsey (D–CA) offered an amendment to allow States to use 

funds to develop strategies to improve the qualifications of preschool teachers, which may include the State certification for 

such teachers. 

• Representative Holt (D–NJ) offered an amendment to 

allow teacher recruitment grants to be used to recruit employees from high demand industries, including science, mathematics, and engineering, into the teaching profession. 

On September 11, 2003, Representatives Pete Hoekstra (R–MI), 

John Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), James 

Greenwood (R–PA), Joe Wilson (R–SC), and Tom Cole (R–OK) inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00123 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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troduced H.R. 3077, the International Studies in Higher Education 

Act of 2003, to reauthorize international education programs under 

title VI of the Higher Education Act through fiscal year 2009. 

On September 11, 2003, Representatives Pete Hoekstra (R–MI), 

John Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Johnny 

Isakson (R–GA), Patrick Tiberi (R–OH), Joe Wilson (R–SC), and 

Tom Cole (R–OK) introduced H.R. 3076, the Graduate Opportunities in Higher Education Act of 2003, to reauthorize graduate education programs under title VII of the Higher Education Act 

through fiscal year 2009. 

On September 17, 2003, the Subcommittee on Select Education 

considered H.R. 3077 in legislative session and reported it favorably, as amended, to the Committee on Education and the Workforce by voice vote. The Subcommittee considered and adopted by 

voice vote the following amendment to H.R. 3077: • Representative Hoekstra (R–MI) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation. Specifically, the amendment changed the process 

for naming the members of the International Advisory Board 

from the Secretary of Education to the House of Representatives, Senate and Secretary of Education, including the addition of two representatives from national security agencies. 

The amendment further required that the activities and functions of the International Advisory Board were to be paid by 

no more than 50 percent or less of the funds appropriated to 

the Secretary for evaluation, outreach and dissemination. The 

amendment clarified that minority serving institutions should 

be considered as partners in the International Business Education Centers program. Lastly, the amendment clarified the 

language allowing agency and military recruiters access to 

campuses. 

On September 17, 2003, the Subcommittee on Select Education 

considered H.R. 3076 in legislative session and reported it favorably as amended to the Committee on Education and the Workforce 

by voice vote. The Subcommittee considered and adopted by voice 

vote the following amendment to H.R. 3076: 

• Representative Hoekstra (R–MI) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation, including the reinstatement of language that ensures qualified students receive Javits fellowship awards, regardless of Department of Education error. 

On September 25, 2003, the Committee on Education and the 

Workforce considered H.R. 3077 in legislative session and reported 

it favorably, as amended, to the House of Representatives by voice 

vote. The Committee considered and adopted the following amendments to H.R. 3077: 

• Representative Hoekstra (R–MI) offered a substitute 

amendment that clarified the functions of the International 

Advisory Board to ensure the Board is advisory in its scope. In 

addition, the amendment clarified that Board members cannot 

receive compensation or gifts for their service, staggered the 

terms of the Board members, and clarified the basic operations 

of the Board. The amendment clarified that no more than half 

of the total funds awarded to an institution of higher education 

or consortia of such institutions under title VI could be used 

121 

for costs of dissemination of materials to elementary and secondary schools. Lastly, the amendment also clarified that Federal agency and military recruiters are given the same access 

to campuses as provided to other prospective employers. The 

amendment was adopted by voice vote. • Representative Holt (D–NJ) offered an amendment that 

established a study, to be conducted by the Secretary of Education in consultation with the International Advisory Board, 

of foreign language heritage communities. The amendment was 

adopted by unanimous consent. • Representative Holt (D–NJ) offered an amendment to authorize projects under the National Language and Area Centers programs that support students’ understanding of science 

and technology in coordination with foreign language proficiency. The amendment was adopted by unanimous consent. 

On Thursday, September 25, 2003, the Committee on Education 

and the Workforce considered H.R. 3076 in legislative session and 

reported it favorably as amended to the House of Representatives 

by voice vote. The Committee considered and adopted the following 

amendments to H.R. 3076: • Representative Hoekstra (R–MI) offered a substitute 

amendment that made technical and clarifying changes to the 

legislation. The amendment included the addition of an authorized use of special project funds for the Fund for the Improvement of Postsecondary Education (FIPSE), which encourages 

the establishment of academic programs to train faculty to 

teach traditional American history. The substitute also moved 

the competitive priority for graduate work in second language 

pedagogy and second language acquisition, including the preparation of teachers who teach limited English proficient students, from the Javits program to the Graduate Assistance in 

Areas of National Need (GAANN) program. The amendment 

was adopted by voice vote. • Representative Ehlers (R–MI) offered an amendment that 

was adopted by unanimous consent by the Committee. The 

amendment moves the GAANN competitive priority language 

to the section of title VII within which areas of national need 

and institutional eligibility are determined. This placement is 

more appropriate to the intent of the priority and aligns the 

determination of the Secretary with the actual disciplines to be 

considered. The amendment also requires that an applicant 

have a master’s degree or be working toward a Ph.D. in math 

or science prior to receipt of the fellowship. 

• Representative Holt (D–NJ) offered an amendment that 

was adopted by unanimous consent by the Committee. The 

amendment requires applicants for the GAANN program to include within that application, assurances that the department 

receiving the grant collaborates with departments, programs or 

units in all content areas to ensure a successful combination 

of training in both teaching and content areas. 

• Representatives Ryan (D–OH) and Hoekstra (R–MI) offered an amendment that was adopted by unanimous consent 

by the Committee. The amendment would add an authorized 

activity in the special projects fund of FIPSE. The amendment 

allows FIPSE to include support for planning, research, trainVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00125 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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ing, and other services to be provided by institutions of higher 

education in order to work with private and civic organizations 

to assist communities in addressing pressing and severe community problems. 

109TH CONGRESS

Hearings—First session 

On Tuesday, March 1, 2005, the Committee on Education and 

the Workforce held a hearing in Washington, D.C., entitled, ‘‘Enforcement of Federal Anti-Fraud Laws in For-Profit Education.’’

The purpose of this hearing was to examine the effectiveness and 

enforcement of Federal laws that exist to prevent fraud and abuse 

in for-profit education. Testifying before the Committee were The 

Honorable Maxine Waters (D–CA), Member of Congress, U.S. 

House of Representatives; Mr. Thomas A. Carter, Deputy Inspector 

General, Department of Education, Washington, D.C.; Mr. David 

Rhodes, President, The School of Visual Arts, New York, New York; 

Mr. Nicholas Glakas, President, Career College Association, Washington, D.C.; and Ms. Paula Dorsey, former Director of Admissions, 

Bryman College, Reseda, California. 

On Tuesday, April 19, 2005, the Committee on Education and the 

Workforce held a hearing in Washington D.C., entitled, ‘‘College 

Access: Is Government Part of this hearing was to learn about 

what has been accomplished in regard to the conditions under 

which individuals enter the country with the use of a student visa 

since the Subcommittees held joint hearings on October 31, 2001 

and September 24, 2002. Testifying before the Subcommittees were 

Mr. Victor Cerda, Special Counsel, U.S. Department of Homeland 

Security, Immigration and Customs Enforcement, Washington, 

D.C.; Mr. Stephen A. Edson, Managing Director of the Visa Services Directorate, Bureau of Consular Affairs, Department of State, 

Washington, D.C.; Mr. Randolph C. Hite, Director, Information 

Technology Architecture and Systems Issues, Government Accountability Office, Washington, D.C.; Mr. Lawrence Bell, Director, Office of International Education, University of Colorado, Boulder, 

Colorado; and Dr. C.D. Mote, Jr., President, University of Maryland, College Park, Maryland. 

On Friday, April 22, 2005, the Committee on Education and the 

Workforce held a hearing entitled, ‘‘College Access: Is Government 

Part of the Solution, or Part of the Problem?’’ This hearing served 

as a forum to discuss the effects of ever-rising college tuition costs 

and debate some of the possible solutions to this problem. Testifying before the Committee were Dr. Richard Vedder, Distinguished Professor of Economics, Ohio University, Athens, Ohio; and 

Dr. Donald Heller, Associate Professor and Senior Research Associate, Center for the Study of Higher Education, The Pennsylvania 

State University, University Park, Pennsylvania. 

On Monday, May 2, 2005, the Committee on Education and the 

Workforce, Subcommittee on Select Education, held a field hearing 

entitled, ‘‘International Education and Foreign Language Studies 

in Higher Education.’’ The hearing was held to discuss international education and the respective programs under title VI of 

the Higher Education Act. Specifically, the Subcommittee sought to 

gather additional information about how institutions of higher eduVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00126 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
123 

cation are working with local K–12 schools to promote international education opportunities. Testifying before the Subcommittee were Dr. Blandina Cardenas, President, The University 

of Texas—Pan American, Edinburg, Texas; Ms. Olga Chapa, Graduate Student, The University of Texas—Pan American, Edinburg, 

Texas; Dr. Raymund Paredes, Commissioner, Texas Higher Education Coordinating Board, Austin, Texas; Dr. Jose Jaime Rivera, 

President, University of the Sacred Heart, San Juan, Puerto Rico; 

and Dr. Tomas Arciniega, President Emeritus, California State 

University—Bakersfield, Valley Center, California. 

On Monday, May 5, 2005, the Committee on Education and the 

Workforce, Subcommittee on Select Education, held a hearing entitled, ‘‘College Credit Mobility: Can Transfer of Credit Policies be 

Improved?’’ This hearing served as a forum to discuss college credit 

mobility policies at the institutional level, as well as to examine 

best practices at the state level, which ensure that the policies and 

articulation agreements permit the fair and efficient transfer of 

credit. Testifying before the Subcommittee were Dr. Philip Day, 

National Articulation and Transfer Network, San Francisco, California; Dr. Nancy Zimpher, President, University of Cincinnati, 

Cincinnati, Ohio; Dr. Theresa Klebacha, Director, Strategic Initiatives, Florida Department of Education, Tallahassee, Florida; and 

Mr. Jerome Sullivan, Executive Director, American Association of 

Collegiate Registrars and Admissions Officers, Washington, D.C. 

On Thursday, May 5, 2005, the Committee on Education and the 

Workforce, Subcommittee on 21st Century Competitiveness, held a 

hearing in Washington D.C., entitled, ‘‘College Credit Mobility: Can 

Transfer of Credit Policies be Improved?’’ This hearing served as a 

forum to discuss college credit mobility policies at the institutional 

level, as well as to examine best practices at the state level, which 

ensure that the policies and articulation agreements permit the fair 

and efficient transfer of credit. Testifying before the Subcommittee 

were Dr. Philip Day, National Articulation and Transfer Network, 

San Francisco, California; Dr. Nancy Zimpher, President, University of Cincinnati, Cincinnati, Ohio; Dr. Theresa Klebacha, Director, Strategic Initiatives, Florida Department of Education, Tallahassee, Florida; and Mr. Jerome Sullivan, Executive Director, 

American Association of Collegiate Registrars and Admissions Officers, Washington, D.C. 

On Thursday, May 19, 2005, the Committee on Education and 

the Workforce, Subcommittee on 21st Century Competitiveness, 

held a hearing in Washington D.C., entitled, ‘‘Challenges to American Competitiveness in Math and Science.’’ The hearing focused on 

whether elementary and high schools are being creative enough 

with their math and science curriculum to make these courses appealing to students. Also, the hearing examined what is being done 

at institutions of higher education to retain and graduate students 

who start their academic careers in math, science or engineering 

disciplines. Testifying before the Subcommittee were Mr. Norm Augustine, Retired Chairman and Chief Executive Officer, Lockheed 

Martin Corporation, Bethesda, Maryland; Dr. Thomas Magnanti, 

Dean of the School of Engineering, Massachusetts Institute of 

Technology, Cambridge, Massachusetts; Ms. June Streckfus, Executive Director, Maryland Business Roundtable, Baltimore, Maryland; and Dr. Nancy Songer, Professor of Science Education and 

124 

Learning Technologies, University of Michigan, Ann Arbor, Michigan. 

Legislative action—First session 

On February 8, 2005, Representatives John Boehner (R–OH) and 

Howard P. ‘‘Buck’’ McKeon (R–CA) introduced H.R. 609, the College Access and Opportunity Act, to reauthorize the Higher Education Act (HEA) through fiscal year 2011. 

On February 2, 2005, Representatives Patrick Tiberi (R–OH), 

John Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Joe Wilson (R–SC), Peter Hoekstra (R–MI), and Ruben Hinojosa (D–TX) 

introduced H.R. 509, the International Studies in Higher Education 

Act of 2005, to reauthorize international education programs under 

title VI of the Higher Education Act through fiscal year 2011. 

On February 2, 2005, Representatives Patrick Tiberi (R–OH), 

John Boehner (R–OH), Howard P. ‘‘Buck’’ McKeon (R–CA), Vernon 

Ehlers (R–MI), Joe Wilson (R–SC), Peter Hoekstra (R–MI), and 

Ruben Hinojosa (D–TX) introduced H.R. 510, the Graduate Opportunities in Higher Education Act of 2005, to reauthorize graduate 

education programs under title VII of the Higher Education Act 

through fiscal year 2011. 

On June 16, 2005, the Subcommittee on Select Education considered H.R. 509 in legislative session and reported it favorably, as 

amended, to the Committee on Education and the Workforce by 

voice vote. The Subcommittee considered and adopted by voice vote 

the following amendment to H.R. 509: • Representative Tiberi (R–OH) offered a substitute amendment that made technical and clarifying changes to the legislation. Specifically, the amendment emphasized international 

business and trade competitiveness as some of the core areas 

in international education initiatives; clarified grantees that 

are required to disseminate information to elementary and secondary schools ensure that the materials are reflective of a 

wide range of viewpoints; and expanded the representation on 

the International Advisory Board to include additional Federal 

agency representatives that have responsibilities for diplomacy 

and international commerce. 

On June 16, 2005, the Subcommittee on Select Education considered H.R. 510 in legislative session and reported it favorably, as 

amended, to the Committee on Education and the Workforce by 

voice vote. The Subcommittee considered and adopted by voice vote 

the following amendment to H.R. 510: 

• Representative Tiberi (R–OH) offered a substitute amendment to make technical and clarifying changes to the legislation. 

The Subcommittee on 21st Century Competitiveness considered 

H.R. 609 in legislative session on Wednesday, July 13 and Thursday, July 14, 2005 and reported it favorably, as amended to the 

Committee on Education and the Workforce by a vote of 18–15. The 

Subcommittee considered and adopted the following amendments 

to H.R. 609: 

• Representative McKeon (R–CA) offered a substitute 

amendment to make technical and clarifying changes to the 

legislation. Specifically, under title I of the bill, the amendment modified the provision on Student Speech and AssociaVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00128 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
125 

tion Rights; clarified the college cost reporting requirements; 

and added a prohibition for propaganda not authorized by Congress. The substitute amended title II of the bill to include gifted and talented as one of the learning styles on which teacher 

preparation programs should focus and amended reporting requirements to include additional information on the academic 

fields being studied by students participating in teacher preparation programs. Title III was amended by adding a new eligible institution to the Historically Black Graduate Institution 

(HBGI) program. Amendments to title IV included a reconfiguration of the reduction of origination fees that incorporated 

the mandatory guaranty fee while still reducing fees paid by 

students to 1 percent by 2010; clarified the prohibition of the 

ability for students to consolidate their loans while in-school in 

both the Federal Family Education Loan (FFEL) program and 

the Direct Loan (DL) program; eliminated the ability of FFEL 

lenders to take advantage of the ‘‘super two step’’ loophole in 

the consolidation loan program; prospectively eliminated the 

ability of lenders to earn a minimum of 9.5 percent special allowance through the practice of ‘‘recycling’’; clarified how much 

money a guarantor can retain from defaulted borrowers 

through consolidation versus rehabilitation of a borrower’s defaulted loan; amended the date for Perkins loan Federal Capital Contributions recovery; established eligibility for competency based programs for title IV purposes; removed the reporting requirements on transfer of credit; and added due process language for program reviews and accreditation hearings. 

In addition, the substitute amendment made minor changes to 

the Education of the Deaf Act, by linking the accountability 

provisions of the No Child Left Behind Act with the elementary and secondary schools operated by Gallaudet University. 

The amendment was adopted by voice vote. 

• Representative Fortun ̃ o (R–PR) offered an amendment to 

maintain the single definition of an institution of higher education, but exempt titles III and V of the Higher Education Act 

from those funds for which for-profit institutions would be eligible to compete. The amendment was adopted by a vote of 22–

10. 

• Representative Foxx (R–NC) offered an amendment to prohibit the Department of Education from implementing the proposed student unit record database. The amendment was 

adopted by voice vote. 

• Representative Wu (D–OR) offered an amendment to allow 

for the development of dual degree programs that allow students to earn two undergraduate degrees, one in education and 

the other in the subject of the student’s choosing. The amendment was adopted by voice vote. 

• Representative Price (R–GA) offered an amendment to authorize the Teacher Incentive Fund, which will provide funds 

to states that want to develop merit pay initiatives. The 

amendment was adopted by a vote of 17–15. 

• Representative Keller (R–FL) offered an amendment to 

waive Pell Grant repayment obligations for students who withdraw from their institution of higher education due to FederVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00129 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
126 

ally-declared natural disasters. The amendment was adopted 

by voice vote. • Representative Keller (R–FL) offered an amendment to 

prohibit individuals who are subject to an involuntary civil 

commitment upon completion of a period of incarceration for a 

sexual offense from being eligible for a Pell Grant. The amendment was adopted by voice vote. • Representative Keller (R–FL) offered an amendment to 

raise the maximum authorized Pell Grant to $6,000. The 

amendment was adopted by voice vote. • Representative Johnson (R–TX) offered an amendment to 

limit a student’s Pell Grant to 16 semesters (8 years) or 24 

quarters (6 years). The amendment was amended by unanimous consent to limit a student’s Pell Grant to 18 semesters 

(9 years) or 27 quarters (7 years). The amendment was adopted 

by voice vote. • Representative Castle (R–DE) offered an amendment to 

strike the repeal of the 90/10 rule and move the rule to the 

Program Participation Agreement and further define what is 

included in the 10 percent part of the ratio. The amendment 

was adopted by voice vote. • Representatives Porter (R–NV) and McCarthy (D–NY) offered an amendment to modify the existing Child Care Loan 

Forgiveness discretionary program to include loan forgiveness 

for nurses and other occupations deemed by the Secretary to 

be areas of national need. The amendment was adopted by 

voice vote. • Representative McCollum (D–MN) offered an amendment 

to direct the Secretary of Education to commission a study on 

fraud and abuse in the title IV student financial aid programs. 

The amendment was adopted by a vote of 33–0. 

The Committee on Education and the Workforce considered H.R. 

609 in legislative session on Wednesday, July 20, Thursday, July 

21 and Friday, July 22, 2005 and reported it favorably, as amended, to the House of Representatives, by a vote of 27–20, 1 present. 

The Committee considered and adopted the following amendments 

to H.R. 609: 

• Representative Boehner (R–OH) offered a substitute 

amendment to make technical and clarifying changes to the 

legislation. Specifically, under title I of the bill, the substitute 

clarified that degrees offered by Rabbinical schools are recognized as equivalent to the baccalaureate degree and Rabbinical 

schools are able to participate in the title IV student financial 

aid programs; and improved the fraud and abuse protections 

for students that receive title IV aid enrolled in foreign schools. 

In title II, the substitute added language that allow states to 

further evaluate the content knowledge of potential teachers in 

the subject matter they will be teaching; allowed funds to be 

used to increase the supply of highly qualified math, science 

and special education teachers and the faculty needed to train 

them; clarified that funds can be used to help recruit high 

achieving students, including those who are bilingual, into the 

field of early childhood education; and allowed institutions of 

higher education to develop articulation agreements to make it 

easier for existing early childhood educators to obtain a bachVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00130 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
127 

elor’s degree. In title III, the substitute included a provision for 

the Tribally Controlled Colleges and Universities and the Alaska-Native and Native-Hawaiian Serving Institutions to use 

grant funds to support instruction in tribal governance and 

tribal public policy. In title IV, the substitute clarified that individuals who are convicted of fraud and abuse within the title 

IV student aid programs are no longer eligible for such aid 

until they pay back to the Federal government the aid received 

through fraudulent means. Additionally, the substitute specifically addresses the needs of homeless youth in the TRIO program and GEAR UP and clarifies that TRIO programs should 

include services to address the transition of veterans into math 

and science fields. The substitute adds language to ensure that 

a loan cannot be transferred into a qualifying tax exempt bond 

to obtain 9.5 percent special allowance. The substitute also includes a provision to provide the opportunity for active duty 

members of the Armed Services who are out of school to obtain 

a student loan deferment of up to three years. The substitute 

consolidates and clarifies consumer empowerment information 

by establishing a central location for the collection of such information, designated as the College Opportunities On-Line 

(COOL) website operated by the Department of Education. The 

substitute also includes foreign language teachers and U.S. 

government employees who are in positions that regularly require the use of a foreign language in the discretionary national need loan forgiveness program. The substitute amendment reflected the amendments made to H.R. 509 and H.R. 

510, the reauthorization bills for title VI and VII of the Higher 

Education Act, respectively. Under title VI of the bill, the substitute clarifies that when the members of the International 

Advisory Board assess activities of centers or programs supported by title VI funds, the materials that are used to make 

assessments must be those submitted by grantees to the Department of Education as part of the grant requirements. 

Under title VII of the bill, the substitute adds language to prohibit funds from the Fund for the Improvement of Postsecondary Education (FIPSE) from being spent on students who 

are not eligible for title IV aid; and allows FIPSE funds to be 

used to support students who are fulfilling internships in disadvantaged communities. The substitute renames the ‘‘Education of the Deaf Act of 1986’’ as the ‘‘Gallaudet University 

and National Technical Institute for the Deaf Act.’’ The amendment was adopted by voice vote. 

• Representative Castle (R–DE) offered an amendment to 

clarify for-profit institutions cannot automatically compete for 

other Federal programs outside of the Higher Education Act. 

The amendment was adopted by voice vote. 

• Representative McCarthy (D–NY) offered an amendment 

to require that reports of graduation rates under the college 

cost section of the bill must indicate whether completion or 

graduation rates are from two- or four-year institutions, and if 

the rates are from a two-year program of instruction, they be 

accompanied by the percentage of students who transferred to 

a four-year institution. The amendment was adopted by unanimous consent. 

128 

• Representative McCarthy (D–NY) offered an amendment 

to clarify that the College Affordability Index must be presented next to an institution’s tuition and fees on the College 

Opportunities On-Line (COOL) website. The amendment was 

adopted by unanimous consent. • Representatives Hinojosa (D–TX), Grijalva (D–AZ), 

Fortun ̃ o (R–PR), and Tiberi (R–OH) offered an amendment to 

create a new program for graduate programs at Hispanic Serving Institutions (HSIs). The amendment was adopted by a vote 

of 46–2. • Representative Wu (D–OR) offered an amendment to establish or expand dual enrollment programs at institutions of 

higher education with funds from the Fund for the Improvement of Postsecondary Education (FIPSE). The amendment 

was adopted by unanimous consent. • Representatives Tiberi (R–OH) and Barrow (D–GA) offered 

an amendment to clarify that programs that reduce postsecondary remediation rates and improve degree attainment rates 

for low-income students and former high school dropouts are 

eligible for funds under FIPSE. The amendment was adopted 

by voice vote. • Representative Price (R–GA) offered an amendment to direct the Secretary of Education to study the indebtedness of 

medical school graduates. The amendment was adopted by 

voice vote. • Representative Davis (D–IL) offered an amendment to direct the Secretary of Education to study the graduation rates 

of minority male students. The amendment was adopted by 

voice vote. • Representatives Petri (R–WI) and Boehner (R–OH) offered 

an amendment to provide borrowers a choice between a fixed 

interest rate and a variable interest rate on consolidation 

loans. The amendment was adopted by a vote of 26–20. • Representative Petri (R–WI) offered an amendment to reduce insurance and reinsurance rates for lenders and guarantors, respectively. The amendment was adopted by voice vote. 

• Representatives Kildee (D–MI) and Van Hollen (D–MD) offered an amendment to reform the school as lender initiative 

in the FFEL program. The amendment was adopted by unanimous consent. 

• Representative Grijalva (D–AZ) offered an en bloc amendment to expand the discretionary national need loan forgiveness program to include librarians, teachers of bilingual education, first-responders, and child welfare workers. The amendment was adopted by voice vote. 

• Representative Musgrave (R–CO) offered an amendment to 

exempt small business assets from being included in the disclosure of assets for the purposes of need analysis. The amendment was adopted by a vote of 28–18. 

• Representatives Osborne (R–NE) and Holt (D–NJ) offered 

an amendment to make community colleges eligible to participate in the year-round Pell Grant program. The amendment 

was adopted by voice vote. 

• Representative Boustany (R–LA) offered an amendment to 

consider children who are adopted after age 13 to be included 

129 

in the ‘‘special circumstances’’ discretion allowed for school financial aid officers in need analysis determinations. The 

amendment was adopted by voice vote. 

• Representative Musgrave (R–CO) offered an amendment to 

ensure that a student’s Federal student aid is not impacted by 

his or her participation in a State choice program. The amendment was amended by unanimous consent by Representative 

Musgrave by changing ‘‘entity’’ to ‘‘State’’ and adopted by voice 

vote. 

• Representative Foxx (R–NC) offered an amendment to increase accountability in the TRIO programs. The amendment 

was adopted by a vote of 27–19. 

• Representative Castle (R–DE) offered an amendment to 

further define the 90/10 ratio and increase the penalties for 

non-compliance. The amendment was adopted by voice vote. 

• Representative Platts (R–PA) offered an amendment to require colleges and universities that are in the top 25 percent 

of those in their sector to exceed the College Affordability 

Index to establish college cost task forces. The amendment was 

adopted by voice vote. 

• Representative Ehlers (R–MI) offered an amendment to require accrediting agencies to monitor the growth of distance 

education programs. The amendment was adopted by unanimous consent. 

• Representatives McKeon (R–CA), Ehlers (R–MI) and Kind 

(D–WI) offered an amendment to provide scholarships to the 

top high school seniors to pursue undergraduate and graduate 

degrees in math and science, allow interest repayment on loans 

for math and science studies, and create education councils on 

math and science. The amendment was adopted by voice vote. 

• Representatives McKeon (R–CA), Ryan (D–OH), and 

Tierney (D–MA) offered an amendment to authorize the nonmandatory cost provisions of the Advisory Committee on Student Financial Aid report on FAFSA simplification. The 

amendment was adopted by voice vote. 

• Representative Van Hollen (D–MD) offered an amendment 

to continue the Experimental Sites initiative and experiments. 

The amendment was amended by unanimous consent by clarifying institutional experiments in the Experimental Sites initiative would continue unless the Secretary determines the institution’s participation has not been successful. The amendment was adopted by voice vote. 

• Representative McKeon (R–CA) offered an amendment to 

ensure accreditors take into account an institution’s religious 

mission during the institutional review. The amendment was 

adopted by voice vote. 

• Representative Andrews (D–NJ) offered an amendment to 

require institutions of higher education to disclose fire safety 

policies and procedures to enrolled and prospective students. 

The amendment was adopted by a vote of 35–13. 

• Representative Andrews (D–NJ) offered an amendment to 

modify the return of title IV provisions for clock hour institutions. The amendment was adopted by voice vote. 

130 

• Representative Wu (D–OR) offered an amendment to establish a Sense of the Committee regarding textbook costs. The 

amendment was adopted by voice vote. 

• Representative Kind (D–WI) offered an amendment to direct the Secretary of Education to do a study on adult learners 

attending institutions of higher education. The amendment 

was adopted by voice vote. 

Below is a summary of H.R. 609. 

SUMMARY

Short title; Table of contents 

Section 1 gives the short title of the bill as the College Access 

and Opportunity Act of 2005 and sets forth the table of contents. 

References; Effective date 

Section 2 specifies that the provisions of the bill amend the Higher Education Act of 1965, and makes these amendments (except as 

otherwise provided in the legislation) effective upon enactment of 

the legislation. 

Title I—General provisions 

Title I of H.R. 609 amends provisions and programs under title 

I (General Provisions) of the Higher Education Act and reauthorizes title I through fiscal year 2011. 

Definition of an institution of higher education 

The bill creates a single definition of an institution of higher education. Under current law, the Higher Education Act includes two 

definitions of an institution of higher education. The first definition, in section 101 of the law, applies to institutional participation 

in both title IV student financial aid programs and non-title IV programs. The second definition, in section 102 of the law, applies only 

to institutions participating in title IV programs. By creating a single definition, H.R. 609 removes the 90/10 rule from the criteria 

that institutions of higher education must meet in order to be eligible for title IV participation. Additionally, the single definition provision repeals the 50 percent rule for telecommunications courses. 

The single definition provision clarifies that institutions of higher 

education that dually enroll students in their institution and a secondary school will continue to be eligible for participation in the 

title IV programs. Additionally, the single definition clarifies that 

institutions of higher education who admit home-schooled students 

are able to participate in the title IV programs. 

Institutions outside the United States 

H.R. 609 maintains the section 102 definition of an institution of 

higher education for institutions outside of the United States and 

makes several amendments to the current law provision. The bill 

clarifies the definition of a foreign school to include a requirement 

for the school to be legally authorized by the education ministry (or 

comparable agency) of the country in which the school is located. 

H.R. 609 also removes the requirement for students attending Canadian Medical schools to take the Foreign Medical exam. For the 

purposes of qualifying as a foreign medical school for participation 

131 

in the Federal Family Education Loan (FFEL) program, the bill requires the Secretary to publish qualifying criteria by regulation 

and establish an advisory panel of medical experts to evaluate the 

standards of foreign medical school accreditation and determine 

their comparability to U.S. standards. 

Restrictions on funds for for-profit institutions 

With the creation of a single definition of an institution of higher 

education, the bill also places restrictions on funds for proprietary 

schools and makes proprietary schools ineligible for funds available 

through title III or title V of the Higher Education Act. Additionally, other Federal funds made available to institutions of higher 

education through the current statutory reference to section 101 

will not be made automatically available to for-profit institutions 

until the other Federal statute is amended to expressly include the 

for-profit sector. 

New borrower definition 

H.R. 609 clarifies the definition of a ‘‘new borrower’’ to separate 

the Federal Family Education Loan (FFEL) and Direct Loan (DL) 

programs from the Perkins loan program. 

Student Speech and Association Rights 

H.R. 609 modifies the current Sense of Congress on Student 

Speech and Association Rights to clarify students should not be excluded from campus activities or denied any benefits based on their 

ideological or political beliefs. 

National Advisory Committee on Institutional Quality and 

Integrity 

The bill reauthorizes the National Advisory Committee on Institutional Quality and Integrity (NACIQI) and permits members of 

NACIQI to continue to serve after an expiration of their term until 

a successor has been appointed. 

Alcohol and Drug Abuse Prevention; Prior Rights and Obligations; Performance Based Organization 

H.R. 609 reauthorizes the Alcohol and Drug Abuse Prevention 

grants program, Prior Rights and Obligations dealing with bond 

servicing, and the Performance Based Organization (PBO) through 

fiscal year 2011. 

Limitation on certain uses of funds 

The bill places a limitation on certain uses of funds, such as limiting publicity or propaganda activities not authorized by Congress 

prior to the enactment of H.R. 609. 

Consumer information and public accountability in higher 

education 

H.R. 609 amends current law section 131 to require the Secretary to redesign the College Opportunities On-Line (COOL) 

website to make the site more user-friendly and contain information that is of greater use to students and families when making 

decisions about college. The bill requires the Department to revamp 

its current COOL website, including all currently required data 

132 

from institutions of higher education, to create a College Consumer 

Profile that is easily reviewed by parents and students. The bill 

also amends the Higher Education Act section 131 to require institutions of higher education that increase their tuition and fees 

more than twice the rate of inflation over a three-year interval to 

submit a management plan in conjunction with the entity that controls their tuition and fee costs to the Secretary for publication on 

the COOL website. H.R. 609 establishes a college affordability 

index and requires an institution that exceeds the index to report 

how it will work to reduce that increase. Institutions that are in 

the highest 25 percent of the college affordability index for their 

sector will be required to establish a quality-efficiency task force to 

review operations at the institution. Institutions that fail to comply 

with their management plan or action plan are subject to an audit 

by the Inspector General, additional monitoring by the Department 

of Education, and potentially a fine of $25,000. The bill provides for 

a low-cost school exemption as well as an exemption for those 

schools that exceed the index but do so by less than $500. The bill 

requires the Government Accountability Office to conduct a study 

of best practices of those institutions that keep costs low and increase the affordability of higher education. H.R. 609 also calls for 

a student aid recipient survey on the current population of students receiving Federal student aid to be completed by the Department of Education not less than once every four years. 

Databases of student information 

H.R. 609 contains a prohibition of the design, development, creation, implementation or maintenance of nationwide databases that 

track individual students over time. 

Title II—Teacher Preparation 

Title II of H.R. 609 amends provisions and programs under title 

II (Teacher Preparation) of the Higher Education Act and reauthorizes title II through fiscal year 2011. 

H.R. 609 amends Part A (Teacher Quality Enhancement Grants 

for States and Partnerships) and Part B (Preparing Tomorrow’s 

Teachers to Use Technology) of title II of the Higher Education Act, 

authorizes new teacher preparation activities under Part C (Centers of Excellence), and authorizes the creation of new state and locally developed performance based pay structures for teachers and 

principals under Part D (Teacher Incentive Fund). 

Teacher quality enhancement grants for states and partnerships 

The bill authorizes competitively awarded grants to: (1) increase 

student academic achievement; (2) improve the quality of the current and future teaching force by improving the preparation of prospective teachers and enhancing professional development activities; (3) hold institutions of higher education accountable for preparing highly qualified teachers; (4) recruit highly qualified individuals, including minorities and individuals from other occupations, into the teaching force, and (5) assist States and local educational agencies in developing and implementing performance 

based pay systems for teachers and principals who increase student 

academic achievement and close the achievement gap. 

133 

State grants 

H.R. 609 requires States that receive grants to develop evaluation systems to determine the effectiveness of grant activities, 

which must include measures for teacher effectiveness that are 

based on gains in student academic achievement and teacher mastery of the academic subjects they teach. 

Under this section, States must use funds to reform teacher 

preparation requirements, coordinate with State activities authorized under title II of the No Child Left Behind Act and ensure that 

current and future teachers are highly qualified. State grant funds 

can be used for: (1) designing teacher preparation programs that 

are based on rigorous academic content, scientifically based research (including scientifically based reading research), and challenging State student academic content standards; (2) reforming 

teacher State certification to ensure that teachers have the necessary subject matter knowledge and teaching skills to help students meet challenging State student academic achievement standards; (3) providing prospective teachers with alternative routes to 

traditional preparation and State certification; (4) planning and implementing innovative teacher preparation programs, such as charter colleges of education; (5) developing performance-based compensation systems for teachers and principals; (6) developing teacher advancement and retention initiatives that promote professional 

growth, multiple career paths, and pay differentiation; (7) ensuring 

that local educational agencies and schools are able to expeditiously remove incompetent or unqualified teachers; (8) developing 

systems to measure the effectiveness of teacher preparation programs; (9) providing technical assistance to low-performing teacher 

preparation programs as identified by the State; (10) ensuring that 

local educational agencies and schools are able to recruit highly 

qualified teachers; (11) developing strategies to improve qualifications of preschool teachers and preschool teacher preparation programs; (12) incorporating the learning needs of gifted and talented 

students into activities to ensure that new teachers possess basic 

knowledge and skills to meet the needs of these students; (13) establishing or expanding new-teacher mentoring and assessment 

programs that are part of a licensure process to identify student 

learning differences among gifted students; (14) supporting the development of new special education, math and science faculty positions in institutions of higher education dedicated to the preparation of teachers in these disciplines; and (15) assessing the performance of teacher preparation programs within institutions of 

higher education in States that provide comparisons across schools 

in the State. 

Partnership grants 

H.R. 609 provides that each eligible partnership must include at 

least: (1) a high quality teacher preparation program at an institution of higher education; (2) a school of arts and sciences; (3) a high 

need local educational agency; and (4) a public or private educational organization. 

Each eligible partnership must submit an application that, 

among other things, describes: (1) how faculty of a teacher preparation program at an institution of higher education that seeks a 

partnership grant will serve with highly qualified teachers in the 

134 

classroom at partner local educational agencies over the term of the 

grant; and (2) how teachers in private elementary and secondary 

schools located in the geographic areas served by the partnership 

will be able to participate equitably in the partnership. 

This section requires that at least 50 percent of partnership 

funds be used to ‘‘directly benefit’’ partner local educational agencies and clarifies that any entity under the partnership may be the 

fiscal agent of such partnership. 

H.R. 609 requires that eligible partnerships use funds to reform 

teacher preparation requirements, coordinate with State activities 

authorized under title II of the No Child Left Behind Act, and ensure that current and future teachers are highly qualified. Partnership grant funds must be used for: (1) designing teacher preparation programs that are based on rigorous academic content, scientifically based research (including scientifically based reading research), and challenging State student academic content standards; 

(2) providing sustained and high quality pre-service and in-service 

clinical experience for teachers, including the mentoring of prospective teachers by exemplary teachers; (3) creating opportunities for 

enhanced and ongoing professional development consistent with 

the definition of ‘‘professional development’’ in the No Child Left 

Behind Act; and (4) developing professional development activities 

that provide training in how to teach and address the needs of students with different learning styles (particularly students with disabilities) and to provide training in methods of improving student 

behavior in the classroom. 

An eligible partnership that receives a partnership grant may 

also use funds for: (1) providing prospective teachers with alternative routes to traditional preparation and State certification; (2) 

disseminating information on effective practices of the partnership; 

(3) developing managerial and leadership professional development 

programs for principals and superintendents; (4) providing teacher 

recruitment activities; (5) creating opportunities for teachers to 

gain clinical experience in science, math, and technology (as long 

as such teachers commit to an additional two years in the classroom after the clinical experience); (6) coordination with community 

colleges to implement teacher preparation programs; (7) establishing or implementing a teacher mentoring program; (8) providing training for teachers to use computer software for multilingual education to address the needs of limited English proficient 

students; (9) increasing the knowledge and skills of pre-service 

teachers participating in activities related to the needs of gifted 

and talented students; and (10) increasing the number of highly 

qualified special education, math and science teachers. 

Teacher recruitment grants 

H.R. 609 requires that applicants for Teacher Recruitment 

Grants submit an application that, among other things, describes 

the extent to which the applicant will use funds to recruit minorities into the teaching profession and directs the Secretary of Education to give priority to applicants that will place an emphasis on 

recruiting minorities into the teaching profession. In addition, the 

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ceive assistance to a minimum of one year, plus an amount of time 

equivalent to the aid received. 

An eligible applicant must use teacher recruitment grant funds 

to: (1) award scholarships to help students pay the costs of tuition, 

room, board, and other expenses of completing a teacher preparation program; (2) provide support services to enable scholarship recipients to complete postsecondary education programs; and (3) provide follow up services to former scholarship recipients during the 

recipients’ first 3 years of teaching; or develop and implement activities to ensure that high need local educational agencies and 

schools are able to effectively recruit highly qualified teachers. 

In addition to using funds for the aforementioned required activities, an eligible applicant that receives a teacher recruitment grant 

may also use funds to recruit employees from high demand industries, including mathematics, science, engineering, and technology 

industries, into the teaching profession. Eligible applicants may 

also use funds to conduct outreach and coordinate with inner city 

and rural secondary schools to encourage students to pursue teaching as a career; develop and implement dual degree programs; and 

recruit high achieving students and bilingual students into early 

childhood education programs. 

Accountability for programs that prepare teachers 

Under H.R. 609, each State that receives grants under the Act 

must continue its ‘‘State Report Card on the Quality of Teacher 

Preparation’’ (as required under P.L. 105–244, the Higher Education Amendments of 1998) and report annually to the Secretary 

of Education, for both traditional and alternative teacher preparation programs, the percentage of students (who completed at least 

50 percent of the coursework required for teacher preparation programs) that took and passed the State certification or licensure assessment. 

H.R. 609 continues provisions for the Secretary of Education to 

report on teacher quality and preparation in the United States. 

Among other things, the Secretary’s report (which is made available to the Congress and the public) must include: (1) A comparison of States’ efforts to improve teaching quality; and (2) the national mean and median scores on any standardized test that is 

used in one or more States for teacher certification or licensure. 

Each teacher preparation program that enrolls students receiving 

Federal assistance under the Act must also continue current law 

reporting requirements with regard to the quality of teacher preparation. In particular, H.R. 609 requires annual reports from teacher 

preparation programs that must include: (1) the pass rate of each 

student who completed at least 50 percent of the coursework required for the teacher preparation program on the State certification or licensure assessment; (2) a comparison of the program’s 

pass rate for students who completed at least 50 percent of the 

coursework required for the teacher preparation program with the 

average pass rate for other programs in the State; and (3) a comparison of the program’s average raw score for students who completed at least 50 percent of the coursework required for the teacher preparation program with the average raw scores for other programs in the State. In the case of programs with fewer than ten 

students who have completed at least 50 percent of the requireVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00139 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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ments, the institution shall collect and publish information with respect to an average pass rate on State certification or licensure assessments taken over a 3-year period. 

H.R. 609 adds provisions to the Higher Education Act that require the Governor of a State (or the entity in the State responsible 

for teacher certification and preparation) to attest to the reliability 

of data reported under the Act to the Secretary of Education. 

Preparing tomorrow’s teachers to use technology 

H.R. 609 continues activities authorized under the Preparing Tomorrow’s Teachers to Use Technology program. This program was 

updated and transferred from the Elementary and Secondary Education Act to the Higher Education Act during consideration of the 

No Child Left Behind Act in the 107th Congress. The purpose of 

this program is to prepare prospective teachers to use advanced 

technology to prepare all students to meet challenging State and 

local academic content and student academic achievement standards. 

Centers of excellence 

H.R. 609 authorizes grants for the creation of Centers of Excellence at high quality minority serving institutions. Under this part, 

grants are competitively awarded to high quality teacher preparation programs (as determined by the State) at eligible institutions 

which include: Historically Black Colleges or Universities, Hispanic-Serving Institutions, Tribally Controlled Colleges or Universities, Alaska Native-Serving Institutions, or Native HawaiianServing Institutions. 

Teacher incentive fund 

The bill also authorizes the Teacher Incentive Fund with the 

purpose of assisting States, local educational agencies, and nonprofit or for-profit organizations to develop and implement, or expand, innovative compensation systems to provide financial rewards for teachers and principals who raise student academic 

achievement and close the achievement gap, especially in the highest-need local educational agencies. 

Title III—Institutional Aid 

Title III of H.R. 609 amends provisions and programs under title 

III (Institutional Aid) of the Higher Education Act and reauthorizes 

title III through fiscal year 2011. 

Tribally Controlled Colleges and Universities 

The bill amends the current competitive grant program for Tribally Controlled Colleges and Universities (TCCUs) and establishes 

a formula grant for these institutions. The minimum grant for each 

institution is $400,000. With the creation of a formula grant, the 

bill removes the two-year wait-out period, which is no longer necessary under the new formula grant provision. Additionally, H.R. 

609 allows TCCUs to use funds for the development and improvement of facilities for Internet and other distance learning academic 

instruction capabilities and to use funds to assist with advanced 

degrees in tribal governance or the development of tribal public 

policy. 

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Alaska-Native and Native-Hawaiian Serving Institutions 

H.R. 609 conforms the uses of funds provisions for Alaska-Native 

and Native-Hawaiian Serving Institutions to that of all the other 

minority serving institution programs by allowing funds to be used 

for construction and maintenance of instructional facilities. These 

institutions can also use funds for the development and improvement of facilities for Internet and other distance learning academic 

instruction capabilities and to use funds to assist with advanced 

degrees in tribal governance or the development of tribal public 

policy. Lastly, the bill allows these institutions to use no more than 

20 percent of their grant funds to establish an endowment fund 

with the use of matching funds. This provision is already provided 

for within title III for other minority serving institutions. 

Historically Black Colleges and Universities 

The bill amends the program that serves Historically Black Colleges and Universities (HBCUs) to allow these institutions to use 

no more than two percent of funds received through their grant to 

secure technical assistance, for use with enrollment management, 

financial management and strategic planning. The bill also requires that these institutions report to the Secretary on the use of 

those funds. As with the other programs that assist minority serving institutions, the bill allows HBCUs to use their funds for the 

development and improvement of facilities for Internet and other 

distance learning academic instruction capabilities. H.R. 609 permits HBCUs to use their funds to establish community outreach 

programs and collaborative partnerships between their institution 

and elementary and secondary schools. Lastly, the bill increases 

the minimum grant for HBCUs from $500,000 to $750,000 provided 

funds are available to provide eligible institutions a grant equal to 

the preceding year. 

Historically Black Graduate Institutions 

H.R. 609 amends the Historically Black Graduate Institutions 

(HBGIs) program to ensure that the institution receiving an HBGI 

grant is accredited by a national accrediting agency recognized by 

the Secretary and is in good standing with that agency. The bill 

adds four new eligible institutions to the HBGI program and maintains the current hold harmless funding provisions. 

Technical amendments to Title III 

H.R. 609 amends the uses of funds for all of the programs that 

award funds to minority-serving institutions under this title to encourage education and counseling services for students and their 

families that will improve their financial and economic literacy. Additionally, all minority serving institutions can use funds to acquire 

real property adjacent to the campus for the expansion and development of academic facilities. The bill also ensures that eligible 

programs under this title are those that provide not less than a 

two-year program that is acceptable for full credit toward a bachelor’s degree. 

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Title IV—Student Assistance 

Title IV of H.R. 609 amends provisions and programs under title 

IV (Student Assistance) of the Higher Education Act and reauthorizes title IV through fiscal year 2011, unless otherwise specified. 

Pell Grant program 

H.R. 609 amends the Pell Grant program by extending the authorization through academic year 2012–2013 and establishes a 

maximum grant award of $6,000. The bill eliminates the tuition 

sensitivity provision. The bill provides for year-round Pell Grants 

for students enrolled for 12 consecutive months, rather than 9 consecutive months in order to accelerate program completion. Yearround Pell Grants are limited to four-year institutions that have a 

graduation rate of at least 30 percent and two-year institutions 

that have a graduation rate in at least one of the last three years 

for which data is available that exceeds the average for the sector. 

The bill requires an evaluation of the year-round Pell Grant program and a report by the Secretary to the Congress. H.R. 609 restricts the use of Pell Grants for remedial or ESL instruction to one 

academic year. H.R. 609 also limits the number of semesters or 

quarters a student may receive a Pell Grant to 18 semesters or 27 

quarters. 

The bill creates a new initiative called Pell Grants Plus— Achievement Grants for State Scholars. This initiative will provide 

for up to an additional $1,000 for the first two years of full-time 

undergraduate study to Pell-eligible, high achieving students. To be 

eligible to receive the additional $1,000 for the first-year of postsecondary study, a student must be enrolled full-time in the first year 

of undergraduate education and not have been previously enrolled 

in an undergraduate program. The student must also be Pell eligible and have successfully completed a high school program supported by the Center for State Scholars. This award, along with 

other aid for which the student is eligible, may not exceed the student’s cost of attendance. To continue eligibility for the second year 

of undergraduate study, the student must continue to be Pell-eligible, be enrolled full time and obtain a grade point average of at 

least 3.0 and fulfill satisfactory academic progress. The Secretary 

will monitor the progress, retention, and completion of these students to evaluate the impact of this program and provide recommendations to the authorizing committees for its continuation or 

necessary changes. 

TRIO program 

H.R. 609 reauthorizes the TRIO program and extends TRIO 

grants to five years and synchronizes the grants to a five-year 

term. The bill also increases the minimum award amount for TRIO 

grants. H.R. 609 allows for a competition among novice TRIO applicants to provide an opportunity for institutions that have never received a TRIO grant to compete for funds. The provision requires 

the Secretary to put aside ten percent of the funds available for 

each competition for novice applicants. If there are not enough 

qualified novice applicants to utilize the ten percent, the bill directs 

the funds to be returned to the general TRIO fund for other 

awards. H.R. 609 ensures that all veterans and individuals who are 

defined as homeless or unaccompanied youth will be eligible to parVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00142 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
139 

ticipate in TRIO provided services. The bill also clarifies that institutions with more than one campus may apply for separate grants 

to serve different populations on different campuses. The bill increases stipends for students in Upward Bound and the McNair 

Postbaccalaureate Achievement Program. Throughout the TRIO 

programs, the bill authorizes funds to be used for education and 

counseling services to improve financial and economic literacy of 

students and families who are assisted by TRIO funds. Additionally, the bill calls for Educational Opportunity Centers and Student 

Support Services to provide services to low-income working adults. 

The bill also establishes new performance measures for TRIO 

grantees, which will help the Secretary and the Congress measure 

the quality and effectiveness of programs and the impact the programs are having on the target populations to be served. 

Gaining Early Awareness and Readiness for Undergraduate 

Programs (GEAR UP) 

H.R. 609 reauthorizes the Gaining Early Awareness and Readiness for Undergraduate Program (GEAR UP) and provides assurances that entities currently holding GEAR UP grants may reapply 

upon expiration of their grant. Additionally, the bill allows GEAR 

UP services to be provided to students coming out of a GEAR UP 

cohort and transitioning into postsecondary education. The bill requires that GEAR UP applications include a description of activities in place to coordinate, complement and enhance services provided by other State entities. H.R. 609 authorizes funds to be used 

for education and counseling services to improve financial and economic literacy of students and families who are assisted by GEAR 

UP funds. The bill clarifies individuals who are defined as homeless or unaccompanied youth are eligible to participate in GEAR 

UP programs. Finally, H.R. 609 clarifies that the duration of a 

GEAR UP grant is for six years. 

Campus based aid programs 

H.R. 609 reauthorizes all three campus based aid programs: Supplemental Educational Opportunity Grants (SEOG), Federal Work 

Study and the Perkins loan program. The bill provides for a phase 

out of the base guarantee for the allocation of campus based aid 

funds to eligible institutions beginning in 2008. Base guarantee 

funds decrease by 20 percent every two years and are replaced by 

funds awarded by the fair share formula calculation. Should the 

funds in the SEOG and Federal Work Study programs exceed $700 

million, the bill gives the Secretary the discretion to allocate not 

more than 10 percent of such funds to institutions that graduate 

degree-seeking Pell Grant recipients who complete a four-year degree in four years and a two-year degree in two years. Within all 

three campus based aid programs, the books and supplies allowance is increased in the determination of the cost of attendance. 

Within the Federal Work Study program, the bill allows student 

employment in on-campus day care centers to count toward community service jobs for work-study students. The bill also permits 

up to 15 percent or $75,000 of an institution’s allocation, whichever 

is less, to be used to locate and develop jobs for students, including 

community service jobs. H.R. 609 makes technical and clarifying 

corrections to the work college provisions. 

140 

Leveraging Educational Assistance Partnerships; Child Care 

Access Means Parents in School 

H.R. 609 reauthorizes the Leveraging Educational Assistance 

Partnerships (LEAP) program and the Child Care Access Means 

Parents in School program. 

High School Equivalency Program; College Assistance Migrant Program 

H.R. 609 reauthorizes the High School Equivalency Program 

(HEP) and the College Assistance Migrant Program (CAMP). The 

bill expands services to those with family members who are migrant or seasonal farm workers, and allows for follow-up services. 

H.R. 609 encourages that funds be used for HEP students who are 

in programs of two-years or less to transfer to four-year institutions. 

Robert C. Byrd Honors Scholarship Program 

The bill reauthorizes the Byrd Scholarship Program and amends 

the emphasis of the program to focus more intently on the math 

and science related disciplines. The program is renamed to the 

Robert C. Byrd Mathematics and Science Honors Scholarship Program. 

Learning Anytime Anywhere Partnerships 

H.R. 609 repeals the Learning Anytime Anywhere Partnerships 

program. 

Federal Family Education Loan (FFEL) & Direct Loan (DL) 

programs 

The Federal Family Education Loan (FFEL) program is reauthorized through fiscal year 2011 and the insurance provisions are 

reauthorized through fiscal year 2012. The Direct Loan (DL) program is also reauthorized through fiscal year 2011. H.R. 609 provides a small increase to the maximum amount of funds that are 

available to guaranty agencies for administrative purposes included 

in section 458 of the Higher Education Act, while maintaining current authorized levels for the overall administration of the student 

aid programs. 

H.R. 609 increases the annual maximum loan limits in both the 

FFEL and DL programs for first and second year college students 

from $2,625 to $3,500 and from $3,500 to $4,500, respectively, beginning with loans issued on or after July 1, 2007. The bill also 

clarifies that underlying loans that have been wrapped into a consolidation loan will still count against the borrower’s aggregate 

loan limits. Finally, H.R. 609 increases the annual unsubsidized 

graduate loan limits in both the FFEL and DL programs from 

$10,000 to $12,000. 

The bill retains the variable rate formula for both the FFEL and 

DL programs and repeals the change in Stafford loan and PLUS 

loan interest rates scheduled for July 1, 2006. 

Beginning on July 1, 2006, the bill changes the interest rates on 

consolidation loans in both the FFEL and DL programs to offer the 

borrower a choice between a fixed interest rate or a variable interest rate. The fixed interest rate is equal to the 91-day Treasury bill 

+ 3.3 percent, capped at 8.25 percent and includes a one-time fixed 

141 

rate offset fee of 0.50 percent. The variable interest rate is equal 

to the 91-day Treasury bill + 2.3 percent, capped at 8.25 percent. 

The fixed interest rate for PLUS loans is equal to the 91-day Treasury bill + 4.1 percent, capped at 9.0 percent and includes a onetime fixed rate offset fee of 0.50 percent. The variable interest rate 

for PLUS loans is equal to the 91-day Treasury bill + 3.1 percent, 

capped at 9.0 percent. 

H.R. 609 retains a provision from current law that limits the 

number of times a borrower can consolidate his loans; however, the 

bill does allow a borrower to move into the DL program for purposes of avoiding default by utilizing income contingent repayment. 

The bill also eliminates in-school consolidation in the FFEL program and closes a loophole in the consolidation loan program that 

permits borrowers to re-consolidate by switching between the FFEL 

and DL programs. H.R. 609 eliminates the single holder rule but 

requires that a borrower notify the holder of his loans of his intent 

to consolidate if all of the loans are held by one lender. In addition, 

the bill requires lenders provide the borrowers with more information, such as the benefits the borrower could be losing by consolidating, when the borrower requests to consolidate his loans. Taken 

together, these two reforms give greater flexibility for borrowers to 

choose their consolidation lender and ensure the borrowers are 

given all the information about the advantages and disadvantages 

of consolidating his loans. 

The bill makes several conforming and technical amendments 

within the special allowance section. The bill also requires lenders 

to rebate to the government their ‘‘floor income.’’ Floor income is 

a benefit to lenders that takes place when the fluctuating guaranteed rate of return for lenders is lower than the fluctuating borrower interest rate. During this period, current law permits the 

lender to keep the higher amount being paid by the borrower, rather than just retaining the lender’s guaranteed rate of return. H.R. 

609 requires the lender only receive its guaranteed rate of return 

and rebate to the government the difference between lender yield 

and the borrower’s interest rate, when the borrower rate is higher. 

H.R. 609 also permanently closes the 9.5 percent subsidy by extending the Taxpayer-Teacher Protection Act (P.L. 108–409) and 

shutting down the ability of lenders to recycle additional loans to 

gain the minimum 9.5 percent special allowance. 

H.R. 609 requires guaranty agencies to charge the one percent 

Federal default fee on loans disbursed on or after July 1, 2006. 

This fee is already included in current law, but the guaranty agencies have the ability to waive the fee. The fee will be deposited in 

the guaranty agencies’ Federal Student Loan Reserve fund. The bill 

also phases down the origination fee charged on FFEL Stafford 

loans from three percent to zero percent over the course of the reauthorization. H.R. 609 also phases down the origination fee required on Direct Loans from the statutorily required four percent 

to one percent by 2010. The bill also prohibits the Secretary of 

Education from waiving this fee as a repayment incentive and prohibits any sort of repayment incentive being given prior to the borrower entering repayment. By 2010, students will only be charged 

a one percent fee on their student loans in both the FFEL and the 

DL programs. 

142 

To prevent against further fraud and abuse within the student 

loan program, H.R. 609 requires the disbursement of Federal loan 

funds to students attending foreign schools to be sent to the institution. 

The bill aligns the DL extended repayment plan with the FFEL 

extended repayment plan. The bill also requires a borrower to take 

into account his or her spouse’s income when determining income 

for purposes of the income contingent repayment plans. H.R. 609 

also creates a new interest only repayment plan under which the 

borrower would only pay the interest on the loan for the first two 

years. This plan was created in both the FFEL and Direct Loan 

programs. 

The bill adds a new deferment option for student loan borrowers 

(either in the FFEL or DL program) that are serving in the U.S. 

Armed Forces. 

H.R. 609 authorizes additional areas for discretionary loan forgiveness in both the FFEL and DL programs, including early childhood educators, nurses, foreign language specialists, librarians, bilingual educators, first responders in low income areas, child welfare workers, speech language pathologists and other areas of national need as designated by the Secretary. 

The bill also makes permanent mandatory teacher loan forgiveness for highly qualified math, science and special education teachers teaching in public or private schools and adds a new teacher 

loan forgiveness option for reading specialists. The bill increases 

risk sharing for the lenders and guarantors in the FFEL program 

by lowering the lender insurance from 98 percent to 96 percent and 

the guarantor reinsurance from 95 percent to 93 percent. H.R. 609 

also grants 100 percent insurance for claims with respect to loans 

for which it is determined that the borrower, without the lender’s 

knowledge, provided false information when the loan was made 

that caused the loan to be ineligible for interest benefits under the 

Federal loan programs. The bill also tightens the requirements on 

the exceptional performance program and lowers the insurance 

from 100 percent to 98 percent. H.R. 609 lowers the amount guarantors are permitted to keep as collection costs from 18.5 percent 

to 10 percent if the borrower consolidates a defaulted loan rather 

than pursuing rehabilitation. In addition, H.R. 609 imposes a limit 

of 45 percent on the amount of a guarantor’s collections portfolio 

that can be in consolidation loans. The bill also lowers the number 

of payments for a borrower to rehabilitate the loan from 12 to 9 

and infuses more requirements of financial literacy into borrower 

education initiatives. 

H.R. 609 adds a provision that requires parents to repay loan 

funds obtained by fraud before any additional funds can be taken 

out if the parents are convicted of fraud in the student loan programs. 

The school as lender program provisions are reformed to clarify 

that schools can only lend to graduate students and any profits 

made by the school must be put toward need based aid. 

To ease the burden on student loan borrowers that are already 

facing formidable challenges due to a disability, H.R. 609 provides 

that if the Veterans Administration or the Social Security Administration determines an individual to be totally and permanently disabled, the Secretary of Education shall accept that determination 

143 

and the borrower need not provide the Secretary of Education with 

additional paperwork for the discharge of student loan obligations. 

H.R. 609 also eliminates the requirement that a forbearance 

agreement be in writing in the FFEL and DL programs, and instead requires that a notice of forbearance agreement be sent to 

the borrower and kept in the borrower’s file. 

Teacher loan forgiveness 

H.R. 609 makes permanent an increase in the allowable maximum loan forgiveness for math, science, special education teachers 

and reading specialists in the FFEL and the DL programs from 

$5,000 to $17,500. This loan forgiveness was originally included for 

one year in the Taxpayer-Teacher Protection Act of 2004 (P.L. 108– 409). This increased loan forgiveness is available for highly qualified math, science and special education teachers and reading specialists teaching in high need, title I schools. The loan forgiveness 

passed by the Congress last year, and made permanent in H.R. 

609, coordinates the requirement for teachers to be highly qualified, as well as the poverty level for school wide programs, as defined in the No Child Left Behind Act, with eligibility for all teacher loan forgiveness. 

Perkins loan program 

The Perkins loan program is reauthorized through fiscal year 

2011. As with the other two campus based aid programs, the base 

guarantee is also phased out for the Perkins loan program and the 

allocation of funds is replaced with the fair share formula calculation. H.R. 609 increases the annual maximum loan limits from 

$4,000 to $5,500 for undergraduates and from $6,000 to $8,000 for 

graduate or professional students. Additionally, the aggregate loan 

limits are increased from $20,000 to $27,500 for undergraduates 

and from $40,000 to $60,000 for graduate and professional students. The bill conforms forbearance requirements in Perkins to 

FFEL and DL to state that a borrower need not request the forbearance in writing. H.R. 609 also allows institutions to negotiate 

compromise payments on defaulted Perkins loans. The bill conforms the rehabilitation provision in Perkins to that in FFEL and 

DL by requiring 9 on-time, consecutive monthly payments, rather 

than 12. H.R. 609 also allows for greater cancellation opportunities 

for members of the Armed Services and gives them the same consideration as is given to teachers, full-time law enforcement officers 

and nurses. 

Need analysis 

H.R. 609 simplifies and expands the eligibility of families to utilize the Simplified Needs Test for need analysis to include those already receiving benefits under a means-tested Federal benefit program, which is defined in the bill. The bill also authorizes the Secretary to regularly evaluate the impact of these eligibility guidelines and ensure that the Simplified Needs Test continues to be 

targeted to the maximum number of low- and moderate-income students as possible. 

H.R. 609 calls for improvements to the paper and electronic Free 

Application for Federal Student Aid (FAFSA). The bill directs the 

Secretary to permit applicants to complete their FAFSA in the 

144 

three years prior to enrollment in order to obtain a non-binding estimate of the family contribution. The bill also authorizes an evaluation by the Secretary to determine differences between initial, 

non-binding early estimates and the final financial aid award made 

to the student. Additionally, H.R. 609 authorizes the Secretary to 

develop and use a simplified paper application form to be known 

as the EZ-FAFSA for applicants who meet the requirements of eligibility for the Simplified Needs Test. The Secretary shall annually 

report to Congress on the impact of the digital divide on students 

completing applications for Federal student aid and also report on 

the steps taken to phase out the paper form as barriers to the electronic form are eliminated. In addition to the EZ-FAFSA, the Secretary shall develop and use a simplified electronic application with 

reduced data elements and state data that only applies to the applicant. 

For all forms, the Secretary shall ensure that data collection 

complies with privacy requirements and that all forms developed 

shall maintain reasonable and appropriate administrative, technical, and physical safeguards to ensure the integrity and confidentiality of the information. 

H.R. 609 authorizes a streamlined reapplication process for students and further encourages the Secretary to work to reduce the 

number of data elements on the FAFSA. The Secretary shall encourage States to take such steps as necessary to encourage the use 

of simplified application forms and conduct an annual review to determine which forms and data items the States require to award 

need-based State aid to applicants. 

The bill makes clear that the FAFSA, in whatever form it is produced, shall be produced, distributed, and processed by the Secretary and no parent or student shall be charged a fee for the collection, processing or delivery of financial aid through the use of 

the FAFSA. 

The bill clarifies that a student who is an orphan, in foster care, 

or is a ward of the court, or was in foster care or a ward of the 

court until the age of 18, is considered an independent student. 

H.R. 609 also treats active duty members of the military as independent students for the purposes of need analysis. H.R. 609 clarifies that a student’s status as a ward of the court prior to 18 years 

of age, a student’s status as an individual adopted at or after age 

13, or a student’s status as a homeless or unaccompanied youth can 

be considered as a ‘‘special circumstance’’ for the purposes of 

awarding title IV Federal financial aid. 

The bill increases the dependent student work protection allowance from $2,200 to $3,000. H.R. 609 excludes distributions from 

eligible 529 plans from counting as income or a resource and equalizes the treatment of both tuition savings plans and pre-paid tuition plans in the need analysis formula. Under the bill, plans will 

be treated as assets of the parents for dependent students and assets of the student for independent students. H.R. 609 provides for 

an exception to be made to the need analysis formula for families 

that own small businesses that employ less than 100 full-time 

equivalent employees. The bill also provides for a clarification to 

the need analysis formula for students who receive a stipend from 

their State as a replacement for the direct appropriation of funds 

to the institution of higher education. 

145 

Definitions of academic year and eligible program 

H.R. 609 provides simplification for clock hour schools within the 

definition of an academic year in terms of the number of weeks required. The bill reduces a 30-week requirement to 26 weeks, while 

retaining the requirement for 900 hours to constitute a full academic year. Additionally, the bill recognizes that an eligible program can include an instructional program that utilizes direct assessment of student learning, in lieu of credit or clock hours. 

Distance education 

The bill amends the definition of distance education as an eligible program for title IV student aid purposes as a program that is 

offered in whole or part through telecommunications, if provided by 

an accredited institution of higher education, other than a foreign 

school. The accreditor that accredits the institution must have the 

evaluation of distance education within its scope. The bill eliminates the connection between correspondence and telecommunications for the purposes of the repeal of the 50 percent rule and 

title IV program participation. 

Expanding information dissemination regarding eligibility 

for Pell Grants 

H.R. 609 requires the Secretary to make a special effort to notify 

students and parents who qualify for free lunch, food stamps, or 

other such programs, of their potential eligibility for a maximum 

Pell Grant. 

Student eligibility 

The bill amends various provisions concerning student eligibility. 

Students who are convicted of title IV program fraud are required 

to repay the funds they fraudulently obtained to the Secretary or 

the holder of the loan. Second, individuals who are subject to involuntary civil commitments upon completion of a period of incarceration for sexual offenses are not eligible for Pell Grants. Third, the 

bill clarifies eligibility for students from the Freely Associated 

States for Pell Grants. 

H.R. 609 authorizes the Secretary of Education to work with the 

Secretary of the Treasury to provide for an IRS data match. 

The bill clarifies that the suspension of eligibility for drug offense 

convictions occurs only for those students enrolled in an institution 

of higher education and receiving title IV aid when convicted of 

their offense. H.R. 609 also requires the institution of higher education to inform students of the possibility of suspension of eligibility for title IV aid for drug related offenses. 

Institutional refunds 

H.R. 609 allows an institution of higher education to contact a 

student who may be eligible for a late disbursement of loan funds 

and get the borrower’s agreement before disbursing the funds. The 

bill also provides an institution with 45 days from the date of determination that a student has withdrawn to return loan funds. 

H.R. 609 permits the Secretary to waive the amounts that students 

are required to return to the government with respect to Pell Grant 

funds if the withdrawal is due to a major disaster, declared by the 

President. 

146 

Institutional and financial assistance information for students 

The bill ensures that institutional and financial assistance information that is provided to students is made publicly available 

through appropriate publications, mailings, electronic media, and 

accrediting agency reports. H.R. 609 expands the information an 

institution provides to students regarding academic programs to include the institution’s educational mission and goals. Additionally, 

the institution is responsible for providing the student with a summary of student outcomes for full time undergraduate students 

that includes completion and graduation rates of certificate and degree-seeking students, as well as any additional qualitative or 

quantitative outcome data reflective of distance education outcomes 

or licensing and placement rates for professional and vocational 

programs. The bill provides students the opportunity to register 

complaints about the institution with the institution or programmatic accreditor. H.R. 609 requires the institution to notify 

the student regarding the acceptance or denial of academic credit 

earned at another institution of higher education and maintain a 

policy that the denial of credit will not be based solely on the 

source of accreditation of a sending institution, provided that the 

sending institution is accredited by an agency or association that 

is recognized by the Secretary. 

The bill does clarify that the provision does not authorize any 

employee at the Department of Education to exercise any direction, 

supervision, or control over the curriculum, program of instruction, 

administration or personnel of any institution of higher education 

or any accrediting agency or association regarding the transfer of 

credit policy. H.R. 609 permits institutions to provide supplemental 

data to enrolled and prospective students that demonstrate evidence of student participation in educationally purposeful activities. 

The bill requires institutions of higher education to include in 

their exit counseling materials the same consumer protection language required by lenders with regard to consolidation loans. H.R. 

609 also clarifies that foreign institutions are not required to report 

data dealing with campus crime, as these institutions do not utilize 

similar crime definitions and do not abide by similar reporting requirements as domestic institutions of higher education. 

H.R. 609 requires institutions of higher education to file a fire 

safety report with the Secretary detailing campus fire safety practices and standards. 

College Access Initiative 

The bill creates a new section, the College Access Initiative that 

is intended to provide outreach and better information regarding 

student financial aid and access programs to students and their 

families. The College Access Initiative requires guaranty agencies 

to gather information on programs and student aid available in the 

State in which they are designated. That information must be 

made available to the public and reported to the Secretary to establish a directory of programs and provide for access to the information through the Internet and any other means determined by the 

Secretary. Each guaranty agency shall establish a plan to gather 

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clude how the agency will undertake the task, how it will publicize 

the information gathered, and how it will coordinate with other entities in the State. Information collected by the guarantors will include resources on college planning, career preparation and paying 

for college. Guarantors may utilize funds from their operating fund 

and if any funds remain, they may use funds from their former restricted accounts. 

Distance Education Demonstration Program 

H.R. 609 reauthorizes and amends the Distance Education Demonstration Program to allow up to five degree-granting, accredited 

correspondence schools to participate. The bill also increases the 

number of institutional and consortium participants from 35 to 

100. 

College Affordability Demonstration Program 

The bill authorizes a College Affordability Demonstration Program that will foster increased innovation in the delivery of higher 

education and student financial aid in a manner that results in reduced costs for students as well as the institution. Strategies that 

can be employed could include: accelerated degree or program completion, increasing availability of and access to distance education, 

and engaging in collaborative arrangements with other institutions 

and organizations. The College Affordability Demonstration Program is open to no more than 100 institutions of higher education, 

including those applying as part of systems or consortia and does 

not include foreign schools. At the conclusion of the Demonstration, 

the Secretary shall review current law rules and regulations and 

identify those that present impediments to the implementation of 

innovations that result in cost savings and in expanding access to 

education. 

Program Participation Agreements 

The bill clarifies that an institution of higher education is permitted to provide voter registration materials electronically to enrolled students. 

The bill also amends the Program Participation Agreement (PPA) 

by moving the 90/10 rule for proprietary institutions from eligibility criteria for the for-profit sector to the PPA and further defining the 10 percent portion of the ratio. The new 90/10 rule now applies to all institutions of higher education and counts the following 

funds toward the 10 percent: (1) funds used by students to pay tuition, fees and other institutional charges from sources other than 

title IV funds; (2) institutional funds used to satisfy matching-fund 

requirements for programs under title IV; (3) funds from savings 

plans for educational expenses established by the Internal Revenue 

Code of 1986; (4) funds paid by a student, or on behalf of a student 

by a party other than the institution, for an education or training 

program that is not eligible for funds under title IV; and (5) institutional aid (in the case of loans, only the amount of loan repayment 

received during the fiscal year and in the case of institutional 

scholarships, only those provided by the institution in the form of 

monetary aid or tuition discounts). If the institution fails to comply 

with the 90/10 rule for three consecutive years, the institution shall 

become ineligible to participate in the title IV programs. The SecVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00151 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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retary may also place the institution on provisional certification or 

require other such monitoring and reporting that is necessary for 

the institution to demonstrate compliance. The Secretary shall 

identify on the College Opportunities On-Line (COOL) website 

those institutions that fail to meet the 90/10 rule in any given year. 

H.R. 609 also requires institutions of higher education, within 

one year of the date of enactment, to disclose to an alleged victim 

of any crime of violence or non-forcible sex offense, the final results 

of any disciplinary proceeding. If the victim is deceased, that information shall be disclosed to the victim’s next of kin. 

Program integrity 

H.R. 609 permits States to be able to apply to the Secretary for 

approval as a recognized accreditor. 

The bill clarifies that accreditors who seek to have distance education in the scope of their accrediting process must demonstrate 

to the Secretary that the accreditation agency’s or association’s 

standards effectively address the quality of an institution’s distance 

education programs, but the accreditors are not required to have 

separate standards, procedures, or policies for the evaluation of distance education or programs. The bill also requires that an institution that offers distance education programs have processes by 

which it establishes that the student who registers in a distance 

education course or program is the same student who participates, 

completes academic work, and receives academic credit. H.R. 609 

ensures that accrediting agencies or associations shall take into account the institution’s stated missions, including religious values, 

when evaluating the institution for accreditation in a particular 

program. 

H.R. 609 clarifies that student achievement success must be 

measured against the relevant performance data and measures 

that the institution determines to be necessary to evaluate or 

strengthen its programs. The bill also clarifies that the accreditor 

must take into consideration fiscal administrative capacity and 

board governance, in the context of the institution’s mission, when 

evaluating an institution. 

In order to clarify the due process protections provided to the institution by the accrediting process, H.R. 609 calls for accrediting 

agencies and associations to establish and apply review procedures 

throughout the accrediting process, including evaluation and withdrawal proceedings that comply with due process requirements. 

These requirements include: (1) adequate specification of requirements and deficiencies at the institution or program being examined; (2) an opportunity for a written response by any such institution to be included in the evaluation and withdrawal proceedings; 

(3) an opportunity for the institution to appeal any adverse action 

at a hearing prior to such action becoming final before an appeals 

panel; and (4) the right to representation by counsel for an institution. 

The bill requires accrediting agencies and associations to make 

public a summary of agency or association actions including final 

denial, withdrawal, suspension or termination of accreditation or 

any other final adverse action taken with respect to an institution. 

H.R. 609 amends the accrediting agency and association operating procedures to include a provision under which agencies and 

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associations confirm that institutions have transfer of credit policies that are publicly disclosed and do not call for the denial of 

credit transfer based solely on the accreditor of the sending institution as long as the agency or association is recognized by the Secretary of Education. Additionally, accrediting agencies and associations are required to develop a brief summary, which should be 

made available to the public that details final adverse actions 

against institutions of higher education. The agencies and associations are also required to monitor the enrollment growth of distance education programs to ensure that an institution experiencing significant growth has the capacity to serve its students effectively. H.R. 609 also requires that the agencies and associations 

publicly disclose a list of the individuals who comprise the evaluation teams and a description of the agency’s process for selecting, 

preparing and evaluating its evaluation team volunteers; as well as 

any statements related to the accreditation responsibilities of such 

individuals. Lastly, the bill requires that the agency or association 

review any record of student complaints received. The Secretary is 

required to provide the Congress with an annual report on the status of any accreditation agency or association whose evaluation 

scope has been limited, or that has been suspended or terminated 

from recognition. 

During program reviews, H.R. 609 requires the Secretary to provide the institution with adequate opportunity to review and respond to any program review report or audit finding before the 

final program review or audit determination is reached. Additionally, the bill requires the Secretary to take into consideration the 

institution’s response in any final program review or audit determination. Under the bill, the Secretary shall include in the response a written statement addressing the institution’s response 

and stating the basis for the final determination. H.R. 609 also requires that the Secretary maintain and preserve at all times the 

confidentiality of any program review report or audit finding until 

a final program review or audit determination has been issued. 

Lastly, the bill requires that the authority to approve or issue any 

program review report or audit finding, preliminary or otherwise 

that exceeds $500,000 not be delegated to any officer other than 

the Chief Operating Officer of Federal Student Aid at the Department of Education. 

Report to Congress on prevention of fraud and abuse in student financial aid programs 

H.R. 609 authorizes the Secretary to commission a nonpartisan, 

comprehensive study on the prevention of fraud and abuse in title 

IV student financial aid programs and report the results to Congress not later than December 31, 2007. 

Title V—Developing Institutions 

Title V of H.R. 609 amends provisions and programs under title 

V (Developing Institutions) of the Higher Education Act and reauthorizes title V through fiscal year 2011. 

H.R. 609 amends the definition of an eligible Hispanic Serving 

Institution (HSI) and clarifies when an institution’s eligibility is determined. The bill also requires that the institution offer not less 

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elor’s degree in order to be eligible under title V. H.R. 609 also provides for a use of funds that will allow these institutions to use 

their grant funds to educate or counsel students and their families 

on economic and financial literacy. The bill will also allow HSIs to 

acquire real property adjacent to the campus with title V funds. 

Additionally, the bill allows these institutions to use their grant 

funds to establish community outreach programs and partnerships 

between HSIs and local elementary and secondary schools. H.R. 

609 repeals the two-year wait out period for HSIs. The bill also establishes a graduate program for HSIs. 

Title VI—International Education 

Title VI of H.R. 609 amends the programs under title VI (International Education Programs) of the Higher Education Act and reauthorizes title VI through fiscal year 2011. 

The bill creates a new International Education Advisory Board 

for all title VI programs to increase accountability by providing advice, counsel, and recommendations to the Secretary of Education 

and the Congress on international education issues for higher education. H.R. 609 also requires the Secretary of Education to take 

into account the degree to which activities of the centers, programs, 

and fellowships at institutions funded by title VI advance national 

interests, generate and disseminate information, and foster debate 

on international issues from diverse perspectives. 

In order to ensure that students of all ages are exposed to international education, the bill encourages and strengthens international knowledge at all stages of education by allowing centers 

and programs funded by title VI to serve as a national resource for 

courses and materials for use in elementary and secondary schools. 

The bill allows more of the overall title VI funds to be used for 

undergraduate education and also permits 10 percent of a project’s 

funds to be used for sending undergraduate students on educational programs abroad. Additionally, the bill stresses the importance for institutions to promote the safety of students in study 

abroad programs. 

Noting that minority serving institutions may not have the capacity to provide matching funds for the programs under title VI, 

the bill adds a special rule to the programs in the title that allows 

the Secretary to waive or reduce the non-Federal match for Historically Black Colleges and Universities, Hispanic Serving Institutions, Tribally Controlled Colleges and Universities, and AlaskaNative and Native-Hawaiian Serving institutions. 

The bill clarifies that the Institute for International Public Policy 

(IIPP) include all underrepresented populations in its program in 

order to enhance participation in international service. The International Studies in Higher Education Act also names students who 

participate in graduate or undergraduate internship programs 

through the IIPP as the ‘‘Ralph J. Bunche Fellows.’’

Title VII—Graduate Education 

Title VII of H.R. 609 amends the programs under title VII (Graduate Education Programs) of the Higher Education Act and reauthorizes title VII through fiscal year 2011. 

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Jacob K. Javits Fellowship Program 

The bill permits military personnel to interrupt Javits fellowship 

study when called to active duty, and requires the Javits fellowship 

board to include members from diverse geographic regions as well 

as at least one representative from a minority serving institution. 

The bill aligns the stipends for Javits fellowships to the National 

Science Foundation (NSF) Graduate Research Fellowship program. 

Graduate Assistance in Areas of National Need 

Within the Graduate Assistance in Areas of National Need 

(GAANN) program, the bill establishes a competitive priority for 

grants to those preparing math, science and special education faculty, as well as those preparing faculty to teach teachers of limited 

English proficient individuals. The bill aligns the stipends for 

GAANN fellowships to the NSF Graduate Research Fellowship program. 

The Thurgood Marshall Legal Educational Opportunity Program 

The College Access and Opportunity Act clarifies the grant authority within the Thurgood Marshall Program. 

Fund for the Improvement of Postsecondary Education 

(FIPSE) 

The bill encourages the recognition of innovative reform programs with the Fund for the Improvement of Postsecondary Education (FIPSE) program for non-traditional student populations 

and programs that work to improve secondary school and college 

graduation rates. The bill also provides for special projects within 

FIPSE to include partnerships to develop dual enrollment programs and articulation agreements; international partnerships 

with postsecondary institutions abroad; encourages the establishment of academic programs that teach traditional American history; and provide funds for institutions of higher education that 

want to provide services to disadvantaged communities. 

Urban Community Service program 

The bill repeals the Urban Community Service program. 

Demonstration Projects to Ensure Students with Disabilities 

Receive a Quality Higher Education 

The bill provides for new authority within the Demonstration 

Projects to Ensure Students with Disabilities Receive a Quality 

Higher Education Program to assist with students’ transition between secondary and postsecondary education. 

Title VIII—Clerical amendments 

Title VIII makes technical and clerical amendments to the Act. 

Title IX—Amendments to other education laws 

Education of the Deaf Act of 1986 

Title IX of H.R. 609 amends multiple education laws. The first 

is the Education of the Deaf Act of 1986, which authorizes and provides support for Gallaudet University and the National Technical 

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Institute for the Deaf (NTID). H.R. 609 reauthorizes the Education 

of the Deaf Act of 1986 through 2011 and includes amendments to 

several provisions of the Act. 

First, H.R. 609 identifies the Laurent Clerc National Deaf Education Center as the entity responsible for K–12 education programs at Gallaudet University. Second, the bill requires Gallaudet 

University to develop academic content standards, academic 

achievement standards, and academic assessments consistent with 

the No Child Left Behind Act for the elementary and secondary 

programs operated at the Laurent Clerc National Deaf Education 

Center. Third, the bill deletes the unnecessary definition of ‘‘institution of higher education.’’ Fourth, the bill slightly alters the reporting requirements for the NTID and Gallaudet University to require information about the disposition of students within one year 

of graduation or completion of their program. Fifth, the bill codifies 

the relationship between the Secretary of Education and the Rochester Institute of Technology for the operation of the NTID. Sixth, 

the bill includes several technical amendments, including updates 

to references to the authorizing committees of Congress. And, finally, the bill changes the name of the Act to the ‘‘Gallaudet University and National Technical Institute for the Deaf Act.’’

Cancellation of student loan debt for survivors of victims of 

the September 11, 2001 attacks 

H.R. 609 provides for cancellation of student loan debt for survivors of victims of the September 11, 2001 terrorist attacks. 

Repeals of expired and executed provisions 

The bill repeals the following provisions from the Higher Education Act Amendments of 1998: the Study of Market Mechanisms 

in Federal Student Loan Programs, the Study of Feasibility of Alternative Financial Instruments for Determining Lender Yields, 

the Student Related Debt Study, the Study of Opportunities for 

Participation in Athletic Programs, the Community Scholarship 

Mobilization program, the Incarcerated Youth program, the Improving United States Understanding of Science, Engineering, and 

Technology in East Asia program, and the Web-Based Education 

Commission. 

Extensions of authorizations and studies 

H.R. 609 extends the authorizations for the Transfer of Credit 

study, the Cohort Default Rate study, the Violence Against Women 

program, and the Underground Railroad program. 

Tribally Controlled College or University Assistance Act of 

1978; Navajo Community College Act; Education Amendments of 1992 

The bill reauthorizes the Tribally Controlled College or University Assistance Act of 1978 and makes clarifying changes to provisions concerning Indian student count and accreditation. H.R. 609 

reauthorizes the Navajo Community College Act and the provisions 

in the Education Amendments of 1992. 

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Studies and Sense of the Committee 

H.R. 609 authorizes four new studies, including: a Study of Student Learning Outcomes and Public Accountability, a Study of Minority Graduation Rates, a Study of Education-Related Indebtedness of Medical School Graduates, and a Study of Adult Learners. 

The bill also contains a Sense of the Committee on Education and 

the Workforce regarding college textbook prices. 

COMMITTEE VIEWS

In 1965, the Higher Education Act was established as a means 

to help low- and middle-income students gain access to college. The 

Higher Education Act represented the vision that a college education should be available to students from all walks of life, from 

across geographic regions, and from varying financial circumstances. The Higher Education Act was not created as a new 

postsecondary infrastructure to support or control colleges and universities; the investment was and still is primarily targeted to students themselves. The Higher Education Act is unique in its focus 

on providing students with a portable funding source that they 

may use at the institution of their choosing, modeling the success 

that can be achieved through authentic educational choice. 

Since its inception four decades ago, the Higher Education Act 

has provided hundreds of billions of dollars to students, as well as 

significant resources to colleges and universities themselves. The 

Higher Education Act is responsible for helping generations of 

American students successfully complete postsecondary studies and 

reap the benefits that come with higher education. Yet despite this 

clear success, the Committee believes the Higher Education Act 

has failed to achieve a fundamental goal: lowering the cost of a college education. For every increase in Federal student aid, it seems 

there is a larger increase in college tuition. The result is an 

unending spiral of financial confusion that leaves far too many 

American students unable to pursue a college education. 

The Committee believes reauthorization of the Higher Education 

Act is a vital opportunity to reassess the effectiveness of the Federal investment in higher education; realign our priorities to ensure the focus of the Higher Education Act is students; and redefine what it means to hold colleges and universities accountable. 

Policymakers have an opportunity—and an obligation—to enact 

meaningful reforms on behalf of American students, families, and 

taxpayers. 

The College Access and Opportunity Act, H.R. 609, reflects four 

principles for reform that guided the Committee’s efforts throughout the reauthorization process. Those principles are: affordability, 

accessibility, accountability, and quality. 

The first principle, affordability, cannot be achieved through Federal intervention alone. Colleges and universities, states and local 

communities, business interests, and students and parents must all 

work together to develop solutions to the affordability crisis in 

American higher education. However, there is a Federal role to 

play, and to that end, H.R. 609 seeks to make postsecondary education more affordable through two distinct approaches. First, the 

bill strengthens and updates the Federal student aid programs to 

better reflect the current higher education climate. Second, the bill 

154 

shines a spotlight on the college cost issue to empower consumers 

as they make decisions in the college marketplace. 

The second principle, accessibility, also requires input and involvement from all higher education stakeholders. While affordability is one key to accessibility, the issue of college access is not 

simply a question of cost. To expand college access, H.R. 609 includes a multitude of reforms aimed at meeting the needs of nontraditional college students. The face of the higher education population is changing, and Federal programs must be flexible and dynamic in serving the growing number of Americans from differing 

backgrounds pursuing higher education. The College Access and 

Opportunity Act adds new flexibility to allow programs and institutions to serve the changing needs of their students. The bill embraces advances in technology such as distance learning that can 

open the doors of higher education to new segments of the population. The Committee also believes college access is not just about 

getting students in the door, but ensuring their persistence and 

success. For that reason, the bill seeks to break down barriers to 

college credit transferability to allow an increasingly mobile student population to plan ahead to transfer from one institution to 

another and ultimately complete their education. 

The third principle, accountability, is a term that has become almost synonymous with education reform in recent years. However, 

accountability has a different connotation in the context of higher 

education than that commonly associated with K–12 education reform. In higher education, accountability can be best understood as 

a means for higher education consumers—students and parents, as 

well as all American taxpayers—to access information. It is often 

said that knowledge is power, and in higher education, the Committee believes that adage holds true. By providing consumers with 

access to information, they will be empowered with the knowledge 

they need to make their own best decisions in the college marketplace. The very nature of Federal higher education support—primarily a portable funding source that students spend at the institution of their choosing—demands that accountability will be in 

service to that consumer. 

Finally, the fourth principle, quality, must be understood within 

the realm of the vast diversity of America’s higher education system. There is no single, standard measure of quality that can be 

applied to all institutions or sectors of higher education. Institutions have differing missions. Students have differing goals within 

their postsecondary pursuits, and as such, seek differing measures 

by which they may judge quality. For these reasons, the Committee 

believes there cannot be a single Federal measure of quality, but 

rather the Federal government can help facilitate opportunities for 

institutions, students, and the public to make their own determinations of what constitutes a quality higher education. To that end, 

H.R. 609 focuses on greater transparency within the accreditation 

process and for the data colleges and universities report to the Federal government and made available to the public. 

Education beyond high school is becoming increasingly vital to 

the success of individual Americans, and to our society as a whole. 

As the Committee helps shape the future of higher education policy, it must bear in mind the vast growth in higher education participation that is yet to come. H.R. 609 will help update America’s 

155 

higher education system to meet the challenges of the future, and 

to ensure the Federal investment in higher education continues to 

be as effective and efficient as it can be. 

Historically speaking, and perhaps even more so today, Federal 

involvement in higher education is primarily viewed in financial 

terms. The Committee believes this emphasis on funding has both 

positive and negative implications for students and taxpayers. On 

the positive side, the Committee strongly believes that what has 

made the Higher Education Act so effective is that it targets funds 

directly to students. The Higher Education Act is a shining example of how educational freedom encourages competition and serves 

students by allowing them to make decisions about what educational opportunity will best meet their needs. On the negative 

side, the Committee believes the vast Federal investment has allowed America’s higher education system to become complacent in 

its efforts to expand service, increase efficiency, hold down costs, 

and increase quality. Some would even argue that the infusion of 

Federal resources has stifled the type of innovation and competition that would exist in a more demand-driven system that was not 

so dependent on third-party payments. 

Funding for higher education has indeed gone up dramatically in 

recent years. According to information from the College Board in 

its 2004 Trends in Student Aid report, Federally supported student 

aid programs have increased by 152 percent in the last decade. 

This includes increases in Pell Grants, Supplemental Educational 

Opportunity Grants, Federal Work Study, support for veterans and 

other military personnel, and student loans. As the cornerstone of 

the need-based Federal student aid programs, the increases in the 

Pell Grant program are striking. Since Republicans gained control 

of the House of Representatives in 1995, total Pell Grant funding 

has doubled, increasing from $6.2 billion to $12.4 billion for fiscal 

year 2005 and the maximum Pell Grant award has increased from 

$2,340 to $4,050 in that same period. 

The Committee is proud of the financial commitment Congress 

has demonstrated in recent years toward higher education. This 

support will continue. However, the Committee is concerned that 

the value of this investment may be diminished by a lack of market 

discipline, meaningful competition, and consumer awareness. As 

such, the Committee believes that while the financial focus of the 

Higher Education Act is important to its success, there is also a 

need to refocus on the aforementioned principles of access, accountability, affordability, and quality. 

Title I—General provisions 

Through the College Access and Opportunity Act, the Committee 

intends to restore fairness to the Higher Education Act in its treatment of students from varying backgrounds pursuing the common 

goal of accessing and succeeding in postsecondary education. A college degree is viewed by many as the gateway to the American 

Dream, and the Committee believes students should be treated 

fairly and equitably as they strive for their goals. In title I of H.R. 

609, the Committee seeks to: call upon the higher education community to engage in efforts to rein in the dramatic tuition increases 

that threaten college access for low- and middle-income students; 

ensure fair recognition for institutions of higher education and the 

156 

students they serve; protect students’ rights and individual privacy; 

recognize the unique circumstances of students educated in nontraditional settings such as home schools; emphasize the importance of alcohol education; and ensure the protection of individual 

students’ personal information. 

College cost 

A college education has long been viewed as a ticket to prosperity, the gateway to the American Dream. Today, higher education is playing a more vital role than ever in shaping our nation’s 

competitiveness. However, America’s higher education system is in 

crisis. Decades of uncontrolled cost increases are pushing the 

dream of a college degree further out of reach for needy students. 

The crisis requires a dramatic response. According to a 2002 report 

from the Advisory Committee on Student Financial Assistance, cost 

factors prevent 48 percent of college-qualified high school graduates 

from attending a four-year institution, and 22 percent from attending any college at all. The statistics are similarly bleak for middle 

income students and families. At this rate, by the end of the decade, more than two million college-qualified students will be completely denied the opportunity for a postsecondary education. 

The Committee believes the college cost explosion is a disturbing 

trend and one that cannot be allowed to continue. Education, the 

great equalizer in our country, can bridge social, economic, racial 

and geographic divides like no other force. Parents, students and 

taxpayers are investing billions of dollars in higher education each 

year, and institutions of higher education must be accountable for 

ensuring that they are getting a quality return on that investment. 

For four decades, the Federal government has provided significant funding to help ensure that students from low- and moderateincome families are not prevented from receiving a postsecondary 

education simply because of financial circumstances. It is estimated 

by the Department of Education that this year alone the Federal 

government is investing more than $70 billion in financial aid 

awarded directly to students through grants, Federally-guaranteed 

loans, work-study opportunities, and various other financial assistance programs. The Pell Grant program, which is the foundation 

of need-based student aid, has received record support in the past 

ten years under Republican-controlled Congresses. Additionally, 

total program funding has doubled, the maximum Pell Grant 

award has increased significantly, and more students than ever before are gaining access to a college education with the help of Pell 

Grants. 

There is no question that the Federal contribution to student aid 

programs has been significant, and has increased much more 

quickly than the rate of inflation in order to keep pace with college 

costs. However, college costs have risen dramatically over the past 

three decades, and even the immense Federal contribution has 

struggled to keep pace with skyrocketing tuition increases. On 

April 19, 2005, the Committee held a hearing to examine the issue 

of ‘‘College Access: Is Government Part of the Solution; or Part of 

the Problem?’’ During the hearing, members of Congress heard 

from Dr. Richard Vedder, Distinguished Professor of Economics at 

Ohio University: 

157 

There are two sectors of the economy where the federal 

government involves itself heavily in financing private 

transactions, namely health care and higher education. It 

is not a coincidence that these are the two sectors with the 

greatest amount of price inflation in modern times. When 

the federal government increases subsidized student loans, 

gives a Pell Grant, or grants a tuition tax credit, it increases the number of students wishing to attend college 

at any given tuition fee. Indeed, that is the idea—the federal government wants to provide access to persons who 

might not otherwise go to college for financial reasons. In 

short, federal policies increase the demand for education 

relative to the supply, which pushes prices or tuition fees 

up. 

The idea of affordability in higher education is not a new one, 

particularly for members of Congress. In 1997, Congress established the National Commission on the Cost of Higher Education. 

The Commission was to study the many factors surrounding the 

rising costs of education, including trends associated with those increases and all of the factors that go into those costs. It was also 

to examine the extent to which increases in institutional financial 

aid and tuition discounting affected tuition increases. In its 1998 

report, ‘‘Straight Talk about College Costs and Prices,’’ the Commission cautioned: 

Financing a college education is a serious and troublesome matter to the American people. Members of the Commission are equally convinced that if this public concern 

continues, and if colleges and universities do not take 

steps to reduce their costs, policymakers at the Federal 

and state levels will intervene and take up the task for 

them. 

While the recommendations of the Commission have been available since 1998, little progress has been made toward implementing the strategies outlined to help rein in escalating college 

costs. The Committee believes that if the college cost crisis is to be 

resolved, a good faith effort must be made by institutions of higher 

education and the greater higher education community to acknowledge the problem and work toward solutions. Additionally, it is the 

Committee’s view that keeping college affordable will help Federal 

student aid go further for students and families and ensure that 

more students can realize the dream of a higher education. In the 

Commission’s 1998 report to Congress, the Commission reported 

that: 

Institutions of higher education, even to most people in 

the academy, are financially opaque. Academic institutions 

have made little effort, either on campus or off, to make 

themselves more transparent, to explain their finances. As 

a result, there is no readily available information about 

college costs and prices nor is there a common national reporting standard for either. 

Although tuition and fee increases are clearly a nationwide problem affecting students and families in all types of institutions and 

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ure. Many institutions of higher education, facing the same economic circumstances as the rest of the higher education community, have chosen not to rapidly increase tuition, and instead explore cost reduction measures, find improvements in administrative 

efficiency, and work toward numerous other strategies that seek 

proactive solutions to keep college affordable. During the July 10, 

2003 hearing in front of the Subcommittee on 21st Century Competitiveness, entitled, ‘‘Affordability in Higher Education: We Know 

There’s a Problem; What’s the Solution?,’’ Dr. Rolf Wegenke, President of the Wisconsin Association of Independent Colleges and Universities (WAICU) testified about his association’s improvements in 

cost-effectiveness, which has become a national model, and stated 

that: 

The WAICU Collaboration Project is a comprehensive 

initiative to perform all administrative support (back office) functions of Wisconsin’s 20 private colleges and universities on a collaborative basis. The objectives are to 

save money, to improve the quality of services to students, 

faculty, and staff, and to serve as a national model for controlling college costs. This project moves beyond 

incrementalism. Never before in history have private colleges and universities considered as extensive a consolidation of functions short of an actual merger. It sends a message to the entire nation that something transformative 

has taken place. 

The Committee believes that the college cost crisis is unlikely to 

be solved by good intentions alone. Rather, solutions will come from 

an increased awareness, understanding, and commitment from the 

higher education community to not only acknowledge the problem 

but work toward addressing it, and broad cooperative efforts from 

all stakeholders in higher education to make a concerted effort to 

improve the affordability of higher education in America. 

The College Affordability Index established in H.R. 609 was an 

outgrowth of the concern over the ever-rising cost of postsecondary 

education. H.R. 609 requires the Secretary to ensure data regarding college costs is available in an easily understandable and accessible format. The College Affordability Index is simply a means to 

take existing information and present it to students and families 

in a new format that can be useful and accessible as they make decisions about what institutions of higher education to attend. This 

index provides an apples-to-apples comparison of tuition growth 

compared to the growth in the Consumer Price Index (CPI). 

Colleges and universities are already reporting on their increases 

in tuition and fees. The College Affordability Index simply compares that data to a widely-accepted standard for measuring inflation, the CPI. The College Affordability Index does not determine 

the quality of education, but it does allow students and their families to determine what they can or cannot afford when making decisions about what could be their largest financial investment. Simply stated, if an institution of higher education increases its tuition 

and fees more than two times the CPI for an interval of three 

years, it warrants additional attention. 

The requirements in the bill simply ask that an institution of 

higher education provide additional information to allow for a clear 

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and informed decision by consumers. If a student decides to attend 

an institution that increases tuition and fees that exceed the College Affordability Index, they do so fully aware and educated. It is 

the Committee’s position that the Federal government does not currently have the authority to dictate tuition and fee rates for institutions of higher education. Under H.R. 609, that current practice remains the same—the Federal government does not have the ability 

to set tuition and fee rates for colleges and universities. The provisions in the bill simply serve as a means by which additional information can be provided to students and their families so they can 

make informed and educated decisions about their postsecondary 

education options based on trends in college costs. 

H.R. 609 provides needed comprehensive solutions to help address college costs. The College Affordability Index infuses some accountability and understandability to cost increases, but the bill 

does much more than that. Additionally, the bill seeks to 

proactively assist institutions of higher education to find innovative 

solutions that will keep college affordable and creates a College Affordability Demonstration initiative, which provides 100 institutions of higher education with the opportunity to waive statutory 

or regulatory provisions that could lead the institution to lower 

costs and operating expenses. 

In a time when the cost of higher education continues to skyrocket, families have the right to see in a clear and uniform manner how much an institution of higher education raises its tuition 

and fees. 

Single definition 

For many non-traditional college students, alternative postsecondary education options such as community colleges, degreegranting or certificate programs, proprietary schools, and distance 

learning programs provide an important alternative gateway to a 

college education. The College Access and Opportunity Act updates 

legal definitions within the Higher Education Act to ensure all eligible institutions are recognized fully as institutions of higher education. The current dual definition results in a tiered system that 

implies some institutions are less worthy than others, or may not 

have the same standing as part of our nation’s higher education 

system when it comes to providing opportunities to students. During the June 16, 2004 hearing on, ‘‘H.R. 4283, the College Access 

and Opportunity Act: Are Students at Proprietary Institutions 

Treated Equitably Under Current Law,’’ Mr. David Moore, Chairman and Chief Executive Officer of Corinthian Colleges, Inc., stated: 

A single definition would send an important signal to 

these students that for-profit institutions represent an 

equally valid option for the pursuit of their higher education and training. It would say to these students that, if 

they choose to seek the education, training, and skills that 

they need to become productive members of the economy 

at these institutions, they will not be regarded under federal law as second class citizens. 

The Committee believes in simply combining the two current institutional definitions into one single, straightforward definition of 

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an institution of higher education while ensuring funds historically 

awarded to community colleges and minority serving institutions 

are preserved for these types of institutions. Money that is awarded to institutions under title III programs, mainly community colleges, and title V programs, Hispanic-Serving Institutions (HSIs), 

would not be available for award to for-profit institutions under 

H.R. 609. The bill clarifies that outside of the Higher Education 

Act, proprietary institutions will not automatically gain eligibility 

for program participation, but policymakers will determine on a 

case-by-case basis which sectors are eligible to receive Federal 

funds. 

Reforms such as the single definition of an institution of higher 

education are a priority for the Committee, as they create a level 

playing field for all sectors of higher education. Proprietary, or forprofit, institutions of higher education have become mainstream 

players in the world of higher education options for students. These 

institutions have existed since the 17th century, providing quick 

training in many professional disciplines. The modern-day proprietary colleges began to crop up on the higher education landscape 

after World War II. The expanded Federal role in financing postsecondary education through student financial aid, beginning with 

the Higher Education Act of 1972 and the introduction of direct 

grants to students now known as Pell grants, created incentives for 

the entry and expansion of a wide range of proprietary schools and 

expanded opportunities for students to attend college. 

Today, there are over 4,500 private for-profit institutions educating millions of students in a wide range of occupational programs, both degree- and non degree-granting. Most for-profit institutions offer degrees previously considered to be the domain of traditional colleges and universities. Complex and converging forces, 

including demographic trends, shifts in the job market, technological developments, and demands on higher education from ongoing reforms and innovations have contributed to the growth of the 

proprietary sector and have created a phenomenal demand for 

higher education providers that the traditional sector cannot meet 

alone. 

Student speech and association rights 

The Committee believes it is critical that students and members 

of the campus community are able to exercise their right to speak 

freely and express their views in organizations and events on campus. Therefore, the Committee amended the existing Sense of Congress on Student Speech and Association Rights to ensure that institutions of higher education are protecting these rights for students. These rights include that students should be judged solely 

on their knowledge and reasoned answers; that student funds 

should be used to present diverse views at campus events, lectures 

and programs; that institutions should present students with an 

array of material in the instructional setting that include dissenting views; and that students should not be unfairly punished 

because of their ideology or political beliefs. 

Further, the Committee recognizes that a good education involves free academic inquiry and thought in all fields of study. 

There is evidence to suggest, however, that both faculty and students have been harassed or discriminated against because of the 

161 

expression of their personal or professional judgments, opinions or 

beliefs that may be considered political, ideological or religious. 

Sometimes these opinions or beliefs may, in fact, be well-researched and intellectually informed, but because they are deemed 

controversial, the faculty or students who hold these beliefs may be 

harassed or limited in some way from academic or professional advancement. The Committee believes that such discrimination discourages the type of intellectual curiosity necessary for a free, 

democratic society to flourish and encourages universities to promote intellectual pluralism within the context of the university’s 

institutional mission. 

Home-school students 

A growing number of Americans are receiving their elementary 

and secondary education in a non-public, private, or non-traditional 

campus setting. These programs are a valuable part of our nation’s 

efforts to prepare its youth for the demands of a modern society. 

For example, the Committee recognizes that home schooling is an 

effective and popular means of educating an estimated two million 

students and is a legal educational option available to parents and 

students in all 50 states. Home schools comply with states’ compulsory attendance laws through specific home school provisions or 

through provisions applying to private schools. Students educated 

in these non-public, private, or non-traditional schools acquire four 

years of academic requirements, generally graduate with all the requirements of a college preparatory diploma, and have a record of 

nationally standardized achievement scores well above the national 

average, including college admissions tests. 

However, these non-traditional settings frequently do not offer a 

seamless fit with traditional transcript formats and admissions 

standards at institutions of higher education. Unfortunately, some 

state university systems and individual colleges and universities 

have failed to positively address this issue, despite clear and specific language in the 1998 Committee Report on the Higher Education Act reauthorization. The Committee understands that some 

community colleges, individual colleges and universities, and state 

university systems continue to require applicants from home school 

settings to submit scores from additional standardized tests in lieu 

of a transcript or diploma from an accredited high school. The Committee strongly urges these institutions to take note of the changes 

in this bill that accord the same admissions standing for students 

graduating from a home school setting and specifically clarify that 

these students have satisfied secondary education standards. 

The Committee recognizes students graduate from a home school 

setting as high school graduates and recommends that institutions 

of higher education adopt admissions policies and practices that reflect this recognition. Given that standardized test scores (ACT or 

SAT) and portfolios provide a sound basis for an admission decision 

regarding these students, the Committee recommends that colleges 

and universities consider using these methods for assessing applicants educated in home school settings rather than requiring them 

to undergo additional types of testing which could be seen as discriminating against these specific students and may have the effect 

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tions, decreasing the diversity of opinions and backgrounds that 

most institutions strive to achieve. 

Accordingly, the Committee believes that in determining requirements for admission, an institution of higher education that receives Federal funds shall make every effort to evaluate and treat 

applicants from home school settings fairly and in a non-discriminatory manner. The Committee further encourages institutions and 

systems of higher education to continue to adopt admissions policies that reflect this sense of the Committee, and to engage in a 

dialogue with parents, students and other representatives of the 

home school community regarding admissions policies that will 

best serve the educational interests of home school graduates. 

Alcohol and drug abuse 

College and university presidents have cited alcohol consumption 

as a major health problem on college and university campuses. According to the National Institute on Alcohol Abuse and Alcoholism, 

two of 5 college students are binge drinkers, and 1,700 college students die each year from alcohol-related injuries, the vast majority 

of whom are killed in traffic accidents in which the victims or their 

friends were driving drunk or impaired. Department of Education 

figures indicate that between 30 and 40 percent of college and university students are below the age of 21, and cannot legally consume alcohol. 

Advertising for alcoholic beverages, like all advertising, can be 

seen by underage individuals even though they may not be the intended audience. The Congress has urged all colleges and universities to adopt policies limiting the advertisement and promotion of 

alcoholic beverages on campus. Although a causal link between advertising and youth consumption has not been established, it is the 

opinion of the Committee that ongoing efforts are necessary to ensure that alcohol advertising and marketing remains directed at 

adult audiences. This recommendation is consistent with existing 

voluntary advertising codes and is not predicated on the argument 

that banning the advertising will, in itself, reduce the prevalence 

and intensity of drinking among underage college students. Instead, the objective is to declare and affirm colleges’ genuine and 

consistent commitment to a policy of discouraging alcohol use 

among underage students. 

In addition to urging conscientious adherence to voluntary advertising codes, the Committee urges all interested parties to continue 

to build upon existing public-private partnerships to restrict access 

to illegal underage individuals, encourage the use of designated 

drivers, and other measures that would improve the safety of students, residents of surrounding communities, and all citizens using 

our highways. 

Unit record system prohibition 

The Committee believes that students pursuing higher education 

have an expectation of basic privacy protections, and that students 

should not be forced to relinquish their fundamental privacy rights 

as a condition of attending an institution of higher education. Further, the Committee disagrees with claims that the only means of 

assuring accountability in higher education is to collect and maintain a vast, Federal database of private, personally identifiable inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00166 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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formation about all students enrolled in higher education. Accountability is among the core principles identified by the Committee to 

help guide higher education reform, and the Committee believes accountability will be achieved by placing more information about colleges and universities into the hands of students—not by placing 

information about students into a massive new database that could 

compromise fundamental privacy protections. 

The Committee understands that the longitudinal sample surveys carried out by the National Center for Education Statistics, 

such as the Baccalaureate and Beyond Study, the Beginning PostSecondary Study, and the National Postsecondary Student Aid Survey, involve the voluntary participation of samples of students 

rather than the collection of extensive, personally identifiable data 

on all students, and thus are not subject to the prohibition. 

Title II—Teacher preparation 

The caliber of teacher education programs has come under increased scrutiny over the past several years. Among other things, 

teacher preparation programs have been criticized for providing 

prospective teachers with inadequate time to learn subject matter; 

for teaching a superficial curriculum; and for being unduly fragmented, with courses not linked to practice teaching and with education faculty isolated from their arts and sciences faculty colleagues. In particular, there have been concerns about high rates 

of failure of recent teacher college graduates on initial licensing or 

certification exams. According to the Congressional Research Service, one of the most publicly reported instances of high failure rates 

was in 1998 when 59 percent of prospective teachers in Massachusetts failed that State’s new certification exam. The results raised 

questions about the quality of the preparation and training prospective teachers had received from teacher preparation programs 

at institutions of higher education across the State. 

In January 2002, President Bush signed into law the No Child 

Left Behind Act, the bipartisan education reform package that has 

infused accountability for results into K–12 education in America. 

The No Child Left Behind Act calls for a highly qualified teacher 

in every public school classroom by the end of the 2005–2006 school 

year. In order to be highly qualified, a teacher must obtain full 

State certification, a bachelor’s degree, and be able to demonstrate 

a high level of competency in all subjects taught (by passing a rigorous State assessment, completing an academic major for each 

subject taught, or participating in a State approved review process). 

Title II of H.R. 609 seeks to meet the call of the No Child Left 

Behind Act to place a highly qualified teacher in every classroom 

by making improvements that will help ensure teacher training 

programs are producing well-prepared teachers who meet the needs 

of America’s students. H.R. 609 takes the important step of aligning teacher training programs under title II of the Higher Education Act with the high standards for teacher quality found in the 

bipartisan No Child Left Behind Act. This bill will help to ensure 

that teacher training programs are fulfilling their obligation to 

those seeking to enter the teaching profession—an obligation to ensure that teachers are well-prepared to teach when they enter the 

classroom. 

164 

In general, H.R. 609 continues the current law structure of title 

II of the Higher Education Act and authorizes three types of competitive grants that each play a unique, yet critical role in the education of tomorrow’s teachers. Under the Higher Education Act, 45 

percent of the funds are reserved for State grants, which must be 

used to reform teacher preparation requirements and ensure that 

current and future teachers are highly qualified; 45 percent of the 

funds are reserved for partnership grants, which allow effective 

partners to join together, combining strengths and resources to 

train highly qualified teachers to achieve success where it matters 

most—in the classroom; and 10 percent of the funds are reserved 

for teacher recruitment grants, which will help bring high quality 

individuals into teacher programs, and ultimately put more highly 

qualified teachers into classrooms. 

State grants 

H.R. 609 authorizes States to use funds to design (or redesign) 

teacher preparation programs so they are based on rigorous academic content, scientifically based research (including scientifically 

based reading research), and challenging State academic content 

standards. As a result, States will be able to strengthen teacher 

preparation programs by setting higher standards for what potential teachers need to learn as part of their instruction and ensure 

more teachers leave these programs ready to meet the ‘‘highly 

qualified’’ definition for teachers established under the No Child 

Left Behind Act. 

On May 20, 2003, the Subcommittee on 21st Century Competitiveness held a hearing entitled ‘‘America’s Teacher Colleges: Are 

They Making the Grade?’’ The purpose of this hearing was to discuss whether teacher colleges and other teacher preparation programs are producing a high quality teaching force. Kati Haycock, 

Director of the Education Trust, testified during the hearing that: 

Discussions of teacher quality are inadequately informed 

by data regarding what makes the biggest difference in 

student learning. As the U.S. Government Accountability 

Office has reported, the U.S. Department of Education has 

granted almost half a billion dollars ($460 million) in HEA 

Title II funds but there is no consistent, reliable way to 

evaluate the effect of these grants on raising student 

achievement. State Grants should be limited to states that 

are willing to establish data systems to evaluate the efficacy of teacher training programs and professional development activities on improving teacher effectiveness. Ultimately, states should be in a position to evaluate their success in terms of hard data indicating whether various activities helped raise student achievement. 

Accordingly, H.R. 609 adds a new State grant evaluation provision that requires States that accept grants under the Act to develop evaluation systems to determine the effectiveness of grant activities. Specifically, these new systems will evaluate the effectiveness of teacher preparation programs and professional development 

activities within the State in producing gains in: (1) the teacher’s 

annual contribution to improving student academic achievement, 

as measured by State academic assessments required under section 

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1111 of the No Child Left Behind Act; and (2) teacher mastery of 

the academic subjects they teach, as measured by pre- and postparticipation tests of teacher knowledge. 

The College Access and Opportunity Act recognizes that flexibility should exist in the methods used for training highly qualified 

teachers and allows funds to be used for innovative methods in 

teacher preparation programs, such as charter colleges of education 

and university and local educational agency partnership schools, 

which can provide an alternative gateway for teachers to become 

highly qualified. 

Under H.R. 609, States have the flexibility to set up charter colleges of education that function in a manner similar to elementary 

and secondary charter schools except that they would prepare highly qualified teachers in a higher education setting. These charter 

colleges of education will exchange flexibility in meeting State requirements for institutional commitments to produce results-based 

outcomes for teacher education graduates—measured based on increased student academic achievement. The Committee is aware of 

at least three institutions of higher education that have created 

charter colleges: the Charter College of Education at California 

State University, Los Angeles, California; the Charter School of 

Education and Human Sciences at Berry College in Mount Berry, 

Georgia; and the Charter Teacher Education Program at Fort Valley State University in Fort Valley, Georgia. 

On October, 9, 2002, the Subcommittee on 21st Century Competitiveness held a hearing in Washington, D.C. entitled ‘‘Training 

Tomorrow’s Teachers: Ensuring a Quality Postsecondary Education.’’ Dr. Allen Mori, Dean of the Charter College of Education 

at California State University, Los Angeles, California, testified before the Subcommittee and noted that: 

The Charter College of Education is clearly on the cutting edge of high quality teacher preparation in the 21st 

century. Spurred by the Title II requirements to improve 

teacher education, faculty was determined to build worldclass teacher preparation programs to meet the needs of 

the ethnically and linguistically diverse urban community 

of the Los Angeles basin. This context is a powerful theme 

in both the subject matter and teacher preparation curriculum. 

Specifically, the language in H.R. 609 allows States to use funds 

for the planning and implementation of charter colleges of education that: (1) permit flexibility in meeting State requirements as 

long as graduates, during their initial years in the profession, increase student academic achievement; (2) provide long-term data 

gathered from teachers’ performance over multiple years in the 

classroom on the ability to increase student academic achievement; 

(3) ensure high-quality preparation of teachers from underrepresented groups; and (4) create performance measures that can be 

used to document the effectiveness of innovative methods for preparing highly qualified teachers. 

The Committee recognizes that there are other innovative approaches to teacher preparation, such as university and local educational agency partnership schools, which will support and encourage institutions of higher education to establish K–12 schools of exVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00169 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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cellence in partnership with local educational agencies. These partnership schools will utilize the assets of the institution of higher 

education, the local educational agency, and the community in 

order to introduce new models for learning that are founded on research-based practices, rigorous academic content, and high standards. 

States can also use their grant funds to provide prospective 

teachers with alternative routes to traditional preparation to become highly qualified teachers and achieve State certification. Such 

approaches will help to reduce unnecessary barriers to State certification and offer alternative routes to State teacher certification for 

qualified individuals, including mid-career professionals from other 

occupations, former military personnel, and recent college graduates with records of academic distinction. The Committee notes 

that alternative routes to State certification, as opposed to traditional teacher preparation programs administered by colleges of 

education, can streamline the State certification process and help 

to move competent and qualified candidates into the classroom in 

an expeditious manner. 

There are several well-known programs nationwide that recruit 

highly qualified candidates using alternative routes to State certification, including the Troops to Teachers program. This program 

provides financial assistance and training to retiring military personnel and helps to place them in local school districts, thus providing a new source of teachers to schools across the country. According to the National Center for Education Information, teachers 

certified through alternative routes also bring diversity to the 

classroom and are more apt to take challenging assignments. In 

particular, the Center found that 90 percent of teachers in the 

Troops to Teachers program are male, compared to just 26 percent 

in the overall teaching force and about 30 percent of teachers in 

the program are from a minority or ethnic group, compared to just 

10 percent overall. 

Another popular and successful program associated with alternative routes to teaching is Teach for America. This nationwide 

nonprofit organization recruits accomplished college graduates 

without formal backgrounds in education to teach in high-need 

urban and rural schools. Candidates apply to the program and, if 

selected, attend a summer training course before being placed in 

school districts across the country. Teach for America and the host 

school districts provide new teachers with support during the twoyear program, after which some teachers return to graduate school, 

transfer to other professions or continue teaching. Since its inception in 1990, Teach for America has placed more than 12,000 talented young men and women in some of our nation’s most disadvantaged schools. 

The Committee also recognizes the potential for an improved 

teaching force through the American Board for Certification of 

Teacher Excellence, which provides a nationally recognized, high 

quality credential to attract the best and the brightest into the 

classroom. This certification has also been recognized by the Congress—in section 2151(c)(2) of the Elementary and Secondary Education Act of 1965—as one of the nationally recognized doorways 

into the teaching profession. The American Board is a rigorous way 

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sionals who may want to enter teaching from other fields. Because 

the rigor of the exam its candidates will be required to take, American Board certified teachers have to prove that they not only have 

a mastery of their subject matter, but also the professional knowledge to become successful and highly qualified teachers. The American Board offers two types of teacher certification: a ‘‘Passport to 

Teaching,’’ which is available for career changers and prospective 

new teachers and ‘‘Master Certification,’’ which is targeted toward 

extraordinary educators who are already in the teaching profession 

and have a demonstrated record of accomplishment in improving 

student academic achievement. 

The Committee notes that the key to producing highly qualified 

teachers is not the path by which they travel, but the destination 

they reach. Teachers trained through innovative options, or certified through alternate means, will still be held to the same standards of accountability and quality, but will not be constrained by 

artificial requirements that could place barriers between high quality individuals and the classrooms where they are desperately 

needed. H.R. 609 takes the important step of recognizing that individuals seeking to enter the teaching profession often have varied 

backgrounds—and by creating flexible approaches that step outside 

the box, these individuals can become highly qualified teachers 

through training programs as unique as their individual experiences. 

H.R. 609 authorizes State grant, partnership grant, and teacher 

recruitment grant programs for the development and implementation of mechanisms to assist local educational agencies in recruiting and retaining highly qualified teachers. The Committee notes 

that the authorized activities under these programs provide significant flexibility for States and partnerships to design innovative initiatives to recruit and retain highly qualified teachers. The Committee wants to make clear that funds under these programs may 

be used to cover moving expenses to secure employment of highly 

qualified teachers and provide other financial assistance necessary 

to purchase a home (including mortgage application fees and closing costs). The Committee recognizes this use of grant funds as an 

appropriate way to attract and retain highly qualified teachers. 

Partnership grants 

Under H.R. 609, each eligible partnership seeking assistance 

under the Act must include at least: (1) a high quality teacher 

preparation program at an institution of higher education; (2) a 

school of arts and sciences; (3) a high need local educational agency; and (4) a public or private educational organization. The Committee believes that these expanded partnership grants will bring 

diverse expertise together for the common goal of placing highly 

qualified teachers in the classrooms of high need school districts. 

The Committee is requiring participation by a public or private 

educational organization in each partnership because varied expertise in areas such as teacher preparation, certification, test preparation, and others can bring added dimensions that benefit school 

districts, teachers, and most importantly, students. Some public or 

private educational entities may be particularly skilled at working 

with disadvantaged students and can help make teachers more successful in teaching to standards with challenging student popuVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00171 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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lations. Other organizations may be adept at helping students master concepts critical to their achievement on high quality assessments. The Committee supports a flexible approach and believes it 

would be impossible to define every valuable service that may be 

offered by a ‘‘public or private educational organization’’ to a partnership under this program. Limiting the potential participants is 

a disservice to the partnership concept and decreases the ability of 

school districts and teacher preparation programs to make local decisions about the best ways to improve teacher quality and increase 

student academic achievement. The Committee also notes that public and private educational organizations that participate in the 

partnership should have the capacity to offer high quality services 

that respond to the needs of the partnership. 

The College Access and Opportunity Act requires partnership 

grant applicants to describe how faculty of a teacher preparation 

program at an institution of higher education that seeks a partnership grant will serve with highly qualified teachers in the classroom at partner local educational agencies over the term of the 

grant. The Committee believes this increased interaction between 

teaching faculty and teachers in the classroom will provide additional insight into the needs of everyday teachers. In addition, H.R. 

609 requires that at least 50 percent of partnership funds be used 

to ‘‘directly benefit’’ partner local educational agencies and clarifies 

that any entity under the partnership may be the fiscal agent of 

such partnership. It is the intent of the Committee that partner 

local educational agencies actively participate in the application 

process and support any proposed grant activities as described in 

such partnership applications. Provisions in H.R. 609 are designed 

to ensure that each partner local educational agency has the ability 

to influence grant activities and guarantee that partnership activities focus on the needs of teachers and students in the classroom. 

Accountability 

While current higher education law contains annual reporting requirements, these reporting measures have proven ineffective in 

determining the true quality of teacher preparation programs. In 

fact, under the current law reporting requirements (as required 

under title II of P.L. 105–244, the Higher Education Act Amendments of 1998) many States and teacher preparation programs 

have, either intentionally or unintentionally, submitted skewed and 

irrelevant data. Under current law, teacher preparation programs 

at institutions of higher education must report the percentage of 

graduates who successfully pass the State certification or licensure 

assessments. 

However, most institutions have simply made completion of their 

program contingent upon passage of these assessments. This practice masks the number of students who are not adequately prepared by the institution to pass these tests in the first place. The 

Committee is discouraged by this reporting loophole that some 

teacher preparation programs at institutions of higher education 

have used to circumvent current law accountability provisions. Accordingly, the College Access and Opportunity Act includes improved accountability provisions that will strengthen reporting 

measures and hold teacher preparation programs (for both tradiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00172 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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tional and alternative programs) accountable for providing accurate 

and useful information. 

H.R. 609 requires each State that receives funds under the Act 

to annually report to the Secretary (for both traditional and alternative teacher preparation programs) on the percentage of students 

who completed at least 50 percent of the requirements for teacher 

preparation programs that go on to take and pass the State certification or licensure assessment. These State report cards on the 

quality of teacher preparation must also report on the State-determined passing score of that assessment and disaggregate and rank 

each teacher preparation program in the State based on such data. 

In addition, each teacher preparation program that enrolls students receiving Federal assistance under the Higher Education Act 

must report annually to the State and the general public: (1) the 

pass rate of each student who completed at least 50 percent of the 

requirements for the teacher preparation program on the State certification or licensure assessment; (2) a comparison of the program’s pass rate with the average pass rate for other programs in 

the State; and (3) a comparison of the program’s average raw score 

with the average raw scores for other programs in the State. 

The Committee directs institutions of higher education and other 

teacher preparation programs that receive grants under the College 

Access and Opportunity Act to report effective data on the number 

of students that have spent a significant amount of time in teacher 

preparation programs (those who have completed at least half of 

the requirements of the teacher preparation program) and that 

have taken and passed State certification or licensure assessments. 

The Committee believes that effective reporting of such data will 

demonstrate which teacher preparation programs have added value 

to program participants (enabling such participants to pass State 

certification and licensure assessments) and that these improved 

reporting requirements will make it less likely that States will submit misleading data. Clarifying language in H.R. 609 (which focuses on students who have completed at least 50 percent of the 

requirements for a teacher preparation program) is specifically designed to eliminate the discrepancy in current law with regard to 

reporting requirements for ‘‘graduates’’ and ‘‘program completers.’’

The Committee also believes that new data on average raw scores 

on State certification or licensure assessments will help to distinguish teacher preparation programs within States that report similar pass rate data. 

Centers of Excellence 

The demand for more ethnically and culturally diverse highly 

qualified teachers is critical, especially given the significant growth 

in the numbers of minority K–12 students across the country. Opportunities that increase the numbers of minority teachers and enhance their training, will support broader strategies to enhance instructional opportunities for, and can help to eliminate the achievement gaps of, minority students. Accordingly, H.R. 609 authorizes 

grants for the creation of Centers of Excellence at high quality minority serving institutions. The Committee believes that the Centers of Excellence will provide minority serving institutions that 

have a demonstrated record of preparing highly qualified teachers 

with a leadership role in recruiting and preparing highly qualified 

170 

teachers and increase opportunities for Americans of all educational, ethnic, economic, and geographic backgrounds to become 

highly qualified teachers. 

In general, the purposes of these Centers are to increase teacher 

recruitment at minority serving institutions and make institutional 

improvements to teacher preparation programs at such institutions. Grants are competitively awarded to high quality teacher 

preparation programs (as determined by the State) at eligible institutions which include: Historically Black Colleges and Universities, 

Hispanic-Serving Institutions, Tribally Controlled Colleges and 

Universities, Alaska Native-Serving Institutions, or Native Hawaiian-Serving Institutions. 

Promoting improved early childhood education 

The reforms in H.R. 609 expand opportunities for increasing the 

number of early childhood education programs offered at institutions of higher education to prepare high quality pre-kindergarten 

teachers. The community college system is an important component 

of a professional development system for the early childhood education workforce. The Committee encourages States to do everything possible to ensure that a lack of articulation between two and 

four-year institutions does not require prospective early childhood 

education teachers to repeat coursework, which lengthens the 

amount of time it takes such teachers to obtain Bachelor’s degrees 

in early childhood education and results in higher costs. Under 

H.R. 609, States could use funds to provide grants to institutions 

of higher education to implement articulation agreements that ensure there is no replication of coursework, and ensure students 

have the opportunity to make a smooth transition from an Associate’s degree to a Bachelor’s degree program in early childhood education. 

Evidence suggests that early childhood education programs, including Head Start programs, struggle to recruit teachers with the 

language skills to implement research-based instructional strategies for limited English proficient children. The College Access and 

Opportunity Act will address this issue by improving opportunities 

for States to recruit bilingual early childhood education teachers 

and to increase the number of early childhood education teacher 

preparation programs for bilingual teachers. For example, a state 

could use grant funds to provide financial and academic support for 

bilingual or teachers of limited English proficient students seeking 

to comply with Head Start Bachelor’s degree requirements. 

Teacher Incentive Fund 

One of the most important goals of the No Child Left Behind Act 

is to ensure that all public school students are taught by a highly 

qualified teacher, with a particular emphasis on ensuring that 

schools with high concentrations of low-income students are staffed 

by fully credentialed teachers that have a firm understanding of 

the subject area content knowledge they are imparting to students. 

The Committee is concerned that the manner in which public 

school teachers are generally compensated (paying teachers according to a structured scale on the basis of their level of education and 

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tors is necessarily associated with better teaching or higher student 

achievement) may work against the goals in No Child Left Behind. 

H.R. 609 addresses this issue by including language authorizing 

the Teacher Incentive Fund, a competitive grant program for State 

educational agencies, local educational agencies, or partnerships 

that include a non-profit organization. These grants would be used 

to design and implement performance based compensation systems 

that provide financial rewards for teachers and principals who 

demonstrate effectiveness in raising student achievement and closing the achievement gap, especially in our nation’s highest need 

local educational agencies. Grantees will be allowed to determine 

the specifics of what these compensation systems look like as long 

as they are based primarily on gains in student academic achievement. A priority for high need local educational agencies is also included. 

Grantees will be required to demonstrate a significant investment in, and ensure the sustainability of, the performance based 

compensation system funded by the Teacher Incentive Fund by 

committing to pay for an increasing share of the total cost of the 

project, for each year of the grant, with State, local, or other nonFederal funds. The Department of Education is also required to assess each funded project through an outside, independent evaluator, to ensure that Federal funds are being used to improve student outcomes. 

The Committee is confident that the Teacher Incentive Fund will 

allow States and local educational agencies, along with their nonprofit partners, to implement reforms to teacher compensation systems that will result in improved learning environments and increased academic achievement for our nation’s neediest students. 

Title III—Institutional aid 

Title III of the Higher Education Act provides assistance to Historically Black Colleges and Universities (HBCUs) and other institutions of higher education that enroll large numbers of minority 

and low-income students. To be eligible for funds under title III, institutions must have low educational and general expenditures as 

compared to other similar institutions. H.R. 609 makes significant 

changes to title III, designed to expand the activities for which 

these institutions can use Federal funds. 

Republicans have been committed to providing all minority serving institutions with the resources necessary to ensure students receive a high-quality postsecondary education. There is a strong, 

demonstrated record of increased funding for these institutions. 

HBCUs have received $238.6 million in fiscal year 2005, which represents a 29 percent increase since President George W. Bush took 

office in 2001. Since Republicans took control of the House of Representatives, funding for HBCUs has increased by almost 120 percent, from $109 million in fiscal year 1995 to $238.6 million in fiscal year 2005. 

Funding for Historically Black Graduate Institutions (HBGIs) 

has increased by nearly 30 percent since President George W. Bush 

took office, from $45 million in fiscal year 2001 to $58 million in 

fiscal year 2005. Funding for HBGIs has increased by almost 200 

percent since Republicans took control of the House of RepresentaVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00175 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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tives, from $19.6 million in fiscal year 1995 to $58 million in fiscal 

year 2005. 

Funding for Alaska Native and Native Hawaiian-serving institutions has increased by nearly 100 percent since President George 

W. Bush took office, from $6 million in fiscal year 2001 to $11.9 

million in fiscal year 2005. When Republicans took control of the 

House of Representatives, Alaska Native and Native Hawaiianserving institutions were receiving no Federal support. In fiscal 

year 2005, they received $11.9 million. Additionally, funding for 

Tribally Controlled Colleges and Universities (TCCUs) has increased by almost 60 percent since President George W. Bush took 

office, from $15 million in fiscal year 2001 to $23.8 million in fiscal 

year 2005. When Republicans took control of the House of Representatives, TCCUs were not receiving any Federal funding support under the Higher Education Act. 

Authorized under title V of the Higher Education Act, HispanicServing Institutions (HSIs) have seen an increase in funding by 39 

percent since President George W. Bush took office, from $68.5 million in fiscal year 2001 to $95.1 million in fiscal year 2005. Funding 

for HSIs has increased by nearly 700 percent since Republicans 

took control of the House of Representatives, from $12 million in 

fiscal year 1995 to $95.1 million in fiscal year 2005. 

Under the bill, all institutions under title III are able to use 

funds for the acquisition of real property adjacent to the campus 

of the institution on which to construct classrooms, libraries, laboratories and other instructional facilities. Additionally, the bill retains the ability for institutions to use their funds for construction, 

maintenance, renovation and improvement of instructional facilities. The Committee is concerned about the current state of many 

historically significant buildings on campuses that are designated 

as title III institutions. Many of these buildings are not only in 

need of renovation and updating; they are also in need of seismic 

reinforcement and substantial repair. The Committee believes that 

reinforcement and repair of these historical buildings is a type of 

construction, maintenance, renovation and improvement and that 

funds used for this purpose should be permitted by the Secretary. 

Additionally, the bill ensures that all minority-serving institutions can use funds for the development or improvement of facilities for Internet use or other distance learning academic instruction capabilities as a way to expand access and increase the use of 

technology in the classroom. The bill also equalizes all of the uses 

of funds for title III institutions. One significant addition provides 

that each type of minority serving institution may use no more 

than 20 percent of their grant funds to establish or increase an endowment fund. 

Tribally Controlled College and University Formula 

The Committee believes that Tribally Controlled Colleges and 

Universities (TCCUs) would greatly benefit from a formula distribution of the title III development grants program. The formula 

established in H.R. 609 recognizes the needs of these unique institutions and the intent of the program. Many TCCUs operate on 

very small budgets and many rely on a patchwork of competitive 

grants for the funds to simply keep their doors open to students. 

These institutions are some of the neediest in the nation and as 

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such, they use a significant amount of resources to complete competitive applications for funds they receive year after year. The 

pool of eligible applicants for TCCU funds is small and is likely to 

remain below 50 institutions in the foreseeable future. The Committee believes that creating a simplified application process would 

enable these institutions to use their resources to directly serve 

students and improve the infrastructure and academic opportunities. 

Historically Black Graduate Institutions (HBGIs) 

The Committee believes that the addition of four Historically 

Black Graduate Institutions (HBGIs) will continue provide opportunities for growth in math and science fields where African American graduate students are underrepresented. It is the Committee’s 

view that the both Master and Doctoral degree granting institutions are well-served by HBGI program funds. When distributing 

HBGI funds, there should be no distinction made as to which degree the eligible institution awards, so long as it is in a math or 

science related discipline in which African American students are 

underrepresented. The Committee also believes that only institutions in good standing with their institutional accreditor should be 

eligible for funds in order to best utilize the program resources. 

Title IV—Student assistance 

Through the Higher Education Act, the Federal government is providing more than $70 billion in direct financial aid to students 

in fiscal year 2005 alone. Those funds, provided through Pell 

Grants, student loans, and campus-based and other financial aid 

programs, are meant to help defray the cost of college and level the 

playing field so low- and middle-income students can access higher 

education opportunities like those available to higher income students. 

The Federal student aid programs are meant to help offset some 

of the costs of higher education, yet considerable evidence exists 

showing that increases in student aid coincide with increases in 

college costs. As a result, student aid may be contributing to the 

very tuition increases it is intended to guard against. There is no 

simple remedy to this spiral of aid and cost increases. However, by 

gaining awareness of the correlation between aid and tuition 

growth, policymakers can have more informed conversations with 

higher education stakeholders as they work together to ensure college access for American students. 

If the tuition explosion of the past decade has taught us anything, it is that simply pouring more money into the system is not 

a viable solution. To be sure, Federal financial aid is a critical component of our nation’s higher education system. It can help bridge 

the gap between lower and higher income students, and provide 

even more access to postsecondary education and the possibilities 

it offers. But increased aid alone will not result in increased college 

access if the pattern of college cost increases at its current pace. 

American taxpayers are already shouldering a tremendous higher education cost burden. In addition to the more than $70 billion 

annually in direct Federal student aid, Federal dollars support institutional aid, research, and a wide-range of programs outside the 

scope of the Higher Education Act but still involving colleges and 

174 

universities. In addition, a significant portion of state revenues are 

devoted to higher education subsidies. And even after all this taxpayer support, students and families must also contend with annual tuition and fee increases that grow at double-digit rates and 

squeeze family budgets to the breaking point. 

The Committee believes that further investments in student aid 

must be made strategically, bearing in mind that more money 

alone will not result in more access to higher education for American students. H.R. 609 demands greater accountability, efficiency, 

and effectiveness from the existing student aid programs. The bill 

continues a long-standing effort to reduce red tape, eliminate unnecessary bureaucracy, and examine the underlying causes that 

drive up tuition. By reassessing current investments in higher education, the Committee believes the reforms contained in H.R. 609 

will make better use of the massive Federal investment in higher 

education by expanding college access while simultaneously protecting the interests of all American taxpayers who are footing the 

bill. 

FED UP 

The Committee began to lay the groundwork for the College Access and Opportunity Act dating back to 2001 with an innovative, 

web-based outreach initiative that was a first-of-its-kind opportunity for higher education stakeholders across the nation to get involved in the reauthorization process. The Committee believed the 

first step in developing meaningful reforms was not simply to impose new regulations on top of the existing framework, but to identify ways to actually reduce red tape and bureaucracy for students, 

financial aid personnel, and colleges and universities. Known as 

the FED UP project, this bipartisan initiative was the first step toward developing a more efficient and effective Federal student aid 

system. 

In that spirit, and in an effort to identify outdated, redundant, 

or overly burdensome provisions in title IV of the Higher Education 

Act and its regulations, the ‘‘Upping the Effectiveness of Our Federal Student Aid Programs,’’ or ‘‘FED UP,’’ was developed by 21st 

Century Competitiveness Subcommittee Chairman Howard P. 

‘‘Buck’’ McKeon (R–CA) and the late Representative Patsy Mink 

(D–HI) in 2001. The project, which was launched in May 2001, solicited suggestions from the higher education community as to 

what provisions in the Higher Education Act and which regulations 

should be changed or eliminated and why. More than 3,000 responses were received and logged from loan professionals, financial 

aid officers, students, higher education associations and concerned 

citizens. The Department of Education completed a negotiated rulemaking session based on the proposals submitted through FED UP 

and released new regulations. 

H.R. 609 continues the FED UP project to streamline the current 

student aid regulations. The legislation specifically addresses statutory changes that are necessary to relieve some of the administrative burdens on students, financial aid professionals, student loan 

providers and institutions of higher education, while providing clarification of other provisions currently in law. This opportunity to 

address technical and clerical amendments necessary to alleviate 

unnecessary burdens and confusion within the title IV programs 

175 

was supported widely by Members of Congress and all sectors of 

the higher education community. Some of the responses to the FED 

UP process from financial aid professionals include comments from 

student financial aid officers, trade associations and college presidents. ‘‘FED UP is an example of how government should work,’’ said 

David Sheridan, Dean of Enrollment Services at the Stevens Institute of Technology in New Jersey. ‘‘Your FED UP initiative is a unique, cooperative effort to 

streamline and appropriately target aid to needy students. It has 

been most welcomed by our colleges and universities and we hope 

to see further positive results from your undertaking,’’ said David 

Warren, President of the National Association of Independent Colleges and Universities (NAICU). 

Jolene Koester, President of the California State University at 

Northridge said, ‘‘I am delighted to participate in this effort because I share your belief that the time, effort, and especially Federal dollars that are consumed in some of these processes could be 

better applied to more productive ends. We very much appreciate 

the opportunity to respond, and thank you for bringing the attention of your office to this important issue.’’

Pell Grants 

The Federal Pell Grant program is the single largest source of 

grant aid for postsecondary education attendance funded by the 

Federal government. Congress has appropriated nearly $12.4 billion in fiscal year 2005 to serve about 5.3 million undergraduate 

students. The annual appropriations process sets the maximum 

award, currently at the historically high level of $4,050 for fiscal 

year 2005. Pell Grants are need-based aid intended to be the foundation for all Federal student aid awarded to undergraduates. The 

grants do not have to be repaid and are awarded to needy students 

and families who might not otherwise have the opportunity to pursue a college education. Although there is no absolute income 

threshold that determines who is eligible and who is ineligible for 

Pell Grants, recipients are primarily low-income. 

Beginning in fiscal year 1973, the Pell Grant program has made 

the dream of college a reality for tens of millions of students. Funding for the Pell Grant program has increased dramatically over the 

past three decades, but even these significant funding increases 

have not been able to keep pace with the explosion in college costs. 

Tuition increases at institutions across the country have been regularly outpacing the rate of inflation by three to four times, and 

often more. The purchasing power of the Pell Grant has been largely impacted by the dramatic increase in tuition and fees in all sectors of American higher education. Tuition increases, if left unchecked, will continue to erode the great strides made by Congress 

in support of the Pell Grant program. That’s why the issue of college costs must also be included in any discussion of higher education accessibility. In conjunction with efforts to address the larger issues that impact college affordability and accessibility, H.R. 

609 includes important reforms to strengthen the Pell Grant program and provides necessary reforms to ensure that the nation’s 

neediest students are able to continue to access a postsecondary 

education. 

176 

Since Republicans gained control of the House of Representatives 

in 1995, total Pell Grant funding has doubled, increasing from $6.2 

billion to $12.4 billion for fiscal year 2005. In President Bush’s first 

term, Pell Grant funding increased by $3.6 billion, an increase of 

more than 40 percent. Republicans have also significantly increased the Pell Grant maximum award. Since 1995, the Pell 

Grant maximum award has increased by 73 percent, from $2,340 

to $4,050. The House of Representatives recently approved a spending bill for fiscal year 2006 that added more than $1 billion in total 

funding for the Pell Grant program to increase the total appropriation for the program to $13.4 billion and increased the maximum 

award to $4,100. This is a major accomplishment, since even incremental increases in the Pell Grant maximum award are costly. 

Budget estimates indicate that increasing the maximum award by 

$100 at current maximum award levels costs $420 million. In addition, in order to ensure that the Pell Grant program remains on 

solid financial ground, the House of Representatives passed a 

Labor-HHS-Education spending bill that pays off the $4.3 billion 

program shortfall and institutes a Pell Grant scoring rule, which 

ensures that the program will not run a deficit in future years. 

Increased funding not only leads to increases in the maximum 

award—it also allows the program to serve a greater number of 

disadvantaged students. Since 1995, the number of students receiving Pell Grants has increased from 3.6 million to 5.3 million—an 

increase of 1.7 million students, or 47 percent. In President Bush’s 

first term alone, the number of students receiving Pell Grants increased by one million. 

H.R. 609 includes several important reforms to strengthen the 

Pell Grant program and better serve students. The bill calls for a 

maximum award funding authorization of $6,000—a responsible 

and realistic authorization level for the program. The increased authorization level, from $5,800, which is the current law authorization, to $6,000 was offered by Representative Ric Keller (R–FL). 

Pell Grants Plus—Achievement Grants for State Scholars 

H.R. 609 creates the Pell Grants Plus—Achievement Grants for 

State Scholars initiative and provides an additional $1,000—over 

and above the Pell Grant a student is receiving—for high-achieving, low-income students who participate in the State Scholars program, a rigorous, college preparatory high school program. The provision has been a part of President Bush’s budget submission to 

Congress for the past two years. Under this new initiative, students may receive Pell Grants Plus in their first and second years 

of college, providing additional aid in the freshman and sophomore 

years when students often struggle to pay for college and may be 

more vulnerable to dropping out. According to the American College Testing (ACT) program, ‘‘Students who complete a rigorous 

curriculum—with at least three years of mathematics and science, 

as well as four years of English and social studies, and courses in 

foreign language—are more successful in pursuing and completing 

further education.’’

While this is the first time that merit has been associated with 

the Pell Grant program, the Committee believes that it is imperative to get grant funds in the hands of high-achieving, low-income 

177 

students who have great potential to be successful in postsecondary 

education. 

Year-Round Pell Grants 

In order to help needy students who are working to graduate 

quickly, the bill allows for year-round Pell Grants. Currently, students may only receive Pell Grants based on the traditional two semester academic year. This limits options for students studying 

year-round or on a non-traditional schedule. 

The Committee believes that in the coming decades, many states 

will experience significant increases in postsecondary education enrollments. To respond to this challenge, institutions must look for 

new ways to deliver higher education and make more effective and 

efficient use of existing campuses. Offering year-round Pell Grants 

will allow institutions of higher education to make better use of 

current facilities by encouraging students to attend college on a 

year-round basis. Students who do this might, for example, complete a two-year associates or a four-year bachelor’s degree in less 

time than usual. Students may use the new summer Pell Grant eligibility to take courses that are overbooked in the regular academic 

year due to rising enrollments, concentrate on certain courses that 

require intensive study, or prepare for difficult or preliminary 

coursework (particularly incoming freshman and transfer students). 

The provision of year-round Pell Grants will reduce costs to students and move them through their programs more quickly, thus 

allowing institutions to increase enrollments and accelerate course 

completion and graduation for students. Equally as important to 

expedited program completion, the provision of year-round Pell 

Grants reduces the overall cost of the Pell Grant program to the 

taxpayer. Additionally, year-round Pell Grants reduce the amount 

of debt that a student may have to absorb, if year-round Pell 

Grants were otherwise not available and the student was left to finance his education by loans alone during the summer months. 

Since 1992, the Secretary had the option to offer year-round Pell 

Grants on a ‘‘case-by-case basis,’’ but has never exercised that authority because of the concern that it will add to the shortfall in 

the Pell Grant program. Because of the necessity to limit the cost 

in the initial phase of the program, the provision is limited to fouryear degree granting institutions of higher education that have a 

graduation rate of at least 30 percent and two-year degree granting 

institutions of higher education that have a graduation rate for one 

of the last three years that is above the average for their sector. 

Tuition sensitivity 

H.R. 609 eliminates the tuition sensitivity provision currently in 

the Higher Education Act, which reduces the annual maximum Pell 

Grant for students attending institutions with very low tuition 

charges. This provision penalizes the lowest income students, by reducing their Pell Grant aid, for attending very low cost institutions. 

In fiscal year 2003, the year for which the most recent data is 

available, the tuition sensitivity rule impacted 97,600 students 

whose Pell Grants were reduced by an aggregate amount slightly 

more than $19.9 million. According to the Congressional Research 

178 

Service, the estimated average loss in Pell Grant assistance for affected students was approximately $204 in fiscal year 2003. 

Reduced grants under the tuition sensitivity rule may result in 

some of the neediest students having to borrow additional funds to 

meet their expenses—even at the lowest priced institutions. Retaining this provision may serve as an incentive for low-cost institutions to increase their tuition. The Committee believes that the cost 

of attendance at institutions is high enough, even at institutions 

with the lowest tuition charges, and elimination of the tuition sensitivity provision will not result in favoring lower priced public institutions over higher priced institutions. 

Pell Grant eligibility 

Current law prohibits a student who is incarcerated in a State 

or Federal penal institution from receiving Federal student loans 

and Pell Grants. However, some State laws allowed jurors to confine the worst sexual predators to mental health facilities. Offenders in these centers are not called ‘‘inmates’’ but ‘‘residents.’’ Therefore, current law permits these offenders to qualify for Pell Grants. 

In the past year alone, over 50 sexual predators residing in one 

mental health facility in Florida have received over $200,000 to 

take college courses, paid for by U.S. taxpayer dollars through the 

Pell Grant program. Representative Ric Keller (R–FL) offered an 

amendment to modify the eligibility requirements for Pell Grants 

by ensuring that offenders who remain in custody through involuntary civil commitment not be eligible for the awards. The Committee believes that this amendment does not thwart rehabilitation 

or education of offenders, but it does address a very specific and 

particularly dangerous group of offenders and does not permit Federal funds to be expended to these individuals through Pell Grant 

awards. 

Pell Grant limitation 

Representative Sam Johnson (R–TX) offered an amendment to 

limit the length of time a student may receive a Pell Grant to 18 

semesters or 27 quarters. This amendment returns to the original 

intent of the Higher Education Act while recognizing new enrollment trends. Until 1992, a student’s eligibility was limited to six 

years. This amendment ensures that this reauthorization will 

refocus grant aid to students who are actively pursuing a degree, 

while at the same time, recognizing the growth in part-time attendance. The Committee believes this is a reasonable limit that will 

encourage students to make consistent progress toward a degree 

while protecting the American taxpayers’ investment in higher education. By basing the limit on semesters or quarters rather than 

years, this amendment protects the ability of part-time and nontraditional students to pursue a degree over an extended number 

of years. 

Data from the Department of Education shows that only about 

six percent of students who received a Pell Grant in 2004 first received their grant in 1996 or earlier. Data also shows that less 

than one percent of students received eight Pell Grants over an 11 

year span. This data demonstrates that the vast majority of students will easily meet this requirement. And the few students who 

179 

might have struggled to comply with this timeframe will have new 

incentives to complete a degree and enter the workforce. 

Tax table updates 

In December 2004, the Department of Education published a notice of its intent to revise the Federal need analysis methodology 

for the 2005–2006 award year. This action was consistent with the 

Higher Education Act, which since 1992 has required periodic updates to the tables used within the need analysis formula. In the 

notice, the Department of Education published revised versions of 

the tables for state and other taxes used to determine the Expected 

Family Contribution of students and their families. There has been 

concern expressed that the revisions to the tables may cause some 

students to lose Pell Grant funds, since the data previously used 

was from 1988 and reflects State and local taxes that were much 

higher than the tax rates in the current environment. However, it 

is essential for policy makers to use the best information available 

to target those resources to students who need them the most. 

The Committee believes that the decision to update the IRS tax 

tables that are used by the Department of Education as part of its 

need analysis methodology for determining students’ Pell Grant eligibility was the right thing to do to ensure integrity in serving students with the greatest need. The Department of Education is required under the changes made in the Higher Education Act 

Amendments of 1992, signed into law under the Clinton Administration, to use up-to-date information in determining students’ Pell 

Grant eligibility. Prior to the recent updates, the Department of 

Education was relying on tax data that dated back to 1988. As a 

consequence, 17-year-old tables were still being used nearly two 

decades after they were compiled. 

Updating the tax tables used to determine Pell Grant eligibility 

will not only allow continued increases in the number of American 

students receiving Pell Grants, but it will also improve prospects 

for a future increase in the maximum Pell Grant award—the 

amount of aid available annually to the poorest students in America. Support for the tax table updates has been voiced throughout 

the country. In December 2004, the Cleveland Plain Dealer reported that, ‘‘In truth, the revision was long overdue. Officials had 

been using tax data more than a decade out of date’’ and in January 2005, associate provost of university enrollment at Northwestern University told the Daily Northwestern that ‘‘[The Education Department] should update [the tax tables]. If they waited 

two years from now, the hit could be stronger.’’

TRIO novice applicants 

In order to promote competition in the TRIO program and allows 

new programs the opportunity to compete for and receive grant 

funds, H.R. 609 requires the Secretary of Education to set aside ten 

percent of the TRIO funds available for each TRIO program competition for quality novice applicants. The current TRIO award 

structure is intended to be competitive, yet in practice it virtually 

guarantees a limited number, if any, new programs will receive 

grants. Under this set-aside, if there are not enough quality novice 

applicants to utilize the ten percent set aside, the funds would be 

returned to the general TRIO fund for additional future awards. 

180 

The purpose of the TRIO programs is to ensure that low-income, 

first-generation college students and students with disabilities are 

able to access and get additional information about postsecondary 

education opportunities. Ensuring that novice applicants can compete for and receive grants only serves to expand access to higher 

education. 

Current law requires the same weight be given to prior experience that was given in 1994–1997. Prior experience is defined in 

the regulations to ultimately award a grantee a maximum of 15 

extra points on their application, putting them at a distinct advantage over new grantees who cannot receive the prior experience 

points. The Committee adamantly opposes the provision of prior experience points based on historical participation over the demonstrated outcomes and achievements of the grantee. While the 15 

points are not guaranteed for prior experience, assuming a previous 

grant holder meets basic requirements, the seasoned grantee will 

be awarded extra points that in some cases make it mathematically 

impossible for new programs to get funded. The Committee believes 

the best programs should be funded and programs that have not 

met the performance criteria are not simply carried by virtue of 

previously having a grant. While some previously funded programs 

are not automatically renewed, they do have a substantial advantage. The Committee believes in retaining prior experience as a 

consideration, but questions the current 15 point process as less 

than two percent of previous grants were not renewed. 

The novice applicant proposal retains the current prior experience provision which, with little if any impact on current grantees, 

will ensure novice applicants are provided a clear opportunity to 

compete with their peers for awards that ultimately serve students. 

TRIO accountability 

While many TRIO grantees provide quality services, an evaluation of three programs—Upward Bound, Talent Search, and Student Support Services—conducted by the Office of Management 

and Budget (OMB) calls into question the overall impact of certain 

TRIO programs. Additionally, the current grantee selection process, 

although competitive, heavily favors current TRIO providers, making it difficult for even the most qualified novice applicants to receive a grant. 

Since 1990, TRIO appropriations have more than tripled from 

$241.8 million to $836.5 million in fiscal year 2005. The Committee 

takes seriously its responsibility to ensure that the near $837 million taxpayers spend annually for TRIO programs are meeting the 

expectation that TRIO is improving college entrance and retention 

rates for low-income and first generation college students. Current 

law does not require recipients of these funds to demonstrate results in achieving the programs’ stated purpose and the Committee 

supports reforms to ensure that the most qualified applicants are 

awarded grants to operate TRIO programs, and new applicants 

have a greater opportunity to participate. 

Among the TRIO reforms included in H.R. 609 is an amendment 

offered by Representative Virginia Foxx (R–NC) to strengthen 

TRIO accountability, transparency, and the quality of TRIO services available to eligible students by establishing program performance measures and enhancing grantee reporting requirements. ImVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00184 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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proved data collection and the use of program measures will allow 

grant recipients to quantitatively evaluate their success at meeting 

the program’s objective, while helping the Department of Education 

identify areas needing program improvement so that resources can 

be effectively targeted. 

Evidence shows that greater competition fosters continuous program improvement. In many cases, year after year the same TRIO 

providers receive the bulk of the funds, even when there is little 

or no evidence of results. The performance-based grant selection 

process created by Representative Foxx will ensure that the most 

qualified applicants receive grants. The amendment will allow 

high-quality grantees to continue operating TRIO programs in their 

communities, while providing the Secretary clear authority to replace grantees that are not meeting performance goals. Under H.R. 

609, current TRIO providers that do not meet performance goals 

will not receive priority consideration during the next grant cycle 

yet may still compete for a subsequent TRIO award. In the view 

of this Committee, programs that cannot demonstrate reasonable 

program outcomes must not be given a free pass to continue receiving taxpayer funds. 

President George W. Bush has made competition for the provision of government services a priority of his Administration. This 

is good policy because when competition increases, the consumer 

generally benefits. A requirement that current TRIO grantees demonstrate success before subsequent grants are awarded promotes 

basic fairness and encourages enhanced program performance. 

With millions of dollars awarded each year in Federal TRIO grants, 

the need for efficiency and accountability is significant. 

The Committee recognizes that the primary principles of government contracting and grant-making should be to purchase the best 

product, provide the best service, and fund the best operations at 

the best price for the American taxpayer. The TRIO programs 

should not depart from these basic principles. 

TRIO for veterans 

The Committee bill also resolves an issue important to veterans 

who are being served by the Upward Bound TRIO program. The 

bill authorizes the use of Upward Bound funding for Math and 

Science programs for veterans. In taking this action, the Committee recognizes that from 1991 through 2004, the Department of 

Education successfully funded Veterans Upward Bound Math 

Science programs at both Humboldt State University and Montana 

State University. In 2004, the Department of Education unilaterally decided to discontinue these grants after 13 years despite the 

fact that one of the grantees has successfully won the competition 

to operate its Veterans Upward Bound Math Science program and 

was completing the first year in a multi-year grant. The Committee 

action specifically provides the legislative authority to fund such 

programs, and the Committee expects the Secretary to reinstate 

these programs for the duration of the grant cycle. The Committee 

further expects the Secretary to honor the terms under which the 

grants were originally awarded including funding level, number of 

students to be served, recruitment criteria, provision of room and 

board, and the ability to offer veterans the opportunity to earn 

math and science credit. 

182 

General TRIO provisions 

In return, the Committee expects the grantees to comply with all 

applicable accountability measures and new program outcomes that 

are part of the legislation. Further, the Committees intends for the 

programs to continue on a competitive basis for the duration of the 

authorization period. In taking this action, the Committee believes 

such efforts will ensure that these important outreach initiatives 

will continue to be offered to veterans across the country, as they 

return from service, to better prepare them to pursue a postsecondary education and gain the skills they need to be successful in 

today’s economy while complying with new accountability standards and program outcome measures. 

The bill also provides some important technical changes in the 

TRIO program. The Department of Education has adopted regulations within the Student Support Services program that narrowly 

define additional campuses. This definition thwarts an institution’s 

ability to apply for grants to serve diverse groups of disadvantaged 

students at various campuses. H.R. 609 provides clarification for 

institutions with multiple campuses serving different populations 

by defining the terms ‘‘multiple campuses’’ and ‘‘different populations.’’

Robert C. Byrd Mathematics and Science Honors Scholarship 

Program 

Over the past several years the Committee has heard from multiple witnesses that our nation’s competitiveness depends on the 

quality of our science, technology, engineering and mathematics related workforce. Careers in these disciplines support the United 

States in maintaining its leadership in innovation and in ensuring 

that we can solve challenging problems such as designing new 

technologies, protecting our nation, and maintaining a strong economy. Therefore, the Committee is discouraged that America’s high 

school students are struggling to keep up with their industrializedworld peers in the fields of mathematics and science and believes 

that Congress must do more to encourage our young people to pursue careers in these fields, which will not only benefit their future, 

but the future of our country. 

Accordingly, H.R. 609 includes a comprehensive proposal to help 

strengthen American competitiveness by increasing opportunities 

for students to study mathematics, science, and related fields. H.R. 

609 builds on the framework of existing Federal higher education 

investments to better reflect the national priority of increasing the 

number of American students studying advanced science and mathematics. H.R. 609 updates the Robert C. Byrd Honors Scholarship 

program to authorize grants for mathematics and science scholarships, loan interest repayment, and state education coordinating 

councils. 

The College Access and Opportunity Act of 2005 includes three 

distinct approaches to increase mathematics and science opportunities for students. First, the bill authorizes mathematics and science 

honors scholarships to encourage students to pursue a baccalaureate, masters, or doctoral degree in physical, life, or computer 

sciences, mathematics, and engineering. This idea, generated from 

testimony provided by Mr. Norm Augustine during the hearing, 

‘‘Challenges to American Competitiveness in Math and Science,’’ is 

183 

intended to provide an incentive for more students to persist in 

studies in the math and science disciplines. Mr. Augustine’s testimony pointed out that in the mathematics field, current trends indicate that of 3,500 ninth graders interested in math, only 300 of 

those students will qualify as freshmen to pursue a degree in 

mathematics. Of the 300 students, only 10 will receive a bachelor’s 

degree and only one will finish at the Ph.D. level. 

Second, H.R. 609 authorizes the Secretary to pay up to $5,000 in 

student loan interest for individuals who have obtained degrees in 

science or mathematics and serve as teachers or other professionals 

in related fields. The loan forgiveness also provides an incentive for 

students to enter into the math and science fields. In addition, this 

incentive attempts to maintain people in the math and science 

fields by requiring that anyone receiving this forgiveness must 

work in a math or science related field for at least five years. Finally, the College Access and Opportunity Act of 2005 authorizes 

the Secretary to award grants to states for Mathematics and 

Science Education Coordinating Councils that would be composed 

of education, business, and community leaders within the state. 

These Councils would work together to implement state-based reform agendas that support the continuing improvement of mathematics and science education and will help to support activities 

that lead to better teacher recruitment and training and increased 

student academic achievement in math and science. 

The Committee recognizes that Federal, State, and local mathematics and science programs are broadening their perspective to include science, technology, engineering and mathematics education, 

commonly referred to as ‘‘STEM’’ education. With respect to coordinating councils under this subpart, it is the Committee’s intent 

that the Mathematics and Science Coordinating Councils include 

STEM within its purview of State activities. It is also the Committee’s intent that funds can be used for recruitment and training of 

science, technology, engineering and mathematics teachers, and to 

support increased student achievement in science, technology, engineering and mathematics. 

Stafford Loan programs 

The Federal student loan system is comprised of two separate 

student loan programs—the Federal Family Education Loan 

(FFEL) program and the Direct Loan (DL) program. In the FFEL 

program, private lenders partnering with the government disburse 

the capital. Borrowers then deal with their private lender as the 

loan moves through its life cycle. Lenders can be banks, standalone student loan companies or non-profit agencies. Guaranty 

agencies work with the lenders and the borrowers to ensure that 

the borrowers stay out of default and administer the Federal guarantee to the lenders if the borrower does default on the loan. All 

government partners in the FFEL program work to provide borrowers with customer service and financial education with the goal 

of avoiding borrower defaults. Secondary markets, which are generally non-profit state agencies/organizations that act as lenders, 

purchase loans from other lenders to free up capital and also originate their own loans, often offering significant cuts to the borrower 

interest rate or favorable repayment terms. 

184 

The main difference between the FFEL program and the DL program is that in the DL program, the capital is disbursed directly 

from the Federal Treasury, via the Department of Education, to the 

schools on behalf of the student. Borrowers then deal with the Department of Education and its contractors for customer service. 

Over the years, the two programs have competed against each 

other and the participants in the FFEL program competed against 

themselves. This competition has dramatically improved the level 

of service being offered in both programs. In addition, because the 

two student loan programs were created at different times, the borrower benefit offerings in the programs differ. H.R. 609 took steps 

toward equalizing the two student loan programs to ensure that 

borrowers did not have different benefits in one program over the 

other program. 

The Committee entered into this reauthorization with the goal of 

making it easier for America’s young people access and persist in 

completing some form of higher education. A primary effort has 

been made to reevaluate the current investment and determine 

whether program priorities are in need of realignment. The Committee specifically identified the pressing need to address the explosion in subsidies directed to college graduates; the dramatic growth 

in the cost of the consolidation loan program, for example, poses a 

very real threat to the ability of Congress to direct future aid increases to low- and middle-income students who have not yet had 

the opportunity to pursue a college education. The Committee has 

developed a reasonable, sustainable loan structure that will continue to serve college graduates working to repay their loans while 

refocusing the primary investment on current and future students. 

The Committee has met these goals by passing a number of reforms to both the FFEL program and the DL program that will increase loan limits, significantly decrease fees paid by borrowers 

and better align the borrower benefits offered in the FFEL and DL 

programs. The Committee offers these additional benefits to borrowers by common sense reforms that curb the excess funds being 

spent unwisely in the student loan programs. The reforms included 

in H.R. 609 will better equalize the Stafford loan programs and 

also put both programs on a more solid financial foundation that 

will allow the program to operate efficiently for years into the future. 

Borrower benefits 

The Federal student loan programs offer unparalleled borrower 

benefits. Students are able to access Federally guaranteed loans at 

below-market interest rates without collateral or credit checks. 

Lower income borrowers who qualify for the Subsidized Stafford 

Loan program are not charged interest on their loans while in 

school, in their six month grace period following graduation, or in 

periods of loan deferment. Borrowers can access a variety of repayment options, and the already low fees in the programs are lowered 

even further under H.R. 609. However, the Committee believes inequities between the FFEL and DL programs must be corrected so 

that all student loan borrowers, regardless of which loan program 

their school has chosen, have access to the same level of borrower 

benefits. 

185 

In the area of loan fees, the Committee believes the current fee 

structure is unnecessarily complex, and unevenly applied to borrowers. For example, under current law, the fees paid by the borrowers can vary lender by lender or between student loan programs. The Higher Education Act requires that the Secretary 

charge a four percent origination fee for loans originated in the DL 

program and lenders charge a three percent origination fee in the 

FFEL program, plus an optional one percent fee to be charged by 

guarantors. Thus, under a strict reading of the law, borrowers in 

both programs are to be charged a total of four percent in fees upon 

origination of their Federal student loans. Congress originally 

added these fees as a temporary cost saving measure during the 

Omnibus Budget Reconciliation Act of 1981. These fees were never 

intended to be a permanent addition to the Higher Education Act. 

Since that time, a number of changes have been made to the 

origination fees charged on Federal student loans. In the DL program, beginning under the Clinton Administration, the Department of Education interpreted the origination fee provision to permit DL to only charge a three percent fee. This practice has continued. The program then further discounts the origination fee by offering an up-front rebate of 1.5 percent of the loan principal purported to be a repayment incentive. When a borrower enters repayment, if the borrower does not make 12 on-time payments, the fee 

is capitalized back onto the principal of the loan. Only about 19 

percent of students in the DL program are actually able to meet 

the 12 on-time payments requirement. In practice, this policy results in some DL borrowers paying a 1.5 percent fee and others 

paying a three percent fee. 

In the FFEL program, the government must receive a three percent origination fee on loans, but the statute is not specific as to 

who pays that fee—lenders or borrowers. Thus, similar to the uneven borrower treatment in DL, some borrowers in the FFEL program will pay the full three percent fee, while others pay a discounted origination fee because some or all of the fee will be paid 

by the lender on the borrower’s behalf. The FFEL borrower also 

may pay a fee of one percent of the loan to the guaranty agency 

to be deposited into the guarantor’s Federal Reserve fund; however, 

guaranty agencies currently have the authority to waive charging 

this fee to the student. The funds deposited into the Federal Reserve fund are property of the Federal government, and the Committee believes it is unwise public policy for Congress to grant 

guaranty agencies the authority to waive collection of the Federal 

dollars, thereby endangering the fiscal health of the agency and 

weakening the overall strength of the FFEL program. The guaranty fee has always been included in the structure of the Higher 

Education Act and unlike origination fees, was never thought to be 

a temporary measure. 

H.R. 609 provides for a multi-step process by which total loan 

fees will be reduced for all borrowers while the future fiscal health 

of the loan programs will be improved. H.R. 609 mandates that 

borrowers pay the existing one percent fee charged by guaranty 

agencies, renamed the Federal default fee, to ensure the long-term 

viability of the loan guaranty structure. At the same time, H.R. 609 

phases out the temporary origination fees in the FFEL program, 

and phases total DL fees to one percent, concurrently eliminating 

186 

the complex and uneven practice of rebating fees prior to repayment. Taken together, this will result in both FFEL and DL borrowers paying a total of just one percent in loan fees, a 75 percent 

reduction from the four percent fees under existing law. This simplified structure will ensure borrowers in both programs are treated equally and increase the amount of money a borrower actually 

receives to help pay for his education. Borrowers will pay a small 

fee (one percent) for the benefit of a consumer loan capped at a fiscally responsible 8.25 percent that includes a number of benefits 

that will assist students as they work to complete their education, 

allow borrowers to pay back their loans in a timely fashion and assist struggling borrowers to develop repayment options. 

Loan limits 

To encourage responsible borrowing habits, prevent excessive 

student loan debt, and protect taxpayers against loan defaults, the 

Higher Education Act provides for annual and aggregate loan limits. As the Committee developed its higher education reform package, there was considerable debate between those who sought significantly higher loan limits, and those who believed loan limits 

should remain at their current levels, or even be reduced for some 

borrowers. 

At the heart of this debate is the question of whether higher loan 

limits will do more to expand college access or simply expand student debt. According to the College Board, the cost of attendance 

at a public four-year institution has risen 28 percent over the past 

10 years. However, loan limits for first year students have not increased significantly since 1986. As a result, many would argue 

that loan limits should be increased to keep pace with the explosion in tuition. Groups such as the American Council on Education 

(ACE), Association of American Universities (AAU), College Parents of America, Consumer Bankers Association (CBA), Education 

Finance Council (EFC), National Association on Independent Colleges and Universities (NAICU), National Association of State Universities and Land Grant Colleges (NASULGC), National Association of Student Financial Aid Administrators (NASFAA), National 

Council of Higher Education Loan Programs (NCHELP) and Sallie 

Mae all spoke out in favor of increased loan limits for students. As 

the cost of attending college rapidly increases, students and families are relying more and more on student loans to assist them in 

pursuing their education. At the same time, the level of student 

debt continues to rise as well. The average Stafford loan debt level 

for a student graduating in 1995–1996 was $10,471; this figure 

rose to $15,862 for those graduating in 2003–04. The Committee 

believes reasonable concern should be given to ensure the Federal 

government is not contributing to unmanageable debt burdens by 

providing irresponsible loan limits. The Committee believes that 

the Federal government should do its part to ensure that borrowers 

have access to affordable loans through the Stafford loan program. 

If students complete their first and second years, they are more 

likely to continue on through graduation. In increasing the loan 

limits for these students, the Committee believes students will be 

better equipped to enter into and graduate from college. H.R. 609 

provides reasonable increases in annual maximum loan limits for 

first and second year undergraduate students from $2,625 to 

187 

$3,500 and $3,500 to $4,500, respectively, but does not increase the 

aggregate limit of $23,000. Similarly, H.R. 609 increases the annual maximum graduate loan limits from $10,000 to $12,000 but 

does not increase the aggregate loan limit. 

Interest rates 

Throughout the four decade history of the Federal student loan 

program, one of the most contentious issues has been that of the 

interest rate charged to borrowers. The Federal government has 

implemented a variety of fixed interest rates, only to be forced to 

revisit those rates when the inevitable occurs and the rate becomes 

out of sync with market conditions. The Committee believes it is 

of paramount importance that the student loan programs be placed 

on a solid financial foundation based in sound economic principles. 

As such, the Committee believes a variable interest rate that fluctuates with the market offers a viable, long-term solution to the interest rate question. 

Under current law, the Stafford loan program is provided to borrowers on a variable interest rate pegged to the 91-day Treasury 

bill. The rate is adjusted annually, and a discount is provided to 

borrowers in school, in a grace period, or in deferment. However, 

that variable rate structure is scheduled to be replaced by a fixed, 

6.8 percent interest rate for all borrowers beginning on July 1, 

2006. Without Congressional action, all future Stafford loan borrowers would pay a static 6.8 percent interest rate regardless of 

market conditions. 

Over the past several years, interest rates have fallen dramatically, and the variable rate structure of the student loan programs 

has allowed for students to benefit tremendously from these circumstances. In fact, interest rates have hit an all-time low in recent years for the student loan programs, residing at 3.37 percent 

last year. Even as interest rates rose somewhat in July 2005 to 4.7 

percent for students in school and 5.3 percent for borrowers in repayment, the rates have not risen to the level set to take effect on 

July 1, 2006, which would lock borrowers in with no opportunity 

to benefit from changes in the economic climate. Prior to the introduction of the variable interest rate in 1992, Congress made a 

number of failed attempts at predicting future economic conditions 

by setting fixed interest rates ranging from six percent to up to 10 

percent over time. The Committee believes the history of the loan 

programs demonstrate clearly that a fixed rate is unsustainable because it prevents borrowers from taking advantage of fluctuations 

in the market. However, the variable rate currently in place—and 

included in H.R. 609—offers borrowers dual benefits. It allows borrowers access to low rates when they are made available, and it 

protects borrowers from excessive rate increases through an interest rate cap of 8.25 percent. H.R. 609 eliminates the switch to a 

fixed interest rate on July 1, 2006 and keeps the interest rates set 

on a variable rate formula. In the past, every reauthorization period resulted in Congress adjusting the interest rates to match the 

current economic environment. By maintaining a variable interest 

rate with a reasonable cap of 8.25 percent, H.R. 609 ensures that 

students are able to take advantage of low interest rates when 

rates decline and are protected by a fiscally responsible and reasonVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00191 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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able cap should interest rates rise. The 8.25 percent cap also protects the taxpayers’ liability in the program. 

Considerable debate during the reauthorization also surrounded 

the issue of interest rates for the consolidation loan program. The 

consolidation loan program was originally intended to assist two 

groups of borrowers: first, borrowers with multiple lenders who 

wanted to consolidate their debt in order to make just one student 

loan payment per month, and second, those borrowers who had so 

much debt that they needed to stretch out their repayment term 

to lower their monthly payments. Congress never intended the consolidation loan program to be a refinancing tool. In fact, when the 

consolidation loan program was created in 1986, borrowers paid the 

greater of the weighted average of the underlying loans rounded up 

to the nearest whole percent, or 9 percent. That means borrowers 

paid a minimum interest rate of 9 percent. Given this historical 

perspective, it is clear that the consolidation loan program was not 

created as a refinancing tool to secure interest rates like those seen 

in recent years, and the explosion in consolidation loan subsidies 

have been an unintended consequence that must be addressed to 

ensure the future health and viability of the loan programs. 

As interest rates began to decline in recent years, a period most 

argued was not predicted, nor would last, a record number of borrowers have consolidated their loans not necessarily because they 

needed the intended benefits of the program, but because of abnormally low interest rates and the unintended disparity between the 

consolidation program and the underlying Stafford program. Under 

current law, Stafford loans are variable interest rate loans, and 

consolidation loans are fixed interest rate loans. By consolidating 

a loan under these conditions, a borrower was able to lock in a long 

term fixed rate based on the rates of their underlying loans. In 

fact, consolidation loan volume is now very close to Stafford loan 

volume. In the 2004–05 academic year there were $55.225 billion 

in Stafford loans disbursed and $55.272 billion in consolidation 

loans disbursed. Just five years ago, during the 1999–2000 academic year, there were $32.110 billion in Stafford loans disbursed 

and only $10.217 billion in consolidation loans disbursed. 

The Committee held a hearing last year entitled, ‘‘Fiscal Responsibility and Federal Consolidation Loans: Examining Cost Implications for Taxpayers, Students, and Borrowers,’’ during which Mr. 

Robert Shapiro, Chairman of Sonecon, LLP and a Senior Fellow 

with the Brookings Institution and Progressive Policy Institute, 

testified about the long term budgetary impacts of the consolidation loan program. In his testimony, Mr. Shapiro stated: 

If interest rates move in the most likely way, taxpayers 

will pay private consolidators almost $14 billion to subsidize the interest on the current stock of fixed-rate consolidated student loans over the lifetime of those loans. 

Moreover, there is a reasonable likelihood that the costs 

will be much higher over the lifetime of these loans, if interest rates are 2 to 3 percentage points higher than projected, taxpayers will pay private consolidators more than 

$48 billion to service the current stock of loans. 

In addition, the independent Government Accountability Office 

pointed out the problem as well in its report, ‘‘As Federal Costs of 

189 

Loan Consolidation Rise, Other Options Should Be Examined,’’ which pointed out that the record low interest rates and the record 

high consolidation loan volume has led to increased administrative 

costs and subsidy costs in the student loan programs. 

While the Committee acknowledges that in the last few years, 

the fixed rate structure of the consolidation loan program has been 

advantageous to some borrowers, it is also clear that sound public 

policy cannot be based on a snapshot of a few years of 

unsustainably low interest rates. In making long-term policy, the 

Committee sought information on long-term trends to see how borrowers and taxpayers would be best served. In that vein, the independent Congressional Research Service (CRS) issued a report in 

2004 that demonstrated that variable interest rate consolidation 

loans would have, more often than not, been cheaper for borrowers. 

The CRS analysis showed that in 13 of the last 18 years—since 

1986, the first year of the consolidation loan program—borrowers 

would actually have been better off had their consolidation loans 

been available under a variable interest rate. If borrowers had extended repayment of their consolidation loans to 20 years, the analysis showed borrowers would have paid less interest in 14 of the 

last 18 years. This analysis demonstrates that over time, variable 

rates are actually beneficial to borrowers by offering the dual benefits of market fluctuation and an interest rate cap. 

H.R. 609 also takes precedent setting steps in offering borrowers 

new options in the consolidation loan program. For the first time 

ever, a borrower whose loans are held with one lender will be permitted to shop around with other lenders for the best deal on a consolidation loan. In addition, when the borrower consolidates, for the 

first time ever, the borrower will be able to choose between a fixed 

interest rate loan and a variable interest rate loan. The variable 

interest rate will be based on the same fiscally prudent formula 

that sets the Stafford loans, the 91-day Treasury bill + 2.3 percent. 

The fixed interest rate will be based off of the 91-day Treasury bill 

+ 3.3 percent with a one time 0.50 percent fixed rate offset fee. 

These formulas permit borrowers to obtain exceptionally good interest rates (both options maintain the cap at 8.25 percent), but require that a borrower bear a greater share of the costs and risks 

associated with the benefits of up to a 30-year repayment schedule 

at a low fixed interest rate. 

Direct Loans versus Federal Family Education Loans 

Ever since the inception of the Direct Loan program in 1993, 

there has been confusion and debate as to which program is better, 

costs less, and whether the two should coexist at all. The Committee continues to be concerned about the budgetary scoring of the 

Direct Loan (DL) program and the Federal Family Education Loan 

(FFEL) program. Our concerns echo those expressed in the fiscal 

year 2006 conference budget resolution adopted earlier this year by 

Congress. The resolution includes the following report language 

concerning the budgetary scoring of the student loan programs: 

Although the Congress strongly supports the Federal 

student loan programs, it is increasingly concerned that 

the subsidy estimates for the Ford Direct Loan Program do 

not reflect the program’s true cost to the Federal Government. For example, the President’s 2006 budget reveals 

190 

that although the program was expected to result in a net 

savings of $2 billion from its inception through fiscal year 

2004, the actual experience is that the program resulted in 

a net cost to taxpayers of $3 billion over the same period. 

This represents a $5-billion underestimate of the program’s actual cost to taxpayers over roughly 10 years. Accordingly, the Congress supports the administration’s continuing efforts to direct the Department of Education to refine and improve its cost estimating techniques for this 

program. 

The Congress believes it is important for estimates to be 

corrected for all known deficiencies so that the decision 

makers have sufficient information to compare the cost to 

taxpayers of competing policy options, and large-scale 

structural reform proposals, in the student loan programs. 

Due to the concerns the Committee had about the costs of the 

two programs and because the Committee believes the competition 

between the two programs has been beneficial to all colleges and 

universities, the Committee made a decision to allow the market to 

decide in allowing the competition, which has been beneficial both 

to the programs, students, and institutions, to continue. That competition resulted in better customer service and borrower benefits 

in the FFEL program and has resulted in some increased accountability in the DL program by the Department of Education. Earlier 

in this Congress, the Committee on Government Reform held a 

hearing entitled, ‘‘Federal Student Loan Programs Are They Meeting the Needs of Students and Schools?’’ with the purpose of exploring the differences between the two student loan programs as it relates to the services the programs provide schools and students. 

During this hearing, the Director of Student Financial Aid at The 

Ohio State University, the country’s largest DL institution, Ms. 

Natala Hart, spoke about the benefits of the competition between 

the two student loan programs. She stated: 

We at Ohio State believe both FFELP and DL working 

together have resulted in the most effective and efficient 

improvements in the financial aid system. While we remain steadfastly a DL school, we encourage continuation 

of FFELP as well as DL, as competition makes both programs more receptive to students’ needs. 

At that same hearing, Ms. Cynthia Thorton, Director of Financial 

Aid at Dillard University also testified. Her testimony focused 

around the problems her university experienced with the DL program and why they switched back into the FFEL program. Dillard 

University joined the DL program in 1996 and left the program in 

2003 after experiencing continued problems with reconciliation of 

accounts. She stated: 

Dillard University entered the FDLP in 1996, after the 

program was two years old. Initially, it appeared that 

loans were being delivered in a timelier manner. However, 

in 1997, the FDLP transitioned its loan origination services from Computer Data Systems to Electronic Data Systems. The transition was difficult on the Department of 

Education and the schools involved. 

191 

During this transition, student loan services were interrupted for four to five weeks which created a financial crisis for the school and loan recipients awaiting funds to 

meet fiscal obligations. After evaluating the challenges the 

students and the administration were experiencing with 

the FDLP, Dillard University made the decision to return 

to the FFELP program. 

Dillard’s return to the FFELP was a slow process. I believe if one would ask the Financial Aid Office at FDLP 

schools what is the one element they dislike about the Direct Loan Program, I am sure the overwhelming response 

would be the reconciliation. In addition to the arduous 

task of administering the FDLP, reconciling the FDLP was 

an additional responsibility not required by the FFELP. I 

recall many difficulties trying to reconcile and close out the 

program simply because records were lost at the Direct 

Loan servicer. Even after providing the agencies copies of 

cancelled checks, it was difficult to bring closure to discrepancies. We officially closed out our loans with the 

FDLP at the conclusion of the 2003–2004 school years. 

Ms. Thorton was not alone in her experience. In a survey conducted by Rockbridge Associates Inc. of Financial Aid Administrators (FAAs) at institutions that switched from the DL program to 

the FFEL program, 20 percent of the FAAs surveyed said that the 

decision to switch programs relied heavily on general issues of customer service and 22 percent said that the fees and borrower benefits in the program were the reasons the institutions switched programs. In addition, since the inception of the DL program, over 500 

schools have left the program to return to the FFEL program. 

Today, approximately 75 percent of the student loan volume is in 

the FFEL program and 25 percent is in the DL program. However, 

the DL schools now seem pleased with the level of service they are 

receiving. For that reason, the Committee focused its efforts in reauthorization around taking steps toward leveling the playing field 

between the two programs from the borrower’s perspective. For example, H.R. 609 phases down fees paid by borrowers so that by 

2010 students will be paying one percent in both programs. The bill 

also increases loan limits in each program and aligns the DL program’s extended repayment plan to match the FFEL repayment 

plan. 

Over the past several years, the Committee tried to better evaluate the cost of the two student loan programs. While the Committee passed a reauthorization bill that tried to strengthen both 

student loan programs, the Committee remains concerned that the 

subsidy estimate for the DL program does not reflect the program’s 

true cost. The President’s fiscal year 2006 budget request indicates 

that over the life of the programs, the FFEL program has been reestimated to cost $7 billion less than originally estimated while the 

DL program has been re-estimated to cost $5 billion more than 

originally estimated. In addition, in a recently released report, Citizens Against Government Waste recommended that closer scrutiny 

of the costs between the FFEL program and the DL program is 

warranted. Earlier this year, the independent auditing firm 

PricewaterhouseCoopers (PwC) concluded that the DL program 

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mates show because certain costs and revenues are completely ignored. For example, budget estimates fail to account for the revenue generated by taxes paid to the Treasury by private sector 

lenders, exclude all administrative costs associated with the DL 

program, and utilize biased scorekeeping rules that continue to underestimate the cost of the DL program. 

The Committee is also concerned that the official scorekeeping 

baselines for the Federal student loan programs are inadequate as 

a policy decision-making tool because they do not accurately portray the relative cost of the two major student loan programs—the 

DL and the FFEL—or the cost impact of shifting loan volume between the two programs. 

The Committee believes that until the above factors are accurately accounted for in the official scoring baseline, any claim of 

budgetary savings from shifting loan volume among the student 

loan programs is premature. This will remain the case so long as 

a flawed and incomplete system of accounting remains in use. 

Therefore, the Committee intends to work with the House Budget 

Committee and the Congressional Budget Office to develop a more 

accurate official scoring baseline, that incorporates the cost and 

revenue factors identified by the PricewaterhouseCoopers study, 

and which will more correctly account for the budgetary impact of 

the Federal DL program. 

Teacher loan forgiveness 

No Child Left Behind requires each State educational agency to 

develop a plan to ensure that all teachers teaching in core academic subjects within the State are highly qualified not later than 

the end of the 2005–2006 school year. Additionally, over the next 

ten years, school districts will need to hire over two million additional teachers to keep up with increased student enrollment. 

States and school districts must recruit a greater quantity of people to the teaching profession while also ensuring teacher quality. 

Unfortunately, schools with concentrated poverty have greater 

teacher and administrator shortages, fewer applications for vacancies, higher absenteeism among teachers and staff, and higher 

rates of teacher and administrator turnover. Shortages of math, 

science and special education teachers are at a critical level. While 

No Child Left Behind will help school districts recruit and train 

high quality teachers, more help is needed. 

The expanded loan forgiveness for math, science and special education teachers, as well as reading specialists, is a longstanding 

priority for the Committee and the Congress. There are demonstrated shortages of teachers in these subject areas, particularly 

in rural and urban school districts that serve disadvantaged students. According to The Urban Teacher Challenge, released in January 2000, the nation’s largest urban school districts responding to 

a national survey reported immediate needs for math (95 percent), 

science (98 percent) and special education teachers (98 percent). 

The National Center for Education Statistics reports, for the 1999–

2000 school year, that 67 percent of public elementary and middle 

schools had vacancies in special education, 70 percent in mathematics, 61 percent in biology and 51 percent in physical science. 

According to the Center for the Study of Teaching Policy, almost 

57 percent of public school teachers are teaching physical science 

193 

without a major or minor in their field. H.R. 609 will provide incentives that will allow flexibility to local schools to recruit and retain 

highly qualified teachers in these critical subject areas in both public and private elementary and secondary schools across the country. Similar loan forgiveness measures have been included in President Bush’s annual budget requests in 2002, 2003, 2004, 2005, and 

2006 and approved by Congress in 2002 (H.R. 5091), 2003 (H.R. 

438), and 2004 (H.R. 5186). 

H.R. 609 complements No Child Left Behind’s focus on improving 

the education that children receive, particularly the education that 

disadvantaged students and students with disabilities receive, by 

supporting quality teachers for our children. H.R 609 makes permanent the expanded mandatory teacher loan forgiveness maximum amount of $17,500, up from the previous $5,000, of a teacher’s outstanding loan obligation for those teaching math, science or 

special education for five years in a title I school. In addition, H.R. 

609 includes loan forgiveness for reading specialists, recognizing 

that literacy is one of the most important building blocks students 

need to learn in order to be successful throughout their lives. The 

teacher must teach for five consecutive years in a title I school for 

five years in order to qualify. Additionally, in order to aid those 

students who are not able to meet their loan payments while they 

are teaching, the Secretary has authority to provide the borrower 

a waiver of that repayment obligation if the borrower can prove, in 

accordance with regulations promulgated by the Secretary, economic hardship. 

By offering additional financial support for public and private elementary and secondary teachers who have made a commitment to 

teach in title I schools in the defined critical subject areas—math, 

science and special education—this bill can make it possible for 

more disadvantaged students to be taught by caring and competent 

teachers in subject areas that will help shape not only the student 

but the economic future of the country. Teaching in high need, low 

income schools isn’t always easy, but nowhere is it more important. 

H.R. 609 includes a provision that would permit private school 

teachers who are otherwise exempt from State certification requirements related to highly qualified teacher status to also take advantage of the increased amount of teacher loan forgiveness included 

in this bill. H.R. 609 considers private school teachers to be in the 

same category as charter school teachers under the highly qualified 

teacher provisions of No Child Left Behind. Further, allowing private school teachers to fulfill rigorous subject matter and skills 

knowledge requirements by achieving passing scores on nationally 

developed and available teacher competency tests would provide 

private school teachers the opportunity to participate in the loan 

forgiveness program even in States that preclude such teachers 

from taking State teacher competency tests. 

The Committee believes we need to do everything we can to encourage college students to enter a field that, while challenging, is 

one of the most rewarding careers one can undertake. H.R. 609 will 

help to encourage the best and the brightest of our nation’s college 

students to enter the teaching profession to remain committed to 

the profession and the schools in which they teach. 

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National need loan forgiveness 

H.R. 609 also updates the existing authority for discretionary 

loan forgiveness for child care workers, a program that has not received funding in recent years in its current form. Under the bill, 

the Committee expanded the program to offer up to $5,000 of loan 

forgiveness to individuals in professions considered to be areas of 

national need as designated by the Secretary. This program includes loan forgiveness for early childhood educators, nurses, foreign language specialists, librarians, bilingual educators, first responders in low income communities, child welfare workers and 

speech language pathologists. These items were added by the Committee as priorities at this time. 

During the mark-up, Representative Porter (R–NV) highlighted 

that dating back to 2000, there was a six percent shortage of 

nurses and other health care professionals. That shortage is projected to increase to a shortage of almost 30 percent in the next 15 

to 20 years. There is also a shortage of professionals available to 

teach students to become nurses, exacerbating the shortages today 

and those we will see into the future. Over the next 10 years, more 

than two million teachers will leave the field for other careers. 

With the continued vacancies in the nursing profession, we need 

people willing to go into the teaching field to educate students hoping to pursue a career in nursing. In addition, Representative 

Platts (R–PA) brought to the Committee’s attention the shortage of 

early childhood educators and the importance of having qualified 

people serve in these positions. The Economic Policy Institute, the 

Keystone Research Center and the Foundation for Child Development recently published a report titled, ‘‘Losing Ground in Early 

Childhood Education: Declining Workforce Qualifications in an Expanding Industry, 1979–2004,’’ in which it was demonstrated that 

the number of early childhood staff with college degrees has 

dropped significantly over the past 20 years, from 43 percent to 30 

percent. In addition, the report pointed out that the most educated 

cohort of early childhood teachers are retiring in the next 15 years 

and there are not enough students in the pipeline to fill those positions. 

The Committee believes authorizing loan forgiveness for these 

areas with demonstrated national need will provide a step in the 

right direction as the nation works to alleviate shortages in key 

fields. 

Cutting excess spending out of the student loan programs 

H.R. 609 makes a number of reforms that alter the Federal investment in the student loan programs and ensure Federal funds 

will be spent more wisely on behalf of students and taxpayers. Perhaps most visible of these reforms given the significant media attention to the issue in the months preceding reauthorization is the 

provision for a comprehensive and permanent end to provisions 

that allow certain lenders to collect higher than market rate 

yields—the so-called half SAP/9.5 floor for special allowance—on 

some students loans. The history of these provisions is complex, but 

the solution provided under H.R. 609 is unambiguous. 

By way of background, current law and regulations permit lenders with access to pre-October 1, 1993 tax-exempt bond estates to 

receive a minimum return on the loans of 9.5 percent. This practice 

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originated in order to place non-profit lenders on a more level playing field with other types of lenders; through eligible tax-exempt 

bonds, non-profit lenders were guaranteed to receive half the special allowance payment (SAP) of banks, or a minimum of 9.5 percent. The special allowance payment of half SAP or at least 9.5 percent, from here forward to be referred to as 9.5 percent subsidies, 

was put into the law in the 1980s when interest rates were much 

higher and the Federal government needed to infuse additional 

capital into the program. 

The Omnibus Reconciliation Act of 1993 eliminated the guaranteed 9.5 percent rate of return for tax-exempt bonds going forward 

as interest rates began to fall. Many, including the Committee, believe Congressional intent was that over time, as the eligible bonds 

were paid off and retired, the 9.5 subsidies would be eliminated entirely. However, through a series of administrative actions, the subsidy payments were allowed to continue. 

In 1993, the Clinton Administration issued a Dear Colleague Letter that permitted the 9.5 percent subsidies to continue by allowing 

eligible bonds to be refinanced without losing the 9.5 percent benefit. In 1996, the Department of Education under the Clinton Administration issued another piece of administrative guidance that 

permitted loans to be transferred in and out of eligible bonds, allowing still more loans to become subject to the higher guaranteed 

rate of return. This practice of transferring, in particular, has been 

responsible for the significant growth in volume of 9.5 percent subsidies, as eligible loans have been transferred to taxable bonds. 

In recent years interest rates have dropped dramatically and the 

9.5 percent subsidies have created a windfall for some lenders. The 

Committee believes that while the 9.5 percent subsidies may have 

made sense two decades ago, when the economic climate was much 

different than it is today, the time has come to put an end to this 

unnecessarily high rate of return. During the 108th Congress, temporary legislation was enacted to provide an immediate halt to the 

practices that had allowed the volume of 9.5 percent subsidies to 

grow: transferring loans in and out of eligible bonds, and refunding 

bonds to extend the maturity date. The Committee was clear when 

that bill, the Taxpayer-Teacher Protection Act (P.L. 108–409), was 

enacted, it was merely a temporary solution. The complete and permanent closure of the 9.5 percent subsidies was to come during the 

Higher Education Act reauthorization. 

There is ample evidence that the administrative actions during 

the Clinton Administration allowed the 9.5 percent subsidies to expand, rather than decline as was originally intended. From 2001 to 

2004, the Department of Education’s special allowance payments 

on these ‘‘9.5 loans’’ increased from $209 million to $955.5 million. 

Between the time Congress passed the Taxpayer-Teacher Protection Act in October 2004 and the third quarter of fiscal year 2005, 

special allowance payments on these loans have dropped from $262 

million to $210 million and loan volume has decreased from 17.5 

billion to 14.6 billion. 

With demonstrated proof that the Taxpayer Teacher Protection 

Act is working, the Committee believes the 9.5 percent subsidies 

are well on their way to being eliminated entirely. Through H.R. 

609, the Committee makes the provisions of the Taxpayer-Teacher 

Protection Act permanent, and goes a step further by also closing 

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down the practice known as recycling, which permits the proceeds 

of an eligible bond to be reinvested in new loans which also carry 

the higher rate of return. Taken together, the reforms in H.R. 609 

will halt the practices of transferring, refunding, and recycling, and 

no additional loans will be tagged with the special 9.5 percent subsidies. Subsidies are already declining rapidly, and under the bill, 

in time they will be eliminated all together. 

A second practice which spends Federal funds unwisely is known 

as the ‘‘Super Two Step,’’ a practice whereby lenders counsel borrowers with FFEL consolidation loans to re-consolidate into the DL 

program and then re-consolidate again into the FFEL program. As 

previously stated, the intent of the consolidation loan program was 

to permit borrowers to either lower their monthly loan payments 

by stretching out their repayment term or consolidate multiple payments into one payment. The program was never intended to be 

used for refinancing purposes. This practice subverts all Congressional intent of the statute and has resulted in millions of dollars 

being bled from the Federal Treasury. 

H.R. 609 also stops another form of excess earnings in the loan 

programs, in which lenders are able to collect more than their 

guaranteed minimum rate of return. The structure of the loan programs provides for a minimum rate of return for lenders to ensure 

funds are available to students, as well as a below market interest 

rate for borrowers. The lenders’ guaranteed rate of return, known 

as a lender yield, fluctuates with the market. Student loan interest 

rates also fluctuate with the market. As a result, the borrower 

rate—still below the market rate for other consumer loan products—may sometimes exceed the lender yield. In simple terms, this 

means the rate being paid by the borrower is actually higher than 

the minimum rate guaranteed to the lender. H.R. 609 requires 

lenders to return to the Federal government these excess earnings, 

otherwise referred to as ‘‘floor income.’’ This reform will generate 

savings for taxpayers while preserving the basic structure of low 

rates for borrowers and minimum returns for lenders. 

Risk sharing 

The Federally guaranteed loan program is based on the premise 

that the Federal government guarantees lenders against default, in 

exchange for which lenders offer capital to loan borrowers at below 

market rates. In the past several years, lenders have significantly 

increased efficiency and improved program operation, and as a result, are able to provide student loans with a lower cost of capital 

while still providing valuable benefits to borrowers. Student loan 

borrowers have already begun to benefit from the improvements 

made by lenders, and under H.R. 609, taxpayers will also begin to 

benefit. 

Given the increased efficiency in the loan programs and the historically low default rates, the Committee believes it is prudent for 

lenders to accept a modest increase in the risk sharing. In addition, 

the Committee feels strongly that FFEL program participants, 

lenders, and guarantors must continue efforts in the area of default 

aversion to ensure default rates remain low. The Committee agreed 

with the President’s fiscal year 2006 budget submission to Congress on this point. Representative Tom Petri (R–WI) responded by 

introducing an amendment, which the Committee accepted, that reVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00200 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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duced lender insurance from 98 percent to 96 percent and reduced 

guarantor reinsurance from 95 percent to 93 percent. When lender 

insurance is cut, the guarantors are not required to reimburse the 

lenders as much and therefore should be proportionately reduced 

in the reinsurance paid by the Federal government. In addition, 

the cut to guarantor reinsurance will provide an additional incentive to guaranty agencies to continue to excel in preventing delinquencies and defaults. As previously mentioned, H.R. 609 also infuses more stability in the financial health of the guarantor’s system by requiring borrower payment of the one percent Federal default fee. 

To further strengthen the loan programs in the interest of American taxpayers, the Committee has provided for common sense 

changes to reward high-performing lenders and servicers. Currently, a large majority of the loan volume qualifies for the 100 percent insurance award that comes with the designation of a lender 

or service as an ‘‘Exceptional Performer.’’ As of the writing of this 

report, the Department of Education has awarded the Exceptional 

Performer designation to 11 lenders or servicers. Of those 11, the 

servicers together service loans for 93 lenders and the lenders are 

all in ranked in the top 35 of loan holders. These numbers demonstrate that a large majority of the loan volume is currently receiving 100 percent insurance, rather than the standard 98 percent. With so little risk sharing in the program, lenders and 

servicers have little incentive to continue to strive to improve their 

default aversion methods. The Exceptional Performer program has 

achieved its goal and the Committee believes it is time to retool the 

program so that it continues to serve its original purpose—to push 

lenders and servicers to improve their programs thereby resulting 

in lower defaults. To that end, the Committee ties the exceptional 

performer designation to outcome based measures rather than the 

current method, which demands nothing more than a score on a 

compliance audit. The new Exceptional Performer designation is 

also constructed in such a way that only the best lenders and 

servicers are awarded this designation by only permitting the top 

five percent in the industry to receive the special award. 

Repayment plans 

In recent years, college students have seen a rise in the cost of 

college and similarly, a rise in the amount of student loan debt 

they need to take on in order to pay for that rise in college tuition. 

In addition, over the past few years, the market has provided 

record low interest rates on their student loans. When students 

graduate, they are faced with a decision about whether to consolidate their loans, thereby stretching out their monthly payments, or 

to pick one of the repayment plans currently offered within the 

Stafford loan program. Under current law, DL borrowers will find 

themselves with different options than FFEL borrowers. H.R. 609 

levels the playing field by conforming the DL repayment plans to 

match the FFEL repayment plans. 

Under current law, borrowers who have just graduated and may 

not have a job right away or who may have a low-paying job have 

limited options as far as avenues to lower their monthly payment 

without stretching out their debt. The Committee believes this is 

an important gap to fill as some students may just need temporary 

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relief and do not want to stretch their payments out longer than 

10 years. H.R. 609 implements an interest only repayment plan 

whereby borrowers pay only the interest accruing on their loan, or 

$600 annually which ever is more, for the first two years they are 

in repayment. This new interest only repayment plan, which is 

added to both the FFEL and DL programs will give borrowers additional repayment relief as they begin their careers without having 

the borrowers forced into the consolidation loan program or forced 

to default because they do not have the funds to make the initial 

payments. 

Military deferment 

In 2003, Congress extended the Higher Education Relief Opportunities for Students Act (HEROES), P.L. 108–76, granting the Department of Education waiver authority of statutory and regulatory 

student loan requirements for college students who had been called 

to active duty in the U.S. Armed Forces. The Department of Education implemented the waivers in December 2003. Since that time, 

students serving in the Armed Forces have enjoyed the benefits of 

extended in-school deferment on their loans, relaxed requirements 

to obtain a leave of absence from the school and extended grace periods if the student was in grace when he or she was called to 

serve. In addition, student loan borrowers that obtained loans prior 

to July 1, 1993 were able to qualify for a military deferment. This 

deferment option was removed during the 1992 reauthorization. 

The Committee believes members of the military that have accrued loans since July 1, 1993 should also be afforded these same 

benefits and accepted an idea proposed by Representative Tom 

Osborne (R–NE) to solve this discrepancy. As a result, H.R. 609 includes a provision that extends a student loan deferment option to 

members of the Armed Forces or National Guard serving on active 

duty during a war or other military emergency or national emergency. This new deferment will permit the borrowers to forgo payments on their loan principal without going into default. In addition, all interest accruing on subsidized loans will be paid for by 

the Department of Education. The borrower will have the option of 

either paying the interest that is accruing on the unsubsidized 

loans or not paying the interest and having it capitalize at the end 

of the deferment period. This new provision will permit our service 

members the ability to concentrate on the task at hand without 

having to worry that they are meeting their monthly student loan 

payments. The provision also sends a message of support to our deployed troops, many of whom have left their families and often 

their civilian jobs, that they do not have to forfeit the right to an 

affordable education in order to serve their country in uniform. 

Financial education and additional disclosures 

The rules and regulations surrounding the student loan program 

are complex and can be extremely confusing to borrowers. With 

students taking on increased levels of student loan debt to finance 

their education and with the strong detrimental effects on a borrower’s credit report that evolves from defaulting on student loan 

payments, the Committee strongly believes that more financial 

education should be infused into the law. Currently, students must 

attend both entrance counseling and exit counseling in order to 

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take out student loans. However, often these sessions are held in 

auditoriums or big group settings where the borrower is not given 

counseling that directly meets their financial situation. In addition, 

more and more financial aid offices are taking their entrance and 

exit counseling online where the borrower can quickly click through 

some instructions and answer a fairly simple quiz that, again, does 

not address their specific financial situation. These counseling sessions also do not take into account other spending or budgeting 

needs of a newly graduated student. The Committee has spoken 

with many lenders, servicers and guarantors regarding the steps 

these entities are already taking to provide borrowers with better 

counseling. FFEL participants are taking more steps than necessary in order to ensure that their customers are well informed. 

However, the Committee strongly believes there is an important 

Federal purpose here, so H.R. 609 is infused with various provisions requiring guaranty agencies to undertake additional steps in 

the financial education area. It is the hope of the Committee that 

with the new provisions, students and borrowers will be better informed about the burden of borrowing more money than necessary 

and will also be counseled on how to work into their overall budget 

their student loan obligations which will prevent delinquencies and 

defaults. 

The goal of creating better informed borrowers also spills into the 

consolidation loan program. Over the past several years, the Committee has heard from Americans all across the country who consolidated their loans at much higher interest rates because they 

were not told that they could only consolidate once or that they 

would lose certain benefits upon consolidating. In addition, with 

the advent of the record low interest rates, an increased amount 

of direct-to-consumer advertising in the student loan industry has 

commenced. In response to these new trends, H.R. 609 takes steps 

to ensure that borrowers are being given all of the relevant information by these companies. The bill requires that lenders give borrowers information on the effects of consolidation on the borrower’s 

total interest to be paid, fees to be paid and length of repayment. 

In addition, the borrower is to be told about how the consolidation 

loan would change the benefits given by the underlying loan, the 

ability of a borrower to prepay the loan or pay on a shorter schedule. Finally, lenders are also required to disseminate information 

on any tax benefits for which the borrower could be eligible. The 

Committee believes these additional disclosures will help borrowers 

more fully understand their rights under the student loan program 

and assist borrowers in deciding whether it is financially prudent 

to consolidate their loans. 

The Committee has also heard from borrowers who indicated 

that they wanted to be able to find the best offer on their consolidation loans or find a lender with different customer service. Currently, if borrowers have all of their loans with one lender, the borrower must consolidate with that lender. H.R. 609 expands the borrower’s options in eliminating this inflexible rule. With the changes 

in the Committee’s bill, borrowers will now be able to shop around 

to find the best offer that suits their financial needs. 

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Credit bureaus 

In 2003, the media reported on an incident with one lender 

where the student loan company stopped reporting to all three national credit bureaus and instead reported its borrowers’ payment 

information to just one bureau. The lender defended its actions by 

saying that it wanted to protect its customers’ privacy because the 

other two credit bureaus were selling its borrowers’ loan information to other student loan companies. This lack of disclosure affected borrowers’ ability to obtain mortgages and credit cards, and 

had a particularly detrimental effect on first time home buyers. 

Mortgage lenders will often look at all three bureaus’ credit scores 

and average them for a particular borrower in order to determine 

the feasibility of lending to the borrower. If the borrower’s scores 

are inconsistent, this could harm the borrower’s ability to obtain a 

positive review by the mortgage lender. The Committee understands the dramatic effect paying, or not paying, student loans 

back has on a borrower’s credit rating and believes strongly that 

a lender should report information to all national credit bureaus. 

H.R. 609 requires that lenders must report loan payment information to all national credit bureaus, not just one or two particular 

companies. 

Disability determination 

H.R. 609 makes a subtle but powerful change to the parameters 

around total and permanent disability discharge provisions. The 

Higher Education Act has long provided for the discharge of a student’s loan in the case of death and total and permanent disability. 

In 2000, the regulations surrounding the total and permanent disability discharge changed dramatically. New and additional burdens to students already facing very difficult life and health situations were added in an effort to stem perceived fraud and abuse. 

While the Committee agrees with enforcing standards to ensure 

only those truly eligible receive such a benefit, the accompanying 

requirements must also be reasonable. H.R. 609 provides if the 

Veterans Administration or the Social Security Administration determines an individual is in fact totally and permanently disabled, 

the Secretary of Education shall accept that determination. The 

Committee believes that a balance can be achieved between providing for this discharge without unnecessary administrative burden on recipients and preventing fraud and abuse. The Committee 

believes that once an individual has met the burden of proof relating to disability for the purposes of the discharge of a student loan 

under rules established under another Federal agency, there 

should be no need for an additional Federal agency to revisit that 

determination. 

School as lender 

The Committee believes that there is a need to clarify Congressional intent with respect to the school as lender program and put 

into place additional protections for students whose schools serve 

as the lender given the inherent conflict of interest that may exist 

with this arrangement. According to the Government Accountability Office, schools receive a premium for the loans anywhere between two and six percent of the face value of the loans. Under current law, schools are permitted to use the premiums made off of 

201 

selling the loans for their own purposes, but must use the borrower 

interest payments and special allowance payments from the government for need based grant programs. For students attending 

those institutions, the financial aid office is both their lender as 

well as their financial advisor. The Committee views the school as 

lender program as an inherent conflict of interest in the school’s 

role, which is, first and foremost, to educate the student and second, to ensure that the student is receiving the best financial aid 

package for his or her financial situation. H.R. 609 takes additional 

steps to reduce the role schools can play as a student’s bank by 

permitting schools to only lend to graduate students, not parents 

or undergraduate students, and also further restricts where the 

profits the school is making can be spent. If schools are making 

money from the program, the Committee believes it should be put 

back into the need based aid programs at the school. Through requiring that the schools’ profits from its lending programs be put 

into the need based aid programs, H.R. 609 takes one more step 

to ensure that students receive the funding they truly need to attend college, without forcing the student to take out more costly 

private loans. 

Institutional default reduction initiatives 

H.R. 609 permanently extends two expiring provisions within the 

Higher Education Act that provide incentives to institutions to 

keep their default rates low and assist students in receiving student loan funds without delay. The 1998 Higher Education Act reauthorization provided for a waiver of multiple disbursements required for single term loans, and of a 30-day delay in delivering 

loan funds to a student who is enrolled in the first year of an undergraduate program of study and who has not previously borrowed. The Committee believes that it is important to extend these 

two provisions, as they have provided an incentive for institutions 

of higher education to maintain low default rates and serve to benefit students, who are able to receive Federal student aid funds 

faster and more efficiently. 

Campus based aid programs 

H.R. 609 contains provisions to phaseout base guarantee allocations to institutions of higher education in the three campus based 

aid programs—Federal Work Study (FWS), Perkins loans, and Supplemental Educational Opportunity Grants (SEOG)—based on previous allocations, or the ‘‘base guarantee’’ over the period of 2008–

2016. The New York Times highlighted the problem in a November 

2003 story, when it reported, ‘‘The federal government typically 

gives the wealthiest private universities, which often serve the 

smallest percentage of low-income students, significantly more financial aid money than their struggling counterparts with much 

greater shares of poor students’’ (‘‘Rich Colleges Receiving Richest 

Share of U.S. Aid,’’ Greg Winter, New York Times, November 9, 

2003). 

While certain institutions and associations, such as the California State University (CSU) System and the National Association 

of Student Financial Aid Administrators (NASFAA) have urged a 

more rapid phaseout, the Committee chose this time frame to ensure that all institutions of higher education had ample time to adVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00205 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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just to the new funding formula. Under current law, the campus 

based aid funding formulas ensure that participating institutions 

receive no less than their base guarantee. Since 1986, an institution’s base guarantee has been the principal determinant of its current year allocation, regardless of whether its enrollment of financially needy students increased, decreased, or remained constant. 

This ‘‘hold harmless’’ provision drastically reduces the funding 

available to students attending institutions that have seen dramatic increases in the enrollment of students from low-income families. 

The bill proposes to phase out the base guarantee and replace 

the formula with the ‘‘fair share’’ formula already provided for in 

current law. The fair share formula bases its allocation on important criteria such as the number of financially needy students and 

the tuition and fee costs at the institution. These criteria are relevant and reflect the needs of the campus more so than a historical 

funding figure that may be awarded to institutions in a manner 

disproportionate to the number of needy students at the campus. 

Defenders of the status quo have historically tried to pit states 

and even individual colleges and universities against one another 

by claiming that a ‘‘fair share’’ formula will cut their portion of student aid. This argument misses the point entirely. When it comes 

to Federal student aid, it’s not about one state versus another or 

one college versus another: it’s about how Congress can best assist 

individual needy students. The solution is one of basic fairness. 

Federal student aid should be awarded based on the financial need 

of students. The base guarantee concept is especially unfair to students at new institutions or new campuses. For new institutions, 

the base guarantee is calculated using enrollment data from the 

first 1–2 years of the institution’s program participation. The ‘‘snapshot’’ of student enrollment generally does not reflect a mature campus population as the new campus adds both programs 

and students in its early years. The result is an artificially low 

campus based aid allocation for a growing student body and little 

new money to be distributed to students on a ‘‘fair share’’ basis. 

Under current law, the majority of funding provided for the campus-based aid programs is allocated for base guarantees. Approximately more than 40 percent of funding is available for allocation 

according to fair share criteria in SEOG, about 30 percent in FWS 

and only 8 percent in Perkins loans. With most funding being devoted to meeting institutional base guarantees, little Federal 

money is actually being allocated to institutions based on their 

needy student population. 

The Committee is concerned over the inequity of the current formula and is especially concerned for the students who will go underserved if the campus based aid formula goes unchanged. 

Perkins loan program 

Federal financial assistance programs significantly boost the 

chance for students to pursue a higher education. In particular, the 

Perkins loan program offers low interest rates to students through 

campus-based revolving funds. 

Perkins loan borrowers are predominantly from lower income 

families. These students are often the first in their family to attend 

college. For the 2003–2004 academic year, the Department of EduVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00206 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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cation reports that 630,000 students borrowed $1.46 billion in Perkins loans, with an average amount of $2,003 awarded per student. 

Since the inception of the Perkins loan program in 1958, over $27 

billion dollars in loans have been made to students through almost 

25 million financial aid awards. 

While the Committee applauds the Administration’s budget proposal to enhance the financial aid programs, this increase would 

come at the expense of the elimination of the Perkins loan program, which is a critical source of low-interest loans that many students rely on to pay for college. Perkins loans provide substantial 

financial assistance to millions of students and families across the 

country. H.R. 609 reauthorizes the Perkins loan program and 

makes additional reforms to ensure funds are targeted to the neediest students and the program continues to operate in an efficient 

manner. 

Within the Perkins loan program, H.R. 609 makes clear that a 

student who has a defaulted loan may be eligible for rehabilitation 

if it is practicable, especially in cases where a judgment has been 

entered against the borrower. However, rehabilitation is not an entitlement to the borrower, as institutions of higher education have 

often gone to significant time and expense in obtaining a judgment 

against a borrower who refuses to repay a loan in default. In those 

cases, it may not be in the best interest of the program to require 

that a borrower be offered the benefits of loan rehabilitation. The 

Committee believes that the decisions should be left up to the institution or the Secretary to determine on a case-by-case basis so that 

unique situations and circumstances can be considered. 

Need analysis—simplification 

Two years ago, Congress tasked the Advisory Committee on Student Financial Assistance, which provides advice and counsel to 

Congress and the Secretary of Education on student financial aid 

matters, to conduct a study on options to simplify the student financial aid process. Its primary task was to examine possible 

changes to the financial aid process to make it more understandable and less complex, especially for low- to moderate-income families, without increasing program costs or reducing program integrity. The final report, ‘‘The Student Aid Gauntlet’’ was released 

with ten major recommendations. In response to Congressional concern that the Advisory Committee had not fulfilled its obligation 

regarding the potential costs associated with its recommendations, 

the Advisory Committee claimed that ‘‘Eight of the ten recommendations do not require any increase in program costs.’’ The 

Committee wishes to reiterate that the Advisory Committee’s analysis only took into account the cost implications to the Pell Grant 

program, and not the mandatory cost implications for the student 

loan program. While minimal, some of the modifications made to 

H.R. 609 as suggested by the Advisory Committee’s report have 

mandatory cost implications. The Advisory Committee’s recommendations that were not adopted in H.R. 609 would likely have 

had significant cost implications. The Committee is committed to 

access and providing streamlined and simplified means for students to access postsecondary education. However, given current 

budgetary and fiscal constraints, the Committee believes the Advisory Committee should have more appropriately recognized the fisVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00207 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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cal barriers that precluded implementation of some of the recommendations. 

While many of the reforms of the Advisory Committee were 

adopted in H.R. 609 and have bipartisan support, the Committee 

remains concerned that the approach taken by the Advisory Committee in its dissemination of the final report to the press prior to 

delivery to Congressional requesters was careless and inappropriate. The Committee hopes that with a new reauthorization, the 

Advisory Committee will work together with Congressional leaders 

to continue the work of providing policymakers with ways to understand and ideas to reform the Federal, State and institutional programs that provide need-based aid to millions of students. 

H.R. 609 provisions and the amendment offered by Representatives Howard P. ‘‘Buck’’ McKeon (R–CA), Tim Ryan (D–OH) and 

John Tierney (D–MA) implement the non-cost related recommendations of the Advisory Committee. The provisions help break down 

barriers for students and their families that want to pursue the 

dream of a higher education by directing the Secretary to develop 

a streamlined application and re-application form and encouraging 

the Secretary to reduce the number of data elements required on 

the Free Application for Federal Student Aid (FAFSA). Excessive 

data elements make the FAFSA confusing and time-consuming, especially for low- and middle-income families and first-generation 

college students. 

H.R. 609 aligns eligibility for the Simplified Needs Test (SNT) to 

other means-tested Federal benefit programs. The Committee believes this alignment will allow more students to take advantage 

of the simplified application form for SNT eligible students. Additionally, the bill directs the Secretary to develop an EZ–FAFSA to 

allow auto-zero eligible students access to a simplified paper application. 

Additionally, the bill directs the Secretary to submit to students 

and their families ‘‘early estimates’’ where a student can submit 

their FAFSA prior to enrollment to obtain an estimate of their financial aid package. The Committee believes this will allow families to plan in advance for their child’s education and be more informed about the realities of college cost and the amount of financial aid available. 

During the 1992 reauthorization of the Higher Education Act, 

the bill passed by the House of Representatives included a provision that exempted small business assets from need analysis formula. Representative Marilyn Musgrave (R–CO) offered, and the 

Committee accepted, a similar amendment that exempted small 

business assets from the need analysis formula for families that 

own a business that employs less than 100 full-time equivalent employees. Under current law, farm equipment and other assets attributed to farms are excluded from the need analysis formula. The 

Committee believes this same protection should apply to small 

business owners, who should not be asked to borrow against their 

way of living to finance a child’s education. 

Internal Revenue Service data match 

H.R. 609 contains a provision that will greatly enhance the integrity of Federal student aid programs and will help accomplish the 

goals of President Bush’s initiative to reduce erroneous student aid 

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payments government-wide. The bill provides authorization for the 

Secretary of Education to work with the Secretary of the Treasury 

to provide for an Internal Revenue Service (IRS) data match. Multiple Inspector General (IG) reports have found significant evidence 

of student applicants (either by error or fraud) underreporting income on the student financial aid application and the FAFSA, thus 

gaining eligibility to higher than deserved Pell Grant awards. Statistical test matches between the Department of Education and the 

IRS confirm the IG findings of significant underreporting (and thus 

significant overpayments) in the Pell Grant program. IG reports 

have further concluded that the Department of Education’s current 

verification process is inadequate to address the fraud and error in 

Pell Grant awards. During the 108th Congress, H.R. 3613, the Student Aid Streamlined Disclosure Act of 2003, was introduced by 

Representative Sam Johnson (R–TX) and would require the Federal government to improve the verification process for Pell Grant 

awards through an IRS data match. In addition to helping to reduce the under-awarding of Pell Grant benefits for students who 

actually qualify for more generous awards, the bill was estimated 

to free up as much as $340 million that Congress could use to better serve the increasing number of needy students legitimately receiving Pell grants or increase the maximum Pell Grant award for 

students. 

Income protection allowance 

H.R. 609 increases the income protection allowance for depend- ent students to $3,000 for the 2006–07 academic year. This increase will offer additional protections for students that need to 

work while in college without having those hard-earned funds reduce the amount of Federal financial aid awarded to them. 

Portable student scholarship treatment 

Facing increasing pressure to deal with high college costs and 

tight budgets, some States are seeking innovative opportunities to 

focus higher education funding directly on students. Some States 

are directing the subsidy they traditionally provide to institutions 

of higher education to individual students in the form of portable 

scholarships, rather than subsidizing State-level institutions that 

in turn may serve some students within the State. 

For example, the State of Colorado developed the College Opportunity Fund (COF), which links State funding directly to resident 

undergraduate students. Through the COF, the State is able to be 

up front with potential students and their parents about the cost 

of higher education and the State’s willingness to help fund college 

costs. The State of Colorado will do this by collecting information 

through performance contracts that will make public information 

such as: student enrollment, transfer, and graduation rates; student satisfaction and performance; and institutional cost and productivity. Specifically, under the new State system, the State will 

no longer make direct lump-sum financial transactions to its public 

institutions for undergraduate education. Instead, funds will go to 

public and private institutions on behalf of resident undergraduate 

students in the form of a per-student stipend. Stipends are set annually by the General Assembly in Colorado during the budget 

process and the allocation is defined on a credit hour basis. The stiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00209 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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pend for the 2005–2006 academic year is $2,400 per student for public institutions and $1,200 per student for the participating private institutions. 

While these types of state choice programs may appear to direct 

a large sum of financial aid to students, in reality, it is simply a 

new methodology for distributing subsidies that have always been 

provided to higher education. Student financial aid is calculated 

based on a complex group of factors, including the amount of aid 

awarded from other sources. Therefore, because this is a new way 

of awarding funds to students, this type of State higher education 

subsidy if not protected in Federal law, may actually hinder a student’s eligibility for Federal student aid. The Committee believes 

that students should not lose out on Federal aid simply because 

their State has chosen an innovative option for funding higher education institutions. The amendment offered by Representative 

Marilyn Musgrave (R–CO) simply ensures students will not lose 

eligibility because of their State higher education funding process. 

Return of Title IV 

Within the return of title IV funds policy, H.R. 609 simply clarifies current law that a program measured in clock hours may, 

under certain circumstances, use scheduled hours to determine the 

percentage of the payment period or period of enrollment for which 

assistance has been earned. H.R. 609 makes clear that students are 

not to return more than 50 percent of the total grant assistance 

they received. This clarification will assist students from the lowest 

income families who receive large Pell Grant awards. The amount 

returned will be only that amount which exceeds the 50 percent remaining after the calculation has been completed. The Committee 

wishes to alleviate a burden, which falls disproportionately on the 

lowest income students, while ensuring that students are responsible to return some portion of the grant assistance received from 

the Federal government when the student withdraws from school. 

The bill also clarifies that a student will not be required to return 

sums of $50 or less. 

In order to assist Pell Grant recipients who are forced to withdraw from their institution of higher education due to a natural 

disaster as declared by the President, Representative Ric Keller 

(R–FL) offered an amendment to grant the Secretary waiver authority for purposes of the return of title IV formula. Waiver authority currently exists for institutions of higher education that are 

adversely impacted by natural disasters. However, there is no authority for the Secretary to work with the nation’s neediest students in times of catastrophe. This provision is narrowly and responsibly crafted to protect low-income students who are forced to 

withdraw from school because of a Federally-declared natural disaster. 

Drug provision 

The Committee believes strongly in providing clarification to the 

drug ineligibility requirements now in law. Only those students 

who are enrolled in an institution of higher education and receiving 

Federal financial aid should be subject to the ineligibility requirements. This will ensure the provision serves the purpose for which 

it was intended: to serve as a deterrent to prevent drug offenses 

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while students are enrolled in higher education at taxpayer expense, and not to reach back and limit financial aid for past offenses. 

Campus disciplinary proceedings 

The Committee acknowledges the importance of informing the 

victim, or the next of kin in case of death, in specific instances of 

student misconduct at institutions of higher education; however, it 

also recognizes the need to maintain the protection and privacy of 

student educational records, as required under Federal privacy 

laws. Therefore the Committee approved a requirement for institutions of higher education to disclose the final results of any disciplinary proceeding to an alleged victim of any crime of violence or 

non-forcible sex offense. This will ensure the institution carefully 

examines the complaint and if any action is taken that the victim, 

or victim’s family, knows what action the institution took in regard 

to the crime and is informed while protecting student privacy. This 

provision will help institutions of higher education and victims 

work together toward greater safety on campus. 

Distance education 

In the 1992 reauthorization of the Higher Education Act, Congress enacted provisions to restrict access to title IV funds for institutions offering more than 50 percent of their courses by correspondence or enrolling 50 percent or more of their students in 

correspondence courses. An unintended and unforeseen result was 

that the definition of correspondence included telecommunications, 

which over the last decade has encompassed distance education on 

the Internet. 

In 1998, Congress created the Distance Education Demonstration 

Program that provides waivers to these rules for participating institutions and created a Commission to study the quality and accessibility of distance education. Internet-based distance education 

was still relatively new at that time. The Distance Education Demonstration Program was one means to study distance education to 

determine appropriate changes to the Higher Education Act. The 

Commission, with former Senator Bob Kerrey as Chairman and 

then-Congressman Johnny Isakson as Vice-Chairman, and the Distance Education Demonstration Program found that distance education is capable of providing access to millions of students, particularly working adults, at a level comparable to on-ground education. Both the Web-based Commission and the Department of 

Education have recommended the repeal of the 50 percent rules 

which continue to limit students’ access to distance education. 

The Committee repeals the application of the 50 percent rule’s 

application to distance education to ensure the higher education 

system can take advantage of technological advancements that create new opportunities for students and schools. By removing unnecessary barriers to distance education, the Committee believes institutions of higher education will be given the flexibility to increase 

the use of technology and provide students with new postsecondary 

options. Financial rules, administrative capability rules, and accreditation safeguards remain in place to prevent fraud and abuse. 

While maintaining the rule for correspondence classes, the bill also 

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gram to include up to five accredited, degree-granting correspondence schools. 

The Committee understands that Internet-based distance learning is a mode of learning by which students pursue higher education, courses are conducted and managed, and institutions of 

higher education expand to reach a new and non-traditional group 

of students. The Committee further understands that distance 

learning can be a cost-effective way of educating students through 

both synchronous (live) and asynchronous (interactive) means. 

Therefore, the Committee encourages institutions of higher education to consider the use of ‘‘computer transmission,’’ whether synchronous or asynchronous, and ‘‘computer conferencing,’’ that is, 

distance learning, in a way that uses a distributed learning system 

which ensures secure and encrypted protection for students getting 

their education through an Internet-based system. 

The Committee also provides for significant accreditation safeguards to ensure the quality of institutions of higher education that 

offer distance education. The bill requires accrediting agencies or 

associations that accredit institutions offering distance education to 

have distance education within their scope of recognition as approved by the Secretary. This will ensure that only accrediting 

agencies or associations with the capability to review distance education will allow these institutions access to the title IV programs. 

In addition to the criteria that accrediting agencies or associations 

are already required to review for all institutions, the bill requires 

accrediting agencies and associations to ensure that institutions offering distance education programs have processes by which they 

establish that the student who registers is the same student who 

participates in and completes the program. The Committee expects 

institutions that offer distance education today to have security 

mechanisms in place, such as identification numbers or other pass 

code information required to be used each time the student participates in class time or coursework on-line. In time, as technology 

develops, the Committee anticipates that additional identification 

technologies will become more sophisticated, less expensive and 

more mainstream. 

Finally, the bill requires accrediting agencies to monitor the 

growth of distance education programs at institutions that are experiencing significant increases in enrollments. The purpose of 

such monitoring is to determine whether institutions continue to 

have the capacity to handle a significant increase in the number 

of students. The Committee does not suggest that growth in enrollments necessarily relates to a loss of quality. Instead, the role of 

the accrediting agency or association should be to review that the 

institution maintains the same or an increasing level of quality, regardless of enrollment growth. 

In its third report to Congress on the Distance Education Demonstration Program, the Department of Education reports that repeal of the 50 percent rule is necessary to expand access to nontraditional student populations, including minority students. The 

Committee concurs with the Department’s statement: 

The advent of distance learning has forever changed this 

critical segment of our educational system. Indeed, the evidence would suggest that several of the rules that were intended to protect Federal funds have instead protected 

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brick-and-mortar institutions, by limiting Title IV eligibility to institutions that offer primarily on-site courses, 

and delayed appropriate expansion of this alternative 

mode of delivery. 

Along with the development of new delivery modes, the 

changing demographics of postsecondary education stunts 

bring into focus the problems arising from the outmoded 

assumptions that at one time warranted using term structure as a foundation for financial aid rules. 

Transfer of credit 

In light of the significant changes in the economy, workforce 

needs and the postsecondary student population, the Committee 

believes that arbitrary and unnecessary barriers to transfer of credits must be eliminated. The Committee received evidence of many 

instances in which students who decide to continue or further their 

education at a new institution are hindered by their inability to 

transfer credits based upon indefensible factors. The denial of credit transfer inhibits students from obtaining the education and 

training they need to enter or advance their careers. In doing so, 

deterrents to credit transfer often results in increasing the cost of 

postsecondary education by forcing students to take and pay for the 

same courses twice. This situation puts an unnecessary financial 

strain on individual students, the title IV programs, and the American taxpayer. 

The Committee does not intend to intrude upon institutions’

evaluation of student work and other academic factors affecting 

transfer decisions. However, one factor often used as a substitute 

for such individual evaluations—the agency accrediting the sending 

institution—is not a legitimate basis on which to deny credit transfer as long as the institution’s accrediting agency has been reviewed by the Department of Education and determined to be a reliable authority on educational quality. Accordingly, the bill requires institutions to publicly disclose their policies regarding 

transfer of credit decisions, and not to deny transfer of credit solely 

on the accreditation of the sending institution so long as the accrediting agency or association is recognized by the Secretary. H.R. 

609 does not mandate what course work must be accepted by any 

institution of higher education. The Committee encourages institutions of higher education to establish their own policies for the acceptance of transfer credits. H.R. 609 would simply require an institution to base its decision to accept credits based on its own stated and publicized policies. 

In order to protect institutions from inappropriate Federal intrusion on educational decision making, the legislation requires accrediting agencies and associations to ensure institutional compliance. The Committee expects the accrediting agencies and associations to be vigilant and to vigorously review the transfer of credit 

provisions through their accreditation processes so that no institution will deny transfer of credit based solely on the accreditation 

of the sending program or institution. The Committee also expects 

the Department to review thoroughly and consistently accrediting 

agencies’ performance in this area as part of its recognition of accrediting agencies and associations. 

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The Committee is concerned that difficulties in transfer and articulation continue to serve as a barrier to access and completion 

of postsecondary education for many students across the country. 

According to data from the Department of Education, nearly half 

of all students will change colleges during their academic career. 

Loss of credits can mean the difference between success and failure 

for many students and is particularly detrimental to minority and 

low-income students. Accordingly, the Committee wishes to acknowledge the National Articulation and Transfer Network 

(NATN), which has been working to develop a nationally coordinated articulation and transfer network to increase the rate of percentage of credits accepted in transfer and fully counted toward the 

degree or certificate completion requirements of undergraduate students. NATN is supported and sponsored by hundreds of institutions of higher education across the United States with minority 

serving institutions being at the forefront of its current efforts. The 

Committee believes that NATN can become a national center of information for students and institutions to facilitate the enrollment, 

transfer, and full-credit articulation of students. The Committee 

encourages the Secretary to work closely with NATN and its partner institutions and organizations to find ways to ease the transfer 

burden for postsecondary students. 

90/10 Rule 

The 90/10 rule was put into effect by the 1998 Higher Education 

Act Amendments (P.L. 105–244), replacing its predecessor, the 85/ 

15 rule, which was authorized by the 1992 Higher Education Act 

Amendments (P.L. 102–235). 

Supporters of the 85/15 rule argued that the rule was necessary 

to stem fraudulent and abusive practices that had been identified 

at proprietary institutions. It also was argued that implementing 

the rule might restore some market incentive to education as proprietary institutions would be unable to charge more than what 

students not receiving enough Federal financial aid to pay all their 

institutional charges were willing to pay. Detractors of the rule argued that requiring proprietary institutions to obtain at least 15 

percent of their revenue from non-title IV sources could limit access 

to low-income students if proprietary institutions were forced to 

deny admission to students receiving title IV funds to meet the required percentage of non-title IV revenues. 

During the 1998 reauthorization process, Congress reduced the 

percentage of revenue that proprietary institutions had to obtain 

from non-title IV sources to at least 10 percent. Congress declined 

to make changes to the formula for calculating revenue that had 

generated controversy since its inception following the 1992 reauthorization. The Department of Education, however, opted to modify the definition of revenue and calculation of eligibility through 

regulations following the 1998 reauthorization. 

While the utility of the 90/10 rule as a proxy measure of institutional integrity and educational quality was subject to dispute, the 

Committee concluded that it was inappropriate to repeal the rule 

at this time and instead decided to modify it significantly. In addition, the Committee, through the amended language, wishes to 

clarify the rule’s interpretation and application by the Department. 

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The Committee has changed the 90/10 rule from an eligibility criterion to a program participation criterion under the Program Participation Agreement (PPA) currently in law. In addition, the rule 

will now apply to all program participants, instead of solely to proprietary institutions. The Committee believes if the rule does act 

to promote institutional integrity and educational quality, it should 

apply more broadly. Failure to comply with the requirements of the 

PPA results in sanctions against an institution. The penalties 

against the institution for non-compliance or violation of the 90/10 

rule will not be as severe as they would be if the rule remained 

an eligibility criterion, which ultimately penalizes individual students. Because the operation of the rule involves a number of complexities and variables, the Committee further modified it by requiring that before the ultimate sanction of discontinuing participation is pursued, an institution would have to violate the rule for 

three consecutive years. If an institution violates the rule in any 

one year, the Department has a range of means to monitor the institution, and the institution should have the opportunity to demonstrate any inaccuracies in the calculation, or come back into compliance. 

The Committee wishes to make clear that the provision means 

that all non-title IV revenue received by an institution for any educational purposes consistent with its mission shall count toward 

the 10 percent requirement. The Committee is aware that the Department, under its current rules, presumes that all title IV funds 

are to be counted first in establishing a participant’s compliance 

with the rule. This presumption does not comport with Congress’ intent. The purpose of the rule is to ensure that institutions receive 

at least 10 percent of their revenues from non-title IV sources. 

Thus this revenue should be counted first and apply toward meeting the requirement provided that institutions can supply a reasonable audit trail. 

Furthermore, the Committee intends to reverse the Department’s 

current interpretation that excludes institutional funds used to satisfy matching-fund requirements, and funds from savings plans 

such as those established under section 529 of the Internal Revenue Code, from being counted toward the 10 percent requirement. 

The Committee does not intend for this rule to be a disincentive 

for institutional participation in programs requiring matching 

funds, or individual participation in educational savings plans. 

The Committee believes that institutional aid, in the form of 

loans and scholarships, including both monetary aid and tuition 

discounts, should be encouraged. The Committee directs the Department to apply the statutory language in a manner that carries 

out this intent, and does not impose unnecessary impediments to 

counting such aid toward the 10 percent requirement. The Committee emphasizes that the provision on established restricted accounts does not apply to discounted tuition. 

The Committee detailed certain funds that shall be included in 

calculating the 10 percent, but it should be clear that the list is not 

intended to be exclusive. Those types of funds that were permitted 

to be included as non-title IV funds under the current regulations, 

such as non-Federal public grant funds, workforce development 

funds, and funds from activities conducted by the institution that 

are necessary for the education and training of its students, such 

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as clinical or service programs or auxiliary enterprises in which 

students are required to participate, are intended to continue to be 

included in calculating the 10 percent requirement. 

Protections against fraud/abuse/diploma mills 

Although no formal legal definition exists, a diploma mill is generally regarded as an entity that lacks accreditation from a State 

or professional accreditation organization, but that nonetheless 

sells college and graduate degrees that are fraudulent or worthless 

because of the lack of standards imposed on the purchasers of such 

degrees. Diploma mills have proliferated in recent decades due to 

lax law enforcement and technological advances such as the rise of 

the Internet. By some estimates, there are several hundred diploma mills operating at any given time, with revenue in excess of 

$200 million per year. There has also been a swell of fake accrediting organizations to provide diploma mills an air of legitimacy. 

The Committee learned more about diploma mills and the proliferation of fake degrees and accreditors during a hearing held by 

the Subcommittee on 21st Century Competitiveness on September 

23, 2004 entitled, ‘‘Are Current Safeguards Protecting Taxpayers 

Against Diploma Mills?’’ During the hearing, witnesses described 

characteristics of diploma mills and called for solutions, such as 

public lists of accredited institutions of higher education. 

Most diploma mills display some or all of the following hallmarks 

of a fraudulent operation: (1) They are unaccredited or they claim 

to be accredited but the organization that they cite is not one of 

the legitimate accrediting agencies recognized by the Council on 

Higher Education Accreditation or the Department of Education; 

(2) they do not require previous academic records, such as grade 

point average or test scores, for admission; (3) they charge tuition 

based on the number of degrees purchased rather than the number 

of credit hours or courses taken; (4) they offer many or all degree 

credits based on a student’s life experience; (5) they guarantee that 

students will receive diplomas in far less time than it would take 

at a traditional university; (6) their professors often have degrees 

from unaccredited universities and have little or no contact with 

students; (7) they are located in a foreign country or have addresses that are post office box numbers; and (8) they have names that 

are strikingly similar to legitimate, accredited universities. 

Diploma mills pose dangers to consumers and employers, as well 

as the general public and to legitimate institutions of higher education. Although some individuals who obtain degrees from diploma 

mills are active conspirators in fraud, others are innocent victims 

of financial scams in which they pay hundreds or thousands of dollars for worthless degrees. 

State and Federal efforts to shut down these entities have been 

somewhat erratic over the years, depending in part on the jurisdiction and enforcement priorities involved. For example, enforcement 

has been weak at times for reasons that range from the difficulty 

in distinguishing between fraudulent and legitimate institutions to 

the ability of diploma mills to move jurisdictions quickly if authorities in one state begin an aggressive enforcement campaign. Further complicating matters is the fact that every state has its own 

diploma mill laws, which vary in strength and effectiveness. MeanVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00216 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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while, the Federal government pursues enforcement actions against 

diploma mills under a separate set of laws. 

Although Federal law does not explicitly prohibit diploma mills, 

the sale of fraudulent academic credentials is punishable under 

several Federal statutes relating to mail fraud, wire fraud, and 

conspiracy, and four different governmental agencies have some direct involvement in or authority over the legal issues raised by diploma mills, namely the FBI, the U.S. Postal Inspection Service, 

the Federal Trade Commission, and the Department of Education. 

In recent years the investigative and enforcement activities at the 

Federal level have not been as strong as in the past or as they 

could be. The Committee encourages these agencies to focus their 

attention on eradicating diploma and accreditation mills, and to coordinate their efforts when possible. 

In the past year, three agencies have ramped up their efforts. 

The Department of Education has unveiled a website/master online list of accredited colleges, universities and other postsecondary 

institutions, including career and trade schools that are accredited 

by agencies recognized by the Department of Education. This 

website is intended to help students, parents, and employers determine whether a particular school is a diploma mill or not. The 

website can be accessed at: http://ope.ed.gov/accreditation/. The 

Office of Personnel Management also announced stricter guidelines 

regarding educational requirements of those who seek employment 

with the Federal government—aimed at helping agencies better 

understand how to check credibility of an applicant’s credentials 

and professional training. Finally, the Federal Trade Commission 

released a document, entitled: ‘‘Avoid Fake-Degree Burns by Researching Academic Credentials,’’ which may serve as a guide for 

businesses explaining how to identify a diploma mill. 

Although the Federal government has been successful in keeping 

diploma mills and accreditation mills out of the Federal student aid 

programs in recent years, the Committee recognizes there should 

be a greater effort across both the Federal and State governments 

to find ways to keep diploma mills out of business altogether. 

Accreditation 

Accreditation is a peer review process meant to ensure the academic quality of a school or a program offered by an institution of 

higher education. In order for an institution of higher education to 

be eligible to participate in any of the Federal title IV student aid 

programs, the institution must be accredited by an agency or association recognized by the Secretary based on certain criteria set 

forth in the Higher Education Act. 

For decades, our nation has used the independent peer reviewed 

accreditation system to ensure the quality of an institution of higher education. Yet far too few students, parents, or taxpayers know 

what this process entails. H.R. 609 makes common sense reforms 

that strengthen the value of accreditation by opening the process 

up to consumers. The accreditation system serves as the central 

component in the Federal government’s effort to hold institutions 

accountable. It is widely credited as an invaluable tool for measuring institutional quality without undue Federal control and Federal pressure. 

214 

At the same time, the Committee also recognizes that the accreditation system is not perfect. While it may be a ‘‘uniquely American 

institution,’’ it is also one that—all too often—perpetuates the status quo on campuses. Even with the additional requirement made 

in the 1998 Higher Education Act Amendments that accreditors 

begin to focus on student outcomes, the system and the institutions 

they accredit could be more effective when it comes to measuring 

academic quality. This lackluster focus on academic achievement 

and student learning outcomes has resulted in the fact that more 

than half of our nation’s students do not graduate in four years. 

Low graduation rates may be compounded by the fact that parents 

and students lack the necessary information to determine whether 

a particular college or university is a quality institution or appear 

to meet the needs of that particular student. 

In order to provide information to students, parents, and policy 

makers, H.R. 609 ensures the quality of the accreditation team conducting site visits with some enhanced standards other than requiring that volunteers are ‘‘well-trained.’’ H.R. 609 requires 

accreditors to disclose their process for selecting and evaluating 

their agency accrediting team members. The bill also ensures that 

accrediting agencies and associations are not required to establish 

different standards and reviews for distance education, as compared to more traditional face-to-face classroom interaction. Further, H.R. 609 clarifies those institutions that offer courses by distance education have in place processes to determine the students 

who register in a distance education course or program are the 

same students who participate, complete and receive academic 

credit. H.R. 609 requires the Secretary to provide Congress a report 

of the agency or association actions including accreditation granted, 

suspended, terminated, or denied; information on the qualifications 

of the team members doing site visits; and reasons for the actions 

taken. 

Following an adverse decision regarding the accreditation status 

of an institution of higher education, questions of the adequacy of 

current due process procedures under the Higher Education Act 

were raised. Accreditation has functioned well for decades using 

volunteers and following the classic principles of peer review and 

collegiality. The fairness of accreditation processes has repeatedly 

been upheld by courts, for the denial or withdrawal of accreditation 

often leads to lawsuits asserting a denial of due process. While the 

Committee believes the Department of Education has a reliable 

and comprehensive process to review and approve accrediting agencies’ appeals processes, the Committee amended the Higher Education Act to provide additional processes for accrediting agencies 

or associations to follow when taking an adverse action against an 

institution. The Committee clarifies that an institution shall be 

given appropriate notice and opportunity to be heard prior to an 

adverse action by an accrediting agency or association becoming 

final. It is not the intent of the Committee to expand the types of 

adverse actions beyond those already defined by the Secretary as 

the denial, withdrawal, suspension, revocation, or termination of 

accreditation or pre-accreditation, or any comparable accrediting 

action an agency may take against an institution or program. Finally, while it is essential to afford institutions appropriate due 

process in the accreditation context, it is not the intent of this 

215 

Committee or this statutory provision to suggest or imply that accrediting agencies or associations are state actors or that the level 

of constitutional due process shall apply. 

Title V—Developing institutions 

Hispanic Serving Institutions (HSIs) play an important role in 

American higher education, particularly in their capacity to provide 

college access to underrepresented populations, and populations of 

students with limited financial means. HSIs receive Federal funding under title V of the Higher Education Act. These grants are 

provided to institutions that offer and increase the number of educational opportunities available to Hispanic and other low-income 

students. The Committee supports the elimination of the two-year 

wait-out period for HSIs that prevents these institutions from applying for a new grant until two years have elapsed after the expiration of the prior grant. The Committee has determined that there 

is no need for a wait-out provision and its elimination will allow 

funds for institutional development to go to the maximum number 

of institutions that submit qualified applications. 

Hispanic Serving Institution Graduate Program 

The Committee believes that increasing the number of Hispanic 

students in graduate education is imperative to business, industry, 

medicine and education. During the May 2, 2005 field hearing entitled, ‘‘Expanding Opportunities for Graduate Study at Hispanic 

Serving Institutions,’’ Dr. Blandina Cardenas, President of the University of Texas—Pan American argued that: 

The students with master’s degrees will be required to 

lead a diverse work force and create new products and 

product delivery systems for a diverse national market and 

for competitiveness in the global market. Hispanics with 

doctoral degrees must be available in sufficient numbers to 

serve the teaching and research needs of our colleges and 

universities and research organizations in the private and 

public sector. I believe that Hispanics with post-baccalaureate preparation will bring significant added value to 

the creative and problem-solving enterprise—not in spite 

of the less privileged backgrounds, but because of it. 

Hispanics still lag well behind other groups in college-going 

rates, retention and graduation rates and participation in graduate 

education. In 2003, data from the Department of Education shows 

that 34 percent of white students over the age of 25 had completed 

four or more years of college. For African American students, the 

figure was 17.3 percent; and for Hispanic students, the rate was 

11.4 percent. 

In 2002, Hispanic students received 4.2 percent of all masters degrees awarded in the U.S., compared to 62.1 percent for white students and 7.7 percent for African American students. From 1992 to 

2002, the percentage of Hispanic students receiving master’s degrees rose from 2.6 percent to 4.2 percent. In 2002, the percentage 

of Hispanic students receiving doctoral degrees was 3.1 percent, 

compared to 57.3 percent for white students and 5.1 percent for African American students. The share of doctoral degrees received by 

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lieves these data illustrate the necessity of expanding graduate opportunities for Hispanic students and providing resources to the institutions that serve the majority of Hispanic students desiring a 

graduate degree. 

Title VI—International education 

International education programs at the postsecondary level play 

a critical role in building and maintaining the nation’s ability to 

supply expertise in foreign language, area studies and international business arenas. In order to continue the nation’s established leadership role in international affairs, the opportunities for 

students to become knowledgeable in international issues and foreign languages has become increasingly important. America’s interests and national security are inextricably tied to our knowledge 

and understanding of the rest of the world. 

Programs authorized under title VI of the Higher Education Act 

reflect the priority placed by the Federal government on diplomacy, 

national security, and trade competitiveness by allowing for the 

study of international and world issues and cultures, as well as foreign languages at the postsecondary education level. Centers and 

fellowships authorized under title VI serve the nation’s national security interests in two ways: they produce new cadres of personnel 

trained in foreign languages and knowledgeable about foreign 

areas and they provide a cumulative body of knowledge about 

international affairs, which provide expertise for government agencies and an intellectual foundation for intelligence. 

In a report published by the American Council on Education’s 

Center for Institutional and International Initiatives entitled, ‘‘Beyond September 11: A Comprehensive National Policy on International Education,’’ three national policy objectives have been established by the higher education community for success in international education. First, the nation must produce international experts and knowledge to address national strategic needs. Second, it 

is imperative to strengthen the ability of the United States to solve 

international problems. Third, it is time to develop a citizenry and 

workforce that is competent in international issues and affairs. 

Programs under title VI were established over forty years ago to 

address these objectives and have been reformed and reauthorized 

to better reflect the current international climate. 

The bill updates the findings and purposes of the programs 

under title VI to reflect our national security needs in the post-September 11th era, as well as the current international climate. 

Therefore, H.R. 609 increases coordination between international 

and foreign language studies programs to better meet America’s 

national and international security needs. The bill also clarifies 

that programs under title VI are to reinforce and coordinate with 

other Federal programs in the areas of foreign language, area studies, and international affairs. The Committee recognizes that a 

complete understanding of area studies is intrinsically tied to 

knowledge of the history, politics, geography, and languages within 

a particular region. 

During the June 2005 hearing on title VI programs at The Ohio 

State University, Dr. Jerry R. Ladman, Associate Professor for 

International Affairs commented about the importance of the title 

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VI programs to the current international climate, both inside and 

out of academia. He said: 

As was Sputnik and the Cold War, the events of September 11, 2001, were another milestone event. Probably 

nothing in our nation’s history has indicated to the population at large how important it is to have numerous professionals within the public and private sectors who are 

trained in area studies and foreign languages, especially 

less-commonly taught languages, such as Arabic, Urdu, 

Hindi, Pashto, and Tajik. Whereas it is obvious that this 

is important for matters of national security, it is also generally recognized as important for the United States in 

business and other matters. 

International Advisory Board 

In a June 2005 report from the Congressional Research Service, 

there was significant discussion regarding the establishment of either a ‘‘multi-agency board, endowment, foundation or other independent Federal entity to coordinate and/or administer all Federal 

programs dealing with foreign language and international studies.’’ The report further suggested that one function of such board or 

agency might be ‘‘relatively long-range planning to attempt to meet 

both the Federal government’s and the Nation’s needs for foreign 

language and area studies specialists in a coordinated manner.’’ During the June 2003 hearing on title VI, Dr. Stanley Kurtz, a 

Research Fellow with the Hoover Institution, argued that a board, 

similar to those that govern the Fulbright and National Security 

Education Programs, was needed to help enhance the programs 

under title VI. Dr. Kurtz proposed that a board should be inclusive 

of all points of view and should therefore ‘‘be able to hold annual 

[public] hearings on title VI activities, including the outreach activities of the National Resource Centers.’’ In a book entitled, ‘‘Language and National Security in the 21st 

Century,’’ published by the National Foreign Language Center, the 

authors recommend an ‘‘establishment of mechanisms to monitor 

national needs and capacity in language and to assess how those 

needs and that capacity are addressed by Federal, State, and local 

programs, including title VI.’’ The International Advisory Board, 

authorized by the bill, is responsible for making specific recommendations that will assist the Secretary and the Congress to 

improve the programs under title VI to better reflect the national 

needs related to homeland security, international education, and 

international affairs, including the assessment of the national 

needs and training provided by the institutions of higher education 

that receive a grant for expert and non-expert level foreign language training. 

The Committee believes that the programs authorized under title 

VI of the Higher Education Act are crucially important because 

they ensure the expansion of the international knowledge base of 

the nation’s citizenry and promote the growth and development in 

national need areas related to addressing national security interests and international commerce. The International Advisory Board 

will provide advice, counsel and recommendations to the Secretary 

and the Congress on international education issues for higher education in order to improve international education program. MemVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00221 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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bers of the International Advisory Board are to be appointed by the 

House of Representatives, the Senate, and the Secretary, who must 

select two representatives from agencies with diplomacy, national 

security, international commerce or other international activity responsibilities. These agencies may include, but not be limited to, 

the Department of Defense, the Department of Homeland Security, 

the Department of State, the Department of Commerce, and the 

Central Intelligence Agency. 

The International Advisory Board is authorized to hold public 

hearings to review the recommendations provided by the Board to 

the Secretary and the Congress. The Committee believes this is an 

important first step to engage the independent board with the 

grantees, communities and constituencies who are most interested 

in the objectives and outcomes of the programs authorized under 

title VI. The Committee believes strongly that H.R. 609 and the 

new International Advisory Board does not have the authority to 

mandate, direct, or control an institution of higher education’s specific instructional content, curriculum, or program of instruction. 

Moreover, the Committee believes that when selecting grantees, 

the Secretary should take into account the degree to which activities of centers, programs, and fellowships at institutions of higher 

education advance national interests, generate and disseminate information, and foster debate on American foreign policy from diverse intellectual perspectives. The Committee also believes that 

the bill clearly requires that recruiters from the military and Federal agencies should be given the same access as is granted to prospective employers who wish to recruit students for non-government related employment opportunities. The Committee believes 

students who benefit from the programs funded under title VI have 

instrumental and unique skills in foreign language, world regions 

and international affairs that would serve to benefit the military 

and agencies of the Federal government. 

Coordination with elementary and secondary schools 

During the June 2003 hearing, Ms. Vivien Stewart, representing 

the Asia Society, testified that the levels of student knowledge 

about international affairs is rudimentary. ‘‘Young Americans are 

next to last in their knowledge of geography and international affairs compared with students from eight other industrial countries,’’ she argued. Furthermore, Ms. Stewart highlighted the fact 

that most prospective teachers do not take any international education courses and have very low participation rates in study 

abroad programs. 

H.R. 609 ensures that colleges of education and teacher professional development programs can be included as partners in outreach grants and summer institute programs. By authorizing the 

Secretary to make grants to outreach and summer institute programs that involve partnerships with local educational agencies 

and public and private elementary and secondary schools, the Committee believes there will be an increase in student academic 

achievement in foreign language and knowledge of world regions. 

Finally, by authorizing title VI centers and programs to serve as 

a national resource for courses and materials for elementary and 

secondary schools, the Committee believes this legislation will enVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00222 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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courage and enhance international knowledge at all stages and levels of education. 

Foreign language studies 

The Committee urges the Secretary to encourage the development of programs that stress the teaching of foreign languages for 

practical and professional use, including programs that promote 

foreign language education across the curriculum. 

The bill encourages the Secretary to engage in data collection 

and analysis of international education and foreign language needs 

and outputs on an ongoing and systematic basis, and to make the 

results known nationally on a regular basis. The Committee notes 

that international and foreign language education is an evolving 

field in the United States, with heightened importance to the national interest. The Committee also encourages the Secretary to 

consider projects that assess the impact of student learning abroad, 

develop foreign language proficiency assessments where they do 

not exist for the less commonly taught languages, assess the relationship between gains in foreign language proficiency and knowledge of world regions, and assess the impact of technology on language acquisition. 

The Committee recognizes that students who study abroad for 

the enhancement of foreign language knowledge and proficiency, as 

well as the study of world regions, may travel to areas or regions 

in conflict or unrest. The Committee encourages institutions of 

higher education to take into consideration safety policies and procedures for students participating in any study abroad program 

funded under title VI. 

International business education 

The Committee believes that international business education 

programs reauthorized by H.R. 609 under title VI of the Higher 

Education Act play a unique and important role in overall international education efforts. The programs have proven to be an integral part of many postsecondary institutions’ efforts to develop 

international education initiatives. 

During the May 2005 hearing on title VI initiatives in the area 

of international business education, Dr. Stephen M. Hills, Academic Director, Office of International Programs in the Fisher College of Business at The Ohio State University, discussed the importance of the Centers for International Business Education & Research (CIBERs), authorized under title VI: 

There are currently 30 national CIBER centers in the 

United States, each committed to enlarging the sphere of 

teaching, research, and outreach undertaken on their campuses and in their communities in the area of international business development. Each of the CIBER centers 

has at its core the goal of increasing international competitiveness, business language acumen, global trade expertise, and area studies competency. Programs are directed 

to undergraduate, graduate and Ph.D. students within colleges of business as well as elsewhere on campus; to faculty from throughout the university, and to executives and 

professionals within business communities. 

220 

Institute for International Public Policy (IIPP) 

A hallmark program for the education, inclusion and participation of students from underrepresented populations, the Institute 

for International Public Policy (IIPP) was amended in H.R. 609 to 

include all underrepresented populations in its program in order to 

enhance participation in international service. The Committee recognizes the achievements of a statesman and diplomat, Ralph J. 

Bunche by naming students who participate in internships under 

the IIPP program as the ‘‘Ralph J. Bunche Fellows.’’ Additionally, the Committee recognizes the valuable and important role minority serving institutions play in postsecondary education. As these institutions may not have the capacity to provide 

full matching funds for the programs under title VI, H.R. 609 adds 

a special rule to the programs in the title that allows the Secretary 

to waive or reduce the non-Federal match for Historically Black 

Colleges and Universities, Hispanic Serving Institutions, Tribally 

Controlled Colleges and Universities, and Alaska Native and Native Hawaiian serving institutions. Although this waiver authority 

currently exists for some programs under the title and throughout 

the Higher Education Act, the Committee believes it is important 

to ensure continuity and consistency among all title VI programs, 

which have a direct benefit to our national interests and security. 

It is imperative that title VI programs, as the largest Federal 

program supporting language and area studies in the national interest, continue to take responsibility for training experts as well 

as building and maintaining national capacity in the nation’s education system. The consideration and adoption of H.R. 609 will 

have a distinct effect on the international education efforts of postsecondary education institutions as partners in addressing national 

strategic needs in foreign language, area studies, international affairs and international business education. 

Title VII—Graduate education 

As we proceed through the 21st Century, the need for advanced 

education is becoming increasingly more critical to successfully 

maintaining our place in a technologically advanced economy. Now, 

more than ever, our citizens are obtaining graduate degrees in 

order to gain more knowledge and expertise in their field of study. 

Graduate Assistance in Areas of National Need 

Graduate programs, while important for their role in higher education, also play an essential, yet often overlooked role in K–12 

education. Graduate programs provide the education and training 

necessary for individuals to become faculty at institutions of higher 

education, who in turn, train the elementary and secondary teachers of tomorrow. In order to ensure the nation’s children receive the 

best education possible, Congress must ensure the faculties in our 

teacher colleges are prepared to meet this challenge. 

The Committee commends the Secretary for identifying as the 

current areas of national need: biology, chemistry, computer and 

information sciences, engineering, geological and related sciences, 

math, and physics. It is estimated that more than half of the economic growth of the United States today results directly from research and development in science and technology. The effectiveness of the United States in promoting economic growth will be 

221 

largely determined by the intellectual capital of the United States. 

Education is critical to developing this resource. 

Teachers provide the essential connection between students and 

the content they are learning. Elementary and secondary classrooms across the nation are facing teacher shortages in particular 

subject areas. Many states and schools are struggling to find highly 

qualified math, science and special education teachers. As our 

schools work to educate a rapidly growing population whose native 

language is not English, we need individuals specifically trained in 

teaching students with limited English proficiency (LEP). Student 

performance on the recent Third International Math and Science 

Study highlights the shortcomings of current K–12 science and 

mathematics education in the United States, particularly when 

compared to other countries. We must expect more from our nation’s educators and students if we are to build on the accomplishments of previous generations. New methods of teaching mathematics and science are required, as well as better curricula and improved training of special education and LEP teachers. 

To achieve improved training of teachers, H.R. 609 requires that 

the Secretary establish a competitive priority for grants under the 

Graduate Assistance in Areas of National Need (GAANN) program 

in order to prepare individuals for the professoriate who are committed to training highly qualified elementary and secondary 

school teachers of mathematics and science. 

The Committee encourages the Secretary to provide priority to 

departments that engage in such activities, and encourages the 

Secretary to regard departments of mathematics and sciences, as 

well as departments of engineering, as departments that may provide such activities. 

The Committee recognizes that a chronic and persistent shortage 

of special education faculty curtails the national capacity of colleges 

and universities to conduct research and prepare teachers who can 

effectively teach students with disabilities. The number of special 

education doctorates produced annually has decreased by 30 percent in the last 20 years, according to the Higher Education Consortium for Special Education. About half of those with doctorates 

choose to work in higher education; the others work in leadership 

positions in settings such as local school systems. 

The Committee is aware that the chronic and persistent shortage 

of special education teachers is exacerbated by the shortage of special education faculty in institutions of higher education. Without 

adequate faculty, there will be fewer qualified teachers and thus 

lower student achievement. Research has documented that students are more likely to have higher achievement when they are 

taught by qualified teachers, than when they are taught by unqualified teachers. As accountability for student achievement increases, the demand for qualified special education teachers will 

likewise increase. 

To achieve improved training of teachers, H.R. 609 requires the 

Secretary to establish a competitive priority for grants under the 

GAANN program in order to prepare individuals for the professoriate who are committed to training highly qualified elementary 

and secondary school teachers that can effectively teach students 

with disabilities. 

222 

The provisions of No Child Left Behind require closing the 

achievement gap that exists for the nation’s 4.5 million limited 

English proficient children. There is an acute shortage of teachers 

prepared to teach these young students. The tremendous need for 

bilingual/English as a second language (ESL) teachers exists not 

only in states with traditionally large immigrant populations like 

California, Florida and Texas, but also on a national level and in 

an increasing number of small towns and rural communities. 

Therefore, in order to ensure that students with limited English 

proficiency are instructed by teachers who are qualified to address 

the needs of this unique student population, H.R. 609 requires the 

Secretary to establish a competitive priority for grants under the 

GAANN program. This priority will help to ensure preparation of 

individuals for the professoriate in fields such as second language 

pedagogy and second language acquisition who are committed to 

training highly qualified elementary and secondary school teachers 

can effectively teach limited English proficient students. 

Fund for the Improvement of Postsecondary Education 

Ensuring innovation, reform and outreach in higher education is 

essential in assisting institutions to meet their full potential and 

allowing their students to do the same. The Committee recognizes 

that many institutions of higher education possess tremendous resources in their facilities, faculty and student body, and often these 

resources are underutilized outside of the traditional classroom. 

H.R. 609 extends the opportunity for institutions of higher education to reach out to the communities in which they reside. By allowing the Secretary to include community outreach and involvement as an activity within the Fund for Improving Postsecondary 

Education (FIPSE), the special project authorization allows institutions of higher education to assist in meeting the pressing needs 

of the surrounding community, while providing an educational experience for students that will be unmatched in the classroom. 

The Committee anticipates that one of the new activities provided through FIPSE grants can and should improve secondary 

school graduation and college attendance and completion rates for 

disadvantaged students. While there are many secondary school reform models that could meet this eligibility requirement, the Committee would like to make note of one particular model program 

called Project GRAD. Project GRAD is a comprehensive, cost-effective program with a record of improving the academic achievement 

and college access of students from low-income backgrounds. 

Project GRAD’s integrated approach to teaching and learning includes working with an entire feeder system in a school district, 

the local non-profit GRAD organization, community involvement 

and collaboration, and working with existing assets. Project GRAD 

delivers a comprehensive set of research-based programs in reading, mathematics, classroom management, social services/parent involvement, and college preparation. In addition, Project GRAD provides a four-year college scholarship to all students who qualify. It 

is this unique structural approach that contributes to higher academic standards and offers the dream of graduation and college to 

all the students within a feeder system, or even an entire district. 

In response to the numerous institutions of higher education that 

are working to implement programs to work with private and civic 

223 

organizations to resolve pressing and severe community problems, 

FIPSE includes a new ’national need’ designation that permits 

grantees to use funds to support the development of coordinated 

curriculum and internship opportunities for students in disadvantaged communities. The Committee understands that some universities, such as the Shepherd Program at Washington and Lee University, are working to coordinate and expand programs to study 

poverty and its impact on communities. The Committee encourages 

the Department to identify other such programs for the purposes 

of awarding funds in order to assist disadvantaged communities in 

meeting this important national need. 

In 2000, Congress unanimously passed a concurrent resolution 

(S. Con. Res. 129) stating, in part, that ‘‘the historical illiteracy of 

America’s college and university graduates is a serious problem. 

***’’ reflecting a failure to impart to students a basic understanding of the history, ideals, documents and institutions that 

have formed the nation. The Committee notes that the events of 

September 11, 2001 made these concerns even more compelling. 

The ideals, institutions, key documents, and history on which our 

nation stands need to be understood if they are to be sustained in 

times of trial. 

This issue was most recently highlighted in a hearing conducted 

by the Subcommittee on Select Education, on September 9, 2003. 

At that hearing, Dr. William Barclay Allen, Professor of Political 

Philosophy and Director of the Program in Public Policy and Administration at Michigan State University, spoke of the impact of 

the disappearance of university requirements in traditional American history and western civilization: 

A direct consequence of this trend has been an erosion 

of the training of professors (and therefore K–12 teachers) 

to preserve broad familiarity with facts, texts, and significant dates affecting our civic existence. A targeted response to this situation, cutting across disciplinary distinctions, will meaningfully strengthen the academy’s ability 

to play a central role in fostering content mastery regarding the significant moral, constitutional, political, intellectual, economic, cultural, and international influences revealed through American history. 

In response to this concern, H.R. 609 includes an important 

amendment to the FIPSE program. Specifically, language was 

added identifying the expansion of academic programs focused on 

traditional American history as an area of ‘‘national need.’’ It is the 

intent of the Committee that this authority be used for reinvigorating majors and graduate programs in these fields, thus creating 

a new pipeline for producing the scholars and teachers needed to 

staff these fields at the graduate and undergraduate levels and in 

teacher training programs. 

By including the establishment of academic programs in support 

of research and the development of teaching materials for teaching 

traditional American history, students and faculty may once again 

ensure the values and history of the United States are learned, remembered and passed on to future generations. H.R. 609 will go a 

long way in bringing back the relevance of teaching this important 

topic and ensure it is done comprehensively. 

224 

During this reauthorization, the Committee feels strongly that 

the importance of graduate education overall should not be overlooked. Dr. Earl Lewis, Dean of the Rackham Graduate School, 

Vice Provost for Academic Affairs for Graduate Studies, and Professor of History at the University of Michigan expressed his support for graduate education programs before the Subcommittee on 

Select Education: 

Graduate education prepares the scientists and engineers needed by industry, government, and universities to 

conduct the nation’s research and development. Graduate 

programs also educate the scholars in the humanities, social sciences, and the arts who preserve and enlarge our 

understanding of the history and scope of human thought 

and the human condition, and transmit that knowledge to 

succeeding generations. Moreover, graduate programs at 

our nation’s universities generate new knowledge and act 

as incubators of innovative ideas that drive new technologies and create new ways to address societal, health, 

security, and economic needs and challenges. 

As Congress continues its work on the reauthorization of the 

Higher Education Act, it must continue to build on the demonstrated success of these valuable graduate programs. These programs, and the amendments made within H.R. 609, will prepare 

the next generation of scientists, scholars and teachers and ensure 

the support and effectiveness of these programs. 

Title VIII—Clerical amendments 

H.R. 609 made numerous technical and clarifying amendments to 

the Higher Education Act. 

Title IX—Amendments to other education laws 

H.R. 609 mostly maintains current law in its reauthorization of 

the Education of the Deaf Act of 1986. However, the bill includes 

three important reforms that the Committee feels will strengthen 

the Act and improve the programs offered by Gallaudet University 

and the National Technical Institute for the Deaf (NTID). 

First, H.R. 609 requires Gallaudet University to develop academic content standards, academic achievement standards, and 

academic assessments consistent with the No Child Left Behind 

Act for the elementary and secondary programs operated at the 

Laurent Clerc National Deaf Education Center. In July, data from 

the National Assessment of Educational Progress 2004 long-term 

trend assessment was released showing improving test scores in 

mathematics and reading. This data confirms that the high standards and accountability established in the No Child Left Behind 

Act are having a significant impact on our nation’s schools. The 

Committee feels strongly that students participating in the elementary and secondary programs at Gallaudet University deserve the 

same high standards and opportunities that other students are experiencing. 

H.R. 609 also codifies the relationship between the Secretary and 

the Rochester Institute of Technology (RIT). RIT has operated the 

NTID through a contract with the Secretary since 1968, yet the 

Education of the Deaf Act of 1986 has never recognized this relaVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00228 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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tionship. Given RIT’s nearly 40 years of successful work on behalf 

of students who are deaf or hard of hearing, the Committee believes that formally identifying RIT as the university responsible 

for the operation of the NTID is a commonsense reform that rewards excellence and ensures stability in this program. 

Finally, H.R. 609 changes the name of the Act to the ‘‘Gallaudet 

University and National Technical Institute for the Deaf Act.’’ This 

technical change recognizes the Act’s purpose of providing support 

for the academic programs and research projects of these two institutions. Given the many other programs that are geared more generally toward students who are deaf or hard of hearing, the Committee believes that this change will ensure that the Act will continue to focus resources on Gallaudet University and the NTID for 

the benefit of all students who are deaf or hard of hearing. 

Conclusion 

The College Access and Opportunity Act is the product of more 

than two years of dedicated effort to improving America’s higher 

education system. The Committee believes the Higher Education 

Act is among the nation’s most significant mechanisms to empower 

individuals and increase opportunities for success, and that is why 

the reauthorization could be no ordinary task. From the outset, the 

Committee has been committed to enacting meaningful reforms 

that would benefit students and taxpayers. The process began, appropriately, by identifying ways to simplify the process. The goal 

was not to add another layer of confusion, but to review the programs with a critical eye to determine what is working well, and 

what could be working better; what regulations and red tape are 

unnecessary, and what more needs to be done. 

Early in the process, the Committee identified access, accountability, affordability, and quality as the guiding principles for the 

reauthorization. Those ideals helped to shape the policies contained 

in the legislation, and can be used to determine Congressional intent. Ultimately, the Committee believes that reauthorization of 

the Higher Education Act is an opportunity to reform and strengthen one of the most vital systems in America—the higher education 

system. Rather than squander the opportunity with a rubber stamp 

for the status quo, the Committee members rolled up their sleeves 

and fought for real changes. The result is a bill that will expand 

college access and ensure the Higher Education Act is equipped for 

the future. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title; table of contents 

States the short title as the ‘‘College Access and Opportunity Act 

of 2005.’’ Contains the Table of Contents. 

Section 2. References; effective date 

Establishes the effective date as the date of enactment. States 

that, unless otherwise noted, any amendment to repeal or amend 

a section or provision amends or repeals a section or provision of 

the Higher Education Act of 1965. 

226 

Title I—General Provisions 

Section 101. Definition of institution of higher education 

Strikes sections 101 and 102 and inserts new sections 101 and 

102. Creates a single definition of an institution of higher education under section 101. Includes within the list of students an institution may enroll to meet the definition those students who are 

dually enrolled at the institution and a secondary school. Clarifies 

requirements for the legal authorization of foreign schools. Repeals 

the 50 percent rule as it pertains to distance education by telecommunication. Clarifies the institutional eligibility criteria applicable to foreign not-for-profit veterinary schools. Removes the requirement for students attending Canadian Medical schools to take 

the Foreign Medical exam. Requires the Secretary to publish qualifying criteria by regulations and establish an advisory panel with 

regards to evaluating the qualifications of foreign medical schools. 

Adds a new section 123 that clarifies how proprietary institutions 

may use grant funds and makes proprietary institutions ineligible 

for funds under titles III and V of this Act. Makes conforming 

amendments regarding home-schooled students. Amends the title 

of 484(d) to read ‘‘(d) Satisfaction of Secondary Education Standards.’’ Makes several conforming amendments to reflect the single 

definition of institutions of higher education. States that the inclusion of for-profit schools within the definition of ‘‘institution of 

higher education’’ will not apply to any other provision of law enacted before the date of enactment of this Act. 

Section 102. New borrower definition 

Amends section 103(7) to clarify definition of ‘‘new borrower’’ and 

separate the Federal Family Education Loan and Direct Loan programs from the Perkins program. 

Section 103. Student speech and association rights 

Amends section 112 to clarify the current Sense of Congress regarding student speech and association rights. 

Section 104. Extension of National Advisory Committee on Institutional Quality and Integrity 

Amends section 114(b) by permitting members of the Committee 

to continue to serve after the expiration of a term until a successor 

is appointed. 

Amends section 114(g) to extend the authorization of the National Advisory Committee on Institutional Quality and Integrity. 

Section 105. Alcohol and drug abuse prevention 

Amends section 120(e)(5) to extend the Alcohol and Drug Abuse 

prevention grants. 

Section 106. Prior rights and obligations 

Amends section 121(a) to extend the authorization to continue 

coverage of prior rights and obligations for servicing of outstanding 

bonds from old title VII bonds. 

227 

Section 107. Limitation on certain uses of funds 

Amends part B of title I by inserting a new section 124 that prohibits funds from this Act from being used for publicity or propaganda not authorized by Congress or for any prepackaged news 

story not authorized by law unless it includes a clear notification 

that the story was prepared or funded by the Department of Education. 

Section 108. Consumer information and public accountability in 

higher education 

Amends section 131 by rewriting the section. Outlines the purpose of the section. Requires the Secretary to assess the key data 

elements that are of greatest importance to students and families; 

convene a group of experts to determine what data elements are 

important, cost-effective strategies for institutions to employ to collect necessary data, and the general comparability of data across 

institutions; to make recommendations on what data elements to 

include on the redesigned College Opportunities On-Line (COOL) 

website; and, to assure that the redesigned COOL website uses 

data elements currently provided by institutions, includes clear and 

uniform information, provides comparable information, and includes a sorting function. Also requires the Secretary to redesign 

the Integrated Postsecondary Education Data Systems as necessary. Also requires the Secretary to publish a college consumer 

profile for each institution participating in title IV programs. Requires the Secretary to make available, at a minimum, the data 

collected pursuant to this section in a manner that permits the review and comparison of institutions and is easily accessible and understandable. Requires the Secretary to work with public and private entities to promote broad public awareness, particularly 

among middle and high school students and their families, of the 

information made available under this section. Requires the Secretary to distribute this information to students who participate in 

Federally funded education programs and other Federal programs 

as determined by the Secretary. Establishes a college affordability 

index and requires institutions that exceed the index to report how 

they will work to address that increase. 

Requires each institution that has a college affordability index 

that exceeds two for any three year period and that has an index 

that is in the highest 25 percent of those institutions to establish 

a quality-efficiency task force to review the operations of the institution. Outlines the membership and functions of the task force 

and requires the task force’s recommendations to be included in the 

report to the Secretary. If the Secretary determines that an institution who has exceeded the index has failed to comply with its management plan and has failed to meet the index for two consecutive 

academic years, the Secretary is required to publicly report the institution’s costs and expenditures and tuition and fees from students, place the institution on an affordability alert status, notify 

the institution’s accrediting agency, and may require the institution to submit to a review and audit by the Department’s Inspector 

General. Provides for a relative price exemption and dollar increase 

exemption to this requirement. Establishes classes of institutions 

for the purposes of comparing costs. Permits the Secretary to impose fines on institutions that fail to provide the necessary inforVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00231 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
228 

mation in a timely and accurate manner. Requires GAO to conduct 

a study of best practices regarding costs. Requires an interim report in 2011 and a final report in 2013. Makes technical amendments regarding data collection and references to other sections. 

Requires the Secretary conduct the student aid survey every 4 

years. 

Section 109. Databases of student information 

Inserts a new section 132 that states that nothing in the Act 

should be construed to authorize the design, development, creation, 

implementation, or maintenance of a nationwide database of personally identifiable information on individuals receiving assistance, 

attending institutions receiving assistance, or otherwise involved in 

any studies or other collections of data under this Act, including a 

student unit record system, an education bar code system, or any 

other system that tracks individual students over time. The new 

section clarifies that this prohibition does not affect the loan obligation enforcement activities described in section 485B of this Act. 

Section 110. Performance-based organization 

Revises section 141 to clarify the goals of the Performance-Based 

Organization related to the costs of administering the student aid 

programs. Clarifies the definition of ‘‘year.’’ Revises the consultation process on the annual performance plan to include guarantors 

and secondary markets. Makes technical amendments to correct 

various citations. 

Title II—Teacher Preparation 

Section 201. Teacher quality enhancement grants 

Amends Part A of title II by rewriting sections 201 through 210. 

Section 201 outlines the purposes and definitions for the title. 

States the need for holding institutions of higher education accountable for preparing highly qualified teachers. Defines or modifies the definition for the following terms: ‘‘Arts and Sciences,’’ ‘‘Exemplary Teacher,’’ ‘‘Highly Qualified,’’ High-Need Local Educational Agency,’’ ‘‘Poverty Line,’’ ‘‘Professional Development,’’ ‘‘Scientifically Based Reading Research,’’ ‘‘Scientifically Based Research,’’ and ‘‘Teaching Skills.’’

Section 202 authorizes the State Grants competitive grant program for eligible States. 

Defines the term ‘‘Eligible State’’ and outlines requirements for 

applications for grants. Requires States to use funds to reform 

teacher preparation requirements, coordinate with State activities 

under section 2113(c) of the Elementary and Secondary Education 

Act of 1965, and ensure that current and future teachers are highly 

qualified. Authorizes grant recipients to use funds to develop teacher preparation programs that prepare highly qualified teachers who 

are able to understand scientifically based research and its applicability, and are able to use advanced technology effectively in the 

classroom; reform teacher certification, recertification, or licensing 

requirements to ensure that teachers have the necessary subject 

matter knowledge and teaching skills and that the requirements 

are aligned with challenging State academic content standards; 

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cation and traditional preparation to become highly qualified teachers; implement innovative programs such as charter colleges of 

education or university and local educational agency partnership 

schools that enhance the ability of institutions of higher education 

to prepare highly qualified teachers; develop, or assist local educational agencies in developing, merit or bonus pay systems to retain principals and teachers; develop, or assist local educational 

agencies in developing, teacher advancement and retention initiatives that promote professional growth and emphasize multiple career paths and pay differentiation; develop and implement effective 

mechanisms to ensure that local educational agencies and schools 

are able to remove incompetent or unqualified teachers consistent 

with procedures that ensure due process; provide technical assistance to low-performing teacher preparation programs; develop systems to measure the effectiveness of teacher preparation programs 

and professional development programs and strategies to document 

gains in student academic achievement or increases in teacher 

master of content; develop mechanisms to ensure that local educational agencies and schools are able to recruit and retain highly 

qualified teachers or provide activities as described in section 

204(d); improve the qualifications of early childhood educators, improve and expand preschool teacher preparation programs, and reduce unnecessary burdens to the attainment of a bachelor’s degree 

in early childhood education and increase the number of bilingual 

early childhood educators, which may include developing articulation agreements between institutions of higher education; incorporate the learning needs of gifted and talented students into the 

activities described in paragraphs (1), (2), or (3) of this subsection 

in order to ensure that new teachers possess basic knowledge and 

skills necessary to meet the educational needs of gifted and talented students; establish or expand new teacher mentoring and assessment programs that are a part of a licensure process which is 

designed to demonstrate that new teachers possess basic knowledge of the classroom indicators of giftedness, are able to identify 

student learning differences among gifted students, and are able to 

provide instruction to accommodate such differences; support the 

development of new special education, math, and science faculty 

positions in institutions of higher education dedicated to the preparation of highly qualified special education, math, and science 

teachers, with matching funds from institutions of higher education 

and a commitment to continue new faculty positions when Federal 

funding ends; and, assess the performance of teacher preparation 

programs within institutions of higher education in the State using 

an assessment which provides comparisons across such schools in 

the State based upon indicators including teacher candidate knowledge in subject areas in which such candidate has been prepared 

to teach, and to make such information publicly available and 

widely disseminated. Requires States to develop and utilize a system to annually evaluate teacher preparation programs and professional development activities, and to publicize the results. 

Section 203 authorizes the Partnership Grants competitive grant 

program for eligible partnerships. Defines the terms ‘‘Eligible Partnerships’’ and ‘‘Partner Institution’’ and outlines the requirements 

for applications for grants. Requires grantees to reform teacher 

preparation requirements, coordinate with State activities under 

230 

section 2113(c) of the Elementary and Secondary Education Act of 

1965, and ensure that current and future teachers are highly qualified by engaging in one or more of the following activities: implement reforms within teacher preparation programs to ensure that 

such programs are preparing teachers who are highly qualified, are 

able to understand scientifically based research and its applicability, and are able to use advanced technology effectively in the 

classroom; provide sustained and high-quality pre-service and inservice clinical and mentoring experiences; create opportunities for 

enhanced and ongoing professional development that improves academic content knowledge of teachers and promotes strong teaching 

skills; develop, or assist local educational agencies in developing, 

professional development activities that provide training in how to 

teach and address the needs of students with different learning 

styles and needs and provide training in improving student behavior and identifying interventions to help those students. Authorizes 

grantees to use funds to provide prospective teachers with alternative routes to State certification and traditional preparation to 

become highly qualified teachers; disseminate information on effective practices and coordinate activities with other State offices and 

agencies; develop and implement professional development programs for principals and superintendents that enable them to be 

effective school leaders and prepare all students to meet challenging State academic content and achievement standards; recruit 

students into the teaching profession; create opportunities for clinical experience and training in areas related to math, science, and 

technology; coordinate with community colleges to implement 

teacher preparation programs, including through distance education or articulation agreements; establish or implement a teacher 

mentoring program for teachers in their first three years of teaching; train teachers to use computer software for multilingual education to address the needs of limited English proficient students; 

increase the knowledge and skills of pre-service teachers participating in activities under the required uses of funds subsection in 

the educational and related needs of gifted and talented students; 

and, increase the number of highly qualified special education, 

math, and science teachers through such activities as recruitment, 

scholarships for tuition and new teacher mentoring. Requires that 

at least 50 percent of the funds made available under this section 

be used directly to benefit the high-need local educational agency 

included in the partnership. Requires that funds received under 

this section supplement, rather than supplant, other Federal, 

State, and local funds. 

Section 204 authorizes the Teacher Recruitment Grants competitive grants program for eligible applicants. Defines the term ‘‘Eligible Applicant’’ and outlines the requirements for applications for 

grants. Requires grantees to use funds to award scholarships to 

help students pay the costs of tuition, room, board, and other expenses of completing a teacher preparation program; provide support services to enable students to complete a program and transition from another field into a teaching career; provide follow-up 

services to former scholarship recipients during the recipient’s first 

three years of teaching; and develop mechanisms to ensure that 

high-need local educational agencies and schools are able to effectively recruit highly qualified teachers. Authorizes grantees to use 

231 

funds to develop effective mechanisms to recruit into the teaching 

profession employees from high-demand industries and the fields of 

math, science, and engineering; conduct outreach and coordinate 

with inner city and rural secondary schools to encourage students 

to pursue teaching careers; develop and implement dual degree 

programs that enable students at institutions of higher education 

to earn two undergraduate degrees concurrently, one of which 

being in education and the other in the subject matter of the student’s choosing; and, recruit high achieving students, bilingual students, and other qualified candidates into early childhood education programs. Requires scholarship recipients to teach in a highneed local educational agency for a certain time period or repay the 

scholarship. Requires the Secretary of Education to give priority to 

eligible applicants who provide an assurance that they will recruit 

a high percentage of minority students to become highly qualified 

teachers. 

Section 205 outlines administrative provisions for Part A of title 

II. Specifies the duration of grants awarded under this part and 

that grantees under sections 203 and 204 may only receive a grant 

once. Requires the Secretary to refer applications for grants under 

this part to a peer review panel for evaluation. Outlines the priorities the peer review panel should consider in making recommendations to the Secretary. Requires the Secretary to determine, based 

on the peer review process, which application shall receive funding 

and the amounts of the grants. Requires grantees under this part 

to provide matching funds. Limits to two percent the amount of the 

grant that can be used on administration expenses. 

Section 206 requires grantees under section 202 to submit an annual accountability report to the Secretary and the education committees of Congress. Outlines the areas that are to be covered by 

the accountability report. Requires grantees under section 203 to 

establish as a condition of submitting an application an evaluation 

plan that includes strong performance objectives. Outlines the objectives and measures that are to be considered by the plan. Requires grantees under sections 202 and 203 to report annually on 

the progress toward meeting the purposes of this part and the 

goals, objectives, and measures described in subsections (a) and (b) 

of the section. Requires the Secretary to withhold certain grant 

payments if the Secretary determines that a grantee is not making 

substantial progress in meeting the purposes and goals of the appropriate section. Requires the Secretary to evaluate the activities 

funded under this part, report his or her findings to the education 

committees of Congress, and broadly disseminate information regarding both successful and ineffective practices. 

Section 207 requires each State that receives funds under the Act 

to submit to the Secretary annually a State report card on the 

quality of teacher preparation in the State. Outlines what is required to be included in the report. Requires the Secretary to provide annually a report to Congress on teacher qualifications and 

preparation in the United States. Outlines what is required to be 

included in the report. Requires the Secretary to coordinate, to the 

extent practicable, the information collected and published under 

this part among States for teachers who become certified in a State 

other than the one in which they received their most recent degree. 

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cation program that conducts a teacher preparation program that 

enrolls students who receive Federal aid under this Act to submit 

an annual report to the State and the general public on both traditional certification or licensure programs and alternative certification or licensure programs. Outlines what is required to be included in the report and how the report must be published and disseminated. Permits the Secretary to impose a fine on an institution 

of higher education for failure to provide the required information 

in a timely or accurate manner. 

Section 208 requires each State that receives funds under the Act 

to have in place a procedure to identify and assist, through the provision of technical assistance, low-performing programs of teacher 

preparation within institutions of higher education. Requires each 

State that receives funds under the Act to provide annually a list 

of such low-performing programs, including programs in danger of 

being placed on the list. Requires States receiving funds under this 

title to develop plans to close or reconstitute underperforming programs of teacher preparation within institutions of higher education. States that any institution of higher education that provides 

a program of teacher preparation in which the State has withdrawn its approval or terminated financial support due to low performance will be ineligible for any funding for professional development activities awarded by the Department of Education and will 

not be permitted to enroll any student who receives aid under title 

IV of the Act in the institution’s teacher preparation program. 

Section 209 requires the Secretary to ensure that States and institutions of higher education use equitable methods in reporting 

and that the reporting not allow for the identification of individuals. Outlines procedures for the Secretary to collect data from 

States in which there are no certification or licensure assessments 

or that do not set minimum performance levels on those assessments. Prohibits Federal control over any aspect of any private, religious, or home school, and clarifies that nothing in this section 

prohibits private, religious, or home schools from participating in 

the programs under this part. Clarifies that nothing in this part 

encourages or requires any changes in a State’s treatment of any 

private, religious, or home school. Prohibits the Secretary from establishing or supporting any national system of teacher certification. 

Section 210 establishes the authorization of appropriations for 

this part as $300 million for fiscal year 2006 and such sums for 

each of the 5 succeeding fiscal years. Establishes the percentages 

of funds to be available for sections 202, 203, and 204, respectively. 

Section 202. Preparing tomorrow’s teachers to use technology 

Amends section 222(a) by establishing nonprofit telecommunications entities as eligible applicants. 

Amends section 223(b) by clarifying that funds should focus on 

using technology to increase student academic achievement. 

Amends section 224 with regards to the authorization of appropriations. 

Section 203. Centers of excellence 

Amends title II by inserting a new part C. 

233 

Section 231 establishes the purposes for this part. Defines the 

following terms: ‘‘Eligible Institution,’’ ‘‘Highly Qualified,’’ ‘‘Scientifically Based Reading Research,’’ and ‘‘Scientifically Based Research.’’ Section 232 authorizes the Centers of Excellence competitive 

grant program. Requires grantees to ensure that current and future teachers are highly qualified. Requires grantees to use funds 

to implement reforms within teacher preparation programs to ensure that such programs are preparing teachers who are highly 

qualified, are able to understand scientifically based research, and 

are able to use advanced technology effectively in the classroom to 

improve student academic achievement; provide new teachers sustained and high-quality pre-service clinical experience, mentoring 

from exemplary teachers, and increased interaction between faculty 

at institutions of higher education and new and experienced school 

personnel; develop initiatives to promote retention of highly qualified teachers and principals, including minority teachers and principals; award need-based scholarships to help students pay the cost 

of tuition, room, board, and other expenses; disseminate information on effective practices for teacher preparation and successful 

teacher certification and licensure assessment preparation strategies; and activities authorized under sections 202, 203, and 204. 

Outlines the requirements for submitting an application. Sets the 

minimum grant under this part at $500,000. Limits to two percent 

the amount of a grant that can be used for administrative expenses. Requires the Secretary to prescribe regulations as necessary. 

Section 233 establishes the authorization of appropriations as $10 million for fiscal year 2006 and such sums for the five succeeding fiscal years. 

Section 204. Teacher incentive fund program 

Amends title II by inserting a new part D. Section 241 outlines 

the purposes of this part and defines the terms ‘‘Eligible Entity’’

and ‘‘High-Need Local Educational Agency.’’

Section 242 authorizes the Secretary to award competitive grants 

of up to 5 years in length for eligible entities to develop and implement, or expand, a comprehensive performance-based compensation 

system for teachers and principals for one or more local educational 

agencies. Outlines the necessary and permitted characteristics of a 

comprehensive performance-based compensation system under this 

part. Requires grantees to use funds only to design and implement, 

or expand, in collaboration with teachers, principals, other school 

administrators, and members of the public, a compensation system 

consistent with the requirements of this part. Allows grantees to 

use funds to: develop appraisal systems that reflect clear and fair 

measures of student academic achievement; conduct outreach with 

the local educational agency or the State to gain input on how to 

construct the appraisal system and to develop support for it; pay, 

as part of a comprehensive performance-based system, bonuses and 

increased salaries to teachers and principals who raise student 

achievement, so long as the grantee uses an increasing share of 

non-Federal funds to pay these monetary rewards each year of the 

grant; pay, as part of a comprehensive performance-based compensation system, additional bonuses to teachers who both raise 

234 

student achievement and either teach in high-poverty schools or 

teach subjects that are difficult to staff, or both, so long as the 

grantee uses an increasing share of non-Federal funds to pay these 

monetary rewards each year of the grant; pay, as part of a comprehensive performance-based compensation system, additional bonuses to principals who both raise student achievement and serve 

in high-poverty schools, so long as the grantee uses an increasing 

share of non-Federal funds to pay these monetary rewards each 

year of the grant. Outlines what is required to be included in the 

grant application. Requires the Secretary to give priority to applications for projects that would establish comprehensive performance-based compensation systems in high-need local educational 

agencies. 

Section 243 requires the Secretary to conduct an independent 

evaluation of the program under this part and may use up to 1 percent of the funds made available under this part or $1,000,000, 

whichever is less, for any fiscal year for the cost of the evaluation. 

Section 244 establishes the authorization for this part as 

$100,000,000 for fiscal year 2006 and such sums as may be necessary through 2010. 

Section 205. Transition 

Requires the Secretary to take necessary actions to provide for 

the orderly implementation of this title. 

Title III—Institutional Aid 

Section 301. Title III grants for American Indian tribally controlled 

colleges and universities 

Amends section 316(b) with regards to the definitions of eligible 

institutions and Indian. 

Amends section 316(c)(2) to expand the authorized use of funds 

related to instructional facilities, and to provide new authorized activities with regards to distance learning and tribal governance. 

Amends section 316(d) by changing the program from a competitive grant program to a formula grant program. Provides a minimum grant to each eligible institution of $400,000. Removes the 

two-year wait out period for these grants, as it is no longer necessary under a formula system. 

Section 302. Alaska Native and Native Hawaiian-serving institutions 

Amends section 317(c)(2) to authorize the use of funds for the 

construction and maintenance of instructional facilities and the acquisition of real property adjacent to the campus. Creates additional new authorized uses of funds related to distance learning 

and tribal governance. 

Amends section 317(c) by allowing grant funds to be used to establish or increase an endowment fund so long as the institution 

provides matching funds. 

Amends section 317(d) by striking subparagraphs (A) and (B) in 

paragraph (2) with regards to the requirements that applications 

include a 5-year improvement plan and other information and assurances as the Secretary may require. 

235 

Section 303. Grants to part B institutions 

Amends section 323(a) by authorizing the use of funds for the 

construction and maintenance of instructional facilities and the acquisition of real property adjacent to the campus. Amends the authority to establish community outreach programs to prepare elementary and secondary students for postsecondary education. 

Amends section 323 by adding a new subsection (c) to allow for 

the use of no more than two percent of funds received under Part 

B to secure technical assistance, financial management and strategic planning 

Amends section 323(a)(2) to include activities related to distance 

learning. 

Amends section 324(d)(1) to increase the minimum grant to 

$750,000 under certain conditions. 

Amends section 326(a)(1) to require that the institution be accredited by a national accrediting agency and be in good standing. 

Amends section 326(c) to authorize the use of funds for the construction and maintenance of instructional facilities and the acquisition of real property adjacent to the campus. 

Amends section 326(e) to add the names of additional eligible institutions. Further amends section 326(e) to update the year for the 

special rule. 

Amends section 326(f) to update the authorization levels. Further 

amends section 326(f) to update cross-references. 

Amends section 326(g) to update the year for the hold harmless 

rule. 

Section 304. Technical amendments 

Amends section 311(c) to include within the use of funds education or counseling services to improve financial and economic literacy. 

Amends section 312(b) to require that an institution offer not less 

than a two year program that is acceptable for full credit toward 

a bachelor’s degree. 

Amends section 316(c) to include within the use of funds education or counseling services to improve financial and economic literacy. 

Amends section 317(c) to include within the use of funds education counseling services to improve financial and economic literacy. 

Amends section 323(a) to include within the use of funds education counseling services to improve financial and economic literacy. 

Makes several technical amendments. 

Revises section 343(e) to add in a subsection heading to read: 

‘‘Sale of Qualified Bonds.’’

Repeals section 1024 as transferred by section 301(a)(5) of the 

Higher Education Amendments of 1998. 

Section 305. Title III authorizations 

Amends section 399(a) in regards to the authorization of appropriations. 

236 

Title IV—Student Assistance 

PART A—GRANTS TO STUDENTS

Section 401. Pell Grants 

Amends section 401(a) by extending the authority of the program. Further amends section 401(a) by striking paragraph (2) 

with regards to advance payment to students attending institutions 

that do not participate in the disbursement system. 

Amends section 401(b) to increase the authorized annual maximum award to $6,000 through academic year 2012–2013. Further 

amends section 401(b) by eliminating tuition sensitivity. Further 

amends section 401(b) by providing for year-round Pell grants for 

students enrolled for 12 months at baccalaureate degree granting 

institutions with a graduation rate of at least 30 percent for the 

four preceding years and two-year institutions with a graduation 

rate that is at least above the average for the institution’s type and 

control. Outlines the requirements for the awarding of the yearround Pell grants. Requires an evaluation and report by the Secretary by 2011. 

Amends section 401(c) by inserting a new paragraph (5) that limits the period during which a student may receive a Pell Grant to 

the equivalent of 18 semesters or 27 quarters in duration (as determined by the Secretary) without regard to whether the student is 

enrolled on a full-time basis during any portion of that period, and 

including any period of time for which the student received Pell 

Grants prior to the date of enactment of this Act. Further amends 

section 401(c) by restricting the use of Pell Grants for remedial or 

English as a second language instruction to one academic year. 

Further amends section 401(b) by prohibiting a student who is 

subject to an involuntary civil commitment upon completion of a 

period of incarceration for a sexual offense (as determined by the 

Secretary) from receiving a Pell Grant. 

Amends subpart 1 of part A by inserting a new section 401A to 

create the Pell Grants Plus—Achievement Grants for State Scholars program. Outlines how students will be eligible to receive 

grants and sets the grant amount as $1000 so long as the total 

amount of a student’s financial assistance does not exceed the cost 

of attendance. Requires the Secretary to establish regulations for 

determining student eligibility. Outlines the requirements students 

must meet to continue to receive an award during his or her second 

year of undergraduate education. Requires the Secretary to monitor 

the progress, retention, and completion of students receiving 

awards, evaluate the impact of the program, and submit a report 

at least every two years to the authorizing committees of Congress. 

Repeals Chapter 3 of subpart 2 of part A, the Academic Achievement Incentive Scholarship program. 

Section 402. TRIO programs 

Amends section 402A(b) to establish the duration of TRIO grants 

as five years and Staff Development Activities grants as two years, 

and allow the Secretary to determine the duration of Project Improvement and Dissemination Partnership Projects grants. Further 

amends section 402A(b) to synchronize outstanding grants to the 

five-year term. Further amends section 402A(b) to increase the 

237 

minimum TRIO grants to $200,000 and Staff Development Activities grants to $170,000. 

Amends section 402A(c) to require the Secretary to set aside ten 

percent of funds for novice applicants. In the event an insufficient 

number of quality novice applicants are available, requires the Secretary to distribute the ten percent among other applicants. 

Amends section 402A(c) by striking the requirement that the 

Secretary notify current grant holders applying for an additional 

grant of the status of that application up to eight months prior to 

the expiration of the current grant. 

Amends section 402A(e) with a technical amendment. Further 

amends section 402A(e) by inserting a new paragraph (3) to make 

homeless or unaccompanied youth under section 725 of the McKinney-Vento Act eligible to participate in the Talent Search, Upward 

Bound, Student Support Services, and Educational Opportunity 

Centers programs. 

Amends section 402A(f) to establish the authorization level as 

$836,500,000 and to extend the authorization through fiscal year 

2011. 

Amends section 402A(g) by amending the definition of ‘‘Veteran 

Eligibility’’ and defining the terms ‘‘Different Campus’’ and ‘‘Different Population.’’ Amends section 402B(b) to add education or counseling services 

that address the financial and economic literacy of students and 

parents to the list of permissible services. 

Amends section 402C(b) to add education or counseling services 

that address the financial and economic literacy of students and 

parents to the list of permissible services. 

Further amends section 402C(b) to stress the transition of veterans into math and science fields in the list of permissible services. 

Amends section 402D(b) to add education or counseling services 

that address the financial and economic literacy of students and 

parents to the list of permissible services. 

Amends section 402E(b) to add education or counseling services 

that address the financial and economic literacy of students and 

parents to the list of permissible services. 

Amends section 402F(b) to add education or counseling services 

that address the financial and economic literacy of students and 

parents to the list of permissible services. 

Amends section 402C(e) by increasing the maximum stipend to 

$100 for services carried out in June, July, and August, and to $60 

for services carried out during the remainder of the year. 

Amends section 402D(d) to include within an application’s consideration the services provided to low-income working adults. 

Amends section 402E(e) by increasing the maximum stipend to 

$5,000. 

Amends section 402F(c) by requiring the Secretary to consider 

the services that would be provided to low-income working adults 

when considering the application. 

Section 403. TRIO reform 

Amends section 402A by inserting a new subsection (c). The new 

subsection requires the Secretary to establish expected program 

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ness of TRIO programs. Describes the purposes for which the measures are to be used. Permits local grant recipients to establish local 

performance measures. 

Amends section 402A(d) by amending paragraph (2). The new 

paragraph establishes criteria to be used by the Secretary in selecting grant recipients. Further amends section 402A(d) by striking 

subparagraph (A) of paragraph (3) and inserting a new subparagraph (A) that requires the Secretary to use the performance measures to evaluate each applicant’s prior experience in achieving expected program outcomes. Further amends section 402A(d) by inserting a new subparagraph (C) in paragraph (3) that prohibits the 

Secretary from awarding prior experience points to any current 

grantee that failed to meet certain criteria. Further amends section 

402A(d) by amending subparagraph (B) of paragraph (4) to prohibit 

the Secretary from providing assistance to an entity if the Secretary has determined that such entity has been involved in fraud. 

Amends section 402A(e) by amending paragraph (3) with regards 

to the provision of technical assistance by the Secretary to applicants for grants under the TRIO programs. 

Rewrites section 402A(f) to require the Secretary to establish 

uniform reporting requirements and require each recipient of funds 

to annually submit information the Secretary deems necessary. Requires the Secretary to submit a report to the authorizing committees of Congress at least once every two years. Describes what is 

to be included in the report. 

Amends section 402A(g) to permit the Secretary to use no more 

than one half of 1 percent of funds appropriated for TRIO to support the administration of the programs. 

Amends section 402B by inserting a new subsection (d) that requires the Secretary to consider the college-going rate of participants in programs provided by the grantee and compare that to the 

rates of other applicants eligible to receive consideration of prior 

experience when considering a grantee’s past performance and 

prior experience. 

Amends section 402C by inserting a new subsection (f) that requires the Secretary to consider the college-going rate of participants in programs provided by the grantee and compare that to the 

rates of other applicants eligible to receive consideration of prior 

experience when considering a grantee’s past performance and 

prior experience. 

Amends section 402D by inserting a new subsection (e) that requires the Secretary to consider the college-going rate of participants in programs provided by the grantee and compare that to the 

rates of other applicants eligible to receive consideration of prior 

experience when considering a grantee’s past performance and 

prior experience. 

Amends section 402E by inserting a new subsection (f) that requires the Secretary to consider the college-going rate of participants in programs provided by the grantee and compare that to the 

rates of other applicants eligible to receive consideration of prior 

experience when considering a grantee’s past performance and 

prior experience. 

Amends section 402F by inserting a new subsection (d) that requires the Secretary to consider the college-going rate of participants in programs provided by the grantee and compare that to the 

239 

rates of other applicants eligible to receive consideration of prior 

experience when considering a grantee’s past performance and 

prior experience. 

Rewrites section 402G to authorize the Secretary to make grants 

to institutions of higher education and other entities to provide 

training and technical assistance for staff and leadership personnel 

participating in TRIO programs for the purpose of improving the 

operations of the programs. Outlines the areas in which training 

should be provided. Requires the Secretary to consult with regional 

and State professional associations with knowledge of TRIO programs before issuing grants. 

Rewrites section 402H to require the Secretary to make grants 

or enter into contracts with organizations to evaluate the effectiveness of the programs and disseminate information on the impact of 

the programs. Outlines the areas of effectiveness to be measured. 

Requires the Secretary to submit to the authorizing committees of 

Congress an annual interim report on the progress of the evaluations within two years of the date of enactment of this Act and a 

final report no later than three years following the date of enactment. Requires all reports and underlying data to be made publicly 

available upon request. 

Section 404. GEARUP 

Amends section 404A(b) to establish the duration of the grant as 

six years. 

Amends section 404A by inserting a new subsection (d) to ensure 

that entities currently receiving a grant may reapply once the 

grant expires. 

Amends section 404B to allow services to be provided to students 

during their first year of college. 

Amends section 404D to allow services to be provided to students 

during their first year of college. 

Amends section 404C(a) to require applications for grants to include a description of activities in place to coordinate, complement, 

and enhance services provided by other State entities. 

Amends section 404D(b) to include financial and economic literacy within the counseling provided. 

Further amends section 404D by inserting a new subsection (e) 

to make homeless or unaccompanied youth under section 725 of the 

McKinney-Vento Act eligible to participate in the Talent Search, 

Upward Bound, Student Support Services, and Educational Opportunity Centers programs. 

Amends section 404H to increase the authorization level and extend the authorization through 2011. 

Section 405. Federal Supplemental Educational Opportunity Grants 

Amends 413A(b) to increase the authorization level and extend 

the authorization through 2011. 

Amends section 413C(c) to ensure that institutions give priority 

for supplemental grants to students who receive Pell Grants and 

meet the requirements under section 484, and that no more than 

10 percent of an institution’s funds go to students who did not receive a Pell Grant in a prior year. 

Amends section 413D(a) to phase out of the base guarantee beginning in fiscal year 2007. Further amends section 413D(a) to 

240 

allow the Secretary, should the allocation exceed $700,000,000 for 

fiscal year 2008 or any succeeding fiscal year, to allocate not more 

than 10 percent of such funds to institutions with at least 10 percent of students receiving Federal Pell Grants and that meet certain graduate rate criteria for Pell Grant-receiving students depending on the type of institution. 

Amends section 413D(c) to increase the books and supplies allowance to $600. 

Section 406. LEAP 

Amends section 415A(b) to extend the authorization through 

2011. 

Section 407. HEP/CAMP program 

Amends section 418A(b) to expand recruitment services to include those with a spouse who is a migrant or seasonal farm worker. Further amends section 418A(b) to include preparation for college entrance exams and child care and transportation among the 

supportive services provided. Further amends section 418A(b) to 

allow up to two percent of funds to be used for follow up and reporting. 

Amends section 418A(c) to expand outreach and recruitment 

services to include those with a spouse who is a migrant or seasonal farm worker. Further amends section 418A(c) to include economic education or personal finance counseling among the services 

provided. Further amends section 418A(c) to specify that mentoring 

and guidance should be included among the follow up services provided. Further amends section 418A(c) to encourage the transfer of 

those in a program of two years or less to a four year institution. 

Amends section 418A(h) to increase the high school equivalency 

program authorization to $24,000,000 and extend the authorization 

to 2011. Further amends section 418A(h) to increase the college assistance migrant program authorization to $16,000,000 and extend 

the authorization to 2011. 

Section 408. Robert C. Byrd Honors Scholarships Program 

Amends subpart 6 of part A by rewriting the subpart. 

Section 419A authorizes the Robert C. Byrd Mathematics and 

Science Honors Scholarship Program. States the purposes of the 

section and defines the terms ‘‘Computer Science,’’ ‘‘Eligible Student,’’ ‘‘Engineering,’’ ‘‘Life Sciences,’’ ‘‘Managing Agent,’’ ‘‘Mathematics,’’ and ‘‘Physical Sciences.’’ Authorizes the Secretary to make 

a five year award to a private, non-profit organization to manage 

a program of Mathematics and Science Honors Scholarships under 

this section. Outlines requirements for the Federal contribution to 

the scholarships and the maximum scholarship award. Permits the 

Secretary to establish eligibility criteria and operational standards 

for the managing agent, and review and revise those criteria as 

necessary. Permits the Secretary to terminate the agreement if the 

managing agent fails to meet the requirements and requires the 

Secretary to conduct outreach efforts to raise awareness of the 

scholarships. Outlines the duties of the managing agent. Outlines 

the requirements for submitting an application. Outlines several 

responsibilities of students for receiving and maintaining a scholarVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00244 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
241 

ship. Outlines the responsibilities of institutions of higher education. 

Section 419B authorizes the Mathematics and Science Incentive 

Program. Authorizes the Secretary to carry out a program of assuming the obligation to pay, pursuant to the provisions of this section, the interest on a loan made, insured, or guaranteed under 

parts B and D of title IV. Outlines the eligibility criteria for inclusion in the program. Outlines limitations on the obligations the 

Secretary is permitted to assume. Outlines the responsibilities of 

the Secretary in selecting program participants. Subjects the payment of interest under this section to the availability of appropriations. Outlines the period during which the Secretary is required 

to pay interest on behalf of the borrower. Requires the Secretary 

to pay to each eligible lender or holder for each payment period the 

amount of interest that accrues on a loan. Outlines the application 

procedures for eligible borrowers. Defines criteria for including a 

consolidation loan in this program. Prohibits the receipt of benefits 

under this program and several others. Defines the terms ‘‘High 

Need Local Educational Agency’’ and ‘‘Mathematics, Science, or Engineering Professional.’’

Section 419C authorizes the Mathematics and Science Education 

Coordinating Council Grants program. Outlines the purposes of the 

program and defines the terms ‘‘Eligible State’’ and ‘‘Mathematics 

and Science Education Coordinating Council.’’ Authorizes the Secretary to use not more than $5 million to award competitive grants 

to eligible States for the purposes of carrying out activities under 

this section. Outlines the authorized uses of funds. Outlines the application process. Requires the Governor of a State, or the State entity described in section (b)(1)(B) to consult with a variety of State 

entities with respect to the activities undertaken under this section. Outlines several administrative provisions related to the 

awarding of grants under this section. Requires States that receive 

a grant under this section to submit an annual accountability report to the Secretary. Requires the Secretary to evaluate the activities funded under this section and report his or her findings to the 

authorizing committees of Congress. Also requires the Secretary to 

broadly disseminate successful practices developed under this section. Prohibits the Secretary for making the grant payment for 

more than two years if he or she determines that the State is not 

making substantial progress in meeting the goals required under 

this section. 

Section 419D authorizes $41 million for this subpart for fiscal 

year 2006 and such sums for the five succeeding years. 

Section 409. Child Care Access 

Amends section 419N(g) to extend the authorization to 2011. 

Section 410. Learning Anytime Anywhere Partnerships 

Repeals subpart 8 of part A. Amends section 400(b) to make a 

conforming amendment. 

242 

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Section 421. Reauthorization of Federal Family Education Loan 

program 

Amends section 421(b) to reference loan processing and issuance 

fee rather than administrative cost allowance. 

Amends section 424(a) to extend Federal insurance on student 

loans to 2012. Further amends section 424(a) to extend Federal insurance on student loans for students who have other loans under 

this part and are continuing their education through 2016. 

Amends sections 428(a) and 428C(e) to continue the authorization for the guaranteed and consolidation loan programs. 

Section 422. Loan limits 

Amends sections 425(a) and 428(b) to increase the maximum annual loan limits for freshmen from $2,625 to $3,500 and for sophomores from $3,500 to $4,500. 

Amends section 428C(a) by inserting a new clause (ii) in paragraph (3)(B)to clarify that the underlying loans in a consolidation 

loan will count against a borrower’s aggregate borrowing limits. 

Establishes that amendments made by this section will apply to 

loans made, insured, or guaranteed under part B or part D beginning July 1, 2007. 

Section 423. Interest rates and special allowances 

Amends section 427A(k) to repeal the interest rate change to a 

fixed interest rate scheduled to take effect in 2006. 

Amends section 427A by striking subsection (l) with regards to 

interest rates for new loans on or after July 1, 2006. 

Amends section 455(b) to repeal the interest rate change to a 

fixed interest rate scheduled to take effect in 2006. Further amends 

section 455(b) by striking paragraph (7) with regards to interest 

rates for new loans on or after July 1, 2006. 

Further amends section 427A(k) by specifying in the heading of 

paragraph (4) that the paragraph applies to loans made before July 

1, 2006. Further amends section 427A(k) by inserting a new paragraph (5) to provide borrowers a choice between a variable rate and 

a fixed rate for all consolidation loans made on or after July 1, 

2006. Establishes how the interest rates will be determined and establishes an interest rate cap. 

Amends section 455(b) by specifying in the heading of subparagraph (D) of paragraph (6) that the subparagraph applies to loans 

made before July 1, 2006. Further amends section 455(b) by inserting a new subparagraph (E) in paragraph (6) to provide borrowers 

a choice between a variable rate and a fixed rate for all consolidation loans made on or after July 1, 2006. Establishes how the interest rates will be determined and establishes an interest rate cap. 

Makes technical amendment to section 428C. 

Makes technical and conforming amendments to section 438(b). 

Further amends section 438(b) by striking clauses (v), (vi), and (vii) 

and inserting a new clause (v) in subparagraph (I) of paragraph (2) 

that requires the annual return of excess interest to the Federal 

treasury, outlines how the excess interest is to be calculated, and 

defines the term ‘‘special allowance support level.’’ States that the 

243 

amendments made to this subsection do not apply to any loans 

made under this section before July 1, 2006. 

Section 424. Additional loan terms and conditions 

Amends section 428(b) by inserting a new subparagraph (H) in 

paragraph (1) to require guaranty agencies to collect a single insurance premium equal to no more than 1 percent of the loan principal for loans for which the first disbursement of principal is made 

before July 1, 2006, or for the collection and deposit into the Federal Student Loan Reserve Fund of a Federal default fee of 1 percent of the loan principal for loans made on or after July 1, 2006. 

Further amends section 428(b) in paragraph (N) to require the disbursement of loan funds to students attending foreign schools to be 

sent to the institution but made payable to the student. Also requires the endorsement or other certification by the student. Further amends section 428(b) to prohibit the Secretary from restricting the proportions or ratios by which payments may be graduated 

with the informed agreement of the borrower. Further amends section 428(b) by inserting a new clause (iv) in subparagraph (A) of 

paragraph (9) to provide for an interest only repayment plan, so 

long as the interest amounts to at least $600, for the first two 

years of repayment. 

Amends section 428H(h) to require guaranty agencies with agreements with the Secretary under section 428(b)(1) to, in lieu of the 

insurance premium, collect and deposit into the Federal Student 

Loan Reserve Fund a Federal default fee of 1 percent of the loan 

principal for loans made on or after July 1, 2006. 

Amends section 428A(a) by inserting a new subparagraph (C) in 

paragraph (1) to prohibit the Secretary from waiving the Federal 

default fee under sections 428(b)(1)(H) and 428H(h). 

Amends section 428B(a)(1) by inserting a new subparagraph (C) 

in paragraph (3) to ensure parents who have been convicted of 

fraud have paid off their student loans before they are able to take 

out additional loans. 

Amends section 455(d) to make technical and conforming amendments to align repayment plans in part D with repayment plans 

in part D. 

Amends section 438(c) by inserting a new subparagraph heading 

in paragraph (2) to read: ‘‘(A) In General—.’’ Further amends section 438(c) by inserting a new subparagraph (B) within paragraph 

(2) to gradually reduce origination fees paid by students to 0 percent by 2010 for loans, except consolidation loans, made under part 

B. 

Amends section 455(c) to reduce origination fees to 1 percent by 

2010 for loans, except PLUS loans and consolidation loans, made 

under part D. Further amends section 455(c) by prohibiting the 

Secretary from waiving any amount of the loan fee prescribed 

under this section as part of a repayment incentive. Also prohibits 

the Secretary from providing any repayment incentive before a borrower enters repayment. 

Further amends section 438(c) by inserting a new paragraph (9) 

that establishes a fixed rate offset charge in an amount not to exceed 0.5 percent of the principal for consolidation loans. 

244 

Further amends section 455(c) by inserting a new paragraph (4) 

that establishes a fixed rate offset charge in an amount not to exceed 0.5 percent of the principal for consolidation loans. 

Section 425. Consolidation loan changes 

Amends section 428C(a) to terminate a student’s status as an eligible borrower under this section and section 455(g) upon the receipt of a consolidation loan. Further amends section 428C(a) by inserting a new subclause (V) in clause (i) of subparagraph (B) of 

paragraph (3) to allow a student who has already consolidated 

their loan to obtain a subsequent Direct Loan consolidation loan 

only 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. Further amends section 428C(a) to include 

a cross-reference to section 428(b)(7)(A) in subclause (I) of clause 

(ii) of subparagraph (3). Further amends section 428C(a) by striking subparagraph (C) of paragraph (3) with regards to spousal consolidation. 

Amends section 428C(b) to require the Secretary to offer any eligible borrower that is denied a consolidation loan, or a consolidation loan with income-sensitive repayment terms, by an eligible 

lender under subsection (a)(1) of this section, a direct consolidation 

loan if the eligible borrower submits an application. The Secretary 

is required to offer such loans to a borrower who has defaulted so 

that the borrower may resolve the default. Further amends section 

428C(b) by requiring lenders of consolidation loans to have an eligible borrower certify, if all of his or her loans are held by a single 

holder, that he or she has notified that holder of his or her interest 

in receiving a consolidation loan and strikes language that required 

borrowers with a single holder to consolidate with that holder. Further amends section 428C(b) by striking an outdated references to 

a minimum loan balance required for consolidation. Further 

amends section 428C(b) by inserting a new subparagraph (F) in 

paragraph (1) that requires the consolidating lender to provide a 

borrower with a clear and conspicuous notice of the effects of consolidation on a borrower’s total interest to be paid, fees and length 

of repayment; the effects of consolidation on a borrower’s underlying loan benefits; the ability of the borrower to pre-pay the loan, 

pay on a shorter schedule, change repayment plans, and information making clear how borrower benefit programs may vary among 

lenders and loan holders; the tax benefits for which the borrower 

might be eligible; the consequences of default; and that by applying 

for the consolidation loan, the borrower is not obligated to take the 

loan. 

Amends section 428(b) to require the repayment period to begin 

the day after 6 months after the date the student ceases to carry 

at least on-half the normal full-time academic workload as determined by the institution. 

Establishes the effective date for the amendments under subsection (a)(2)(A) of this section of H.R. 609 as July 1, 2006. 

Amends sections 455(a) and 455(g) to align consolidation loans 

under part D with the requirements of this section. 

245 

Section 426. Deferment of student loans for military service 

Amends section 428(b) by inserting a new clause (iii) in subparagraph (M) of paragraph (1) to provide loan deferments for up to 

three years for individuals serving on active duty or performing 

National Guard duty during a war or other military operation or 

emergency. 

Amends section 455(f) by inserting a new subparagraph (C) in 

paragraph (2) to provide loan deferments for up to three years for 

individuals serving on active duty or performing National Guard 

duty during a war or other military operation or emergency. 

Amends section 464(c) by inserting a new clause (iii) in subparagraph (A) of paragraph (2) to provide loan deferments for up to 

three years for individuals serving on active duty or performing 

National Guard duty during a war or other military operation or 

emergency. 

Amends section 481 by inserting a new subsection (d) that defines the terms ‘‘Active Duty,’’ ‘‘Military Operation,’’ ‘‘National 

Emergency,’’ ‘‘Serving on Active Duty,’’ and ‘‘Qualifying National 

Guard Duty.’’

States that nothing in these amendments authorizes the refunding of any repayment on a loan. 

Establishes the effective date for these amendments as July 1, 

1993. 

Section 427. Loan forgiveness for service in areas of national need 

Rewrites section 428K to amend the Loan Forgiveness for Child 

Care Providers program. Renames the program the Loan Forgiveness for Service in Areas of National Need program. Outlines the 

purposes of the section. Authorizes the Secretary to assume the obligation to repay a qualified loan amount for a loan made, insured, 

or guaranteed under this part or part D (excluding PLUS and consolidated loans) by a borrower who has been employed full-time for 

at least five consecutive complete school, academic, or calendar 

years in an area of national need, and is not in default on a loan 

for which the borrower seeks forgiveness. Forgiveness is awarded 

on a first-come, first-served basis subject to the availability of appropriations. Identifies the areas of national need as being early 

childhood educators, nurses, foreign language specialists, librarians, highly qualified teachers of bilingual education in low-income 

communities, first responders in low-income communities, child 

welfare workers, and speech-language pathologists. Provides the 

Secretary the authority to designate the areas of national need. Establishes the qualified loan amount as being not more than $5,000. 

Prohibits a borrower from receiving a benefit for the same service 

under both this section and subtitle D of title I of the National and 

Community Service Act of 1990. Prohibits a borrower from receiving a reduction of loan obligations under both this section and sections 428J or 460. Defines the terms ‘‘Child Care Facility,’’ ‘‘Critical 

Foreign Language,’’ ‘‘Early Childhood Educator,’’ ‘‘Eligible Preschool Program,’’ ‘‘Low-Income Community,’’ ‘‘Nurse,’’ and ‘‘SpeechLanguage Pathologist.’’ Authorizes such sums as may be necessary 

for fiscal years 2006–2011. 

246 

Section 428. Unsubsidized Stafford Loans 

Amends section 428H(d) to increase the maximum annual loan 

limits for unsubsidized loans for graduate students from $10,000 to 

$12,000. 

States that this amendment will apply to loans made on or after 

July 1, 2007. 

Section 429. Elimination of termination dates from Taxpayer-Teacher Protection Act of 2004 

Amends section 438(b) as amended by the Taxpayer-Teacher Protection Act of 2004 to eliminate the termination dates for special 

allowance payments. Further amends section 438(b) by inserting a 

new clause (vi) in subparagraph (B) of paragraph (2) to require the 

quarterly rate of the special allowance to be the rate determined 

under subparagraphs (A), (E), (F), (G), (H), or (I) for a holder of 

loans that were made or purchased on or after October 1, 2005, or 

for a holder of loans that were not earning a quarterly rate of special allowance determined in this subsection as of October 1, 2005. 

Amends section 3(b) of the Taxpayer-Teacher Protection Act of 

2004 by striking paragraph (3) with regards to the effective date 

for new borrowers to be eligible for loan forgiveness. 

Amends section 428J(a) by including a cross-reference to a new 

subsection (g)(3). 

Amends section 428J(c) by inserting a new subparagraph (C) in 

paragraph (3). The new subparagraph (C) includes elementary or 

secondary school teachers who primarily teach reading. To qualify, 

such teachers must meet the requirements of subsection (b) of this 

section, have obtained a separate reading instruction credential 

from the State in which the teacher is employed and be certified 

by the chief administrative officer of the public or non-profit private elementary or secondary school in which the borrower is employed to teach reading as being proficient in teaching the essential 

components of reading instruction and as having such credential. 

Amends section 428J(g) by inserting a new paragraph (3) to establish guidelines for private school teachers to qualify under this 

section for the loan forgiveness. 

Amends section 460(a) by inserting a cross-reference to a new 

subsection (g)(3). 

Amends section 460(g) by inserting a new paragraph (3) to establish guidelines for private school teachers to qualify under this section. 

Section 430. Additional administrative provisions 

Amends section 428(b) to require 100 percent insurance on ‘‘exempt claims.’’ Further amends section 428(b) by changing the insurance rate from 98 percent to 96 percent in the case of a loan 

for which the first disbursement of principal is made or on after 

July 1, 2006. 

Amends section 428(c) by inserting a new subparagraph (G) in 

paragraph (1) to require 100 percent reinsurance on ‘‘exempt 

claims’’ and define ‘‘exempt claims’’ under this new subparagraph. 

Further amends section 428(c) by inserting a new subparagraph 

(H) in paragraph (1) to reduce the reinsurance rate from 95 percent 

to 93 percent for loans for which the first disbursement of principal 

is made on or after July 1, 2006 described in subparagraphs (A) 

247 

and (B). Further amends section 428(c) to eliminate the requirement that forbearance agreements be documented in writing. Further amends section 428(c) by inserting a new paragraph (10) that 

requires forbearance agreements to be recorded and confirmed with 

the borrower. Further amends section 428(c) by inserting a heading 

for clause (i) in paragraph (2)(A) and inserting a new clause (ii) to 

require the guaranty agreements to include requirements establishing procedures to preclude consolidation lending from being an 

excessive proportion of guaranty agency recoveries on defaulted 

loans. Further amends section 428(c) by amending a cross-reference 

by redesignating certain subparagraphs as clauses, and by adding 

new subparagraphs (B) and (C). The new subparagraphs require 

guaranty agencies, beginning October 1, 2006, to not charge collection costs that are more than 18.5 percent of the outstanding principal and interest of a defaulted loan that is paid off through consolidation; return to the Secretary a portion of the collection charge 

equal to 8.5 percent of the outstanding principal and interest of 

such defaulted loan; and, beginning October 1, 2009, to return to 

the Secretary the entire amount charged with respect to each defaulted loan that is paid off with excess consolidation proceeds. The 

new subparagraphs also define the term ‘‘excess consolidation proceeds.’’ Amends section 428I which outlines the rules for exceptional performance. States that the Secretary is required to designate eligible 

lenders and servicers that meet certain performance measures for 

exceptional performance, and to notify the guaranty agencies of the 

lenders and servicers receiving the designation. Outlines the performance measures eligible lenders and servicers must meet to receive the designation. Requires each guaranty agency to provide 

the Secretary with other information in its possession regarding 

lenders and servicers requesting the exceptional performance designation from the Secretary. Outlines the basis for the Secretary’s 

decision. States that any lender or servicer designated for exceptional performance as of the day before the date of enactment of 

the College Access and Opportunity Act of 2005 shall continue to 

be so designated and subject to the requirements of this section as 

in effect on that day until the performance standards described in 

this section are established. Prohibits the Secretary from designating any additional lenders or servicers until the new performance standards are established. Requires guaranty agencies to pay, 

to each eligible lender or servicer, 98 percent of the unpaid principal and interest of all loans for which claims are submitted for 

payment by that eligible lender or servicer for the one year period 

following the receipt by the guaranty agency of the notification of 

designation under this section, or until the guaranty agency receives notice from the Secretary that the designation of the lender 

or servicer has been revoked. Requires the Secretary to revoke the 

exceptional performance designation if a lender or servicer fails to 

meet the performance standards, gained the designation through 

fraud, or is failing to operate in accordance with regulations. States 

that this section does not limit the ability of guaranty agencies to 

require the submission of claims documentation evidencing servicing performed on loans, except that the guaranty agency may not 

require greater documentation than that required for lenders and 

servicers not receiving the exceptional performance designation. 

248 

States that loans reimbursed under this section will not be subject 

to additional review by the Secretary or repurchase by the guaranty agency unless a determination is made by the Secretary that 

the lender or servicer engaged in fraud or other purposeful misconduct in obtaining the exceptional performance designation. 

Grants the Secretary the authority to terminate the exceptional 

performance designation of lenders and servicers if he or she determines that the termination would be in the best interests of the 

United States. Defines the terms ‘‘Eligible Loan’’ and ‘‘Servicer.’’

Establishes the effective date of these amendments as July 1, 2006. 

Makes additional technical amendments. 

Amends section 428A(a) by striking the authority of the Secretary to waive the prohibition on inducements under certain circumstances within the Voluntary Flexible Agreements (VFA). 

Amends section 428A(c) by striking the existing paragraph (3) 

and inserting a new paragraph (3) that requires the Secretary to 

publish notification in the Federal Register of any new agreements 

and allow public comment on the proposed agreement prior to final 

approval. 

Amends section 428B(a)(1) by adding at the end, a new subparagraph which requires parents convicted of or who have plead guilty 

to a crime involving fraud in obtaining funds under this title complete repayment of the funds to the Secretary before they are eligible to receive additional funds. 

Amends section 428F(a) to strike the requirement for 12 months 

of consecutive payments and insert a requirement for nine payments made within 20 days of the due date during 10 consecutive 

months. Further amends section 428F(a) by inserting a new subparagraph (C) of paragraph (1) to codify the collection costs permissible for rehabilitated loans at up to 18.5 percent of the outstanding principle and interest of the loan. 

Amends section 428F by inserting a new subsection (c) that requires, where appropriate, each program described under subsection (b) of section 428F to make available financial and economic 

education materials for the borrower. 

Amends section 432(k) to require the Secretary to provide financial and economic education and counseling. 

Amends section 430A(a) to require loan holders to report loan information to all national credit bureaus. 

Amends section 432(l) to include the anticipated graduation date. 

Amends section 432 by striking subsection (n) with regards to 

Default Reduction Management. 

Amends section 435(d) by amending paragraph (2) to establish 

new requirements for institutions to become an eligible lender in 

the FFEL program. Establishes that an eligible institution is permitted to use a portion of the proceeds from special allowance payments, interest payments from borrowers, interest subsidies from 

the Department, and any proceeds from the sale or other disposition of loans for need based aid and reasonable, direct administrative expenses. Requires an institution to ensure that the proceeds 

received under this paragraph are used to supplement, and not 

supplant, non-Federal funds that would otherwise be used for needbased grant programs. Prohibits schools from acting as PLUS lenders and as lenders to undergraduate students. 

249 

Amends section 437(a) to state that a borrower who has been certified as permanently and totally disabled by the Department of 

Veteran Affairs or the Social Security Administration will not be 

required to present further documentation. 

Amends section 437(c) to include a parent’s eligibility within the 

false certification section. 

Amends section 439(d) by striking paragraph (3) with regards to 

the perfection of security interests in student loans. 

Amends section 428(a) by inserting a new subclause (III) of 

clause (v) of subparagraph (A) of paragraph (3) to prohibit a lender 

from receiving interest on a loan disbursed through an escrow 

agent for any period that precedes the date that is 3 days before 

the first disbursement of the loan. 

Further amends section 428(c) by requiring a guaranty agency to 

file a claim for reimbursement with respect to losses under this 

subsection within 30 days after the agency discharges its insurance 

obligation on the loan rather than 45 days. 

Amends section 428(i) by amending from 21 days to 10 the 

timeline for lenders to make payments into the escrow account 

prior to the date of the disbursement of the installment to the borrowers. 

Amends section 428G(e) by striking the reference that limits the 

applicability of this subsection to foreign institutions. 

Amends section 428H(e) by striking paragraph (6) and inserting 

a new paragraph (6) to prohibit a lender from receiving interest on 

a loan under this section for any period that precedes the dates described in section 428(a)(3)(A)(v). 

Amends section 438(b) to require the daily interest to be computed using the interest rate described in section 3902(a) of title 

31, United States Code. 

Makes technical amendments. 

PART C—FEDERAL WORK-STUDY PROGRAMS

Section 441. Authorization of appropriations 

Amends section 441(b) by extending the authorization through 

2011. 

Section 442. Community service 

Amends section 441(c) to remove the requirement that eligible 

child care services be open and accessible to the community. 

Section 443. Allocation of funds 

Amends section 442(a) to phase out of the base guarantee beginning in fiscal year 2007. Further amends section 442(a) to permit 

the Secretary, should the allocation for this program exceed 

$700,000,000, to allocate not more than 10 percent of the excess to 

eligible institutions with at least 10 percent of students receiving 

Federal Pell Grants and that meet certain graduate rate criteria 

for Pell Grant-receiving students depending on the type of institution. 

Establishes the effective date for the amendments made here and 

funds appropriated under section 441(441b) as 2008. 

250 

Section 444. Books and supplies 

Amends section 442(c) by increasing the books and supplies allowance to $600. 

Section 445. Job location and development 

Amends section 446(a) to increase the amount and percentage of 

funds eligible for job location and development programs to 15 percent or $75,000, which ever is less. Further amends section 446(a) 

to specify that at least one-third of this amount must be specifically 

allocated to locate and develop community service jobs. 

Section 446. Work college 

Amends section 448 to strike ‘‘work-learning’’ and ‘‘work-service’’

and insert ‘‘work-learning-service.’’

Amends section 448(e) with regards to the definition of ‘‘work-college.’’ Further amends section 448(e) by striking ‘‘work-learning’’

and inserting ‘‘work-learning-service’’ in paragraph (2) and amending the definition of ‘‘comprehensive student work-learning-service’’

in paragraph (2). 

Amends section 448(f) by extending the authorization through 

2011. 

PART D—FEDERAL DIRECT LOAN PROGRAM

Section 451. Reauthorization of the Direct Loan program 

Amends section 458(a) by increasing the authorization each year 

and extending the authorization through 2011. 

Amends section 458(b) by establishing that the calculation basis 

will be 0.10 percent of the original principal amount of outstanding 

loans on which insurance was issued under part B. 

Amends section 458(c) by striking subparagraphs (A) through (E) 

of paragraph (1) and inserting new subparagraphs (A) through (F) 

that establish new account maintenance fee caps. 

Amends section 455(e) to strike the requirement that the borrower files a Federal income tax return jointly with his or her 

spouse. 

PART E—FEDERAL PERKINS LOAN PROGRAM

Section 461. Reauthorization of programs 

Amends section 461(b) to extend the authorization of the program through 2012. Further amends section 461(b) to extend the 

authorization for loans to students to continue or complete courses 

of study through 2017. 

Amends section 466 to extend the time frame after which an institution would have to return funds to the Secretary. 

Amends section 462(a) to phase out of the base guarantee beginning in fiscal year 2008. 

States that the effective date for the amendments to section 

462(a) will be fiscal year 2008. 

Amends section 462(c) to increase the books and supplies allowance to $600. 

251 

Section 462. Loan terms and conditions 

Amends section 464(a) to increase the annual maximum loan 

limits from $4,000 to $5,500 for undergraduates and from $6,000 

to $8,000 for graduate or professional students. Further amends 

section 464(a) to increase the aggregate loan limits for undergraduates from $20,000 to $27,500 and for graduate and professional students from $40,000 to $60,000. Further amends section 464(a) to 

increase the aggregate loan limits for students not otherwise covered under this paragraph from $8,000 to $11,000. 

Amends section 464(e) to strike the requirement that a borrower 

must request forbearance in writing. 

Amends section 464(f) to strike the terms schools must meet to 

allow compromise payments on defaulted loans; prohibits compromise payments on defaulted loans unless the Secretary grants 

approval. 

Amends section 464(h) to lower from 12 to nine the number of 

consecutive payments that are required to be made for a loan to 

be considered rehabilitated. 

Section 463. Loan cancellation 

Amends section 465(a) by striking clause (iii) of subparagraph (A) 

of paragraph (3) with regards to the percentage of loan forgiveness 

for members of the Armed Forces. Further amends section 465(a) 

by allowing for loan forgiveness for members of the Armed Forces 

at the same rate as is provided teachers who teach in a title I local 

educational agency; special education teachers; law enforcement officers; teachers in math, science, foreign languages, bilingual education, or other high need areas as defined by the State educational 

agency; nurses or medical technicians; and employees of a public or 

private nonprofit child or family service agency. 

Section 464. Technical amendments 

Amends section 462(g) to clarify that consecutive payments are 

consecutive monthly payments. 

Amends section 463(a) to require the Secretary to carry out the 

provisions of paragraph (4)(A). The Secretary is now only permitted 

to carry out these provisions. 

Amends section 464(c) to correct incorrect designations. 

Amends section 465(a) to correct a cross-reference. Further 

amends section 465(a) by making a technical correction. 

Amends section 467(b) to correct a cross-reference. 

Amends section 469(c) to correct cross-references to the Individuals with Disabilities Education Act. 

PART F—NEED ANALYSIS

Section 471. Significantly simplifying the student aid application 

process 

Amends section 479(b) by striking clause (i) of subparagraph (A) 

of paragraph (1) and inserting a new clause (i) to redefine the requirements a dependent student must meet to be eligible to file the 

simplified needs test. Further amends section 479(b) by striking 

clause (i) of subparagraph (B) of paragraph (1) to redefine the requirements an independent student must meet to be eligible to file 

the simplified needs test. 

252 

Amends section 479(c) by striking subparagraph (A) of paragraph 

(1) and inserting a new subparagraph (A) to redefine the characteristics a dependent student must meet in order to be considered as 

having an expected family contribution of zero. Further amends 

section 479(c) by striking subparagraph (A) of paragraph (2) and 

inserting a new subparagraph (A) to redefine the characteristics an 

independent student must meet in order to be considered as having 

an expected family contribution of zero. 

Amends section 479 by inserting new subsections (d) and (e) to 

define the term ‘‘Means-Tested Federal Benefit Program’’ and require the Secretary to regularly evaluate the impact of the eligibility guidelines in this section to ensure that the simplified needs 

test continues to be targeted to the maximum number of low- and 

moderate-income students. 

Amends section 483(a) by striking paragraphs (1), (2), and (5) 

and redesignating certain paragraphs. Further amends section 

483(a) by inserting new paragraphs (1) through (8). Paragraph (1) 

requires the Secretary to cooperate with student financial assistance organizations to produce, distribute, and process free of 

charge common financial reporting forms to be used for determining financial need and eligibility. The forms should be in both 

paper and electronic format and should be referred to as ‘‘Free Application for Federal Student Aid’’ or ‘‘FAFSA.’’ Paragraph (2) requires the Secretary to permit applicants to complete such forms 

in the years prior to enrollment in order to obtain a non-binding 

estimate of the family contribution, and requires the Secretary to 

evaluate the differences between the estimates and the actual determinations two years after this paragraph is implemented and 

submit a report to the authorizing committees of Congress on the 

results of the evaluation. Paragraph (3) requires the Secretary to 

develop a common paper form and an EZ–FAFSA for students with 

an expected family contribution of zero. Outlines what is to be included in the EZ–FAFSA. Requires the Secretary to encourage applicants to use the electronic FAFSA forms that the Secretary must 

maintain. Outlines how the Secretary must maintain the electronic 

forms. Requires the Secretary to report annually to Congress on 

the impact of the digital divide on students completing applications 

for title IV aid and steps being taken to eliminate the divide. Paragraph (4) requires the Secretary to develop a common electronic 

form. Outlines what is to be included on the form. Requires the 

Secretary to develop a simplified electronic application for students 

with an expected family contribution of zero. Outlines what is to 

be included on the simplified form. Requires the Secretary to ensure that electronic data collection protects applicants’ privacy and 

permits the Secretary to allow electronic forms to be submitted 

without a signature if the signature is subsequently submitted by 

the applicant. Paragraph (5) requires the Secretary to develop a 

streamlined reapplication process. The Secretary is also required to 

continue reducing the data elements on the FAFSA and report on 

this to Congress. Paragraph (6) requires the Secretary, in consultation with Sate agencies, to include on the forms such State- specific 

data items as the Secretary determines are necessary. Requires the 

Secretary to conduct an annual review. Requires the Secretary to 

encourage States to take steps to encourage the use of simplified 

application forms. Requires the Secretary to annually publish in 

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the Federal Register a notice requiring State agencies to inform the 

Secretary if the State is unable to utilize the simplified application 

forms and the State-specific data that the State agency requires for 

delivery of State need-based aid. Requires State notification to the 

Secretary regarding the use of application forms. Requires the Secretary, if the State does not provide proper notice, to permit residents of the State to complete simplified forms and not require 

them to complete any data previously required by that State. Paragraph (7) prohibits the Secretary from charging students or parents 

for the use of the FAFSA in any of its forms. Requires the use of 

the FAFSA for determining need for aid under most title IV programs. Requires organizations that charge students and parents to 

assist them with the filing of a FAFSA to provide several notices 

regarding the nature of the FAFSA. Paragraph (8) requires the 

Secretary to initiate the processing of forms under this section as 

early as practicable prior to January 1 of the student’s planned 

year of enrollment. 

Amends section 482(a) to require proposed modifications, updates, and notices to be published in the Federal Register by March 

1. 

Amends section 483 by inserting a new subsection (e) to require 

the Secretary to utilize savings accrued by moving more applicants 

to the electronic form to improve access to the electronic forms for 

students with an expected family contribution of zero. 

Amends section 480(d) by striking paragraph (2) and inserting a 

new paragraph (2) with regards to include in the definition of 

‘‘Independent Student’’ any student who is an orphan, in foster 

care, or a ward of the court, or was in foster care or a ward of the 

court until the individual reached the age of 18. 

Section 472. Additional need analysis amendments 

Amends section 475(g) to increase the dependent student work protection allowance from $2,200 to $3,000 beginning July 1, 2006. 

Amends section 478(h) by striking an incorrect cross-reference 

and clarifying what expenses are allowable under the employment 

expense allowance. 

Amends section 479A(a) by inserting a new heading for the subsection and a new paragraph (1). Further amends section 479A(a) 

by inserting a new paragraph (2). Further amends section 479A(a) 

to include a student’s status as a ward of the court before turning 

18, a homeless or unaccompanied youth under section 725 of the 

McKinney-Vento Act, and an individual who was adopted at or 

after age 13 as special circumstances under the new paragraph (2). 

Further amends section 479A(a) by inserting new paragraphs (3) 

and (4) as technical amendments. 

Amends section 480(d) to treat active duty members of the military as independent students for purposes of need analysis. 

Amends section 480(e) by inserting a new paragraph (5) to exclude distributions from a qualified tuition program established 

under section 529 of the Internal Revenue Code of 1986 that is not 

included in gross income calculations under section 529. 

Amends section 480(f) with regards to the definition of assets by 

including qualified tuition programs established under section 529 

of the Internal Revenue Code of 1986. Further amends section 

480(f) by inserting a new paragraph (2) to clarify that qualified tuiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00257 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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tion programs under section 529 of the Internal Revenue Code of 

1986 will not be treated as an asset for a dependent student under 

section 475. The new paragraph (2) also clarifies how the value of 

a qualified tuition program will be calculated for the purposes of 

determining the assets of parents or independent students. 

Amends section 480(j) by striking ‘‘; Tuition Prepayment Plans’’

from the heading of the subsection, striking paragraph (2), and inserting language in paragraph (3) to exclude distributions from a 

qualified tuition program under section 529 of the Internal Revenue Code of 1986 that are not includable in gross income calculations from counting as a resource. Further amends section 480(j) by 

inserting a new paragraph (3) that excludes assistance not received 

under this title from both estimated financial assistance and cost 

of attendance, if that assistance is designated by the State providing that assistance to offset a specific component of the cost of 

attendance. This new paragraph also states that if the assistance 

is excluded from either estimated financial assistance or cost of attendance, it must be excluded from both. 

Further amends section 480(f) by inserting a new subparagraph 

(C) in paragraph (3) that exempts small businesses with 100 or 

fewer full-time or full-time equivalent employees that is owned or 

controlled by the family. 

PART G—GENERAL PROVISIONS RELATING TO STUDENT FINANCIAL

ASSISTANCE

Section 481. Definitions of academic year and eligible program 

Amends section 481(a) by amending paragraph (2) to reduce the 

30-week requirement for clock hour schools to 26 weeks. Further 

amends section 481(a) by granting the Secretary the authority to 

reduce the 30 week minimum for credit hour schools to 26 weeks 

as appropriate on a case-by-case basis. 

Amends section 481(b) by inserting a new paragraph (3) to include within the definition of eligible program an instructional program that utilizes direct assessment of student learning or recognizes the direct assessment of student learning by others in lieu of 

credit hours or clock hours as the measure of student learning. 

This eligibility determination must be made by the Secretary for 

institutions being deemed eligible for the first time. Requires the 

Secretary to provide an annual report to Congress identifying the 

programs made eligible under this paragraph. 

Section 482. Distance education 

Amends section 481(b) by inserting a new paragraph (4) to provide a definition of distance education as an eligible program for 

title IV purposes. 

Amends section 484(l) by striking the one year or longer program 

of study requirement for a telecommunication course to not be considered a correspondence course; and, by striking the requirement 

that less than 50 percent of an institution’s courses be telecommunications or correspondence courses in order for telecommunications courses to not be considered correspondence 

courses. Further amends section 484(l) by excluding institutions described in the Carl D. Perkins Vocational and Technical Education 

Act of 1998. 

255 

Section 483. Expanding information dissemination regarding eligibility for Pell Grants 

Amends section 483(a) by inserting a new paragraph (8) to require the Secretary to make a special effort to notify students and 

parents who qualify for free lunch, food stamps, or other such programs, of their potential eligibility for a maximum Pell grant. 

Section 484. Student eligibility 

Amends section 484(a) by inserting a new paragraph (6) that requires students who have plead guilty or no contest to a crime involving fraud in obtaining funds under this title, to have fully repaid the funds to the Secretary or to the holder of a loan before 

being considered eligible. 

Amends section 484(r) by striking paragraph (1) and inserting a 

new paragraph (1) to clarify that only those students enrolled and 

receiving student aid under title IV at the time of the conviction 

will lose student aid eligibility. 

Amends section 484(j) to clarify that students from the freely associated states will only be eligible for Pell Grants. 

Amends section 484(q) to include a specific reference to the Internal Revenue Code of 1986 to define what information the Secretary 

will have access to. 

Amends section 484(b) to include incarcerated parents among 

those not eligible for Federal loans. Further amends section 484(b) 

by prohibiting a student who is subject to an involuntary civil commitment upon completion of a period of incarceration for a sexual 

offense (as determined by the Secretary) from being eligible for a 

loan under this title. 

Section 485. Institutional refunds 

Amends section 484B(a) to clarify that LEAP funds are excluded 

from the requirements of this section. Further amends section 

484B(a) to allow for multiple leaves of absence. Further amends 

section 484B(a) to provide a cross-reference to subsection (d) to determine how the percentage of the enrollment period or payment 

period that has been completed will be calculated. Further amends 

section 484B(a) to require the institution to contact a student who 

is eligible for a late disbursement or post-withdrawal disbursement 

and obtain confirmation that the loan funds are still required by 

the student, explain to the student his or her obligation to repay 

the funds, and document in his or her file the result of such contact 

and the final determination. 

Amends section 484B(b) to provide an institution with 45 days 

from the date of the determination that a student has withdrawn 

to return the loan funds. Further amends section 484B(b) to clarify 

the rule that protects 50 percent of a student’s grant funds. Further amends section 484B(b) by stating that students do not have 

to return amounts of $50 or less. Further amends section 485B(b) 

by inserting a new subparagraph (D) in paragraph (2) to permit the 

Secretary to waive the Pell Grant amounts that students are required to return under this section if the withdrawals are by students residing in, employed in, or attending an institution that is 

located in an area in which the President has declared that a major 

disaster exists and whose attendance was interrupted because of 

the impact of the disaster on the student or the institution; and, 

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if the withdrawals end within the academic year during which the 

declared disaster occurred or during the next succeeding academic 

year. 

Amends section 484B(d) by making technical amendments. Further amends section 484B(d) by amending subparagraph B of paragraph (2) to mean the clock hours scheduled to be completed by the 

student in the period as of the last date of attendance, not to exceed 150 percent of the hours completed by the student in the period. 

Section 486. Institutional and financial assistance information for 

students 

Amends section 485(a) to ensure that the information required 

under this section is made publicly available through appropriate 

outlets and included in reports required by the institution’s accrediting agency. Further amends section 485(a) by including information about the institution’s educational mission and goals in the information an institution provides to students. Further amends section 485(a) by striking subparagraph (L) in paragraph (1) and inserting a new subparagraph (L) to expand the information institutions are required to provide students to include student outcomes 

for full time undergraduate students. Further amends section 

485(a) to require institutions to include the process for registering 

any complaints with the appropriate accrediting agencies or associations in the information disclosed to students. Further amends 

section 485(a) by making a technical amendment to subparagraph 

(M) of paragraph (1). Further amends section 485(a) by inserting 

new subparagraphs (P) and (Q) in paragraph (1) to expand the information institutions must provide students to include the penalties found in the drug provision in section 484(r) and the institution’s policies for accepting transfer of credit. The information regarding transfer of credit must include a statement that such decisions will not be based solely on the accrediting agency of the sending institution as long as the accrediting agency is recognized by 

the Secretary. States that nothing in the transfer of credit amendments authorizes an officer or employee of the Department to exercise any direction, supervision, or control over curriculum, program 

of instruction, administration, or personnel of any institution or accrediting agency. Further amends section 485(a) by striking paragraph (6) and inserting a new paragraph (6) to provide institutions 

an opportunity to provide supplemental data to enrolled and prospective students on the completion or graduation rate for students 

who leave school to serve in the armed services, on official church 

missions, or with a recognized foreign aid service of the Federal 

Government; and, inserting a new paragraph (7) to allow institutions now participating in the National Survey on Student Engagement (NSSE), Community College Survey of Student Engagement 

(CCSSE), or other similar survey to publicly report that data. 

Amends section 485(b) by inserting a new paragraph (3) to require institutions to include in their exit counseling material the 

same consumer protection language required by lenders with regard to consolidation loans. 

Amends section 485(f) to clarify that foreign institutions are not 

required to report data dealing with campus crime. 

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Further amends section 485(a) by inserting a new subparagraph 

(P) in paragraph (1) to include the fire safety report prepared by 

the institution. 

Amends section 485 by inserting a new subsection (h) to require 

each institution, beginning in the first academic year that begins 

after the date of enactment of the Campus Fire Safety Right-toKnow Act of 2005, to prepare, publish, and distribute through appropriate publications or mailings to all current students and employees, and any applicant for enrollment or employment, an annual fire safety report. Outlines what is required to be included in 

the report. Also requires each institution participating in a title IV 

program to request each recognized fraternity and sorority, and 

any other student group that is recognized by the institution and 

that owns or controls housing facilities, to collect and report to the 

institution the information described in this subsection. Also requires each institution participating in any title IV program to 

make, keep, and maintain a log that records all on-campus fires, 

including the nature, date, time, and general location of each fire 

and all false fire alarms. These entries, except where disclosure is 

prohibited by law, must be open to public inspection. Each institution must also make annual reports to the campus community on 

such fires and false fire alarms. Each institution participating in 

title IV programs must also submit to the Secretary a copy of the 

statistics required to be available under this subsection. Requires 

the Secretary to review the statistics, make copies of the statistics 

available to the public, and identify and disseminate exemplary fire 

safety practices. Defines the term ‘‘campus.’’

Section 487. College access initiative 

Amends part G by inserting a new section 485D to create a college access initiative. This new section will require the Secretary 

to direct each guaranty agency to gather information on programs 

and student aid available in the State in which the agency is designated. The information must be made available to the public free 

of charge and be reported to the Secretary to establish a directory 

of programs through web sites, publications, and other means determined by the Secretary. The new section requires each guaranty 

agency to establish a plan to gather and disseminate the information required. The new section outlines the information required 

from the guarantors and the activities the guarantors must undertake. The new section permits guarantors to utilize funds from operating funds pursuant to section 422B and, if any funds remain, 

from earnings on the restricted accounts under section 422(h)(4). 

The new section requires the Secretary and guaranty agencies to 

publicize the availability of the information within 270 days of enactment of this Act, particularly to traditionally underrepresented 

populations. 

Section 488. Distance Education Demonstration Program 

Amends section 486(b) to make conforming and technical 

changes. 

Amends section 486(d) by allowing the Secretary to select up to 

100 institutions in any year after the program’s first year rather 

than only 35 institutions in the third year, and to allow up to five 

degree-granting, accredited correspondence schools to participate. 

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Section 489. College Affordability Demonstration Program 

Amends part G by inserting a new section 486A. The new section 

provides for a College Affordability Demonstration Program to provide innovation in the delivery of higher education and student financial aid in a manner resulting in reduced costs for students and 

institutions and more effective delivery of education and financial 

aid. The new section authorizes the Secretary to select up to 100 

institutions, or systems or consortia of institutions, to participate 

and enables the Secretary to waive requirements under this Act for 

participating institutions as the Secretary feels necessary to meet 

the purpose of this section. Limits this waiver authority by prohibiting the Secretary from waiving maximum award amounts for an 

academic year or loan period and requires the Secretary to determine that the waiver can reasonably be expected to result in reduced costs to students or institutions without an increase in Federal program costs. The new section defines what institutions are 

eligible, outlines how those institutions should apply, and outlines 

the criteria the Secretary should use to select participants. The 

new section requires the Secretary to report to the public and the 

authorizing committees of Congress the list of participating institutions and a list of the statutory or regulatory requirements being 

waived for each institution. The new section requires the Secretary 

to evaluate the program every two years and review the existing 

impediments to the implementation of innovations that result in 

cost savings and in expanding access to education. The new section 

requires the Secretary to report to the authorizing committees of 

Congress every two years on the progress of the demonstration program. The new section requires the Secretary to provide oversight 

of the participating institutions. The new section sets the termination date for the program as October 1, 2011. 

Section 490. Program participation agreements 

Amends section 487(a) by extending the prohibition on employing 

individuals responsible for administering funds under this title who 

have been convicted of, or pled ‘‘no contest’’ to, crimes involving 

funds under this title to include other Federal, State or local government funds. Further amends section 487(a) with a technical 

amendment to clarify that an institution must comply with the ‘‘return of title IV funds’’ policy in section 484B. Further amends section 487(a) by inserting a new subparagraph (D) in paragraph (23) 

to clarify that an institution is permitted to provide voter registration material electronically via the form itself or with information 

and a link to the forms accepted in the institution’s State. Further 

amends section 487(a) by inserting a new paragraph (24) that requires the institution to receive at least 10 percent of its revenues 

from sources other than those provided under this title. 

Amends section 487 by inserting a new subsection (f) to implement the non-title IV revenue requirement. Outlines how the 10 

percent established in section 487(a)(24) must be calculated. States 

that an institution that fails to meet the requirement in section 

487(a)(24) for three successive years will become ineligible to participate in the title IV programs. Also outlines sanctions the Secretary could impose on an institution that fails to meet the requirement in any given year. Requires the Secretary to identify on the 

259 

College Opportunities On-Line website any institution that fails to 

meet the requirements of section 487(a)(24) in any year. 

Amends section 487(c) to permit the Secretary to modify the requirements for foreign schools, and to waive requirements for foreign institutions with loan volumes under $500,000. 

Further amends section 487(a) by inserting a new paragraph (25) 

to require institutions, within one year of the date of enactment of 

this Act, to disclose to an alleged victim of any crime of violence 

or nonforcible sex offense, the final results of any disciplinary proceeding. If the victim is deceased, that information is required to 

be disclosed to the victim’s next of kin. 

Section 491. Additional technical and conforming amendments 

Amends section 483(d) to correct a cross-reference to the Individuals with Disabilities Education Act. 

Amends section 484(a) to make a technical correction 

Amends section 484(b) to correct a cross-reference to the section 

of this title which authorizes unsubsidized Stafford loans for middle-income borrowers. Further amends section 484(b) by making 

technical amendments to strike an unnecessary reference to section 

428H. 

Amends section 484(l) to correct a cross-reference to the Carl D. 

Perkins Vocational and Education Act of 1998. 

Amends section 484A(b) by extending the provisions of paragraph (2) to loans made under parts D and E of this title. 

Amends section 485B(a) by making several technical amendments to correct the designations of the paragraphs within this 

subsection and to correct a cross-reference to a section of the 

United States Code. 

Amends section 487A(b) by making technical amendments. Further amends section 487A(b) by authorizing the Secretary to continue the voluntary participation of institutions participating as of 

July 1, 2005 and the participation of any such institution unless 

the Secretary determines that such institution’s participation has 

not been successful in carrying out the purposes of this section. 

Amends section 491(c) by inserting a new paragraph (3) to clarify 

that an appointment to the Advisory Committee on Student Financial Assistance is effective upon appearing in the Congressional 

Record. 

Amends section 491(h) with regards to payments to members of 

the Advisory Committee on Student Financial Assistance to conform to requirements regarding the pay of Federal employees. 

Amends section 491(k) by extending the authorization of the Advisory Committee to 2011. 

Amends title IV, part G by repealing section 493A with regards 

to year 2000 requirements at the department. 

Amends section 498(c) by making a technical amendment. 

Amends section 498(d) by making a technical amendment. 

PART H—PROGRAM INTEGRITY

Section 495. Accreditation 

Amends section 496(a) by striking subparagraph (B) in paragraph (3) to allow states to be able to apply to the Secretary to become a recognized accreditor. Further amends section 496(a) by inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00263 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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serting a new subparagraph heading (A) at the beginning of paragraph (4) of the subsection, by inserting language in the new subparagraph (A) of paragraph (4) to require accreditors to consider 

the stated missions of institutions of higher education, including 

but not limited to such missions as inculcation of religious values, 

and inserting a new subparagraph (B) of paragraph (4) to clarify 

that an accreditor who seeks to have distance education in the 

scope of the agency’s accrediting process must demonstrate that the 

agency’s standards effectively address the quality of an institution’s 

distance education programs in the areas identified in paragraph 

(5) of this subsection; and, the agency requires that an institution 

that offers distance education programs to have processes by which 

it establishes that the student who registers in a distance education course or program is the same student who participates, 

completes the work, and receives the credit. Further amends section 496(a) by amending subparagraph (A) of paragraph (5) to require that accrediting agencies assess institutions’ success with respect to student achievement in several areas. Further amends section 496(a) to include fiscal and administrative capacity and, under 

certain circumstances, board governance to the list of institutional 

characteristics the accreditor is required to evaluate. Further 

amends section 496(a) by striking paragraph (6) and inserting a 

new paragraph (6) that requires accreditors to establish and apply 

review procedures throughout the accrediting process and outlines 

what the procedures must provide for. Further amends section 

496(a) by striking paragraph (8) and inserting a new paragraph (8) 

to require accreditors to make public and submit to the Secretary 

and the State licensing or authorizing agency a summary of agency 

or association actions involving any adverse action taken with respect to the institution. 

Amends section 496(c) by amending paragraph (1) to ensure that 

members of accrediting teams are well-trained and knowledgeable 

about distance education. Further amends section 496(c) by inserting new paragraphs (7), (8), (9), (10), and (11), and (12) to require 

accreditors to include the information required in subparagraph (H) 

of section 485(a)(1) in the accreditors’ reviews; to confirm that the 

institution has transfer policies that are publicly disclosed and do 

not deny transfer of credit based solely on the accreditation of the 

sending institution as long as the accreditor is recognized by the 

Secretary; to develop a summary available to the public of any adverse actions taken by the agency; to monitor the enrollment 

growth of distance education to ensure that an institution experiencing significant growth has the capacity to serve its students effectively; to disclose publicly a list of the individuals who comprised 

the evaluation teams during the prior calendar year and the title 

and institutional affiliation of each individual, a description of the 

agency’s process for selecting, preparing, and evaluating such individuals, and any statements related to the accreditation responsibilities of such individuals; and, to review the record of student 

complaints resulting from the student information process described in section 485(a)(1)(J). 

Amends section 496(l) by inserting a new paragraph (3) to require the Secretary to provide an annual report to Congress on accrediting agencies or associations whose status has been limited, 

suspended or terminated. 

261 

Amends section 498A(b) by inserting new paragraphs (6), (7), (8), 

and (9) to expand the requirements the Secretary must meet in fulfilling his or her responsibilities to include providing the institution 

an adequate opportunity to review and respond to any report or 

audit finding before a final determination is reached; reviewing and 

taking into consideration the institution’s response in any final determination, and include in the final determination a written statement addressing the institution’s response and stating the basis for 

the final determination and a copy of the institution’s statement in 

response; maintaining and preserving the confidentiality of any report or audit until the requirements listed above are met; and, requiring that the authority to approve or issue any report or audit 

finding involving amounts that may exceed $500,000 is not delegated beyond the Chief Operating Officer of Federal Student Aid. 

Section 496. Report to Congress on prevention of fraud and abuse 

in student financial aid programs 

Amends title IV by inserting a new section 499. The new section 

requires the Secretary to commission an independent, non-partisan, comprehensive study on the prevention of fraud and abuse 

in title IV student financial aid programs and report the results of 

such study to Congress. Outlines the areas to be covered in the 

study. Establishes a deadline of December 31, 2007 for the Secretary to transmit the report to Congress. The report must include 

clear and specific recommendations for legislative and regulatory 

actions that are likely to significantly reduce the fraud and abuse 

in title IV programs. 

Title V—Developing Institutions 

Section 501. Definitional changes 

Amends section 502(a) by clarifying that a Hispanic-Serving Institution must have an enrollment of undergraduate full-time 

equivalent students that is at least 25 percent Hispanic at the end 

of the award year immediately preceding the date of application. 

Further amends section 502(a) by striking the requirement that a 

Hispanic-Serving Institution provide assurances that at least 50 

percent of the institution’s Hispanic students are low-income. 

Section 502. Assurance of enrollment of needy students 

Amends section 511(c) by striking paragraph (2) with regards to 

the 5-year improvement plan. Further amends section 511(c) to require the institution to provide in its application for a grant assurances that the institution has an enrollment of needy students as 

required in section 502(b). 

Section 503. Additional amendments 

Amends section 502(a) to insert the requirement that the institution offer not less than a two year program that is acceptable for 

full credit toward a bachelor’s degree. 

Amends section 503(b) to insert within the uses of funds education or counseling services designed to improve financial and economic literacy of students and parents. Further amends section 

503(b) by inserting within the allowable uses of funds the construction, maintenance, renovation, and improvement of instructional 

262 

facilities, the purchase or rental of telecommunications technology 

equipment or services, and the acquisition of real property adjacent 

to the campus. Further amends section 503(b) to insert within the 

allowable uses of funds the establishment of community outreach 

programs and partnerships between institutions and local elementary or secondary schools. 

Amends section 504(a) by striking the 2-year wait out period. 

Makes a technical amendment to section 514(c). 

Section 504. Postbaccalaureate opportunities for Hispanic Americans 

Amends title V by inserting a new part B, which authorizes the 

‘‘Promoting Postbaccalaureate Opportunities for Hispanic Americans’’ program. Section 511 outlines the purposes of the program. 

Section 512 authorizes the Secretary to award competitive grants 

to Hispanic-serving institutions determined by the Secretary to be 

making substantive contributions to graduate educational opportunities for Hispanic students. Defines the term ‘‘Eligible Institution.’’

Section 513 lists the activities grantees are authorized to undertake. Section 514 outlines how applications are to be submitted, establishes a duration of five years for grants awarded, limits to one 

the number of grants any single institution can receive under this 

part in one fiscal year. 

Section 505. Authorization of appropriations 

Amends section 528(a) by establishing the authorization for appropriations for this title. 

Title VI—Title VI Amendments 

Section 601. International and foreign language studies 

Amends section 601 with regard to the findings and purposes of 

this Act. 

Amends section 602(a) by authorizing the Secretary to award 

grants to support instructors of the less commonly taught languages; authorizing the dissemination of materials developed by 

centers and programs to local educational agencies, public and private elementary and secondary schools, and institutions of higher 

education; authorizing projects that support in students an understanding of science and technology in coordination with foreign language proficiency; and encouraging partnerships between two- and 

four-year institutions of higher education, colleges of education, 

and Federal and state departments and agencies. 

Amends section 603(c) regarding Language Resource Centers. 

Amends section 604 by authorizing additional uses of funds for 

sending undergraduate students on educational programs abroad to 

enhance their foreign language proficiency and cultural knowledge; 

requiring grantees to submit program evaluations; and removing 

the 10 percent funding cap for this section. 

Amends section 605(a) by modifying authorized activities to encourage the Department of Education to engage in data collection, 

analysis, and dissemination of international education and foreign 

language needs and outputs. 

Amends section 606 by permitting museums to apply for grants 

under this section; by authorizing funds to be used for the acquisiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00266 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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tion of printed material from abroad for the purposes of this section, the development of standards for electronic access, the means 

for access of international data, the establishment of linkages with 

institutions abroad that facilitate access to foreign information, and 

to provide the Department of Education with the flexibility to establish new activities that are useful for carrying out the purposes 

of this section, with the idea that future technological changes may 

enhance the activities which could be conducted under this section; 

and allows the Secretary of Education to waive or reduce the nonFederal share for institutions that are eligible to receive assistance 

under part A or B of title III or under title V and have demonstrated a need for a waiver in the grant application. 

Amends section 607(b) by requiring the Secretary to take into account the degree to which grant applicants address national interests and generate and disseminate information from diverse perspectives with regard to international issues. 

Amends section 608(a) with regard to equitable distribution. 

Amends section 610 with regard to the authorization of appropriations. 

Section 602. Business and international education programs 

Amends section 612 by clarifying that minority serving institutions are eligible for assistance under this section; and by allowing 

the Secretary to waive or reduce the non-Federal share for institutions that receive assistance under part A or B of title III or under 

title V and have demonstrated a need for a waiver in the grant application. 

Amends section 613 by allowing the Secretary to waive or reduce 

the non-Federal share for institutions that receive assistance under 

part A or B of title III or under title V and have demonstrated a 

need for a waiver in the grant application. 

Amends section 614 with regard to the authorization of appropriations. 

Section 603. Institution for International Public Policy 

Amends section 621 by clarifying that the Institute for International Public Policy shall include all underrepresented minorities 

in its program in order to enhance participation in international 

service; by modifying the heading of section 621 to read ‘‘Program 

for Foreign Service Professionals’’; and, by clarifying that eligible 

recipients include all minority serving institutions and institutions 

that serve substantial numbers of underrepresented students. 

Amends section 622 by encouraging collaboration among colleges 

and universities receiving funds under this title. 

Amends section 623(a) to include Alaska Native-serving, Native 

Hawaiian-serving, and Hispanic-serving institutions in the study 

abroad program. 

Amends section 624 by modifying the heading of section 624 to 

read ‘‘Advanced Degree in International Relations;’’ and by authorizing the Institute for International Public Policy’s consortia of institutions to provide advanced degree programs in a variety of academic areas. 

Amends section 625 to include Alaska Native-serving, Native Hawaiian-serving, and Hispanic-serving institutions in the internships program; by repealing the Interagency Committee on MinorVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00267 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
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ity Careers in International Affairs; and by stating that students 

who participate in Internship programs under subsections (a) and 

(b) will be called ‘‘Ralph J. Bunche Fellows.’’

Amends section 626 by requiring the Secretary to submit a biennial report. 

Amends section 628 with regard to the authorization of appropriations for this part. 

Section 604. Evaluation, outreach, and dissemination 

Amends Part D of title VI to include section 632. Section 632 authorizes the Secretary to use not more than 1 percent of the funds 

made available for this title for program evaluation, national outreach, and information dissemination activities. 

Section 605. Advisory Board 

Amends Part D of title VI to include section 633. Section 633 establishes the International Advisory Board and sets forth its mission, authorities, and purpose; clarifies that the Board will be independent of the Secretary and the Department of Education; contains provisions regarding the Board’s organizational structure and 

membership; and sets forth the functions and operations of the 

Board. 

Section 606. Recruiter access to students and student recruiting information; safety 

Amends Part D of title VI to include sections 634 and 635. Section 634 sets forth provisions regarding recruiter access to students 

for the purpose of recruiting for graduate opportunities or prospective employment. 

Section 635 contains provisions concerning student safety. 

Section 607. National study of foreign language heritage communities 

Amends Part D of title VI to include section 636. Section 636 contains provisions requiring the Secretary, in consultation with the 

International Advisory Board, to conduct a study of foreign language heritage communities, particularly those communities that 

include speakers of languages that are critical to the national security of the United States; and requiring the Secretary to submit a 

report not later than a year after the date of enactment. 

Title VII—Title VII Amendments 

Section 701. Javits Fellowship program 

Amends section 701 (a) by adding language after the second sentence clarifying that a master’s degree in fine arts shall be considered a terminal degree. 

Amends section 701(c) by allowing institutions of higher education to grant fellowship recipients an interruption of study due 

to active duty military service or a personal or family member illness. 

Amends section 702(a)(1) with regard to the allocation of fellowships within the Jacob K. Javits program and by requiring the Secretary to ensure that one member of the fellowship board will be 

from a minority serving institution. 

265 

Amends section 703 with regard to stipends and by providing for 

institutional allowances. 

Amends section 705 with regard to the authorization of appropriations. 

Section 702. Graduate Assistance in Areas of National Need 

Amends section 712(b) pertaining to the designation of areas of 

national need. 

Amends section 712 by inserting subsection (c), which requires 

the Secretary to establish a priority for grants to prepare faculty 

to train highly qualified elementary and secondary school teachers 

of math, science and special education, and teachers who will provide instruction for limited English proficient individuals. 

Amends section 713(b) to require grantees that are departments, 

programs, or units involved in teacher preparation to provide assurances that the grantee collaborates with other departments 

within the institution to ensure a successful combination of training in both teaching and content. 

Amends section 714(b) with regard to stipends. 

Amends section 714(c) by making technical amendments. 

Amends section 715(a)(1) concerning additional assistance. Specifies that the Consumer Price Index to be used is the Consumer 

Price Index for All Urban Consumers. 

Amends section 716 with regard to the authorization of appropriations. 

Section 703. Thurgood Marshall Legal Educational Opportunity 

program 

Amends section 721(c) pertaining to contract and grant purposes 

for the Thurgood Marshall Legal Educational Opportunity program. 

Amends section 721(d)(1)(D) with regard to services provided. 

Amends section 721(h) with regard to the authorization of appropriations. 

Amends section 731 by repealing subsection (e). 

Section 704. Fund for the improvement of postsecondary education 

Amends section 741(a) by authorizing the Secretary to consider 

applications for grants that recognize the needs of non-traditional 

student populations; focus on technology to deliver distance education; introduce reforms that encourage students to enter and reenter postsecondary institutions and pursue postsecondary study 

tied to individual needs; provide support for services that improve 

high school graduation and college attendance and completion rates 

for disadvantaged students, and for programs that reduce postsecondary remediation rates, and improve degree attainment rates, for 

low-income students and former high school dropouts; and assess, 

in partnership with a public or private nonprofit institution or 

agency, the performance of teacher preparation programs within 

institutions of higher education in a State using an assessment 

which provides comparisons across such schools within the State 

based upon indicators including teacher candidate knowledge in 

subject areas in which such candidate has been prepared to teach. 

266 

Amends section 741 by prohibiting funds made available under 

this part from being used to provide financial assistance to students who do not meet the requirements of section 484(a)(5). 

Amends section 744(c) by expanding the area of national need related to articulation agreements to include dual enrollment programs between secondary schools and institutions of higher education. Further amends section 744(c) to clarify that special 

projects may include international partnerships with postsecondary 

institutions abroad, the establishment of academic programs that 

teach traditional American history, and institutional efforts to address pressing community needs, including support for the development of coordinated curriculum and internship opportunities for 

students in disadvantaged communities. 

Amends section 745 with regard to the authorization of appropriations. 

Section 705. Urban Community Service 

Amends title VII by repealing part C, Urban Community Service 

program. 

Section 706. Demonstration projects to ensure students with disabilities receive a quality higher education 

Amends section 762(a) by allowing grants to address the needs 

of all students with disabilities. 

Amends section 762(b)(2) by allowing grantees to assist students 

with disabilities with the transition between secondary and postsecondary education and to use funds to develop innovative, effective and efficient distance education programs that would enhance 

access of students with disabilities to postsecondary education programs. 

Amends section 763 by requiring the application to include a description of how the institution will work to replicate the best practices of institutions of higher education with demonstrated success 

in serving students with disabilities. 

Amends section 765 with regard to the authorization of appropriations. 

Title VIII—Clerical Amendments 

Section 801. Clerical amendments 

Amends section 103 by inserting a new paragraph (1) to define 

the term ‘‘authorizing committees’’ as the Committee on Health, 

Education, Labor, and Pensions of the Senate and the Committee 

on Education and the Workforce of the House of Representatives. 

Amends multiple sections with technical amendments that strike 

the names of the Senate and House committees and insert references to the authorizing committees. 

Makes several technical amendments to multiple sections to correct headings and cross-references. 

Amends section 435(a) by striking subparagraph (B) of paragraph (3) with regards to Federal Supplemental Loans for Students. 

States that nothing in these amendments should be construed to 

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plemental loans for students under section 428A as in effect prior 

to July 1, 1994. 

Title IX—Amendments to Other Education Laws 

PART A—EDUCATION OF THE DEAF ACT OF 1986

Section 901. Laurent Clerc National Deaf Education Center 

Amends section 104(a) of the Education of the Deaf Act of 1986 

by referencing the Laurent Clerc National Deaf Education Center. 

Amends section 104(b) of the Education of the Deaf Act of 1986 

by referencing the Laurent Clerc National Deaf Education Center. 

Further amends section 104(b) by inserting a new paragraph (5) 

that requires Gallaudet University, in consultation with the Secretary, to implement standards and assessments for the programs 

operated by the Laurent Clerc National Deaf Education Center 

that are consistent with the Elementary and Secondary Education 

Act of 1965. The standards and assessments must be in place by 

the beginning of the 2007–2008 academic year. The results of the 

assessments must be publicly reported. 

Section 902. Authority 

Amends section 111 of the Education of the Deaf Act of 1986 by 

naming the Rochester Institute of Technology as the institution responsible for the National Technological Institute for the Deaf. 

Section 903. Agreement for the National Technical Institute for the 

Deaf 

Amends section 112(a) of the Education of the Deaf Act of 1986 

by naming the Rochester Institute of Technology as the institution 

responsible for the National Technological Institute for the Deaf. 

Amends section 112(b) of the Education of the Deaf Act of 1986 

by specifying the governing body as the Rochester Institute of 

Technology’s Board of Trustees. Further amends section 112(b) by 

specifying that the Board of Trustees for the Rochester Institute of 

Technology is responsible for accounting for the indirect costs paid 

by the National Technological Institute for the Deaf to the Rochester Institute of Technology. Further amends section 112(b) by 

correcting the reference to the House and Senate authorizing committees. 

Amends section 112(c) of the Education of the Deaf Act of 1986 

by referring specifically to the Rochester Institute of Technology. 

Section 904. Definitions 

Amends section 201 of the Education of the Deaf Act of 1986 by 

striking paragraph (3) with regards to the definition of institution 

of higher education. Further amends section 201 by inserting a new 

paragraph (7) that defines ‘‘RIT’’ as the Rochester Institute of Technology. 

Section 905. Audit 

Amends section 203(a) of the Education of the Deaf Act of 1986 

by correcting the reference to the Government Accountability Office. 

Amends section 203(b) of the Education of the Deaf Act of 1986 

by requiring the National Technological Institute for the Deaf to 

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have an annual independent financial and compliance audit made 

of the Rochester Institute of Technology’s programs and activities, 

including the Institute’s programs and activities. Further amends 

section 203(b) by correcting section references. Further amends section 203(b) by requiring a copy of each audit be delivered to the authorizing committees of the House and Senate. Further amends 

section 203(b) by specifically referring to the Rochester Institute of 

Technology. 

Amends section 203(c) of the Education of the Deaf Act of 1986 

by correcting the reference to the House and Senate authorizing 

committees. 

Section 906. Reports 

Amends section 204 of the Education of the Deaf Act of 1986 by 

specifically referring to the Rochester Institute of Technology. Further amends section 204 by correcting the reference to the House 

and Senate authorizing committees. Further amends section 204 by 

requiring Gallaudet University and the Institute to report on the 

disposition of enrolled students within one year of graduation or 

completion. 

Section 907. Liaison for educational programs 

Amends section 206(a) of the Education of the Deaf Act of 1986 

to strike the reference to a 30 day deadline. 

Section 908. Federal endowment programs for Gallaudet University 

and the National Technical Institute for the Deaf 

Amends section 207(a) of the Education of the Deaf Act of 1986 

by specifically referring to the Rochester Institute of Technology. 

Section 909. Oversight and effect of agreements 

Amends section 208(a) of the Education of the Deaf Act of 1986 

by specifically referring to the Rochester Institute of Technology. 

Further amends section 208(a) by correcting the reference to the 

authorizing committees. 

Section 910. Authorization of appropriations 

Amends section 205(c) of the Education of the Deaf Act of 1986 

to extend the authorization through 2011. 

Amends section 207(h) of the Education of the Deaf Act of 1986 

to extend the authorizations through 2011. 

Amends section 212 of the Education of the Deaf Act of 1986 to 

extend the authorizations through 2011. 

Inserts a new section (1) that establishes the short title of this 

act as the ‘‘Gallaudet University and National Technical Institute 

for the Deaf Act.’’

PART B—ADDITIONAL EDUCATION LAWS

Section 921. Cancellation of student loan indebtedness for survivors 

of Victims of the September 11, 2001, attacks 

Defines the terms ‘‘Eligible Public Servant,’’ ‘‘Eligible Victim,’’

‘‘Eligible Parent,’’ ‘‘Secretary,’’ and ‘‘Federal Student Loan.’’

Requires the Secretary to provide for the discharge or cancellation of the Federal student loan indebtedness of the spouse of an 

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eligible public servant, the portion of a Federal consolidation loan 

incurred on behalf of the eligible victim that was used jointly by 

the eligible victim and his or her spouse, the portion of the consolidation loan indebtedness of an eligible parent that was incurred on 

behalf of an eligible victim, and the PLUS loan indebtedness of an 

eligible parent that was incurred on behalf of an eligible victim. 

Outlines the methods to be used to cancel or discharge eligible 

loans. 

Requires the Secretary to establish procedures for the filing of 

applications and to publicize the availability of loan discharge or 

cancellation. 

States that funds available for the purposes of making payments 

to lenders in accordance with section 437(a) shall be available for 

making payments to lenders as required by this section. 

States that the provisions of this section shall be applied to loans 

on which amounts were owed on September 11, 2001. 

Section 922. Amendment to Higher Education Amendments of 1998 

Repeals several expired studies and programs from the Higher 

Education Amendments of 1998. 

Amends section 804(b) of the Higher Education Amendments of 

1998 to provide a deadline of September 30, 2007 for the Secretary 

to report the conclusions on the study on transfer of credits. Further amends section 804(b) to include the policies of institutions of 

higher education in the report. 

Amends section 806(a) of the Higher Education Amendments of 

1998 to include all institutions of higher education in the report. 

Amends section 806(c) of the Higher Education Amendments of 

1998 by setting the deadline as September 30, 2007 for the submission of the report. 

Amends section 826(g) of the Higher Education Amendments of 

1998 by extending the authorization through 2011. 

Amends section 826 of the Higher Education Amendments of 

1998 by correcting the paragraph designations. 

Amends section 841(c) of the Higher Education Amendments of 

1998 to establish the authorization level as $3 million in 2006 and 

such sums through 2011. 

Amends section 422(d) of the Higher Education Amendments of 

1998 to establish an effective date for the amendments of July 1, 

2006. 

Section 923. Tribally Controlled College or University Assistance 

Act of 1978 

Amends section 110(a) of the Tribally Controlled Community College or University 

Assistance Act of 1978 to extend the authorization through 2011. 

Amends section 306(a) of the Tribally Controlled Community College or University 

Assistance Act of 1978 to extend the authorization through 2011. 

Amends section 403 of the Tribal Economic Development and 

Technology Related Education Assistance Act of 1990 to extend the 

authorization through 2011. 

Amends section 2(a) of the Tribally Controlled Community College or University Assistance Act of 1978 to clarify the definition 

of ‘‘national Indian organization.’’

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Amends section 2(b) of the Tribally Controlled Community College or University Assistance Act of 1978 by striking paragraph (5) 

and inserting a new paragraph (5) to clarify how eligible credits 

earned in a continuing education program should be counted in determining the Indian student count. 

Amends section 103 of the Tribally Controlled Community College or University Assistance Act of 1978 by inserting a new paragraph (4) to require a tribally controlled college or university to be 

accredited by a nationally recognized accrediting agency recognized 

by the Secretary in order to be eligible for funds. 

Section 924. Navajo Community College Act 

Amends section 5(a) of the Navajo Community College Act to extend the authorization through 2011. 

Section 925. Education Amendments of 1992 

Amends section 1543(d) of the Education Amendments of 1992 to 

extend the authorization through 2011. 

Section 926. Study of student learning outcomes and public accountability 

Requires the Secretary to provide for the conduct of a study of 

the best practices of States in assessing undergraduate postsecondary student learning, particularly as such practices relate to 

public accountability systems. Requires the study to be conducted 

by a national, non-partisan, or bi-partisan association or organization with knowledge in State practices and access to necessary 

State officials. The association or organization must also represent 

States or State officials. Outlines the topics to be covered by the 

study. Requires the agency or association conducting the study to 

establish and consult with a national committee that will meet at 

least twice a year to review the research, identify best practice 

models, and review recommendations. Outlines the membership of 

the national committee. Requires the association to consult regularly with the authorizing committees in the House and Senate and 

submit a report on the study to those committees no later than two 

years after the date of enactment of this Act. 

Section 927. Study of minority graduation rates 

Requires the Secretary to commission a national study on the decreasing number of underrepresented minority males, particularly 

African American males, entering and graduating from colleges and 

universities and make recommendations to Congress on new approaches to increase minority male graduation rates and the number of minority males going into careers where the population is 

underrepresented. Requires the report to be submitted within one 

year of the enactment of this Act. 

Section 928. Study of education related indebtedness of medical 

school graduates 

Requires the Secretary to conduct a study to evaluate the higher 

education-related indebtedness of medical school graduates in the 

United States at the time of graduation. Also requires the Secretary to submit a report on the study to the respective authorizing 

271 

committees of Congress within one year of the date of enactment 

of the Act and make the report widely available to the public. 

Section 929. Study of adult learners 

Requires the Secretary to conduct a study of the developing 

trends in older adult learners attending college and how institutions of higher education are addressing the needs of this specific 

population in terms of outreach, accessibility, financing, and student support services, including online education. Requires the Secretary to submit a report on the study to the Committee on Education and the Workforce that includes recommendations on measures the Federal government can take to address the needs in regards to education and job training for the aging population and 

the changing demographics of our country. 

Section 930. Increase in college textbook prices 

States findings of the Committee on Education and the Workforce related to the rising costs of textbooks. States the sense of the 

Committee that in order to make a higher education more accessible for all students, the following should occur to make college 

textbooks more affordable to students: textbook publishers should 

provide students with the option of buying materials ‘‘a la carte’’

or ‘‘unbundled’’; textbook publishers should work with faculty to 

understand the cost to students of purchasing the recommended 

textbook; college bookstores should work with faculty to review 

timelines and processes for ordering and stocking selected textbooks, and disclose textbook costs to faculty and students; and, colleges and universities should be encouraged to implement numerous options to address textbook affordability. 

EXPLANATION OF AMENDMENTS

The provisions of the substitute are explained in this report. 

APPLICAITON OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch. The bill 

amends the Higher Education Act of 1965 by providing increase access for students to a higher education. The bill reauthorizes the 

teacher training programs, student aid programs, programs that 

assist minority serving institutions, graduate study programs, 

international and foreign language programs, and various provisions that support and enhance student access and institutional accountability. The bill includes comprehensive reforms that 

prioritize student access and strengthen accountability to empower 

students and parents, the consumers of higher education. The bill 

does not prevent legislative branch employees from receiving services provided under this legislation. 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement of whether the 

provisions of the reported bill include unfunded mandates. The bill 

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reauthorizes spending programs under the Higher Education Act. 

As such, the bill does not contain any unfunded mandates. 

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STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

body of this report. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the House of Representatives and section 308(a) of the Congressional Budget Act of 1974 and with respect to requirements of 

3(c)(3) of rule XIII of the House of Representatives and section 402 

of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for H.R. 609 from the Director 

of the Congressional Budget Office: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 16, 2005. 

Hon. JOHN A. BOEHNER, 

Chairman, Committee on Education and the Workforce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for the direct spending effects of 

H.R. 609, the College Access and Opportunities Act of 2005. CBO 

has not completed its review of the provisions of the bill that would 

affect spending subject to appropriation. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Deborah Kalcevic. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, 

Director. 

Enclosure. 

H.R. 609—College Access and Opportunities Act of 2005 

Summary: H.R. 609 would make numerous changes to federal 

higher education programs, including the student and parent loan 

programs. CBO projects that, under the current-law baseline, the 

loan programs would guarantee or disburse loans totaling about 

$360 billion over the 2006–2010 period—costing about $37 billion 

in total spending (mostly measured as subsidy costs). CBO estimates that enacting H.R. 609 would reduce these costs by $6.3 billion in 2006, $8.7 billion over the 2006–2010 period, and $4.5 billion over the 2006–2015 period. H.R. 609 also would affect spending subject to appropriation, but CBO has not completed an analysis of the bill’s potential impact on discretionary spending. 

Provisions of H.R. 609 with significant budget effects include: 

• Change the formulas used to calculate borrower interest 

rates and lender yields; 

• Eliminate the separate formula for lender yields for loans 

supported with certain tax-exempt funding; 

• Change the insurance provided to lenders; 

• Change the funding for mandatory administrative costs; 

314 

• Reduce borrower origination fees and mandate collection of 

a 1.0 percent insurance premium; 

• Increase loan limits for first-year, second-year, and graduate 

students; and 

• Delay the recall of the federal share of the Perkins Loan Revolving Fund. 

Pursuant to section 407 of H. Con. Res. 95 (the Concurrent Resolution on the Budget, Fiscal Year 2006), CBO estimates that enacting H.R. 609 would cause an increase in direct spending greater 

than $5 billion in the 10-year period between 2016 and 2025. CBO 

also expects that the direct spending costs of the bill would exceed 

the $5 billion threshold in at least one of the 10-year periods from 

2026 through 2055. 

H.R. 609 contains no intergovernmental or private-sector mandates as defined by the Unfunded Mandates Reform Act (UMRA); 

any costs to state, local, or tribal governments would results from 

complying with conditions of federal assistance. 

Estimated cost to the Federal Government: The estimated impact 

of H.R. 609 on direct spending is shown in the following table. The 

costs of this legislation would fall within budget function 500 (education, training, and social services). 

Basis of estimate: This estimate of the direct spending effects of 

H.R. 609 assumes that the bill will be enacted in the fall of 2005. 

The CBO has not completed its review of the provisions of the bill 

that would affect spending subject to appropriation. 

Major provisions reducing spending 

The provisions of H.R. 609 that would generate the largest savings include changes to the borrower interest rate and lender-yield 

formulas, reductions in the federal insurances rates for lenders, 

and modifications in the budget authority provided for mandatory 

administrative expenses. Together these provisions would reduce 

outlays by $6.3 billion in 2006, $12.4 billion over the 2006–2010 period, and $20.1 billion over the 2006–2015 period. Because the 

changes would be made in federal loan programs, the impacts generally are the estimated changes in the subsidy costs that are assessed on a net present value basis, as specified in the Federal 

Credit Reform Act. 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

CHANGES IN DIRECT SPENDING 

Major Provisions 

Reducing Spending: 

Changes in Borrower 

Interest Rates 

and Lender Yields: 

Estimated 

Budget Authority ......... ¥5,495 ¥1,290 ¥1,190 ¥1,135 ¥1,145 ¥1,165 ¥1,195 ¥1,220 ¥1,245 ¥1,275 

Estimated Outlays ............. ¥5,040 ¥1,080 ¥1,075 ¥1,005 ¥1,005 ¥1,015 ¥1,035 ¥1,065 ¥1,085 ¥1,110 

315 

By fiscal year, in millions of dollars—

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

Changes to Certain 

Loans Financed 

with Tax-Exempt 

Bonds: 

Estimated 

Budget Authority ......... ¥980 ¥265 ¥265 ¥270 ¥270 ¥275 ¥280 ¥290 ¥290 ¥290 

Estimated Outlays ............. ¥850 ¥235 ¥235 ¥235 ¥240 ¥245 ¥245 ¥250 ¥255 ¥265 

Changes in Lender 

Insurance: 

Estimated 

Budget Authority ......... ¥425 ¥145 ¥150 ¥160 ¥165 ¥170 ¥180 ¥185 ¥195 ¥200 

Estimated Outlays ............. ¥385 ¥115 ¥130 ¥140 ¥145 ¥150 ¥155 ¥160 ¥170 ¥175 

Changes in Mandatory Administrative Costs: 

Estimated 

Budget Authority ......... ¥13 ¥128 ¥66 ¥187 ¥214 ¥241 0 0 0 0 

Estimated Outlays ............. 17 ¥111 ¥50 ¥172 ¥198 ¥225 ¥81 ¥21 ¥8 0 

Subtotal: 

Estimated 

Budget 

Authority ...... ¥6,913 ¥1,828 ¥1,671 ¥1,752 ¥1,794 ¥1,851 ¥1,655 ¥1,695 ¥1,730 ¥1,765 

Estimated 

Outlays ¥6,258 ¥1,541 ¥1,490 ¥1,552 ¥1,558 ¥1,635 ¥1,516 ¥1,496 ¥1,518 ¥1,550 

Major Provisions Increasing Spending: 

Changes in Borrower 

Origination Fees 

and Insurance 

Premiums: 

Estimated 

Budget Authority ......... 10 265 685 1,045 1,420 1,590 1,610 1,625 1,635 1,660 

Estimated Outlays ............. ¥90 70 450 750 1,070 1,275 1,335 1,345 1,350 1,360 

Increased Loan Limits: 

Estimated 

Budget Authority ......... 0 315 540 555 580 600 620 640 660 685 

Estimated Outlays ............. 0 185 410 485 505 525 540 560 580 595 

Changes in the Perkins Loan Program: 

Estimated 

Budget Authority ......... 40 40 40 40 40 40 401 715 736 840 

Estimated Outlays ............. 0 40 40 40 40 40 401 715 736 840 

Subtotal: 

Estimated 

Budget 

Authority ...... 50 620 1,265 1,640 2,040 2,230 2,631 2,980 3,031 3,185 

Estimated 

Outlays ¥90 295 900 1,275 1,615 1,840 2,276 2,620 2,666 2,795 

316 

By fiscal year, in millions of dollars—

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

Other Provisions 

With Measurable 

Effects: 

Estimated 

Budget Authority ......... 245 76 33 38 53 66 66 71 66 76 

Estimated Outlays ............. 192 81 58 33 53 66 71 71 71 76 

Interaction Effects: 

Estimated 

Budget Authority ......... ¥132 ¥163 ¥182 ¥161 ¥154 ¥145 ¥137 ¥146 ¥137 ¥146 

Estimated Outlays ............. ¥104 ¥100 ¥163 ¥141 ¥130 ¥121 ¥131 ¥135 ¥129 ¥126 

Total Changes 

in Direct 

Spending: 

Estimated 

Budget 

Authority ...... ¥6,750 ¥1,295 ¥555 ¥235 145 300 905 1,210 1,230 1,350 

Estimated 

Outlays ¥6,260 ¥1,265 ¥695 ¥385 ¥50 150 700 1,060 1,090 1,195 

Borrower Interest Rate and Lender-Yield Formulas. Relative to 

the current-law baseline, H.R. 609 would change many of the formulas used to compute what borrowers owe to lenders and what 

lenders can charge. The following table outlines the current-law 

formulas and the proposed changes. Borrower rates on new Stafford and parent loans are scheduled to switch from a variable-rate 

formula to a fixed rate (6.8 percent for students and 7.9 percent for 

parents) in July 2006; H.R. 609 would eliminate that change and 

continue the current variable-rate formulas. The rates on consolidated loans would change from being a fixed rate based on the 

weighted average of the loans being consolidated, rounded up to 

the nearest one-eighth percent, to the borrower’s choice of a variable rate (91-day Treasury bill rate plus 2.3 percentage points for 

students and plus 3.1 percentage points for parents) or a fixed rate 

(set at the 91-day Treasury bill rate plus 3.3 percentage points for 

students and plus 4.1 percentage points for parents). The rates for 

students and for parents would be capped at 8.25 percent and 9.0 

percent, respectively. 

The lender-yield formulas for student and parent loans would 

continue to be based on a variable-rate formula, but H.R. 609 

would no longer allow the borrowers’ rates to serve as the minimum for the lender yield. Lenders under current law receive the 

higher of the lender-yield formula or the rate paid by borrowers, 

but the bill would require lenders to rebate the difference between 

the two rates to the government when the borrower rate is higher. 

The combination of these changes to borrowers and lenders 

would save $5.0 billion in 2006, $9.2 billion over the 2006–2010 period, and $14.5 billion through 2015. 

Another change in the payment formulas for lenders affects loans 

that are funded with financing based on tax-exempt bonds issued 

between 1980 and 1993. Historically, these loans have had a different formula for determining payments to lenders. Specifically, 

the formula for the special allowance payments to the holders of 

317 

these loans was 50 percent of the sum of the 91-day Treasury bill 

rate plus 3.5 percentage points or 9.5 percent, whichever was higher. In recent years, the 9.5 percent rate was higher. (Consequently, 

these have come to be referred to as 9.5 percent loans.) Legislation 

in 2004 modified this policy for most new loans from tax-exempt 

lenders during the October 2004 to December 2005 period, changing the lender formula to conform to the rates to other leaders. 

Under current law, the formula on new loans will revert back to 

the pre-October 2004 structure. H.R. 609 would continue the practice in place on December 2005, but expand its scope to include all 

new loans supported with this type of financing. This policy would 

save an estimated $850 million in 2006, $1.8 billion over the 2006–

2010 period, $3.1 billion over the 2006–2015 period. 

Type of Loan Loans originating after December 

1999 and before July 2006 

Loans originating after June 

2006 (current law) 

Loans originating after June 

2006 (under H.R. 609) 

BORROWER INTEREST RATES 

Student loans: 

In-school, grace, or 

deferment.

Variable rate set annually at 

91-day Treasury bill plus 

1.7 percentage points 

(8.25 percent cap).

Fixed rate at 6.8 percent ..... Variable rate set annually at 

91-day Treasury bill plus 

1.7 percentage points 

(8.25 percent cap). 

In repayment ................. Variable rate set annually at 

91-day Treasury bill plus 

2.3 percentage points 

(8.25 percent cap).

Fixed rate at 6.8 percent ..... Variable rate set annually at 

91-day Treasury bill plus 

2.3 percentage points 

(8.25 percent cap). 

Parent loans ........................... Variable rate set annually at 

the Treasury bill rate plus 

3.1 percent (9.0 percent 

cap).

Fixed rate at 7.9 percent ..... Variable rate set annually at 

91-day Treasury bill rate 

plus 3.1 percent (9.0 percent cap). 

Consolidation loans: 

Students ........................ Fixed rate set at the weighted average of loans consolidated rounded up to 

nearest 1

⁄8 percent.

Fixed rate set at the weighted average of loans consolidated rounded up to 

nearest 1

⁄8 percent.

Choice of variable rate set 

annually at 91-day Treasury bill rate plus 2.3 percent (8.25 percent cap) 

or fixed rate set at 91- 

day Treasury bill rate 

plus 3.3 percentage 

points. 

Parents .......................... Fixed rate set at the weighted average of loans consolidated rounded up to 

nearest 1

⁄8 percent.

Fixed rate set at the weighted average of loans consolidated rounded up to 

nearest 1

⁄8 percent.

Choice of variable rate set 

annually at 91-day Treasury bill rate plus 3.1 percent (9.0 percent cap) or 

fixed rate set at 91-day 

Treasury bill rate plus 4.1 

percentage points. 

LENDER YIELDS 

Student loans: 

In-school, grace, and 

deferment.

Greater of 3-month commercial paper rate plus 1.74 

percentage points or the 

borrower rate.

Greater of 3-month commercial paper rate plus 1.74 

percentage points or the 

borrower rate.

3-month commercial paper 

rate plus 1.74 percentage 

points. 

In-repayment ................. Greater of 3-month commercial paper rate plus 2.34 

percentage points or the 

borrower rate.

Greater of 3-month commercial paper rate plus 2.34 

percentage points or the 

borrower rate.

3-month commercial paper 

rate plus 2.34 percentage 

points. 

Parent Loans .......................... Greater of 3-month commercial paper rate plus 2.64 

percentage points only 

when the borrower rate is 

capped at 9.0 percent or 

the borrower rate.

Greater of 3-month commercial paper rate plus 2.64 

percentage points only 

when that formula exceeds 9.0 percent or the 

borrower rate.

3-month commercial paper 

rate plus 2.64 percentage 

points. 

318 

Type of Loan Loans originating after December 

1999 and before July 2006 

Loans originating after June 

2006 (current law) 

Loans originating after June 

2006 (under H.R. 609) 

Consolidation loans: 

Student loans ................ Regular formula less 1.05 

percentage points.

Regular formula less 1.05 

percentage points.

Regular formula less 1.05 

percentage points. 

Parent loans .................. Regular formula less 1.05 

percentage points.

Regular formula less 1.05 

percentage points.

Regular formula less 1.05 

percentage points. 

Federal Lender Insurance. H.R. 609 would reduce the portion of 

defaulted loans for which lenders are reimbursed. under current 

law, lenders are generally reimbursed for 98 percent of the outstanding balances on loans which go into default. lenders who meet 

certain requirements are classified as exceptional lenders and they 

receive 100 percent insurance. H.R. 609 would reduce the 98 percent to 96 percent, and would tighten eligibility for the exceptional 

lender designation. For those lenders losing exceptional lender status the insurance rate would drop from 100 percent to 96 percent. 

CBO estimates that these changes would reduce outlays by $385 

million in 2006, $915 million over the 2006–2010 period, and $1.7 

billion through 2015. 

Changes to the federal reinsurance rate only affect 

intrabudgetary transactions, and have no effect on total federal 

spending or revenues. 

Funding for Mandatory Administrative Costs. Under the Higher 

Education Act of 1965, section 458 specifies a direct appropriation 

for administrative costs associated with operating the financial assistance programs for post-secondary education students. After 

2002, the statue does not contain a limit on the amount provided 

for those activities; thus, CBO treats this account as an uncapped 

direct spending program. CBO’s baseline assumes that the portion 

of the account that funds administrative activities would be equal 

to the actual amount used in 2004, adjusted for anticipated inflation. The other major components is an account maintenance fee 

payable to guaranty agencies equal to 0.10 percent of original principal on outstanding guaranteed student loans. 

H.R. 609 would establish new annual caps on total section 458 

funds, and restrict the amount that could be used for the agency 

account maintenance fees below what the formula would provide. 

CBO assumes that the entire amount of the fees will be paid, but 

a portion would be paid out of the federal student loans reserve 

fund (the on-budget guaranty agency account referred to in the previous section) instead of out of section 458. As a result, the 

amounts that certain agencies would retain in the reserve fund 

would fall below that fund’s minimum requirements and some of 

these agencies would have to collect the 1.0 percent insurance premium allowed guaranty agencies—premiums that many of those 

agencies currently waive. The net effect of these changes in section 

458 funding would increase outlays by $17 million in 2006, but reduce them by $514 million over the 2006–2010 period and by $849 

million over the 2006–1015 period. 

Major provisions increasing spending 

The provisions in the bill that would result in the largest increases in spending are the changes to origination fees and insurance premiums paid by borrowers, increases in loan limits, and 

modifications to the Perkins Loan Revolving fund. The estimated 

319 

costs resulting from these portions of H.R. 609 total $4.0 billion 

over the 2006–2010 period and $16.2 billion over the 2006–2015 period. 

Borrower Origination Fees and Premiums. H.R. 609 would 

gradually reduce borrower origination fees for both subsidized and 

unsubsidized student loans, while at the same time requiring guaranty agencies to charge all guaranteed students and parent loans 

borrowers the 1.0 percent premium currently authorized. Currently, origination fees for guaranteed loans are 3.0 percent and 

the insurance premium is up to 1.0 percent. In the direct loan programs, the origination fee is 3.0 percent (although the actual practice is to charge 1.5 percent up front and another 1.5 percent if the 

borrower fails to make payments) and there is no insurance fee. 

The changes in the bill would equalize the total fees charged to students borrowing through guaranteed loans with those borrowing 

through the direct loan program. 

Total fees on student borrowers would drop to 2.5 percent in July 

2007, to 2.0 percent in July 2008, to 1.5 percent in July 2009, and 

to 1.0 percent in July 2010. These changes would reduce outlays 

by $90 million in 2006 because the increase insurance premiums 

are recorded more quickly than the reduced origination fees (fees 

are tied to loan disbursements that often fall into a subsequent 

year). CBO estimates that the net impact of the changes would be 

to increase outlays by $2.25 billion over the 2006–2010 period and 

by $8.9 billion over the 2006–2015 period. 

Borrower Loan Limits. H.R. 609 would increase the maximum 

amount of subsidized loans for first- and second-year students from 

$2,625 and $3,500, respectively, to $3,500 and $4,500 beginning in 

2007. In addition, the bill would increase the limit for unsubsidized 

loans for each year of graduate school from $10,000 to 12,000. To 

conform the aggregate borrowing limits to the latter changes, the 

limit on unsubsidized loans would be increased by $10,000. These 

increases would boost aggregate student loans borrowing and increase spending by $1.6 billion over the 2007–2010 period and by 

$4.4 billion over the 2007–2015 period. 

Perkins Loan Revolving Fund. H.R. 609 would divert certain default collections in the Perkins loan program to schools and delay 

the beginning of the recall to the Treasury of balances held by participating schools from 2012 to 2020. 

Under current loan, any collections by the Secretary of Education 

on defaulted Perkins loans—a program administered by colleges 

and universities—are returned to the Treasury. These collections 

amount to roughly $40 million per year. The bill would require the 

Secretary to reallocate these funds—in the following year—to other 

schools participating in the loan programs, thus increasing net federal spending by $40 million annually beginning in 2007. 

Beginning in 2012, schools are required to return the federal 

share of their Perkins loan repayments to the Treasury. H.R. 609 

would delay that date until 2020. Based on data from the Department of Education, CBO estimates that the recall of the federal 

share would total about $2.5 billion over the 2012–2015 period. 

Consequently, the delay that would result from enacting H.R. 609 

would reduce recoveries by a like amount. 

320 

Other provisions with measurable effects 

H.R. 609 contains numerous provisions that would have much 

smaller budgetary effects than those described above. Among them 

are changes in loan cancellation programs, borrower repayment 

terms, and interest deferment eligibility. Other provisions with 

some estimated budget effects during the 2006–2010 period include 

changes in the income protection allowance for dependent students, 

the restrictions on eligibility for certain student with drug-related 

convictions, the eligibility of schools to participate on the basis of 

distance learning programs, and the multiple disbursement requirement for certain loans for schools with low default rates. The 

total effects of these provisions are costs of $192 million in 2006, 

$417 million over the 2006–2010 period, and $772 million for the 

2006–2015 period. 

Interactions 

The overall spending reductions that H.R. 609 would yield are 

significantly larger than the sum of the individual provisions because many provisions interact. For example, the lender-yield and 

borrower interest rate changes save even more when the increased 

loan volume flowing from the changes in loans limits are considered. However, those same loan limit increases boost the costs of 

the provisions that reduce borrower fees. As another example, the 

application of the proposed lender yields and borrower interest 

rates to the 9.5 percent loans increase the saving when compared 

to that provision alone. In total, the interactions among the various 

provisions generate an additional $104 million in savings in 2006, 

$638 million over the 2006–2010 period, and $1.3 billion over the 

2006–2015 period. 

Estimated long-term effects on direct spending: Pursuant to section 407 of H. Con. Res. 95 (the Concurrent Resolution on the 

Budget, Fiscal Year 2006), CBO estimates that enacting H.R. 609 

would cause an increase in direct spending greater than $5 billion 

in the 10-year period between 2016 and 2025. CBO also expects 

that the direct spending costs of the bill would exceed the $5 billion 

threshold in at least one of the 10-year periods from 2026 through 

2055. 

Intergovernment and private sector impact: H.R. 609 contains no 

intergovernmental or private-sector mandates as directed by 

UMRA. The bill would authorize funding for student aid and higher education programs, much of which would go to public institutions of higher education. 

The bill also would impose several new reporting requirements 

on institutions of higher education that receive federal aid under 

Title IV of the Higher Education Act. These institutions would be 

required to submit data that would be used by the Department of 

Education to calculate an institution’s affordability index. Institutions with indexes that exceed a certain threshold also would be required to submit management and action plans that outline steps 

the institution will take to reduce affordability index. CBO assumes 

that these requirements are effectively placed on institutions participating in grant programs; therefore costs related to these provisions would be incurred voluntarily, as a condition of federal assistance. 

321 

Estimated prepared by: Federal spending: Deborah Kalcevic, 

Chad Chirico, and Justin Humphrey; Impact on state, local, and 

tribal governments: Lisa Ramirez-Branum; Impact on the private 

sector: Nabeel Alsalam. 

Estmate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause (3)(c) of House Rule XIII, the goal of 

the bill is to reauthorize and improve programs authorized under 

the Higher Education Act. The Committee expects the Department 

of Education to comply with these provisions and implement the 

changes to the law in accordance with these stated goals. 

CONSTITUTIONAL AUTHORITY STATEMENT

Under clause 3(d)(1) of rule XIII of the Rules of the House of 

Representatives, the Committee must include a statement citing 

the specific powers granted to Congress in the Constitution to 

enact the law proposed by the bill. The Committee believes that the 

amendments, made by this bill to the Social Security Act, are within Congress’ authority under Article I, section 8, clause 1 of the 

Constitution. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 609. 

However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its report 

a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

322 

HIGHER EDUCATION ACT OF 1965 

TITLE I—GENERAL PROVISIONS 

PART A—DEFINITIONS 

øSEC. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER EDUCATION. 

ø(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this 

Act, other than title IV, the term ‘‘institution of higher education’’

means an educational institution in any State that—

ø(1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate; 

ø(2) is legally authorized within such State to provide a program of education beyond secondary education; 

ø(3) provides an educational program for which the institution awards a bachelor’s degree or provides not less than a 2- 

year program that is acceptable for full credit toward such a 

degree; 

ø(4) is a public or other nonprofit institution; and 

ø(5) is accredited by a nationally recognized accrediting 

agency or association, or if not so accredited, is an institution 

that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for 

the granting of preaccreditation status, and the Secretary has 

determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency 

or association within a reasonable time. 

ø(b) ADDITIONAL INSTITUTIONS INCLUDED.—For purposes of this 

Act, other than title IV, the term ‘‘institution of higher education’’

also includes—

ø(1) any school that provides not less than a 1-year program 

of training to prepare students for gainful employment in a 

recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a); and 

ø(2) a public or nonprofit private educational institution in 

any State that, in lieu of the requirement in subsection (a)(1), 

admits as regular students persons who are beyond the age of 

compulsory school attendance in the State in which the institution is located. 

ø(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section and section 102, the Secretary shall publish a list of nationally 

recognized accrediting agencies or associations that the Secretary 

determines, pursuant to subpart 2 of part H of title IV, to be reliable authority as to the quality of the education or training offered. 

øSEC. 102. DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR 

PURPOSES OF TITLE IV PROGRAMS. 

ø(a) DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR PURPOSES OF TITLE IV PROGRAMS.—

ø(1) INCLUSION OF ADDITIONAL INSTITUTIONS.—Subject to 

paragraphs (2) through (4) of this subsection, the term ‘‘institution of higher education’’ for purposes of title IV includes, in 

323 

addition to the institutions covered by the definition in section 

101—

ø(A) a proprietary institution of higher education (as defined in subsection (b) of this section); 

ø(B) a postsecondary vocational institution (as defined in 

subsection (c) of this section); and 

ø(C) only for the purposes of part B of title IV, an institution outside the United States that is comparable to an 

institution of higher education as defined in section 101 

and that has been approved by the Secretary for the purpose of part B of title IV. 

ø(2) INSTITUTIONS OUTSIDE THE UNITED STATES.—

ø(A) IN GENERAL.—For the purpose of qualifying as an 

institution under paragraph (1)(C), the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination 

that such institutions are comparable to an institution of 

higher education as defined in section 101 (except that a 

graduate medical school, or a veterinary school, located 

outside the United States shall not be required to meet the 

requirements of section 101(a)(4)). Such criteria shall include a requirement that a student attending such school 

outside the United States is ineligible for loans made, insured, or guaranteed under part B of title IV unless—

ø(i) in the case of a graduate medical school located 

outside the United States—

ø(I)(aa) at least 60 percent of those enrolled in, 

and at least 60 percent of the graduates of, the 

graduate medical school outside the United States 

were not persons described in section 484(a)(5) in 

the year preceding the year for which a student is 

seeking a loan under part B of title IV; and 

ø(bb) at least 60 percent of the individuals who 

were students or graduates of the graduate medical school outside the United States or Canada 

(both nationals of the United States and others) 

taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year for which a student is seeking a 

loan under part B of title IV; or 

ø(II) the institution has a clinical training program that was approved by a State as of January 

1, 1992; or 

ø(ii) in the case of a veterinary school located outside the United States that does not meet the requirements of section 101(a)(4), the institution’s students 

complete their clinical training at an approved veterinary school located in the United States. 

ø(B) ADVISORY PANEL.—

ø(i) IN GENERAL.—For the purpose of qualifying as 

an institution under paragraph (1)(C) of this subsection, the Secretary shall establish an advisory 

panel of medical experts that shall—

324 

ø(I) evaluate the standards of accreditation applied to applicant foreign medical schools; and 

ø(II) determine the comparability of those 

standards to standards for accreditation applied to 

United States medical schools. 

ø(ii) SPECIAL RULE.—If the accreditation standards 

described in clause (i) are determined not to be comparable, the foreign medical school shall be required to 

meet the requirements of section 101. 

ø(C) FAILURE TO RELEASE INFORMATION.—The failure of 

an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by subparagraph (A) shall 

render such institution ineligible for the purpose of part B 

of title IV. 

ø(D) SPECIAL RULE.—If, pursuant to this paragraph, an 

institution loses eligibility to participate in the programs 

under title IV, then a student enrolled at such institution 

may, notwithstanding such loss of eligibility, continue to 

be eligible to receive a loan under part B while attending 

such institution for the academic year succeeding the academic year in which such loss of eligibility occurred. 

ø(3) LIMITATIONS BASED ON COURSE OF STUDY OR ENROLL- MENT.—An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if 

such institution— ø(A) offers more than 50 percent of such institution’s 

courses by correspondence, unless the institution is an institution that meets the definition in section 521(4)(C) of 

the Carl D. Perkins Vocational and Applied Technology 

Education Act; 

ø(B) enrolls 50 percent or more of the institution’s students in correspondence courses, unless the institution is 

an institution that meets the definition in such section, except that the Secretary, at the request of such institution, 

may waive the applicability of this subparagraph to such 

institution for good cause, as determined by the Secretary 

in the case of an institution of higher education that provides a 2- or 4-year program of instruction (or both) for 

which the institution awards an associate or baccalaureate 

degree, respectively; 

ø(C) has a student enrollment in which more than 25 

percent of the students are incarcerated, except that the 

Secretary may waive the limitation contained in this subparagraph for a nonprofit institution that provides a 2- or 

4-year program of instruction (or both) for which the institution awards a bachelor’s degree, or an associate’s degree 

or a postsecondary diploma, respectively; or 

ø(D) has a student enrollment in which more than 50 

percent of the students do not have a secondary school diploma or its recognized equivalent, and does not provide a 

2- or 4-year program of instruction (or both) for which the 

institution awards a bachelor’s degree or an associate’s degree, respectively, except that the Secretary may waive the 

limitation contained in this subparagraph if a nonprofit inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00328 Fmt 6659 Sfmt 6602 E:\HR\OC\HR231.XXX HR231
325 

stitution demonstrates to the satisfaction of the Secretary 

that the institution exceeds such limitation because the institution serves, through contracts with Federal, State, or 

local government agencies, significant numbers of students 

who do not have a secondary school diploma or its recognized equivalent. 

ø(4) LIMITATIONS BASED ON MANAGEMENT.—An institution 

shall not be considered to meet the definition of an institution 

of higher education in paragraph (1) if— ø(A) the institution, or an affiliate of the institution that 

has the power, by contract or ownership interest, to direct 

or cause the direction of the management or policies of the 

institution, has filed for bankruptcy, except that this paragraph shall not apply to a nonprofit institution, the primary function of which is to provide health care educational services (or an affiliate of such an institution that 

has the power, by contract or ownership interest, to direct 

or cause the direction of the institution’s management or 

policies) that files for bankruptcy under chapter 11 of title 

11, United States Code, between July 1, 1998, and December 1, 1998; or 

ø(B) the institution, the institution’s owner, or the institution’s chief executive officer has been convicted of, or has 

pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under title IV, or 

has been judicially determined to have committed fraud involving funds under title IV. 

ø(5) CERTIFICATION.—The Secretary shall certify an institution’s qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H of title 

IV. 

ø(6) LOSS OF ELIGIBILITY.—An institution of higher education 

shall not be considered to meet the definition of an institution 

of higher education in paragraph (1) if such institution is removed from eligibility for funds under title IV as a result of an 

action pursuant to part H of title IV. 

ø(b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.— ø(1) PRINCIPAL CRITERIA.—For the purpose of this section, 

the term ‘‘proprietary institution of higher education’’ means a 

school that— ø(A) provides an eligible program of training to prepare 

students for gainful employment in a recognized occupation; 

ø(B) meets the requirements of paragraphs (1) and (2) of 

section 101(a); 

ø(C) does not meet the requirement of paragraph (4) of 

section 101(a); 

ø(D) is accredited by a nationally recognized accrediting 

agency or association recognized by the Secretary pursuant 

to part H of title IV; 

ø(E) has been in existence for at least 2 years; and 

ø(F) has at least 10 percent of the school’s revenues from 

sources that are not derived from funds provided under 

title IV, as determined in accordance with regulations prescribed by the Secretary. 

326 

ø(2) ADDITIONAL INSTITUTIONS.—The term ‘‘proprietary institution of higher education’’ also includes a proprietary educational institution in any State that, in lieu of the requirement in paragraph (1) of section 101(a), admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located. 

ø(c) POSTSECONDARY VOCATIONAL INSTITUTION.—

ø(1) PRINCIPAL CRITERIA.—For the purpose of this section, 

the term ‘‘postsecondary vocational institution’’ means a school 

that—

ø(A) provides an eligible program of training to prepare 

students for gainful employment in a recognized occupation; 

ø(B) meets the requirements of paragraphs (1), (2), (4), 

and (5) of section 101(a); and 

ø(C) has been in existence for at least 2 years. 

ø(2) ADDITIONAL INSTITUTIONS.—The term ‘‘postsecondary vocational institution’’ also includes an educational institution in 

any State that, in lieu of the requirement in paragraph (1) of 

section 101(a), admits as regular students persons who are beyond the age of compulsory school attendance in the State in 

which the institution is located.¿ 

SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION. 

(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this 

Act, the term ‘‘institution of higher education’’ means an educational 

institution in any State that—

(1) admits as regular students only individuals who—

(A) meet the requirements of section 484(d)(3), or have a 

certificate of graduation from a school providing secondary 

education, or the recognized equivalent of such a certificate; 

(B) are beyond the age of compulsory school attendance 

in the State in which the institution is located; or 

(C) will be dually enrolled in that institution and a secondary school; 

(2) is legally authorized within such State to provide a program of education beyond secondary education; 

(3)(A) is accredited by a nationally recognized accrediting 

agency or association; or 

(B) if not so accredited, is a public or nonprofit institution 

that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for 

the granting of preaccreditation status, and the Secretary has 

determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or 

association within a reasonable time; and 

(4) meets either of the following criteria: 

(A) is a nonprofit, for-profit, or public institution that—

(i) provides an educational program for which the institution awards a bachelor’s, graduate, or professional 

degree; 

(ii) provides not less than a 2-year educational program which is acceptable for full credit towards such 

a degree; 

327 

(iii) provides not less than a 1-year program of training that prepares students for gainful employment in a 

recognized occupation; or 

(iv) awards a degree that is acceptable for admission 

to graduate or professional degree programs, subject to 

the review and approval of the Secretary; or 

(B) is a nonprofit, for-profit, or public institution that 

provides an eligible program (as defined in section 481)—

(i) for which the institution awards a certificate; and 

(ii) that prepares students for gainful employment in 

a recognized occupation. 

(b) ADDITIONAL LIMITATIONS.—

(1) FOR-PROFIT POSTSECONDARY INSTITUTIONS.—

(A) DURATION OF ACCREDITATION.—A for-profit institution shall not be considered to be an institution of higher 

education unless such institution is accredited by a nationally recognized accrediting agency or association and such 

institution has been in existence for at least 2 years. 

(B) INSTITUTIONAL ELIGIBILITY ONLY FOR COMPETITIVE

GRANTS.—For the purposes of any program providing 

grants to institutions for use by the institution (and not for 

distribution among students), a for-profit institution shall 

not be considered to be an institution of higher education 

under this section if such grants are awarded on any basis 

other than competition on the merits of the grant proposal 

or application. 

(2) POSTSECONDARY VOCATIONAL INSTITUTIONS.—A nonprofit 

or public institution that meets the criteria of subsection 

(a)(4)(B) shall not be considered to be an institution of higher 

education unless such institution has been in existence for at 

least 2 years. 

(3) LIMITATIONS BASED ON MANAGEMENT.—An institution 

shall not be considered to meet the definition of an institution 

of higher education in this section if—

(A) the institution, or an affiliate of the institution that 

has the power, by contract or ownership interest, to direct 

or cause the direction of the management or policies of the 

institution, has filed for bankruptcy, except that this paragraph shall not apply to a nonprofit institution, the primary function of which is to provide health care educational services (or an affiliate of such an institution that 

has the power, by contract or ownership interest, to direct 

or cause the direction of the institution’s management or 

policies) that filed for bankruptcy under chapter 11 of title 

11, United States Code, between July 1, 1998, and December 1, 1998; or 

(B) the institution, the institution’s owner, or the institution’s chief executive officer has been convicted of, or has 

pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been judicially determined to have 

committed a crime involving the acquisition, use, or expenditure involving Federal, State, or local government 

funds. 

328 

(4) LIMITATION ON COURSE OF STUDY OR ENROLLMENT.—An 

institution shall not be considered to meet the definition of an 

institution of higher education in subsection (a) if such institution— (A) offers more than 50 percent of such institution’s 

courses by correspondence (excluding courses offered by 

telecommunications as defined in section 484(l)(4)), unless 

the institution is an institution that meets the definition in 

section 3(3)(C) of the Carl D. Perkins Vocational and Technical Education Act of 1998; 

(B) enrolls 50 percent or more of the institution’s students 

in correspondence courses (excluding courses offered by telecommunications as defined in section 484(l)(4)), unless the 

institution is an institution that meets the definition in section 3(3)(C) of the Carl D. Perkins Vocational and Technical Education Act of 1998, except that the Secretary, at 

the request of the institution, may waive the applicability 

of this subparagraph to the institution for good cause, as 

determined by the Secretary in the case of an institution of 

higher education that provides a 2- or 4-year program of 

instruction (or both) for which the institution awards an 

associate or baccalaureate degree, respectively; 

(C) has a student enrollment in which more than 25 percent of the students are incarcerated, except that the Secretary may waive the limitation contained in this subparagraph for an institution that provides a 2- or 4-year program of instruction (or both) for which the institution 

awards a bachelor’s degree, or an associate’s degree or a 

postsecondary certificate, respectively; or 

(D) has a student enrollment in which more than 50 percent of the students either do not meet the requirements of 

section 484(d)(3) or do not have a secondary school diploma 

or its recognized equivalent, and does not provide a 2- or 

4-year program of instruction (or both) for which the institution awards an associate’s degree or a bachelor’s degree, 

respectively, except that the Secretary may waive the limitation contained in this subparagraph if an institution demonstrates to the satisfaction of the Secretary that the institution exceeds such limitation because the institution 

serves, through contracts with Federal, State, or local government agencies, significant numbers of students who do 

not meet the requirements of section 484(d)(3) or do not 

have a secondary school diploma or its recognized equivalent. 

(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section, 

the Secretary shall publish a list of nationally recognized accrediting agencies or associations that the Secretary determines, pursuant to subpart 2 of part H of title IV, to be reliable authority as to 

the quality of the education or training offered. 

(d) CERTIFICATION.—The Secretary shall certify, for the purposes 

of participation in title IV, an institution’s qualification as an institution of higher education in accordance with the requirements of 

subpart 3 of part H of title IV. 

(e) LOSS OF ELIGIBILITY.—An institution of higher education shall 

not be considered to meet the definition of an institution of higher 

329 

education in this section for the purposes of participation in title IV 

if such institution is removed from eligibility for funds under title 

IV as a result of an action pursuant to part H of title IV. 

SEC. 102. INSTITUTIONS OUTSIDE THE UNITED STATES. 

(a) INSTITUTIONS OUTSIDE THE UNITED STATES.—

(1) IN GENERAL.—An institution outside the United States 

shall be considered to be an institution of higher education only 

for purposes of part B of title IV if the institution is comparable 

to an institution of higher education, as defined in section 101, 

is legally authorized by the education ministry (or comparable 

agency) of the country in which the school is located, and has 

been approved by the Secretary for purposes of that part. The 

Secretary shall establish criteria by regulation for that approval 

and that determination of comparability. An institution may 

not be so approved or determined to be comparable unless such 

institution is a public or nonprofit institution, except that, subject to paragraph (2)(B), a graduate medical school or veterinary school located outside the United States may be a for-profit institution. 

(2) MEDICAL AND VETERINARY SCHOOL CRITERIA.—In the case 

of a graduate medical or veterinary school outside the United 

States, such criteria shall include a requirement that a student 

attending such school outside the United States is ineligible for 

loans made, insured, or guaranteed under part B of title IV unless—

(A) in the case of a graduate medical school located outside the United States—

(i)(I) at least 60 percent of those enrolled in, and at 

least 60 percent of the graduates of, the graduate medical school outside the United States were not persons 

described in section 484(a)(5) in the year preceding the 

year for which a student is seeking a loan under part 

B of title IV; and 

(II) at least 60 percent of the individuals who were 

students or graduates of the graduate medical school 

outside the United States or Canada (both nationals of 

the United States and others) taking the examinations 

administered by the Educational Commission for Foreign Medical Graduates received a passing score in the 

year preceding the year for which a student is seeking 

a loan under part B of title IV; or 

(ii) the institution has a clinical training program 

that was approved by a State as of January 1, 1992; 

or 

(B) in the case of a veterinary school located outside the 

United States that is not a public or nonprofit institution, 

the institution’s students complete their clinical training at 

an approved veterinary school located in the United States. 

(b) ADVISORY PANEL.—

(1) IN GENERAL.—For the purpose of qualifying a foreign 

medical school as an institution of higher education only for 

purposes of part B of title IV, the Secretary shall publish qualifying criteria by regulation and establish an advisory panel of 

medical experts that shall—

330 

(A) evaluate the standards of accreditation applied to applicant foreign medical schools; and 

(B) determine the comparability of those standards to 

standards for accreditation applied to United States medical schools. 

(2) FAILURE TO RELEASE INFORMATION.—The failure of an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be 

required by subsection (a)(2) shall render such institution ineligible for the purpose of part B of title IV. 

SEC. 103. ADDITIONAL DEFINITIONS. 

In this Act: 

(1) AUTHORIZING COMMITTEES.—The term ‘‘authorizing committees’’ means the Committee on Health, Education, Labor, 

and Pensions of the Senate and the Committee on Education 

and the Workforce of the House of Representatives. 

ø(1)¿ (2) COMBINATION OF INSTITUTIONS OF HIGHER EDU- CATION.—The term ‘‘combination of institutions of higher education’’ means a group of institutions of higher education that 

have entered into a cooperative arrangement for the purpose of 

carrying out a common objective, or a public or private nonprofit agency, organization, or institution designated or created 

by a group of institutions of higher education for the purpose 

of carrying out a common objective on the group’s behalf. 

ø(2)¿ (3) DEPARTMENT.—The term ‘‘Department’’ means the 

Department of Education. 

ø(3)¿ (4) DISABILITY.—The term ‘‘disability’’ has the same 

meaning given that term under section 3(2) of the Americans 

With Disabilities Act of 1990. 

ø(4)¿ (5) ELEMENTARY SCHOOL.—The term ‘‘elementary 

school’’ has the same meaning given that term under section 

9101 of the Elementary and Secondary Education Act of 1965. 

ø(5)¿ (6) GIFTED AND TALENTED.—The term ‘‘gifted and talented’’ has the same meaning given that term under section 

9101 of the Elementary and Secondary Education Act of 1965. 

ø(6)¿ (7) LOCAL EDUCATIONAL AGENCY.—The term ‘‘local educational agency’’ has the same meaning given that term under 

section 9101 of the Elementary and Secondary Education Act 

of 1965. 

ø(7) NEW BORROWER.—The term ‘‘new borrower’’ when used 

with respect to any date means an individual who on that date 

has no outstanding balance of principal or interest owing on 

any loan made, insured, or guaranteed under title IV.¿ 

(8) NEW BORROWER.—The term ‘‘new borrower’’ when used 

with respect to any date for any loan under any provision of—

(A) part B or part D of title IV means an individual who 

on that date has no outstanding balance of principal or interest owing on any loan made, insured, or guaranteed 

under either of those parts; and 

(B) part E of title IV means an individual who on that 

date has no outstanding balance of principal or interest 

owing on any loan made under that part. 

ø(8)¿ (9) NONPROFIT.—The term ‘‘nonprofit’’ as applied to a 

school, agency, organization, or institution means a school, 

agency, organization, or institution owned and operated by one 

331 

or more nonprofit corporations or associations, no part of the 

net earnings of which inures, or may lawfully inure, to the 

benefit of any private shareholder or individual. 

ø(9)¿ (10) SCHOOL OR DEPARTMENT OF DIVINITY.—The term ‘‘school or department of divinity’’ means an institution, or a 

department or a branch of an institution, the program of instruction of which is designed for the education of students— (A) * * * 

* * * * * * * 

ø(10)¿ (11) SECONDARY SCHOOL.—The term ‘‘secondary 

school’’ has the same meaning given that term under section 

9101 of the Elementary and Secondary Education Act of 1965. 

ø(11)¿ (12) SECRETARY.—The term ‘‘Secretary’’ means the 

Secretary of Education. 

ø(12)¿ (13) SERVICE-LEARNING.—The term ‘‘service-learning’’ has the same meaning given that term under section 101(23) 

of the National and Community Service Act of 1990. 

ø(13)¿ (14) SPECIAL EDUCATION TEACHER.—The term ‘‘special 

education teacher’’ means teachers who teach children with 

disabilities as defined in section 602 of the Individuals with 

Disabilities Education Act. 

ø(14)¿ (15) STATE EDUCATIONAL AGENCY.—The term ‘‘State 

educational agency’’ has the same meaning given that term 

under section 9101 of the Elementary and Secondary Education Act of 1965. 

ø(15)¿ (16) STATE HIGHER EDUCATION AGENCY.—The term ‘‘State higher education agency’’ means the officer or agency 

primarily responsible for the State supervision of higher education. 

ø(16)¿ (17) STATE; FREELY ASSOCIATED STATES.— (A) * * * 

* * * * * * * 

PART B—ADDITIONAL GENERAL PROVISIONS 

* * * * * * * 

SEC. 112. PROTECTION OF STUDENT SPEECH AND ASSOCIATION 

RIGHTS. 

ø(a) PROTECTION OF RIGHTS.—It is the sense of Congress that no 

student attending an institution of higher education on a full- or 

part-time basis should, on the basis of participation in protected 

speech or protected association, be excluded from participation in, 

be denied the benefits of, or be subjected to discrimination or official sanction under any education program, activity, or division of 

the institution directly or indirectly receiving financial assistance 

under this Act, whether or not such program, activity, or division 

is sponsored or officially sanctioned by the institution.¿ 

(a) PROTECTION OF RIGHTS.—

(1) It is the sense of Congress that no student attending an 

institution of higher education on a full- or part-time basis 

should, on the basis of participation in protected speech or protected association, be excluded from participation in, be denied 

the benefits of, or be subjected to discrimination or official sanction under any education program, activity, or division of the 

332 

institution directly or indirectly receiving financial assistance 

under this Act, whether or not such program, activity, or division is sponsored or officially sanctioned by the institution; and 

(2) It is the sense of Congress that—

(A) the diversity of institutions and educational missions 

is one of the key strengths of American higher education; 

(B) individual colleges and universities have different 

missions and each institution should design its academic 

program in accordance with its educational goals; 

(C) within the context of its institutional mission, a college should promote intellectual pluralism and facilitate 

the free and open exchange of ideas; 

(D) students should not be intimidated, harassed, discouraged from speaking out, discriminated against, or subject to official sanction because of their personal political, 

ideological, or religious beliefs; and 

(E) students should be treated equally and fairly, including evaluation and grading, without regard to or consideration of their personal political views or ideological beliefs. 

(3) Nothing in paragraph (2) shall be construed to modify, 

change, or infringe upon any constitutionally protected religious 

liberty, freedom, expression, or association. 

(b) CONSTRUCTION.—Nothing in this section shall be construed—

(1) to discourage the imposition of an official sanction on a 

student that has willfully participated in the disruption or attempted disruption of a lecture, class, speech, presentation, or 

performance made or scheduled to be made under the auspices 

of the institution of higher education, if the imposition of such 

sanction is done objectively, fairly, and without regard to the 

student’s personal political, ideological, or religious beliefs; or 

* * * * * * * 

SEC. 114. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND INTEGRITY. 

(a) ESTABLISHMENT.—There is established in the Department a 

National Advisory Committee on Institutional Quality and Integrity (hereafter in this section referred to as the ‘‘Committee’’), 

which shall be composed of 15 members appointed by the Secretary 

from among individuals who are representatives of, or knowledgeable concerning, education and training beyond secondary education, including representatives of all sectors and types of institutions of higher education ø(as defined in section 102)¿, to assess 

the process of eligibility and certification of such institutions under 

title IV and the provision of financial aid under title IV. 

(b) TERMS OF MEMBERS.—Terms of office of each member of the 

Committee shall be 3 years, except that any member appointed to 

fill a vacancy occurring prior to the expiration of the term for 

which the member’s predecessor was appointed shall be appointed 

for the remainder of such term. A member of the Committee may 

continue to serve after the expiration of a term until a successor has 

been appointed. 

* * * * * * * 

333 

(g) TERMINATION.—The Committee shall cease to exist on September 30, ø2004¿ 2012. 

* * * * * * * 

SEC. 120. DRUG AND ALCOHOL ABUSE PREVENTION. 

(a) * * * 

* * * * * * * 

(e) ALCOHOL AND DRUG ABUSE PREVENTION GRANTS.—

(1) * * * 

* * * * * * * 

(5) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subsection $5,000,000 

for fiscal year ø1999¿ 2006 and such sums as may be necessary 

for each of the ø4¿ 5 succeeding fiscal years. 

SEC. 121. PRIOR RIGHTS AND OBLIGATIONS. 

(a) AUTHORIZATION OF APPROPRIATIONS.—

(1) PRE-1987 PARTS C AND D OF TITLE VII.—There are authorized to be appropriated such sums as may be necessary for fiscal year ø1999 and for each of the 4¿ 2006 and for each of the 

5 succeeding fiscal years to pay obligations incurred prior to 

1987 under parts C and D of title VII, as such parts were in 

effect before the effective date of the Higher Education Amendments of 1992. 

(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—There are 

authorized to be appropriated such sums as may be necessary 

for fiscal year ø1999 and for each of the 4¿ 2006 and for each 

of the 5 succeeding fiscal years to pay obligations incurred 

prior to the date of enactment of the Higher Education Amendments of 1998 under part C of title VII, as such part was in 

effect during the period—

(A) * * * 

* * * * * * * 

SEC. 123. RESTRICTIONS ON FUNDS FOR FOR-PROFIT SCHOOLS. 

(a) IN GENERAL.—Notwithstanding any other provision of this Act 

authorizing the use of funds by an institution of higher education 

that receives funds under this Act, none of the funds made available 

under this Act to a for-profit institution of higher education may be 

used for—

(1) construction, maintenance, renovation, repair, or improvement of classrooms, libraries, laboratories, or other facilities; 

(2) establishing, improving, or increasing an endowment 

fund; or 

(3) establishing or improving an institutional development office to strengthen or improve contributions from alumni and the 

private sector. 

(b) EXCEPTION.—Subsection (a) shall not apply to funds received 

by the institution from the grant, loan, or work assistance that is 

awarded under title IV to the students attending such institution. 

(c) INELIGIBILITY FOR CERTAIN PROGRAMS.—Notwithstanding section 101, a for-profit institution of higher education shall not be 

considered an eligible institution for the programs under titles III 

and V of this Act. 

334 

SEC. 124. LIMITATION ON CERTAIN USES OF FUNDS. 

No funds made available to carry out this Act may be used—

(1) for publicity or propaganda purposes not authorized by 

the Congress before the date of enactment of the College Access 

and Opportunity Act of 2005; or 

(2) unless authorized by law in effect on such date of enactment, to produce any prepackaged news story intended for 

broadcast or distribution unless such story includes a clear a 

notification contained within the text or audio of such story 

stating that the prepackaged news story was prepared or funded by the Department of Education. 

PART C—COST OF HIGHER EDUCATION 

øSEC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC 

ACCOUNTABILITY IN HIGHER EDUCATION. 

ø(a) IMPROVED DATA COLLECTION.— ø(1) DEVELOPMENT OF UNIFORM METHODOLOGY.—The Secretary shall direct the Commissioner of Education Statistics to 

convene a series of forums to develop nationally consistent 

methodologies for reporting costs incurred by postsecondary institutions in providing postsecondary education. 

ø(2) REDESIGN OF DATA SYSTEMS.—On the basis of the methodologies developed pursuant to paragraph (1), the Secretary 

shall redesign relevant parts of the postsecondary education 

data systems to improve the usefulness and timeliness of the 

data collected by such systems. 

ø(3) INFORMATION TO INSTITUTIONS.—The Commissioner of 

Education Statistics shall— ø(A) develop a standard definition for the following data 

elements: 

ø(i) tuition and fees for a full-time undergraduate 

student; 

ø(ii) cost of attendance for a full-time undergraduate 

student, consistent with the provisions of section 472; 

ø(iii) average amount of financial assistance received 

by an undergraduate student who attends an institution of higher education, including—

ø(I) each type of assistance or benefit described 

in section 428(a)(2)(C)(i); 

ø(II) fellowships; and 

ø(III) institutional and other assistance; and 

ø(iv) number of students receiving financial assistance described in each of subclauses (I), (II), and (III) 

of clause (iii); 

ø(B) not later than 90 days after the date of enactment 

of the Higher Education Amendments of 1998, report the 

definitions to each institution of higher education and 

within a reasonable period of time thereafter inform the 

Committee on Labor and Human Resources of the Senate 

and the Committee on Education and the Workforce of the 

House of Representatives of those definitions; and 

ø(C) collect information regarding the data elements described in subparagraph (A) with respect to at least all institutions of higher education participating in programs 

335 

under title IV, beginning with the information from academic year 2000–2001 and annually thereafter. 

ø(b) DATA DISSEMINATION.—The Secretary shall make available 

the data collected pursuant to subsection (a). Such data shall be 

available in a form that permits the review and comparison of the 

data submissions of individual institutions of higher education. 

Such data shall be presented in a form that is easily understandable and allows parents and students to make informed decisions 

based on the costs for typical full-time undergraduate students. 

ø(c) STUDY.— ø(1) IN GENERAL.—The Commissioner of Education Statistics 

shall conduct a national study of expenditures at institutions 

of higher education. Such study shall include information with 

respect to— ø(A) the change in tuition and fees compared with the 

consumer price index and other appropriate measures of 

inflation; 

ø(B) faculty salaries and benefits; 

ø(C) administrative salaries, benefits and expenses; 

ø(D) academic support services; 

ø(E) research; 

ø(F) operations and maintenance; and 

ø(G) institutional expenditures for construction and technology and the potential cost of replacing instructional 

buildings and equipment. 

ø(2) EVALUATION.—The study shall include an evaluation 

of— ø(A) changes over time in the expenditures identified in 

paragraph (1); 

ø(B) the relationship of the expenditures identified in 

paragraph (1) to college costs; and 

ø(C) the extent to which increases in institutional financial aid and tuition discounting practices affect tuition increases, including the demographics of students receiving 

such discounts, the extent to which financial aid is provided to students with limited need in order to attract a 

student to a particular institution, and the extent to which 

Federal financial aid, including loan aid, has been used to 

offset the costs of such practices. 

ø(3) FINAL REPORT.—The Commissioner of Education Statistics shall submit a report regarding the findings of the study 

required by paragraph (1) to the appropriate committees of 

Congress not later than September 30, 2002. 

ø(4) HIGHER EDUCATION MARKET BASKET.—The Bureau of 

Labor Statistics, in consultation with the Commissioner of 

Education Statistics, shall develop a higher education market 

basket that identifies the items that comprise the costs of higher education. The Bureau of Labor Statistics shall provide a report on the market basket to the Committee on Labor and 

Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives not 

later than September 30, 2002. 

ø(5) FINES.—In addition to actions authorized in section 

487(c), the Secretary may impose a fine in an amount not to 

exceed $25,000 on an institution of higher education for failing 

336 

to provide the information described in paragraph (1) in a 

timely and accurate manner, or for failing to otherwise cooperate with the National Center for Education Statistics regarding 

efforts to obtain data on the cost of higher education under this 

section and pursuant to the program participation agreement 

entered into under section 487. 

ø(d) STUDENT AID RECIPIENT SURVEY.—(1) The Secretary shall 

survey student aid recipients on a regular cycle, but not less than 

once every 3 years—

ø(A) to identify the population of students receiving Federal 

student aid; 

ø(B) to determine the income distribution and other socioeconomic characteristics of federally aided students; 

ø(C) to describe the combinations of aid from State, Federal, 

and private sources received by students from all income 

groups; 

ø(D) to describe the debt burden of loan recipients and their 

capacity to repay their education debts; and 

ø(E) to disseminate such information in both published and 

machine readable form. 

ø(2) The survey shall be representative of full-time and parttime, undergraduate, graduate, and professional and current and 

former students in all types of institutions, and should be designed 

and administered in consultation with the Congress and the postsecondary education community.¿ 

SEC. 131. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN 

HIGHER EDUCATION. 

(a) PURPOSE.—It is the purpose of this section to—

(1) provide students and families with an easy-to-use, comprehensive web-based tool for researching and comparing institutions of higher education; 

(2) increase the transparency of college cost, price, and financial aid; and 

(3) raise public awareness of information available about 

postsecondary education, particularly among low-income families, non-traditional student populations, and first-generation 

college students. 

(b) COLLEGE OPPORTUNITY ON-LINE (COOL) WEBSITE RE-DESIGN

PROCESS.—In carrying out this section, the Secretary—

(1) shall identify the data elements that are of greatest importance to prospective students, enrolled students, and their families, paying particular attention to low-income, non-traditional 

student populations, and first-generation college students; 

(2) shall convene a group of individuals with expertise in the 

collection and reporting of data related to institutions of higher 

education, the measurement of institutional compliance costs, 

consumer use of data related to institutions of higher education, 

general consumer marketing, and college intervention services 

to—

(A) determine the relevance of particular data elements to 

prospective students, enrolled students, and families; 

(B) assess the cost-effectiveness of various ways in which 

institutions of higher education might produce the data desired by consumers; 

337 

(C) determine the general comparability of the data 

across institutions of higher education; 

(D) make recommendations regarding the inclusion of 

specific data items and the most effective and least burdensome methods to institutions of higher education of collecting and reporting useful data; and 

(3) shall assure that the redesigned COOL website—

(A) uses, to the extent practicable, data elements currently 

provided by institutions of higher education to the Secretary; 

(B) includes clear and uniform information determined to 

be relevant to prospective students, enrolled students, and 

families; 

(C) provides comparable information, by assuring that 

data is based on accepted criteria and common definitions; 

(D) includes a sorting function that permits users to customize their search for and comparison of institutions of 

higher education based on the information identified 

through the process as prescribed in paragraph (1) as being 

of greatest relevance to choosing an institution of higher 

education. 

(c) DATA COLLECTION.—

(1) DATA SYSTEM.—The Secretary shall continue to redesign 

the relevant parts of the Integrated Postsecondary Education 

Data System to include additional data as required by this section and to continue to improve the usefulness and timeliness 

of data collected by such systems in order to inform consumers 

about institutions of higher education. 

(2) COLLEGE CONSUMER PROFILE.—The Secretary shall publish, for each academic year and in accordance with standard 

definitions developed by the Commissioner of Education Statistics (including definitions developed under section 131(a)(3)(A) 

as in effect on the day before the date of enactment of the College Access and Opportunity Act of 2005), from at least all institutions of higher education participating in programs under 

title IV the following information: 

(A) The tuition and fees charged for a first-time, full-time 

undergraduate student. 

(B) The room and board charges for such a student. 

(C) The cost of attendance for a first-time, full-time undergraduate student, consistent with the provisions of section 472. 

(D) The average amount of financial assistance received 

by a first-time full-time undergraduate student, including—

(i) each type of assistance or benefits described in 

428(a)(2)(C)(ii); 

(ii) institutional and other assistance; and 

(iii) Federal loans under parts B, D, and E of title 

IV. 

(E) The number of first-time, full-time students receiving 

financial assistance described in each clause of subparagraph (D). 

338 

(F) The average net price for first-time, full-time students 

receiving Federal, State, or institutional grant or loan assistance. 

(G) The institutional instructional expenditure per fulltime equivalent student. 

(H) Student enrollment information, including information on the number and percentage of full-time and parttime students, the number and percentage of resident and 

non-resident students. 

(I) Faculty/student ratios. 

(J) Faculty information, including the total number of 

faculty and the percentage of faculty who are full-time employees of the institution and the percentage who are parttime. 

(K) Completion and graduation rates, identifying whether the completion or graduation rates are from a 2-year or 

4-year program of instruction and, in the case of a 2-year 

program of instruction, the percentage of students who 

transfer to 4-year institutions prior or subsequent to completion or graduation. 

(L) A link to the institution of higher education with information of interest to students including mission, accreditation, student services (including services for students with 

disabilities), transfer of credit policies and, if appropriate, 

placement rates and other measures of success in preparing 

students for entry into or advancement in the workforce. 

(M) Any additional information that the Secretary may 

require. 

(d) DATA DISSEMINATION.—The Secretary shall make available, at 

a minimum, the data collected pursuant to this section, including 

an institution’s college affordability index as calculated in accordance with subsection (e). Such data shall be made available in a 

manner that permits the review and comparison of data submissions of individual institutions of higher education. Such data shall 

be presented in a form that is easily accessible and understandable 

and allows parents and students to make informed decisions based 

on the prices for typical full-time undergraduate students and the 

institution’s rate of cost increase. The Secretary shall work with 

public and private entities to promote broad public awareness, particularly among middle and high school students and their families, 

of the information made available under this section, including by 

distribution to students who participate in or receive benefits from 

Federally funded education programs and other Federal programs 

determined by the Secretary. 

(e) COLLEGE AFFORDABILITY INDEX.—

(1) IN GENERAL.—The Secretary shall, on the basis of the 

data submitted under subsection (a), calculate a college affordability index for each institution of higher education submitting 

such data and shall make the index available in accordance 

with subsection (d) as soon as operationally possible on the Department’s college opportunity online Web site. Such index shall 

be presented in a manner so that the index for any institution 

is stated in a column or cell immediately adjacent to a column 

or cell containing the total tuition and fees of the institution. 

339 

(2) CALCULATION OF INDEX.—The college affordability index 

shall be equal to—

(A) the percentage increase in the tuition and fees 

charged for a first-time, full-time, full-year undergraduate 

student between the first of the 3 most recent preceding academic years and the last of those 3 academic years; divided 

by 

(B) the percentage increase in the Consumer Price 

Index—All Urban Consumers (Current Series) from July of 

the first of those 3 academic years to July of the last of 

those 3 academic years. 

(f) OUTCOMES AND ACTIONS.—

(1) RESPONSE FROM INSTITUTION.—Effective on June 30, 

2009, an institution that has a college affordability index that 

exceeds 2.0 for any 3-year interval ending on or after that date 

shall provide a report to the Secretary, in such a form, at such 

time, and containing such information as the Secretary may require. Such report shall include—

(A) an explanation of the factors contributing to the increase in the institution’s costs and in the tuition and fees 

charged to students; 

(B) a management plan stating the specific steps the institution is and will be taking to reduce its college affordability index; 

(C) an action plan, including a schedule, by which the institution will reduce increases in or stabilize, such costs 

and tuition and fees; and 

(D) if determinations of tuition and fee increases are not 

within the exclusive control of the institution, a description 

of the agency or instrumentality of State government or 

other entity that participates in such determinations and 

the authority exercised by such agency, instrumentality, or 

entity. 

(2) INFORMATION TO THE PUBLIC.—Upon receipt of the institution’s report and management plan under paragraph (1), the 

Secretary shall make the institution’s report required under 

paragraph (1) available to the public in accordance with subsection (b). 

(3) QUALITY-EFFICIENCY TASK FORCES.—

(A) REQUIRED.—Each institution subject to paragraph (1) 

that has a college affordability index that is in the highest 

25 percent of such indexes of all institutions subject to 

paragraph (1) shall establish a quality-efficiency task force 

to review the operations of such institution. 

(B) MEMBERSHIP.—Such task force shall include administrators and business and civic leaders and may include 

faculty, students, trustees, parents of students, and alumni 

of such institution. 

(C) FUNCTIONS.—Such task force shall analyze institutional operating costs in comparison with such costs at 

other institutions within the class of institutions. Such 

analysis should identify areas where, in comparison with 

other institutions in such class, the institution operates 

more expensively to produce a similar result. Any identified 

340 

areas should then be targeted for in-depth analysis for cost 

reduction opportunities. 

(D) REPORT.—The results of the analysis by a quality-efficiency task force under this paragraph shall be included 

in the report to the Secretary under paragraph (1). 

(4) CONSEQUENCES FOR 2-YEAR CONTINUATION OF FAILURE.— If the Secretary determines that the institution has failed to 

comply with the management plan and action plan submitted 

by the institution under this subsection following the next 2 

academic years that begin after the submission of such plans, 

and has failed to reduce the college affordability index below 

2.0 for such 2 academic years, the Secretary— (A) shall make available to the public a detailed report 

provided by the institution on all costs and expenditures, 

and on all tuition and fees charged to students, for such 2 

academic years; 

(B) shall place the institution on an affordability alert 

status and shall make the information regarding the institution’s failure available in accordance with subsection (d); 

(C) shall notify the institution’s accrediting agency of the 

institution’s failure; and 

(D) may require the institution to submit to a review and 

audit by the Inspector General of the Department of Education to determine the cause of the institution’s failure. 

(5) INFORMATION TO STATE AGENCIES.—Any institution that 

reports under paragraph (1)(C) that an agency or instrumentality of State government or other entity participates in the determinations of tuition and fee increases shall, prior to submitting any information to the Secretary under this subsection, 

submit such information to, and request the comments and 

input of, such agency, instrumentality, or entity. With respect to 

any such institution, the Secretary shall provide a copy of any 

communication by the Secretary with that institution to such 

agency, instrumentality, or entity. 

(6) EXEMPTIONS.— (A) RELATIVE PRICE EXEMPTION.—The Secretary shall, for 

any 3-year interval for which college affordability indexes 

are computed under paragraph (1), determine and publish 

the dollar amount that, for each class of institution described in paragraph (7) represents the maximum tuition 

and fees charged for a full-time undergraduate student in 

the least costly quartile of institutions within each such 

class during the last year of such 3-year interval. An institution that has a college affordability index computed 

under paragraph (1) that exceeds 2.0 for any such 3-year 

interval, but that, on average during such 3-year interval, 

charges less than such maximum tuition and fees shall not 

be subject to the actions required by subparagraph (B) or 

(C) of paragraph (1), or any action under paragraph (4), 

unless such institution, for a subsequent 3-year interval, 

charges more than such maximum tuition and fees. 

(B) DOLLAR INCREASE EXEMPTION.—An institution that 

has a college affordability index computed under paragraph (1) that exceeds 2.0 for any 3-year interval, but that 

exceeds such 2.0 by a dollar amount that is less than $500, 

341 

shall not be subject to the actions required by subparagraph (B) or (C) of paragraph (1), or any action under 

paragraph (4), unless such institution has a college affordability index for a subsequent 3-year interval that exceeds 

2.0 by more than such dollar amount. 

(7) CLASSES OF INSTITUTIONS.—For purposes of this subsection, the classes of institutions shall be those sectors used by 

the Integrated Postsecondary Education Data System, based on 

whether the institution is public, nonprofit private, or for-profit 

private, and whether the institution has a 4-year, 2-year, or less 

than 2-year program of instruction. 

(g) FINES.—In addition to actions authorized in section 487(c), the 

Secretary may impose a fine in an amount not to exceed $25,000 on 

an institution of higher education for failing to provide the information described in this section in a timely and accurate manner, or 

for failing to otherwise cooperate with the National Center for Education Statistics regarding efforts to obtain data on the cost and 

price of higher education under this section and pursuant to the 

program participation agreement entered into under section 487. 

(h) GAO STUDY AND REPORT.—

(1) GAO STUDY.—The Comptroller General shall conduct a 

study of the policies and procedures implemented by institutions in increasing the affordability of postsecondary education. 

Such study shall include information with respect to—

(A) a list of those institutions that—

(i) have reduced their college affordability indexes; or 

(ii) are, as determined under subsection (f)(6)(A), 

within the least costly quartile of institutions within 

each class described in subsection (f)(7); 

(B) policies implemented to stem the increase in tuition 

and fees and institutional costs; 

(C) the extent to which room and board costs and prices 

changed; 

(D) the extent to which other services were altered to affect tuition and fees; 

(E) the extent to which the institution’s policies affected 

student body demographics and time to completion; 

(F) what, if any, operational factors played a role in reducing tuition and fees; 

(G) the extent to which academic quality was affected, 

and how; 

(H) the extent to which policies and practices reducing 

costs and prices may be replicated from one institution to 

another; and 

(I) other information as necessary to determine best practices in increasing the affordability of postsecondary education. 

(2) INTERIM AND FINAL REPORTS.—The Comptroller General 

shall submit an interim and a final report regarding the findings of the study required by paragraph (1) to the appropriate 

authorizing committees of Congress. The interim report shall be 

submitted not later than July 31, 2011, and the final report 

shall be submitted not later than July 31, 2013. 

(i) STUDENT AID RECIPIENT SURVEY.—

342 

(1) SURVEY REQUIRED.—The Secretary shall conduct a survey 

of student aid recipients under title IV on a regular cycle and 

State-by-State basis, but not less than once every 4 years—

(A) to identify the population of students receiving Federal student aid; 

(B) to describe the income distribution and other socioeconomic characteristics of federally aided students; 

(C) to describe the combinations of aid from State, Federal, and private sources received by students from all income groups; 

(D) to describe the debt burden of educational loan recipients and their capacity to repay their education debts, and 

the impact of such debt burden on career choices; 

(E) to describe the role played by the price of postsecondary education in the determination by students of what 

institution to attend; and 

(F) to describe how the increased costs of textbooks and 

other instructional materials affects the costs of postsecondary education to students. 

(2) SURVEY DESIGN.—The survey shall be representative of 

full-time and part-time, undergraduate, graduate, and professional and current and former students in all types of institutions, and designed and administered in consultation with the 

Congress and the postsecondary education community. 

(3) DISSEMINATION.—The Secretary shall disseminate the information resulting from the survey in both printed and electronic form. 

(j) REGULATIONS.—The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section. 

SEC. 132. DATABASES OF STUDENT INFORMATION PROHIBITED. 

(a) PROHIBITION.—Except as described in (b), nothing in this Act 

shall be construed to authorize the design, development, creation, 

implementation, or maintenance of a nationwide database of personally identifiable information on individuals receiving assistance, 

attending institutions receiving assistance, or otherwise involved in 

any studies or other collections of data under this Act, including a 

student unit record system, an education bar code system, or any 

other system that tracks individual students over time. 

(b) EXCEPTION.—The provisions of subsection (a) shall not affect 

the loan obligation enforcement activities described in section 485B 

of this Act. 

PART D—ADMINISTRATIVE PROVISIONS FOR 

DELIVERY OF STUDENT FINANCIAL ASSISTANCE 

SEC. 141. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY 

OF FEDERAL STUDENT FINANCIAL ASSISTANCE. 

(a) ESTABLISHMENT AND PURPOSE.—

(1) * * * 

(2) PURPOSES.—The purposes of the PBO are—

(A) * * * 

343 

(B) to reduce the unit costs of administering those programs and, to the extent practicable, the total costs of administering those programs; 

* * * * * * * 

(c) PERFORMANCE PLAN AND REPORT.—

(1) PERFORMANCE PLAN.—

(A) IN GENERAL.—Each fiscal year, the Secretary and 

Chief Operating Officer shall agree on, and make available 

to the public, a performance plan for the PBO for the succeeding 5 years that establishes measurable goals and objectives for the organization. 

(B) CONSULTATION.—In developing the 5-year performance plan and any revision to the plan, the Secretary and 

the Chief Operating Officer shall consult with students, institutions of higher education, Congress, lenders, secondary markets, guaranty agencies, the Advisory Committee on Student Financial Assistance, and other interested parties not less than 30 days prior to the implementation of the performance plan or revision. 

* * * * * * * 

(2) ANNUAL REPORT.—Each year, the Chief Operating 

Officer shall prepare and submit to Congress, through the Secretary, an annual report on the performance of the PBO, including an evaluation of the extent to which the PBO met the 

goals and objectives contained in the 5-year performance plan 

described in paragraph (1) for the preceding year. The annual 

report shall include the following: 

(A) * * * 

(B) Financial and performance requirements applicable 

to the PBO under the øChief Financial Officer Act of 1990 

and¿ Chief Financial Officers Act of 1990, the Government 

Performance and Results Act of 1993, and other relevant 

statutes. 

(d) CHIEF OPERATING OFFICER.—

(1) * * * 

* * * * * * * 

(4) PERFORMANCE AGREEMENT.— (A) * * * 

(B) TRANSMITTAL.—The final agreement, and any revision to the final agreement, shall be transmitted to the 

øCommittee on Education and the Workforce of the House 

of Representatives and the Committee on Labor and 

Human Resources of the Senate¿ authorizing committees, and made publicly available. 

* * * * * * * 

(f ) STUDENT LOAN OMBUDSMAN.—

(1) * * * 

* * * * * * * 

(3) FUNCTIONS OF OMBUDSMAN.—The Ombudsman shall—

(A) in accordance with regulations of the Secretary, receive, review, and attempt to resolve informally complaints 

from borrowers of loans described in paragraph (1), includVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00347 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
344 

ing, as appropriate, attempts to resolve such complaints 

within the Department of Education and with institutions 

of higher education, lenders, guaranty agencies, loan 

servicers, and other participants in the loan programs described in paragraph ø(1)(A)¿ (1); and 

* * * * * * * 

TITLE II—TEACHER QUALITY 

ENHANCEMENT 

øPART A—TEACHER QUALITY ENHANCEMENT 

GRANTS FOR STATES AND PARTNERSHIPS 

øSEC. 201. PURPOSES; DEFINITIONS. 

ø(a) PURPOSES.—The purposes of this part are to— ø(1) improve student achievement; 

ø(2) improve the quality of the current and future teaching 

force by improving the preparation of prospective teachers and 

enhancing professional development activities; 

ø(3) hold institutions of higher education accountable for preparing teachers who have the necessary teaching skills and are 

highly competent in the academic content areas in which the 

teachers plan to teach, such as mathematics, science, English, 

foreign languages, history, economics, art, civics, Government, 

and geography, including training in the effective uses of technology in the classroom; and 

ø(4) recruit highly qualified individuals, including individuals from other occupations, into the teaching force. 

ø(b) DEFINITIONS.—In this part: 

ø(1) ARTS AND SCIENCES.—The term ‘‘arts and sciences’’ means—

ø(A) when referring to an organizational unit of an institution of higher education, any academic unit that offers 

1 or more academic majors in disciplines or content areas 

corresponding to the academic subject matter areas in 

which teachers provide instruction; and 

ø(B) when referring to a specific academic subject matter 

area, the disciplines or content areas in which academic 

majors are offered by the arts and science organizational 

unit. 

ø(2) HIGH NEED LOCAL EDUCATIONAL AGENCY.—The term 

‘‘high need local educational agency’’ means a local educational 

agency that serves an elementary school or secondary school located in an area in which there is—

ø(A) a high percentage of individuals from families with 

incomes below the poverty line; 

ø(B) a high percentage of secondary school teachers not 

teaching in the content area in which the teachers were 

trained to teach; or 

ø(C) a high teacher turnover rate. 

ø(3) POVERTY LINE.—The term ‘‘poverty line’’ means the poverty line (as defined by the Office of Management and Budget, 

and revised annually in accordance with section 673(2) of the 

345 

Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved. 

øSEC. 202. STATE GRANTS. 

ø(a) IN GENERAL.—From amounts made available under section 

210(1) for a fiscal year, the Secretary is authorized to award grants 

under this section, on a competitive basis, to eligible States to enable the eligible States to carry out the activities described in subsection (d). 

ø(b) ELIGIBLE STATE.— ø(1) DEFINITION.—In this part, the term ‘‘eligible State’’ means—

ø(A) the Governor of a State; or 

ø(B) in the case of a State for which the constitution or 

law of such State designates another individual, entity, or 

agency in the State to be responsible for teacher certification and preparation activity, such individual, entity, or 

agency. 

ø(2) CONSULTATION.—The Governor and the individual, entity, or agency designated under paragraph (1) shall consult 

with the Governor, State board of education, State educational 

agency, or State agency for higher education, as appropriate, 

with respect to the activities assisted under this section. 

ø(3) CONSTRUCTION.—Nothing in this subsection shall be 

construed to negate or supersede the legal authority under 

State law of any State agency, State entity, or State public official over programs that are under the jurisdiction of the agency, entity, or official. 

ø(c) APPLICATION.—To be eligible to receive a grant under this 

section, an eligible State shall, at the time of the initial grant application, submit an application to the Secretary that— ø(1) meets the requirement of this section; 

ø(2) includes a description of how the eligible State intends 

to use funds provided under this section; and 

ø(3) contains such other information and assurances as the 

Secretary may require. 

ø(d) USES OF FUNDS.—An eligible State that receives a grant 

under this section shall use the grant funds to reform teacher preparation requirements, and to ensure that current and future teachers possess the necessary teaching skills and academic content 

knowledge in the subject areas in which the teachers are assigned 

to teach, by carrying out 1 or more of the following activities: 

ø(1) REFORMS.—Implementing reforms that hold institutions 

of higher education with teacher preparation programs accountable for preparing teachers who are highly competent in 

the academic content areas in which the teachers plan to 

teach, and possess strong teaching skills, which may include 

the use of rigorous subject matter competency tests and the requirement that a teacher have an academic major in the subject area, or related discipline, in which the teacher plans to 

teach. 

ø(2) CERTIFICATION OR LICENSURE REQUIREMENTS.—Reforming teacher certification or licensure requirements to ensure 

that teachers have the necessary teaching skills and academic 

content knowledge in the subject areas in which teachers are 

assigned to teach. 

346 

ø(3) ALTERNATIVES TO TRADITIONAL PREPARATION FOR TEACHING.—Providing prospective teachers with alternatives to traditional preparation for teaching through programs at colleges of 

arts and sciences or at nonprofit educational organizations. 

ø(4) ALTERNATIVE ROUTES TO STATE CERTIFICATION.—

Carrying out programs that—

ø(A) include support during the initial teaching 

experience; and 

ø(B) establish, expand, or improve alternative routes to 

State certification of teachers for highly qualified individuals, including mid-career professionals from other occupations, paraprofessionals, former military personnel and recent college graduates with records of academic distinction. 

ø(5) RECRUITMENT; PAY; REMOVAL.—Developing and implementing effective mechanisms to ensure that local educational 

agencies and schools are able to effectively recruit highly qualified teachers, to financially reward those teachers and principals whose students have made significant progress toward 

high academic performance, such as through performancebased compensation systems and access to ongoing professional 

development opportunities for teachers and administrators, 

and to expeditiously remove incompetent or unqualified teachers consistent with procedures to ensure due process for the 

teachers. 

ø(6) SOCIAL PROMOTION.—Development and implementation 

of efforts to address the problem of social promotion and to prepare teachers to effectively address the issues raised by ending 

the practice of social promotion. 

ø(7) RECRUITMENT.—Activities described in section 204(d). 

øSEC. 203. PARTNERSHIP GRANTS. 

ø(a) GRANTS.—From amounts made available under section 

210(2) for a fiscal year, the Secretary is authorized to award grants 

under this section, on a competitive basis, to eligible partnerships 

to enable the eligible partnerships to carry out the activities described in subsections (d) and (e). 

ø(b) DEFINITIONS.—

ø(1) ELIGIBLE PARTNERSHIPS.—In this part, the term ‘‘eligible 

partnerships’’ means an entity that—

ø(A) shall include—

ø(i) a partner institution; 

ø(ii) a school of arts and sciences; and 

ø(iii) a high need local educational agency; and 

ø(B) may include a Governor, State educational agency, 

the State board of education, the State agency for higher 

education, an institution of higher education not described 

in subparagraph (A), a public charter school, a public or 

private elementary school or secondary school, a public or 

private nonprofit educational organization, a business, a 

teacher organization, or a prekindergarten program. 

ø(2) PARTNER INSTITUTION.—In this section, the term ‘‘partner institution’’ means a private independent or State-supported public institution of higher education, the teacher training program of which demonstrates that—

347 

ø(A) graduates from the teacher training program exhibit strong performance on State-determined qualifying 

assessments for new teachers through—

ø(i) demonstrating that 80 percent or more of the 

graduates of the program who intend to enter the field 

of teaching have passed all of the applicable State 

qualification assessments for new teachers, which 

shall include an assessment of each prospective teacher’s subject matter knowledge in the content area or 

areas in which the teacher intends to teach; or 

ø(ii) being ranked among the highest-performing 

teacher preparation programs in the State as determined by the State—

ø(I) using criteria consistent with the requirements for the State report card under section 

207(b); and 

ø(II) using the State report card on teacher 

preparation required under section 207(b), after 

the first publication of such report card and for 

every year thereafter; or 

ø(B) the teacher training program requires all the students of the program to participate in intensive clinical experience, to meet high academic standards, and—

ø(i) in the case of secondary school candidates, to 

successfully complete an academic major in the subject 

area in which the candidate intends to teach or to 

demonstrate competence through a high level of performance in relevant content areas; and 

ø(ii) in the case of elementary school candidates, to 

successfully complete an academic major in the arts 

and sciences or to demonstrate competence through a 

high level of performance in core academic subject 

areas. 

ø(c) APPLICATION.—Each eligible partnership desiring a grant 

under this section shall submit an application to the Secretary at 

such time, in such manner, and accompanied by such information 

as the Secretary may require. Each such application shall—

ø(1) contain a needs assessment of all the partners with respect to teaching and learning and a description of how the 

partnership will coordinate with other teacher training or professional development programs, and how the activities of the 

partnership will be consistent with State, local, and other education reform activities that promote student achievement; 

ø(2) contain a resource assessment that describes the resources available to the partnership, the intended use of the 

grant funds, including a description of how the grant funds will 

be fairly distributed in accordance with subsection (f ), and the 

commitment of the resources of the partnership to the activities assisted under this part, including financial support, faculty participation, time commitments, and continuation of the 

activities when the grant ends; and 

ø(3) contain a description of—

ø(A) how the partnership will meet the purposes of this 

part; 

348 

ø(B) how the partnership will carry out the activities required under subsection (d) and any permissible activities 

under subsection (e); and 

ø(C) the partnership’s evaluation plan pursuant to section 206(b). 

ø(d) REQUIRED USES OF FUNDS.—An eligible partnership that receives a grant under this section shall use the grant funds to carry 

out the following activities: 

ø(1) REFORMS.—Implementing reforms within teacher preparation programs to hold the programs accountable for preparing teachers who are highly competent in the academic content areas in which the teachers plan to teach, and for promoting strong teaching skills, including working with a school 

of arts and sciences and integrating reliable research-based 

teaching methods into the curriculum, which curriculum shall 

include programs designed to successfully integrate technology 

into teaching and learning. 

ø(2) CLINICAL EXPERIENCE AND INTERACTION.—Providing sustained and high quality preservice clinical experience including 

the mentoring of prospective teachers by veteran teachers, and 

substantially increasing interaction between faculty at institutions of higher education and new and experienced teachers, 

principals, and other administrators at elementary schools or 

secondary schools, and providing support, including preparation time, for such interaction. 

ø(3) PROFESSIONAL DEVELOPMENT.—Creating opportunities 

for enhanced and ongoing professional development that improves the academic content knowledge of teachers in the subject areas in which the teachers are certified to teach or in 

which the teachers are working toward certification to teach, 

and that promotes strong teaching skills. 

ø(e) ALLOWABLE USES OF FUNDS.—An eligible partnership that 

receives a grant under this section may use such funds to carry out 

the following activities: 

ø(1) TEACHER PREPARATION AND PARENT INVOLVEMENT.—Preparing teachers to work with diverse student populations, including individuals with disabilities and limited English proficient individuals, and involving parents in the teacher preparation program reform process. 

ø(2) DISSEMINATION AND COORDINATION.—Broadly disseminating information on effective practices used by the partnership, and coordinating with the activities of the Governor, 

State board of education, State higher education agency, and 

State educational agency, as appropriate. 

ø(3) MANAGERIAL AND LEADERSHIP SKILLS.—Developing and 

implementing proven mechanisms to provide principals and superintendents with effective managerial and leadership skills 

that result in increased student achievement. 

ø(4) TEACHER RECRUITMENT.—Activities described in section 

204(d). 

ø(f ) SPECIAL RULE.—No individual member of an eligible partnership shall retain more than 50 percent of the funds made available to the partnership under this section. 

ø(g) CONSTRUCTION.—Nothing in this section shall be construed 

to prohibit an eligible partnership from using grant funds to coordiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00352 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
349 

nate with the activities of more than one Governor, State board of 

education, State educational agency, local educational agency, or 

State agency for higher education. 

øSEC. 204. TEACHER RECRUITMENT GRANTS. 

ø(a) PROGRAM AUTHORIZED.—From amounts made available 

under section 210(3) for a fiscal year, the Secretary is authorized 

to award grants, on a competitive basis, to eligible applicants to enable the eligible applicants to carry out activities described in subsection (d). 

ø(b) ELIGIBLE APPLICANT DEFINED.—In this part, the term ‘‘eligible applicant’’ means—

ø(1) an eligible State described in section 202(b); or 

ø(2) an eligible partnership described in section 203(b). 

ø(c) APPLICATION.—Any eligible applicant desiring to receive a 

grant under this section shall submit an application to the Secretary at such time, in such form, and containing such information 

as the Secretary may require, including—

ø(1) a description of the assessment that the eligible applicant, and the other entities with whom the eligible applicant 

will carry out the grant activities, have undertaken to determine the most critical needs of the participating high-need 

local educational agencies; 

ø(2) a description of the activities the eligible applicant will 

carry out with the grant; and 

ø(3) a description of the eligible applicant’s plan for continuing the activities carried out with the grant, once Federal 

funding ceases. 

ø(d) USES OF FUNDS.—Each eligible applicant receiving a grant 

under this section shall use the grant funds—

ø(1)(A) to award scholarships to help students pay the costs 

of tuition, room, board, and other expenses of completing a 

teacher preparation program; 

ø(B) to provide support services, if needed to enable scholarship recipients to complete postsecondary education programs; 

and 

ø(C) for followup services provided to former scholarship recipients during the recipients first 3 years of teaching; or 

ø(2) to develop and implement effective mechanisms to ensure that high need local educational agencies and schools are 

able to effectively recruit highly qualified teachers. 

ø(e) SERVICE REQUIREMENTS.—The Secretary shall establish such 

requirements as the Secretary finds necessary to ensure that recipients of scholarships under this section who complete teacher 

education programs subsequently teach in a high-need local educational agency, for a period of time equivalent to the period for 

which the recipients receive scholarship assistance, or repay the 

amount of the scholarship. The Secretary shall use any such repayments to carry out additional activities under this section. 

øSEC. 205. ADMINISTRATIVE PROVISIONS. 

ø(a) DURATION; ONE-TIME AWARDS; PAYMENTS.—

ø(1) DURATION.—

ø(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—

Grants awarded to eligible States and eligible applicants 

350 

under this part shall be awarded for a period not to exceed 

3 years. 

ø(B) ELIGIBLE PARTNERSHIPS.—Grants awarded to eligible partnerships under this part shall be awarded for a 

period of 5 years. 

ø(2) ONE-TIME AWARD.—An eligible State and an eligible 

partnership may receive a grant under each of sections 202, 

203, and 204 only once. 

ø(3) PAYMENTS.—The Secretary shall make annual payments 

of grant funds awarded under this part. 

ø(b) PEER REVIEW.—

ø(1) PANEL.—The Secretary shall provide the applications 

submitted under this part to a peer review panel for evaluation. With respect to each application, the peer review panel 

shall initially recommend the application for funding or for disapproval. 

ø(2) PRIORITY.—In recommending applications to the 

Secretary for funding under this part, the panel shall—

ø(A) with respect to grants under section 202, give 

priority to eligible States serving States that—

ø(i) have initiatives to reform State teacher certification requirements that are designed to ensure that 

current and future teachers possess the necessary 

teaching skills and academic content knowledge in the 

subject areas in which the teachers are certified or 

licensed to teach; 

ø(ii) include innovative reforms to hold institutions 

of higher education with teacher preparation programs 

accountable for preparing teachers who are highly 

competent in the academic content area in which the 

teachers plan to teach and have strong teaching skills; 

or 

ø(iii) involve the development of innovative efforts 

aimed at reducing the shortage of highly qualified 

teachers in high poverty urban and rural areas; 

ø(B) with respect to grants under section 203—

ø(i) give priority to applications from eligible partnerships that involve businesses; and 

ø(ii) take into consideration—

ø(I) providing an equitable geographic distribution of the grants throughout the United States; 

and 

ø(II) the potential of the proposed activities for 

creating improvement and positive change. 

ø(3) SECRETARIAL SELECTION.—The Secretary shall determine, based on the peer review process, which application shall 

receive funding and the amounts of the grants. In determining 

grant amounts, the Secretary shall take into account the total 

amount of funds available for all grants under this part and 

the types of activities proposed to be carried out. 

ø(c) MATCHING REQUIREMENTS.—

ø(1) STATE GRANTS.—Each eligible State receiving a grant 

under section 202 or 204 shall provide, from non-Federal 

sources, an amount equal to 50 percent of the amount of the 

351 

grant (in cash or in kind) to carry out the activities supported 

by the grant. 

ø(2) PARTNERSHIP GRANTS.—Each eligible partnership receiving a grant under section 203 or 204 shall provide, from nonFederal sources (in cash or in kind), an amount equal to 25 

percent of the grant for the first year of the grant, 35 percent 

of the grant for the second year of the grant, and 50 percent 

of the grant for each succeeding year of the grant. 

ø(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible 

State or eligible partnership that receives a grant under this part 

may not use more than 2 percent of the grant funds for purposes 

of administering the grant. 

ø(e) TEACHER QUALIFICATIONS PROVIDED TO PARENTS UPON RE- QUEST.—Any local educational agency or school that benefits from 

the activities assisted under this part shall make available, upon 

request and in an understandable and uniform format, to any parent of a student attending any school served by the local educational agency, information regarding the qualification of the student’s classroom teacher with regard to the subject matter in which 

the teacher provides instruction. The local educational agency shall 

inform parents that the parents are entitled to receive the information upon request. 

øSEC. 206. ACCOUNTABILITY AND EVALUATION. 

ø(a) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State 

that receives a grant under section 202 shall submit an annual 

accountability report to the Secretary, the Committee on Labor and 

Human Resources of the Senate, and the Committee on Education 

and the Workforce of the House of Representatives. Such report 

shall include a description of the degree to which the eligible State, 

in using funds provided under such section, has made substantial 

progress in meeting the following goals: 

ø(1) STUDENT ACHIEVEMENT.—Increasing student achievement for all students as defined by the eligible State. 

ø(2) RAISING STANDARDS.—Raising the State academic standards required to enter the teaching profession, including, 

where appropriate, through the use of incentives to incorporate 

the requirement of an academic major in the subject, or related 

discipline, in which the teacher plans to teach. 

ø(3) INITIAL CERTIFICATION OR LICENSURE.—Increasing success in the pass rate for initial State teacher certification or licensure, or increasing the numbers of highly qualified individuals being certified or licensed as teachers through alternative 

programs. 

ø(4) CORE ACADEMIC SUBJECTS.—

ø(A) SECONDARY SCHOOL CLASSES.—Increasing the percentage of secondary school classes taught in core academic subject areas by teachers—

ø(i) with academic majors in those areas or in a related field; 

ø(ii) who can demonstrate a high level of competence 

through rigorous academic subject area tests; or 

ø(iii) who can demonstrate competence through a 

high level of performance in relevant content areas. 

ø(B) ELEMENTARY SCHOOL CLASSES.—Increasing the percentage of elementary school classes taught by teachers—

352 

ø(i) with academic majors in the arts and sciences; 

or 

ø(ii) who can demonstrate competence through a 

high level of performance in core academic subjects. 

ø(5) DECREASING TEACHER SHORTAGES.—Decreasing shortages of qualified teachers in poor urban and rural areas. 

ø(6) INCREASING OPPORTUNITIES FOR PROFESSIONAL DEVELOP- MENT.—Increasing opportunities for enhanced and ongoing professional development that improves the academic content 

knowledge of teachers in the subject areas in which the teachers are certified or licensed to teach or in which the teachers 

are working toward certification or licensure to teach, and that 

promotes strong teaching skills. 

ø(7) TECHNOLOGY INTEGRATION.—Increasing the number of 

teachers prepared to integrate technology in the classroom. 

ø(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each eligible partnership receiving a grant under section 203 shall establish and include 

in the application submitted under section 203(c), an evaluation 

plan that includes strong performance objectives. The plan shall include objectives and measures for—

ø(1) increased student achievement for all students as measured by the partnership; 

ø(2) increased teacher retention in the first 3 years of a 

teacher’s career; 

ø(3) increased success in the pass rate for initial State certification or licensure of teachers; and 

ø(4) increased percentage of secondary school classes taught 

in core academic subject areas by teachers—

ø(A) with academic majors in the areas or in a related 

field; and 

ø(B) who can demonstrate a high level of competence 

through rigorous academic subject area tests or who can 

demonstrate competence through a high level of performance in relevant content areas; 

ø(5) increasing the percentage of elementary school classes 

taught by teachers with academic majors in the arts and 

sciences or who demonstrate competence through a high level 

of performance in core academic subject areas; and 

ø(6) increasing the number of teachers trained in technology. 

ø(c) REVOCATION OF GRANT.—

ø(1) REPORT.—Each eligible State or eligible partnership receiving a grant under this part shall report annually on the 

progress of the eligible State or eligible partnership toward 

meeting the purposes of this part and the goals, objectives, and 

measures described in subsections (a) and (b). 

ø(2) REVOCATION.—

ø(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—If the 

Secretary determines that an eligible State or eligible applicant is not making substantial progress in meeting the 

purposes, goals, objectives, and measures, as appropriate, 

by the end of the second year of a grant under this part, 

then the grant payment shall not be made for the third 

year of the grant. 

ø(B) ELIGIBLE PARTNERSHIPS.—If the Secretary determines that an eligible partnership is not making substanVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00356 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
353 

tial progress in meeting the purposes, goals, objectives, 

and measures, as appropriate, by the end of the third year 

of a grant under this part, then the grant payments shall 

not be made for any succeeding year of the grant. 

ø(d) EVALUATION AND DISSEMINATION.—The Secretary shall 

evaluate the activities funded under this part and report the Secretary’s findings regarding the activities to the Committee on 

Labor and Human Resources of the Senate and the Committee on 

Education and the Workforce of the House of Representatives. The 

Secretary shall broadly disseminate successful practices developed 

by eligible States and eligible partnerships under this part, and 

shall broadly disseminate information regarding such practices 

that were found to be ineffective. 

øSEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS. 

ø(a) DEVELOPMENT OF DEFINITIONS AND REPORTING METHODS.— Within 9 months of the date of enactment of the Higher Education 

Amendments of 1998, the Commissioner of the National Center for 

Education Statistics, in consultation with States and institutions of 

higher education, shall develop key definitions for terms, and uniform reporting methods (including the key definitions for the consistent reporting of pass rates), related to the performance of elementary school and secondary school teacher preparation programs. 

ø(b) STATE REPORT CARD ON THE QUALITY OF TEACHER PREPARA- TION.—Each State that receives funds under this Act shall provide 

to the Secretary, within 2 years of the date of enactment of the 

Higher Education Amendments of 1998, and annually thereafter, 

in a uniform and comprehensible manner that conforms with the 

definitions and methods established in subsection (a), a State report card on the quality of teacher preparation in the State, which 

shall include at least the following: 

ø(1) A description of the teacher certification and licensure 

assessments, and any other certification and licensure requirements, used by the State. 

ø(2) The standards and criteria that prospective teachers 

must meet in order to attain initial teacher certification or licensure and to be certified or licensed to teach particular subjects or in particular grades within the State. 

ø(3) A description of the extent to which the assessments 

and requirements described in paragraph (1) are aligned with 

the State’s standards and assessments for students. 

ø(4) The percentage of teaching candidates who passed each 

of the assessments used by the State for teacher certification 

and licensure, and the passing score on each assessment that 

determines whether a candidate has passed that assessment. 

ø(5) The percentage of teaching candidates who passed each 

of the assessments used by the State for teacher certification 

and licensure, disaggregated and ranked, by the teacher preparation program in that State from which the teacher candidate 

received the candidate’s most recent degree, which shall be 

made available widely and publicly. 

ø(6) Information on the extent to which teachers in the State 

are given waivers of State certification or licensure requirements, including the proportion of such teachers distributed 

354 

across high- and low-poverty school districts and across subject 

areas. 

ø(7) A description of each State’s alternative routes to teacher certification, if any, and the percentage of teachers certified 

through alternative certification routes who pass State teacher 

certification or licensure assessments. 

ø(8) For each State, a description of proposed criteria for assessing the performance of teacher preparation programs within institutions of higher education in the State, including indicators of teacher candidate knowledge and skills. 

ø(9) Information on the extent to which teachers or prospective teachers in each State are required to take examinations 

or other assessments of their subject matter knowledge in the 

area or areas in which the teachers provide instruction, the 

standards established for passing any such assessments, and 

the extent to which teachers or prospective teachers are required to receive a passing score on such assessments in order 

to teach in specific subject areas or grade levels. 

ø(c) INITIAL REPORT.—

ø(1) IN GENERAL.—Each State that receives funds under this 

Act, not later than 6 months of the date of enactment of the 

Higher Education Amendments of 1998 and in a uniform and 

comprehensible manner, shall submit to the Secretary the information described in paragraphs (1), (5), and (6) of subsection 

(b). Such information shall be compiled by the Secretary and 

submitted to the Committee on Labor and Human Resources 

of the Senate and the Committee on Education and the Workforce of the House of Representatives not later than 9 months 

after the date of enactment of the Higher Education Amendments of 1998. 

ø(2) CONSTRUCTION.—Nothing in this subsection shall be 

construed to require a State to gather information that is not 

in the possession of the State or the teacher preparation programs in the State, or readily available to the State or teacher 

preparation programs. 

ø(d) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER

PREPARATION.—

ø(1) REPORT CARD.—The Secretary shall provide to Congress, 

and publish and make widely available, a report card on teacher qualifications and preparation in the United States, including all the information reported in paragraphs (1) through (9) 

of subsection (b). Such report shall identify States for which eligible States and eligible partnerships received a grant under 

this part. Such report shall be so provided, published and 

made available not later than 2 years 6 months after the date 

of enactment of the Higher Education Amendments of 1998 

and annually thereafter. 

ø(2) REPORT TO CONGRESS.—The Secretary shall report to 

Congress—

ø(A) a comparison of States’ efforts to improve teaching 

quality; and 

ø(B) regarding the national mean and median scores on 

any standardized test that is used in more than 1 State for 

teacher certification or licensure. 

355 

ø(3) SPECIAL RULE.—In the case of teacher preparation programs with fewer than 10 graduates taking any single initial 

teacher certification or licensure assessment during an academic year, the Secretary shall collect and publish information 

with respect to an average pass rate on State certification or 

licensure assessments taken over a 3-year period. 

ø(e) COORDINATION.—The Secretary, to the extent practicable, 

shall coordinate the information collected and published under this 

part among States for individuals who took State teacher certification or licensure assessments in a State other than the State in 

which the individual received the individual’s most recent degree. 

ø(f ) INSTITUTIONAL REPORT CARDS ON THE QUALITY OF TEACHER

PREPARATION.—

ø(1) REPORT CARD.—Each institution of higher education 

that conducts a teacher preparation program that enrolls students receiving Federal assistance under this Act, not later 

than 18 months after the date of enactment of the Higher Education Amendments of 1998 and annually thereafter, shall report to the State and the general public, in a uniform and comprehensible manner that conforms with the definitions and 

methods established under subsection (a), the following information: 

ø(A) PASS RATE.—(i) For the most recent year for which 

the information is available, the pass rate of the institution’s graduates on the teacher certification or licensure 

assessments of the State in which the institution is located, but only for those students who took those assessments within 3 years of completing the program. 

ø(ii) A comparison of the program’s pass rate with the 

average pass rate for programs in the State. 

ø(iii) In the case of teacher preparation programs with 

fewer than 10 graduates taking any single initial teacher 

certification or licensure assessment during an academic 

year, the institution shall collect and publish information 

with respect to an average pass rate on State certification 

or licensure assessments taken over a 3-year period. 

ø(B) PROGRAM INFORMATION.—The number of students 

in the program, the average number of hours of supervised 

practice teaching required for those in the program, and 

the faculty-student ratio in supervised practice teaching. 

ø(C) STATEMENT.—In States that approve or accredit 

teacher education programs, a statement of whether the 

institution’s program is so approved or accredited. 

ø(D) DESIGNATION AS LOW-PERFORMING.—Whether the 

program has been designated as low-performing by the 

State under section 208(a). 

ø(2) REQUIREMENT.—The information described in paragraph 

(1) shall be reported through publications such as school catalogs and promotional materials sent to potential applicants, 

secondary school guidance counselors, and prospective employers of the institution’s program graduates. 

ø(3) FINES.—In addition to the actions authorized in section 

487(c), the Secretary may impose a fine not to exceed $25,000 

on an institution of higher education for failure to provide the 

356 

information described in this subsection in a timely or accurate 

manner. 

øSEC. 208. STATE FUNCTIONS. 

ø(a) STATE ASSESSMENT.—In order to receive funds under this 

Act, a State, not later than 2 years after the date of enactment of 

the Higher Education Amendments of 1998, shall have in place a 

procedure to identify, and assist, through the provision of technical 

assistance, low-performing programs of teacher preparation within 

institutions of higher education. Such State shall provide the Secretary an annual list of such low-performing institutions that includes an identification of those institutions at-risk of being placed 

on such list. Such levels of performance shall be determined solely 

by the State and may include criteria based upon information collected pursuant to this part. Such assessment shall be described in 

the report under section 207(b). 

ø(b) TERMINATION OF ELIGIBILITY.—Any institution of higher 

education that offers a program of teacher preparation in which the 

State has withdrawn the State’s approval or terminated the State’s 

financial support due to the low performance of the institution’s 

teacher preparation program based upon the State assessment described in subsection (a)—

ø(1) shall be ineligible for any funding for professional development activities awarded by the Department of Education; 

and 

ø(2) shall not be permitted to accept or enroll any student 

that receives aid under title IV of this Act in the institution’s 

teacher preparation program. 

ø(c) NEGOTIATED RULEMAKING.—If the Secretary develops any 

regulations implementing subsection (b)(2), the Secretary shall submit such proposed regulations to a negotiated rulemaking process, 

which shall include representatives of States, institutions of higher 

education, and educational and student organizations. 

øSEC. 209. GENERAL PROVISIONS. 

ø(a) METHODS.—In complying with sections 207 and 208, the Secretary shall ensure that States and institutions of higher education 

use fair and equitable methods in reporting and that the reporting 

methods protect the privacy of individuals. 

ø(b) SPECIAL RULE.—For each State in which there are no State 

certification or licensure assessments, or for States that do not set 

minimum performance levels on those assessments—

ø(1) the Secretary shall, to the extent practicable, collect 

data comparable to the data required under this part from 

States, local educational agencies, institutions of higher education, or other entities that administer such assessments to 

teachers or prospective teachers; and 

ø(2) notwithstanding any other provision of this part, the 

Secretary shall use such data to carry out requirements of this 

part related to assessments or pass rates. 

ø(c) LIMITATIONS.—

ø(1) FEDERAL CONTROL PROHIBITED.—Nothing in this part 

shall be construed to permit, allow, encourage, or authorize 

any Federal control over any aspect of any private, religious, 

or home school, whether or not a home school is treated as a 

private school or home school under State law. This section 

357 

shall not be construed to prohibit private, religious, or home 

schools from participation in programs or services under this 

part. 

ø(2) NO CHANGE IN STATE CONTROL ENCOURAGED OR REQUIRED.—Nothing in this part shall be construed to encourage 

or require any change in a State’s treatment of any private, religious, or home school, whether or not a home school is treated as a private school or home school under State law. 

ø(3) NATIONAL SYSTEM OF TEACHER CERTIFICATION PROHIBITED.—Nothing in this part shall be construed to permit, allow, 

encourage, or authorize the Secretary to establish or support 

any national system of teacher certification. 

øSEC. 210. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this part 

$300,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years, of which—

ø(1) 45 percent shall be available for each fiscal year to 

award grants under section 202; 

ø(2) 45 percent shall be available for each fiscal year to 

award grants under section 203; and 

ø(3) 10 percent shall be available for each fiscal year to 

award grants under section 204.¿ 

PART A—TEACHER QUALITY ENHANCEMENT 

GRANTS FOR STATES AND PARTNERSHIPS 

SEC. 201. PURPOSES; DEFINITIONS. 

(a) PURPOSES.—The purposes of this part are to—

(1) improve student academic achievement; 

(2) improve the quality of the current and future teaching 

force by improving the preparation of prospective teachers and 

enhancing professional development activities; 

(3) hold institutions of higher education accountable for preparing highly qualified teachers; and 

(4) recruit qualified individuals, including minorities and individuals from other occupations, into the teaching force. 

(b) DEFINITIONS.—In this part: 

(1) ARTS AND SCIENCES.—The term ‘‘arts and sciences’’

means—

(A) when referring to an organizational unit of an institution of higher education, any academic unit that offers 

one or more academic majors in disciplines or content 

areas corresponding to the academic subject matter areas 

in which teachers provide instruction; and 

(B) when referring to a specific academic subject matter 

area, the disciplines or content areas in which academic 

majors are offered by the arts and science organizational 

unit. 

(2) EXEMPLARY TEACHER.—The term ‘‘exemplary teacher’’ has 

the meaning given such term in section 9101 of the Elementary 

and Secondary Education Act of 1965 (20 U.S.C. 7801). 

(3) HIGHLY QUALIFIED.—The term ‘‘highly qualified’’ when 

used with respect to an individual means that the individual 

is highly qualified as determined under section 9101 of the EleVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00361 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
358 

mentary and Secondary Education Act of 1965 (20 U.S.C. 7801) 

or section 602 of the Individuals with Disabilities Education 

Act (20 U.S.C. 1401). 

(4) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term ‘‘high-need local educational agency’’ means a local educational 

agency—

(A)(i)(I) that serves not fewer than 10,000 children from 

families with incomes below the poverty line; or 

(II) for which not less than 25 percent of the children 

served by the agency are from families with incomes below 

the poverty line; 

(ii) that is among those serving the highest number or 

percentage of children from families with incomes below the 

poverty line in the State, but this clause applies only in a 

State that has no local educational agency meeting the requirements of clause (i); or 

(iii) with a total of less than 600 students in average 

daily attendance at the schools that are served by the agency and all of whose schools are designated with a school locale code of 7, as determined by the Secretary; and 

(B)(i) for which there is a high percentage of teachers not 

teaching in the academic subjects or grade levels that the 

teachers were trained to teach; or 

(ii) for which there is a high percentage of teachers with 

emergency, provisional, or temporary certification or licensing. 

(5) POVERTY LINE.—The term ‘‘poverty line’’ means the poverty 

line (as defined by the Office of Management and Budget, and 

revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved. 

(6) PROFESSIONAL DEVELOPMENT.—The term ‘‘professional development’’ has the meaning given such term in section 9101 of 

the Elementary and Secondary Education Act of 1965 (20 

U.S.C. 7801). 

(7) SCIENTIFICALLY BASED READING RESEARCH.—The term ‘‘scientifically based reading research’’ has the meaning given 

such term in section 1208 of the Elementary and Secondary 

Education Act of 1965 (20 U.S.C. 6368). 

(8) SCIENTIFICALLY BASED RESEARCH.—The term ‘‘scientifically based research’’ has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 

1965 (20 U.S.C. 7801). 

(9) TEACHING SKILLS.—The term ‘‘teaching skills’’ means 

skills that—

(A) are based on scientifically based research; 

(B) enable teachers to effectively convey and explain subject matter content; 

(C) lead to increased student academic achievement; and 

(D) use strategies that— (i) are specific to subject matter; 

(ii) include ongoing assessment of student learning; 

(iii) focus on identification and tailoring of academic 

instruction to students’s specific learning needs; and 

(iv) focus on classroom management. 

359 

SEC. 202. STATE GRANTS. 

(a) IN GENERAL.—From amounts made available under section 

210(1) for a fiscal year, the Secretary is authorized to award grants 

under this section, on a competitive basis, to eligible States to enable the eligible States to carry out the activities described in subsection (d). 

(b) ELIGIBLE STATE.—

(1) DEFINITION.—In this part, the term ‘‘eligible State’’

means—

(A) the Governor of a State; or 

(B) in the case of a State for which the constitution or 

law of such State designates another individual, entity, or 

agency in the State to be responsible for teacher certification and preparation activity, such individual, entity, or 

agency. 

(2) CONSULTATION.—The Governor or the individual, entity, 

or agency designated under paragraph (1)(B) shall consult with 

the Governor, State board of education, State educational agency, State agency for higher education, or State agency responsible for early childhood education and programs, as appropriate, with respect to the activities assisted under this section. 

(3) CONSTRUCTION.—Nothing in this subsection shall be construed to negate or supersede the legal authority under State 

law of any State agency, State entity, or State public official 

over programs that are under the jurisdiction of the agency, entity, or official. 

(c) APPLICATION.—To be eligible to receive a grant under this section, an eligible State shall submit an application to the Secretary 

that—

(1) meets the requirement of this section; 

(2) demonstrates that the State is in full compliance with sections 207 and 208; 

(3) includes a description of how the eligible State intends to 

use funds provided under this section; 

(4) includes measurable objectives for the use of the funds 

provided under the grant; 

(5) demonstrates the State has submitted and is actively implementing a plan that meets the requirements of sections 

1111(h)(1)(C)(viii) and 1119 of the Elementary and Secondary 

Education Act of 1965 (20 U.S.C. 6311(h)(1)(C)(viii) and 6319); 

and 

(6) contains such other information and assurances as the 

Secretary may require. 

(d) USES OF FUNDS.—An eligible State that receives a grant 

under this section shall use the grant funds to reform teacher preparation requirements, to coordinate with State activities under section 2113(c) of the Elementary and Secondary Education Act of 

1965 (20 U.S.C. 6613(c)), and to ensure that current and future 

teachers are highly qualified, by carrying out one or more of the following activities: 

(1) REFORMS.—Ensuring that all teacher preparation programs in the State are preparing teachers who are highly qualified, are able to understand scientifically based research and its 

applicability, and are able to use advanced technology effectively in the classroom, including use for instructional techVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00363 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
360 

niques to improve student academic achievement, by assisting 

such programs— (A) to retrain faculty; and 

(B) to design (or redesign) teacher preparation programs 

so they—

(i) are based on rigorous academic content, scientifically based research (including scientifically based 

reading research), and challenging State student academic content standards; and 

(ii) promote strong teaching skills. 

(2) CERTIFICATION OR LICENSURE REQUIREMENTS.—Reforming teacher certification (including recertification) or licensing 

requirements to ensure that— (A) teachers have the subject matter knowledge and 

teaching skills in the academic subjects that the teachers 

teach that are necessary to help students meet challenging 

State student academic achievement standards; and 

(B) such requirements are aligned with challenging State 

academic content standards. 

(3) ALTERNATIVES TO TRADITIONAL TEACHER PREPARATION

AND STATE CERTIFICATION.—Providing prospective teachers with 

alternative routes to State certification and traditional preparation to become highly qualified teachers through— (A) innovative approaches that reduce unnecessary barriers to State certification while producing highly qualified 

teachers, which may include articulation agreements between institutions of higher education; 

(B) programs that provide support to teachers during 

their initial years in the profession; and 

(C) alternative routes to State certification of teachers for 

qualified individuals, including mid-career professionals 

from other occupations, former military personnel, and recent college graduates with records of academic distinction. 

(4) INNOVATIVE PROGRAMS.—Planning and implementing innovative programs to enhance the ability of institutions of higher education to prepare highly qualified teachers, such as charter colleges of education or university and local educational 

agency partnership schools, that—

(A) permit flexibility in meeting State requirements as 

long as graduates, during their initial years in the profession, increase student academic achievement; 

(B) provide long-term data gathered from teachers’ performance over multiple years in the classroom on the ability to increase student academic achievement; 

(C) ensure high-quality preparation of teachers from 

underrepresented groups; and 

(D) create performance measures that can be used to document the effectiveness of innovative methods for preparing 

highly qualified teachers. 

(5) MERIT PAY.—Developing, or assisting local educational 

agencies in developing— (A) merit-based performance systems that reward teachers who increase student academic achievement; and 

(B) strategies that provide differential and bonus pay in 

high-need local educational agencies to retain—

361 

(i) principals; 

(ii) highly qualified teachers who teach in high-need 

academic subjects, such as reading, mathematics, and 

science; 

(iii) highly qualified teachers who teach in schools 

identified for school improvement under section 1116(b) 

of the Elementary and Secondary Education Act of 

1965 (20 U.S.C. 6316(b)); 

(iv) special education teachers; 

(v) teachers specializing in teaching limited English 

proficient children; and 

(vi) highly qualified teachers in urban and rural 

schools or districts. 

(6) TEACHER ADVANCEMENT.—Developing, or assisting local 

educational agencies in developing, teacher advancement and 

retention initiatives that promote professional growth and emphasize multiple career paths (such as paths to becoming a 

highly qualified mentor teacher or exemplary teacher) and pay 

differentiation. 

(7) TEACHER REMOVAL.—Developing and implementing effective mechanisms to ensure that local educational agencies and 

schools are able to remove expeditiously incompetent or unqualified teachers consistent with procedures to ensure due 

process for the teachers. 

(8) TECHNICAL ASSISTANCE.—Providing technical assistance 

to low-performing teacher preparation programs within institutions of higher education identified under section 208(a). 

(9) TEACHER EFFECTIVENESS.—Developing—

(A) systems to measure the effectiveness of teacher preparation programs and professional development programs; 

and 

(B) strategies to document gains in student academic 

achievement or increases in teacher mastery of the academic subjects the teachers teach as a result of such programs. 

(10) TEACHER RECRUITMENT AND RETENTION.—Undertaking 

activities that—

(A) develop and implement effective mechanisms to ensure that local educational agencies and schools are able effectively to recruit and retain highly qualified teachers; or 

(B) are described in section 204(d). 

(11) EARLY CHILDHOOD EDUCATOR.—Developing strategies—

(A) to improve the qualifications of preschool teachers, 

which may include State certification for such teachers; 

(B) to improve and expand preschool teacher preparation 

programs; and 

(C) to reduce unnecessary burdens to the attainment of a 

bachelor’s degree in early childhood education and increase 

the number of bilingual early childhood educators, which 

may include developing articulation agreements between institutions of higher education. 

(12) GIFTED AND TALENTED STUDENTS.—Incorporating the 

learning needs of gifted and talented students into the activities 

described in paragraph (1), (2), or (3) in order to ensure that 

362 

new teachers possess the basic knowledge and skills necessary 

to meet the educational needs of gifted and talented students. 

(13) NEW-TEACHER MENTORING ON THE NEEDS OF GIFTED AND

TALENTED STUDENTS.— Establishing or expanding new-teacher 

mentoring and assessment programs (including induction and 

evaluation programs) that are a part of a licensure process 

which is designed to demonstrate that new teachers possess 

basic knowledge of the classroom indicators of giftedness, are 

able to identify student learning differences among gifted students, and are able to provide instruction to accommodate such 

differences. 

(14) SPECIAL EDUCATION, MATH, AND SCIENCE FACULTY.— Supporting the development of new special education, math, 

and science faculty positions in institutions of higher education 

dedicated to the preparation of highly qualified special education, math, and science teachers (as defined by section 9101 

of the Elementary and Secondary Education Act or section 602 

of the Individuals with Disabilities Education Act), with matching funds from institutions of higher education and a commitment to continue new faculty positions when Federal funding 

ends. 

(15) SUBJECT AREA EVALUATION.—Assessing the performance 

of teacher preparation programs within institutions of higher 

education in the State using an assessment which provides 

comparisons across such schools in the State based upon indicators including teacher candidate knowledge in subject areas 

in which such candidate has been prepared to teach. Such information shall be made publicly available and widely disseminated. 

(e) EVALUATION.— (1) EVALUATION SYSTEM.—An eligible State that receives a 

grant under this section shall develop and utilize a system to 

evaluate annually the effectiveness of teacher preparation programs and professional development activities within the State 

in producing gains in— (A) the teacher’s annual contribution to improving student academic achievement, as measured by State academic assessments required under section 1111(b)(3) of the 

Elementary and Secondary Education Act of 1965 (20 

U.S.C. 6311(b)(3)); and 

(B) teacher mastery of the academic subjects they teach, 

as measured by pre- and post-participation tests of teacher 

knowledge, as appropriate. 

(2) USE OF EVALUATION SYSTEM.—Such evaluation system 

shall be used by the State to evaluate—

(A) activities carried out using funds provided under this 

section; and 

(B) the quality of its teacher education programs. 

(3) PUBLIC REPORTING.—The State shall make the information described in paragraph (1) widely available through public 

means, such as posting on the Internet, distribution to the 

media, and distribution through public agencies. 

SEC. 203. PARTNERSHIP GRANTS. 

(a) GRANTS.—From amounts made available under section 210(2) 

for a fiscal year, the Secretary is authorized to award grants under 

363 

this section, on a competitive basis, to eligible partnerships to enable 

the eligible partnerships to carry out the activities described in subsections (d) and (e). 

(b) DEFINITIONS.—

(1) ELIGIBLE PARTNERSHIPS.—In this part, the term ‘‘eligible 

partnership’’ means an entity that—

(A) shall include—

(i) a partner institution; 

(ii) a school of arts and sciences; 

(iii) a high-need local educational agency; and 

(iv) a public or private educational organization; and 

(B) may include a Governor, State educational agency, 

the State board of education, the State agency for higher 

education, an institution of higher education not described 

in subparagraph (A), a public charter school, a public or 

private elementary school or secondary school, a public or 

private educational organization, a business, a science-, 

mathematics-, or technology-oriented entity, a faith-based 

or community organization, a prekindergarten program, a 

teacher organization, an education service agency, a consortia of local educational agencies, or a nonprofit telecommunications entity. 

(2) PARTNER INSTITUTION.—In this section, the term ‘‘partner 

institution’’ means an institution of higher education, the teacher training program of which demonstrates that—

(A) graduates from the teacher training program exhibit 

strong performance on State-determined qualifying assessments for new teachers through—

(i) demonstrating that the graduates of the program 

who intend to enter the field of teaching have passed 

all of the applicable State qualification assessments for 

new teachers, which shall include an assessment of 

each prospective teacher’s subject matter knowledge in 

the content area or areas in which the teacher intends 

to teach; or 

(ii) being ranked among the highest-performing 

teacher preparation programs in the State as determined by the State—

(I) using criteria consistent with the requirements for the State report card under section 

207(a); and 

(II) using the State report card on teacher preparation required under section 207(a); or 

(B) the teacher training program requires all the students 

of the program to participate in intensive clinical experience, to meet high academic standards, and—

(i) in the case of secondary school candidates, to successfully complete an academic major in the subject 

area in which the candidate intends to teach or to demonstrate competence through a high level of performance in relevant content areas; and 

(ii) in the case of elementary school candidates, to 

successfully complete an academic major in the arts 

and sciences or to demonstrate competence through a 

364 

high level of performance in core academic subject 

areas. 

(c) APPLICATION.—Each eligible partnership desiring a grant 

under this section shall submit an application to the Secretary at 

such time, in such manner, and accompanied by such information 

as the Secretary may require. Each such application shall—

(1) contain a needs assessment of all the partners with respect 

to teaching and learning and a description of how the partnership will coordinate with other teacher training or professional 

development programs, and how the activities of the partnership will be consistent with State, local, and other education reform activities that promote student academic achievement; 

(2) contain a resource assessment that describes the resources 

available to the partnership, the intended use of the grant 

funds, including a description of how the grant funds will be 

used in accordance with subsection (f), and the commitment of 

the resources of the partnership to the activities assisted under 

this part, including financial support, faculty participation, 

time commitments, and continuation of the activities when the 

grant ends; 

(3) contain a description of—

(A) how the partnership will meet the purposes of this 

part; 

(B) how the partnership will carry out the activities required under subsection (d) and any permissible activities 

under subsection (e); 

(C) the partnership’s evaluation plan pursuant to section 

206(b); 

(D) how faculty of the teacher preparation program at the 

partner institution will serve, over the term of the grant, 

with highly qualified teachers in the classrooms of the 

high-need local educational agency included in the partnership; 

(E) how the partnership will ensure that teachers, principals, and superintendents in private elementary and secondary schools located in the geographic areas served by an 

eligible partnership under this section will participate equitably in accordance with section 9501 of the Elementary 

and Secondary Education Act of 1965 (20 U.S.C. 7881); 

(F) how the partnership will design and implement a 

clinical program component that includes close supervision 

of student teachers by faculty of the teacher preparation 

program at the partner institution and mentor teachers; 

(G) how the partnership will design and implement an 

induction program to support all new teachers through the 

first 3 years of teaching that includes mentors who are 

trained and compensated by the partnership for their work 

with new teachers; and 

(H) how the partnership will collect, analyze, and use 

data on the retention of all teachers in schools located in 

the geographic areas served by the partnership to evaluate 

the effectiveness of its teacher support system; and 

(4) contain a certification from the high-need local educational agency included in the partnership that it has reviewed 

365 

the application and determined that the grant proposed will 

comply with subsection (f). 

(d) REQUIRED USES OF FUNDS.—An eligible partnership that receives a grant under this section shall use the grant funds to reform 

teacher preparation requirements, to coordinate with State activities 

under section 2113(c) of the Elementary and Secondary Education 

Act of 1965 (20 U.S.C. 6613(c)), and to ensure that current and future teachers are highly qualified, by carrying out one or more of 

the following activities: 

(1) REFORMS.—Implementing reforms within teacher preparation programs to ensure that such programs are preparing 

teachers who are highly qualified, are able to understand scientifically based research and its applicability, and are able to 

use advanced technology effectively in the classroom, including 

use for instructional techniques to improve student academic 

achievement, by—

(A) retraining faculty; and 

(B) designing (or redesigning) teacher preparation programs so they—

(i) are based on rigorous academic content, scientifically based research (including scientifically based 

reading research), and challenging State student academic content standards; and 

(ii) promote strong teaching skills. 

(2) CLINICAL EXPERIENCE AND INTERACTION.—Providing sustained and high-quality preservice and in-service clinical experience, including the mentoring of prospective teachers by exemplary teachers, substantially increasing interaction between faculty at institutions of higher education and new and experienced teachers, principals, and other administrators at elementary schools or secondary schools, and providing support for 

teachers, including preparation time and release time, for such 

interaction. 

(3) PROFESSIONAL DEVELOPMENT.—Creating opportunities for 

enhanced and ongoing professional development that improves 

the academic content knowledge of teachers in the subject areas 

in which the teachers are certified to teach or in which the 

teachers are working toward certification to teach, and that promotes strong teaching skills. 

(4) TEACHER PREPARATION.—Developing, or assisting local 

educational agencies in developing, professional development 

activities that—

(A) provide training in how to teach and address the 

needs of students with different learning styles, particularly 

students with disabilities, limited English proficient students, gifted and talented students, and students with special learning needs; and 

(B) provide training in methods of—

(i) improving student behavior in the classroom; and 

(ii) identifying early and appropriate interventions to 

help students described in subparagraph (A) learn. 

(e) ALLOWABLE USES OF FUNDS.—An eligible partnership that receives a grant under this section may use such funds to carry out 

the following activities: 

366 

(1) ALTERNATIVES TO TRADITIONAL TEACHER PREPARATION

AND STATE CERTIFICATION.—Providing prospective teachers with 

alternative routes to State certification and traditional preparation to become highly qualified teachers through—

(A) innovative approaches that reduce unnecessary barriers to teacher preparation producing highly qualified 

teachers, which may include articulation agreements between institutions of higher education; 

(B) programs that provide support during a teacher’s initial years in the profession; and 

(C) alternative routes to State certification of teachers for 

qualified individuals, including mid-career professionals 

from other occupations, former military personnel, and recent college graduates with records of academic distinction. 

(2) DISSEMINATION AND COORDINATION.—Broadly disseminating information on effective practices used by the partnership, and coordinating with the activities of the Governor, State 

board of education, State higher education agency, and State 

educational agency, as appropriate. 

(3) MANAGERIAL AND LEADERSHIP SKILLS.—Developing and 

implementing professional development programs for principals 

and superintendents that enable them to be effective school 

leaders and prepare all students to meet challenging State academic content and student academic achievement standards. 

(4) TEACHER RECRUITMENT.—Activities—

(A) to encourage students to become highly qualified 

teachers, such as extracurricular enrichment activities; and 

(B) activities described in section 204(d). 

(5) CLINICAL EXPERIENCE IN SCIENCE, MATHEMATICS, AND

TECHNOLOGY.—Creating opportunities for clinical experience 

and training, by participation in the business, research, and 

work environments with professionals, in areas relating to 

science, mathematics, and technology for teachers and prospective teachers, including opportunities for use of laboratory 

equipment, in order for the teacher to return to the classroom 

for at least 2 years and provide instruction that will raise student academic achievement. 

(6) COORDINATION WITH COMMUNITY COLLEGES.—Coordinating with community colleges to implement teacher preparation programs, including through distance learning or articulation agreements, for the purposes of allowing prospective teachers—

(A) to attain a bachelor’s degree and State certification or 

licensure; and 

(B) to become highly qualified teachers. 

(7) TEACHER MENTORING.—Establishing or implementing a 

teacher mentoring program that—

(A) includes minimum qualifications for mentors; 

(B) provides training and stipends for mentors; 

(C) provides mentoring programs for teachers in their 

first 3 years of teaching; 

(D) provides regular and ongoing opportunities for mentors and mentees to observe each other’s teaching methods 

in classroom settings during the school day; 

367 

(E) establishes an evaluation and accountability plan for 

activities conducted under this paragraph that includes rigorous objectives to measure the impact of such activities; 

and 

(F) provides for a report to the Secretary on an annual 

basis regarding the partnership’s progress in meeting the 

objectives described in subparagraph (E). 

(8) COMPUTER SOFTWARE FOR MULTILINGUAL EDUCATION.— Training teachers to use computer software for multilingual 

education to address the needs of limited English proficient students. 

(9) GIFTED AND TALENTED STUDENTS.—Increasing the knowledge and skills of preservice teachers participating in activities 

under subsection (d) in the educational and related needs of 

gifted and talented students by, among other strategies, infusing teacher coursework with units on the characteristics of 

high-ability learners, using assessments to identify preexisting 

knowledge and skills among students, and developing teaching 

strategies that are driven by the learner’s progress. 

(10) REDUCING THE SHORTAGE OF HIGHLY QUALIFIED SPECIAL

EDUCATION, MATH, AND SCIENCE TEACHERS.—Increasing the 

number of highly qualified special education, math, and science 

teachers (as defined by section 9101 of the Elementary and Secondary Education Act or section 602 of the Individuals with 

Disabilities Education Act) through such activities as recruitment, scholarships for tuition, and new teacher mentoring. 

(f) SPECIAL RULE.—At least 50 percent of the funds made available to an eligible partnership under this section shall be used directly to benefit the high-need local educational agency included in 

the partnership. Any entity described in subsection (b)(1)(A) may be 

the fiscal agent under this section. 

(g) CONSTRUCTION.—Nothing in this section shall be construed to 

prohibit an eligible partnership from using grant funds to coordinate with the activities of more than one Governor, State board of 

education, State educational agency, local educational agency, or 

State agency for higher education. 

(h) SUPPLEMENT, NOT SUPPLANT.—Funds made available under 

this section shall be used to supplement, and not supplant, other 

Federal, State, and local funds that would otherwise be expended 

to carry out the purposes of this section. 

SEC. 204. TEACHER RECRUITMENT GRANTS. 

(a) PROGRAM AUTHORIZED.—From amounts made available under 

section 210(3) for a fiscal year, the Secretary is authorized to award 

grants, on a competitive basis, to eligible applicants to enable the 

eligible applicants to carry out activities described in subsection (d). 

(b) ELIGIBLE APPLICANT DEFINED.—In this part, the term ‘‘eligible 

applicant’’ means—

(1) an eligible State described in section 202(b); or 

(2) an eligible partnership described in section 203(b). 

(c) APPLICATION.—Any eligible applicant desiring to receive a 

grant under this section shall submit an application to the Secretary at such time, in such form, and containing such information 

as the Secretary may require, including—

(1) a description of the assessment that the eligible applicant, 

and the other entities with whom the eligible applicant will 

368 

carry out the grant activities, have undertaken to determine the 

most critical needs of the participating high-need local educational agencies; 

(2) a description of the activities the eligible applicant will 

carry out with the grant, including the extent to which the applicant will use funds to recruit minority students to become 

highly qualified teachers; and 

(3) a description of the eligible applicant’s plan for continuing 

the activities carried out with the grant, once Federal funding 

ceases. 

(d) USES OF FUNDS.—Each eligible applicant receiving a grant 

under this section shall use the grant funds— (1)(A) to award scholarships to help students, such as individuals who have been accepted for their first year, or who are 

enrolled in their first or second year, of a program of undergraduate education at an institution of higher education, pay 

the costs of tuition, room, board, and other expenses of completing a teacher preparation program; 

(B) to provide support services, if needed to enable scholarship recipients— (i) to complete postsecondary education programs; or 

(ii) to transition from a career outside of the field of education into a teaching career; and 

(C) for followup services provided to former scholarship recipients during the recipients first 3 years of teaching; or 

(2) to develop and implement effective mechanisms to ensure 

that high-need local educational agencies and schools are able 

effectively to recruit highly qualified teachers. 

(e) ADDITIONAL DISCRETIONARY USES OF FUNDS.—In addition to 

the uses described in subsection (d), each eligible applicant receiving 

a grant under this section may use the grant funds—

(1) to develop and implement effective mechanisms to recruit 

into the teaching profession employees from— (A) high-demand industries, including technology industries; and 

(B) the fields of science, mathematics, and engineering; 

(2) to conduct outreach and coordinate with inner city and 

rural secondary schools to encourage students to pursue teaching as a career; 

(3) to develop and implement dual degree programs that enable students at institutions of higher education to earn two undergraduate degrees concurrently, one of such degrees being in 

education and the other in the subject matter of the student’s 

choosing; and 

(4) to recruit high achieving students, bilingual students, and 

other qualified candidates into early childhood education programs. 

(f) SERVICE REQUIREMENTS.—

(1) IN GENERAL.—The Secretary shall establish such requirements as the Secretary determines necessary to ensure that recipients of scholarships under this section who complete teacher 

education programs— (A) subsequently teach in a high-need local educational 

agency for a period of time equivalent to— (i) one year; increased by 

369 

(ii) the period for which the recipient received scholarship assistance; or 

(B) repay the amount of the scholarship. 

(2) USE OF REPAYMENTS.—The Secretary shall use any such 

repayments to carry out additional activities under this section. 

(g) PRIORITY.—The Secretary shall give priority under this section 

to eligible applicants who provide an assurance that they will recruit a high percentage of minority students to become highly qualified teachers. 

SEC. 205. ADMINISTRATIVE PROVISIONS. 

(a) DURATION; ONE-TIME AWARDS; PAYMENTS.—

(1) DURATION.—

(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—Grants 

awarded to eligible States and eligible applicants under 

this part shall be awarded for a period not to exceed 3 

years. 

(B) ELIGIBLE PARTNERSHIPS.—Grants awarded to eligible 

partnerships under this part shall be awarded for a period 

of 5 years. 

(2) ONE-TIME AWARD.—An eligible partnership may receive a 

grant under each of sections 203 and 204, as amended by the 

College Access and Opportunity Act of 2005, only once. 

(3) PAYMENTS.—The Secretary shall make annual payments 

of grant funds awarded under this part. 

(b) PEER REVIEW.—

(1) PANEL.—The Secretary shall provide the applications submitted under this part to a peer review panel for evaluation. 

With respect to each application, the peer review panel shall initially recommend the application for funding or for disapproval. 

(2) PRIORITY.—In recommending applications to the Secretary 

for funding under this part, the panel shall—

(A) with respect to grants under section 202, give priority 

to eligible States that—

(i) have initiatives to reform State teacher certification requirements that are based on rigorous academic content, scientifically based research, including 

scientifically based reading research, and challenging 

State student academic content standards; 

(ii) have innovative reforms to hold institutions of 

higher education with teacher preparation programs 

accountable for preparing teachers who are highly 

qualified and have strong teaching skills; or 

(iii) have innovative efforts aimed at reducing the 

shortage of highly qualified teachers in high poverty 

urban and rural areas; and 

(B) with respect to grants under section 203—

(i) give priority to applications from broad-based eligible partnerships that involve businesses and community organizations; and 

(ii) take into consideration—

(I) providing an equitable geographic distribution of the grants throughout the United States; 

and 

370 

(II) the potential of the proposed activities for 

creating improvement and positive change. 

(3) SECRETARIAL SELECTION.—The Secretary shall determine, 

based on the peer review process, which application shall receive funding and the amounts of the grants. In determining 

grant amounts, the Secretary shall take into account the total 

amount of funds available for all grants under this part and 

the types of activities proposed to be carried out. 

(c) MATCHING REQUIREMENTS.— (1) STATE GRANTS.—Each eligible State receiving a grant 

under section 202 or 204 shall provide, from non-Federal 

sources, an amount equal to 50 percent of the amount of the 

grant (in cash or in kind) to carry out the activities supported 

by the grant. 

(2) PARTNERSHIP GRANTS.—Each eligible partnership receiving a grant under section 203 or 204 shall provide, from nonFederal sources (in cash or in kind), an amount equal to 25 percent of the grant for the first year of the grant, 35 percent of 

the grant for the second year of the grant, and 50 percent of the 

grant for each succeeding year of the grant. 

(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible State 

or eligible partnership that receives a grant under this part may not 

use more than 2 percent of the grant funds for purposes of administering the grant. 

SEC. 206. ACCOUNTABILITY AND EVALUATION. 

(a) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State 

that receives a grant under section 202 shall submit an annual accountability report to the Secretary and the authorizing committees. 

Such report shall include a description of the degree to which the 

eligible State, in using funds provided under such section, has made 

substantial progress in meeting the following goals: 

(1) PERCENTAGE OF HIGHLY QUALIFIED TEACHERS.—Increasing the percentage of highly qualified teachers in the State as 

required by section 1119 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319) and section 602 of the Individuals with Disabilities Act (20 U.S.C. 1401). 

(2) STUDENT ACADEMIC ACHIEVEMENT.—Increasing student 

academic achievement for all students, which may be measured 

through the use of value-added assessments, as defined by the 

eligible State. 

(3) RAISING STANDARDS.—Raising the State academic standards required to enter the teaching profession as a highly qualified teacher. 

(4) INITIAL CERTIFICATION OR LICENSURE.—Increasing success 

in the pass rate for initial State teacher certification or licensure, or increasing the numbers of qualified individuals being 

certified or licensed as teachers through alternative routes to 

certification and licensure. 

(5) DECREASING TEACHER SHORTAGES.—Decreasing shortages 

of highly qualified teachers in poor urban and rural areas. 

(6) INCREASING OPPORTUNITIES FOR RESEARCH-BASED PROFESSIONAL DEVELOPMENT.—Increasing opportunities for enhanced and ongoing professional development that—

(A) improves the academic content knowledge of teachers 

in the subject areas in which the teachers are certified or 

371 

licensed to teach or in which the teachers are working toward certification or licensure to teach; and 

(B) promotes strong teaching skills. 

(7) TECHNOLOGY INTEGRATION.—Increasing the number of 

teachers prepared effectively to integrate technology into curricula and instruction and who use technology to collect, manage, and analyze data to improve teaching, learning, decisionmaking, and parental involvement for the purpose of increasing 

student academic achievement. 

(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each eligible partnership applying for a grant under section 203 shall establish, and include in the application submitted under section 203(c), an evaluation plan that includes strong performance objectives. The plan 

shall include objectives and measures for—

(1) increased student achievement for all students, as measured by the partnership; 

(2) increased teacher retention in the first 3 years of a teacher’s career; 

(3) increased success in the pass rate for initial State certification or licensure of teachers; 

(4) increased percentage of highly qualified teachers; and 

(5) increasing the number of teachers trained effectively to integrate technology into curricula and instruction and who use 

technology to collect, manage, and analyze data to improve 

teaching, learning, and decisionmaking for the purpose of improving student academic achievement. 

(c) REVOCATION OF GRANT.—

(1) REPORT.—Each eligible State or eligible partnership receiving a grant under section 202 or 203 shall report annually 

on the progress of the eligible State or eligible partnership toward meeting the purposes of this part and the goals, objectives, 

and measures described in subsections (a) and (b). 

(2) REVOCATION.—

(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—If the 

Secretary determines that an eligible State or eligible applicant is not making substantial progress in meeting the purposes, goals, objectives, and measures, as appropriate, by 

the end of the second year of a grant under this part, then 

the grant payment shall not be made for the third year of 

the grant. 

(B) ELIGIBLE PARTNERSHIPS.—If the Secretary determines 

that an eligible partnership is not making substantial 

progress in meeting the purposes, goals, objectives, and 

measures, as appropriate, by the end of the third year of a 

grant under this part, then the grant payments shall not be 

made for any succeeding year of the grant. 

(d) EVALUATION AND DISSEMINATION.—The Secretary shall evaluate the activities funded under this part and report annually the 

Secretary’s findings regarding the activities to the authorizing committees. The Secretary shall broadly disseminate successful practices 

developed by eligible States and eligible partnerships under this 

part, and shall broadly disseminate information regarding such 

practices that were found to be ineffective. 

372 

SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS. 

(a) STATE REPORT CARD ON THE QUALITY OF TEACHER PREPARATION.—Each State that receives funds under this Act shall provide 

to the Secretary annually, in a uniform and comprehensible manner 

that conforms with the definitions and methods established by the 

Secretary, a State report card on the quality of teacher preparation 

in the State, both for traditional certification or licensure programs 

and for alternative certification or licensure programs, which shall 

include at least the following: 

(1) A description of the teacher certification and licensure assessments, and any other certification and licensure requirements, used by the State. 

(2) The standards and criteria that prospective teachers must 

meet in order to attain initial teacher certification or licensure 

and to be certified or licensed to teach particular subjects or in 

particular grades within the State. 

(3) A description of the extent to which the assessments and 

requirements described in paragraph (1) are aligned with the 

State’s standards and assessments for students. 

(4) The percentage of students who have completed at least 50 

percent of the requirements for a teacher preparation program 

at an institution of higher education or alternative certification 

program and who have taken and passed each of the assessments used by the State for teacher certification and licensure, 

and the passing score on each assessment that determines 

whether a candidate has passed that assessment. 

(5) For students who have completed at least 50 percent of the 

requirements for a teacher preparation program at an institution of higher education or alternative certification program, 

and who have taken and passed each of the assessments used 

by the State for teacher certification and licensure, each such 

institution’s and each such program’s average raw score, 

ranked by teacher preparation program, which shall be made 

available widely and publicly. 

(6) A description of each State’s alternative routes to teacher 

certification, if any, and the number and percentage of teachers 

certified through each alternative certification route who pass 

State teacher certification or licensure assessments. 

(7) For each State, a description of proposed criteria for assessing the performance of teacher preparation programs in the 

State, including indicators of teacher candidate skills, academic 

content knowledge, and evidence of gains in student academic 

achievement. 

(8) For each teacher preparation program in the State, the 

number of students in the program, the number of minority students in the program, the average number of hours of supervised practice teaching required for those in the program, and 

the number of full-time equivalent faculty and students in supervised practice teaching. 

(b) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER

PREPARATION.—

(1) REPORT CARD.—The Secretary shall provide to Congress, 

and publish and make widely available, a report card on teacher qualifications and preparation in the United States, includVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00376 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
373 

ing all the information reported in paragraphs (1) through (8) 

of subsection (a). Such report shall identify which eligible 

States received a grant under this part, and the States in which 

eligible partnerships receiving grants are located. Such report 

shall be published and made available annually. 

(2) REPORT TO CONGRESS.—The Secretary shall report to Congress—

(A) a comparison of States’ efforts to improve teaching 

quality; and 

(B) regarding the national mean and median scores on 

any standardized test that is used in more than one State 

for teacher certification or licensure. 

(3) SPECIAL RULE.—In the case of programs with fewer than 

10 students who have completed at least 50 percent of the requirements for a teacher preparation program taking any single 

initial teacher certification or licensure assessment during an 

academic year, the Secretary shall collect and publish information with respect to an average pass rate on State certification 

or licensure assessments taken over a 3-year period. 

(c) COORDINATION.—The Secretary, to the extent practicable, shall 

coordinate the information collected and published under this part 

among States for individuals who took State teacher certification or 

licensure assessments in a State other than the State in which the 

individual received the individual’s most recent degree. 

(d) INSTITUTION AND PROGRAM REPORT CARDS ON QUALITY OF

TEACHER PREPARATION.— (1) REPORT CARD.—Each institution of higher education or alternative certification program that conducts a teacher preparation program that enrolls students receiving Federal assistance 

under this Act shall report annually to the State and the general public, in a uniform and comprehensible manner that conforms with the definitions and methods established by the Secretary, both for traditional certification or licensure programs 

and for alternative certification or licensure programs, the following information: 

(A) PASS RATE.—(i) For the most recent year for which 

the information is available, the pass rate of each student 

who has completed at least 50 percent of the requirements 

for the teacher preparation program on the teacher certification or licensure assessments of the State in which the institution is located, but only for those students who took 

those assessments within 3 years of receiving a degree from 

the institution or completing the program. 

(ii) A comparison of the institution or program’s pass rate 

for students who have completed at least 50 percent of the 

requirements for the teacher preparation program with the 

average pass rate for institutions and programs in the 

State. 

(iii) A comparison of the institution or program’s average 

raw score for students who have completed at least 50 percent of the requirements for the teacher preparation program with the average raw scores for institutions and programs in the State. 

(iv) In the case of programs with fewer than 10 students 

who have completed at least 50 percent of the requirements 

374 

for a teacher preparation program taking any single initial 

teacher certification or licensure assessment during an academic year, the institution shall collect and publish information with respect to an average pass rate on State certification or licensure assessments taken over a 3-year period. 

(B) PROGRAM INFORMATION.—The number of students in 

the program, the average number of hours of supervised 

practice teaching required for those in the program, and the 

number of full-time equivalent faculty and students in supervised practice teaching. 

(C) STATEMENT.—In States that require approval or accreditation of teacher education programs, a statement of 

whether the institution’s program is so approved or accredited, and by whom. 

(D) DESIGNATION AS LOW-PERFORMING.—Whether the program has been designated as low-performing by the State 

under section 208(a). 

(2) REQUIREMENT.—The information described in paragraph 

(1) shall be reported through publications such as school catalogs and promotional materials sent to potential applicants, secondary school guidance counselors, and prospective employers 

of the institution’s program graduates, including materials sent 

by electronic means. 

(3) FINES.—In addition to the actions authorized in section 

487(c), the Secretary may impose a fine not to exceed $25,000 

on an institution of higher education for failure to provide the 

information described in this subsection in a timely or accurate 

manner. 

(e) DATA QUALITY.—Either—

(1) the Governor of the State; or 

(2) in the case of a State for which the constitution or law of 

such State designates another individual, entity, or agency in 

the State to be responsible for teacher certification and preparation activity, such individual, entity, or agency; 

shall attest annually, in writing, as to the reliability, validity, integrity, and accuracy of the data submitted pursuant to this section. 

SEC. 208. STATE FUNCTIONS. 

(a) STATE ASSESSMENT.—In order to receive funds under this Act, 

a State shall have in place a procedure to identify and assist, 

through the provision of technical assistance, low-performing programs of teacher preparation within institutions of higher education. Such State shall provide the Secretary an annual list of such 

low-performing institutions that includes an identification of those 

institutions at risk of being placed on such list. Such levels of performance shall be determined solely by the State and may include 

criteria based upon information collected pursuant to this part. 

Such assessment shall be described in the report under section 

207(a). A State receiving Federal funds under this title shall develop plans to close or reconstitute underperforming programs of 

teacher preparation within institutions of higher education. 

(b) TERMINATION OF ELIGIBILITY.—Any institution of higher education that offers a program of teacher preparation in which the 

State has withdrawn the State’s approval or terminated the State’s 

financial support due to the low performance of the institution’s 

375 

teacher preparation program based upon the State assessment described in subsection (a)—

(1) shall be ineligible for any funding for professional development activities awarded by the Department of Education; and 

(2) shall not be permitted to accept or enroll any student who 

receives aid under title IV of this Act in the institution’s teacher 

preparation program. 

SEC. 209. GENERAL PROVISIONS. 

(a) METHODS.—In complying with sections 207 and 208, the Secretary shall ensure that States and institutions of higher education 

use fair and equitable methods in reporting and that the reporting 

methods do not allow identification of individuals. 

(b) SPECIAL RULE.—For each State in which there are no State 

certification or licensure assessments, or for States that do not set 

minimum performance levels on those assessments—

(1) the Secretary shall, to the extent practicable, collect data 

comparable to the data required under this part from States, 

local educational agencies, institutions of higher education, or 

other entities that administer such assessments to teachers or 

prospective teachers; and 

(2) notwithstanding any other provision of this part, the Secretary shall use such data to carry out requirements of this part 

related to assessments or pass rates. 

(c) LIMITATIONS.—

(1) FEDERAL CONTROL PROHIBITED.—Nothing in this part 

shall be construed to permit, allow, encourage, or authorize any 

Federal control over any aspect of any private, religious, or 

home school, whether or not a home school is treated as a private school or home school under State law. This section shall 

not be construed to prohibit private, religious, or home schools 

from participation in programs or services under this part. 

(2) NO CHANGE IN STATE CONTROL ENCOURAGED OR REQUIRED.—Nothing in this part shall be construed to encourage 

or require any change in a State’s treatment of any private, religious, or home school, whether or not a home school is treated 

as a private school or home school under State law. 

(3) NATIONAL SYSTEM OF TEACHER CERTIFICATION PROHIBITED.—Nothing in this part shall be construed to permit, allow, 

encourage, or authorize the Secretary to establish or support 

any national system of teacher certification. 

SEC. 210. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part 

$300,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years, of which—

(1) 45 percent shall be available for each fiscal year to award 

grants under section 202; 

(2) 45 percent shall be available for each fiscal year to award 

grants under section 203; and 

(3) 10 percent shall be available for each fiscal year to award 

grants under section 204. 

376 

PART B—PREPARING TOMORROW’S TEACHERS 

TO USE TECHNOLOGY 

* * * * * * * 

SEC. 222. ELIGIBILITY. 

(a) ELIGIBLE APPLICANTS.—In order to receive a grant or enter 

into a contract or cooperative agreement under this part, an applicant shall be a consortium that includes the following: 

(1) * * * 

* * * * * * * 

(3) One or more of the following entities: 

(A) * * * 

* * * * * * * 

(D) A professional association, foundation, museum, library, for-profit business, public or private nonprofit organization, community-based organization, nonprofit telecommunications entity, or other entity, with the capacity to 

contribute to the technology-related reform of teacher 

preparation programs. 

* * * * * * * 

SEC. 223. USE OF FUNDS. 

(a) * * * 

(b) PERMISSIBLE USES.—The consortium may use funds made 

available under this part for a project, described in the application 

submitted by the consortium under this part, that carries out the 

purpose of this part, such as the following: 

(1) Developing and implementing high-quality teacher preparation programs that enable educators—

(A) * * * 

* * * * * * * 

ø(E) to use technology to collect, manage, and analyze 

data to improve teaching and decisionmaking.¿ 

(E) to use technology to collect, manage, and analyze 

data to improve teaching, learning, and decisionmaking for 

the purpose of increasing student academic achievement. 

* * * * * * * 

SEC. 224. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part 

such sums as may be necessary for øeach of fiscal years 2002 and 

2003.¿ fiscal year 2006 and each of the 5 succeeding fiscal years. 

PART C—CENTERS OF EXCELLENCE 

SEC. 231. PURPOSES; DEFINITIONS. 

(a) PURPOSES.—The purposes of this part are—

(1) to help recruit and prepare teachers, including minority 

teachers, to meet the national demand for a highly qualified 

teacher in every classroom; and 

377 

(2) to increase opportunities for Americans of all educational, 

ethnic, class, and geographic backgrounds to become highly 

qualified teachers. 

(b) DEFINITIONS.—As used in this part: 

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

means—

(A) an institution of higher education that has a teacher 

preparation program that meets the requirements of section 

203(b)(2) and that is—

(i) a part B institution (as defined in section 322); 

(ii) a Hispanic-serving institution (as defined in section 502); 

(iii) a Tribal College or University (as defined in section 316); 

(iv) an Alaska Native-serving institution (as defined 

in section 317(b)); or 

(v) a Native Hawaiian-serving institution (as defined 

in section 317(b)); 

(B) a consortium of institutions described in subparagraph (A); or 

(C) an institution described in subparagraph (A), or a 

consortium described in subparagraph (B), in partnership 

with any other institution of higher education, but only if 

the center of excellence established under section 232 is located at an institution described in subparagraph (A). 

(2) HIGHLY QUALIFIED.—The term ‘‘highly qualified’’ when 

used with respect to an individual means that the individual 

is highly qualified as determined under section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801) 

or section 602 of the Individuals with Disabilities Education 

Act (20 U.S.C. 1401). 

(3) SCIENTIFICALLY BASED READING RESEARCH.—The term 

‘‘scientifically based reading research’’ has the meaning given 

such term in section 1208 of the Elementary and Secondary 

Education Act of 1965 (20 U.S.C. 6368). 

(4) SCIENTIFICALLY BASED RESEARCH.—The term ‘‘scientifically based research’’ has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 

1965 (20 U.S.C. 7801). 

SEC. 232. CENTERS OF EXCELLENCE. 

(a) PROGRAM AUTHORIZED.—From the amounts appropriated to 

carry out this part, the Secretary is authorized to award competitive 

grants to eligible institutions to establish centers of excellence. 

(b) USE OF FUNDS.—Grants provided by the Secretary under this 

part shall be used to ensure that current and future teachers are 

highly qualified, by carrying out one or more of the following activities: 

(1) Implementing reforms within teacher preparation programs to ensure that such programs are preparing teachers who 

are highly qualified, are able to understand scientifically based 

research, and are able to use advanced technology effectively in 

the classroom, including use for instructional techniques to improve student academic achievement, by—

(A) retraining faculty; and 

378 

(B) designing (or redesigning) teacher preparation programs that—

(i) prepare teachers to close student achievement 

gaps, are based on rigorous academic content, scientifically based research (including scientifically based 

reading research), and challenging State student academic content standards; and 

(ii) promote strong teaching skills. 

(2) Providing sustained and high-quality preservice clinical 

experience, including the mentoring of prospective teachers by 

exemplary teachers, substantially increasing interaction between faculty at institutions of higher education and new and 

experienced teachers, principals, and other administrators at elementary schools or secondary schools, and providing support, 

including preparation time, for such interaction. 

(3) Developing and implementing initiatives to promote retention of highly qualified teachers and principals, including minority teachers and principals, including programs that provide—

(A) teacher or principal mentoring from exemplary teachers or principals; or 

(B) induction and support for teachers and principals 

during their first 3 years of employment as teachers or 

principals, respectively. 

(4) Awarding scholarships based on financial need to help 

students pay the costs of tuition, room, board, and other expenses of completing a teacher preparation program. 

(5) Disseminating information on effective practices for teacher preparation and successful teacher certification and licensure 

assessment preparation strategies. 

(6) Activities authorized under sections 202, 203, and 204. 

(c) APPLICATION.—Any eligible institution desiring a grant under 

this section shall submit an application to the Secretary at such a 

time, in such a manner, and accompanied by such information the 

Secretary may require. 

(d) MINIMUM GRANT AMOUNT.—The minimum amount of each 

grant under this part shall be $500,000. 

(e) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible institution that receives a grant under this part may not use more than 

2 percent of the grant funds for purposes of administering the grant. 

(f) REGULATIONS.—The Secretary shall prescribe such regulations 

as may be necessary to carry out this part. 

SEC. 233. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part $10,000,000 for fiscal year 2006 and such sums as may be necessary 

for each of the 5 succeeding fiscal years. 

PART D—TEACHER INCENTIVE FUND 

PROGRAM 

SEC. 241. PURPOSE; DEFINITIONS. 

(a) PURPOSE.—The purpose of this part is to assist States, local 

educational agencies, and non-profit or for-profit organizations to 

develop and implement, or expand, innovative compensation systems 

379 

to provide financial rewards for teachers and principals who raise 

student academic achievement and close the achievement gap, especially in the highest-need local educational agencies. 

(b) DEFINITIONS.—For purposes of this part: 

(1) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means— (A) a local educational agency, including a charter school 

that is a local educational agency; 

(B) a State educational agency, or other State agency designated by the chief executive of the State; or 

(C) a partnership of— (i) one or more agencies described in subparagraph 

(A) or (B), or both; and 

(ii) at least one non-profit or for-profit organization. 

(2) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term ‘‘high-need local educational agency’’ has the meaning given 

that term in section 201. 

SEC. 242. TEACHER INCENTIVE FUND GRANTS. 

(a) PROGRAM AUTHORIZED.— (1) IN GENERAL.—From the amounts appropriated to carry 

out this part, the Secretary is authorized to award competitive 

grants of up to 5 years in length to eligible entities to develop 

and implement, or expand, a comprehensive performance-based 

compensation system for teachers and principals for one or 

more local educational agencies. 

(2) COMPREHENSIVE PERFORMANCE-BASED COMPENSATION

SYSTEMS.—A comprehensive performance-based compensation 

system developed and implemented, or expanded with funds 

under this part— (A) shall differentiate levels of compensation primarily on 

the basis of increases in student academic achievement; 

and 

(B) may— (i) differentiate levels of compensation on the basis of 

high-quality teachers’ and principals’ employment and 

success in hard-to-staff schools or high-need subject 

areas; and 

(ii) recognize teachers’ and principals’ skills and 

knowledge as demonstrated through— (I) successful fulfillment of additional responsibilities or job functions; and 

(II) evidence of high achievement and mastery of 

content knowledge and teaching skills. 

(b) USE OF FUNDS.—A grantee shall use grant funds provided 

under this part only to design and implement, or expand, in collaboration with teachers, principals, other school administrators, 

and members of the public, a compensation system consistent with 

the requirements of this part. Authorized activities under this part 

may include the following: 

(1) Developing appraisal systems that reflect clear and fair 

measures of student academic achievement. 

(2) Conducting outreach within the local educational agency 

(or agencies) or the State to gain input on how to construct the 

appraisal system and to develop support for it. 

(3) Paying, as part of a comprehensive performance-based 

compensation system, bonuses and increased salaries to teachVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00383 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
380 

ers and principals who raise student academic achievement, so 

long as the grantee uses an increasing share of non-Federal 

funds to pay these monetary rewards each year of the grant. 

(4) Paying, as part of a comprehensive performance-based 

compensation system, additional bonuses to teachers who both 

raise student academic achievement and either teach in highpoverty schools or teach subjects that are difficult to staff, or 

both, so long as the grantee uses an increasing share of nonFederal funds to pay these monetary rewards each year of the 

grant. 

(5) Paying, as part of a comprehensive performance-based 

compensation system, additional bonuses to principals who both 

raise student academic achievement and serve in high-poverty 

schools, so long as the grantee uses an increasing share of nonFederal funds to pay these monetary rewards each year of the 

grant. 

(c) APPLICATIONS.—To be eligible to receive a grant under this 

part, an eligible entity shall submit an application that includes—

(1) a description of the local educational agency or local educational agencies to be served by the project, including such demographic information as the Secretary may request; 

(2) information on student academic achievement and the 

quality of the teachers and principals in the local educational 

agency or agencies to be served by the project; 

(3) a description of the performance-based teacher and principal compensation system that the applicant proposes to develop and implement or expand; 

(4) a description of how the applicant will use grant funds 

under this part in each year of the grant; 

(5) an explanation of how the applicant will meet the requirement in subsection (b)(3) and how the grantee will continue its 

performance-based compensation system after the grant ends; 

(6) a description of the support and commitment from teachers, the community or local educational agency or agencies for 

the development and implementation, or expansion, of a performance-based teacher and principal compensation system; 

(7) a description of how teacher, principal and student performance will be measured and the baseline measurement 

units; and 

(8) a description, if applicable, of how the applicant will define the term ‘‘high-quality’’ for the purposes of subsection 

(a)(2)(B)(i), through the use of measurable indicators, such as 

effectiveness in raising student academic achievement, or demonstrated mastery of subject matter knowledge. 

(d) PRIORITY.—The Secretary shall give priority to applications 

for projects that would establish comprehensive performance-based 

compensation systems in high-need local educational agencies. 

SEC. 243. EVALUATIONS. 

The Secretary shall conduct an independent evaluation of the program under this part and may use up to 1 percent of the funds 

made available under this part or $1,000,000, whichever is less, for 

any fiscal year for the cost of the evaluation. 

381 

SEC. 244. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part 

$100,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years. 

TITLE III—INSTITUTIONAL AID 

* * * * * * * 

PART A—STRENGTHENING INSTITUTIONS

SEC. 311. PROGRAM PURPOSE. 

(a) * * * 

* * * * * * * 

(c) AUTHORIZED ACTIVITIES.—Grants awarded under this section 

shall be used for 1 or more of the following activities: 

(1) * * * 

* * * * * * * 

(7) Education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents. 

ø(7)¿ (8) Funds management, administrative management, 

and acquisition of equipment for use in strengthening funds 

management. 

ø(8)¿ (9) Joint use of facilities, such as laboratories and libraries. 

ø(9)¿ (10) Establishing or improving a development office to 

strengthen or improve contributions from alumni and the private sector. 

ø(10)¿ (11) Establishing or improving an endowment fund. 

ø(11)¿ (12) Creating or improving facilities for Internet or 

other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology 

equipment or services. 

ø(12)¿ (13) Other activities proposed in the application submitted pursuant to subsection (c) that—

(A) * * * 

* * * * * * * 

SEC. 312. DEFINITIONS; ELIGIBILITY. 

(a) * * * 

(b) ELIGIBLE INSTITUTION.—For the purpose of this part, the term 

‘‘eligible institution’’ means—

(1) an institution of higher education—

(A) which has an enrollment of needy students as required by subsection ø(c)¿ (d) of this section; 

* * * * * * * 

(E) which provides a program that is not less than a 2- 

year educational program that is acceptable for full credit 

toward a bachelor’s degree; 

ø(E)¿ (F) which meets such other requirements as the 

Secretary may prescribe; and 

ø(F)¿ (G) which is located in a State; and 

* * * * * * * 

382 

SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND 

UNIVERSITIES. 

(a) * * * 

ø(b) DEFINITIONS.—In this section: 

ø(1) INDIAN.—The term ‘‘Indian’’ has the meaning given the 

term in section 2 of the Tribally Controlled College or University Assistance Act of 1978. 

ø(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning 

given the term in section 2 of the Tribally Controlled College 

or University Assistance Act of 1978. 

ø(3) TRIBAL COLLEGE OR UNIVERSITY.—The term ‘‘Tribal College or University’’ has the meaning give the term ‘‘tribally 

controlled college or university’’ in section 2 of the Tribally 

Controlled College or University Assistance Act of 1978, and 

includes an institution listed in the Equity in Educational 

Land Grant Status Act of 1994. 

ø(4) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ means an institution of higher education as defined in section 101(a), except that paragraph (2) 

of such section shall not apply.¿ 

(b) DEFINITIONS.—

(1) ELIGIBLE INSTITUTIONS.—For purposes of this section, 

Tribal Colleges and Universities are the following: 

(A) any of the following institutions that qualify for funding under the Tribally Controlled College or University Assistance Act of 1978 or is listed in Equity in Educational 

Land Grant Status Act of 1994 (7 U.S.C. 301 note): Bay 

Mills Community College; Blackfeet Community College; 

Cankdeska Cikana Community College; Chief Dull Knife 

College; College of Menominee Nation; Crownpoint Institute 

of Technology; Dine ́ College; D–Q University; Fond du Lac 

Tribal and Community College; Fort Belknap College; Fort 

Berthold Community College; Fort Peck Community College; Haskell Indian Nations University; Institute of American Indian and Alaska Native Culture and Arts Development; Lac Courte Oreilles Ojibwa Community College; 

Leech Lake Tribal College; Little Big Horn College; Little 

Priest Tribal College; Nebraska Indian Community College; 

Northwest Indian College; Oglala Lakota College; Saginaw 

Chippewa Tribal College; Salish Kootenai College; Si 

Tanka University—Eagle Butte Campus; Sinte Gleska University; Sisseton Wahpeton Community College; Sitting 

Bull College; Southwestern Indian Polytechnic Institute; 

Stone Child College; Tohono O’Odham Community College; 

Turtle Mountain Community College; United Tribes Technical College; and White Earth Tribal and Community College; and 

(B) any other institution that meets the definition of tribally controlled college or university in section 2 of the Tribally Controlled College or University Assistance Act of 

1978, and meets all other requirements of this section. 

(2) INDIAN.—The term ‘‘Indian’’ has the meaning given the 

term in section 2 of the Tribally Controlled College or University Assistance Act of 1978. 

(c) AUTHORIZED ACTIVITIES.—

383 

(1) * * * 

(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—The activities described in paragraph (1) may include—

(A) * * * 

ø(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other 

instructional facilities, including purchase or rental of telecommunications technology equipment or services;¿ 

(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services, and the 

acquisition of real property adjacent to the campus of the 

institution on which to construct such facilities; 

(C) support of faculty exchanges, faculty development, 

and faculty fellowships to assist in attaining advanced degrees in the faculty’s field of instruction, or advanced degrees in tribal governance or tribal public policy; 

(D) academic instruction in disciplines in which Indians 

are underrepresented, in tribal governance, or tribal public 

policy; 

* * * * * * * 

(G) education or counseling services designed to improve 

the financial literacy and economic literacy of students and, 

as appropriate, their parents; 

ø(G)¿ (H) funds management, administrative management, and acquisition of equipment for use in strengthening funds management; 

ø(H)¿ (I) joint use of facilities, such as laboratories and 

libraries; 

ø(I)¿ (J) establishing or improving a development office 

to strengthen or improve contributions from alumni and 

the private sector; 

ø(J)¿ (K) establishing or enhancing a program of teacher 

education designed to qualify students to teach in elementary schools or secondary schools, with a particular emphasis on teaching Indian children and youth, that shall include, as part of such program, preparation for teacher certification; 

ø(K)¿ (L) establishing community outreach programs 

that encourage Indian elementary school and secondary 

school students to develop the academic skills and the interest to pursue postsecondary education; øand¿ 

(M) developing or improving facilities for Internet use or 

other distance learning academic instruction capabilities; 

and 

ø(L)¿ (N) other activities proposed in the application 

submitted pursuant to subsection (d) that—

(i) contribute to carrying out the activities described 

in subparagraphs (A) through ø(K)¿ (M); and 

* * * * * * * 

ø(d) APPLICATION PROCESS.—

384 

ø(1) INSTITUTIONAL ELIGIBILITY.—To be eligible to receive assistance under this section, a Tribal College or University shall 

be an eligible institution under section 312(b). 

ø(2) APPLICATION.—Any Tribal College or University desiring 

to receive assistance under this section shall submit an application to the Secretary at such time, and in such manner, as 

the Secretary may by regulation reasonably require. The Secretary shall, to the extent possible, prescribe a simplified and 

streamlined format for such applications that takes into account the limited number of institutions that are eligible for 

assistance under this section. Each such application shall include—

ø(A) a 5-year plan for improving the assistance provided 

by the Tribal College or University to Indian students, increasing the rates at which Indian secondary school students enroll in higher education, and increasing overall 

postsecondary retention rates for Indian students; and 

ø(B) such enrollment data and other information and assurances as the Secretary may require to demonstrate 

compliance with paragraph (1). 

ø(3) SPECIAL RULES.—

ø(A) ELIGIBILITY.—No Tribal College or University that 

receives funds under this section shall concurrently receive 

funds under other provisions of this part or part B. 

ø(B) EXEMPTION.—Section 313(d) shall not apply to institutions that are eligible to receive funds under this section. 

ø(C) DISTRIBUTION.—In awarding grants under this section, the Secretary shall, to the extent possible and consistent with the competitive process under which such 

grants are awarded, ensure maximum and equitable distribution among all eligible institutions.¿ 

(d) APPLICATION AND ALLOTMENT.—

(1) INSTITUTIONAL ELIGIBILITY.—To be eligible to receive assistance under this section, a Tribal College or University shall 

be an eligible institution under section 312(b). 

(2) APPLICATION.—Any Tribal College or University desiring 

to receive assistance under this section shall submit an application to the Secretary at such time, and in such manner, as the 

Secretary may reasonably require. 

(3) ALLOTMENTS TO INSTITUTIONS.—

(A) ALLOTMENT: PELL GRANT BASIS.—From the amount 

appropriated to carry out this section for any fiscal year, 

the Secretary shall allot to each eligible institution a sum 

which bears the same ratio to one-half that amount as the 

number of Pell Grant recipients in attendance at such institution at the end of the award year preceding the beginning 

of that fiscal year bears to the total number of Pell Grant 

recipients at all eligible institutions. 

(B) ALLOTMENT: DEGREE AND CERTIFICATE BASIS.—From 

the amount appropriated to carry out this section for any 

fiscal year, the Secretary shall allot to each eligible institution a sum which bears the same ratio to one-half that 

amount as the number of degrees or certificates awarded by 

such institution during the preceding academic year bears 

385 

to the total number of degrees or certificates at all eligible 

institutions. 

(C) MINIMUM GRANT.—Notwithstanding subparagraphs 

(A) and (B), the amount allotted to each institution under 

this section shall not be less than $400,000. 

(4) SPECIAL RULES.— (A) CONCURRENT FUNDING.—For the purposes of this 

part, no Tribal College or University that is eligible for and 

receives funds under this section shall concurrently receive 

funds under other provisions of this part or part B. 

(B) EXEMPTION.—Section 313(d) shall not apply to institutions that are eligible to receive funds under this section. 

SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS. 

(a) * * * 

* * * * * * * 

(c) AUTHORIZED ACTIVITIES.— (1) * * * 

(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs 

may include— (A) * * * 

ø(B) renovation and improvement in classroom, library, 

laboratory, and other instructional facilities;¿ 

(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services, and the 

acquisition of real property adjacent to the campus of the 

institution on which to construct such facilities; 

(C) support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in the faculty’s field of instruction, or advanced degrees in tribal governance or tribal public policy; 

(D) curriculum development and academic instruction, in 

tribal governance, or tribal public policy; 

* * * * * * * 

(G) joint use of facilities such as laboratories and libraries; øand¿ 

(H) academic tutoring and counseling programs and student support servicesø.¿; 

(I) development or improvement of facilities for Internet 

use or other distance learning academic instruction capabilities; and 

(J) education or counseling services designed to improve 

the financial literacy and economic literacy of students and, 

as appropriate, their parents. 

(3) ENDOWMENT FUNDS.—

(A) IN GENERAL.—An Alaska Native or Native Hawaiianserving institution may use not more than 20 percent of the 

grant funds provided under this section to establish or increase an endowment fund at the institution. 

(B) MATCHING REQUIREMENT.—In order to be eligible to 

use grant funds in accordance with subparagraph (A), the 

institution shall provide to the endowment fund from nonVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00389 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
386 

Federal funds an amount equal to the Federal funds used 

in accordance with subparagraph (A), for the establishment 

or increase of the endowment fund. 

(C) APPLICABILITY OF OTHER PROVISIONS.—The provisions of part C regarding the establishment or increase of 

an endowment fund, that the Secretary determines are not 

inconsistent with this paragraph, shall apply to funds used 

under subparagraph (A). 

(d) APPLICATION PROCESS.—

(1) * * * 

(2) APPLICATIONS.—Any institution which is determined by 

the Secretary to be an Alaska Native-serving institution or a 

Native Hawaiian-serving institution may submit an application 

for assistance under this section to the Secretary. The Secretary shall, to the extent possible, prescribe a simplified and 

streamlined format for such applications that takes into account the limited number of institutions that are eligible for 

assistance under this section. øSuch application shall include—

ø(A) a 5-year plan for improving the assistance provided 

by the Alaska Native-serving institution or the Native Hawaiian-serving institution to Alaska Native or Native Hawaiian students; and 

ø(B) such other information and assurance as the Secretary may require.¿ 

* * * * * * * 

PART B—STRENGTHENING HISTORICALLY BLACK COLLEGES AND

UNIVERSITIES

* * * * * * * 

SEC. 323. GRANTS TO INSTITUTIONS. 

(a) GENERAL AUTHORIZATION; USES OF FUNDS.—From amounts 

available under øsection 360(a)(2)¿ section 399(a)(2) in any fiscal 

year the Secretary shall make grants (under section 324) to institutions which have applications approved by the Secretary (under 

section 325) for any of the following uses: 

(1) * * * 

ø(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional 

facilities, including purchase or rental of telecommunications 

technology equipment or services.¿ 

(2) Construction, maintenance, renovation, and improvement 

in classrooms, libraries, laboratories, and other instructional 

facilities, including development or improvement of facilities for 

Internet use or other distance learning academic instruction capabilities and purchase or rental of telecommunications technology equipment or services, and the acquisition of real property adjacent to the campus of the institution on which to construct such facilities. 

* * * * * * * 

(7) Education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents. 

387 

ø(7)¿ (8) Funds and administrative management, and acquisition of equipment for use in strengthening funds management. 

ø(8)¿ (9) Joint use of facilities, such as laboratories and libraries. 

ø(9)¿ (10) Establishing or improving a development office to 

strengthen or improve contributions from alumni and the private sector. 

ø(10)¿ (11) Establishing or enhancing a program of teacher 

education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as 

part of such program, preparation for teacher certification. 

ø(11) Establishing community outreach programs which will 

encourage elementary and secondary students to develop the 

academic skills and the interest to pursue postsecondary education.¿ 

(12) Establishing community outreach programs and collaborative partnerships between part B institutions and local elementary or secondary schools. Such partnerships may include 

mentoring, tutoring, or other instructional opportunities that 

will boost student academic achievement and assist elementary 

and secondary school students in developing the academic skills 

and the interest to pursue postsecondary education. 

ø(12)¿ (13) Other activities proposed in the application submitted pursuant to section 325 that— (A) * * * 

* * * * * * * 

(c) TECHNICAL ASSISTANCE.— (1) IN GENERAL.—An institution may not use more than 2 

percent of the grant funds provided under this part to secure 

technical assistance services. 

(2) TECHNICAL ASSISTANCE SERVICES.—Technical assistance 

services may include assistance with enrollment management, 

financial management, and strategic planning. 

(3) REPORT.—The institution shall report to the Secretary on 

an annual basis, in such form as the Secretary requires, on the 

use of funds under this subsection. 

ø(c)¿ (d) LIMITATIONS.—(1) * * * 

* * * * * * * 

SEC. 324. ALLOTMENTS TO INSTITUTIONS. 

(a) * * * 

* * * * * * * 

(d) MINIMUM ALLOTMENT.—(1) Notwithstanding subsections (a), 

(b), and (c), the amount allotted to each part B institution under 

this section shall not be less than $500,000, except that, if the 

amount appropriated to carry out this part for any fiscal year exceeds the amount required to provide to each institution an amount 

equal to the total amount received by such institution under subsections (a), (b), and (c) for the preceding fiscal year, then the 

amount of such excess appropriation shall first be applied to increase the minimum allotment under this subsection to $750,000. 

(2) If the amount appropriated pursuant to øsection 360(a)(2)(A)¿ 

section 399(a)(2)(A) for any fiscal year is not sufficient to pay the 

388 

minimum allotment required by paragraph (1) of this subsection to 

all part B institutions, the amount of such minimum allotments 

shall be ratably reduced. If additional sums become available for 

such fiscal year, such reduced allocation shall be increased on the 

same basis as they were reduced (until the amount allotted equals 

the minimum allotment required by paragraph (1)). 

* * * * * * * 

SEC. 326. PROFESSIONAL OR GRADUATE INSTITUTIONS. 

(a) GENERAL AUTHORIZATION.—(1) Subject to the availability of 

funds appropriated to carry out this section, the Secretary shall 

award program grants to each of the postgraduate institutions listed in subsection (e) that (A) is determined by the Secretary to be 

making a substantial contribution to the legal, medical, dental, veterinary, or other graduate education opportunities in mathematics, 

engineering, or the physical or natural sciences for Black Americans, (B) 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, and (C) according to such an 

agency or association, is in good standing. 

* * * * * * * 

(c) USES OF FUNDS.—A grant under this section may be used 

for—

(1) * * * 

ø(2) construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional 

facilities, including purchase or rental of telecommunications 

technology equipment or services;¿ 

(2) construction, maintenance, renovation, and improvement 

in classrooms, libraries, laboratories, and other instructional 

facilities, including purchase or rental of telecommunications 

technology equipment or services, and the acquisition of real 

property adjacent to the campus of the institution on which to 

construct such facilities; 

* * * * * * * 

(e) ELIGIBILITY.—

(1) IN GENERAL.—Independent professional or graduate institutions and programs eligible for grants under subsection (a) 

are the following: 

(A) * * * 

* * * * * * * 

(Q) Norfolk State University qualified graduate programs; øand¿ 

(R) Tennessee State University qualified graduate 

programsø.¿; 

(S) Alabama State University qualified graduate program; 

(T) Prairie View A & M University qualified graduate 

program; 

(U) Coppin State University qualified graduate program; 

and 

389 

(V) Delaware State University qualified graduate program. 

* * * * * * * 

(3) SPECIAL RULE.—Institutions that were awarded grants 

under this section prior to October 1, ø1998¿ 2005, shall continue to receive such grants, subject to the availability of appropriated funds, regardless of the eligibility of the institutions 

described in subparagraphs ø(Q) and (R)¿ (S), (T), (U), and (V) 

of paragraph (1). 

* * * * * * * 

(f) FUNDING RULE.—Subject to subsection (g), of the amount appropriated to carry out this section for any fiscal year—

(1) the first ø$26,600,000¿ $54,500,000 (or any lesser amount 

appropriated) shall be available only for the purposes of making grants to institutions or programs described in subparagraphs (A) through ø(P)¿ (R) of subsection (e)(1); 

(2) any amount in excess of ø$26,600,000, but not in excess 

of $28,600,000¿ $54,500,000, but not in excess of $58,500,000, 

shall be available for the purpose of making grants to institutions or programs described in øsubparagraphs (Q) and (R)¿ 

subparagraphs (S), (T), (U), and (V) of subsection (e)(1); and 

(3) any amount in excess of ø$28,600,000¿ $58,500,000, shall 

be made available to each of the institutions or programs identified in subparagraphs (A) through ø(R)¿ (V) pursuant to a 

formula developed by the Secretary that uses the following elements: 

(A) * * * 

* * * * * * * 

(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2) and 

(3) of subsection (f ), no institution or qualified program identified 

in subsection (e)(1) that received a grant for fiscal year ø1998¿ 

2005 and that is eligible to receive a grant in a subsequent fiscal 

year shall receive a grant amount in any such subsequent fiscal 

year that is less than the grant amount received for fiscal year 

ø1998¿ 2005, unless the amount appropriated is not sufficient to 

provide such grant amounts to all such institutions and programs, 

or the institution cannot provide sufficient matching funds to meet 

the requirements of this section. 

SEC. 327. REPORTING AND AUDIT REQUIREMENTS. 

(a) * * * 

(b) REPAYMENT OF UNEXPENDED FUNDS.—Any funds paid to an 

institution and not expended or used for the purposes for which the 

funds were paid within 10 years following the date of the øinitial¿ 

grant awarded to an institution under part B of this title shall be 

repaid to the Treasury of the United States. 

* * * * * * * 

PART D—HISTORICALLY BLACK COLLEGE AND 

UNIVERSITY CAPITAL FINANCING 

* * * * * * * 

390 

SEC. 342. DEFINITIONS. 

For the purposes of this part: 

(1) * * * 

* * * * * * * 

(5) The term ‘‘capital project’’ means, subject to section 

344(b) the repair, renovation, or, in exceptional circumstances, 

the construction or acquisition, of— (A) * * * 

* * * * * * * 

(C) instructional equipment øtechnology,,¿, techology, research instrumentation, and any capital equipment or fixture related to facilities described in subparagraph (A); 

* * * * * * * 

SEC. 343. FEDERAL INSURANCE FOR BONDS. 

(a) * * * 

* * * * * * * 

(e) SALE OF QUALIFIED BONDS.—Notwithstanding any other provision of law, a qualified bond guaranteed under this part may be 

sold to any party that offers terms that the Secretary determines 

are in the best interest of the eligible institution. 

* * * * * * * 

PART E—MINORITY SCIENCE AND 

ENGINEERING IMPROVEMENT PROGRAM 

SUBPART 1—MINORITY SCIENCE AND ENGINEERING IMPROVEMENT

PROGRAM

* * * * * * * 

SEC. 351. PURPOSE; AUTHORITY. 

(a) It is the purpose of this subpart to continue the authority of 

the Department to operate the Minority Institutions Science Improvement Program created under section 3(a)(1) of the National 

Science Foundation Act of 1950 and transferred to the Department 

by section 304(a)(1) of the Department of Education Organization 

Act øof 1979¿. 

* * * * * * * 

øSEC. 1024. MULTIAGENCY STUDY OF MINORITY SCIENCE PROGRAMS. 

øThe Secretary, in cooperation with the heads of other departments and agencies that operate programs similar in purposes to 

the Minority Science Improvement Program which seek to increase 

minority participation and representation in scientific fields, shall 

submit a report to the President and Congress summarizing and 

evaluating such programs by January 1, 1996.¿ 

* * * * * * * 

PART F—GENERAL PROVISIONS

SEC. 391. APPLICATIONS FOR ASSISTANCE. 

(a) * * * 

391 

(b) CONTENTS.—An institution, in its application for a grant, 

shall—

(1) * * * 

* * * * * * * 

(7) describe in a comprehensive manner any proposed project 

for which funds are sought under the application and include—

(A) * * * 

* * * * * * * 

(E) a detailed description of any activity which involves 

the expenditure of more than $25,000, as identified in the 

budget referred to in øsubparagraph (E)¿ subparagraph 

(D); and 

* * * * * * * 

SEC. 396. LIMITATIONS. 

The funds appropriated under øsection 360¿ section 399 may not 

be used—

(1) * * * 

* * * * * * * 

SEC. 399. AUTHORIZATIONS OF APPROPRIATIONS. 

(a) AUTHORIZATIONS.—

(1) PART A.—(A) There are authorized to be appropriated to 

carry out part A, $135,000,000 (other than section 316) for fiscal year ø1999¿ 2006, and such sums as may be necessary for 

each of the ø4¿ 5 succeeding fiscal years. 

(B) There are authorized to be appropriated to carry out section 316, ø$10,000,000¿ $23,800,000 for fiscal year ø1999¿ 

2006 and such sums as may be necessary for each of the ø4¿ 

5 succeeding fiscal years. 

(C) There are authorized to be appropriated to carry out section 317, ø$5,000,000¿ $11,900,000 for fiscal year ø1999¿ 2006 

and such sums as may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

(2) PART B.—(A) There are authorized to be appropriated to 

carry out part B (other than section 326), ø$135,000,000¿ 

$241,000,000 for fiscal year ø1999¿ 2006, and such sums as 

may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

(B) There are authorized to be appropriated to carry out section 326, ø$35,000,000¿ $59,000,000 for fiscal year ø1999¿ 

2006, and such sums as may be necessary for each of the ø4¿ 

5 succeeding fiscal years. 

* * * * * * * 

(4) PART D.—(A) There are authorized to be appropriated to 

carry out part D (other than section 345(7), but including section 347), ø$110,000¿ $212,000 for fiscal year ø1999¿ 2006, 

and such sums as may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

(B) There are authorized to be appropriated to carry out section 345(7), such sums as may be necessary for fiscal year 

ø1999¿ 2006 and each of the ø4¿ 5 succeeding fiscal years. 

* * * * * * * 

392 

TITLE IV—STUDENT ASSISTANCE 

PART A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF

HIGHER EDUCATION

SEC. 400. STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION. 

(a) * * * 

(b) SECRETARY REQUIRED TO CARRY OUT PURPOSES.—The Secretary shall, in accordance with subparts 1 øthrough 8¿ through 7, carry out programs to achieve the purposes of this part. 

Subpart 1—Federal Pell Grants 

SEC. 401. FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; 

APPLICATIONS. 

(a) PROGRAM AUTHORITY AND METHOD OF DISTRIBUTION.—(1) For 

each fiscal year through fiscal year ø2004¿ 2012, the Secretary 

shall pay to each eligible institution such sums as may be necessary to pay to each eligible student (defined in accordance with 

section 484) for each academic year during which that student is 

in attendance at an institution of higher education, as an undergraduate, a Federal Pell Grant in the amount for which that student is eligible, as determined pursuant to subsection (b). Not less 

than 85 percent of such sums shall be advanced to eligible institutions prior to the start of each payment period and shall be based 

upon an amount requested by the institution as needed to pay eligible students 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. 

ø(2) Nothing in this section shall be interpreted to prohibit the 

Secretary from paying directly to students, in advance of the beginning of the academic term, an amount for which they are eligible, 

in cases where the eligible institution elects not to participate in 

the disbursement system required by paragraph (1).¿ 

ø(3)¿ (2) Grants made under this subpart shall be known as 

‘‘Federal Pell Grants’’. 

(b) PURPOSE AND AMOUNT OF GRANTS.—(1) * * * 

ø(2)(A) The amount of the Federal Pell Grant for a student eligible under this part shall be—

ø(i) $4,500 for academic year 1999–2000; 

ø(ii) $4,800 for academic year 2000–2001; 

ø(iii) $5,100 for academic year 2001–2002; 

ø(iv) $5,400 for academic year 2002–2003; and 

ø(v) $5,800 for academic year 2003–2004, 

less an amount equal to the amount determined to be the expected 

family contribution with respect to that student for that year.¿ 

(2)(A) The amount of the Federal Pell Grant for a student eligible under this part shall be $6,000 for academic years 2006–2007 

through 2012–2013, less an amount equal to the amount determined 

to be the expected family contribution with respect to that student 

for that year. 

* * * * * * * 

393 

ø(3)(A) For any academic year for which an appropriation Act 

provides a maximum basic grant in an amount in excess of $2,700, 

the amount of a student’s basic grant shall equal $2,700 plus—

ø(i) one-half of the amount by which such maximum basic 

grant exceeds $2,700; plus 

ø(ii) the lesser of—

ø(I) the remaining one-half of such excess; or 

ø(II) the sum of the student’s tuition and, if the student 

has dependent care expenses (as described in section 

472(8)) or disability-related expenses (as described in section 472(9)), an allowance determined by the institution for 

such expenses. 

ø(B) An institution that charged only fees in lieu of tuition as of 

October 1, 1998, may include in the institution’s determination of 

tuition charged, fees that would normally constitute tuition.¿ 

ø(4)¿ (3) No Federal Pell Grant under this subpart shall exceed 

the difference between the expected family contribution for a student and the cost of attendance (as defined in section 472) at the 

institution at which that student is in attendance. If, with respect 

to any student, it is determined that the amount of a Federal Pell 

Grant plus the amount of the expected family contribution for that 

student exceeds the cost of attendance for that year, the amount 

of the Federal Pell Grant shall be reduced until the combination of 

expected family contribution and the amount of the Federal Pell 

Grant does not exceed the cost of attendance at such institution. 

ø(5)¿ (4) No Federal Pell Grant shall be awarded to a student 

under this subpart if the amount of that grant for that student as 

determined under this subsection for any academic year is less 

than $400, except that a student who is eligible for a Federal Pell 

Grant that is equal to or greater than $200 but less than $400 

shall be awarded a Federal Pell Grant of $400. 

ø(6)(A) The Secretary may allow, on a case-by-case basis, a student to receive 2 Pell grants during a single award year, if—

ø(i) the student is enrolled full-time in an associate or baccalaureate degree program of study that is 2 years or longer at 

an eligible institution that is computed in credit hours; and 

ø(ii) the student completes course work toward completion of 

an associate or baccalaureate degree that exceeds the requirements for a full academic year as defined by the institution. 

ø(B) The Secretary shall promulgate regulations implementing 

this paragraph.¿ 

(5) YEAR-ROUND PELL GRANTS.—

(A) IN GENERAL.—The Secretary shall, for students enrolled full time in a baccalaureate or associate’s degree program of study at an eligible institution, award such students two Pell grants during a single award year to permit 

such students to accelerate progress toward their degree objectives by enrolling in academic programs for 12 months 

rather than 9 months. 

(B) LIMITATION.—The Secretary shall limit the awarding 

of additional Pell grants under this paragraph in a single 

award year to students attending—

(i) baccalaureate degree granting institutions that 

have a graduation rate as reported by the Integrated 

394 

Postsecondary Education Data System for the 4 preceding academic years of at least 30 percent; or 

(ii) two-year institutions that have a graduation rate 

as reported by the Integrated Postsecondary Education 

Data Systems, in at least one of the last 3 years for 

which data is available, that is above the average for 

the applicable year for the institution’s type and control. 

(C) EVALUATION.—The Secretary shall conduct an evaluation of the program under this paragraph and submit to 

the Congress an evaluation report no later than October 1, 

2011. 

(D) REGULATIONS REQUIRED.—The Secretary shall promulgate regulations implementing this paragraph. 

ø(7)¿ (6) Notwithstanding any other provision of this subpart, the 

Secretary shall allow the amount of the Federal Pell Grant to be 

exceeded for students participating in a program of study abroad 

approved for credit by the institution at which the student is enrolled when the reasonable costs of such program are greater than 

the cost of attendance at the student’s home institution, except that 

the amount of such Federal Pell Grant in any fiscal year shall not 

exceed the grant level specified in the appropriate Appropriation 

Act for this subpart for such year. If the preceding sentence applies, the financial aid administrator at the home institution may 

use the cost of the study abroad program, rather than the home institution’s cost, to determine the cost of attendance of the student. 

ø(8)¿ (7) No Federal Pell Grant shall be awarded under this subpart to any individual who is incarcerated in any Federal or State 

penal institution or who is subject to an involuntary civil commitment upon completion of a period of incarceration for a sexual offense (as determined under regulations of the Secretary). (c) PERIOD OF ELIGIBILITY FOR GRANTS.—(1) øThe period¿ Subject 

to paragraph (5), the period during which a student may receive 

Federal Pell Grants shall be the period required for the completion 

of the first undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in 

attendance except that any period during which the student is enrolled in a noncredit or remedial course of study as defined in paragraph (2) shall not be counted for the purpose of this paragraphø.¿ 

but shall be subject to the limitation described in paragraph (5). 

(2) Nothing in this section shall exclude from eligibility courses 

of study which are noncredit or remedial in nature (including 

courses in English language instruction) which are determined by 

the institution, for not more than one academic year, to be necessary to help the student be prepared for the pursuit of a first undergraduate baccalaureate degree or certificate or, in the case of 

courses in English language instruction, to be necessary to enable 

the student to utilize already existing knowledge, training, or 

skills. Nothing in this section shall exclude from eligibility programs of study abroad that are approved for credit by the home institution at which the student is enrolled. 

* * * * * * * 

(5) The period during which a student may receive Federal Pell 

Grants shall not exceed the equivalent of 18 semesters or 27 quarters in duration (as determined by the Secretary by regulation), 

395 

without regard to whether the student is enrolled on a full-time 

basis during any portion of that period, and including any period 

of time for which the student received Federal Pell Grants prior to 

the date of enactment of the College Access and Opportunity Act of 

2005. 

* * * * * * * 

(f) CALCULATION OF ELIGIBILITY.—(1) * * * 

* * * * * * * 

(3) Each contractor processing applications for awards under this 

subpart shall for each academic year after academic year 1986–

1987 prepare and submit a report to the Secretary on the correctness of the computations of amount of the expected family contribution, and on the accuracy of the questions on the application form 

under this subpart for the previous academic year for which the 

contractor is responsible. The Secretary shall transmit the report, 

together with the comments and recommendations of the Secretary, 

to the øCommittee on Appropriations and the Committee on Labor 

and Human Resources of the Senate and the Committee on Appropriations and the Committee on Education and the Workforce of 

the House of Representatives¿ Committees on Appropriations of the 

Senate and House of Representatives and the authorizing committees. 

* * * * * * * 

SEC. 401A. PELL GRANTS PLUS: ACHIEVEMENT GRANTS FOR STATE 

SCHOLARS. 

(a) GRANTS AUTHORIZED.—From sums appropriated to carry out 

section 401, the Secretary shall establish a program to award Pell 

Grants Plus to students who—

(1) have successfully completed a rigorous high school program of study established by a State or local educational agency in consultation with a State coalition assisted by the Center 

for State Scholars; 

(2) are enrolled full-time in the first academic year of undergraduate education, and have not been previously enrolled in a 

program of undergraduate education; and 

(3) are eligible to receive Federal Pell Grants for the year in 

which the grant is awarded. 

(b) AMOUNT OF GRANTS.— (1) IN GENERAL.—Except as provided in paragraph (2), the 

amount of the grant awarded under this section shall be 

$1,000. 

(2) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE.—A 

grant awarded under this section to any student, in combination with the Federal Pell Grant assistance and other student 

financial assistance available to such student, may not exceed 

the student’s cost of attendance. 

(c) SELECTION OF RECIPIENTS.—

(1) PROCEDURES ESTABLISHED BY REGULATION.—The Secretary shall establish by regulation procedures for the determination of eligibility of students for the grants awarded under 

this section. Such procedures shall include measures to ensure 

that eligibility is determined in a timely and accurate manner 

396 

consistent with the requirements of section 482 and the submission of the financial aid form required by section 483. 

(2) REQUIRED INFORMATION.—Each eligible student desiring 

an award under this section shall submit at such time and in 

such manner such information as the Secretary may reasonably 

require. 

(3) CONTINUATION OF GRANT REQUIREMENTS.—In order for a 

student to continue to be eligible to receive an award under this 

section for the second year of undergraduate education, the eligible student must— (A) maintain eligibility to receive a Federal Pell Grant 

for that year; 

(B) obtain a grade point average of at least 3.0 (or the 

equivalent as determined under regulations prescribed by 

the Secretary) for the first year of undergraduate education; 

and 

(C) be enrolled full-time and fulfill the requirements for 

satisfactory progress described in section 484(c). 

(d) EVALUATION, AND REPORTS.—The Secretary shall monitor the 

progress, retention, and completion rates of the students to whom 

awards are provided under this section. In doing so, the Secretary 

shall evaluate the impact of the Pell Grants Plus Program and report, not less than biennially, to the authorizing committees of the 

House of Representatives and the Senate. 

Subpart 2—Federal Early Outreach and Student 

Services Programs 

CHAPTER 1—FEDERAL TRIO PROGRAMS 

SEC. 402A. PROGRAM AUTHORITY; AUTHORIZATION OF APPROPRIATIONS. 

(a) * * * 

(b) RECIPIENTS, DURATION, AND SIZE.— (1) * * * 

ø(2) DURATION.—Grants or contracts made under this chapter shall be awarded for a period of 4 years, except that— ø(A) the Secretary shall award such grants or contracts 

for 5 years to applicants whose peer review scores were in 

the highest 10 percent of scores of all applicants receiving 

grants or contracts in each program competition for the 

same award year; 

ø(B) grants made under section 402G shall be awarded 

for a period of 2 years; and 

ø(C) grants under section 402H shall be awarded for a 

period determined by the Secretary. 

ø(3) MINIMUM GRANTS.—Unless the institution or agency requests a smaller amount, individual grants under this chapter 

shall be no less than— ø(A) $170,000 for programs authorized by sections 402D 

and 402G; 

ø(B) $180,000 for programs authorized by sections 402B 

and 402F; and 

ø(C) $190,000 for programs authorized by sections 402C 

and 402E.¿ 

397 

(2) DURATION.—Grants or contracts awarded under this 

chapter shall be awarded for a period of 5 years, except that— (A) grants under section 402G shall be awarded for a period of 2 years; and 

(B) grants under section 402H shall be awarded for a period determined by the Secretary. 

(3) MINIMUM GRANTS.—Unless the institution or agency requests a smaller amount, individual grants for programs authorized under this chapter shall be no less than $200,000, except that individual grants for programs authorized under section 402G shall be no less than $170,000. 

(c) PERFORMANCE MEASURES.—

(1) IN GENERAL.—The Secretary shall establish expected program outcomes and procedures for measuring, annually and for 

longer periods, the quality and effectiveness of programs operated under this chapter, and the impact of the services provided 

through the programs to support the attainment of higher education for students from disadvantaged backgrounds, low-income individuals, and prospective first-generation college students. 

(2) USE OF MEASURES.—The performance measures described 

in paragraph (1) shall be used to— (A) assess the impact of the specific services provided by 

recipients of grants or contracts under this chapter and, to 

the extent the Secretary finds appropriate, administrative 

and financial management practices of such programs; 

(B) identify strengths and weaknesses in the provision of 

services provided by grantees under this chapter; 

(C) identify project operations that may require training 

and technical assistance resources. 

(3) ADDITIONAL MEASURES.—In addition to the performance 

measures in paragraph (1), each grant recipient may establish 

local performance measures. 

ø(c)¿ (d) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.—

(1) * * * 

(2) SELECTION.— (A) IN GENERAL.—In awarding grants from among qualified applicants, the Secretary shall consider the effectiveness of each applicant in providing services under this 

chapter, based on— (i) the plan of such applicant to deliver program 

services and achieve expected program outcomes established by the Secretary; 

(ii) the plan of such applicant to coordinate program 

services with other programs for disadvantaged students; and 

(iii) any prior experience of such applicant in achieving expected program outcomes under this chapter. 

(B) ADDITIONAL CRITERIA.—The Secretary may establish 

additional selection criteria as necessary to identify the 

most qualified applicants. 

ø(2)¿ (3) PRIOR EXPERIENCE.—øIn making grants under this 

chapter, the Secretary shall consider each applicant’s prior experience of service delivery under the particular program for 

which funds are sought. The level of consideration given the 

398 

factor of prior experience shall not vary from the level of consideration given such factor during fiscal years 1994 through 

1997, except that grants made under section 402H shall not be 

given prior experience consideration.¿ (A) In making grants 

under this chapter, the Secretary shall use the measures described in subsection (c)(1) to evaluate each applicant’s prior experience in achieving expected program outcomes under the particular program for which funds are sought. 

(B) From the amount available under subsection (h) for a 

program under this chapter (other than a program under section 402G or 402H) for any fiscal year in which the Secretary 

conducts a competition for the award of grants or contracts 

under such program, the Secretary shall reserve 10 percent of 

such available amount for purposes of funding applications 

from novice applicants. If the Secretary determines that there 

are an insufficient number of qualified novice applicants to utilize the amount so reserved, the Secretary shall restore the unutilized remainder of the amount reserved for use by applicants 

qualifying under subparagraph (A). 

(C) The Secretary shall not give prior experience points to any 

current grantee that during the then most recent period for 

which funds were provided— (i) failed to meet one or more expected program outcomes 

based on the performance measures described in subsection 

(c); or 

(ii) expended funds for indirect costs in an amount that 

exceeded 8 percent of the total grant award. 

ø(3)¿ (4) ORDER OF AWARDS; PROGRAM FRAUD.—(A) Except 

with respect to grants made under sections 402G and 402H 

and as provided in subparagraph (B), the Secretary shall 

award grants and contracts under this chapter in the order of 

the scores received by the application for such grant or contract in the peer review process required øunder paragraph 

(4)¿ under paragraph (5) and adjusted for prior experience in 

accordance øwith paragraph (2)¿ with paragraph (3) of this 

subsection. 

ø(B) The Secretary is not required to provide assistance to 

a program otherwise eligible for assistance under this chapter, 

if the Secretary has determined that such program has involved the fraudulent use of funds under this chapter.¿ 

(B) The Secretary shall not provide assistance to an entity if 

the Secretary has determined that such entity has involved the 

fraudulent use of public or private funds. 

ø(4)¿ (5) PEER REVIEW PROCESS.—(A) * * * 

* * * * * * * 

ø(5)¿ (6) NUMBER OF APPLICATIONS FOR GRANTS AND CON- TRACTS.—The Secretary shall not limit the number of applications submitted by an entity under any program authorized 

under this chapter if the additional applications describe programs serving different populations or campuses. 

ø(6)¿ (7) COORDINATION WITH OTHER PROGRAMS FOR DIS- ADVANTAGED STUDENTS.—The Secretary shall encourage coordination of programs assisted under this chapter with other programs for disadvantaged students operated by the sponsoring 

institution or agency, regardless of the funding source of such 

399 

programs. The Secretary shall not limit an entity’s eligibility 

to receive funds under this chapter because such entity sponsors a program similar to the program to be assisted under 

this chapter, regardless of the funding source of such program. 

The Secretary shall permit the Director of a program receiving 

funds under this chapter to administer one or more additional 

programs for disadvantaged students operated by the sponsoring institution or agency, regardless of the funding sources 

of such programs. 

ø(7) APPLICATION STATUS.—The Secretary shall inform each 

entity operating programs under this chapter regarding the 

status of their application for continued funding at least 8 

months prior to the expiration of the grant or contract. The 

Secretary, in the case of an entity that is continuing to operate 

a successful program under this chapter, shall ensure that the 

start-up date for a new grant or contract for such program immediately follows the termination of the preceding grant or 

contract so that no interruption of funding occurs for such successful reapplicants. The Secretary shall inform each entity requesting assistance under this chapter for a new program regarding the status of their application at least 8 months prior 

to the proposed startup date of such program.¿ 

ø(d)¿ (e) OUTREACH.—

(1) * * * 

* * * * * * * 

ø(3) TECHNICAL ASSISTANCE.—The Secretary shall provide 

technical training to applicants for projects and programs 

authorized under this chapter. The Secretary shall give priority to serving programs and projects that serve geographic 

areas and eligible populations which have been underserved by 

the programs assisted under this chapter. Technical training 

activities shall include the provision of information on authorizing legislation, goals and objectives of the program, required 

activities, eligibility requirements, the application process and 

application deadlines, and assistance in the development of 

program proposals and the completion of program applications. 

Such training shall be furnished at conferences, seminars, and 

workshops to be conducted at not less than 10 sites throughout 

the United States to ensure that all areas of the United States 

with large concentrations of eligible participants are served.¿ 

(3) TECHNICAL ASSISTANCE.—The Secretary shall provide 

technical assistance to applicants for projects and programs authorized under this chapter. The Secretary shall give priority to 

serving programs and projects that serve geographic areas and 

eligible populations which have been underserved by the programs assisted under this chapter. Technical training activities 

shall include the provision of information on authorizing legislation, goals and objectives of the program, required activities, 

eligibility requirements, the application process and application 

deadlines, and assistance in the development of program proposals and the completion of program applications. 

* * * * * * * 

(f) RECORDKEEPING AND REPORTING.—

400 

(1) IN GENERAL.—The Secretary shall establish uniform reporting requirements and require each recipient of funds under 

this chapter to submit annually and in electronic form such information in such manner and form and at such time as the 

Secretary may require, except that reporting such information 

shall not reveal personally identifiable information about an individual student. 

(2) REPORT TO CONGRESS.—At least once every 2-year period, 

the Secretary shall prepare and submit to the authorizing committees, a report on the services provided to students that shall 

include—

(A) a statement for the then most recently concluded fiscal year specifying— (i) the amount of funds received by grantees to provide services under this chapter; and 

(ii) the amount of funds received by new grantees to 

provide services under this chapter; 

(B) a description of the specific services provided to students; 

(C) a summary of the overall success in achieving specific 

program outcomes or progress toward such outcomes; 

(D) a report of the number of students served by types of 

service received; 

(E) information summarizing the types of organizations 

that received funds under this chapter; and 

(F) a summary of the research and evaluation activities 

under section 402H, including—

(i) a status report on ongoing activities; and 

(ii) results, conclusions, and recommendations of 

such activities available after the then most recent report. 

ø(e)¿ (g) DOCUMENTATION OF STATUS AS A LOW-INCOME INDIVIDUAL.—(1) Except in the case of an independent student, as defined in section 480(d), documentation of an individual’s status pursuant to subsection ø(g)(2)¿ (i)(4) shall be made by providing the 

Secretary with—

(A) * * * 

* * * * * * * 

(2) In the case of an independent student, as defined in section 

480(d), documentation of an individual’s status pursuant to subsection ø(g)(2)¿ (i)(4) shall be made by providing the Secretary 

with—

(A) * * * 

* * * * * * * 

(3) Notwithstanding this subsection and subsection (i)(4), individuals who are homeless or unaccompanied youth as defined in section 725 of the McKinney-Vento Homeless Assistance Act shall be eligible to participate in programs under sections 402B, 402C, 402D, 

and 402F of this chapter. 

ø(f)¿ (h) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of 

making grants and contracts under this chapter, there are authorized to be appropriated ø$700,000,000 for fiscal year 1999, and 

such sums as may be necessary for each of the 4 succeeding fiscal 

years¿ $836,500,000 for fiscal year 2006 and such sums as may be 

401 

necessary for each of the 5 succeeding fiscal years. øOf the amount 

appropriated under this chapter, the Secretary may use no more 

than 1⁄2 of 1 percent of such amount to obtain additional qualified 

readers and additional staff to review applications, to increase the 

level of oversight monitoring, to support impact studies, program 

assessments and reviews, and to provide technical assistance to potential applicants and current grantees. In expending these funds, 

the Secretary shall give priority to the additional administrative requirements provided in the Higher Education Amendments of 

1992, to outreach activities, and to obtaining additional readers. 

The Secretary shall report to Congress by October 1, 1994, on the 

use of these funds.¿ Of the amount appropriated under this chapter, the Secretary may use no more than one half of 1 percent of 

such amount to support the administration of the Federal TRIO 

programs including to increase the level of oversight monitoring, to 

support impact studies, program assessments and reviews, and to 

provide technical assistance to prospective applicants and current 

grantees. 

ø(g)¿ (i) DEFINITIONS.—For the purpose of this chapter: 

(1) DIFFERENT CAMPUS.—The term ‘‘different campus’’ means 

an institutional site that—

(A) is geographically apart from the main campus of the 

institution; 

(B) is permanent in nature; and 

(C) offers courses in educational programs leading to a 

degree, certificate, or other recognized educational credential. 

(2) DIFFERENT POPULATION.—The term ‘‘different population’’

means a group of individuals, with respect to whom an entity 

seeks to serve through an application for funding under this 

chapter, that—

(A) is separate and distinct from any other population 

that the entity seeks to serve through an application for 

funding under this chapter; or 

(B) while sharing some of the same needs as another population that the entity seeks to serve through an application 

for funding under this chapter, has distinct needs for specialized services. 

ø(1)¿ (3) FIRST GENERATION COLLEGE STUDENT.—The term 

‘‘first generation college student’’ means— 

(A) * * * 

* * * * * * * 

ø(2)¿ (4) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income individual’’ means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an 

amount equal to the poverty level determined by using criteria 

of poverty established by the Bureau of the Census. 

ø(3)¿ (5) VETERAN ELIGIBILITY.—No veteran shall be deemed 

ineligible to participate in any program under this chapter øby 

reason of such individual’s age¿ who— 

(A) * * * 

* * * * * * * 

ø(4)¿ (6) WAIVER.—The Secretary may waive the service requirements in subparagraph (A) or (B) of paragraph (3) if the 

402 

Secretary determines the application of the service requirements to a veteran will defeat the purpose of a program under 

this chapter. 

SEC. 402B. TALENT SEARCH. 

(a) * * * 

(b) PERMISSIBLE SERVICES.—Any talent search project assisted 

under this chapter may provide services such as—

(1) * * * 

* * * * * * * 

(3) education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents; 

ø(3)¿ (4) assistance in preparing for college entrance examinations; 

ø(4)¿ (5) guidance on and assistance in secondary school reentry, entry to general educational development (GED) programs, other alternative education programs for secondary 

school dropouts, or postsecondary education; 

ø(5)¿ (6) personal and career counseling, or activities designed to acquaint individuals from disadvantaged backgrounds with careers in which the individuals are particularly 

underrepresented; 

ø(6)¿ (7) tutorial services; 

ø(7)¿ (8) exposure to college campuses as well as cultural 

events, academic programs and other sites or activities not 

usually available to disadvantaged youth; 

ø(8)¿ (9) workshops and counseling for families of students 

served; 

ø(9)¿ (10) mentoring programs involving elementary or secondary school teachers or counselors, faculty members at institutions of higher education, students, or any combination of 

such persons; and 

ø(10)¿ (11) programs and activities as described in paragraphs (1) øthrough (9)¿ through (10) which are specially designed for students of limited English proficiency. 

* * * * * * * 

(d) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing 

an applicant’s past performance under section 402A(c)(1), and prior 

experience under section 402A(d)(3), the Secretary shall consider the 

college-going rate of the participants served by the program compared to that of other applicants eligible to receive consideration of 

prior experience. 

SEC. 402C. UPWARD BOUND. 

(a) * * * 

(b) PERMISSIBLE SERVICES.—Any upward bound project assisted 

under this chapter may provide services such as—

(1) * * * 

(2) education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents; 

ø(2)¿ (3) counseling and workshops; 

ø(3)¿ (4) academic advice and assistance in secondary school 

course selection; 

403 

ø(4)¿ (5) tutorial services; 

ø(5)¿ (6) exposure to cultural events, academic programs, 

and other activities not usually available to disadvantaged 

youth; 

ø(6)¿ (7) activities designed to acquaint youths participating 

in the project with the range of career options available to 

them; 

ø(7)¿ (8) instruction designed to prepare youths participating 

in the project for careers in which persons from disadvantaged 

backgrounds are particularly underrepresented; 

ø(8)¿ (9) on-campus residential programs; 

ø(9)¿ (10) mentoring programs involving elementary or secondary school teachers or counselors, faculty members at institutions of higher education, students, or any combination of 

such persons; 

ø(10)¿ (11) work-study positions where youth participating in 

the project are exposed to careers requiring a postsecondary 

degree; 

ø(11)¿ (12) special services to enable veterans to make the 

transition to postsecondary education, specifically in the fields 

of math and science; and 

ø(12)¿ (13) programs and activities as described in paragraphs ø(1) through (11)¿ (1) through (12) which are specially 

designed for students of limited English proficiency. 

* * * * * * * 

(e) MAXIMUM STIPENDS.—Youths participating in a project proposed to be carried out under any application may be paid stipends 

not in excess of ø$60¿ $100 per month during June, July, and August, except that youth participating in a work-study position 

under subsection ø(b)(10)¿ (b)(11) may be paid a stipend of $300 

per month during June, July, and August. Youths participating in 

a project proposed to be carried out under any application may be 

paid stipends not in excess of ø$40¿ $60 per month during the remaining period of the year. 

(f) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing 

an applicant’s past performance under section 402A(c)(1), and prior 

experience under section 402A(d)(3), the Secretary shall consider the 

college-going rate of the participants served by the program compared to that of other applicants eligible to receive consideration of 

prior experience. 

SEC. 402D. STUDENT SUPPORT SERVICES. 

(a) * * * 

(b) PERMISSIBLE SERVICES.—A student support services project 

assisted under this chapter may provide services such as—

(1) * * * 

(2) education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents; 

ø(2)¿ (3) personal counseling; 

ø(3)¿ (4) academic advice and assistance in course selection; 

ø(4)¿ (5) tutorial services and counseling and peer counseling; 

ø(5)¿ (6) exposure to cultural events and academic programs 

not usually available to disadvantaged students; 

404 

ø(6)¿ (7) activities designed to acquaint students participating in the project with the range of career options available 

to them; 

ø(7)¿ (8) activities designed to assist students participating 

in the project in securing admission and financial assistance 

for enrollment in graduate and professional programs; 

ø(8)¿ (9) activities designed to assist students currently enrolled in 2-year institutions in securing admission and financial assistance for enrollment in a four-year program of postsecondary education; 

ø(9)¿ (10) mentoring programs involving faculty or upper 

class students, or a combination thereof; and 

ø(10)¿ (11) programs and activities as described in paragraphs ø(1) through (9)¿ (1) through (10) which are specially 

designed for students of limited English proficiency. 

* * * * * * * 

(d) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for student support services projects under this 

chapter for any fiscal year, the Secretary shall—

(1) * * * 

* * * * * * * 

(6) consider, in addition to such other criteria as the Secretary may prescribe, the institution’s effort, and where applicable past history, in—

(A) providing sufficient financial assistance to meet the 

full financial need of each student in the project; øand¿ 

(B) maintaining the loan burden of each such student at 

a manageable levelø.¿; and 

(C) working with other entities that serve low-income 

working adults to increase access to and successful progress 

in postsecondary education by low-income working adults 

seeking their first postsecondary degree or certificate. 

(e) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing 

an applicant’s past performance under section 402A(c)(1), and prior 

experience under section 402A(d)(3), the Secretary shall consider the 

college-going rate of the participants served by the program compared to that of other applicants eligible to receive consideration of 

prior experience. 

SEC. 402E. POSTBACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY. 

(a) * * * 

(b) SERVICES.—A postbaccalaureate achievement project assisted 

under this section may provide services such as—

(1) * * * 

* * * * * * * 

(7) education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents; 

ø(7)¿ (8) mentoring programs involving faculty members at 

institutions of higher education, students, or any combination 

of such persons; and 

405 

ø(8)¿ (9) exposure to cultural events and academic programs 

not usually available to disadvantaged students. 

* * * * * * * 

(e) MAXIMUM STIPENDS.—Students participating in research 

under a postbaccalaureate achievement project may receive an 

award that—

(1) shall include a stipend not to exceed ø$2,800¿ $5,000 per 

annum; and 

* * * * * * * 

ø(f) FUNDING.—From amounts appropriated pursuant to the authority of section 402A(f), the Secretary shall, to the extent practicable, allocate funds for projects authorized by this section in an 

amount which is not less than $11,000,000 for each of the fiscal 

years 1993 through 1997.¿ 

(f) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing 

an applicant’s past performance under section 402A(c)(1), and prior 

experience under section 402A(d)(3), the Secretary shall consider the 

college-going rate of the participants served by the program compared to that of other applicants eligible to receive consideration of 

prior experience. 

SEC. 402F. EDUCATIONAL OPPORTUNITY CENTERS. 

(a) * * * 

(b) PERMISSIBLE SERVICES.—An educational opportunity center 

assisted under this section may provide services such as— (1) * * * 

* * * * * * * 

(4) education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents; 

ø(4)¿ (5) assistance in preparing for college entrance examinations; 

ø(5)¿ (6) guidance on secondary school reentry or entry to a 

general educational development (GED) program or other alternative education programs for secondary school dropouts; 

ø(6)¿ (7) personal counseling; 

ø(7)¿ (8) tutorial services; 

ø(8)¿ (9) career workshops and counseling; 

ø(9)¿ (10) mentoring programs involving elementary or secondary school teachers, faculty members at institutions of 

higher education, students, or any combination of such persons; and 

ø(10)¿ (11) programs and activities as described in paragraphs ø(1) through (9)¿ (1) through (10) which are specially 

designed for students of limited English proficiency. 

(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for educational opportunity centers under this section for any fiscal year the Secretary shall—

(1) * * * 

(2) require that such participants be persons who are at least 

nineteen years of age, unless the imposition of such limitation 

with respect to any person would defeat the purposes of this 

section or the purposes of section 402B; øand¿ 

406 

(3) require an assurance that individuals participating in the 

project proposed in the application do not have access to services from another project funded under this section or under 

section 402Bø.¿; and 

(4) consider the extent to which the proposed project would 

provide services to low-income working adults in the region to 

be served, in order to increase access to postsecondary education 

by low-income working adults. 

(d) EXPECTED PROGRAM OUTCOME.—For the purposes of assessing 

an applicant’s past performance under section 402A(c)(1), and prior 

experience under section 402A(d)(3), the Secretary shall consider the 

college-going rate of the participants served by the program compared to that of other applicants eligible to receive consideration of 

prior experience. 

øSEC. 402G. STAFF DEVELOPMENT ACTIVITIES. 

ø(a) SECRETARY’S AUTHORITY.—For the purpose of improving the 

operation of the programs and projects authorized by this chapter, 

the Secretary is authorized to make grants to institutions of higher 

education and other public and private nonprofit institutions and 

organizations to provide training for staff and leadership personnel 

employed in, participating in, or preparing for employment in, such 

programs and projects. 

ø(b) CONTENTS OF TRAINING PROGRAMS.—Such training shall include conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operation of such programs and projects and shall be carried out in the various regions 

of the Nation in order to ensure that the training opportunities are 

appropriate to meet the needs in the local areas being served by 

such programs and projects. Such training shall be offered annually for new directors of projects funded under this chapter as well 

as annually on the following topics and other topics chosen by the 

Secretary: 

ø(1) Legislative and regulatory requirements for the operation of programs funded under this chapter. 

ø(2) Assisting students in receiving adequate financial aid 

from programs assisted under this title and other programs. 

ø(3) The design and operation of model programs for projects 

funded under this chapter. 

ø(4) The use of appropriate educational technology in the operation of projects assisted under this chapter. 

ø(c) CONSULTATION.—Grants for the purposes of this section shall 

be made only after consultation with regional and State professional associations of persons having special knowledge with respect to the needs and problems of such programs and projects. 

øSEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT 

AND DISSEMINATION PARTNERSHIP PROJECTS. 

ø(a) EVALUATIONS.—

ø(1) IN GENERAL.—For the purpose of improving the effectiveness of the programs and projects assisted under this chapter, the Secretary may make grants to or enter into contracts 

with institutions of higher education and other public and private institutions and organizations to evaluate the effectiveness of the programs and projects assisted under this chapter. 

407 

ø(2) PRACTICES.—The evaluations described in paragraph (1) 

shall identify institutional, community, and program or project 

practices that are particularly effective in enhancing the access 

of low-income individuals and first-generation college students 

to postsecondary education, the preparation of the individuals 

and students for postsecondary education, and the success of 

the individuals and students in postsecondary education. Such 

evaluations shall also investigate the effectiveness of alternative and innovative methods within Federal TRIO programs 

of increasing access to, and retention of, students in postsecondary education. 

ø(b) GRANTS.—The Secretary may award grants to institutions of 

higher education or other private and public institutions and organizations, that are carrying out a program or project assisted under 

this chapter prior to the date of enactment of the Higher Education 

Amendments of 1998, to enable the institutions and organizations 

to expand and leverage the success of such programs or projects by 

working in partnership with other institutions, community-based 

organizations, or combinations of such institutions and organizations, that are not receiving assistance under this chapter and are 

serving low-income students and first generation college students, 

in order to— ø(1) disseminate and replicate best practices of programs or 

projects assisted under this chapter; and 

ø(2) provide technical assistance regarding programs and 

projects assisted under this chapter. 

ø(c) RESULTS.—In order to improve overall program or project effectiveness, the results of evaluations and grants described in this 

section shall be disseminated by the Secretary to similar programs 

or projects assisted under this subpart, as well as other individuals 

concerned with postsecondary access for and retention of low-income individuals and first-generation college students.¿ 

SEC. 402G. STAFF DEVELOPMENT ACTIVITIES. 

(a) SECRETARY’S AUTHORITY.—For the purpose of improving the 

operation of the programs and projects authorized by this chapter, 

the Secretary is authorized to make grants to institutions of higher 

education and other public and private nonprofit institutions and 

organizations to provide training and technical assistance for staff 

and leadership personnel employed in, participating in, or preparing for employment in, such programs and projects. 

(b) CONTENTS OF TRAINING PROGRAMS.—Such training shall be 

provided to assist programs and projects in—

(1) achieving the expected program outcomes stated under 

this chapter or additional outcomes identified by individual 

programs or projects; 

(2) addressing any identified program weaknesses in the overall development, conduct, or administration of a grant or contract; 

(3) improving the quality of services provided to eligible students; or 

(4) additional areas in need of program improvement as identified by the Secretary or as requested by grantees in order to 

enhance program operations and outcomes. 

(c) CONSULTATION.—Grants for the purposes of this section shall 

be made only after consultation with regional and State profesVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00411 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
408 

sional associations of persons having special knowledge with respect 

to the needs and problems of such programs and projects. 

SEC. 402H. EVALUATIONS. 

(a) EVALUATIONS.—

(1) IN GENERAL.—For the purpose of improving the effectiveness of the programs and projects assisted under this chapter, 

the Secretary shall make grants to or enter into contracts with 

one or more organizations to—

(A) evaluate the effectiveness of the programs and 

projects assisted under this chapter; and 

(B) disseminate information on the impact of the programs in increasing the education level of participating 

students, as well as other appropriate measures. 

(2) ISSUES TO BE EVALUATED.—The evaluations described in 

paragraph (1) shall measure the effectiveness of programs 

under this chapter in—

(A) meeting the expected program outcomes stated under 

this chapter and all performance measures identified by the 

Secretary; 

(B) enhancing the access of low-income individuals and 

first-generation college students to postsecondary education; 

(C) preparing individuals and students for postsecondary 

education; 

(D) comparing the level of education completed by students who participate in the programs funded under this 

chapter with the level of education completed by students of 

similar backgrounds who do not participate in such programs; 

(E) comparing the retention rates, dropout rates, graduation rates, and college admission and completion rates of 

students who participate in the programs funded under 

this chapter with the rates of students of similar backgrounds who do not participate in such programs; and 

(F) such other issues as the Secretary considers appropriate for inclusion in the evaluation. 

(3) PROGRAM METHODS.—Such evaluations shall also investigate the effectiveness of alternative and innovative methods 

within Federal TRIO programs of increasing access to, and retention of, students in postsecondary education. 

(b) RESULTS.—The Secretary shall submit to the authorizing committees—

(1) an annual interim report on the progress and preliminary 

results of the evaluation of each program funded under this 

chapter no later than 2 years following the date of enactment 

of the College Access and Opportunity Act of 2005; and 

(2) a final report not later than 3 years following the date of 

enactment of such Act. 

(c) PUBLIC AVAILABILITY.—All reports and underlying data gathered pursuant to this section shall be made available to the public 

upon request, in a timely manner following submission of the applicable reports under subsection (b), except that any personally identifiable information on students participating in any TRIO program 

shall not be disclosed or made available to the public. 

409 

CHAPTER 2—GAINING EARLY AWARENESS 

AND READINESS FOR UNDERGRADUATE 

PROGRAMS 

SEC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PROGRAM AUTHORIZED. 

(a) * * * 

(b) AWARDS.—

(1) * * * 

(2) PRIORITY.—In making awards to eligible entities described in paragraph (c)(1), the Secretary shall—

(A) * * * 

(B) ensure that students served under this chapter on 

the day before the date of enactment of the øHigher Education Amendments of 1998¿ College Access and Opportunity Act of 2005 continue to receive assistance through 

the completion of secondary school. 

(3) DURATION.—An award made by the Secretary under this 

chapter to an eligible entity described in paragraph (1) or (2) 

of subsection (c) shall be for the period of 6 years. 

* * * * * * * 

(d) CONTINUING ELIGIBILITY.—An eligible entity shall not cease to 

be an eligible entity upon the expiration of any grant under this 

chapter (including a continuation award). 

SEC. 404B. REQUIREMENTS. 

(a) * * * 

* * * * * * * 

(g) COHORT APPROACH.—

(1) IN GENERAL.—The Secretary shall require that eligible 

entities described in section 404A(c)(2)—

(A) * * * 

(B) ensure that the services are provided through the 

12th grade to students in the participating grade level and 

provide the option of continued services through the student’s first year of attendance at an eligible institution of 

higher education. 

* * * * * * * 

SEC. 404C. ELIGIBLE ENTITY PLANS. 

(a) PLAN REQUIRED FOR ELIGIBILITY.—

(1) * * * 

(2) CONTENTS.—Each plan submitted pursuant to paragraph 

(1) shall be in such form, contain or be accompanied by such 

information or assurances, and be submitted at such time as 

the Secretary may require by regulation. Each such plan 

shall—

(A) describe the activities for which assistance under 

this chapter is sought; øand¿ 

(B) describe activities for coordinating, complementing, 

and enhancing services under this chapter provided by 

other eligible entities in the State; and 

410 

ø(B)¿ (C) provide such additional assurances as the Secretary determines necessary to ensure compliance with the 

requirements of this chapter. 

* * * * * * * 

SEC. 404D. EARLY INTERVENTION. 

(a) * * * 

(b) USES OF FUNDS.— (1) * * * 

(2) PERMISSIBLE ACTIVITIES.—Examples of activities that 

meet the requirements of subsection (a) include the following: 

(A) Providing eligible students in preschool through 

grade 12 and students in the first year of attendance at an 

eligible institution of higher education with a continuing 

system of mentoring and advising that— (i) * * * 

(ii) may include such support services as after school 

and summer tutoring, assistance in obtaining summer 

jobs, career mentoring, øand academic counseling¿ 

academic counseling, and financial literacy and economic literacy education or counseling. 

* * * * * * * 

(c) PRIORITY STUDENTS.—For eligible entities not using a cohort 

approach, the eligible entity shall treat as priority students any 

student in preschool through grade 12, and may consider students 

in their first year of attendance at an eligible institution, who is eligible—

(1) * * * 

* * * * * * * 

(e) HOMELESS AND UNACCOMPANIED YOUTH.—Notwithstanding 

any other provision of this chapter, individuals who are homeless 

or unaccompanied youth as defined in section 725 of the McKinneyVento Homeless Assistance Act shall be eligible to participate in programs under this section. 

SEC. 404H. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this chapter 

ø$200,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years¿ $306,500,000 for 

fiscal year 2006 and such sums as may be necessary for each of the 

5 succeeding fiscal years. 

øCHAPTER 3—ACADEMIC ACHIEVEMENT INCENTIVE 

SCHOLARSHIPS 

øSEC. 406A. SCHOLARSHIPS AUTHORIZED. 

øThe Secretary is authorized to award scholarships to students 

who graduate from secondary school after May 1, 2000, to enable 

the students to pay the cost of attendance at an institution of higher education during the students first 2 academic years of undergraduate education, if the students—

ø(1) are eligible to receive Federal Pell Grants for the year 

in which the scholarships are awarded; and 

ø(2) demonstrate academic achievement by graduating in the 

top 10 percent of their secondary school graduating class. 

411 

øSEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS. 

ø(a) AMOUNT OF AWARD.—

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

amount of a scholarship awarded under this chapter for any 

academic year shall be equal to 100 percent of the amount of 

the Federal Pell Grant for which the recipient is eligible for the 

academic year. 

ø(2) ADJUSTMENT FOR INSUFFICIENT APPROPRIATIONS.—If, 

after the Secretary determines the total number of eligible applicants for an academic year in accordance with section 406C, 

funds available to carry out this chapter for the academic year 

are insufficient to fully fund all awards under this chapter for 

the academic year, the amount of the scholarship paid to each 

student under this chapter shall be reduced proportionately. 

ø(b) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE.—A 

scholarship awarded under this chapter to any student, in combination with the Federal Pell Grant assistance and other student 

financial assistance available to such student, may not exceed the 

student’s cost of attendance. 

øSEC. 406C. ELIGIBILITY OF SCHOLARS. 

ø(a) PROCEDURES ESTABLISHED BY REGULATION.—The Secretary 

shall establish by regulation procedures for the determination of 

eligibility of students for the scholarships awarded under this chapter. Such procedures shall include measures to prevent any secondary school from certifying more than 10 percent of the school’s 

students for eligibility under this section. 

ø(b) COORDINATION.—In prescribing procedures under subsection 

(a), the Secretary shall ensure that the determination of eligibility 

and the amount of the scholarship is determined in a timely and 

accurate manner consistent with the requirements of section 482 

and the submission of the financial aid form required by section 

483. For such purposes, the Secretary may provide that, for the 

first academic year of a student’s 2 academic years of eligibility 

under this chapter, class rank may be determined prior to graduation from secondary school, at such time and in such manner as the 

Secretary may specify in regulations prescribed under this chapter. 

øSEC. 406D. STUDENT REQUIREMENTS. 

ø(a) IN GENERAL.—Each eligible student desiring a scholarship 

under this chapter shall submit an application to the Secretary at 

such time, in such manner, and containing such information as the 

Secretary may reasonably require. 

ø(b) CONTINUING ELIGIBILITY.—In order for a student to continue 

to be eligible to receive a scholarship under this chapter for the second year of undergraduate education, the eligible student shall 

maintain eligibility to receive a Federal Pell Grant for that year, 

including fulfilling the requirements for satisfactory progress described in section 484(c). 

øSEC. 407E. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this chapter $200,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years.¿ 

412 

SUBPART 3—FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY

GRANTS

SEC. 413A. PURPOSE; APPROPRIATIONS AUTHORIZED. 

(a) * * * 

(b) AUTHORIZATION OF APPROPRIATIONS.—(1) For the purpose of 

enabling the Secretary to make payments to institutions of higher 

education which have made agreements with the Secretary in accordance with section 413C(a), for use by such institutions for payments to undergraduate students of supplemental grants awarded 

to them under this subpart, there are authorized to be appropriated ø$675,000,000 for fiscal year 1999 and such sums as may 

be necessary for the 4 succeeding fiscal years¿ $779,000,000 for fiscal year 2006 and such sums as may be necessary for the 5 succeeding fiscal years. 

* * * * * * * 

SEC. 413C. AGREEMENTS WITH INSTITUTIONS; SELECTION OF RECIPIENTS. 

(a) * * * 

* * * * * * * 

(c) SELECTION OF INDIVIDUALS AND DETERMINATION OF AMOUNT

OF AWARDS.—(1) * * * 

ø(2)(A) In carrying out paragraph (1) of this subsection, each institution of higher education shall, in the agreement made under 

section 487, assure that the selection procedures— ø(i) will be designed to award supplemental grants under 

this subpart, first, to students with exceptional need, and 

ø(ii) will give a priority for supplemental grants under this 

subpart to students who receive Pell Grants and meet the requirements of section 484. 

ø(B) For the purpose of subparagraph (A), the term ‘‘students 

with exceptional need’’ means students with the lowest expected 

family contributions at the institution.¿ 

(2) In carrying out paragraph (1) of this subsection, each institution of higher education shall, in the agreement made under section 

487, assure that the selection procedures— (A) will give a priority for supplemental grants under this 

subpart to students who receive Pell Grants and meet the requirements of section 484; and 

(B) will award no more than 10 percent of each institution’s 

allocation received under section 413D to students who did not 

receive Federal Pell Grants in a prior year. 

* * * * * * * 

SEC. 413D. ALLOCATION OF FUNDS. 

ø(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—(1) From the 

amount appropriated pursuant to section 413A(b) for each fiscal 

year, the Secretary shall first allocate to each eligible institution an 

amount equal to 100 percent of the amount such institution received under subsections (a) and (b) of this section for fiscal year 

1999 (as such subsections were in effect with respect to allocations 

for such fiscal year). 

ø(2)(A) From the amount so appropriated, the Secretary shall 

next allocate to each eligible institution that began participation in 

413 

the program under this subpart after fiscal year 1999 but is not a 

first or second time participant, an amount equal to the greater 

of— ø(i) $5,000; or 

ø(ii) 90 percent of the amount received and used under this 

subpart for the first year it participated in the program. 

ø(B) From the amount so appropriated, the Secretary shall next 

allocate to each eligible institution that began participation in the 

program under this subpart after fiscal year 1999 and is a first or 

second time participant, an amount equal to the greatest of— ø(i) $5,000; 

ø(ii) an amount equal to (I) 90 percent of the amount received and used under this subpart in the second preceding fiscal year by eligible institutions offering comparable programs 

of instruction, divided by (II) the number of students enrolled 

at such comparable institutions in such fiscal year, multiplied 

by (III) the number of students enrolled at the applicant institution in such fiscal year; or 

ø(iii) 90 percent of the institution’s allocation under this part 

for the preceding fiscal year. 

ø(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution which 

ø(i) was a first-time participant in the program in fiscal year 

2000 or any subsequent fiscal year, and 

ø(ii) received a larger amount under this subsection in the 

second year of participation, 

an amount equal to 90 percent of the amount it received under this 

subsection in its second year of participation. 

ø(3)(A) If the amount appropriated for any fiscal year is less than 

the amount required to be allocated to all institutions under paragraph (1) of this subsection, then the amount of the allocation to 

each such institution shall be ratably reduced. 

ø(B) If the amount appropriated for any fiscal year is more than 

the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all 

institutions under paragraph (2), then—

ø(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and 

ø(ii) the amount of the allocation to each institution under 

paragraph (2) shall be ratably reduced. 

ø(C) If additional amounts are appropriated for any such fiscal 

year, such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under paragraphs (1) and (2) of 

this subsection). 

ø(4)(A) Notwithstanding any other provision of this section, the 

Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal 

year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B). 

ø(B) In order to receive an allocation pursuant to subparagraph 

(A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate from or transfer to a 4-year institution of higher 

education.¿ 

414 

(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.— (1) BASE GUARANTEE.—From the amount appropriated pursuant to section 413A(b) for each fiscal year after fiscal year 2007, 

the Secretary shall, subject to paragraph (2), first allocate to 

each eligible institution an amount equal to the following percentage of the amount such institution received under subsection (a) of this section for fiscal year 2007 (as such subsection was in effect with respect to allocations for such fiscal 

year): 

(A) 80 percent for fiscal years 2008 and 2009; 

(B) 60 percent for fiscal years 2010 and 2011; 

(C) 40 percent for fiscal years 2012 and 2013; 

(D) 20 percent for fiscal years 2014 and 2015; and 

(E) 0 percent for fiscal year 2016 and any succeeding fiscal year. 

(2) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIATIONS.—

(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each such institution shall be ratably reduced. 

(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are appropriated for any such fiscal year, 

such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under this subsection). 

(3) ADDITIONAL ALLOCATIONS FOR CERTAIN INSTITUTIONS.— (A) ALLOCATIONS PERMITTED.—Notwithstanding any 

other provision of this section, the Secretary may allocate 

an amount equal to not more than 10 percent of the 

amount by which the amount appropriated in any fiscal 

year to carry out this subpart exceeds $700,000,000 among 

eligible institutions described in subparagraph (B). 

(B) ELIGIBLE INSTITUTIONS.—An otherwise eligible institution may receive a portion of the allocation described in 

subparagraph (A) if— (i) not less than 10 percent of the students attending 

the institution receive Federal Pell Grants; and 

(ii)(I) in the case of an institution that offers programs of at least 4 years in duration, if its graduation 

rate for Federal Pell Grant recipients attending the institution and graduating within the period of time 

equal to normal duration of the longest undergraduate 

program offered by the institution, as measured from 

the first day of their enrollment, exceeds the median 

rate for the class of institution (as defined in section 

131(f)(5)(C)); or 

(II) in the case of an institution that offers programs 

of at least 2, but less than 4, years in duration, if its 

rate for Federal Pell Grant recipients attending the institution and graduating or transferring to an institution that offers programs of at least 4 years in duration 

within the period of time equal to the normal duration 

of the program offered, as measured from the first day 

415 

of their enrollment, exceeds the median rate for the 

class of institution (as defined in section 131(f)(5)(C)). 

* * * * * * * 

(c) DETERMINATION OF INSTITUTION’S NEED.—(1) * * * 

* * * * * * * 

(3)(A) * * * 

* * * * * * * 

(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to ø$450¿ $600. 

* * * * * * * 

SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP

PROGRAM

SEC. 415A. PURPOSE; APPROPRIATIONS AUTHORIZED. 

(a) * * * 

(b) AUTHORIZATION OF APPROPRIATIONS; AVAILABILITY.— (1) IN GENERAL.—There are authorized to be appropriated $105,000,000 for fiscal year ø1999¿ 2006, and such sums as 

may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

* * * * * * * 

SUBPART 5—SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES

ARE ENGAGED IN MIGRANT AND SEASONAL FARMWORK

SEC. 418A. MAINTENANCE AND EXPANSION OF EXISTING PROGRAMS. 

(a) * * * 

(b) SERVICES PROVIDED BY HIGH SCHOOL EQUIVALENCY PRO- GRAM.—The services authorized by this subpart for the high school 

equivalency program include—

(1) recruitment services to reach persons—

(A) * * * 

(B)(i) who themselves, or whose spouse, or whose parents, have spent a minimum of 75 days during the past 24 

months in migrant and seasonal farmwork; or 

* * * * * * * 

(3) supportive services which include the following: 

(A) * * * 

(B) placement services designed to place students in a 

university, college, or junior college program, including 

preparation for college entrance exams, or in military service or career positions; and 

* * * * * * * 

(7) exposure to cultural events, academic programs, and 

other educational and cultural activities usually not available 

to migrant youth; øand¿ 

(8) other essential supportive services, including child care 

and transportation, as needed to ensure the success of eligible 

studentsø.¿; and 

(9) follow-up activity and reporting requirements, except that 

not more than 2 percent of the funds provided under this section may be used for such purposes. 

416 

(c) SERVICES PROVIDED BY COLLEGE ASSISTANCE MIGRANT PRO- GRAM.—(1) Services authorized by this subpart for the college assistance migrant program include— (A) outreach and recruitment services to reach persons who 

themselves, or whose spouse or whose parents have spent a 

minimum of 75 days during the past 24 months in migrant and 

seasonal farmwork or who have participated or are eligible to 

participate, in programs under part C of title I of the Elementary and Secondary Education Act of 1965 (or such part’s predecessor authority) or section 402 of the Job Training Partnership Act or section 167 of the Workforce Investment Act of 

1998, and who meet the minimum qualifications for attendance 

at a college or university; 

(B) supportive and instructional services which include: 

ø(i) personal, academic, and career counseling as an ongoing part of the program;¿ 

(i) personal, academic, career, and economic education or 

personal finance counseling as an ongoing part of the program; 

* * * * * * * 

(2) A recipient of a grant to operate a college assistance migrant 

program under this subpart shall provide followup services for migrant students after such students have completed their first year 

of college, and shall not use more than 10 percent of such grant for 

such followup services. Such followup services may include—

(A) monitoring and reporting the academic progress of students who participated in the project during such student’s 

first year of college and during such student’s subsequent 

years in college; øand¿ 

(B) referring such students to on- or off-campus providers of 

counseling services (including mentoring and guidance of such 

students), academic assistance, or financial aidø.¿; and 

(C) for students in any program that does not award a bachelor’s degree, encouraging the transfer to, and persistence in, 

such a program, and monitoring the rate of such transfer, persistence, and completion. 

* * * * * * * 

(e) FIVE-YEAR GRANT PERIOD; CONSIDERATION OF PRIOR EXPERIENCE.—Except under extraordinary circumstances, the Secretary 

shall award grants for a 5-year period. For the purpose of making 

grants under this subpart, the Secretary shall consider the prior 

experience of service delivery under the particular project for which 

funds are sought by each applicant. Such prior experience shall be 

awarded the same level of consideration given this factor for applicants for programs in accordance with øsection 402A(c)(1)¿ section 

402A(c)(2). 

* * * * * * * 

(h) AUTHORIZATION OF APPROPRIATIONS.—(1) There are authorized to be appropriated for the high school equivalency program 

ø$15,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years¿ $24,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 

5 succeeding fiscal years. 

417 

(2) There are authorized to be appropriated for the college assistance migrant program ø$5,000,000 for fiscal year 1999 and such 

sums as may be necessary for each of the 4 succeeding fiscal years¿ 

$16,000,000 for fiscal year 2006 and such sums as may be necessary 

for each of the 5 succeeding fiscal years. 

øSUBPART 6—ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM

øSEC. 419A. STATEMENT OF PURPOSE. 

øIt is the purpose of this subpart to establish a Robert C. Byrd 

Honors Scholarship Program to promote student excellence and 

achievement and to recognize exceptionally able students who show 

promise of continued excellence. 

øSEC. 419C. SCHOLARSHIPS AUTHORIZED. 

ø(a) PROGRAM AUTHORITY.—The Secretary is authorized, in accordance with the provisions of this subpart, to make grants to 

States to enable the States to award scholarships to individuals 

who have demonstrated outstanding academic achievement and 

who show promise of continued academic achievement. 

ø(b) PERIOD OF AWARD.—Scholarships under this section shall be 

awarded for a period of not less than 1 or more than 4 years during 

the first 4 years of study at any institution of higher education eligible to participate in any programs assisted under this title. The 

State educational agency administering the program in a State 

shall have discretion to determine the period of the award (within 

the limits specified in the preceding sentence), except that—

ø(1) if the amount appropriated for this subpart for any fiscal year exceeds the amount appropriated for this subpart for 

fiscal year 1993, the Secretary shall identify to each State educational agency the number of scholarships available to that 

State under section 419D(b) that are attributable to such excess; 

ø(2) the State educational agency shall award not less than 

that number of scholarships for a period of 4 years. 

ø(c) USE AT ANY INSTITUTION PERMITTED.—A student awarded a 

scholarship under this subpart may attend any institution of higher education. 

ø(d) BYRD SCHOLARS.—Individuals awarded scholarships under 

this subpart shall be known as ‘‘Byrd Scholars’’. 

øSEC. 419D. ALLOCATION AMONG STATES. 

ø(a) ALLOCATION FORMULA.—From the sums appropriated pursuant to the authority of section 419K for any fiscal year, the Secretary shall allocate to each State that has an agreement under 

section 419E an amount equal to $1,500 multiplied by the number 

of scholarships determined by the Secretary to be available to such 

State in accordance with subsection (b). 

ø(b) NUMBER OF SCHOLARSHIPS AVAILABLE.—The number of 

scholarships to be made available in a State for any fiscal year 

shall bear the same ratio to the number of scholarships made available to all States as the State’s population ages 5 through 17 bears 

to the population ages 5 through 17 in all the States, except that 

not less than 10 scholarships shall be made available to any State. 

ø(c) USE OF CENSUS DATA.—For the purpose of this section, the 

population ages 5 through 17 in a State and in all the States shall 

418 

be determined by the most recently available data, satisfactory to 

the Secretary, from the Bureau of the Census. 

ø(d) CONSOLIDATION BY INSULAR AREAS PROHIBITED.—Notwithstanding section 501 of Public Law 95–1134 (48 U.S.C. 1469a), 

funds allocated under this part to an Insular Area described in that 

section shall be deemed to be direct payments to classes of individuals, and the Insular Area may not consolidate such funds with 

other funds received by the Insular Area from any department or 

agency of the United States Government. 

ø(e) FAS ELIGIBILITY.—

ø(1) FISCAL YEARS 2000 THROUGH 2004.—Notwithstanding any 

other provision of this subpart, in the case of students from the 

Freely Associated States who may be selected to receive a 

scholarship under this subpart for the first time for any of the 

fiscal years 2000 through 2004—

ø(A) there shall be 10 scholarships in the aggregate 

awarded to such students for each of the fiscal years 2000 

through 2004; and 

ø(B) the Pacific Regional Educational Laboratory shall 

administer the program under this subpart in the case of 

scholarships for students in the Freely Associated States. 

ø(2) TERMINATION OF ELIGIBILITY.—A student from the Freely Associated States shall not be eligible to receive a scholarship under this subpart after September 30, 2004. 

øSEC. 419E. AGREEMENTS. 

øThe Secretary shall enter into an agreement with each State desiring to participate in the scholarship program authorized by this 

subpart. Each such agreement shall include provisions designed to 

assure that—

ø(1) the State educational agency will administer the scholarship program authorized by this subpart in the State; 

ø(2) the State educational agency will comply with the eligibility and selection provisions of this subpart; 

ø(3) the State educational agency will conduct outreach activities to publicize the availability of scholarships under this 

subpart to all eligible students in the State, with particular 

emphasis on activities designed to assure that students from 

low-income and moderate-income families have access to the 

information on the opportunity for full participation in the 

scholarship program authorized by this subpart; and 

ø(4) the State educational agency will pay to each individual 

in the State who is awarded a scholarship under this subpart 

$1,500. 

øSEC. 419F. ELIGIBILITY OF SCHOLARS. 

ø(a) HIGH SCHOOL GRADUATION OR EQUIVALENT AND ADMISSION

TO INSTITUTION REQUIRED.—Each student awarded a scholarship 

under this subpart shall be a graduate of a public or private secondary school or have the equivalent of a certificate of graduation 

as recognized by the State in which the student resides and must 

have been admitted for enrollment at an institution of higher education. 

ø(b) SELECTION BASED ON PROMISE OF ACADEMIC ACHIEVEMENT.—Each student awarded a scholarship under this subpart 

419 

must demonstrate outstanding academic achievement and show 

promise of continued academic achievement. 

øSEC. 419G. SELECTION OF SCHOLARS. 

ø(a) ESTABLISHMENT OF CRITERIA.—The State educational agency 

is authorized to establish the criteria for the selection of scholars 

under this subpart. 

ø(b) ADOPTION OF PROCEDURES.—The State educational agency 

shall adopt selection procedures designed to ensure an equitable 

geographic distribution of awards within the State (and in the case 

of the Federated States of Micronesia, the Republic of the Marshall 

Islands, the Virgin Islands, American Samoa, the Commonwealth 

of the Northern Mariana Islands, Guam, or Palau (until such time 

as the Compact of Free Association is ratified), not to exceed 10 individuals will be selected from such entities). 

ø(c) CONSULTATION REQUIREMENT.—In carrying out its responsibilities under subsections (a) and (b), the State educational agency shall consult with school administrators, school boards, teachers, 

counselors, and parents. 

ø(d) TIMING OF SELECTION.—The selection process shall be completed, and the awards made, prior to the end of each secondary 

school academic year. 

øSEC. 419H. STIPENDS AND SCHOLARSHIP CONDITIONS. 

ø(a) AMOUNT OF AWARD.—Each student awarded a scholarship 

under this subpart shall receive a stipend of $1,500 for the academic year of study for which the scholarship is awarded, except 

that in no case shall the total amount of financial aid awarded to 

such student exceed such student’s total cost-of-attendance. 

ø(b) USE OF AWARD.—The State educational agency shall establish procedures to assure that a scholar awarded a scholarship 

under this subpart pursues a course of study at an institution of 

higher education. 

øSEC. 419J. CONSTRUCTION OF NEEDS PROVISIONS. 

øExcept as provided in section 471, nothing in this subpart, or 

any other Act, shall be construed to permit the receipt of a scholarship under this subpart to be counted for any needs test in connection with the awarding of any grant or the making of any loan 

under this Act or any other provision of Federal law relating to 

educational assistance. 

øSEC. 419K. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated for this subpart 

$45,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years.¿ 

Subpart 6—Robert C. Byrd Honors Scholarship 

Program 

SEC. 419A. ROBERT C. BYRD MATHEMATICS AND SCIENCE HONORS 

SCHOLARSHIP PROGRAM. 

(a) PURPOSE.—The purpose of this section is to award scholarships to students who are enrolled in studies leading to baccalaureate and advanced degrees in physical, life, or computer 

sciences, mathematics, and engineering. 

(b) DEFINITIONS.—As used in this section—

420 

(1) the term ‘‘computer science’’ means the branch of knowledge or study of computers, including such fields of knowledge 

or study as computer hardware, computer software, computer 

engineering, information systems, and robotics; 

(2) the term ‘‘eligible student’’ means a student who—

(A) is a citizen of the United States; 

(B) is selected by the managing agent to receive a scholarship; 

(C) is enrolled full-time in an institution of higher education, other than a United States service academy; and 

(D) has shown a commitment to and is pursuing a major 

in studies leading to a baccalaureate, masters, or doctoral 

degree (or a combination thereof) in physical, life, or computer sciences, mathematics, or engineering; 

(3) the term ‘‘engineering’’ means the science by which the 

properties of matter and the sources of energy in nature are 

made useful to humanity in structures, machines, and products, 

as in the construction of engines, bridges, buildings, mines, and 

chemical plants, including such fields of knowledge or study as 

aeronautical engineering, chemical engineering, civil engineering, electrical engineering, industrial engineering, materials engineering, manufacturing engineering, and mechanical engineering; 

(4) the term ‘‘life sciences’’ means the branch of knowledge or 

study of living things, including such fields of knowledge or 

study as biology, biochemistry, biophysics, microbiology, genetics, physiology, botany, zoology, ecology, and behavioral biology, 

except that the term does not encompass social psychology or the 

health professions; 

(5) the term ‘‘managing agent’’ means an entity to which an 

award is made under subsection (c) to manage a program of 

Mathematics and Science Honors Scholarships; 

(6) the term ‘‘mathematics’’ means the branch of knowledge or 

study of numbers and the systematic treatment of magnitude, 

relationships between figures and forms, and relations between 

quantities expressed symbolically, including such fields of 

knowledge or study as statistics, applied mathematics, and operations research; and 

(7) the term ‘‘physical sciences’’ means the branch of knowledge or study of the material universe, including such fields of 

knowledge or study as astronomy, atmospheric sciences, chemistry, earth sciences, ocean sciences, physics, and planetary 

sciences. 

(c) AWARD.—

(1)(A) From funds authorized under section 419D to carry out 

this section, the Secretary is authorized, through a grant or cooperative agreement, to make an award to a private, non-profit 

organization, other than an institution of higher education or 

system of institutions of higher education, to manage, through 

a public and private partnership, a program of Mathematics 

and Science Honors Scholarships under this section. 

(B) The award under subparagraph (A) shall be for a fiveyear period. 

421 

(2)(A) One hundred percent of the funds awarded under paragraph (1)(A) for any fiscal year shall be obligated and expended 

solely on scholarships to eligible students. 

(B) No Federal funds shall be used to provide more than 50 

percent of the cost of any scholarship to an eligible student. 

(C) The maximum scholarship award shall be the difference 

between an eligible student’s cost of attendance minus any nonloan based aid such student receives. 

(3)(A) The secretary may establish—

(i) eligibility criteria for applicants for managing agent, 

including criteria regarding financial and administrative 

capability; and 

(ii) operational standards for the managing agent, including management and performance requirements, such 

as audit, recordkeeping, record retention, and reporting 

procedures and requirements. 

(B) The Secretary, as necessary, may review and revise any 

criteria, standards, and rules established under this paragraph 

and, through the agreement with the managing agent, see that 

any revisions are implemented. 

(4) If the managing agent fails to meet the requirements of 

this section the Secretary may terminate the award to the managing agent. 

(5) The Secretary shall conduct outreach efforts to help raise 

awareness of the Mathematics and Science Honors Scholarships. 

(d) DUTIES OF THE MANAGING AGENT.—The managing agent 

shall—

(1) develop criteria to award Mathematics and Science Honors Scholarships based on established measurements available 

to secondary students who wish to pursue degrees in physical, 

life, or computer sciences, mathematics, and engineering; 

(2) establish a Mathematics and Science Honors Scholarship 

Fund in a separate, named account that clearly discloses the 

amount of Federal and non-Federal funds deposited in the account and used for scholarships under this section; 

(3) solicit funds for scholarships and for the administration 

of the program from non-Federal sources; 

(4) solicit applicants for scholarships; 

(5) from the amounts in the Fund, award scholarships to eligible students and transfer such funds to the institutions of 

higher education that they attend; and 

(6) annually submit to the Secretary a financial audit and a 

report on the progress of the program, and such other documents as the Secretary may require to determine the effective 

management of the program. 

(e) APPLICATIONS.—

(1) Any eligible entity that desires to be the managing agent 

under this section shall submit an application to the Secretary, 

in such form and containing such information, as the Secretary 

may require. 

(2) Each application shall include a description of—

(A) how the applicant meets or will meet requirements established under subsections (c)(3)(A) and (d); 

422 

(B) how the applicant will solicit funds for scholarships 

and for the administration of the program from non-Federal sources; 

(C) how the applicant will provide nationwide outreach 

to inform students about the program and to encourage students to pursue degrees in physical, life, or computer 

sciences, mathematics, and engineering; 

(D) how the applicant will solicit applications for scholarships, including how the applicant will balance efforts in 

urban and rural areas; 

(E) the selection criteria based on established measurements available to secondary students the applicant will 

use to award scholarships and to renew those awards; 

(F) how the applicant will inform the institution of higher education chosen by the recipient of the name and scholarship amount of the recipient; 

(G) what procedures and assurances the applicant and 

the institution of higher education that the recipient attends will use to verify student eligibility, attendance, degree progress, and academic performance and to deliver 

and account for payments to such institution; 

(H) the management (including audit and accounting) 

procedures the applicant will use for the program; 

(I) the human, financial, and other resources that the applicant will need and use to manage the program; 

(J) how the applicant will evaluate the program and report to the Secretary annually; and 

(K) a description of how the entity will coordinate with, 

complement, and build on similar public and private mathematics and science programs. 

(f) SCHOLARSHIP RECIPIENTS.—

(1) A student receiving a scholarship under this section shall 

be known as a ‘‘Byrd Mathematics and Science Honors Scholar’’. 

(2) Any student desiring to receive a scholarship under this 

section shall submit an application to the managing agent in 

such form, and containing such information, as the managing 

agent may require. 

(3) Any student that receives a scholarship under this section 

shall enter into an agreement with the managing agent to complete 5 consecutive years of service to begin no later than 12 

months following completion of the final degree in a position related to physical, life, or computer sciences, mathematics, or engineering as defined under this section. 

(4) If any student that receives a scholarship under this section fails to earn at least a baccalaureate degree in physical, 

life, or computer sciences, mathematics, or engineering as defined under this section, the student shall repay to the managing agent the amount of any financial assistance paid to such 

student. 

(5) If any student that receives a scholarship under this section fails to meet the requirements of paragraph (3), the student 

shall repay to the managing agent the amount of any financial 

assistance paid to such student. 

423 

(6)(A) Scholarships shall be awarded for only one academic 

year of study at a time. 

(B)(i) A scholarship shall be renewable on an annual basis 

for the established length of the academic program if the student awarded the scholarship remains eligible. 

(ii) The managing agent may condition renewal of a scholarship on measures of academic progress and achievement, with 

the approval of the Secretary. 

(C)(i) If a student fails to either remain eligible or meet established measures of academic progress and achievement, the 

managing agent shall instruct the student’s institution of higher education to suspend payment of the student’s scholarship. 

(ii) A suspension of payment shall remain in effect until the 

student is able to demonstrate to the satisfaction of the managing agent that he or she is again eligible and meets the established measures of academic progress and achievement. 

(iii) A student’s eligibility for a scholarship shall be terminated if a suspension period exceeds 12 months. 

(D)(i)(I) A student awarded a scholarship may, in a manner 

and under the terms established by, and with the approval of, 

the managing agent, postpone or interrupt his or her enrollment 

at an institution of higher education for up to 12 months. 

(II) Such a postponement or interruption shall not be 

considered a suspension for purposes of subparagraph (C). 

(ii) Neither a student nor the student’s institution of higher 

education shall receive the student’s scholarship payments during the period of postponement or interruption, but such payments shall resume upon enrollment or reenrollment. 

(iii) In exceptional circumstances, such as serious injury or 

illness or the necessity to care for family members, the student’s 

postponement or interruption may, upon notification and approval of the managing agent, be extended beyond the 12 month 

period described in clause (i)(I). 

(g) RESPONSIBILITIES OF INSTITUTION OF HIGHER EDUCATION.—

(1) The managing agent shall require any institution of higher education that enrolls a student who receives a scholarship 

under this section to annually provide an assurance, prior to 

making any payment, that the student—

(A) is eligible in accordance with subsection (b)(2); and 

(B) has provided the institution with a written commitment 

to attend, or is attending, classes and is satisfactorily meeting 

the institution’s academic criteria for enrollment in its program 

of study. 

(2)(A) The managing agent shall provide the institution of 

higher education with payments from the Fund for selected recipients in at least two installments. 

(B) An institution of higher education shall return prorated 

amounts of any scholarship payment to the managing agent, 

who shall deposit it in to the Fund, if a recipient declines a 

scholarship, does not attend courses, transfers to another institution of higher education, or becomes ineligible for a scholarship. 

SEC. 419B. MATHEMATICS AND SCIENCE INCENTIVE PROGRAM. 

(a) PROGRAM.—

424 

(1) IN GENERAL.—The Secretary is authorized to carry out a 

program of assuming the obligation to pay, pursuant to the provisions of this section, the interest on a loan made, insured, or 

guaranteed under part B or D of this title. 

(2) ELIGIBILITY.—The Secretary may assume interest payments under paragraph (1) only for a borrower who—

(A) has submitted an application in compliance with subsection (d); 

(B) obtained one or more loans described in paragraph 

(1) as an undergraduate student; 

(C) is a new borrower (within the meaning of section 

103(7) of this Act) on or after the date of enactment of the 

College Access and Opportunity Act of 2005; 

(D) is a highly qualified teacher of science, technology, 

engineering or mathematics at an elementary or secondary 

school in a high need local educational agency, or is a 

mathematics, science, or engineering professional; and 

(E) enters into an agreement with the Secretary to complete 5 consecutive years of service in a position described 

in subparagraph (D), starting on the date of the agreement. 

(3) PRIOR INTEREST LIMITATIONS.—The Secretary shall not 

make any payments for interest that—

(A) accrues prior to the beginning of the repayment period on a loan in the case of a loan made under section 

428H or a Federal Direct Unsubsidized Stafford Loan; or 

(B) has accrued prior to the signing of an agreement 

under paragraph (2)(E). 

(4) INITIAL SELECTION.—In selecting participants for the program under this section, the Secretary—

(A) shall choose among eligible applicants on the basis 

of—

(i) the national security, homeland security, and economic security needs of the United States, as determined by the Secretary, in consultation with other Federal agencies, including the Departments of Labor, Defense, Homeland Security, Commerce, and Energy, the 

Central Intelligence Agency, and the National Science 

Foundation; and 

(ii) the academic record or job performance of the applicant; and 

(B) may choose among eligible applicants on the basis 

of—

(i) the likelihood of the applicant to complete the 5- 

year service obligation; 

(ii) the likelihood of the applicant to remain in 

science, mathematics, or engineering after the completion of the service requirement; or 

(iii) other relevant criteria determined by the Secretary. 

(5) AVAILABILITY SUBJECT TO APPROPRIATIONS.—Loan interest 

payments under this section shall be subject to the availability 

of appropriations. If the amount appropriated for any fiscal 

year is not sufficient to provide interest payments on behalf of 

all qualified applicants, the Secretary shall give priority to 

425 

those individuals on whose behalf interest payments were made 

during the preceding fiscal year. 

(6) REGULATIONS.—The Secretary is authorized to prescribe 

such regulations as may be necessary to carry out the provisions 

of this section. 

(b) DURATION AND AMOUNT OF INTEREST PAYMENTS.—The period 

during which the Secretary shall pay interest on behalf of a student 

borrower who is selected under subsection (a) is the period that begins on the effective date of the agreement under subsection 

(a)(2)(E), continues after successful completion of the service obligation, and ends on the earlier of—

(1) the completion of the repayment period of the loan; 

(2) payment by the Secretary of a total of $5,000 on behalf of 

the borrower; 

(3) if the borrower ceases to fulfill the service obligation under 

such agreement prior to the end of the 5-year period, as soon 

as the borrower is determined to have ceased to fulfill such obligation in accordance with regulations of the Secretary; or 

(4) 6 months after the end of any calendar year in which the 

borrower’s gross income equals or exceeds 4 times the national 

per capita disposable personal income (current dollars) for such 

calendar year, as determined on the basis of the National Income and Product Accounts Tables of the Bureau of Economic 

Analysis of the Department of Commerce, as determined in accordance with regulations prescribed by the Secretary. 

(c) REPAYMENT TO ELIGIBLE LENDERS.—Subject to the regulations 

prescribed by the Secretary by regulation under subsection (a)(6), 

the Secretary shall pay to each eligible lender or holder for each 

payment period the amount of the interest that accrues on a loan 

of a student borrower who is selected under subsection (a). 

(d) APPLICATION FOR REPAYMENT.—

(1) IN GENERAL.—Each eligible individual desiring loan interest payment under this section shall submit a complete and 

accurate application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. 

(2) FAILURE TO COMPLETE SERVICE AGREEMENT.—Such application shall contain an agreement by the individual that, if the 

individual fails to complete the 5 consecutive years of service required by subsection (a)(2)(E), the individual agrees to repay 

the Secretary the amount of any interest paid by the Secretary 

on behalf of the individual. 

(e) TREATMENT OF CONSOLIDATION LOANS.—A consolidation loan 

made under section 428C of this Act, or a Federal Direct Consolidation Loan made under part D of title IV of this Act, may be a qualified loan for the purpose of this section only to the extent that such 

loan amount was used by a borrower who otherwise meets the requirements of this section to repay—

(1) a loan made under section 428 or 428H of this Act; or 

(2) a Federal Direct Stafford Loan, or a Federal Direct Unsubsidized Stafford Loan, made under part D of title IV of this 

Act. 

(f) PREVENTION OF DOUBLE BENEFITS.—No borrower may, for the 

same service, receive a benefit under both this section and—

426 

(1) any loan forgiveness program under title IV of this Act; 

or 

(2) subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.). 

(g) DEFINITIONS.—As used in this section—

(1) the term ‘‘high need local educational agency’’ has the 

same meaning given such term in section 201(b)(4); and 

(2) the term ‘‘mathematics, science, or engineering professional’’ means a person who—

(A) holds a baccalaureate, masters, or doctoral degree (or 

a combination thereof) in science, mathematics, or engineering; and 

(B) works in a field the Secretary determines is closely related to that degree, which shall include working as a professor at a two- or four-year institution of higher education. 

SEC. 419C. MATHEMATICS AND SCIENCE EDUCATION COORDINATING 

COUNCIL GRANTS. 

(a) PURPOSES.—The purposes of this section include—

(1) supporting programs that encourage students to enroll in 

and successfully complete baccalaureate and advanced degrees 

in science, technology, engineering, and mathematics; 

(2) achieving the common objective of organizing, leading, 

and implementing State-based reform agendas that support the 

continuing improvement of mathematics and science education; 

and 

(3) improving collaboration in a State among the State educational agency, 2-year and 4-year institutions of higher education, and the business community through the development or 

improvement of a coordinating council. 

(b) DEFINITIONS.—For the purposes of this section: 

(1) the term ‘‘eligible State’’ means—

(A) the Governor of a State; or 

(B) in the case of a State for which the constitution or 

laws of the State designate an individual, entity, or agency 

in the State, other than the Governor, to be responsible for 

coordination among segments of the State’s educational systems, such individual, entity, or agency. 

(2) the term ‘‘mathematics and science education coordinating 

council’’ means an organization that is charged by a State with 

coordinating mathematics and science education in the State. 

Such a council shall be composed of education, business, and 

community leaders working together to increase student participation and academic achievement in mathematics and science. 

(c) STATE GRANTS.—From amounts made available under section 

419D for this section, the Secretary is authorized to use not more 

than $5,000,000 to award grants on a competitive basis to eligible 

States for the purpose of carrying out activities described in subsection (d). 

(d) USES OF FUNDS.—An eligible State that receives a grant 

under this section is authorized to use grant funds to carry out one 

or more of the following activities: 

(1) In a State in which a mathematics and science education 

coordinating council does not exist, planning and establishing 

such a council. 

427 

(2) In a State in which such a council exists, reforming or expanding the activities of the council, including implementing 

State-based reform agendas that support the continuing improvement of mathematics and science education, and support 

services that lead to better teacher recruitment and training, increased student academic achievement, and increased student 

enrollment and degree attainment in science, technology, engineering, and mathematics. 

(3) Coordinating with activities under part B of title II of the 

Elementary and Secondary Education Act of 1965 and with 

title II of this Act, especially as it pertains to the recruitment 

and preparation of highly qualified mathematics and science 

teachers. 

(e) APPLICATION.—To be eligible to receive a grant under this section, an eligible State shall submit an application to the Secretary 

that—

(1) describes the activities the State will carry out with the 

funds; 

(2) contains a plan for continuing such activities once Federal 

funding ceases; and 

(3) contains such other information and assurances as the 

Secretary may require. 

(f) CONSULTATION.—The Governor of a State, or the individual, 

entity, or agency in the State described in subsection (b)(1)(B), shall 

consult with the State board of education, State educational agency, 

and the State agency for higher education, as appropriate, with respect to the activities assisted under this section. In the case of an 

individual, entity, or agency described in subsection (b)(1)(B), such 

consultation shall also include the Governor. 

(g) CONSTRUCTION.—Nothing in this section shall be construed to 

negate or supersede the legal authority under State law of any State 

agency, State entity, or State public official over programs that are 

under the jurisdiction of the agency, entity, or official. 

(h) ADMINISTRATIVE PROVISIONS.—

(1) IN GENERAL.—

(A) Grants awarded under this section shall be awarded 

for a period not to exceed 5 years. 

(B) A grantee may receive a grant under this part only 

once. 

(C) Payments of grant funds under this section shall be 

annual. 

(2) SECRETARIAL SELECTIONS.—The Secretary shall determine 

which applications receive funds under this section, and the 

amount of the grant. In determining grant amounts, the Secretary shall take into account the total amount of funds available for all grants under this section and the nature of each 

grant proposal, including whether funds are being sought to assist in the creation of a new State mathematics and science education coordinating council or to extend the work of an existing 

council. The Secretary shall also take into account the equitable 

geographic distribution of grants throughout the United States. 

(3) MATCHING REQUIREMENT.—Each eligible State receiving a 

grant under this section shall provide, from non-Federal 

sources, an amount equal to 50 percent of the amount of the 

428 

grant (in cash or in kind) to carry out the activities supported 

by the grant. 

(i) ACCOUNTABILITY AND EVALUATION.— (1) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State 

that receives a grant under this section shall submit an annual 

accountability report to the Secretary. Such report shall include 

a description of the degree to which the eligible State, in using 

grant funds, has made substantial progress in meeting its objectives. 

(2) EVALUATION AND DISSEMINATION.—The Secretary shall 

evaluate the activities funded under this section and report the 

Secretary’s findings regarding such activities to the authorizing 

committees. The Secretary shall broadly disseminate successful 

practices developed by eligible States under this section, and 

shall broadly disseminate information regarding such practices 

that were found to be ineffective. 

(3) REVOCATION.—If the Secretary determines that an eligible 

State is not making substantial progress in meeting the purposes, objectives, and measures, as appropriate, required under 

this section by the end of the second year of a grant, then the 

grant payment shall not be made for the third year and subsequent years of the grant. 

SEC. 419D. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated $41,000,000 for fiscal 

year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years to carry out this subpart. 

Subpart 7—Child Care Access Means Parents in 

School 

SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL. 

(a) * * * 

* * * * * * * 

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section $45,000,000 for fiscal year 

ø1999¿ 2006 and such sums as may be necessary for each of the 

ø4¿ 5 succeeding fiscal years. 

* * * * * * * 

øSubpart 8—Learning Anytime Anywhere 

Partnerships 

øSEC. 420D. FINDINGS. 

øCongress makes the following findings: 

ø(1) The nature of postsecondary education delivery is changing, and new technology and other related innovations can provide promising education opportunities for individuals who are 

currently not being served, particularly for individuals without 

easy access to traditional campus-based postsecondary education or for whom traditional courses are a poor match with 

education or training needs. 

ø(2) Individuals, including individuals seeking basic or technical skills or their first postsecondary experience, individuals 

429 

with disabilities, dislocated workers, individuals making the 

transition from welfare-to-work, and individuals who are limited by time and place constraints can benefit from nontraditional, noncampus-based postsecondary education opportunities 

and appropriate support services. 

ø(3) The need for high-quality, nontraditional, technologybased education opportunities is great, as is the need for skill 

competency credentials and other measures of educational 

progress and attainment that are valid and widely accepted, 

but neither need is likely to be adequately addressed by the 

uncoordinated efforts of agencies and institutions acting independently and without assistance. 

ø(4) Partnerships, consisting of institutions of higher education, community organizations, or other public or private 

agencies or organizations, can coordinate and combine institutional resources—

ø(A) to provide the needed variety of education options 

to students; and 

ø(B) to develop new means of ensuring accountability 

and quality for innovative education methods. 

øSEC. 420E. PURPOSE; PROGRAM AUTHORIZED. 

ø(a) PURPOSE.—It is the purpose of this subpart to enhance the 

delivery, quality, and accountability of postsecondary education and 

career-oriented lifelong learning through technology and related innovations. 

ø(b) PROGRAM AUTHORIZED.—

ø(1) GRANTS.—

ø(A) IN GENERAL.—The Secretary may, from funds appropriated under section 420J make grants to, or enter 

into contracts or cooperative agreements with, eligible 

partnerships to carry out the authorized activities described in section 420G. 

ø(B) DURATION.—Grants under this subpart shall be 

awarded for periods that do not exceed 5 years. 

ø(2) DEFINITION OF ELIGIBLE PARTNERSHIP.—For purposes of 

this subpart, the term ‘‘eligible partnership’’ means a partnership consisting of 2 or more independent agencies, organizations, or institutions. The agencies, organizations, or institutions may include institutions of higher education, community 

organizations, and other public and private institutions, agencies, and organizations. 

øSEC. 420F. APPLICATION. 

ø(a) REQUIREMENT.—An eligible partnership desiring to receive a 

grant under this subpart shall submit an application to the Secretary, in such form and containing such information, as the Secretary may require. 

ø(b) CONTENTS.—Each application shall include—

ø(1) the name of each partner and a description of the responsibilities of the partner, including the designation of a 

nonprofit organization as the fiscal agent for the partnership; 

ø(2) a description of the need for the project, including a description of how the project will build on any existing services 

and activities; 

430 

ø(3) a listing of human, financial (other than funds provided 

under this subpart), and other resources that each member of 

the partnership will contribute to the partnership, and a description of the efforts each member of the partnership will 

make in seeking additional resources; and 

ø(4) a description of how the project will operate, including 

how funds awarded under this subpart will be used to meet the 

purpose of this subpart. 

øSEC. 420G. AUTHORIZED ACTIVITIES. 

øFunds awarded to an eligible partnership under this subpart 

shall be used to—

ø(1) develop and assess model distance learning programs or 

innovative educational software; 

ø(2) develop methodologies for the identification and measurement of skill competencies; 

ø(3) develop and assess innovative student support services; 

or 

ø(4) support other activities that are consistent with the purpose of this subpart. 

øSEC. 420H. MATCHING REQUIREMENT. 

øFederal funds shall provide not more than 50 percent of the cost 

of a project under this subpart. The non-Federal share of project 

costs may be in cash or in kind, fairly evaluated, including services, 

supplies, or equipment. 

øSEC. 420I. PEER REVIEW. 

øThe Secretary shall use a peer review process to review applications under this subpart and to make recommendations for funding 

under this subpart to the Secretary. 

øSEC. 420J. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this subpart $10,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years.¿ 

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

SEC. 421. STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS AUTHORIZED. 

(a) * * * 

(b) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of carrying out this part—

(1) * * * 

* * * * * * * 

(5) there are authorized to be appropriated such sums as 

may be necessary for the purpose of paying øan administrative 

cost allowance¿ a loan processing and issuance fee in accordance with section 428(f) to guaranty agencies. 

Sums appropriated under paragraphs (1), (2), (4), and (5) of this 

subsection shall remain available until expended. No additional 

sums are authorized to be appropriated under paragraph (3) or (4) 

of this subsection by reason of the reenactment of such paragraphs 

by the Higher Education Amendments of 1986. 

* * * * * * * 

431 

SEC. 424. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM. 

(a) LIMITATIONS ON AMOUNTS OF LOANS COVERED BY FEDERAL

INSURANCE.—The total principal amount of new loans made and installments paid pursuant to lines of credit (as defined in section 

435) to students covered by Federal loan insurance under this part 

shall not exceed $2,000,000,000 for the period from July 1, 1976, 

to September 30, 1976, and for each of the succeeding fiscal years 

ending prior to October 1, ø2004¿ 2012. Thereafter, Federal loan 

insurance pursuant to this part may be granted only for loans 

made (or for loan installments paid pursuant to lines of credit) to 

enable students, who have obtained prior loans insured under this 

part, to continue or complete their educational program; but no insurance may be granted for any loan made or installment paid 

after September 30, ø2008¿ 2016. 

* * * * * * * 

SEC. 425. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS 

AND ON FEDERAL LOAN INSURANCE. 

(a) ANNUAL AND AGGREGATE LIMITS.—

(1) ANNUAL LIMITS.—(A) The total of loans made to a student 

in any academic year or its equivalent (as determined by the 

Secretary) which may be covered by Federal loan insurance 

under this part may not exceed—

(i) in the case of a student at an eligible institution who 

has not successfully completed the first year of a program 

of undergraduate education—

(I) ø$2,625¿ $3,500, if such student is enrolled in a 

program whose length is at least one academic year in 

length (as determined under section 481); and 

* * * * * * * 

(ii) in the case of a student at an eligible institution who 

has successfully completed such first year but has not successfully completed the remainder of a program of undergraduate education—

(I) ø$3,500¿ $4,500; or 

* * * * * * * 

(2) AGGREGATE LIMITS.—(A) The aggregate insured unpaid 

principal amount for all such insured loans made to any student shall not at any time exceed—

(i) $23,000, in the case of any student who has not successfully completed a program of undergraduate education, excluding loans made under section ø428A or 428B¿ 428B or 428H; 

and 

(ii) $65,500, in the case of any graduate or professional student (as defined by regulations of the Secretary) and (I) including any loans which are insured by the Secretary under this 

section, or by a guaranty agency, made to such student before 

the student became a graduate or professional student), but 

(II) excluding loans made under section ø428A or 428B¿ 428B 

or 428H, 

432 

except that the Secretary may increase the limit applicable to students who are pursuing programs which the Secretary determines 

are exceptionally expensive. 

* * * * * * * 

SEC. 427A. APPLICABLE INTEREST RATES. 

(a) * * * 

* * * * * * * 

(k) INTEREST RATES FOR NEW LOANS ON OR AFTER OCTOBER 1, 

1998ø, AND BEFORE JULY 1, 2006¿.—

(1) IN GENERAL.—Notwithstanding subsection (h) and subject 

to paragraph (2) of this subsection, with respect to any loan 

made, insured, or guaranteed under this part (other than a 

loan made pursuant to section 428B or 428C) for which the 

first disbursement is made on or after October 1, 1998ø, and 

before July 1, 2006,¿ the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on 

June 30, be determined on the preceding June 1 and be equal 

to—

(A) * * * 

* * * * * * * 

(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding 

subsection (h), with respect to any loan under this part (other 

than a loan made pursuant to section 428B or 428C) for which 

the first disbursement is made on or after October 1, 1998ø, 

and before July 1, 2006,¿ the applicable rate of interest for interest which accrues—

(A) * * * 

* * * * * * * 

(3) PLUS LOANS.—Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after October 1, 1998ø, and before 

July 1, 2006,¿ the applicable rate of interest shall be determined under paragraph (1)— (A) * * * 

* * * * * * * 

(4) CONSOLIDATION LOANS BEFORE JULY 1, 2006.—With respect to any consolidation loan under section 428C for which 

the application is received by an eligible lender on or after October 1, 1998, and before July 1, 2006, the applicable rate of 

interest shall be at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of—

(A) * * * 

* * * * * * * 

(5) CONSOLIDATION LOANS ON OR AFTER JULY 1, 2006.—

(A) BORROWER ELECTION.—With respect to any consolidation loan under section 428C for which the application is 

received by an eligible lender on or after July 1, 2006, the 

applicable rate of interest shall, at the election of the borrower at the time of application for the loan, be either at 

the rate determined under subparagraph (B) or the rate determined under subparagraph (C). 

433 

(B) VARIABLE RATE.—Except as provided in subparagraph (D), the rate determined under this subparagraph 

shall, during any 12-month period beginning on July 1 and 

ending on June 30, be determined on the preceding June 1 

and, for such 12-month period, not be more than—

(i) the bond equivalent rate of 91-day Treasury bills 

auctioned at the final auction held prior to such June 

1; plus 

(ii) 2.3 percent, 

except that such rate shall not exceed 8.25 percent. 

(C) FIXED RATE.—Except as provided in subparagraph 

(D), the rate determined under this subparagraph shall be 

determined for the duration of the term of the loan on the 

July 1 that is or precedes the date on which the application 

is received by an eligible lender, and shall be, for such duration, not more than—

(i) the bond equivalent rate of 91-day Treasury bills 

auctioned at the final auction held prior to the June 1 

immediately preceding such July 1; plus 

(ii) 3.3 percent, 

except that such rate shall not exceed 8.25 percent. 

(D) CONSOLIDATION OF PLUS LOANS.—In the case of any 

such consolidation loan that is used to repay loans each of 

which was made under section 428B or was a Federal Direct PLUS Loan (or both), the rates determined under 

clauses (B) and (C) shall be determined—

(i) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’; 

(ii) by substituting ‘‘4.1 percent’’ for ‘‘3.3 percent’’; 

and 

(iii) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’. 

ø(5)¿ (6) CONSULTATION.—The Secretary shall determine the 

applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such 

rate in the Federal Register as soon as practicable after the 

date of determination. 

ø(l) INTEREST RATES FOR NEW LOANS ON OR AFTER JULY 1, 

2006.—

ø(1) IN GENERAL.—Notwithstanding subsection (h), with respect to any loan made, insured, or guaranteed under this part 

(other than a loan made pursuant to section 428B or 428C) for 

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

the applicable rate of interest shall be 6.8 percent on the unpaid principal balance of the loan. 

ø(2) PLUS LOANS.—Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after July 1, 2006, the applicable rate 

of interest shall be 7.9 percent on the unpaid principal balance 

of the loan. 

ø(3) CONSOLIDATION LOANS.—With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after July 1, 2006, the applicable rate of interest shall be at an annual rate on the unpaid 

principal balance of the loan that is equal to the lesser of—

434 

ø(A) the weighted average of the interest rates on the 

loans consolidated, rounded to the nearest higher oneeighth of 1 percent; or 

ø(B) 8.25 percent.¿ 

ø(m)¿ (l) LESSER RATES PERMITTED.—Nothing in this section or 

section 428C shall be construed to prohibit a lender from charging 

a borrower interest at a rate less than the rate which is applicable 

under this part. 

ø(n)¿ (m) DEFINITIONS.—For the purpose of subsections (a) and 

(d) of this section— (1) * * * 

* * * * * * * 

SEC. 428. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST 

COSTS. 

(a) FEDERAL INTEREST SUBSIDIES.— (1) * * * 

(2) ADDITIONAL REQUIREMENTS TO RECEIVE SUBSIDY.—(A) 

Each student qualifying for a portion of an interest payment 

under paragraph (1) shall— (i) have provided to the lender a statement from the eligible institution, at which the student has been accepted 

for enrollment, or at which the student is in attendance, 

which—

(I) sets forth the loan amount for which the student 

shows financial need; and 

(II) sets forth a schedule for disbursement of the 

proceeds of the loan in installments, consistent with 

the requirements of section 428G; øand¿ 

(iii) have provided to the lender at the time of application for a loan made, insured, or guaranteed under this 

part, the student’s driver’s number, if any. 

* * * * * * * 

(E) For the purpose of subparagraphs (B) and (C) of this 

paragraph, any loan obtained by a student under section 

ø428A or¿ 428H or a parent under section 428B of this Act or 

under any State-sponsored or private loan program for an academic year for which the determination is made may be used 

to offset the expected family contribution of the student for 

that year. 

(3) AMOUNT OF INTEREST SUBSIDY.—(A)(i) * * * 

* * * * * * * 

(v) A lender may not receive interest on a loan for any period 

that precedes the date that is—

(I) in the case of a loan disbursed by check, 10 days before the first disbursement of the loan; øor¿ 

(II) in the case of a loan disbursed by electronic funds 

transfer, 3 days before the first disbursement of the 

loanø.¿; or 

(III) in the case of a loan disbursed through an escrow 

agent, 3 days before the first disbursement of the loan. 

* * * * * * * 

(5) DURATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED

LOANS.—The period referred to in subparagraph (B) of paraVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00438 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
435 

graph (1) of this subsection shall begin on the date of enactment of this Act and end at the close of September 30, ø2004¿ 

2012, except that, in the case of a loan made or insured under 

a student loan or loan insurance program to enable a student 

who has obtained a prior loan made or insured under such program to continue his or her education program, such period 

shall end at the close of September 30, ø2008¿ 2016. 

* * * * * * * 

(b) INSURANCE PROGRAM AGREEMENTS TO QUALIFY LOANS FOR

INTEREST SUBSIDIES.—

(1) REQUIREMENTS OF INSURANCE PROGRAM.—Any State or 

any nonprofit private institution or organization may enter 

into an agreement with the Secretary for the purpose of entitling students who receive loans which are insured under a 

student loan insurance program of that State, institution, or 

organization to have made on their behalf the payments provided for in subsection (a) if the Secretary determines that the 

student loan insurance program—

(A) authorizes the insurance in any academic year, as 

defined in section 481(a)(2), or its equivalent (as determined under regulations of the Secretary) for any student 

who is carrying at an eligible institution or in a program 

of study abroad approved for credit by the eligible home institution at which such student is enrolled at least one-half 

the normal full-time academic workload (as determined by 

the institution) in any amount up to a maximum of—

(i) in the case of a student at an eligible institution 

who has not successfully completed the first year of a 

program of undergraduate education—

(I) ø$2,625¿ $3,500, if such student is enrolled 

in a program whose length is at least one academic year in length; and 

* * * * * * * 

(ii) in the case of a student at an eligible institution 

who has successfully completed such first year but has 

not successfully completed the remainder of a program 

of undergraduate education—

(I) ø$3,500¿ $4,500; or 

* * * * * * * 

(B) provides that the aggregate insured unpaid principal 

amount for all such insured loans made to any student 

shall be any amount up to a maximum of—

(i) $23,000, in the case of any student who has not 

successfully completed a program of undergraduate 

education, excluding loans made under section ø428A 

or 428B¿ 428B or 428H; and 

(ii) $65,500, in the case of any graduate or professional student (as defined by regulations of the Secretary), and (I) including any loans which are insured 

by the Secretary under this section, or by a guaranty 

agency, made to such student before the student became a graduate or professional student, but (II) exVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00439 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
436 

cluding loans made under section ø428A or 428B¿ 

428B or 428H, except that the Secretary may increase the limit applicable 

to students who are pursuing programs which the Secretary determines are exceptionally expensive; 

* * * * * * * 

(G) insures 98 percent of the unpaid principal of loans 

insured under the program, except that 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 100 percent of the unpaid principal amount of 

exempt claims as defined in subsection (c)(1)(G), except, for 

any loan for which the first disbursement of principal is 

made on or after July 1, 2006, the preceding provisions of 

this subparagraph shall be applied by substituting ‘‘96 percent’’ for ‘‘98 percent’’; 

ø(H) provides for collection of a single insurance premium equal to not more than 1.0 percent of the principal 

amount of the loan, by deduction proportionately from 

each installment payment of the proceeds of the loan to 

the borrower, and insures that the proceeds of the premium will not be used for incentive payments to lenders;¿ 

(H) provides— (i) for loans for which the first disbursement of principal is made before July, 1, 2006, for the collection of 

a single insurance premium equal to not more than 1.0 

percent of the principal amount of the loan, by deduction proportionately from each installment payment of 

the proceeds of the loan to the borrower, and insures 

that the proceeds of the premium will not be used for 

incentive payments to lenders; or 

(ii) for loans for which the first disbursement of principal is made on or after July 1, 2006, for the collection 

and deposit into the Federal Student Loan Reserve 

Fund under section 422A of a Federal default fee of 1.0 

percent of the principal amount of such loan, which 

shall be deducted proportionately from each installment payment of the proceeds of the loan to the borrower prior to payment to the borrower, and insures 

that the proceeds of the Federal default fee will not be 

used for incentive payments to lenders; 

* * * * * * * 

(M) provides that periodic installments of principal need 

not be paid, but interest shall accrue and be paid by the 

Secretary, during any period—

(i) * * * 

(ii) not in excess of 3 years during which the borrower is seeking and unable to find full-time employment, except that no borrower who provides evidence 

of eligibility for unemployment benefits shall be required to provide additional paperwork for a 

deferment under this clause; øor¿ 

(iii) not in excess of 3 years during which the borrower—

437 

(I) is serving on active duty during a war or 

other military operation or national emergency; or 

(II) is performing qualifying National Guard 

duty during a war or other military operation or 

national emergency; or 

ø(iii)¿ (iv) not in excess of 3 years for any reason 

which the lender determines, in accordance with regulations prescribed by the Secretary under section 

435(o), has caused or will cause the borrower to have 

an economic hardship; 

(N) provides that funds borrowed by a student—

(i) are disbursed to the institution (including an eligible foreign institution, except as provided in clause 

(ii)) by check or other means that is payable to, and 

requires the endorsement or other certification by, 

such student; or 

(ii) in the case of a student who is studying outside 

the United States in a program of study abroad that 

is approved for credit by the home institution at which 

such student is enrolled øor at an eligible foreign institution¿, are, at the request of the student, disbursed 

directly to the student by the means described in 

clause (i), unless such student requests that the check 

be endorsed, or the funds transfer authorized, pursuant to an authorized power-of-attorney; 

* * * * * * * 

(Q) provides for the guarantee of loans made to students 

and parents under øsections 428A and 428B¿ section 428B 

or 428H; 

* * * * * * * 

(7) REPAYMENT PERIOD.—(A) In the case of a loan made 

under section 427 or 428, the repayment period shall exclude 

any period of authorized deferment or forbearance and øshall 

begin—

ø(i) the day after 6 months after the date the student 

ceases to carry at least one-half the normal full-time academic workload (as determined by the institution); or 

ø(ii) on an earlier date if the borrower requests and is 

granted a repayment schedule that provides for repayment 

to commence at an earlier date.¿ shall begin the day after 

6 months after the date the student ceases to carry at least 

one-half the normal full-time academic workload (as determined by the institution). 

* * * * * * * 

(C) In the case of a loan made under section ø428A, 428B,¿ 

428B or 428C, the repayment period shall begin on the day the 

loan is disbursed, or, if the loan is disbursed in multiple installments, on the day of the last such disbursement, and shall 

exclude any period of authorized deferment or forbearance. 

* * * * * * * 

(9) REPAYMENT PLANS.—

(A) DESIGN AND SELECTION.—In accordance with regulations promulgated by the Secretary, the lender shall offer 

438 

a borrower of a loan made under this part the plans described in this subparagraph for repayment of such loan, 

including principal and interest thereon. No plan may require a borrower to repay a loan in less than 5 years unless the borrower, during the 6 months immediately preceding the start of the repayment period, specifically requests that repayment be made over of a shorter period. 

The borrower may choose from— (i) * * * 

(ii) a graduated repayment plan paid over a fixed 

period of time, not to exceed 10 years, and the Secretary may not restrict the proportions or ratios by 

which such payments may be graduated with the informed agreement of the borrower; 

(iii) an income-sensitive repayment plan, with income-sensitive repayment amounts paid over a fixed 

period of time, not to exceed 10 years, except that the 

borrower’s scheduled payments shall not be less than 

the amount of interest due; øand¿ 

(iv) a delayed repayment plan under which the borrower makes scheduled payments for not more than 2 

years that are annually not less than the amount of interest due or $600, whichever is greater, and then 

makes payments in accordance with clause (i), (ii), or 

(iii); and 

ø(iv)¿ (v) for new borrowers on or after the date of 

enactment of the Higher Education Amendments of 

1998 who accumulate (after such date) outstanding 

loans under this part totaling more than $30,000, an 

extended repayment plan, with a fixed annual or graduated repayment amount paid over an extended period 

of time, not to exceed 25 years, except that the borrower shall repay annually a minimum amount determined in accordance with paragraph (1)(L)(i). 

(c) GUARANTY AGREEMENTS FOR REIMBURSING LOSSES.— (1) AUTHORITY TO ENTER INTO AGREEMENTS.—(A) The Secretary may enter into a guaranty agreement with any guaranty agency, whereby the Secretary shall undertake to reimburse it, under such terms and conditions as the Secretary 

may establish, with respect to losses (resulting from the default of the student borrower) on the unpaid balance of the 

principal and accrued interest of any insured loan. The guaranty agency shall, be deemed to have a contractual right 

against the United States, during the life of such loan, to receive reimbursement according to the provisions of this subsection. Upon receipt of an accurate and complete request by 

a guaranty agency for reimbursement with respect to such 

losses, the Secretary shall pay promptly and without administrative delay. Except as provided in subparagraph (B) of this 

paragraph and in paragraph (7), the amount to be paid a guaranty agency as reimbursement under this subsection shall be 

equal to 95 percent of the amount expended by it in discharge 

of its insurance obligation incurred under its loan insurance 

program. A guaranty agency shall file a claim for reimbursement with respect to losses under this subsection within ø45¿ 

439 

30 days after the guaranty agency discharges its insurance obligation on the loan. 

* * * * * * * 

(G)(i) Notwithstanding any other provisions of this section, in 

the case of exempt claims, the Secretary shall apply the provisions of—

(I) the fourth sentence of subparagraph (A) by substituting ‘‘100 percent’’ for ‘‘95 percent’’; 

(II) subparagraph (B)(i) by substituting ‘‘100 percent’’ for ‘‘85 percent’’; and 

(III) subparagraph (B)(ii) by substituting ‘‘100 percent’’ for ‘‘75 percent’’. (ii) For purposes of clause (i) of this subparagraph, the term ‘‘exempt claims’’ means claims with respect to loans for which 

it is determined that the borrower (or the student on whose behalf a parent has borrowed), without the lender’s or the institution’s knowledge at the time the loan was made, provided false 

or erroneous information or took actions that caused the borrower or the student to be ineligible for all or a portion of the 

loan or for interest benefits thereon. 

(H) Notwithstanding subparagraphs (A) and (B), but subject 

to subparagraphs (E) and (F), in the case of a loan for which 

the first disbursement of principal is made on or after July 1, 

2006, the Secretary shall apply— (i) the fourth sentence of subparagraph (A) by substituting ‘‘93 percent’’ for ‘‘95 percent’’; 

(ii) subparagraph (B)(i) by substituting ‘‘83 percent’’ for ‘‘85 percent’’; and 

(iii) subparagraph (B)(ii) by substituting ‘‘73 percent’’ for ‘‘75 percent’’. ø(G)¿ (I) Notwithstanding any other provision of this section, 

the Secretary shall exclude a loan made pursuant to a lenderof-last-resort program when making reimbursement payment 

calculations under subparagraphs (B) and (C). 

(2) CONTENTS OF GUARANTY AGREEMENTS.—The guaranty 

agreement—

(A) shall set forth such administrative and fiscal procedures as may be necessary to protect the United States 

from the risk of unreasonable loss thereunder, to ensure 

proper and efficient administration of the loan insurance 

program, and to assure that due diligence will be exercised 

in the collection of loans insured under the program, including (i) a requirement that each beneficiary of insurance on the loan submit proof that the institution was contacted and other reasonable attempts were made to locate 

the borrower (when the location of the borrower is unknown) and proof that contact was made with the borrower (when the location is known) and (ii) requirements 

establishing procedures to preclude consolidation lending 

from being an excessive proportion of guaranty agency recoveries on defaulted loans under this part; 

* * * * * * * 

(D) shall provide that if, after the Secretary has made 

payment under the guaranty agreement pursuant to paraVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00443 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
440 

graph (1) of this subsection with respect to any loan, any 

payments are made in discharge of the obligation incurred 

by the borrower with respect to such loan (including any 

payments of interest accruing on such loan after such payment by the Secretary), there shall be paid over to the Secretary (for deposit in the fund established by section 431) 

such proportion of the amounts of such payments as is determined (in accordance with paragraph ø(6)¿ (6)(A)) to 

represent his equitable share thereof, but (i) shall provide 

for subrogation of the United States to the rights of any 

insurance beneficiary only to the extent required for the 

purpose of paragraph (8); and (ii) except as the Secretary 

may otherwise by or pursuant to regulation provide, 

amounts so paid by a borrower on such a loan shall be 

first applied in reduction of principal owing on such loan; 

* * * * * * * 

(3) FORBEARANCE.—A guaranty agreement under this subsection—

(A) shall contain provisions providing that—

(i) upon request, a lender shall grant a borrower forbearance, renewable at 12-month intervals, on terms 

agreed to øin writing¿ by the parties to the loan with 

the approval of the insurer, and otherwise consistent 

with the regulations of the Secretary, if the borrower—

(I) * * * 

* * * * * * * 

(6) SECRETARY’S EQUITABLE SHARE.—(A) For the purpose of 

paragraph (2)(D), the Secretary’s equitable share of payments 

made by the borrower shall be that portion of the payments remaining after the guaranty agency with which the Secretary 

has an agreement under this subsection has deducted from 

such payments—

ø(A)¿ (i) a percentage amount equal to the complement 

of the reinsurance percentage in effect when payment 

under the guaranty agreement was made with respect to 

the loan; and 

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

that, beginning on October 1, 2003, this subparagraph 

shall be applied by substituting ‘‘23 percent’’ for ‘‘24 percent’’. 

(B) A guaranty agency shall—

(i) on or after October 1, 2006—

(I) not charge the borrower collection costs in an amount 

in excess of 18.5 percent of the outstanding principal and 

interest of a defaulted loan that is paid off through consolidation by the borrower under this title; and 

(II) remit to the Secretary a portion of the collection 

charge under subclause (I) equal to 8.5 percent of the outstanding principal and interest of such defaulted loan; and 

(ii) on and after October 1, 2009, remit to the Secretary the 

entire amount charged under clause (i)(I) with respect to each 

441 

defaulted loan that is paid off with excess consolidation proceeds. 

(C) EXCESS CONSOLIDATION PROCEEDS.—For purposes of subparagraph (B), the term ‘‘excess consolidation proceeds’’ means, with respect to any guaranty agency for any Federal fiscal year beginning 

on or after October 1, 2009, the proceeds of consolidation of defaulted loans under this title that exceed 45 percent of the agency’s 

total collections on defaulted loans in such Federal fiscal year. 

* * * * * * * 

(9) GUARANTY AGENCY RESERVE LEVEL.—(A) * * * 

* * * * * * * 

(K) The Secretary, within 3 months after the end of each fiscal year, shall submit to the øHouse Committee on Education 

and the Workforce and the Senate Committee on Labor and 

Human Resources¿ authorizing committees a report specifying 

the Secretary’s assessment of the fiscal soundness of the guaranty agency system. 

* * * * * * * 

(10) DOCUMENTATION OF FORBEARANCE AGREEMENTS.—For 

the purposes of paragraph (3), the terms of forbearance agreed 

to by the parties shall be documented by confirming the agreement of the borrower by notice to the borrower from the lender, 

and by recording the terms in the borrower’s file. 

* * * * * * * 

(g) ACTION ON INSURANCE PROGRAM AND GUARANTY AGREEMENTS.—If a nonprofit private institution or organization—

(1) applies to enter into an agreement with the Secretary 

under subsections (b) and (c) with respect to a student loan insurance program to be carried on in a State with which the 

Secretary does not have an agreement under subsection (b), 

and 

(2) as provided in the application, undertakes to meet the requirements of section 422(c)(6)(B) (i), (ii), and (iii), 

the Secretary shall consider and act upon such application within 

180 days, and shall forthwith notify the øCommittee on Labor and 

Human Resources of the Senate and the Committee on Education 

and the Workforce of the House of Representatives¿ authorizing 

committees of his actions. 

* * * * * * * 

(i) MULTIPLE DISBURSEMENT OF LOANS.—

(1) ESCROW ACCOUNTS ADMINISTERED BY ESCROW AGENT.—

Any guaranty agency or eligible lender (hereafter in this subsection referred to as the ‘‘escrow agent’’) may enter into an 

agreement with any other eligible lender that is not an eligible 

institution or an agency or instrumentality of the State (hereafter in this subsection referred to as the ‘‘lender’’) for the purpose of authorizing disbursements of the proceeds of a loan to 

a student. Such agreement shall provide that the lender will 

pay the proceeds of such loans into an escrow account to be administered by the escrow agent in accordance with the provisions of paragraph (2) of this subsection. Such agreement may 

allow the lender to make payments into the escrow account in 

442 

amounts that do not exceed the sum of the amounts required 

for disbursement of initial or subsequent installments to borrowers and to make such payments not more than ø21¿ 10 

days prior to the date of the disbursement of such installment 

to such borrowers. Such agreement shall require the lender to 

notify promptly the eligible institution when funds are 

escrowed under this subsection for a student at such institution. 

* * * * * * * 

(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—

(1) * * * 

* * * * * * * 

(4) REPORT REQUIRED.—The Secretary shall, at the conclusion of the pilot program under paragraph (3), provide a report 

to the øCommittee on Education and the Workforce of the 

House of Representatives and the Committee on Labor and 

Human Resources of the Senate¿ authorizing committees on 

the impact of the blanket certificates of guaranty on program 

efficiency and integrity. 

* * * * * * * 

SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 

AGENCIES. 

(a) VOLUNTARY AGREEMENTS.— (1) AUTHORITY.—Subject to paragraph (2), the Secretary may 

enter into a voluntary, flexible agreement with a guaranty 

agency under this section, in lieu of agreements with a guaranty agency under subsections (b) and (c) of section 428. The 

Secretary may waive or modify any requirement under such 

subsections, except that the Secretary may not waive— (A) any statutory requirement pertaining to the terms 

and conditions attached to student loans or default claim 

payments made to lenders; øor¿ 

(B) the prohibitions on inducements contained in section 

428(b)(3) øunless the Secretary determines that such a 

waiver is consistent with the purposes of this section and 

is limited to activities of the guaranty agency within the 

State or States for which the guaranty agency serves as 

the designated guarantor.¿; or 

(C) the Federal default fee required by section 

428(b)(1)(H) and the second sentence of section 428H(h). 

ø(2) SPECIAL RULE.—If the Secretary grants a waiver pursuant to paragraph (1)(B), any guaranty agency doing business 

within the affected State or States may request, and the Secretary shall grant, an identical waiver to such guaranty agency 

under the same terms and conditions (including service area 

limitations) as govern the original waiver.¿ 

ø(3)¿ (2) ELIGIBILITY.—During fiscal years 1999, 2000, and 

2001, the Secretary may enter into a voluntary, flexible agreement with not more than 6 guaranty agencies that had 1 or 

more agreements with the Secretary under subsections (b) and 

(c) of section 428 as of the day before the date of enactment 

of the Higher Education Amendments of 1998. Beginning in 

fiscal year 2002, any guaranty agency or consortium thereof 

443 

may enter into a voluntary flexible agreement with the Secretary. 

ø(4)¿ (3) REPORT REQUIRED.—Not later than September 30, 

2001, the Secretary shall report to the øCommittee on Labor 

and Human Resources of the Senate and the Committee on 

Education and the Workforce of the House of Representatives¿ 

authorizing committees regarding the impact that the voluntary flexible agreements have had upon program integrity, 

program and cost efficiencies, and the availability and delivery 

of student financial aid. Such report shall include— (A) * * * 

(B) a list of participating guaranty agencies and the specific statutory or regulatory waivers provided to each guaranty agency øand any waivers provided to other guaranty 

agencies under paragraph (2)¿; 

* * * * * * * 

(c) PUBLIC NOTICE.— (1) * * * 

(2) AGREEMENT NOTICE.—The Secretary shall notify the 

Chairperson and the Ranking Minority Member of the øCommittee on Labor and Human Resources of the Senate and the 

Committee on Education and the Workforce of the House of 

Representatives¿ authorizing committees not later than 30 

days prior to concluding an agreement under this section. The 

notice shall contain— (A) * * * 

* * * * * * * 

ø(3) WAIVER NOTICE.—The Secretary shall notify the Chairperson and the Ranking Minority Member of the Committee on 

Labor and Human Resources of the Senate and the Committee 

on Education and the Workforce of the House of Representatives not later than 30 days prior to the granting of a waiver 

pursuant to subsection (a)(2) to a guaranty agency that is not 

a party to a voluntary flexible agreement.¿ 

(3) NOTICE TO INTERESTED PARTIES.—Once the Secretary 

reaches a tentative agreement in principle under this section, 

the Secretary shall publish in the Federal Register a notice that 

invites interested parties to comment on the proposed agreement. The notice shall state how to obtain a copy of the tentative agreement in principle and shall give interested parties 

no less than 30 days to provide comments. The Secretary may 

consider such comments prior to providing the notices pursuant 

to paragraph (2). 

* * * * * * * 

(5) MODIFICATION NOTICE.—The Secretary shall notify the 

Chairperson and the Ranking Minority Members of the øCommittee on Labor and Human Resources of the Senate and the 

Committee on Education and the Workforce of the House of 

Representatives¿ authorizing committees 30 days prior to any 

modifications to an agreement under this section. 

* * * * * * * 

SEC. 428B. FEDERAL PLUS LOANS. 

(a) AUTHORITY TO BORROW.—

444 

(1) AUTHORITY AND ELIGIBILITY.—Parents of a dependent student shall be eligible to borrow funds under this section in 

amounts specified in subsection (b), if— (A) the parents do not have an adverse credit history as 

determined pursuant to regulations promulgated by the 

Secretary; øand¿ 

(B) the parents meet such other eligibility criteria as the 

Secretary may establish by regulation, after consultation 

with guaranty agencies, eligible lenders, and other organizations involved in student financial assistanceø.¿; and 

(C) if either of the parents has been convicted of, or has 

pled nolo contendere or guilty to, a crime involving fraud 

in obtaining funds under this title, such parent has completed the repayment of such funds to the Secretary, or to 

the holder in the case of a loan under this title obtained by 

fraud. 

* * * * * * * 

SEC. 428C. FEDERAL CONSOLIDATION LOANS. 

(a) AGREEMENTS WITH ELIGIBLE LENDERS.—

(1) * * * 

* * * * * * * 

(3) DEFINITION OF ELIGIBLE BORROWER.—(A) For the 

purpose of this section, the term ‘‘eligible borrower’’ means a 

borrower who—

(i) * * * 

(ii) at the time of application for a consolidation loan—

(I) is in repayment status as determined under section 428(b)(7)(A); 

* * * * * * * 

(B)(i) An individual’s status as an eligible borrower under 

this section or under section 455(g) terminates under both sections upon receipt of a consolidation loan under this section or 

under section 455(g), except that—

(I) * * * 

* * * * * * * 

(III) loans received following the making of the consolidation loan may be added during the 180-day period following the making of the consolidation loan; øand¿ 

(IV) loans received prior to the date of the first consolidation loan may be added to a subsequent consolidation 

loanø.¿; and 

(V) an individual may obtain a subsequent consolidation 

loan under section 455(g) only 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. 

(ii) Loans made under this section shall, to the extent used 

to pay off the outstanding principal balance on loans made 

under this title, excluding capitalized interest, be counted 

against the applicable limitations on aggregate indebtedness 

contained in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, and 

464(a)(2)(B). 

445 

ø(C)(i) A married couple, each of whom has eligible student 

loans, may be treated as if such couple were an individual borrowing under subparagraphs (A) and (B) if such couple agrees 

to be held jointly and severally liable for the repayment of a 

consolidation loan, without regard to the amounts of the respective loan obligations that are to be consolidated, and without regard to any subsequent change that may occur in such 

couple’s marital status. 

ø(ii) Only one spouse in a married couple applying for a consolidation loan under this subparagraph need meet any of the 

requirements of subsection (b) of this section, except that each 

spouse shall—

ø(I) individually make the initial certification that no 

other application is pending in accordance with subsection 

(b)(1)(A); and 

ø(II) agree to notify the holder concerning any change of 

address in accordance with subsection (b)(4).¿ 

* * * * * * * 

(b) CONTENTS OF AGREEMENTS, CERTIFICATES OF INSURANCE, AND

LOAN NOTES.—

(1) AGREEMENTS WITH LENDERS.—Any lender described in 

subparagraph (A), (B), or (C) of subsection (a)(1) who wishes to 

make consolidation loans under this section shall enter into an 

agreement with the Secretary or a guaranty agency which provides—

(A) that, in the case of all lenders described in subsection (a)(1), the lender will make a consolidation loan to 

an eligible borrower (on request of that borrower) only if 

the borrower certifies that the borrower has no other application pending for a loan under this section øand (i) the 

lender holds an outstanding loan of that borrower which is 

selected by the borrower for consolidation under this section, except that this clause shall not apply in the case of 

a borrower with multiple holders of loans under this part, 

or (ii) the borrower certifies that the borrower has sought 

and has been unable to obtain a consolidation loan with income-sensitive repayment terms from the holders of the 

outstanding loans of that borrower (which are so selected 

for consolidation);¿ and that, if all the borrower’s loans 

under this part are held by a single holder, the borrower 

has notified such holder that the borrower is seeking to obtain a consolidation loan under this section; 

* * * * * * * 

(C) that each consolidation loan will be made, notwithstanding any other provision of this part limiting the annual or aggregate principal amount for all insured loans 

made to a borrower, in an amount ø(i) which is not less 

than the minimum amount required for eligibility of the 

borrower under subsection (a)(3), and (ii)¿ which is equal 

to the sum of the unpaid principal and accrued unpaid interest and late charges of all eligible student loans reVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00449 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
446 

ceived by the eligible borrower which are selected by the 

borrower for consolidation; 

* * * * * * * 

(E) that the lender shall offer an income-sensitive repayment schedule, established by the lender in accordance 

with the regulations promulgated by the Secretary, to the 

borrower of any consolidation loan made by the lender on 

or after July 1, 1994; øand¿ 

(F) that the lender of the consolidation loan shall, upon 

application for such loan, provide the borrower with a clear 

and conspicuous notice of at least the following information: 

(i) the effects of consolidation on total interest to be 

paid, fees to be paid, and length of repayment; 

(ii) the effects of consolidation on a borrower’s underlying loan benefits, including loan forgiveness, cancellation, deferment, and reduced interest rates on 

those underlying loans; 

(iii) the ability of the borrower to prepay the loan, 

pay on a shorter schedule, and to change repayment 

plans; 

(iv) that borrower benefit programs may vary among 

different loan holders, and a description of how the 

borrower benefits may vary among different loan holders; 

(v) the tax benefits for which borrowers may be eligible; 

(vi) the consequences of default; and 

(vii) that by making the application the applicant is 

not obligated to agree to take the consolidation loan; 

and 

ø(F)¿ (G) such other terms and conditions as the Secretary or the guaranty agency may specifically require of 

the lender to carry out this section. 

* * * * * * * 

(5) DIRECT LOANS.—øIn the event that a borrower is unable 

to obtain a consolidation loan from a lender with an agreement 

under subsection (a)(1), or is unable to obtain a consolidation 

loan with income-sensitive repayment terms acceptable to the 

borrower from such a lender, the Secretary shall offer any such 

borrower who applies for it, a direct consolidation loan.¿ In the 

event that a lender with an agreement under subsection (a)(1) 

of this section denies a consolidation loan application submitted 

to it by an eligible borrower under this section, or denies an application submitted to it by such a borrower for a consolidation 

loan with income-sensitive repayment terms, the Secretary shall 

offer any such borrower who applies for it, a direct consolidation loan. The Secretary shall offer such a loan to a borrower 

who has defaulted, for the purpose of resolving the default. 

Such direct consolidation loan shall, as requested by the borrower, be repaid either pursuant to income contingent repayment under part D of this title or pursuant to any other repayment provision under this section. The Secretary shall not offer 

such loans if, in the Secretary’s judgment, the Department of 

447 

Education does not have the necessary origination and servicing arrangements in place for such loans. 

* * * * * * * 

(c) PAYMENT OF PRINCIPAL AND INTEREST.—

(1) INTEREST RATE.—(A) Notwithstanding subparagraphs (B) 

and (C), with respect to any loan made under this section for 

which the application is received by an eligible lender—

(i) * * * 

(ii) on or after July 1, 2006, the applicable interest rate 

shall be determined under øsection 427A(l)(3)¿ section 

427A(k)(5). 

* * * * * * * 

(e) TERMINATION OF AUTHORITY.—The authority to make loans 

under this section expires at the close of September 30, ø2004¿ 

2012. Nothing in this section shall be construed to authorize the 

Secretary to promulgate rules or regulations governing the terms 

or conditions of the agreements and certificates under subsection 

(b). Loans made under this section which are insured by the Secretary shall be considered to be new loans made to students for the 

purpose of section 424(a). 

* * * * * * * 

SEC. 428F. DEFAULT REDUCTION PROGRAM. 

(a) OTHER REPAYMENT INCENTIVES.—

(1) SALE OF LOAN.—

(A) Each guaranty agency shall enter into an agreement 

with the Secretary which shall provide that upon securing 

øconsecutive payments for 12 months¿ 9 payments made 

within 20 days of the due date during 10 consecutive 

months of amounts owed on a loan for which the Secretary 

has made a payment under paragraph (1) of section 428(c), 

the guaranty agency (pursuant to an agreement with the 

Secretary) or the Secretary shall, if practicable, sell the 

loan to an eligible lender. Such loan shall not be sold to 

an eligible lender who has been found by the guaranty 

agency or the Secretary to have substantially failed to exercise the due diligence required of lenders under this 

part. Neither the guaranty agency nor the Secretary shall 

demand from a borrower as monthly payment amounts referred to in this paragraph more than is reasonable and affordable based upon the borrower’s total financial circumstances. 

* * * * * * * 

(C) A guaranty agency may charge the borrower and retain collection costs in an amount not to exceed 18.5 percent 

of the outstanding principal and interest at the time of sale 

of a loan rehabilitated under subparagraph (A). 

ø(C)¿ (D) A loan which does not meet the requirements 

of subparagraph (A) may also be eligible for sale under 

this paragraph upon a determination that the loan was in 

default due to clerical or data processing error and would 

not, in the absence of such error, be in a delinquent status. 

* * * * * * * 

448 

(c) FINANCIAL AND ECONOMIC LITERACY.—Where appropriate, 

each program described under subsection (b) shall include making 

available financial and economic education materials for the borrower. 

SEC. 428G. REQUIREMENTS FOR DISBURSEMENT OF STUDENT LOANS. 

(a) * * * 

* * * * * * * 

(c) METHOD OF MULTIPLE DISBURSEMENT.—Disbursements under 

subsection (a)— (1) * * * 

(2) may be made directly by the lender or, in the case of a 

loan under sections 428 and ø428A¿ 428H, may be disbursed 

pursuant to the escrow provisions of section 428(i); and 

* * * * * * * 

(e) EXCLUSION OF CONSOLIDATION AND FOREIGN STUDY LOANS.— The provisions of this section shall not apply in the case of a loan 

made under section 428Cø, made to a student to cover the cost of 

attendance at an eligible institution outside the United States,¿ or 

made to a student to cover the cost of attendance in a program of 

study abroad approved by the home eligible institution if the home 

eligible institution has a cohort default rate (as calculated under 

section 435(m)) of less than 5 percent. 

* * * * * * * 

SEC. 428H. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME 

BORROWERS. 

(a) * * * 

* * * * * * * 

(d) LOAN LIMITS.— (1) * * * 

(2) ANNUAL LIMITS FOR INDEPENDENT, GRADUATE, AND PROFESSIONAL STUDENTS.—The maximum annual amount of loans 

under this section an independent student (or a student whose 

parents are unable to borrow under section 428B or the Federal Direct PLUS Loan Program) may borrow in any academic 

year (as defined in section 481(a)(2)) or its equivalent shall be 

the amount determined under paragraph (1), plus—

(A) * * * 

* * * * * * * 

(C) in the case of such a student who is a graduate or 

professional student attending an eligible institution, 

ø$10,000¿ $12,000; and 

* * * * * * * 

(e) PAYMENT OF PRINCIPAL AND INTEREST.— (1) * * * 

* * * * * * * 

ø(6) REPAYMENT PERIOD.—For purposes of calculating the repayment period under section 428(b)(9), such period shall commence at the time the first payment of principal is due from 

the borrower.¿ 

(6) TIME LIMITS ON BILLING INTEREST.—A lender may not receive interest on a loan under this section from a borrower for 

449 

any period that precedes the dates described in section 

428(a)(3)(A)(v). 

* * * * * * * 

(h) INSURANCE PREMIUM.—Each State or nonprofit private institution or organization having an agreement with the Secretary 

under section 428(b)(1) may charge a borrower under this section 

an insurance premium equal to not more than 1.0 percent of the 

principal amount of the loan, if such premium will not be used for 

incentive payments to lenders. In lieu of the insurance premium 

authorized under the preceding sentence, and effective for loans for 

which the first disbursement of principal is made on or after July 

1, 2006, each State or nonprofit private institution or organization 

having an agreement with the Secretary under section 428(b)(1) 

shall collect and deposit into the Federal Student Loan Reserve 

Fund under section 422A a Federal default fee of 1.0 percent of the 

principal amount of the loan, obtained by deduction proportionately 

from each installment payment of the proceeds of the loan to the 

borrower. 

øSEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES. 

ø(a) DESIGNATION OF LENDERS, SERVICERS, AND GUARANTY AGEN- CIES.—

ø(1) AUTHORITY.—Whenever the Secretary determines that 

an eligible lender, servicer, or guaranty agency has a compliance performance rating that equals or exceeds 97 percent, the 

Secretary shall designate the eligible lender, servicer, or guaranty agency, as the case may be, for exceptional performance. 

The Secretary shall notify each appropriate guaranty agency of 

the eligible lenders and servicers designated under this section. 

ø(2) COMPLIANCE PERFORMANCE RATING.—For purposes of 

paragraph (1), a compliance performance rating is determined 

with respect to compliance with due diligence in the collection 

of loans under this part for each year for which the determination is made. Such rating is equal to the percent of all due diligence requirements applicable to each loan, on average, as established by the Secretary by regulation, with respect to—

ø(A) loans serviced during the period by the eligible 

lender or servicer; or 

ø(B) loans on which loan collection was attempted by the 

guaranty agency. 

ø(b) PAYMENT TO LENDERS AND SERVICERS.—

ø(1) 100 PERCENT PAYMENT RULE.—Each guaranty agency 

shall pay each eligible lender or servicer (as agent for an eligible lender) designated under subsection (a) 100 percent of the 

unpaid principal and interest of all loans for which claims are 

submitted for payment by that eligible lender or servicer for 

the one-year period following the receipt by the guaranty agency of the notification of designation under this section or until 

the guaranty agency receives notice from the Secretary that 

the designation of the lender or servicer under subsection (a) 

has been revoked. 

ø(2) REVOCATION AUTHORITY.—The Secretary shall revoke 

the designation of a lender or servicer under subsection (a) if 

any quarterly audit required under subsection (c)(5) is not received by the Secretary by the date established by the SecVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00453 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
450 

retary or if the audit indicates the lender or servicer failed to 

maintain 97 percent or higher compliance with program regulations, as reflected in the performance of not less than 97 percent of all due diligence requirements applicable to each loan, 

on average, as established by the Secretary for the purpose of 

this section, for 2 consecutive months or 90 percent for 1 

month. 

ø(3) DOCUMENTATION.—Nothing in this section shall restrict 

or limit the authority of guaranty agencies to require the submission of claims documentation evidencing servicing performed on loans, except that the guaranty agency may not require greater documentation than that required for lenders and 

servicers not designated under subsection (a). 

ø(4) PAYMENTS TO GUARANTY AGENCIES.—The Secretary shall 

pay to each guaranty agency designated under subsection (a) 

the appropriate percentage under this subsection for the 1-year 

period following the receipt by the guaranty agency of the notification of designation under subsection (a). 

ø(c) SUPERVISION OF DESIGNATED LENDERS AND SERVICERS.—

ø(1) AUDITS FOR LENDERS AND SERVICERS.—Each eligible 

lender or servicer desiring a designation under subsection (a) 

shall have a financial and compliance audit of the loan portfolio of such eligible lender or servicer conducted annually by 

a qualified independent organization from a list of qualified organizations promulgated by the Secretary in accordance with 

standards established by the Comptroller General and the Secretary. The standards shall measure the lender’s or servicer’s 

compliance with the due diligence standards and shall include 

a defined statistical sampling technique designed to measure 

the performance rating of the eligible lender or servicer for the 

purpose of this section. Each eligible lender or servicer shall 

submit the audit required by this section to the Secretary and 

to each appropriate guaranty agency. 

ø(2) ADDITIONAL INFORMATION ON LENDERS AND SERVICERS.—

Each appropriate guaranty agency shall provide the Secretary 

with such other information in its possession regarding an eligible lender or servicer desiring designation as may relate to 

the Secretary’s determination under subsection (a), including 

but not limited to any information suggesting that the application of a lender or servicer for designation under subsection (a) 

should not be approved. 

ø(3) SECRETARY’S DETERMINATIONS.—The Secretary shall 

make the determination under subsection (a) based upon the 

audits submitted under this section, such other information as 

provided by any guaranty agency under paragraph (2), and any 

information in the possession of the Secretary or submitted by 

any other agency or office of the Federal Government. If the 

results of the audit are not persuasively rebutted by such other 

information, the Secretary shall inform the eligible lender or 

servicer and the appropriate guaranty agency that its application for designation as an exceptional lender or servicer has 

been approved. 

ø(4) COST OF AUDIT.—Each eligible lender or servicer shall 

pay for all the costs of the audits required under this section. 

451 

ø(5) COMPLIANCE AUDIT.—In order to maintain its status as 

an exceptional eligible lender or servicer, the lender or servicer 

shall undergo a quarterly compliance audit at the end of each 

quarter (other than the quarter in which status as an exceptional lender or servicer is established through a financial and 

compliance audit, as described in subsection (c)(1)), and submit 

the results of such audit to the Secretary and such appropriate 

guaranty agency. The compliance audit will review compliance 

with due diligence requirements for the period since the last 

audit. 

ø(6) LOSS OF DESIGNATION.—If the audit performed pursuant 

to paragraph (5) fails to meet the standards for designation as 

an exceptional lender or servicer under subsection (a)(1), the 

lender or servicer shall lose its designation as an exceptional 

lender or servicer. A lender or servicer receiving a compliance 

audit not meeting the standard for designation as an exceptional lender or servicer may reapply for designation under 

subsection (a) at any time. 

ø(7) DUE DILIGENCE STANDARDS.—Due diligence standards 

used for determining compliance under paragraph (5) shall be 

promulgated by the Secretary after consultation with lenders, 

guaranty agencies and servicers and shall consist of a list of 

specific elements for the Federal regulations selected to provide 

an indication of systems degradation. 

ø(8) ADDITIONAL REVOCATION AUTHORITY.—Notwithstanding 

any other provision of this section, designation under subsection (a) may be revoked at any time by the Secretary if the 

Secretary determines that the eligible lender or servicer has 

failed to maintain an overall level of regulatory compliance 

consistent with the audit submitted by the eligible lender or 

servicer under this section or if the Secretary believes the lender or servicer may have engaged in fraud in securing designation under subsection (a) or is failing to service loans in accordance with program regulations. 

ø(d) SUPERVISION OF DESIGNATED GUARANTY AGENCIES.— ø(1) AUDIT OF GUARANTY AGENCIES.—Each guaranty agency 

desiring a designation under subsection (a) shall have a financial and compliance audit of the defaulted loan portfolio of such 

guaranty agency conducted annually by a qualified independent organization or person from a list of qualified organizations or persons promulgated by the Secretary in accordance 

with standards established by the Comptroller General and the 

Secretary. The standards shall include defined statistical sampling techniques designed to measure the performance rating 

of the guaranty agency for the purpose of this section. Each 

guaranty agency shall submit the audit required by this paragraph to the Secretary. 

ø(2) QUARTERLY SAMPLE AUDITS.—The Secretary may require 

quarterly sample audits as a means of determining continued 

qualification of the guaranty agency for designation as an exceptional guaranty agency. 

ø(3) SECRETARY’S DETERMINATIONS.—The Secretary shall 

make the determination under subsection (a) based upon the 

audits submitted under this section and other information in 

his possession. If the results of the audit are not persuasively 

452 

rebutted by such other information, the Secretary shall inform 

the guaranty agency that its application for designation as an 

exceptional guaranty agency has been approved. 

ø(4) COSTS OF AUDITS.—Each guaranty agency shall pay for 

all of the costs of the audits regulated by this section. 

ø(5) REVOCATION FOR FRAUD.—The Secretary may revoke the 

designation of a guaranty agency under subsection (a) at any 

time if the Secretary has reason to believe the guaranty agency 

secured its designation under subsection (a) through fraud or 

fails to comply with applicable regulations. 

ø(6) REVOCATION BASED ON PERFORMANCE.—Designation as 

an exceptional guaranty agency may be revoked at any time by 

the Secretary upon 30 days notice and an opportunity for a 

hearing before the Secretary upon a finding by the Secretary 

that the guaranty agency has failed to maintain an acceptable 

overall level of regulatory compliance. 

ø(e) SPECIAL RULE.—Reimbursements made by the Secretary on 

loans submitted for claim by an eligible lender or loan servicer designated for exceptional performance under this section shall not be 

subject to additional review by the Secretary or repurchase by the 

guaranty agency for any reason other than a determination by the 

Secretary that the eligible lender, loan servicer, or guaranty agency 

engaged in fraud or other purposeful misconduct in obtaining designation for exceptional performance. 

ø(f) LIMITATION.—Nothing in this section shall be construed to affect the processing of claims on student loans of eligible lenders not 

subject to this paragraph. 

ø(g) CLAIMS.—A lender, servicer, or guaranty agency designated 

under subsection (a) failing to service loans or otherwise comply 

with applicable program regulations shall be considered in violation of section 3729 of title 31, United States Code,. 

ø(h) EVALUATION.—Not later than 3 years after the date of enactment of this Act, the Comptroller General shall submit to the 

Chairman of the Senate Labor and Human Resources Committee 

and the House Committee on Education and Labor, an evaluation 

of the provisions of this section including, but not limited to, the 

following: 

ø(1) The effectiveness of due diligence performed by lenders 

and servicers receiving designation as exceptional lenders or 

servicers from the perspective of securing maximum collections 

from borrowers. 

ø(2) A quantification of the dollar volume of claims that were 

paid to exceptional lenders and servicers that would not have 

been paid under applicable program provisions prior to the enactment of this section. 

ø(3) An assessment of the impact of this section on the financial condition of guaranty agencies. 

ø(4) An assessment of the savings to lenders, servicers, and 

guaranty agencies resulting from designation as exceptional 

performance. 

ø(5) An identification of specific administration steps that 

lenders, servicers, and guaranty agencies do not have to perform as a result of designation as exceptional lenders, 

servicers, or guaranty agencies. 

453 

ø(6) A recommendation for program modifications applicable 

to all program participants based on the findings of the evaluation. 

ø(7) A recommendation for modifications to this section and 

whether the program should be continued. 

ø(i) TERMINATION.—After receipt of the study authorized in subsection (h), the Secretary may terminate such program if he determines such termination to be in the fiscal interest of the United 

States. 

ø(j) DEFINITIONS.—For the purpose of this section— ø(1) the term ‘‘due diligence requirements’’ means the activities required to be performed by lenders on delinquent loans 

pursuant to regulations issued by the Secretary; 

ø(2) the term ‘‘eligible loan’’ means a loan made, insured or 

guaranteed under part B of title IV; 

ø(3) the term ‘‘servicer’’ means an entity servicing and collecting student loans which— ø(A) has substantial experience in servicing and collecting consumer loans or student loans; 

ø(B) has an independent financial audit annually which 

is furnished to the Secretary and any other parties designated by the Secretary; 

ø(C) has business systems which are capable of meeting 

the requirements of part B of title IV; 

ø(D) has adequate personnel who are knowledgeable 

about the student loan programs authorized by part B of 

title IV; and 

ø(E) does not have any owner, majority shareholder, director, or officer of the entity who has been convicted of a 

felony.¿ 

SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL PERFORMANCE. 

(a) DESIGNATION OF LENDERS AND SERVICERS.— (1) IN GENERAL.—Whenever the Secretary determines that an 

eligible lender or servicer meets the performance measures required by paragraph (2), the Secretary shall designate that eligible lender or servicer, as the case may be, for exceptional performance. The Secretary shall notify each appropriate guaranty 

agency of the eligible lenders and servicers designated under 

this section. 

(2) PERFORMANCE MEASURES.—

(A) In determining whether to award a lender or servicer 

the exceptional performance designation, the Secretary 

shall require that the lender or servicer be performing at or 

above the 95 percentile of the industry, and demonstrate 

improved performance against the lender’s or service’s average of the last 3 years on the factors described in subparagraph (B). 

(B) The factors on which the Secretary shall require improvement shall include—

(i) delinquency rates; 

(ii) the rate at which delinquent accounts are restored to good standing; 

(iii) default rates; 

(iv) the rate of rejected claims; and 

454 

(v) any other such measures as determined by the 

Secretary. 

(C) In addition, the Secretary shall not make any award 

of such a designation unless the consequence of the designation is cost-neutral to the Federal Government. 

(3) ADDITIONAL INFORMATION ON LENDERS AND SERVICERS.— Each appropriate guaranty agency shall provide the Secretary 

with such other information in its possession regarding an eligible lender or servicer desiring designation as may relate to the 

Secretary’s determination under paragraph (1), including but 

not limited to any information suggesting that the application 

of a lender or servicer for designation should not be approved. 

(4) DETERMINATIONS BY THE SECRETARY.—

(A) The Secretary shall designate an eligible lender or 

servicer for exceptional performance if the eligible lender or 

servicer meets the performance measures required by paragraph (2). 

(B) The Secretary shall make the determination under 

paragraph (1) based upon the documentation submitted by 

the eligible lender or servicer as specified in regulation, 

such other information as provided by any guaranty agency 

under paragraph (3), and any information in the possession of the Secretary or submitted by any other agency or 

office of the Federal Government. 

(C) The Secretary shall inform the eligible lender or 

servicer and the appropriate guaranty agency that its application for designation as an exceptional performance lender 

or servicer has been approved or disapproved. 

(5) TRANSITION.—

(A) Any eligible lender or servicer designated for exceptional performance as of the day before the date of enactment of the College Access and Opportunity Act of 2005 

shall continue to be so designated, and subject to the requirements of this section as in effect on that day (including revocation), until the performance standards described 

in paragraph (2) are established. 

(B) The Secretary shall not designate any additional eligible lenders or servicers for exceptional performance until 

those performance standards are established. 

(b) PAYMENT TO LENDERS AND SERVICERS.—A guaranty agency 

shall pay, to each eligible lender or servicer (as agent for an eligible 

lender) designated under subsection (a), 98 percent of the unpaid 

principal and interest of all loans for which claims are submitted 

for payment by that eligible lender or servicer for the one-year period following the receipt by the guaranty agency of the notification 

of designation under this section, or until the guaranty agency receives notice from the Secretary that the designation of the lender 

or servicer under subsection (a)(2) has been revoked. 

(c) REVOCATION AUTHORITY.— (1) The Secretary shall revoke the designation of a lender or 

a servicer under subsection (a) if the Secretary determines that 

the lender or servicer has failed to meet the performance standards required by subsection (a)(2). 

(2) Notwithstanding any other provision of this section, a designation under subsection (a) may be revoked at any time by the 

455 

Secretary, in the Secretary’s discretion, if the Secretary determines that the eligible lender or servicer has failed to meet the 

criteria and performance standards established by the Secretary 

in regulation, or if the Secretary believes the lender or servicer 

may have engaged in fraud in securing designation under subsection (a), or is failing to service loans in accordance with program regulations. 

(d) DOCUMENTATION.—Nothing in this section shall restrict or 

limit the authority of guaranty agencies to require the submission 

of claims documentation evidencing servicing performed on loans, 

except that the guaranty agency may not require greater documentation than that required for lenders and servicers not designated 

under subsection (a). 

(e) SPECIAL RULE.—Reimbursements made by the Secretary on 

loans submitted for claim by an eligible lender or loan servicer designated for exceptional performance under this section shall not be 

subject to additional review by the Secretary or repurchase by the 

guaranty agency for any reason other than a determination by the 

Secretary that the eligible lender or loan servicer engaged in fraud 

or other purposeful misconduct in obtaining designation for exceptional performance. 

(f) LIMITATION.—Nothing in this section shall be construed to affect the processing of claims on student loans of eligible lenders not 

subject to this section. 

(g) CLAIMS.—A lender or servicer designated under subsection (a) 

failing to service loans or otherwise comply with applicable program 

regulations shall be considered in violation of section 3729 of title 

31, United States Code. 

(h) TERMINATION.—The Secretary may terminate the designation 

of lenders and servicers under this section if he determines that termination would be in the fiscal interest of the United States. 

(i) DEFINITIONS.—As used in this section— (1) the term ‘‘eligible loan’’ means a loan made, insured, or 

guaranteed under this part; and 

(2) the term ‘‘servicer’’ means an entity servicing and collecting student loans that— (A) has substantial experience in servicing and collecting 

consumer loans or student loans; 

(B) has an independent financial audit annually which 

is furnished to the Secretary and any other parties designated by the Secretary; 

(C) has business systems which are capable of meeting 

the requirements of this part; 

(D) has adequate personnel who are knowledgeable about 

the student loan programs authorized by this part; and 

(E) does not have any owner, majority shareholder, director, or officer of the entity who has been convicted of a felony. 

SEC. 428J. LOAN FORGIVENESS FOR TEACHERS. 

(a) * * * 

(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a program, through the holder of the loan, of assuming the obligation to 

repay a qualified loan amount for a loan made under section 428 

or 428H, in accordance with subsection (c), for any new borrower 

on or after October 1, 1998, who—

456 

(1) has been employed as a full-time teacher for 5 consecutive complete school years— (A) * * * 

(B) if employed as an elementary school or secondary 

school teacher, is highly qualified as defined in section 

9101 of the Elementary Secondary Education Act of 1965, or meets the requirements of subsection (g)(3); and 

* * * * * * * 

(c) QUALIFIED LOANS AMOUNT.— (1) * * * 

* * * * * * * 

(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS, 

SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the 

amount specified in paragraph (1), the aggregate amount that 

the Secretary shall repay under this section shall be not more 

than $17,500 in the case of—

(A) a secondary school teacher—

(i) * * * 

(ii) whose qualifying employment for purposes of 

such subsection is teaching mathematics or science on 

a full-time basis; øand¿ 

(B) an elementary school or secondary school teacher—

(i) * * * 

* * * * * * * 

(iii) who, as certified by the chief administrative officer of the public or non-profit private elementary 

school or secondary school in which the borrower is 

employed, is teaching children with disabilities that 

correspond with the borrower’s special education training and has demonstrated knowledge and teaching 

skills in the content areas of the elementary school or 

secondary school curriculum that the borrower is 

teachingø.¿; and 

(C) an elementary or secondary school teacher who primarily teaches reading— (i) who meets the requirements of subsection (b); 

(ii) who has obtained a separate reading instruction 

credential from the State in which the teacher is employed; and 

(iii) who is certified by the chief administrative officer of the public or nonprofit private elementary or secondary school in which the borrower is employed to 

teach reading— (I) as being proficient in teaching the essential 

components of reading instruction as defined in 

section 1208 of the Elementary and Secondary 

Education Act of 1965; and 

(II) as having such credential. 

* * * * * * * 

(g) ADDITIONAL ELIGIBILITY PROVISIONS.— (1) * * * 

(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher in a private school and is exempt from State 

457 

certification requirements (unless otherwise applicable under 

State law), may, in lieu of the requirement of subsection 

(a)(1)(B), have such employment treated as qualifying employment under this section if such individual is permitted to and 

does satisfy rigorous subject knowledge and skills tests by taking competency tests in the applicable grade levels and subject 

areas. For such purposes, the competency tests taken by such a 

private school teacher must be recognized by 5 or more States 

for the purpose of fulfilling the highly qualified teacher requirements under section 9101 of the Elementary and Secondary 

Education Act of 1965, and the score achieved by such teacher 

on each test must equal or exceed the average passing score of 

those 5 States. 

* * * * * * * 

øSEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS. 

ø(a) PURPOSE.—It is the purpose of this section—

ø(1) to bring more highly trained individuals into the early 

child care profession; and 

ø(2) to keep more highly trained child care providers in the 

early child care field for longer periods of time. 

ø(b) DEFINITIONS.—In this section: 

ø(1) CHILD CARE FACILITY.—The term ‘‘child care facility’’ means a facility, including a home, that— ø(A) provides child care services; and 

ø(B) meets applicable State or local government licensing, certification, approval, or registration requirements, if 

any. 

ø(2) CHILD CARE SERVICES.—The term ‘‘child care services’’

means activities and services provided for the education and 

care of children from birth through age 5 by an individual who 

has a degree in early childhood education. 

ø(3) DEGREE.—The term ‘‘degree’’ means an associate’s or 

bachelor’s degree awarded by an institution of higher education. 

ø(4) EARLY CHILDHOOD EDUCATION.—The term ‘‘early childhood education’’ means education in the areas of early child 

education, child care, or any other educational area related to 

child care that the Secretary determines appropriate. 

ø(5) INSTITUTION OF HIGHER EDUCATION.—Notwithstanding 

section 102, the term ‘‘institution of higher education’’ has the 

meaning given the term in section 101. 

ø(c) DEMONSTRATION PROGRAM.—

ø(1) IN GENERAL.—The Secretary may carry out a demonstration program of assuming the obligation to repay, pursuant to subsection (d), a loan made, insured, or guaranteed 

under this part or part D (excluding loans made under sections 

428B and 428C or comparable loans made under part D) for 

any new borrower after the date of enactment of the Higher 

Education Amendments of 1998, who— ø(A) completes a degree in early childhood education; 

ø(B) obtains employment in a child care facility; and 

ø(C) has worked full time for the 2 consecutive years 

preceding the year for which the determination is made as 

a child care provider in a low-income community. 

458 

ø(2) LOW-INCOME COMMUNITY.—For the purposes of this subsection, the term ‘‘low-income community’’ means a community 

in which 70 percent of households within the community earn 

less than 85 percent of the State median household income. 

ø(3) AWARD BASIS; PRIORITY.—

ø(A) AWARD BASIS.—Subject to subparagraph (B), loan 

repayment under this section shall be on a first-come, 

first-served basis and subject to the availability of appropriations. 

ø(B) PRIORITY.—The Secretary shall give priority in providing loan repayment under this section for a fiscal year 

to student borrowers who received loan repayment under 

this section for the preceding fiscal year. 

ø(4) REGULATIONS.—The Secretary is authorized to prescribe 

such regulations as may be necessary to carry out the provisions of this section. 

ø(d) LOAN REPAYMENT.—

ø(1) IN GENERAL.—The Secretary shall assume the obligation 

to repay—

ø(A) after the second consecutive year of employment described in subparagraphs (B) and (C) of subsection (c)(1), 

20 percent of the total amount of all loans made after date 

of enactment of the Higher Education Amendments of 

1998, to a student under this part or part D; 

ø(B) after the third consecutive year of such employment, 20 percent of the total amount of all such loans; and 

ø(C) after each of the fourth and fifth consecutive years 

of such employment, 30 percent of the total amount of all 

such loans. 

ø(2) CONSTRUCTION.—Nothing in this section shall be construed to authorize the refunding of any repayment of a loan 

made under this part or part D. 

ø(3) INTEREST.—If a portion of a loan is repaid by the Secretary under this section for any year, the proportionate 

amount of interest on such loan which accrues for such year 

shall be repaid by the Secretary. 

ø(4) SPECIAL RULE.—In the case where a student borrower 

who is not participating in loan repayment pursuant to this 

section returns to an institution of higher education after graduation from an institution of higher education for the purpose 

of obtaining a degree in early childhood education, the Secretary is authorized to assume the obligation to repay the total 

amount of loans made under this part or part D incurred for 

a maximum of two academic years in returning to an institution of higher education for the purpose of obtaining a degree 

in early childhood education. Such loans shall only be repaid 

for borrowers who qualify for loan repayment pursuant to the 

provisions of this section, and shall be repaid in accordance 

with the provisions of paragraph (1). 

ø(5) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS.—No student borrower may, for the same volunteer service, receive a benefit under both this section and subtitle D of 

title I of the National and Community Service Act of 1990 (42 

U.S.C. 12601 et seq.). 

459 

ø(e) REPAYMENT TO ELIGIBLE LENDERS.—The Secretary shall pay 

to each eligible lender or holder for each fiscal year an amount 

equal to the aggregate amount of loans which are subject to repayment pursuant to this section for such year. 

ø(f ) APPLICATION FOR REPAYMENT.—

ø(1) IN GENERAL.—Each eligible individual desiring loan repayment under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, 

and containing such information as the Secretary may require. 

ø(2) CONDITIONS.—An eligible individual may apply for loan 

repayment under this section after completing each year of 

qualifying employment. The borrower shall receive forbearance 

while engaged in qualifying employment unless the borrower is 

in deferment while so engaged. 

ø(g) EVALUATION.—

ø(1) IN GENERAL.—The Secretary shall conduct, by grant or 

contract, an independent national evaluation of the impact of 

the demonstration program assisted under this section on the 

field of early childhood education. 

ø(2) COMPETITIVE BASIS.—The grant or contract described in 

subsection (b) shall be awarded on a competitive basis. 

ø(3) CONTENTS.—The evaluation described in this subsection 

shall—

ø(A) determine the number of individuals who were encouraged by the demonstration program assisted under 

this section to pursue early childhood education; 

ø(B) determine the number of individuals who remain 

employed in a child care facility as a result of participation 

in the program; 

ø(C) identify the barriers to the effectiveness of the program; 

ø(D) assess the cost-effectiveness of the program in improving the quality of—

ø(i) early childhood education; and 

ø(ii) child care services; 

ø(E) identify the reasons why participants in the program have chosen to take part in the program; 

ø(F) identify the number of individuals participating in 

the program who received an associate’s degree and the 

number of such individuals who received a bachelor’s degree; and 

ø(G) identify the number of years each individual participates in the program. 

ø(4) INTERIM AND FINAL EVALUATION REPORTS.—The Secretary shall prepare and submit to the President and the Congress such interim reports regarding the evaluation described 

in this subsection as the Secretary deems appropriate, and 

shall prepare and so submit a final report regarding the evaluation by January 1, 2002. 

ø(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section $10,000,000 for fiscal 

year 1999, and such sums as may be necessary for each of the 4 

succeeding fiscal years.¿ 

460 

SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL 

NEED. 

(a) PURPOSES.—The purposes of this section are—

(1) to encourage highly trained individuals to enter and continue in service in areas of national need; and 

(2) to reduce the burden of student debt for Americans who 

dedicate their careers to service in areas of national need. 

(b) PROGRAM AUTHORIZED.—

(1) IN GENERAL.—The Secretary is authorized to carry out a 

program of assuming the obligation to repay, pursuant to paragraphs (2) of subsection (c) and subsection (d), a qualified loan 

amount for a loan made, insured, or guaranteed under this 

part or part D (other than loans made under section 428B and 

428C and comparable loans made under part D), for any new 

borrower after the date of enactment of the College Access and 

Opportunity Act of 2005, who—

(A) has been employed full-time for at least 5 consecutive 

complete school, academic, or calendar years, as appropriate, in an area of national need described in subsection 

(c); and 

(B) is not in default on a loan for which the borrower 

seeks forgiveness. 

(2) AWARD BASIS.—Loan repayment under this section shall 

be on a first-come, first-served basis pursuant to the designation 

under subsection (c) and subject to the availability of appropriations. 

(3) REGULATIONS.—The Secretary is authorized to issue such 

regulations as may be necessary to carry out the provisions of 

this section. 

(c) AREAS OF NATIONAL NEED.—

(1) STATUTORY CATEGORIES.—For purposes of this section, an 

individual shall be treated as employed in an area of national 

need if the individual is employed full time and is any of the 

following: 

(A) EARLY CHILDHOOD EDUCATORS.—An individual who 

is employed as an early childhood educator in an eligible 

preschool program or child care facility in a low-income 

community, and who is involved directly in the care, development and education of infants, toddlers, or young children through age five. 

(B) NURSES.—An individual who is employed—

(i) as a nurse in a clinical setting; or 

(ii) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in 

section 801 of the Public Health Service Act (42 U.S.C. 

296)). 

(C) FOREIGN LANGUAGE SPECIALISTS.—An individual 

who has obtained a baccalaureate degree in a critical foreign language and is employed—

(i) in an elementary or secondary school as a teacher 

of a critical foreign language; or 

(ii) in an agency of the United States Government in 

a position that regularly requires the use of such critical foreign language. 

461 

(D) LIBRARIANS.—An individual who is employed fulltime as a libarian in— (i) a public library that serves a geographic area 

within which the public schools have a combined average of 30 percent or more of their total student enrollments composed of children counted under section 

1113(a)(5) of the Elementary and Secondary Education 

Act of 1965; or 

(ii) an elementary or secondary school which is in the 

school district of a local educational agency which is 

eligible in such year for assistance pursuant to title I 

of the Elementary and Secondary Education Act of 

1965, and which for the purpose of this paragraph and 

for that year has been determined by the Secretary 

(pursuant to regulations and after consultation with 

the State educational agency of the State in which the 

school is located) to be a school in which the enrollment of children counted under section 1113(a)(5) of 

the Elementary and Secondary Education Act of 1965 

exceeds 30 percent of the total enrollment of that 

school. 

(E) HIGHLY QUALIFIED TEACHERS: BILINGUAL EDUCATION

AND LOW-INCOME COMMUNITIES.—An individual who— (i) is highly qualified as such term is defined in section 9101 of the Elementary and Secondary Education 

Act of 1965; and 

(ii)(I) is employed as a full-time teacher of bilingual 

education; or 

(II) is employed as a teacher for service in a public 

or nonprofit private elementary or secondary school 

which is in the school district of a local educational 

agency which is eligible in such year for assistance 

pursuant to title I of the Elementary and Secondary 

Education Act of 1965, and which for the purpose of 

this paragraph and for that year has been determined 

by the Secretary (pursuant to regulations and after 

consultation with the State educational agency of the 

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

which the enrollment of children counted under section 

1113(a)(5) of the Elementary and Secondary Education 

Act of 1965 exceeds 40 percent of the total enrollment 

of that school. 

(F) FIRST RESPONDERS IN LOW-INCOME COMMUNITIES.—

An individual who—

(i) is employed as a firefighter, police officer, or emergency medical technician; and 

(ii) serves as such in a low-income community. 

(G) CHILD WELFARE WORKERS.—An individual who—

(i) has obtained a degree in social work or a related 

field with a focus on serving children and families; 

and 

(ii) is employed in public or private child welfare 

services. 

(H) SPEECH-LANGUAGE PATHOLOGISTS.—An individual 

who is a speech-language pathologist, who is employed in 

462 

an eligible preschool program or an elementary or secondary school, and who has, at a minimum, a graduate degree in speech-language pathology, or communication 

sciences and disorders. 

(I) ADDITIONAL AREAS OF NATIONAL NEED.—An individual who is employed in an area designated by the Secretary under paragraph (2) and has completed a baccalaureate or advanced degree related to such area. 

(2) DESIGNATION OF AREAS OF NATIONAL NEED.—After consultation with appropriate Federal, State, and communitybased agencies and organizations, the Secretary shall designate 

areas of national need. In making such designations, the Secretary shall take into account the extent to which— (A) the national interest in the area is compelling; 

(B) the area suffers from a critical lack of qualified personnel; and 

(C) other Federal programs support the area concerned. 

(d) QUALIFIED LOAN AMOUNT.—The Secretary shall repay not more than $5,000 in the aggregate of the loan obligation on a loan 

made under section 428 or 428H that is outstanding after the completion of the fifth consecutive school, academic, or calendar year, 

as appropriate, described in subsection (b)(1). 

(e) CONSTRUCTION.—Nothing in this section shall be construed to 

authorize the refunding of any repayment of a loan made under section 428 or 428H. 

(f) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS.—No 

student borrower may, for the same service, receive a benefit under 

both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.). 

(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may receive a reduction of loan obligations under both this section and section 428J or 460. 

(h) DEFINITIONS.—In this section 

(1) CHILD CARE FACILITY.—The term ‘‘child care facility’’

means a facility, including a home, that—

(A) provides for the education and care of children from 

birth through age 5; and 

(B) meets any applicable State or local government licensing, certification, approval, or registration requirements. 

(2) CRITICAL FOREIGN LANGUAGE.—The term ‘‘critical foreign 

language’’ includes the languages of Arabic, Korean, Japanese, 

Chinese, Pashto, Persian-Farsi, Serbian-Croatian, Russian, 

Portuguese, and any other language identified by the Secretary 

of Education, in consultation with the Defense Language Institute, the Foreign Service Institute, and the National Security 

Education Program, as a critical foreign language need. 

(3) EARLY CHILDHOOD EDUCATOR.—The term ‘‘early childhood 

educator’’ means an early childhood educator employed in an 

eligible preschool program who has completed a baccalaureate 

or advanced degree in early childhood development, early childhood education, or in a field related to early childhood education. 

(4) ELIGIBLE PRESCHOOL PROGRAM.—The term ‘‘eligible preschool program’’ means a program that provides for the care, 

463 

development, and education of infants, toddlers, or young children through age 5, meets any applicable State or local government licensing, certification, approval, and registration requirements, and is operated by—

(A) a public or private school that may be supported, 

sponsored, supervised, or administered by a local educational agency; 

(B) a Head Start agency serving as a grantee designated 

under the Head Start Act (42 U.S.C. 9831 et seq.); 

(C) a nonprofit or community based organization; or 

(D) a child care program, including a home. 

(5) LOW-INCOME COMMUNITY.—In this subsection, the term 

‘‘low-income community’’ means a community in which 70 percent of households earn less than 85 percent of the State median household income. 

(6) NURSE.—The term ‘‘nurse’’ means a nurse who meets all 

of the following: 

(A) The nurse graduated from—

(i) an accredited school of nursing (as those terms 

are defined in section 801 of the Public Health Service 

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

(ii) a nursing center; or 

(iii) an academic health center that provides nurse 

training. 

(B) The nurse holds a valid and unrestricted license to 

practice nursing in the State in which the nurse practices 

in a clinical setting. 

(C) The nurse holds one or more of the following: 

(i) A graduate degree in nursing, or an equivalent 

degree. 

(ii) A nursing degree from a collegiate school of nursing (as defined in section 801 of the Public Health 

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

(iii) A nursing degree from an associate degree school 

of nursing (as defined in section 801 of the Public 

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

(iv) A nursing degree from a diploma school of nursing (as defined in section 801 of the Public Health 

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

(7) SPEECH-LANGUAGE PATHOLOGIST.—The term ‘‘speech-language pathologist’’ means a speech-language pathologist who 

meets all of the following: 

(A) the speech-language pathologist has received, at a 

minimum, a graduate degree in speech-language pathology 

or communication sciences and disorders from an institution of higher education accredited by an agency or association recognized by the Secretary pursuant to section 496(a) 

of this Act; and 

(B) the speech-language pathologist meets or exceeds the 

qualifications as defined in section 1861(ll) of the Social 

Security Act (42 U.S.C. 1395x). 

(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section such sums as may be necVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00467 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
464 

essary for fiscal year 2006 and such sums as may be necessary for 

each of the 5 succeeding fiscal years. 

* * * * * * * 

SEC. 430A. REPORTS TO CREDIT BUREAUS AND INSTITUTIONS OF 

HIGHER EDUCATION. 

(a) AGREEMENTS TO EXCHANGE INFORMATION.—For the purpose 

of promoting responsible repayment of loans covered by Federal 

loan insurance pursuant to this part or covered by a guaranty 

agreement pursuant to section 428, the Secretary, each guaranty 

agency, eligible lender, and subsequent holder shall enter into 

øagreements with credit bureau organizations¿ an agreement with 

each national credit bureau organization (as described in section 

603(p) of the Fair Credit Reporting Act) to exchange information 

concerning student borrowers, in accordance with the requirements 

of this section. For the purpose of assisting such organizations in 

complying with the Fair Credit Reporting Act, such agreements 

may provide for timely response by the Secretary (concerning loans 

covered by Federal loan insurance), by a guaranty agency, eligible 

lender, or subsequent holder (concerning loans covered by a guaranty agreement), or to requests from such organizations for responses to objections raised by borrowers. Subject to the requirements of subsection (c), such agreements shall require the Secretary, the guaranty agency, eligible lender, or subsequent holder, 

as appropriate, to disclose to such organizations, with respect to 

any loan under this part that has not been repaid by the borrower—

(1) * * * 

* * * * * * * 

SEC. 432. LEGAL POWERS AND RESPONSIBILITIES. 

(a) * * * 

* * * * * * * 

(f) AUDIT OF FINANCIAL TRANSACTIONS.—

(1) COMPTROLLER GENERAL AND INSPECTOR GENERAL AUTHORITY.—The Comptroller General and the Inspector General 

of the Department of Education shall each have the authority 

to conduct an audit of the financial transactions of—

(A) * * * 

* * * * * * * 

(C) a representative sample of eligible lenders under this 

part, upon the request of the øCommittee on Education 

and the Workforce of the House of Representatives or the 

Committee on Labor and Human Resources of the Senate¿ 

either of the authorizing committees, with respect to the 

payment of the special allowance under section 438 in 

order to evaluate the program authorized by this part. 

* * * * * * * 

(k) PROGRAM OF ASSISTANCE FOR BORROWERS.—

(1) IN GENERAL.—The Secretary shall undertake a program 

to encourage corporations and other private and public employers, including the Federal Government, to assist borrowers in 

repaying loans received under this title, including providing 

employers with options for payroll deduction of loan payments 

465 

øand offering loan repayment matching provisions as part of 

employee benefit packages.¿, offering loan repayment matching 

provisions as part of employee benefit packages, and providing 

employees with financial and economic education and counseling. 

* * * * * * * 

(l) UNIFORM ADMINISTRATIVE AND CLAIMS PROCEDURES.— (1) IN GENERAL.—The Secretary shall, by regulation developed in consultation with guaranty agencies, lenders, institutions of higher education, secondary markets, students, third 

party servicers and other organizations involved in providing 

loans under this part, prescribe standardized forms and procedures regarding— (A) * * * 

* * * * * * * 

(H) borrower status change and anticipated graduation 

date; and 

* * * * * * * 

(m) COMMON FORMS AND FORMATS.— (1) COMMON GUARANTEED STUDENT LOAN APPLICATION FORM

AND PROMISSORY NOTE.— (A) * * * 

(B) REQUIREMENTS.—The forms prescribed by the Secretary shall— (i) use clear, concise, and simple language to facilitate understanding of loan terms and conditions by applicants; and 

(ii) be formatted to require the applicant to clearly 

indicate a choice of lenderø; and¿. 

* * * * * * * 

ø(n) DEFAULT REDUCTION MANAGEMENT.—

ø(1) AUTHORIZATION.—There are authorized to be appropriated $25,000,000 for fiscal year 1999 and each of the four 

succeeding fiscal years, for the Secretary to expend for default 

reduction management activities for the purposes of establishing a performance measure that will reduce defaults by 5 

percent relative to the prior fiscal year. Such funds shall be in 

addition to, and not in lieu of, other appropriations made for 

such purposes. 

ø(2) ALLOWABLE ACTIVITIES.—Allowable activities for which 

such funds shall be expended by the Secretary shall include 

the following: (A) program reviews; (B) audits; (C) debt management programs; (D) training activities; and (E) such other 

management improvement activities approved by the Secretary. 

ø(3) PLAN FOR USE REQUIRED.—The Secretary shall submit a 

plan, for inclusion in the materials accompanying the President’s budget each fiscal year, detailing the expenditure of 

funds authorized by this section to accomplish the 5 percent reduction in defaults. At the conclusion of the fiscal year, the 

Secretary shall report the Secretary’s findings and activities 

concerning the expenditure of funds and whether the performVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00469 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
466 

ance measure was met. If the performance measure was not 

met, the Secretary shall report the following: 

ø(A) why the goal was not met, including an indication 

of any managerial deficiencies or of any legal obstacles; 

ø(B) plans and a schedule for achieving the established 

performance goal; 

ø(C) recommended legislative or regulatory changes necessary to achieve the goal; and 

ø(D) if the performance standard or goal is impractical 

or infeasible, why that is the case and what action is recommended, including whether the goal should be changed 

or the program altered or eliminated. 

This report shall be submitted to the Appropriations Committees of the House of Representatives and the Senate and to 

the Committee on Education and the Workforce of the House 

of Representatives and the Committee on Labor and Human 

Resources of the Senate.¿ 

ø(o)¿ (n) CONSEQUENCES OF GUARANTY AGENCY INSOLVENCY.—In 

the event that the Secretary has determined that a guaranty agency is unable to meet its insurance obligations under this part, the 

holder of loans insured by the guaranty agency may submit insurance claims directly to the Secretary and the Secretary shall pay 

to the holder the full insurance obligation of the guaranty agency, 

in accordance with insurance requirements no more stringent than 

those of the guaranty agency. Such arrangements shall continue 

until the Secretary is satisfied that the insurance obligations have 

been transferred to another guarantor who can meet those obligations or a successor will assume the outstanding insurance obligations. 

ø(p)¿ (o) REPORTING REQUIREMENT.—All officers and directors, 

and those employees and paid consultants of eligible institutions, 

eligible lenders, guaranty agencies, loan servicing agencies, accrediting agencies or associations, State licensing agencies or boards, 

and entities acting as secondary markets (including the Student 

Loan Marketing Association), who are engaged in making decisions 

as to the administration of any program or funds under this title 

or as to the eligibility of any entity or individual to participate 

under this title, shall report to the Secretary, in such manner and 

at such time as the Secretary shall require, on any financial interest which such individual may hold in any other entity participating in any program assisted under this title. 

SEC. 433. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS. 

(a) * * * 

* * * * * * * 

(e) SPECIAL DISCLOSURE RULES ON øSLS LOANS AND¿ PLUS 

LOANS AND UNSUBSIDIZED LOANS.—Loans made under sections 

ø428A, 428B,¿ 428B and 428H shall not be subject to the disclosure 

of projected monthly payment amounts required under subsection 

(b)(8) if the lender, in lieu of such disclosure, provides the borrower 

with sample projections of monthly repayment amounts assuming 

different levels of borrowing and interest accruals resulting from 

capitalization of interest while the borrower is in school. Such sample projections shall disclose the cost to the student of capitalizing—

467 

(1) * * * 

* * * * * * * 

SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM. 

As used in this part: 

(a) ELIGIBLE INSTITUTION.—

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

term ‘‘eligible institution’’ means an institution of higher education, as defined in section ø102¿ 101, except that, for the 

purposes of sections 427(a)(2)(C)(i) and 428(b)(1)(M)(i), an eligible institution includes any institution that is within this definition without regard to whether such institution is participating in any program under this title and includes any institution ineligible for participation in any program under this 

part pursuant to paragraph (2) of this subsection. 

* * * * * * * 

(3) APPEALS BASED UPON ALLEGATIONS OF IMPROPER LOAN

SERVICING.—An institution that—

(A) is subject to loss of eligibility for the Federal Family 

Education Loan Program pursuant to paragraph (2)(A) of 

this subsection; or 

ø(B) is subject to loss of eligibility for the Federal Supplemental Loans for Students pursuant to section 

428A(a)(2); or¿ 

ø(C)¿ (B) is an institution whose cohort default rate 

equals or exceeds 20 percent for the most recent year for 

which data are available; 

may include in its appeal of such loss or rate a defense based 

on improper loan servicing (in addition to other defenses). In 

any such appeal, the Secretary shall take whatever steps are 

necessary to ensure that such institution has access for a reasonable period of time, not to exceed 30 days, to a representative sample (as determined by the Secretary) of the relevant 

loan servicing and collection records used by a guaranty agency 

in determining whether to pay a claim on a defaulted loan or 

by the Department in determining an institution’s default rate 

in the loan program under part D of this title. The Secretary 

shall reduce the institution’s cohort default rate to reflect the 

percentage of defaulted loans in the representative sample that 

are required to be excluded pursuant to subsection (m)(1)(B). 

* * * * * * * 

(d) ELIGIBLE LENDER.—

(1) IN GENERAL.—Except as provided in paragraphs (2) 

through (6), the term ‘‘eligible lender’’ means—

(A) * * * 

* * * * * * * 

(G) for purposes of making loans under sections 

ø428A(d), 428B(d), 428C,¿ 428B(d), 428C, 428H, and 

439(q), the Student Loan Marketing Association or the 

Holding Company of the Student Loan Marketing Association, including any subsidiary of the Holding Company, 

created pursuant to section 440; 

* * * * * * * 

468 

ø(2) ADDITIONAL REQUIREMENTS OF ELIGIBLE INSTITUTIONS.—

To be an eligible lender under this part, an eligible institution—

ø(A) shall employ at least one person whose full-time responsibilities are limited to the administration of programs 

of financial aid for students attending such institution; 

ø(B) shall not be a home study school; 

ø(C) shall make loans to not more than 50 percent of the 

undergraduate students at the institution; 

ø(D) shall not make a loan, other than a loan to a graduate or professional student, unless the borrower has previously received a loan from the school or has been denied 

a loan by an eligible lender; 

ø(E) shall not have a cohort default rate (as defined in 

section 435(m)) greater than 15 percent; and 

ø(F) shall use the proceeds from special allowance payments and interest payments from borrowers for needbased grant programs, except for reasonable reimbursement for direct administrative expenses; 

except that the requirements of subparagraphs (C) and (D) 

shall not apply with respect to loans made, and loan commitments made, after the date of enactment of the Higher Education Amendments of 1986 and prior to July 1, 1987.¿ 

(2) REQUIREMENTS FOR ELIGIBLE INSTITUTIONS.—

(A) IN GENERAL.—To be an eligible lender under this 

part, an eligible institution—

(i) shall employ at least one person whose full-time 

responsibilities are limited to the administration of 

programs of financial aid for students attending such 

institution; 

(ii) shall not be a home study school; 

(iii) shall not—

(I) make a loan to any undergraduate student; 

(II) make a loan other than a loan under section 

428 or 428H to a graduate or professional student; 

or 

(III) make a loan to a borrower who is not enrolled at that institution; 

(iv) shall award any contract for financing, servicing, or administration of loans under this title on a 

competitive basis; 

(v) shall offer loans which carry an origination fee or 

an interest rate, or both, that are less than such fee or 

rate authorized under the provisions of this title; 

(vi) shall not have a cohort default rate (as defined 

in section 435(m)) greater than 10 percent; 

(vii) shall, for any year for which the institution engages in activities as an eligible lender, provide for a 

compliance audit conducted in accordance with section 

428(b)(1)(U)(iii)(I), and the regulations thereunder, and 

submit the results of such audit to the Secretary; and 

(viii) shall use any proceeds from special allowance 

payments and interest payments from borrowers, interest subsidies received from the Department of EduVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00472 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
469 

cation, and any proceeds from the sale or other disposition of loans, for need-based grant programs. 

(B) ADMINISTRATIVE EXPENSES.—An eligible lender under 

subparagraph (A) shall be permitted to use a portion of the 

proceeds described in subparagraph (A)(viii) for reasonable 

and direct administrative expenses. 

(C) SUPPLEMENT, NOT SUPPLANT.—An eligible lender 

under subparagraph (A) shall ensure that the proceeds described in subparagraph (A)(viii) are used to supplement, 

and not to supplant, non-Federal funds that would otherwise be used for need-based grant programs. 

* * * * * * * 

(m) COHORT DEFAULT RATE.— (1) IN GENERAL.—(A) Except as provided in paragraph (2), 

the term ‘‘cohort default rate’’ means, for any fiscal year in 

which 30 or more current and former students at the institution enter repayment on loans under section 428ø, 428A,¿ or 

428H, received for attendance at the institution, the percentage of those current and former students who enter repayment 

on such loans (or on the portion of a loan made under section 

428C that is used to repay any such loans) received for attendance at that institution in that fiscal year who default before 

the end of the following fiscal year. The Secretary shall require 

that each guaranty agency that has insured loans for current 

or former students of the institution afford such institution a 

reasonable opportunity (as specified by the Secretary) to review 

and correct errors in the information required to be provided 

to the Secretary by the guaranty agency for the purposes of 

calculating a cohort default rate for such institution, prior to 

the calculation of such rate. 

(2) SPECIAL RULES.—(A) * * * 

* * * * * * * 

(D) For the purposes of this subsection, a loan made in accordance with section ø428A¿ 428H (or the portion of a loan 

made under section 428C that is used to repay a loan made 

under section ø428A¿ 428H) shall not be considered to enter 

repayment until after the borrower has ceased to be enrolled 

in a course of study leading to a degree or certificate at an eligible institution on at least a half-time basis (as determined by 

the institution) and ceased to be in a period of forbearance 

based on such enrollment. Each eligible lender of a loan made 

under section ø428A¿ 428H (or a loan made under section 

428C a portion of which is used to repay a loan made under 

section ø428A¿ 428H) shall provide the guaranty agency with 

the information necessary to determine when the loan entered 

repayment for purposes of this subsection, and the guaranty 

agency shall provide such information to the Secretary. 

* * * * * * * 

SEC. 437. REPAYMENT BY THE SECRETARY OF LOANS OF BANKRUPT, 

DECEASED, OR DISABLED BORROWERS; TREATMENT OF 

BORROWERS ATTENDING CLOSED SCHOOLS OR FALSELY 

CERTIFIED AS ELIGIBLE TO BORROW. 

(a) REPAYMENT IN FULL FOR DEATH AND DISABILITY.—If a student borrower who has received a loan described in subparagraph 

470 

(A) or (B) of section 428(a)(1) dies or becomes permanently and totally disabled (as determined in accordance with regulations of the 

Secretary), then the Secretary shall discharge the borrower’s liability on the loan by repaying the amount owed on the loan. In making such determination of permanent and total disability, the Secretary shall provide that a borrower who has been certified as permanently and totally disabled by the Department of Veterans Affairs or the Social Security Administration shall not be required to 

present further documentation for purposes of this title. 

* * * * * * * 

(c) DISCHARGE.— (1) IN GENERAL.—If a borrower who received, on or after January 1, 1986, a loan made, insured, or guaranteed under this 

part and the student borrower, or the student on whose behalf 

a parent borrowed, is unable to complete the program in which 

such student is enrolled due to the closure of the institution or 

if such student’s eligibility or parent’s eligibility to borrow 

under this part was falsely certified by the eligible institution, 

or if the institution failed to make a refund of loan proceeds 

which the institution owed to such student’s lender, then the 

Secretary shall discharge the borrower’s liability on the loan 

(including interest and collection fees) by repaying the amount 

owed on the loan and shall subsequently pursue any claim 

available to such borrower against the institution and its affiliates and principals or settle the loan obligation pursuant to the 

financial responsibility authority under subpart 3 of part H. In 

the case of a discharge based upon a failure to refund, the 

amount of the discharge shall not exceed that portion of the 

loan which should have been refunded. The Secretary shall report to the øCommittee on Education and the Workforce of the 

House of Representatives and the Committee on Labor and 

Human Resources of the Senate¿ authorizing committees annually as to the dollar amount of loan discharges attributable to 

failures to make refunds. 

* * * * * * * 

SEC. 438. SPECIAL ALLOWANCES. 

(a) * * * 

(b) COMPUTATION AND PAYMENT.—

(1) * * * 

(2) RATE OF SPECIAL ALLOWANCE.—(A) * * * 

(B)(i) * * * 

* * * * * * * 

(iv) Notwithstanding clauses (i) and (ii), the quarterly rate of 

the special allowance for holders of loans which are financed 

with funds obtained by the holder from the issuance of obligations originally issued on or after October 1, 1993, or refunded 

after September 30, 2004, øand before January 1, 2006,¿ the 

income from which is excluded from gross income under the Internal Revenue Code of 1986, shall be the quarterly rate of the 

special allowance established under subparagraph (A), (E), (F), 

(G), (H), or (I) as the case may be. Such rate shall also apply 

to holders of loans which were made or purchased with funds 

obtained by the holder from collections or default reimburseVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00474 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
471 

ments on, or interest or other income pertaining to, eligible 

loans made or purchased with funds described in the preceding 

sentence of this subparagraph or from income on the investment of such funds. 

(v) Notwithstanding clauses (i) and (ii), the quarterly rate of 

the special allowance shall be the rate determined under subparagraph (A), (E), (F), (G), (H), or (I) of this paragraph, or 

paragraph (4), as the case may be, for a holder of loans that—

(I) * * * 

(II) are—

(aa) financed by such an obligation that, after September 30, 2004, øand before January 1, 2006,¿ has 

matured or been retired or defeased; 

(bb) refinanced after September 30, 2004, øand before January 1, 2006,¿ with funds obtained from a 

source other than funds described in subclause (I) of 

this clause; or 

(cc) sold or transferred to any other holder after 

September 30, 2004ø, and before January 1, 2006¿. (vi) Notwithstanding clauses (i), (ii), and (v), the quarterly 

rate of the special allowance shall be the rate determined under 

subparagraph (A), (E), (F), (G), (H), or (I) of this paragraph, as 

the case may be, for a holder of loans— (I) that were made or purchased on or after October 1, 

2005; or 

(II) that were not earning a quarterly rate of special allowance determined under clauses (i) or (ii) of subparagraph (B) of this paragraph (20 U.S.C. 1087–1(b)(2)(b)) as 

of October 1, 2005. 

* * * * * * * 

(D)(i) * * * 

(ii) For the purpose of ødivision (i) of this subparagraph¿ 

clause (i) of this subparagraph, the term ‘‘qualified State obligation’’ means— (I) * * * 

* * * * * * * 

(I) LOANS DISBURSED ON OR AFTER JANUARY 1, 2000.—

(i) * * * 

ø(ii) IN SCHOOL AND GRACE PERIOD.—In the case of 

any loan—ø(I) for which the first disbursement is made on 

or after January 1, 2000, and before July 1, 2006, 

and for which the applicable rate of interest is described in section 427A(k)(2); or 

ø(II) for which the first disbursement is made 

on or after July 1, 2006, and for which the applicable rate of interest is described in section 

427A(l)(1), but only with respect to (aa) periods 

prior to the beginning of the repayment period of 

the loan; or (bb) during the periods in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 427(a)(2)(C) or 428(b)(1)(M); 

472 

clause (i)(III) of this subparagraph shall be applied by 

substituting ‘‘1.74 percent’’ for ‘‘2.34 percent’’.¿ 

(ii) IN SCHOOL AND GRACE PERIOD.—In the case of 

any loan for which the first disbursement is made on 

or after January 1, 2000, and for which the applicable 

interest rate is described in section 427A(k)(2), clause 

(i)(III) of this subparagraph shall be applied by substituting ‘‘1.74 percent’’ for ‘‘2.34 percent’’. 

(iii) PLUS LOANS.—In the case of any loan for which 

the first disbursement is made on or after January 1, 

2000, and for which the applicable rate of interest is 

described in section 427A(k)(3) øor (l)(2)¿, clause 

(i)(III) of this subparagraph shall be applied by substituting ‘‘2.64 percent’’ for ‘‘2.34 percent’’ø, subject to 

clause (v) of this subparagraph¿. 

(iv) CONSOLIDATION LOANS.—In the case of any consolidation loan for which the application is received by 

an eligible lender on or after January 1, 2000, and for 

which the applicable interest rate is determined under 

section 427A(k)(4) øor (l)(3)¿ or (k)(5), clause (i)(III) of 

this subparagraph shall be applied by substituting 

‘‘2.64 percent’’ for ‘‘2.34 percent’’ø, subject to clause (vi) 

of this subparagraph¿. 

ø(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS

LOANS BEFORE JULY 1, 2006.—In the case of PLUS 

loans made under section 428B and first disbursed on 

or after January 1, 2000, and before July 1, 2006, for 

which the interest rate is determined under section 

427A(k)(3), a special allowance shall not be paid for 

such loan during any 12-month period beginning on 

July 1 and ending on June 30 unless, on the June 1 

preceding such July 1—

ø(I) the bond equivalent rate of 91-day Treasury 

bills auctioned at the final auction held prior to 

such June 1 (as determined by the Secretary for 

purposes of such section); plus 

ø(II) 3.1 percent, 

exceeds 9.0 percent. 

ø(vi) LIMITATION ON SPECIAL ALLOWANCES FOR CONSOLIDATION LOANS.—In the case of consolidation loans 

made under section 428C and for which the application is received on or after January 1, 2000, for which 

the interest rate is determined under section 

427A(k)(4) or (l)(3), a special allowance shall not be 

paid for such loan during any 3-month period ending 

March 31, June 30, September 30, or December 31 unless—

ø(I) 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 

ø(II) 2.64 percent, 

473 

exceeds the rate determined under section 427A(k)(4) 

or (l)(3), whichever is applicable. 

ø(vii) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS

LOANS ON OR AFTER JULY 1, 2006.—In the case of PLUS 

loans made under section 428B and first disbursed on 

or after July 1, 2006, for which the interest rate is determined under section 427A(l)(2), a special allowance 

shall not be paid for such loan during any 12-month 

period beginning on July 1 and ending on June 30 unless— ø(I) the average of the bond equivalent rates of 

the quotes of the 3-month commercial paper (financial), as published by the Board of Governors 

of the Federal Reserve System in Publication H– 15 (or its successor), for the last calendar week 

ending on or before such July 1; plus 

ø(II) 2.64 percent, 

exceeds 9.0 percent.¿ 

(v) RECAPTURE OF EXCESS INTEREST.— (I) EXCESS CREDITED.—With respect to a loan on 

which the applicable interest rate is determined 

under section 427A(k) and for which the first disbursement of principal is made on or after July 1, 

2006, if the applicable interest rate for any 3- 

month period exceeds the special allowance support level applicable to such loan under this subparagraph for such period, then an adjustment 

shall be made by calculating the excess interest in 

the amount computed under subclause (II) of this 

clause, and by crediting the excess interest to the 

Government not less often than annually. 

(II) CALCULATION OF EXCESS.—The amount of 

any adjustment of interest on a loan to be made 

under this subsection for any quarter shall be 

equal to—

(aa) the applicable interest rate minus the 

special allowance support level determined 

under this subparagraph; multiplied by 

(bb) the average daily principal balance of 

the loan (not including unearned interest 

added to principal) during such calendar 

quarter; divided by 

(cc) four. 

(III) SPECIAL ALLOWANCE SUPPORT LEVEL.—For 

purposes of this clause, the term ‘‘special allowance 

support level’’ means, for any loan, a number expressed as a percentage equal to the sum of the 

rates determined under subclauses (I) and (III) of 

clause (i), and applying any substitution rules applicable to such loan under clauses (ii), (iii), and 

(iv) in determining such sum. 

* * * * * * * 

(4) PENALTY FOR LATE PAYMENT.—(A) * * * 

(B) Such daily interest øshall be computed at the daily 

equivalent rate of the sum of the special allowance rate comVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00477 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
474 

puted pursuant to paragraph (2) and the interest rate applicable to the loan¿ described in subparagraph (A) shall be computed using the interest rate described in section 3902(a) of title 

31, United States Code, and shall be paid for the later of (i) the 

31st day after the receipt of such request for payment from the 

holder, or (ii) the 31st day after the final day of the period or 

periods covered by such request, and shall be paid for each succeeding day until, and including, the date on which the Secretary authorizes payment. 

* * * * * * * 

(c) ORIGINATION FEES FROM STUDENTS.—

(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE SUBSIDIES.—(A) Notwithstanding subsection (b), the Secretary 

shall collect the amount the lender is authorized to charge as 

an origination fee in accordance with paragraph (2) of this subsection and the amount the lender is authorized to collect as a 

fixed rate offset charge in accordance with paragraph (9) of this 

subsection— (i) * * * 

* * * * * * * 

(B) If the Secretary collects the origination fee and the fixed 

rate offset charge under this subsection through the reduction 

of interest and special allowance, and the total amount of interest and special allowance payable under section 428(a)(3)(A) 

and subsection (b) of this section, respectively, is less than the 

amount the lender was authorized to charge borrowers for 

origination fees and fixed rate offset charges in that quarter, 

the Secretary shall deduct the excess amount from the subsequent quarters’ payments until the total amount has been deducted. 

ø(2) AMOUNT OF ORIGINATION FEES.—¿ 

(2) AMOUNT OF ORIGINATION FEES.—

(A) IN GENERAL.—Subject to paragraph (6) of this subsection, with respect to any loan (including loans made 

under section 428H, but excluding loans made under sections 428C and 439(o)) for which a completed note or other 

written evidence of the loan was sent or delivered to the 

borrower for signing on or after 10 days after the date of 

enactment of the Postsecondary Student Assistance 

Amendments of 1981, each eligible lender under this part 

is authorized to charge the borrower an origination fee in 

an amount not to exceed 3.0 percent of the principal 

amount of the loan, to be deducted proportionately from 

each installment payment of the proceeds of the loan prior 

to payment to the borrower. Except as provided in paragraph (8), a lender that charges an origination fee under 

this paragraph shall assess the same fee to all student borrowers. 

(B) SUBSEQUENT REDUCTIONS.—Subparagraph (A) shall 

be applied to loans made under this part (other than loans 

made under sections 428C and 439(o))— (i) by substituting ‘‘2.0 percent’’ for ‘‘3.0 percent’’ with 

respect to loans for which the first disbursement of 

475 

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

July 1, 2007; 

(ii) by substituting ‘‘1.5 percent’’ for ‘‘3.0 percent’’ with respect to loans for which the first disbursement 

of principal is made on or after July 1, 2007, and before July 1, 2008; 

(iii) by substituting ‘‘1.0 percent’’ for ‘‘3.0 percent’’ with respect to loans for which the first disbursement 

of principal is made on or after July 1, 2008, and before July 1, 2009; 

(iv) by substituting ‘‘0.5 percent’’ for ‘‘3.0 percent’’ with respect to loans for which the first disbursement 

of principal is made on or after July 1, 2009, and before July 1, 2010; and 

(v) by substituting ‘‘0.0 percent’’ for ‘‘3.0 percent’’ with respect to loans for which the first disbursement 

of principal is made on or after July 1, 2010. 

(3) RELATION TO APPLICABLE INTEREST.—Such origination fee 

and fixed rate offset charge shall not be taken into account for 

purposes of determining compliance with section 427A. 

(4) DISCLOSURE REQUIRED.—The lender shall disclose to the 

borrower the amount and method of calculating the origination 

fee and fixed rate offset charge. (5) PROHIBITION ON DEPARTMENT COMPELLING ORIGINATION

FEE COLLECTIONS BY LENDERS.—Nothing in this subsection 

shall be construed to permit the Secretary to require any lender that is making loans that are insured or guaranteed under 

this part, but for which no amount will be payable for interest 

under section 428(a)(3)(A) or for special allowances under subsection (b) of this section, to collect any origination fee or fixed 

rate offset charge or to submit the sums collected as origination 

fees or fixed rate offset charges to the United States. The Secretary shall, not later than January 1, 1987, return to any 

such lender any such sums collected before the enactment of 

this paragraph, together with interest thereon. 

(6) øSLS AND PLUS¿ PLUS LOANS.—With respect to any loans 

made under section ø428A or¿ 428B on or after October 1, 

1992, each eligible lender under this part shall charge the borrower an origination fee of 3.0 percent of the principal amount 

of the loan, to be deducted proportionately from each installment payment of the proceeds of the loan prior to payments to 

the borrower. 

(7) DISTRIBUTION OF ORIGINATION FEES.—All origination fees 

and fixed rate offset charges collected pursuant to this section 

on loans authorized under section ø428A or¿ 428B shall be 

paid to the Secretary by the lender and deposited in the fund 

authorized under section 431 of this part. 

* * * * * * * 

(9) FIXED RATE OFFSET CHARGES FOR CONSOLIDATION

LOANS.—For any loan under section 428C for which the borrower elects to take a fixed rate under section 427A(k)(5)(C), the 

lender is authorized to collect a fixed rate offset charge in an 

amount not to exceed 0.5 percent of the principal amount of the 

loan. Such amount may be added to the principal amount of 

the loan for repayment by the borrower. 

476 

SEC. 439. STUDENT LOAN MARKETING ASSOCIATION. 

(a) * * * 

* * * * * * * 

(d) AUTHORITY OF ASSOCIATION.— (1) IN GENERAL.—The Association is authorized, subject to 

the provisions of this section— (A) * * * 

* * * * * * * 

(E) to undertake any other activity which the Board of 

Directors of the Association determines to be in furtherance of the programs of insured student loans authorized 

under this part or will otherwise support the credit needs 

of students, except that— (i) * * * 

* * * * * * * 

(iii) not later than 30 days prior to the initial implementation of a program undertaken pursuant to this 

subparagraph (E), the Association shall advise the 

øChairman and the Ranking Member on the Committee on Labor and Human Resources of the Senate 

and the Chairman and the Ranking Member of the 

Committee on Education and Labor of the House of 

Representatives¿ chairpersons and ranking minority 

members of the authorizing committees in writing of its 

plans to offer such program and shall provide information relating to the general terms and conditions of 

such program. 

The Association is further authorized to undertake any activity 

with regard to student loans which are not insured or guaranteed as provided for in this subsection as it may undertake 

with regard to insured or guaranteed student loans. Any 

warehousing advance made on the security of such loans shall 

be subject to the provisions of paragraph (3) of this subsection 

to the same extent as a warehousing advance made on the security of insured loans. 

* * * * * * * 

ø(3) PERFECTION OF SECURITY INTERESTS IN STUDENT

LOANS.—Notwithstanding the provisions of any State law to 

the contrary, including the Uniform Commercial Code as in effect in any State, a security interest in insured student loans 

created on behalf of the Association or any eligible lender as 

defined in section 435(a) may be perfected either through the 

taking of possession of such loans or by the filing of notice of 

such security interest in such loans in the manner provided by 

such State law for perfection of security interests in accounts.¿ 

ø(4)¿ (3) FORM OF SECURITIES.—Securities issued pursuant to 

the offering of participations or pooled interests under paragraph (1) of this subsection may be in the form of debt obligations, or trust certificates of beneficial ownership, or both. Student loans set aside pursuant to the offering of participations 

or pooled interests shall at all times be adequate to ensure the 

timely principal and interest payments on such securities. 

477 

ø(5)¿ (4) RESTRICTIONS ON FACILITIES AND HOUSING ACTIVI- TIES.—Not less than 75 percent of the aggregate dollar amount 

of obligations bought, sold, held, insured, underwritten, and 

otherwise supported in accordance with the authority contained in paragraph (1)(C) shall be obligations which are listed 

by a nationally recognized statistical rating organization at a 

rating below the second highest rating of such organization. 

* * * * * * * 

(r) SAFETY AND SOUNDNESS OF ASSOCIATION.— (1) * * * 

* * * * * * * 

(3) MONITORING OF SAFETY AND SOUNDNESS.—The Secretary 

of the Treasury shall conduct such studies as may be necessary 

to monitor the financial safety and soundness of the Association. In the event that the Secretary of the Treasury determines that the financial safety and soundness of the Association is at risk, the Secretary of the Treasury shall inform the 

øChairman and ranking minority member of the Committee on 

Labor and Human Resources of the Senate, the Chairman and 

ranking minority member of the Committee on Education and 

Labor of the House of Representatives,¿ chairpersons and 

ranking minority members of the authorizing committees and 

the Secretary of Education of such determination and identify 

any corrective actions that should be taken to ensure the safety and soundness of the Association. 

* * * * * * * 

(5) CAPITAL RESTORATION PLAN.— (A) * * * 

(B) DISAPPROVAL.—If the Secretary of the Treasury does 

not approve a capital restoration plan as provided in subparagraph (A), then not later than the earlier of the date 

the Secretary of the Treasury disapproves of such plan by 

written notice to the Association or the expiration of the 

30-day consideration period referred to in subparagraph 

(A) (as such period may have been extended by mutual 

agreement), the Secretary of the Treasury shall submit the 

Association’s capital restoration plan, in the form most recently proposed to the Secretary of the Treasury by the Association, together with a report on the Secretary of the 

Treasury’s reasons for disapproval of such plan and an alternative capital restoration plan, to the øChairman and 

ranking minority member of the Senate Committee on 

Labor and Human Resources and to the Chairman and 

ranking minority member of the House Committee on Education and Labor¿ chairpersons and ranking minority 

members of the authorizing committees. A copy of such submission simultaneously shall be sent to the Association 

and the Secretary of Education by the Secretary of the 

Treasury. 

* * * * * * * 

(6) SUBSTANTIAL CAPITAL RATIO REDUCTION.—

(A) * * * 

478 

(B) DISAPPROVAL.—If the Secretary of the Treasury disapproves a capital restoration plan or modified plan submitted pursuant to subparagraph (A), then, not later than 

the earlier of the date the Secretary of the Treasury disapproves of such plan or modified plan (by written notice 

to the Association) or the expiration of the 30-day consideration period described in subparagraph (A) (as such period 

may have been extended by mutual agreement), the Secretary of the Treasury shall prepare and submit an alternative capital restoration plan, together with a report on 

his reasons for disapproval of the Association’s plan or 

modified plan, to the øChairman and ranking minority 

member of the Committee on Labor and Human Resources 

of the Senate and to the Chairman and ranking minority 

member of the Committee on Education and Labor of the 

House of Representatives¿ chairpersons and ranking minority members of the authorizing committees. A copy of 

such submission simultaneously shall be sent to the Association and the Secretary of Education by the Secretary of 

the Treasury. The Association, within 5 days after receipt 

from the Secretary of the Treasury of such submission, 

shall submit to the Chairmen and ranking minority members of such Committees, and the Secretary of the Treasury, a written response to such submission, setting out 

fully the nature and extent of the Association’s agreement 

or disagreement with the Secretary of the Treasury with 

respect to the disapproved plan and the alternative plan of 

the Secretary of the Treasury and any findings of the Secretary of the Treasury. 

* * * * * * * 

(8) CRITICAL CAPITAL STANDARD.—(A) * * * 

* * * * * * * 

(C) Immediately upon a determination under subparagraph 

(A) or (B) to implement a capital restoration plan, the Secretary of the Treasury shall submit the capital restoration plan 

to be implemented to the øChairman and ranking minority 

member of the Committee on Labor and Human Resources of 

the Senate, the Chairman and ranking minority member of the 

Committee on Education and Labor of the House of Representatives,¿ chairpersons and ranking minority members of the authorizing committees and the Secretary of Education. 

* * * * * * * 

(10) REVIEW BY SECRETARY OF EDUCATION.—The Secretary of 

Education shall review the Secretary of the Treasury’s submission required pursuant to paragraph (5)(B), (6)(B), or (8) and 

shall submit a report within 30 days to the øChairman and 

ranking minority member of the Senate Committee on Labor 

and Human Resources and to the Chairman and ranking minority member of the House Committee on Education and 

Labor¿ chairpersons and ranking minority members of the authorizing committees—

(A) * * * 

* * * * * * * 

479 

(s) CHARTER SUNSET.— (1) * * * 

(2) SUNSET PLAN.— (A) PLAN SUBMISSION BY THE ASSOCIATION.—Not later 

than July 1, 2007, the Association shall submit to the Secretary of the Treasury and to the øChairman and Ranking 

Member of the Committee on Labor and Human Resources 

of the Senate and the Chairman and Ranking Member of 

the Committee on Economic and Educational Opportunities of the House of Representatives¿ chairpersons and 

ranking minority members of the authorizing committees, a 

detailed plan for the orderly winding up, by July 1, 2013, 

of business activities conducted pursuant to the charter set 

forth in this section. Such plan shall— (i) * * * 

* * * * * * * 

(B) AMENDMENT OF THE PLAN BY THE ASSOCIATION.—The 

Association shall from time to time amend such plan to reflect changed circumstances, and submit such amendments 

to the Secretary of the Treasury and to the øChairman 

and Ranking Minority Member of the Committee on Labor 

and Human Resources of the Senate and Chairman and 

Ranking Minority Member of the Committee on Economic 

and Educational Opportunities of the House of Representatives¿ chairpersons and ranking minority members of the 

authorizing committees. In no case may any amendment 

extend the date for full implementation of the plan beyond 

the dissolution date provided in paragraph (3). 

* * * * * * * 

PART C—FEDERAL WORK-STUDY PROGRAMS

SEC. 441. PURPOSE; APPROPRIATIONS AUTHORIZED. 

(a) * * * 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this part, $1,000,000,000 for fiscal 

year ø1999¿ 2006 and such sums as may be necessary for each of 

the ø4¿ 5 succeeding fiscal years. 

(c) COMMUNITY SERVICES.—For purposes of this part, the term 

‘‘community services’’ means services which are identified by an institution of higher education, through formal or informal consultation with local nonprofit, governmental, and community-based organizations, as designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs, including—

(1) such fields as health care, child care (including child care 

services provided on campus øthat are open and accessible to 

the community¿), literacy training, education (including tutorial services), welfare, social services, transportation, housing 

and neighborhood improvement, public safety, crime prevention and control, recreation, rural development, and community 

improvement; 

* * * * * * * 

480 

SEC. 442. ALLOCATION OF FUNDS. 

ø(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—(1) From the 

amount appropriated pursuant to section 441(b) for each fiscal 

year, the Secretary shall first allocate to each eligible institution 

for each succeeding fiscal year, an amount equal to 100 percent of 

the amount such institution received under subsections (a) and (b) 

for fiscal year 1999 (as such subsections were in effect with respect 

to allocations for such fiscal year). 

ø(2)(A) From the amount so appropriated, the Secretary shall 

next allocate to each eligible institution that began participation in 

the program under this part after fiscal year 1999 but is not a first 

or second time participant, an amount equal to the greater of— ø(i) $5,000; or 

ø(ii) 90 percent of the amount received and used under this 

part for the first year it participated in the program. 

ø(B) From the amount so appropriated, the Secretary shall next 

allocate to each eligible institution that began participation in the 

program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of—

ø(i) $5,000; 

ø(ii) an amount equal to (I) 90 percent of the amount received and used under this part in the second preceding fiscal 

year by eligible institutions offering comparable programs of 

instruction, divided by (II) the number of students enrolled at 

such comparable institutions in such fiscal year, multiplied by 

(III) the number of students enrolled at the applicant institution in such fiscal year; or 

ø(iii) 90 percent of the institution’s allocation under this part 

for the preceding fiscal year. 

ø(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution 

which—

ø(i) was a first-time participant in the program in fiscal year 

2000 or any subsequent fiscal year, and 

ø(ii) received a larger amount under this subsection in the 

second year of participation, 

an amount equal to 90 percent of the amount it received under this 

subsection in its second year of participation. 

ø(3)(A) If the amount appropriated for any fiscal year is less than 

the amount required to be allocated to all institutions under paragraph (1) of this subsection, then the amount of the allocation to 

each such institution shall be ratably reduced. 

ø(B) If the amount appropriated for any fiscal year is more than 

the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all 

institutions under paragraph (2), then— ø(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and 

ø(ii) the amount of the allocation to each institution under 

paragraph (2) shall be ratably reduced. 

ø(C) If additional amounts are appropriated for any such fiscal 

year, such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under paragraphs (1) and (2) of 

this subsection). 

481 

ø(4)(A) Notwithstanding any other provision of this section, the 

Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal 

year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B). 

ø(B) In order to receive an allocation pursuant to subparagraph 

(A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate or transfer to a 4-year institution of higher education.¿ 

(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.— (1) BASE GUARANTEE.—From the amount appropriated pursuant to section 441(b) for each fiscal year after fiscal year 2007, 

the Secretary shall, subject to paragraph (2), first allocate to 

each eligible institution an amount equal to the following percentage of the amount such institution received under subsection (a) of this section for fiscal year 2007 (as such subsection was in effect with respect to allocations for such fiscal 

year): 

(A) 80 percent for fiscal years 2008 and 2009; 

(B) 60 percent for fiscal years 2010 and 2011; 

(C) 40 percent for fiscal years 2012 and 2013; 

(D) 20 percent for fiscal years 2014 and 2015; and 

(E) 0 percent for fiscal year 2016 and any succeeding fiscal year. 

(2) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIA- TIONS.—

(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each such institution shall be ratably reduced. 

(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are appropriated for any such fiscal year, 

such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under this subsection). 

(3) ADDITIONAL ALLOCATIONS FOR CERTAIN INSTITUTIONS.— (A) ALLOCATIONS PERMITTED.—Notwithstanding any 

other provision of this section, the Secretary may allocate 

an amount equal to not more than 10 percent of the 

amount by which the amount appropriated in any fiscal 

year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B). 

(B) ELIGIBLE INSTITUTIONS.—An otherwise eligible institution may receive a portion of the allocation described in 

subparagraph (A) if—

(i) not less than 10 percent of the students attending 

the institution receive Federal Pell Grants; and 

(ii)(I) in the case of an institution that offers programs of at least 4 years in duration, if its graduation 

rate for Federal Pell Grant recipients attending the institution and graduating within the period of time 

equal to normal duration of the longest undergraduate 

program offered by the institution, as measured from 

482 

the first day of their enrollment, exceeds the median 

rate for the class of institution (as defined in section 

131(f)(5)(C)); or 

(II) in the case of an institution that offers programs 

of at least 2, but less than 4, years in duration, if its 

rate for Federal Pell Grant recipients attending the institution and graduating or transferring to an institution that offers programs of at least 4 years in duration 

within the period of time equal to the normal duration 

of the program offered, as measured from the first day 

of their enrollment, exceeds the median rate for the 

class of institution (as defined in section 131(f)(5)(C)). 

* * * * * * * 

(c) DETERMINATION OF INSTITUTION’S NEED.—(1) * * * 

* * * * * * * 

(4)(A) * * * 

* * * * * * * 

(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to ø$450¿ $600. 

* * * * * * * 

SEC. 446. JOB LOCATION AND DEVELOPMENT PROGRAMS. 

(a) AGREEMENTS REQUIRED.—(1) The Secretary is authorized to 

enter into agreements with eligible institutions under which such 

institution may use not more than ø10 percent or $50,000¿ 15 percent or $75,000 of its allotment under section 442, whichever is 

less, to establish or expand a program under which such institution, separately or in combination with other eligible institutions, 

locates and develops jobs, including community service jobs, for 

currently enrolled students, except that not less than one-third of 

such amount shall be specifically allocated to locate and develop 

community service jobs. 

* * * * * * * 

SEC. 448. WORK COLLEGES. 

(a) PURPOSE.—The purpose of this section is to recognize, encourage, and promote the use of comprehensive øwork-learning¿ worklearning-service programs as a valuable educational approach when 

it is an integral part of the institution’s educational program and 

a part of a financial plan which decreases reliance on grants and 

loans. 

(b) SOURCE AND USE FUNDS.—

(1) SOURCE OF FUNDS.—In addition to the sums appropriated 

under subsection (f), funds allocated to the institution under 

part C and part E of this title may be transferred for use 

under this section to provide flexibility in strengthening the 

self-help-through-work element in financial aid packaging. 

(2) ACTIVITIES AUTHORIZED.—From the sums appropriated 

pursuant to subsection (f), and from the funds available under 

paragraph (1), eligible institutions may, following approval of 

an application under subsection (c) by the Secretary—

(A) support the educational costs of qualified students 

through self-help payments or credits provided under the 

483 

øwork-learning¿ work-learning-service program of the institution within the limits of part F of this title; 

(B) promote the work-learning-service experience as a 

tool of postsecondary education, financial self-help and 

community service-learning opportunities; 

(C) carry out activities described in section 443 or 446; 

(D) be used for the administration, development and assessment of comprehensive øwork-learning¿ work-learningservice programs, including— (i) community-based øwork-learning¿ work-learningservice alternatives that expand opportunities for community service and career-related work; and 

(ii) alternatives that develop sound citizenship, encourage student persistence, and make optimum use of 

assistance under this part in education and student 

development; 

(E) coordinate and carry out joint projects and activities 

to promote work service learning; and 

(F) carry out a comprehensive, longitudinal study of student academic progress and academic and career outcomes, relative to student self-sufficiency in financing their 

higher education, repayment of student loans, continued 

community service, kind and quality of service performed, 

and career choice and community service selected after 

graduation. 

(c) APPLICATION.—Each eligible institution may submit an application for funds authorized by subsection (f) to use funds under 

subsection (b)(1) at such time and in such manner as the Secretary, 

by regulation, may reasonably require. 

(d) MATCH REQUIRED.—Funds made available to work-colleges 

pursuant to this section shall be matched on a dollar-for-dollar 

basis from non-Federal sources. 

(e) DEFINITIONS.—For the purpose of this section— (1) the term ‘‘work-college’’ means an eligible institution 

that—(A) has been a public or private nonprofit institution 

with a commitment to community service; 

(B) has operated a comprehensive øwork-learning¿ worklearning-service program for at least 2 years; 

ø(C) requires all resident students who reside on campus 

to participate in a comprehensive work-learning program 

and the provision of services as an integral part of the institution’s educational program and as part of the institution’s educational philosophy; and¿ 

(C) requires all resident students, including at least onehalf of all students who are enrolled on a full-time basis, 

to participate in a comprehensive work-learning-service program for at least 5 hours each week, or at least 80 hours 

during each period of enrollment, unless the student is engaged in an institutionally organized or approved study 

abroad or externship program; and 

(D) provides students participating in the comprehensive 

øwork-learning¿ work-learning-service program with the 

opportunity to contribute to their education and to the welfare of the community as a whole; and 

484 

ø(2) the term ‘‘comprehensive student work-learning program’’ means a student work/service program that is an integral and stated part of the institution’s educational philosophy 

and program; requires participation of all resident students for 

enrollment, participation, and graduation; includes learning 

objectives, evaluation and a record of work performance as part 

of the student’s college record; provides programmatic leadership by college personnel at levels comparable to traditional 

academic programs; recognizes the educational role of worklearning supervisors; and includes consequences for nonperformance or failure in the work-learning program similar to 

the consequences for failure in the regular academic program.¿ 

(2) the term ‘‘comprehensive student work-learning-service 

program’’—

(A) means a student work-learning-service program that 

is an integral and stated part of the institution’s educational philosophy and program; 

(B) requires participation of all resident students for enrollment and graduation; 

(C) includes learning objectives, evaluation, and a record 

of work performance as part of the student’s college record; 

(D) provides programmatic leadership by college personnel at levels comparable to traditional academic programs; 

(E) recognizes the educational role of work-learning-service supervisors; and 

(F) includes consequences for nonperformance or failure 

in the work-learning-service program similar to the consequences for failure in the regular academic program. 

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section $5,000,000 for fiscal year 

ø1999 and such sums as may be necessary for each of the 4 succeeding fiscal years¿ 2006 and such sums as may be necessary for 

the 5 succeeding fiscal years. 

PART D—WILLIAM D. FORD FEDERAL DIRECT 

LOAN PROGRAM 

* * * * * * * 

SEC. 455. TERMS AND CONDITIONS OF LOANS. 

(a) IN GENERAL.—

(1) PARALLEL TERMS, CONDITIONS, BENEFITS, AND AMOUNTS.—

Unless otherwise specified in this part, loans made to borrowers under this part shall have the same terms, conditions, 

and benefits, and be available in the same amounts, as loans 

made to borrowers under sections 428, 428B, 428C, and 428H 

of this title. 

(2) DESIGNATION OF LOANS.—Loans made to borrowers under 

this part that, except as otherwise specified in this part, have 

the same terms, conditions, and benefits as loans made to borrowers under—

(A) section 428 shall be known as ‘‘Federal Direct Stafford Loans’’; 

485 

(B) section 428B shall be known as ‘‘Federal Direct 

PLUS Loans’’; øand¿ 

(C) section 428C shall be known as ‘‘Federal Direct Consolidation Loans’’; and 

ø(C)¿ (D) section 428H shall be known as ‘‘Federal Direct Unsubsidized Stafford Loans’’. (b) INTEREST RATE.— (1) * * * 

* * * * * * * 

(6) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER

OCTOBER 1, 1998ø, AND BEFORE JULY 1, 2006¿.— (A) RATES FOR FDSL AND FDUSL.—Notwithstanding the 

preceding paragraphs of this subsection, for Federal Direct 

Stafford Loans and Federal Direct Unsubsidized Stafford 

Loans for which the first disbursement is made on or after 

October 1, 1998ø, and before July 1, 2006,¿ the applicable 

rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on 

the preceding June 1 and be equal to— (i) the bond equivalent rate of 91-day Treasury bills 

auctioned at the final auction held prior to such June 

1; plus 

(ii) 2.3 percent, 

except that such rate shall not exceed 8.25 percent. 

(B) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding the preceding paragraphs of this subsection, with 

respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after October 1, 1998ø, and before July 1, 2006,¿ the applicable rate of interest for interest which accrues— (i) prior to the beginning of the repayment period of 

the loan; or 

(ii) during the period in which principal need not be 

paid (whether or not such principal is in fact paid) by 

reason of a provision described in section 428(b)(1)(M) 

or 427(a)(2)(C), 

shall be determined under subparagraph (A) by substituting ‘‘1.7 percent’’ for ‘‘2.3 percent’’. (C) PLUS LOANS.—Notwithstanding the preceding paragraphs of this subsection, with respect to Federal Direct 

PLUS Loan for which the first disbursement is made on or 

after October 1, 1998ø, and before July 1, 2006,¿ the applicable rate of interest shall be determined under subparagraph (A)— (i) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’; 

and 

(ii) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’. (D) CONSOLIDATION LOANS BEFORE JULY 1, 2006.—Notwithstanding the preceding paragraphs of this subsection, 

any Federal Direct Consolidation loan for which the application is received on or after February 1, 1999, and before 

July 1, 2006, shall bear interest at an annual rate on the 

unpaid principal balance of the loan that is equal to the 

lesser of—

486 

(i) * * * 

* * * * * * * 

(E) CONSOLIDATION LOANS ON OR AFTER JULY 1, 2006.—

(i) BORROWER ELECTION.—Notwithstanding the preceding paragraphs of this subsection, with respect to 

any Federal Direct Consolidation Loan for which the 

application is received by an eligible lender on or after 

July 1, 2006, the applicable rate of interest shall, at 

the election of the borrower at the time of application 

for the loan, be either at the rate determined under 

clause (ii) or the rate determined under clause (iii). 

(ii) VARIABLE RATE.—Except as provided in clause 

(iv), the rate determined under this clause shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 

1 and, for such 12-month period, be equal to—

(I) the bond equivalent rate of 91-day Treasury 

bills auctioned at the final auction held prior to 

such June 1; plus 

(II) 2.3 percent, 

except that such rate shall not exceed 8.25 percent. 

(iii) FIXED RATE.—Except as provided in clause (iv), 

the rate determined under this clause shall be determined for the duration of the term of the loan on the 

July 1 that is or precedes the date on which the application is received by an eligible lender, and shall be, 

for such duration, equal to— (I) the bond equivalent rate of 91-day Treasury 

bills auctioned at the final auction held prior to 

the June 1 immediately preceding such July 1; 

plus 

(II) 3.3 percent, 

except that such rate shall not exceed 8.25 percent. 

(iv) CONSOLIDATION OF PLUS LOANS.—In the case of 

any such Federal Direct Consolidation Loan that is 

used to repay loans each of which was made under section 428B or was a Federal Direct PLUS Loan (or 

both), the rates determined under clauses (ii) and (iii) 

shall be determined—

(I) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’; 

(II) by substituting ‘‘4.1 percent’’ for ‘‘3.3 percent’’; and 

(III) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’. 

ø(E)¿ (F) TEMPORARY RULES FOR CONSOLIDATION

LOANS.—Notwithstanding the preceding paragraphs of this 

subsection, any Federal Direct Consolidation loan for 

which the application is received on or after October 1, 

1998, and before February 1, 1999, shall bear interest at 

an annual rate on the unpaid principal balance of the loan 

that is equal to— (i) * * * 

* * * * * * * 

487 

ø(7) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER

JULY 1, 2006.— ø(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the 

preceding paragraphs of this subsection, for Federal Direct 

Stafford Loans and Federal Direct Unsubsidized Stafford 

Loans for which the first disbursement is made on or after 

July 1, 2006, the applicable rate of interest shall be 6.8 

percent on the unpaid principal balance of the loan. 

ø(B) PLUS LOANS.—Notwithstanding the preceding 

paragraphs of this subsection, with respect to any Federal 

Direct PLUS loan for which the first disbursement is made 

on or after July 1, 2006, the applicable rate of interest 

shall be 7.9 percent on the unpaid principal balance of the 

loan. 

ø(C) CONSOLIDATION LOANS.—Notwithstanding the preceding paragraphs of this subsection, any Federal Direct 

Consolidation loan for which the application is received on 

or after July 1, 2006, shall bear interest at an annual rate 

on the unpaid principal balance of the loan that is equal 

to the lesser of—

ø(i) the weighted average of the interest rates on the 

loans consolidated, rounded to the nearest higher oneeighth of one percent; or 

ø(ii) 8.25 percent.¿ 

ø(8)¿ (7) REPAYMENT INCENTIVES.— (A) * * * 

(B) ACCOUNTABILITY.—Prior to publishing regulations 

proposing repayment incentives, the Secretary shall ensure 

the cost neutrality of such reductions. The Secretary shall 

not prescribe such regulations in final form unless an official report from the Director of the Office of Management 

and Budget to the Secretary and a comparable report from 

the Director of the Congressional Budget Office to the Congress each certify that any such reductions will be completely cost neutral. Such reports shall be transmitted to 

the øCommittee on Labor and Human Resources of the 

Senate and the Committee on Education and the Workforce of the House of Representatives¿ authorizing committees not less than 60 days prior to the publication of regulations proposing such reductions. 

ø(9)¿ (8) PUBLICATION.—The Secretary shall determine the 

applicable rates of interest under this subsection after consultation with the Secretary of the Treasury and shall publish 

such rate in the Federal Register as soon as practicable after 

the date of determination. 

ø(c) LOAN FEE.—The Secretary shall charge the borrower of a 

loan made under this part an origination fee of 4.0 percent of the 

principal amount of loan.¿ 

(c) LOAN FEE.— (1) IN GENERAL.—The Secretary shall charge the borrower of 

a loan made under this part an origination fee of 4.0 percent 

of the principal amount of loan. 

(2) SUBSEQUENT REDUCTION.—Paragraph (1) shall be applied 

to loans made under this part, other than consolidation loans 

and PLUS loans—

488 

(A) by substituting ‘‘not more or less than 3.0 percent’’ for ‘‘4.0 percent’’ with respect to loans for which the first disbursement of principal is made on or after July 1, 2006, 

and before July 1, 2007; 

(B) by substituting ‘‘not more or less than 2.5 percent’’ for ‘‘4.0 percent’’ with respect to loans for which the first disbursement of principal is made on or after July 1, 2007, 

and before July 1, 2008; 

(C) by substituting ‘‘not more or less than 2.0 percent’’ for ‘‘4.0 percent’’ with respect to loans for which the first disbursement of principal is made on or after July 1, 2008, 

and before July 1, 2009; 

(D) by substituting ‘‘not more or less than 1.5 percent’’ for ‘‘4.0 percent’’ with respect to loans for which the first disbursement of principal is made on or after July 1, 2009, 

and before July 1, 2010; and 

(E) by substituting ‘‘not more or less than 1.0 percent’’ for ‘‘4.0 percent’’ with respect to loans for which the first disbursement of principal is made on or after July 1, 2010. 

(3) WAIVERS AND REPAYMENT INCENTIVES PROHIBITED.—Beginning with loans made on or after July 1, 2006, the Secretary 

is prohibited—

(A) from waiving any amount of the loan fee prescribed 

under this section as part of a repayment incentive in section 455(b)(7); and 

(B) from providing any repayment incentive before the 

borrower enters repayment. 

(4) FIXED RATE OFFSET CHARGES FOR CONSOLIDATION

LOANS.—For any Federal Direct Consolidation Loan for which 

the borrower elects to take a fixed rate under section 

455(b)(6)(E)(iii), the Secretary shall collect a fixed rate offset 

charge in an amount not to exceed 0.5 percent of the principal 

amount of the loan. Such amount may be added to the principal amount of the loan for repayment by the borrower. Such 

amount is not subject to the requirements of paragraph (3) of 

this subsection. 

(d) REPAYMENT PLANS.— (1) DESIGN AND SELECTION.—Consistent with criteria established by the Secretary, the Secretary shall offer a borrower of 

a loan made under this part a variety of plans for repayment 

of such loan, including principal and interest on the loan. The 

borrower shall be entitled to accelerate, without penalty, repayment on the borrower’s loans under this part. The borrower 

may choose— ø(A) a standard repayment plan, with a fixed annual repayment amount paid over a fixed period of time, consistent with subsection (a)(1) of this section; 

ø(B) an extended repayment plan, with a fixed annual 

repayment amount paid over an extended period of time, 

except that the borrower shall annually repay a minimum 

amount determined by the Secretary in accordance with 

section 428(b)(1)(L); 

ø(C) a graduated repayment plan, with annual repayment amounts established at 2 or more graduated levels 

and paid over a fixed or extended period of time, except 

489 

that the borrower’s scheduled payments shall not be less 

than 50 percent, nor more than 150 percent, of what the 

amortized payment on the amount owed would be if the 

loan were repaid under the standard repayment plan; 

and¿ 

(A) a standard repayment plan, consistent with subsection (a)(1) of this section and with section 428(b)(9)(A)(i); 

(B) a graduated repayment plan, consistent with section 

428(b)(9)(A)(ii); 

(C) an extended repayment plan, consistent with section 

428(b)(9)(A)(v), except that the borrower shall annually 

repay a minimum amount determined by the Secretary in 

accordance with section 428(b)(1)(L); 

(D) a delayed repayment plan under which the borrower 

makes scheduled payments for not more than 2 years that 

are annually not less than the amount of interest due or 

$600, whichever is greater, and then makes payments in accordance with subparagraph (A), (B), or (C); and 

ø(D)¿ (E) an income contingent repayment plan, with 

varying annual repayment amounts based on the income 

of the borrower, paid over an extended period of time prescribed by the Secretary, not to exceed 25 years, except 

that the plan described in this subparagraph shall not be 

available to the borrower of a Federal Direct PLUS loan. 

* * * * * * * 

(e) INCOME CONTINGENT REPAYMENT.—

(1) * * * 

(2) REPAYMENT BASED ON ADJUSTED GROSS INCOME.—A repayment schedule for a loan made under this part and repaid 

pursuant to income contingent repayment shall be based on 

the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the borrower or, if the borrower 

is married øand files a Federal income tax return jointly with 

the borrower’s spouse¿, on the adjusted gross income of the 

borrower and the borrower’s spouse. 

* * * * * * * 

(f) DEFERMENT.—

(1) * * * 

(2) ELIGIBILITY.—A borrower of a loan made under this part 

shall be eligible for a deferment during any period—

(A) * * * 

* * * * * * * 

(C) not in excess of 3 years during which the borrower—

(i) is serving on active duty during a war or other 

military operation or national emergency; or 

(ii) is performing qualifying National Guard duty 

during a war or other military operation or national 

emergency; or 

ø(C)¿ (D) not in excess of 3 years during which the Secretary determines, in accordance with regulations prescribed under section 435(o), that the borrower has experienced or will experience an economic hardship. 

* * * * * * * 

490 

(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A borrower of a 

loan made under this part may consolidate such loan with the 

loans described in section 428C(a)(4). øLoans made under this subsection shall be known as ‘‘Federal Direct Consolidation Loans’’.¿ 

To be eligible for a consolidation loan under this part, a borrower 

must meet the eligibility criteria set forth in section 428C(a)(3). The 

Secretary, upon application for such a loan, shall comply with the 

requirements applicable to a lender under section 428C(b)(1)(F). 

* * * * * * * 

SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES. 

(a) ADMINISTRATIVE EXPENSES.—

(1) IN GENERAL.—Each fiscal year there shall be available to 

the Secretary, from funds not otherwise appropriated, funds to 

be obligated for—

(A) * * * 

* * * * * * * 

not to exceed (from such funds not otherwise appropriated) 

ø$617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 

2000, $770,000,000 in fiscal year 2001, $780,000,000 in fiscal 

year 2002, and $795,000,000 in fiscal year 2003¿ $820,000,000 

in fiscal year 2006, $833,000,000 in fiscal year 2007, 

$847,000,000 in fiscal year 2008, $862,000,000 in fiscal year 

2009, and $878,000,000 in fiscal year 2010, and $894,000,000 

in fiscal year 2011. 

* * * * * * * 

(b) CALCULATION BASIS.—Except as provided in subsection (c), account maintenance fees payable to guaranty agencies under paragraph (1)(B) øshall be calculated— ø(1) for fiscal years 1999 and 2000, on the basis of 0.12 percent of the original principal amount of outstanding loans on 

which insurance was issued under part B; and 

ø(2) for fiscal years 2001, 2002, and 2003, on the basis of 

0.10 percent of the original principal amount of outstanding 

loans on which insurance was issued under part B.¿ shall be 

calculated on the basis of 0.10 percent of the original principal 

amount of outstanding loans on which insurance was issued 

under part B. 

(c) SPECIAL RULES.—

(1) FEE CAP.—The total amount of account maintenance fees 

payable under this section—

ø(A) for fiscal year 1999, shall not exceed $177,000,000; 

ø(B) for fiscal year 2000, shall not exceed $180,000,000; 

ø(C) for fiscal year 2001, shall not exceed $170,000,000; 

ø(D) for fiscal year 2002, shall not exceed $180,000,000; 

and 

ø(E) for fiscal year 2003, shall not exceed $195,000,000.¿ 

(A) for fiscal year 2006, shall not exceed $220,000,000; 

(B) for fiscal year 2007, shall not exceed $233,000,000; 

(C) for fiscal year 2008, shall not exceed $247,000,000; 

(D) for fiscal year 2009, shall not exceed $262,000,000; 

(E) for fiscal year 2010, shall not exceed $278,000,000; 

and 

491 

(F) for fiscal year 2011, shall not exceed $294,000,000. 

* * * * * * * 

SEC. 460. LOAN CANCELLATION FOR TEACHERS. 

(a) * * * 

(b) PROGRAM AUTHORIZED.— (1) IN GENERAL.—The Secretary shall carry out a program of 

canceling the obligation to repay a qualified loan amount in accordance with subsection (c) for Federal Direct Stafford Loans 

and Federal Direct Unsubsidized Stafford Loans made under 

this part for any new borrower on or after October 1, 1998, 

who—(A) has been employed as a full-time teacher for 5 consecutive complete school years— (i) * * * 

(ii) if employed as an elementary school or secondary 

school teacher, is highly qualified as defined in section 

9101 of the Elementary and Secondary Education Act 

of 1965, or meets the requirements of subsection (g)(3); 

and 

* * * * * * * 

(c) QUALIFIED LOAN AMOUNTS.— (1) * * * 

* * * * * * * 

(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS, SCIENCE, OR SPECIAL EDUCATION.—Notwithstanding the 

amount specified in paragraph (1), the aggregate amount that 

the Secretary shall cancel under this section shall be not more 

than $17,500 in the case of— (A) a secondary school teacher— (i) * * * 

(ii) whose qualifying employment for purposes of 

such subsection is teaching mathematics or science on 

a full-time basis; øand¿ 

(B) an elementary school or secondary school teacher— (i) * * * 

* * * * * * * 

(iii) who, as certified by the chief administrative officer of the public or non-profit private elementary 

school or secondary school in which the borrower is 

employed, is teaching children with disabilities that 

correspond with the borrower’s special education training and has demonstrated knowledge and teaching 

skills in the content areas of the elementary school or 

secondary school curriculum that the borrower is 

teachingø.¿; and 

(C) an elementary or secondary school teacher who primarily teaches reading— (i) who meets the requirements of subsection (b); 

(ii) who has obtained a separate reading instruction 

credential from the State in which the teacher is employed; and 

(iii) who is certified by the chief administrative officer of the public or nonprofit private elementary or secVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00495 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
492 

ondary school in which the borrower is employed to 

teach reading— (I) as being proficient in teaching the essential 

components of reading instruction as defined in 

section 1208 of the Elementary and Secondary 

Education Act of 1965; and 

(II) as having such credential. 

* * * * * * * 

(g) ADDITIONAL ELIGIBILITY PROVISIONS.— (1) * * * 

(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher in a private school and is exempt from State 

certification requirements (unless otherwise applicable under 

State law), may, in lieu of the requirement of subsection 

(a)(1)(A)(ii), have such employment treated as qualifying employment under this section if such individual is permitted to 

and does satisfy rigorous subject knowledge and skills tests by 

taking competency tests in the applicable grade levels and subject areas. For such purposes, the competency tests taken by 

such a private school teacher must be recognized by 5 or more 

States for the purpose of fulfilling the highly qualified teacher 

requirements under section 9101 of the Elementary and Secondary Education Act of 1965, and the score achieved by such 

teacher on each test must equal or exceed the average passing 

score of those 5 States. 

* * * * * * * 

PART E—FEDERAL PERKINS LOANS

SEC. 461. APPROPRIATIONS AUTHORIZED. 

(a) * * * 

(b) AUTHORIZATION OF APPROPRIATIONS.—(1) For the purpose of 

enabling the Secretary to make contributions to student loan funds 

established under this part, there are authorized to be appropriated $250,000,000 for fiscal year ø1999¿ 2006 and such sums as 

may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

(2) In addition to the funds authorized under paragraph (1), 

there are hereby authorized to be appropriated such sums for fiscal 

year ø2003¿ 2012 and each of the 5 succeeding fiscal years as may 

be necessary to enable students who have received loans for academic years ending prior to October 1, ø2003¿ 2012, to continue or 

complete courses of study. 

* * * * * * * 

SEC. 462. ALLOCATION OF FUNDS. 

ø(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—(1) From the 

amount appropriated pursuant to section 461(b) for each fiscal 

year, the Secretary shall first allocate to each eligible institution an 

amount equal to— ø(A) 100 percent of the amount received under subsections 

(a) and (b) of this section for fiscal year 1999 (as such subsections were in effect with respect to allocations for such fiscal 

year), multiplied by 

ø(B) the institution’s default penalty, as determined under 

subsection (e), 

493 

except that if the institution has a cohort default rate in excess of 

the applicable maximum cohort default rate under subsection (f), 

the institution may not receive an allocation under this paragraph. 

ø(2)(A) From the amount so appropriated, the Secretary shall 

next allocate to each eligible institution that began participation in 

the program under this part after fiscal year 1999 but is not a first 

or second time participant, an amount equal to the greater of—

ø(i) $5,000; or 

ø(ii) 100 percent of the amount received and expended under 

this part for the first year it participated in the program. 

ø(B) From the amount so appropriated, the Secretary shall next 

allocate to each eligible institution that began participation in the 

program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of—

ø(i) $5,000; 

ø(ii) an amount equal to (I) 90 percent of the amount received and used under this part in the second preceding fiscal 

year by eligible institutions offering comparable programs of 

instruction, divided by (II) the number of students enrolled at 

such comparable institutions in such fiscal year, multiplied by 

(III) the number of students enrolled at the applicant institution in such fiscal year; or 

ø(iii) 90 percent of the institution’s allocation under this part 

for the preceding fiscal year. 

ø(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution 

which—

ø(i) was a first-time participant in the program in fiscal year 

2000 or any subsequent fiscal year, and 

ø(ii) received a larger amount under this subsection in the 

second year of participation, 

an amount equal to 90 percent of the amount it received under this 

subsection in its second year of participation. 

ø(D) For any fiscal year after a fiscal year in which an institution 

receives an allocation under subparagraph (A), (B), or (C), the Secretary shall allocate to such institution an amount equal to the 

product of—

ø(i) the amount determined under subparagraph (A), (B), or 

(C), multiplied by 

ø(ii) the institution’s default penalty, as determined under 

subsection (e), 

except that if the institution has a cohort default rate in excess of 

the applicable maximum cohort default rate under subsection (f), 

the institution may not receive an allocation under this paragraph. 

ø(3)(A) If the amount appropriated for any fiscal year is less than 

the amount required to be allocated to all institutions under paragraph (1) of this subsection, then the amount of the allocation to 

each such institution shall be ratably reduced. 

ø(B) If the amount appropriated for any fiscal year is more than 

the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all 

institutions under paragraph (2), then—

ø(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and 

494 

ø(ii) the amount of the allocation to each institution under 

paragraph (2) shall be ratably reduced. 

ø(C) If additional amounts are appropriated for any such fiscal 

year, such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under paragraphs (1) and (2) of 

this subsection).¿ 

(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.— (1) BASE GUARANTEE.—From the amount appropriated pursuant to section 461(b) for each fiscal year after fiscal year 2007, 

the Secretary shall, subject to paragraphs (2) and (3), first allocate to each eligible institution an amount equal to— (A) 100 percent of the amount such institution received 

under subsection (a) of this section for fiscal year 2007 (as 

such subsection was in effect with respect to allocations for 

such fiscal year), multiplied by 

(B) the institution’s default penalty, as determined under 

subsection (e), except that if the institution has a cohort default rate in excess of the applicable maximum cohort default rate under subsection (f), the institution may not receive an allocation under this paragraph. 

(2) PHASE OUT.—For each of the fiscal years after fiscal year 

2007, paragraph (1) shall be applied by substituting for ‘‘100 

percent’’: 

(A) ‘‘80 percent’’ for fiscal years 2008 and 2009; 

(B) ‘‘60 percent’’ for fiscal years 2010 and 2011; 

(C) ‘‘40 percent’’ for fiscal years 2012 and 2013; 

(D) ‘‘20 percent’’ for fiscal years 2014 and 2015; and 

(E) ‘‘0 percent’’ for fiscal year 2016 and any succeeding 

fiscal year. 

(3) RATABLE REDUCTIONS FOR INSUFFICIENT APPROPRIATIONS.—

(A) REDUCTION OF BASE GUARANTEE.—If the amount appropriated for any fiscal year is less than the amount required to be allocated to all institutions under this subsection, then the amount of the allocation to each such institution shall be ratably reduced. 

(B) ADDITIONAL APPROPRIATIONS ALLOCATION.—If additional amounts are appropriated for any such fiscal year, 

such reduced amounts shall be increased on the same basis 

as they were reduced (until the amount allocated equals the 

amount required to be allocated under this subsection). 

* * * * * * * 

(c) DETERMINATION OF INSTITUTION’S SELF-HELP NEED.—

(1) * * * 

* * * * * * * 

(4)(A) * * * 

* * * * * * * 

(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to ø$450¿ $600. 

* * * * * * * 

(g) DEFINITION OF COHORT DEFAULT RATE.—

495 

(1)(A) * * * 

* * * * * * * 

(E) In determining the number of students who default before the end of such award year, the institution, in calculating 

the cohort default rate, shall exclude—

(i) any loan on which the borrower has, after the time 

periods specified in paragraph (2)—

(I) voluntarily made 6 consecutive monthly payments; 

* * * * * * * 

SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION. 

(a) CONTENTS OF AGREEMENTS.—An agreement with any institution of higher education for the payment of Federal capital contributions under this part shall—

(1) * * * 

* * * * * * * 

(4) provide that where a note or written agreement evidencing a loan has been in default despite due diligence on the part 

of the institution in attempting collection thereon—

(A) if the institution has knowingly failed to maintain an 

acceptable collection record with respect to such loan, as 

determined by the Secretary in accordance with criteria established by regulation, the Secretary ømay¿ shall—

(i) * * * 

* * * * * * * 

SEC. 464. TERMS OF LOANS. 

(a) TERMS AND CONDITIONS.—(1) * * * 

(2)(A) Except as provided in paragraph (4), the total of loans 

made to a student in any academic year or its equivalent by an institution of higher education from a loan fund established pursuant 

to an agreement under this part shall not exceed—

(i) ø$4,000¿ $5,500, in the case of a student who has not successfully completed a program of undergraduate education; or 

(ii) ø$6,000¿ $8,000, in the case of a graduate or professional 

student (as defined in regulations issued by the Secretary). 

(B) Except as provided in paragraph (4), the aggregate unpaid 

principal amount for all loans made to a student by institutions of 

higher education from loan funds established pursuant to agreements under this part may not exceed—

(i) ø$40,000¿ $60,000, in the case of any graduate or professional student (as defined by regulations issued by the Secretary, and including any loans from such funds made to such 

person before such person became a graduate or professional 

student); 

(ii) ø$20,000¿ $27,500, in the case of a student who has successfully completed 2 years of a program of education leading 

to a bachelor’s degree but who has not completed the work necessary for such a degree (determined under regulations issued 

by the Secretary), and including any loans from such funds 

made to such person before such person became such a student; and 

496 

(iii) ø$8,000¿ $11,000, in the case of any other student. 

* * * * * * * 

(c) CONTENTS OF LOAN AGREEMENT.—(1) Any agreement between 

an institution and a student for a loan from a student loan fund 

assisted under this part—

(A) * * * 

* * * * * * * 

(D) shall provide that the loan shall bear interest, on the unpaid balance of the loan, at the rate of 5 percent per year in 

the case of any loan made on or after October 1, 1981, except 

that no interest shall accrue ø(I)¿ (i) prior to the beginning 

date of repayment determined under paragraph (2)(A)(i), or 

ø(II)¿ (ii) during any period in which repayment is suspended 

by reason of paragraph (2); 

* * * * * * * 

(2)(A) No repayment of principal of, or interest on, any loan from 

a student loan fund assisted under this part shall be required during any period—

(i) * * * 

* * * * * * * 

(iii) not in excess of 3 years during which the borrower—

(I) is serving on active duty during a war or other military operation or national emergency; or 

(II) is performing qualifying National Guard duty during 

a war or other military operation or national emergency; 

ø(iii)¿ (iv) not in excess of 3 years for any reason which the 

lender determines, in accordance with regulations prescribed 

by the Secretary under section 435(o), has caused or will cause 

the borrower to have an economic hardship; or 

ø(iv)¿ (v) during which the borrower is engaged in service described in section 465(a)(2); 

and provides that any such period shall not be included in determining the 10-year period described in subparagraph (A) of paragraph (1). 

* * * * * * * 

(e) FORBEARANCE.—The Secretary shall ensure thatø, upon written request,¿ an institution of higher education shall grant a borrower forbearance of principal and interest or principal only, renewable at 12-month intervals for a period not to exceed 3 years, 

on such terms as are otherwise consistent with the regulations 

issued by the Secretary and agreed upon in writing by the parties 

to the loan, if—

(1) * * * 

* * * * * * * 

(f) SPECIAL REPAYMENT RULE AUTHORITY.—(1) * * * 

ø(2) No compromise repayment of a defaulted loan as authorized 

by paragraph (1) may be made unless the student borrower pays—

ø(A) 90 percent of the loan under this part; 

ø(B) the interest due on such loan; and 

ø(C) any collection fees due on such loan; 

in a lump sum payment.¿ 

497 

(2) No compromise repayment of a defaulted loan as authorized 

by paragraph (1) may be made unless agreed to by the Secretary. 

* * * * * * * 

(h) REHABILITATION OF LOANS.—

(1) REHABILITATION.—

(A) IN GENERAL.—If the borrower of a loan made under 

this part who has defaulted on the loan makes ø12 

ontime¿ 9 on-time, consecutive, monthly payments of 

amounts owed on the loan, as determined by the institution, or by the Secretary in the case of a loan held by the 

Secretary, the loan shall be considered rehabilitated, and 

the institution that made that loan (or the Secretary, in 

the case of a loan held by the Secretary) shall request that 

any credit bureau organization or credit reporting agency 

to which the default was reported remove the default from 

the borrower’s credit history. 

* * * * * * * 

SEC. 465. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE. 

(a) CANCELLATION OF PERCENTAGE OF DEBT BASED ON YEARS OF

QUALIFYING SERVICE.—(1) * * * 

(2) Loans shall be canceled under paragraph (1) for service—

(A) as a full-time teacher for service in an academic year in 

a public or other nonprofit private elementary or secondary 

school which is in the school district of a local educational 

agency which is eligible in such year for assistance pursuant 

to title I of the Elementary and Secondary Education Act of 

1965, and which for the purpose of this paragraph and for that 

year has been determined by the Secretary (pursuant to regulations and after consultation with the State educational agency of the State in which the school is located) to be a school 

in which the enrollment of children counted under øsection 

111(c)¿ section 1113(a)(5) of the Elementary and Secondary 

Education Act of 1965 exceeds 30 percent of the total enrollment of that school; 

* * * * * * * 

(3)(A) The percent of a loan which shall be canceled under paragraph (1) of this subsection is—

(i) in the case of service described in subparagraph (A), (C), 

(D), (F), (G), (H), or (I) of paragraph (2), at the rate of 15 percent for the first or second year of such service, 20 percent for 

the third or fourth year of such service, and 30 percent for the 

fifth year of such service; 

(ii) in the case of service described in subparagraph (B) of 

paragraph (2), at the rate of 15 percent for each year of such 

service; or 

ø(iii) in the case of service described in subparagraph (D) of 

paragraph (2), not to exceed a total of 50 percent of such loan 

at the rate of 121⁄2 percent for each year of qualifying service; 

or¿ 

ø(iv)¿ (iii) in the case of service described in subparagraph 

(E) of paragraph (2) at the rate of 15 percent for the first or 

498 

second year of such service and 20 percent for the third or 

fourth year of such service. 

* * * * * * * 

SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS. 

(a) IN GENERAL.—After September 30, ø2003¿ 2011, and not 

later than March 31, ø2004¿ 2012, there shall be a capital distribution of the balance of the student loan fund established under this 

part by each institution of higher education as follows: 

(1) The Secretary shall first be paid an amount which bears 

the same ratio to the balance in such fund at the close of September 30, ø2003¿ 2011, as the total amount of the Federal 

capital contributions to such fund by the Secretary under this 

part bears to the sum of such Federal contributions and the institution’s capital contributions to such fund. 

(2) The remainder of such balance shall be paid to the institution. 

(b) DISTRIBUTION OF LATE COLLECTIONS.—After March 31, 2012, 

each institution with which the Secretary has made an agreement 

under this part, shall pay to the Secretary the same proportionate 

share of amounts received by this institution after September 30, 

2003, in payment of principal and interest on student loans made 

from the student loan fund established pursuant to such agreement 

(which amount shall be determined after deduction of any costs of 

litigation incurred in collection of the principal or interest on loans 

from the fund and not already reimbursed from the fund or from 

such payments of principal or interest), as was determined for the 

Secretary under subsection (a). 

(c) DISTRIBUTION OF EXCESS CAPITAL.—(1) Upon a finding by the 

institution or the Secretary prior to October 1, ø2004¿ 2012, that 

the liquid assets of a student loan fund established pursuant to an 

agreement under this part exceed the amount required for loans or 

otherwise in the foreseeable future, and upon notice to such institution or to the Secretary, as the case may be, there shall be, subject 

to such limitations as may be included in regulations of the Secretary or in such agreement, a capital distribution from such fund. 

Such capital distribution shall be made as follows: 

(A) The Secretary shall first be paid an amount which bears 

the same ratio to the total to be distributed as the Federal capital contributions by the Secretary to the student loan fund 

prior to such distribution bear to the sum of such Federal capital contributions and the capital contributions to the fund 

made by the institution. 

(B) The remainder of the capital distribution shall be paid to 

the institution. 

(2) No finding that the liquid assets of a student loan fund established under this part exceed the amount required under paragraph (1) may be made prior to a date which is 2 years after the 

date on which the institution of higher education received the 

funds from such institution’s allocation under section 462. 

SEC. 467. COLLECTION OF DEFAULTED LOANS: PERKINS LOAN REVOLVING FUND. 

(a) * * * 

(b) COLLECTION OF REFERRED, TRANSFERRED, OR ASSIGNED

LOANS.—The Secretary shall continue to attempt to collect any loan 

499 

referred, transferred, or assigned under paragraph ø(5)(A), (5)(B)(i), 

or (6)¿ (4)(A), (4)(B), or (5) of section 463(a) until all appropriate 

collection efforts, as determined by the Secretary, have been expended. 

* * * * * * * 

SEC. 469. DEFINITIONS. 

(a) * * * 

* * * * * * * 

(c) INFANTS, TODDLERS, CHILDREN, AND YOUTH WITH DISABILITIES.—For purposes of this part, the term ‘‘infants, toddlers, children, and youth with disabilities’’ means children with disabilities 

and infants and toddlers with disabilities as defined in øsections 

602 and 632¿ sections 602(3) and 632(5), respectively, of the Individuals with Disabilities Education Act, and the term ‘‘øqualified 

professional provider of early intervention services¿ early intervention services’’ has the meaning specified in øsection 672(2)¿ section 

632(4) of such Act. 

* * * * * * * 

PART F—NEED ANALYSIS 

* * * * * * * 

SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS. 

(a) * * * 

* * * * * * * 

(g) STUDENT CONTRIBUTION FROM AVAILABLE INCOME.—

(1) * * * 

(2) ADJUSTMENT TO STUDENT INCOME.—The adjustment to 

student income is equal to the sum of—

(A) * * * 

* * * * * * * 

(D) an income protection allowance of ø$2,200¿ $3,000 

(or a successor amount prescribed by the Secretary under 

section 478); 

* * * * * * * 

SEC. 478. REGULATIONS; UPDATED TABLES. 

(a) * * * 

* * * * * * * 

(h) EMPLOYMENT EXPENSE ALLOWANCE.—For each award year 

after award year 1993–1994, the Secretary shall publish in the 

Federal Register a revised table of employment expense allowances 

for the purpose of sections 475(c)(5), 476(b)(4), and 477(b)(5). Such 

revised table shall be developed by increasing the dollar amount 

specified in sections 475(c)(5)(A), 475(c)(5)(B), 476(b)(4)(A), 

ø476(b)(4)(B),¿ 477(b)(5)(A), and 477(b)(5)(B) to reflect increases in 

the amount and percent of the Bureau of Labor Statistics budget 

of the marginal costs for ømeals away from home, apparel and upkeep, transportation, and housekeeping services¿ food away from 

home, apparel, transportation, and household furnishings and operations for a two-worker versus one-worker family. 

500 

SEC. 479. SIMPLIFIED NEEDS TESTS. 

(a) * * * 

(b) SIMPLIFIED NEEDS TEST.— (1) ELIGIBILITY.—An applicant is eligible to file a simplified 

form containing the elements required by paragraph (2) if— (A) in the case of an applicant who is a dependent student—

ø(i) the student’s parents file or are eligible to file 

a form described in paragraph (3) or certify that they 

are not required to file an income tax return and the 

student files or is eligible to file such a form or certifies that the student is not required to file an income 

tax return; and¿ 

(i) the student’s parents file, or are eligible to file, a 

form described in paragraph (3) or certify that they are 

not required to file an income tax return, and the student files, or is eligible to file, such a form or certifies 

that the student is not required to file an income tax 

return, or the student’s parents, or the student, received 

benefits at some time during the previous 12-month period under a means-tested Federal benefit program as 

defined under subsection (d); and 

* * * * * * * 

(B) in the case of an applicant who is an independent 

student—

ø(i) the student (and the student’s spouse, if any) 

files or is eligible to file a form described in paragraph 

(3) or certifies that the student (and the student’s 

spouse, if any) is not required to file an income tax return; and¿ 

(i) the student (and the student’s spouse, if any) files, 

or is eligible to file, a form described in paragraph (3) 

or certifies that the student (and the student’s spouse, 

if any) is not required to file an income tax return, or 

the student (and the student’s spouse, if any) received 

benefits at some time during the previous 12-month period under a means-tested Federal benefit program as 

defined under subsection (d); and 

* * * * * * * 

(3) QUALIFYING FORMS.—øA student or family files a form described in this subsection, or subsection (c), as the case may be, 

if the student or family, respectively, files¿ In the case of an 

independent student, the student, or in the case of a dependent 

student, the parent, files a form described in this subsection, or 

subsection (c), as the case may be, if the student or parent, as 

appropriate, files— (A) * * * 

* * * * * * * 

(c) ZERO EXPECTED FAMILY CONTRIBUTION.—The Secretary shall 

consider an applicant to have an expected family contribution equal 

to zero if—

(1) in the case of a dependent student— ø(A) the student’s parents file, or are eligible to file, a 

form described in subsection (b)(3), or certify that the parVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00504 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
501 

ents are not required to file an income tax return and the 

student files, or is eligible to file, such a form, or certifies 

that the student is not required to file an income tax return; and¿ 

(A) the student’s parents file, or are eligible to file, a form 

described in subsection (b)(3) or certify that they are not required to file an income tax return, and the student files, 

or is eligible to file, such a form or certifies that the student 

is not required to file an income tax return, or the student’s 

parents, or the student, received benefits at some time during the previous 12-month period under a means-tested 

Federal benefit program as defined in subsection (d); and 

* * * * * * * 

(2) in the case of an independent student with dependents 

other than a spouse— ø(A) the student (and the student’s spouse, if any) files, 

or is eligible to file, a form described in subsection (b)(3), 

or certifies that the student (and the student’s spouse, if 

any) is not required to file an income tax return; and¿ 

(A) the student (and the student’s spouse, if any) files, or 

is eligible to file, a form described in subsection (b)(3) or 

certifies that the student (and the student’s spouse, if any) 

is not required to file an income tax return, or the student 

(and the student’s spouse, if any) received benefits at some 

time during the previous 12-month period under a meanstested Federal benefit program as defined in subsection (d); 

and 

* * * * * * * 

(d) DEFINITION OF MEANS-TESTED FEDERAL BENEFIT PROGRAM.—

For the purposes of this section, the term ‘‘means-tested Federal benefit program’’ means a mandatory spending program of the Federal 

Government, other than a program under this title, in which eligibility for the program’s benefits, or the amount of such benefits, or 

both, are determined on the basis of income or resources of the individual or family seeking the benefit, and may include such programs as the supplemental security income program under title XVI 

of the Social Security Act, the food stamp program under the Food 

Stamp Act of 1977, the free and reduced price school lunch program 

established under the Richard B. Russell National School Lunch 

Act, the temporary assistance to needy families program established 

under part A of title IV of the Social Security Act, and the women, 

infants and children program established under Section 17 of the 

Child Nutrition Act of 1966, and other programs identified by the 

Secretary. 

(e) REPORTING REQUIREMENTS.—The Secretary shall regularly 

evaluate the impact of the eligibility guidelines in subsections 

(b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) of this section. In particular, the Secretary shall evaluate whether, under the definition of 

means-tested Federal benefit programs in subsection (d), the Simplified Needs Test continues to be targeted to the maximum number 

of low- and moderate-income students. 

SEC. 479A. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS. 

ø(a) IN GENERAL.—¿ 

502 

(a) AUTHORITY TO MAKE ADJUSTMENTS.— (1) ADJUSTMENTS FOR SPECIAL CIRCUMSTANCES.—Nothing in 

this part shall be interpreted as limiting the authority of the 

financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the 

cost of attendance or the values of the data items required to 

calculate the expected student or parent contribution (or both) 

to allow for treatment of an individual eligible applicant with 

special circumstances. However, this authority shall not be 

construed to permit aid administrators to deviate from the contributions expected in the absence of special circumstances. 

(2) SPECIAL CIRCUMSTANCES DEFINED.—Special circumstances may include tuition expenses at an elementary or 

secondary school, medical or dental expenses not covered by insurance, unusually high child care costs, recent unemployment 

of a family member, the number of parents enrolled at least 

half-time in a degree, certificate, or other program leading to 

a recognized educational credential at an institution with a 

program participation agreement under section 487, a student’s 

status as a ward of the court at any time prior to attaining 18 

years of age, a student’s status as an individual who was 

adopted at or after age 13, a student’s status as a homeless or 

unaccompanied youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act), or other changes in a family’s income, a family’s assets, or a student’s status. Special circumstances shall be conditions that differentiate an individual 

student from a class of students rather than conditions that 

exist across a class of students. 

(3) DOCUMENTATION AND USE OF SUPPLEMENTARY INFORMATION.—Adequate documentation for such adjustments shall 

substantiate such special circumstances of individual students. 

In addition, nothing in this title shall be interpreted as limiting the authority of the student financial aid administrator in 

such cases to request and use supplementary information 

about the financial status or personal circumstances of eligible 

applicants in selecting recipients and determining the amount 

of awards under this title. 

(4) FEES FOR SUPPLEMENTARY INFORMATION PROHIBITED.—No 

student or parent shall be charged a fee for collecting, processing, or delivering such supplementary information. 

* * * * * * * 

SEC. 480. DEFINITIONS. 

As used in this part: 

(a) * * * 

* * * * * * * 

(d) INDEPENDENT STUDENT.—The term ‘‘independent’’, when used 

with respect to a student, means any individual who—

(1) * * * 

ø(2) is an orphan or ward of the court or was a ward of the 

court until the individual reached the age of 18;¿ 

(2) is an orphan, in foster care, or a ward of the court, or was 

in foster care or a ward of the court until the individual 

reached the age of 18; 

503 

(3) is a veteran of the Armed Forces of the United States (as 

defined in subsection (c)(1)) or is currently serving on active 

duty in the Armed Forces for other than training purposes; 

* * * * * * * 

(e) EXCLUDABLE INCOME.—The term ‘‘excludable income’’

means—

(1) * * * 

* * * * * * * 

(3) child support payments made by the student or parent; 

øand¿ 

(4) payments made and services provided under part E of 

title IV of the Social Security Actø.¿; and 

(5) any part of any distribution from a qualified tuition program established under section 529 of the Internal Revenue 

Code of 1986 that is not includable in gross income under such 

section 529. 

(f) ASSETS.—(1) The term ‘‘assets’’ means cash on hand, including 

the amount in checking and savings accounts, time deposits, money 

market funds, trusts, stocks, bonds, other securities, mutual funds, 

tax shelters, qualified tuition programs established under section 

529 of the Internal Revenue Code of 1986 (26 U.S.C. 529), except as 

provided in paragraph (2), and the net value of real estate, income 

producing property, and business and farm assets. 

(2) A qualified tuition program shall not be considered an asset 

of a dependent student under section 475 of this part. The value of 

a qualified tuition program for purposes of determining the assets 

of parents or independent students shall be— (A) the refund value of any tuition credits or certificates purchased under section 529 of the Internal Revenue Code of 1986 

(26 U.S.C. 529) on behalf of a beneficiary; or 

(B) the current balance of any account which is established 

under such section for the purpose of meeting the qualified 

higher education expenses of the designated beneficiary of the 

account. 

ø(2)¿ (3) With respect to determinations of need under this title, 

other than for subpart 4 of part A, the term ‘‘assets’’ shall not include the net value of—

(A) the family’s principal place of residence; øor¿ 

(B) a family farm on which the family residesø.¿; or 

(C) a small business with not more than 100 full-time or fulltime equivalent employees (or any part of such a small business) that is owned and controlled by the family. 

* * * * * * * 

(j) OTHER FINANCIAL ASSISTANCEø; TUITION PREPAYMENT

PLANS¿.—(1) For purposes of determining a student’s eligibility for 

funds under this title, estimated financial assistance not received 

under this title shall include all scholarships, grants, loans, or 

other assistance known to the institution at the time the determination of the student’s need is made, including veterans’ education benefits as defined in subsection (c), and national service 

educational awards or post-service benefits under title I of the National and Community Service Act of 1990 (42 U.S.C. 12571 et 

seq.). 

504 

ø(2)(A) Except as provided in subparagraph (B), for purposes of 

determining a student’s eligibility for funds under this title, tuition 

prepayment plans shall reduce the cost of attendance (as determined under section 472) by the amount of the prepayment, and 

shall not be considered estimated financial assistance. 

ø(B) If the institutional expense covered by the prepayment must 

be part of the student’s cost of attendance for accounting purposes, 

the prepayment shall be considered estimated financial assistance.¿ 

ø(3)¿ (2) Notwithstanding paragraph (1), a tax credit taken 

under section 25A of the Internal Revenue Code of 1986, or a distribution that is not includable in gross income under section 529 

of such Code, shall not be treated as estimated financial assistance 

for purposes of section 471(3). 

(3) Notwithstanding paragraph (1) and section 472, assistance not 

received under this title may be excluded from both estimated financial assistance and cost of attendance, if that assistance is designated by the State providing that assistance to offset a specific 

component of the cost of attendance. If that assistance is excluded 

from either estimated financial assistance or cost of attendance, it 

shall be excluded from both. 

* * * * * * * 

PART G—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE

PROGRAMS

SEC. 481. DEFINITIONS. 

(a) ACADEMIC AND AWARD YEAR.—(1) * * * 

ø(2) For the purpose of any program under this title, the term ‘‘academic year’’ shall require a minimum of 30 weeks of instructional time, and, with respect to an undergraduate course of study, 

shall require that during such minimum period of instructional 

time a full-time student is expected to complete at least 24 semester or trimester hours or 36 quarter hours at an institution that 

measures program length in credit hours, or at least 900 clock 

hours at an institution that measures program length in clock 

hours. The Secretary may reduce such minimum of 30 weeks to not 

less than 26 weeks for good cause, as determined by the Secretary 

on a case-by-case basis, in the case of an institution of higher education that provides a 2-year or 4-year program of instruction for 

which the institution awards an associate or baccalaureate degree.¿ 

(2)(A) For the purpose of any program under this title, the term 

‘‘academic year’’ shall—

(i) require a minimum of 30 weeks of instructional time for 

a course of study that measures its program length in credit 

hours; or 

(ii) require a minimum of 26 weeks of instructional time for 

a course of study that measures its program length in clock 

hours; and 

(iii) require an undergraduate course of study to contain an 

amount of instructional time whereby a full-time student is expected to complete at least—

(I) 24 semester or trimester hours or 36 quarter credit 

hours in a course of study that measures its program 

length in credit hours; or 

505 

(II) 900 clock hours in a course of study that measures 

its program length in clock hours. 

(B) The Secretary may reduce such minimum of 30 weeks to not 

less than 26 weeks for good cause, as determined by the Secretary 

on a case-by-case basis, in the case of an institution of higher education that provides a 2-year or 4-year program of instruction for 

which the institution awards an associate or baccalaureate degree. 

(b) ELIGIBLE PROGRAM.—(1) * * * 

* * * * * * * 

(3) For purposes of this title, an eligible program includes an instructional program that utilizes direct assessment of student learning, or recognizes the direct assessment of student learning, in lieu 

of credit hours or clock hours as the measure of student learning. 

In the case of a program being determined eligible for the first time 

under this paragraph, such determination shall be made by the Secretary before such program is considered to be eligible. The Secretary shall provide an annual report to Congress identifying the 

programs made eligible under this paragraph. 

(4) An otherwise eligible program that is offered in whole or in 

part through telecommunications is eligible for the purposes of this 

title if the program is offered by an institution, other than a foreign 

institution, that has been evaluated and determined (before or after 

the date of enactment of this paragraph) to have the capability to 

effectively deliver distance education programs by an accrediting 

agency or association that—

(A) is recognized by the Secretary under subpart 2 of Part 

H; and 

(B) has evaluation of distance education programs within 

the scope of its recognition, as described in section 

496(n)(3). 

* * * * * * * 

(d) DEFINITIONS FOR MILITARY DEFERMENTS.—For purposes of 

parts B, D, and E of this title: 

(1) ACTIVE DUTY.—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 does not include active duty for 

training or attendance at a service school. 

(2) MILITARY OPERATION.—The term ‘‘military operation’’ means a contingency operation as such term is defined in section 101(a)(13) of title 10, United States Code. 

(3) NATIONAL EMERGENCY.—The term ‘‘national emergency’’ means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by the President by reason of terrorist attacks. 

(4) SERVING ON ACTIVE DUTY.—The term ‘‘serving on active 

duty during a war or other military operation or national emergency’’ means service by an individual who is—

(A) a Reserve of an Armed Force ordered to active duty 

under section 12301(a), 12301(g), 12302, 12304, or 12306 of 

title 10, United States Code, or any retired member of an 

Armed Force ordered to active duty under section 688 of 

such title, for service in connection with a war or other 

506 

military operation or national emergency, regardless of the 

location at which such active duty service is performed; and 

(B) any other member of an Armed Force on active duty 

in connection with such emergency or subsequent actions or 

conditions who has been assigned to a duty station at a location other than the location at which such member is 

normally assigned. 

(5) QUALIFYING NATIONAL GUARD DUTY.—The term ‘‘qualifying National Guard duty during a war or other military operation or national emergency’’ means service as a member of the 

National Guard on full-time National Guard duty (as defined 

in section 101(d)(5) of title 10, United States Code) under a call 

to active service authorized by the President or the Secretary of 

Defense for a period of more than 30 consecutive days under 

section 502(f) of title 32, United States Code, in connection with 

a war, other military operation, or a national emergency declared by the President and supported by Federal funds. 

SEC. 482. MASTER CALENDAR. 

(a) SECRETARY REQUIRED TO COMPLY WITH SCHEDULE.—To assure adequate notification and timely delivery of student aid funds 

under this title, the Secretary shall adhere to the following calendar dates in the year preceding the award year: 

(1) Development and distribution of Federal and multiple 

data entry forms— (A) * * * 

ø(B) by March 1: proposed modifications and updates 

pursuant to section 478 published in the Federal Register;¿ 

(B) by March 1: proposed modifications, updates, and notices pursuant to sections 478, 479(c)(2)(C), and 483(a)(6) 

published in the Federal Register; 

* * * * * * * 

(d) NOTICE TO CONGRESS.—The Secretary shall notify the øCommittee on Labor and Human Resources of the Senate and the Committee on Education and Labor of the House of Representatives¿ 

authorizing committees when a deadline included in the calendar 

described in subsection (a) is not met. Nothing in this section shall 

be interpreted to penalize institutions or deny them the specified 

times allotted to enable them to return information to the Secretary based on the failure of the Secretary to adhere to the dates 

specified in this section. 

SEC. 483. FORMS AND REGULATIONS. 

(a) COMMON FINANCIAL AID FORM DEVELOPMENT AND PROCESSING.—

ø(1) SINGLE FORM REQUIRED.—The Secretary, in cooperation 

with representatives of agencies and organizations involved in 

student financial assistance, shall produce, distribute, and 

process free of charge a common financial reporting form to be 

used to determine the need and eligibility of a student for financial assistance under parts A through E of this title (other 

than under subpart 4 of part A). The Secretary shall include 

on the form developed under this subsection such data items 

as the Secretary determines are appropriate for inclusion. Such 

items shall be selected in consultation with States to assist in 

507 

the awarding of State financial assistance. In no case shall the 

number of such data items be less than the number included 

on the form on the date of enactment of the Higher Education 

Amendments of 1998. Such form shall satisfy the requirements 

of section 401(d) of this title. 

ø(2) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORM

PROHIBITED.—The common financial reporting form prescribed 

by the Secretary under paragraph (1) shall be produced, distributed, and processed by the Secretary and no parent or student shall be charged a fee for the collection, processing, or delivery of financial aid through the use of such form. The need 

and eligibility of a student for financial assistance under parts 

A through E of this title (other than under subpart 4 of part 

A) may only be determined by using the form developed by the 

Secretary pursuant to paragraph (1) of this subsection. No student may receive assistance under parts A through E of this 

title (other than under subpart 4 of part A), except by use of 

the form developed by the Secretary pursuant to this section. 

No data collected on a form for which a fee is charged shall be 

used to complete the form prescribed under paragraph (1).¿ 

(1) IN GENERAL.—The Secretary, in cooperation with representatives of agencies and organizations involved in student 

financial assistance, shall produce, distribute, and process free 

of charge common financial reporting forms as described in this 

subsection to be used for application and reapplication to determine the need and eligibility of a student for financial assistance under parts A through E (other than subpart 4 of part A). 

These forms shall be made available to applicants in both 

paper and electronic formats and shall be referred to as the 

‘‘Free Application for Federal Student Aid’’ or the ‘‘FAFSA’’ . (2) EARLY ESTIMATES.— (A) IN GENERAL.—The Secretary shall permit applicants 

to complete such forms as described in this subsection in 

the 4 years prior to enrollment in order to obtain a nonbinding estimate of the family contribution, as defined in 

section 473. The estimate shall clearly and conspicuously 

indicate that it is only an estimate of family contribution, 

and may not reflect the actual family contribution of the 

applicant that shall be used to determine the grant, loan, 

or work assistance that the applicant may receive under 

this title when enrolled in a program of postsecondary education. Such applicants shall be permitted to update information submitted on forms described in this subsection 

using the process required under paragraph (5)(A). 

(B) EVALUATION.—Two years after the early estimates are 

implemented under this paragraph and from data gathered 

from the early estimates, the Secretary shall evaluate the 

differences between initial, non-binding early estimates and 

the final financial aid award made available under this 

title. 

(C) REPORT.—The Secretary shall provide a report to the 

authorizing committees on the results of the evaluation. 

(3) PAPER FORMAT.—

(A) IN GENERAL.—The Secretary shall produce, distribute, and process common forms in paper format to meet 

508 

the requirements of paragraph (1). The Secretary shall develop a common paper form for applicants who do not meet 

the requirements of subparagraph (B). 

(B) EZ FAFSA.— (i) IN GENERAL.—The Secretary shall develop and 

use a simplified paper application form, to be known 

as the ‘‘EZ FAFSA’’, to be used for applicants meeting 

the requirements of section 479(c). 

(ii) REDUCED DATA REQUIREMENTS.—The form under 

this subparagraph shall permit an applicant to submit, 

for financial assistance purposes, only the data elements required to make a determination of whether the 

applicant meets the requirements under section 479(c). 

(iii) STATE DATA.—The Secretary shall include on the 

form under this subparagraph such data items as may 

be necessary to award State financial assistance, as 

provided under paragraph (6), except that the Secretary shall not include a State’s data if that State 

does not permit its applicants for State assistance to 

use the form under this subparagraph. 

(iv) FREE AVAILABILITY AND PROCESSING.—The provisions of paragraph (7) shall apply to the form under 

this subparagraph, and the data collected by means of 

the form under this subparagraph shall be available to 

institutions of higher education, guaranty agencies, 

and States in accordance with paragraph (9). 

(v) TESTING.—The Secretary shall conduct appropriate field testing on the form under this subparagraph. 

(C) PROMOTING THE USE OF ELECTRONIC FAFSA.—

(i) IN GENERAL.—The Secretary shall make an effort 

to encourage applicants to utilize the electronic forms 

described in paragraph (4). 

(ii) MAINTENANCE OF THE FAFSA IN A PRINTABLE

ELECTRONIC FILE.—The Secretary shall maintain a 

version of the paper forms described in subparagraphs 

(A) and (B) in a printable electronic file that is easily 

portable. The printable electronic file will be made easily accessible and downloadable to students on the 

same website used to provide students with the electronic application forms described in paragraph (4) of 

this subsection. The Secretary shall enable students to 

submit a form created under this subparagraph that is 

downloaded and printed from an electronic file format 

in order to meet the filing requirements of this section 

and in order to receive aid from programs under this 

title. 

(iii) REPORTING REQUIREMENT.—The Secretary shall 

report annually to Congress on the impact of the digital divide on students completing applications for title 

IV aid described under this paragraph and paragraph 

(4). The Secretary will also report on the steps taken to 

eliminate the digital divide and phase out the paper 

form described in subparagraph (A) of this paragraph. 

The Secretary’s report will specifically address the imVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00512 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
509 

pact of the digital divide on the following student populations: dependent students, independent students 

without dependents, and independent students with dependents other than a spouse. 

(4) ELECTRONIC FORMAT.— (A) IN GENERAL.—The Secretary shall produce, distribute, and process common forms in electronic format to 

meet the requirements of paragraph (1). The Secretary shall 

develop common electronic forms for applicants who do not 

meet the requirements of subparagraph (C) of this paragraph. 

(B) STATE DATA.—The Secretary shall include on the 

common electronic forms space for information that needs 

to be submitted from the applicant to be eligible for State 

financial assistance, as provided under paragraph (6), except the Secretary shall not require applicants to complete 

data required by any State other than the applicant’s State 

of residence. 

(C) SIMPLIFIED APPLICATIONS: FAFSA ON THE WEB.—

(i) IN GENERAL.—The Secretary shall develop and 

use a simplified electronic application form to be used 

by applicants meeting the requirements under subsection (c) of section 479 and an additional, separate 

simplified electronic application form to be used by applicants meeting the requirements under subsection (b) 

of section 479. 

(ii) REDUCED DATA REQUIREMENTS.—The simplified 

electronic application forms shall permit an applicant 

to submit for financial assistance purposes, only the 

data elements required to make a determination of 

whether the applicant meets the requirements under 

subsection (b) or (c) of section 479. 

(iii) STATE DATA.—The Secretary shall include on the 

simplified electronic application forms such data items 

as may be necessary to award state financial assistance, as provided under paragraph (6), except that the 

Secretary shall not require applicants to complete data 

required by any State other than the applicant’s State 

of residence. 

(iv) AVAILABILITY AND PROCESSING.—The data collected by means of the simplified electronic application 

forms shall be available to institutions of higher education, guaranty agencies, and States in accordance 

with paragraph (9). 

(v) TESTING.—The Secretary shall conduct appropriate field testing on the forms developed under this 

subparagraph. 

(D) USE OF FORMS.—Nothing in this subsection shall be 

construed to prohibit the use of the forms developed by the 

Secretary pursuant to this paragraph by an eligible institution, eligible lender, guaranty agency, State grant agency, 

private computer software provider, a consortium thereof, 

or such other entities as the Secretary may designate. 

(E) PRIVACY.—The Secretary shall ensure that data collection under this paragraph complies with section 552a of 

510 

title 5, United States Code, and that any entity using the 

electronic version of the forms developed by the Secretary 

pursuant to this paragraph shall maintain reasonable and 

appropriate administrative, technical, and physical safeguards to ensure the integrity and confidentiality of the information, and to protect against security threats, or unauthorized uses or disclosures of the information provided on 

the electronic version of the forms. Data collected by such 

electronic version of the forms shall be used only for the application, award, and administration of aid awarded under 

this title, State aid, or aid awarded by eligible institutions 

or such entities as the Secretary may designate. No data 

collected by such electronic version of the forms shall be 

used for making final aid awards under this title until 

such data have been processed by the Secretary or a contractor or designee of the Secretary, except as may be permitted under this title. 

(F) SIGNATURE.—Notwithstanding any other provision of 

this Act, the Secretary may permit an electronic form under 

this paragraph to be submitted without a signature, if a 

signature is subsequently submitted by the applicant. 

(5) STREAMLINING.— (A) STREAMLINED REAPPLICATION PROCESS.— (i) IN GENERAL.—The Secretary shall develop streamlined reapplication forms and processes, including both 

paper and electronic reapplication processes, consistent 

with the requirements of this subsection, for an applicant who applies for financial assistance under this 

title— (I) in the academic year succeeding the year in 

which such applicant first applied for financial assistance under this title; or 

(II) in any succeeding academic years. 

(ii) MECHANISMS FOR REAPPLICATION.—The Secretary shall develop appropriate mechanisms to support reapplication. 

(iii) IDENTIFICATION OF UPDATED DATA.—The Secretary shall determine, in cooperation with States, institutions of higher education, agencies, and organizations involved in student financial assistance, the data 

elements that can be updated from the previous academic year’s application. 

(iv) REDUCED DATA AUTHORIZED.—Nothing in this 

title shall be construed as limiting the authority of the 

Secretary to reduce the number of data elements required of reapplicants. 

(v) ZERO FAMILY CONTRIBUTION.—Applicants determined to have a zero family contribution pursuant to 

section 479(c) shall not be required to provide any financial data in a reapplication form, except that which 

is necessary to determine eligibility under such section. 

(B) REDUCTION OF DATA ELEMENTS.— (i) REDUCTION ENCOURAGED.—Of the number of data 

elements on the FAFSA on the date of enactment of the 

College Access and Opportunity Act of 2005 (including 

511 

questions on the FAFSA for the purposes described in 

paragraph (6)), the Secretary, in cooperation with representatives of agencies and organizations involved in 

student financial assistance, shall continue to reduce 

the number of such data elements following the date of 

enactment. Reductions of data elements under paragraph (3)(B), (4)(C), or (5)(A)(iv) shall not be counted 

towards the reduction referred to in this paragraph unless those data elements are reduced for all applicants. 

(ii) REPORT.—The Secretary shall annually report to 

the House of Representatives and the Senate on the 

progress made of reducing data elements. 

(6) STATE REQUIREMENTS.—

(A) IN GENERAL.—The Secretary shall include on the 

forms developed under this subsection, such State-specific 

data items as the Secretary determines are necessary to 

meet State requirements for State need-based financial aid 

under section 415C, except as provided in paragraphs 

(3)(B)(iii) and (4)(C)(iii) of this subsection. Such items shall 

be selected in consultation with State agencies in order to 

assist in the awarding of State financial assistance in accordance with the terms of this subsection, except as provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of this subsection. The number of such data items shall not be less 

than the number included on the form on October 7, 1998, 

unless a State notifies the Secretary that the State no 

longer requires those data items for the distribution of 

State need-based financial aid. 

(B) ANNUAL REVIEW.—The Secretary shall conduct an annual review process to determine which forms and data 

items the States require to award State need-based financial aid and other application requirements that the States 

may impose. 

(C) STATE USE OF SIMPLIFIED FORMS.—The Secretary 

shall encourage States to take such steps as necessary to encourage the use of simplified application forms, including 

those described in paragraphs (3)(B) and (4)(C), to meet the 

requirements under subsection (b) or (c) of section 479. 

(D) FEDERAL REGISTER NOTICE.—The Secretary shall 

publish on an annual basis a notice in the Federal Register 

requiring State agencies to inform the Secretary—

(i) if the State agency is unable to permit applicants 

to utilize the simplified application forms described in 

paragraphs (3)(B) and (4)(C); and 

(ii) of the State-specific data that the State agency requires for delivery of State need-based financial aid. 

(E) STATE NOTIFICATION TO THE SECRETARY.—

(i) IN GENERAL.—Each State agency shall notify the 

Secretary—

(I) whether the State permits an applicant to file 

a form described in paragraph (3)(B) or paragraph 

(4)(C) of this subsection for purposes of determining eligibility for State need-based financial 

aid; and 

512 

(II) the State-specific data that the State agency 

requires for delivery of State need-based financial 

aid. 

(ii) ACCEPTANCE OF FORMS.—In the event that a 

State does not permit an applicant to file a form described in paragraph (3)(B) or paragraph (4)(C) of this 

subsection for purposes of determining eligibility for 

State need-based financial aid— (I) the State shall notify the Secretary if the 

State is not permitted to do so because of either 

State law or because of agency policy; and 

(II) the notification under subclause (I) shall include an estimate of the program cost to permit applicants to complete simplified application forms 

under paragraphs (3)(B) and paragraph (4)(C) of 

this subsection. 

(iii) LACK OF NOTIFICATION BY THE STATE.—If a 

State does not notify the Secretary pursuant to clause 

(i), the Secretary shall—

(I) permit residents of that State to complete 

simplified application forms under paragraphs 

(3)(B) and paragraph (4)(C) of this subsection; and 

(II) not require any resident of that State to complete any data previously required by that State 

under this section. 

(7) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORMS

PROHIBITED.— (A) FEES PROHIBITED.—The FAFSA, in whatever form 

(including the EZ–FAFSA, paper, electronic, simplified, or 

reapplication), shall be produced, distributed, and processed by the Secretary and no parent or student shall be 

charged a fee for the collection, processing, or delivery of financial aid through the use of the FAFSA. The need and 

eligibility of a student for financial assistance under parts 

A through E of this title (other than under subpart 4 of 

part A) may only be determined by using the FAFSA developed by the Secretary pursuant to this subsection. No student may receive assistance under parts A through E of this 

title (other than under subpart 4 of part A), except by use 

of the FAFSA developed by the Secretary pursuant to this 

subsection. No data collected on a form for which a fee is 

charged shall be used to complete the FAFSA. 

(B) NOTICE.—Any entity that provides to students or parents, or charges students or parents for, any value-added 

services with respect to or in connection with the FAFSA, 

such as completion of the FAFSA, submission of the 

FAFSA, or tracking of the FAFSA for a student, shall provide to students and parents clear and conspicuous notice 

that—(i) the FAFSA is a free Federal student aid application; 

(ii) the FAFSA can be completed without professional 

assistance; and 

(iii) includes the current Internet address for the 

FAFSA on the Department’s web site. 

513 

(8) APPLICATION PROCESSING CYCLE.—The Secretary shall enable students to submit a form created under this subsection in 

order to meet the filing requirements of this section and in 

order to receive aid from programs under this title and shall 

initiate the processing of applications under this subsection as 

early as practicable prior to January 1 of the student’s planned 

year of enrollment. 

ø(3)¿ (9) DISTRIBUTION OF DATA.—Institutions of higher education, guaranty agencies, and States shall receive, without 

charge, the data collected by the Secretary using the form developed pursuant to this section for the purposes of processing 

loan applications and determining need and eligibility for institutional and State financial aid awards. Entities designated by 

institutions of higher education, guaranty agencies, or States 

to receive such data shall be subject to all the requirements of 

this section, unless such requirements are waived by the Secretary. 

ø(4)¿ (10) CONTRACTS FOR COLLECTION AND PROCESSING.—(A) 

The Secretary shall, to the extent practicable, enter into not 

less than 5 contracts with States, institutions of higher education, or private organizations for the purposes of the timely 

collection and processing of the form developed pursuant to 

paragraph (1) and the timely delivery of the data submitted on 

such form. The Secretary shall use such contracts to assist 

States and institutions of higher education with the collection 

of additional data required to award State or institutional financial assistance, except that the Secretary shall not include 

these additional data items on the common financial reporting 

form developed pursuant to this section. The Secretary shall 

include in each such contract a requirement that— (i) * * * 

* * * * * * * 

ø(5) ELECTRONIC FORMS.—(A) The Secretary, in cooperation 

with representatives of agencies and organizations involved in 

student financial assistance, including private computer software providers, shall develop an electronic version of the form 

described in paragraph (1). As permitted by the Secretary, 

such an electronic version shall not require a signature to be 

collected at the time such version is submitted, if a signature 

is subsequently submitted by the applicant. The Secretary 

shall prescribe such version not later than 120 days after the 

date of enactment of the Higher Education Amendments of 

1998. 

ø(B) Nothing in this section shall be construed to prohibit 

the use of the form developed by the Secretary pursuant to 

subparagraph (A) by an eligible institution, eligible lender, 

guaranty agency, State grant agency, private computer software providers, a consortium thereof, or such other entities as 

the Secretary may designate. 

ø(C) No fee shall be charged to students in connection with 

the use of the electronic version of the form, or of any other 

electronic forms used in conjunction with such form in applying 

for Federal or State student financial assistance. 

ø(D) The Secretary shall ensure that data collection complies 

with section 552a of title 5, United States Code, and that any 

514 

entity using the electronic version of the form developed by the 

Secretary pursuant to subparagraph (A) shall maintain reasonable and appropriate administrative, technical, and physical 

safeguards to ensure the integrity and confidentiality of the information, and to protect against security threats, or unauthorized uses or disclosures of the information provided on the electronic version of the form. Data collected by such version of the 

form shall be used only for the application, award, and administration of aid awarded under this title, State aid, or aid 

awarded by eligible institutions or such entities as the Secretary may designate. No data collected by such version of the 

form shall be used for making final aid awards under this title 

until such data have been processed by the Secretary or a contractor or designee of the Secretary.¿ 

ø(6)¿ (11) THIRD PARTY SERVICERS AND PRIVATE SOFTWARE

PROVIDERS.—To the extent practicable and in a timely manner, 

the Secretary shall provide, to private organizations and consortia that develop software used by eligible institutions for the 

administration of funds under this title, all the necessary specifications that the organizations and consortia must meet for 

the software the organizations and consortia develop, produce, 

and distribute (including any diskette, modem, or network 

communications) which are so used. The specifications shall 

contain record layouts for required data. The Secretary shall 

develop in advance of each processing cycle an annual schedule 

for providing such specifications. The Secretary, to the extent 

practicable, shall use means of providing such specifications, 

including conferences and other meetings, outreach, and technical support mechanisms (such as training and printed reference materials). The Secretary shall, from time to time, solicit from such organizations and consortia means of improving 

the support provided by the Secretary. 

ø(7)¿ (12) PARENT’S SOCIAL SECURITY NUMBER AND BIRTH

DATE.—The Secretary is authorized to include on the form developed under this subsection space for the social security 

number and birth date of parents of dependent students seeking financial assistance under this title. 

(13) EXPANDING INFORMATION DISSEMINATION REGARDING

ELIGIBILITY FOR PELL GRANTS.—The Secretary shall make special efforts, in conjunction with State efforts, to notify students 

and their parents who qualify for a free lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 

seq.), the Food Stamps program, or such other programs as the 

Secretary shall determine, of their potential eligibility for a 

maximum Pell Grant, and shall disseminate such informational materials as the Secretary deems appropriate. 

* * * * * * * 

(c) INFORMATION TO COMMITTEES OF CONGRESS.—Copies of all 

rules, regulations, guidelines, instructions, and application forms 

published or promulgated pursuant to this title shall be provided 

to the øCommittee on Labor and Human Resources of the Senate 

and the Committee on Education and the Workforce of the House 

of Representatives¿ authorizing committees at least 45 days prior 

to their effective date. 

515 

(d) TOLL-FREE INFORMATION.—The Secretary shall contract for, 

or establish, and publicize a toll-free telephone service to provide 

timely and accurate information to the general public. The information provided shall include specific instructions on completing the 

application form for assistance under this title. Such service shall 

also include a service accessible by telecommunications devices for 

the deaf (TDD’s) and shall, in addition to the services provided for 

in the previous sentence, refer such students to the national clearinghouse on postsecondary education øthat is authorized under section 685(d)(2)(C)¿, or another appropriate provider of technical assistance and information on postsecondary educational services, 

that is supported under section 663 of the Individuals with Disabilities Education Act. 

* * * * * * * 

(f) ADDRESSING THE DIGITAL DIVIDE.—The Secretary shall utilize 

savings accrued by moving more applicants to the electronic forms 

described in subsection (a)(4) to improve access to the electronic 

forms described in subsection (a)(4) for applicants meeting the requirements of section 479(c). 

SEC. 484. STUDENT ELIGIBILITY. 

(a) IN GENERAL.—In order to receive any grant, loan, or work assistance under this title, a student must— (1) * * * 

* * * * * * * 

(4) file with the Secretary, as part of the original financial 

aid application process, a øcertification,,¿ certification, which 

need not be notarized, but which shall include— (A) * * * 

* * * * * * * 

(5) be a citizen or national of the United States, a permanent 

resident of the United States, able to provide evidence from the 

Immigration and Naturalization Service that he or she is in 

the United States for other than a temporary purpose with the 

intention of becoming a citizen or permanent resident, a citizen 

of any one of the Freely Associated Statesø.¿; and 

(6) if the student has been convicted of, or has pled nolo 

contendere or guilty to, a crime involving fraud in obtaining 

funds under this title, have completed the repayment of such 

funds to the Secretary, or to the holder in the case of a loan 

under this title obtained by fraud. 

(b) ELIGIBILITY FOR STUDENT LOANS.—(1) * * * 

(2) In order to be eligible to receive any loan under øsection 

428A¿ section 428H for any period of enrollment, a student 

shall—

(A) have received a determination of need for a loan 

under section 428(a)(2)(B) of this title; and 

(B) if determined to have need for a loan under section 

428, have applied for such a loanø; and¿. ø(C) has applied for a loan under section 428H, if such 

student is eligible to apply for such a loan.¿ 

* * * * * * * 

(5) Notwithstanding any other provision of this subsection, 

no incarcerated student or parent (on behalf of a student) is eliVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00519 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
516 

gible to receive a loan under this title, and no student who is 

subject to an involuntary civil commitment upon completion of 

a period of incarceration for a sexual offense (as determined 

under regulations of the Secretary) is eligible to receive a loan 

under this title. 

* * * * * * * 

ø(d) STUDENTS WHO ARE NOT HIGH SCHOOL GRADUATES.—¿ (d) 

SATISFACTION OF SECONDARY EDUCATION STANDARDS.—In order for 

a student who does not have a certificate of graduation from a 

school providing secondary education, or the recognized equivalent 

of such certificate, to be eligible for any assistance under subparts 

1, 3, and 4 of part A and parts B, C, D, and E of this title, the 

student shall meet one of the following standards: 

(1) * * * 

* * * * * * * 

( j) ASSISTANCE UNDER SUBPARTS 1 AND 3 OF PART A, AND PART

C.—Notwithstanding any other provision of law, a student shall be 

eligible until September 30, 2004, for assistance under subparts 1 

and 3 of part A, and part C, and shall be eligible only for assistance 

under subpart 1 of part A thereafter, if the student is otherwise 

qualified and— (1) * * * 

* * * * * * * 

(l) COURSES OFFERED THROUGH TELECOMMUNICATIONS.— (1) RELATION TO CORRESPONDENCE COURSES.— (A) IN GENERAL.—A student enrolled in a course of instruction at an institution of higher education that is offered in whole or in part through telecommunications and 

leads to a recognized certificate øfor a program of study of 

1 year or longer¿, or a recognized associate, baccalaureate, 

or graduate degree, conferred by such institution, shall not 

be considered to be enrolled in correspondence courses 

øunless the total amount of telecommunications and correspondence courses at such institution equals or exceeds 

50 percent of the total amount of all courses at the institution¿. 

ø(B) REQUIREMENT.—An institution of higher education 

referred to in subparagraph (A) is an institution of higher 

education—

ø(i) that is not an institute or school described in 

section 521(4)(C) of the Carl D. Perkins Vocational 

and Applied Technology Education Act; and 

ø(ii) for which at least 50 percent of the programs 

of study offered by the institution lead to the award of 

a recognized associate, baccalaureate, or graduate degree.¿ 

(B) EXCEPTION.—Subparagraph (A) does not apply to an 

institution or school described in section 3(3)(C) of the Carl 

D. Perkins Vocational and Technical Education Act of 

1998. 

* * * * * * * 

(q) VERIFICATION OF INCOME DATA.—

517 

ø(1) CONFIRMATION WITH IRS.—The Secretary of Education, 

in cooperation with the Secretary of the Treasury, is authorized to confirm with the Internal Revenue Service the adjusted 

gross income, Federal income taxes paid, filing status, and exemptions reported by applicants (including parents) under this 

title on their Federal income tax returns for the purpose of 

verifying the information reported by applicants on student financial aid applications.¿ 

(1) CONFIRMATION WITH IRS.—The Secretary of Education, in 

cooperation with the Secretary of the Treasury, is authorized to 

confirm with the Internal Revenue Service the information specified in section 6103(l)(13) of the Internal Revenue Code of 1986 

reported by applicants (including parents) under this title on 

their Federal income tax returns for the purpose of verifying the 

information reported by applicants on student financial aid applications. 

* * * * * * * 

(r) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED OFFENSES.—

ø(1) IN GENERAL.—A student who has been convicted of any 

offense under any Federal or State law involving the possession or sale of a controlled substance shall not be eligible to receive any grant, loan, or work assistance under this title during the period beginning on the date of such conviction and 

ending after the interval specified in the following table:¿ 

(1) IN GENERAL.—A student who is convicted of any offense 

under any Federal or State law involving the possession or sale 

of a controlled substance for conduct that occurred during a period of enrollment for which the student was receiving any 

grant, loan, or work assistance under this title shall not be eligible to receive any grant, loan, or work assistance under this 

title from the date of that conviction for the period of time specified in the following table: 

If convicted of an offense involving: 

The possession of a controlled substance: Ineligibility period is: 

First offense ...................................... 1 year

Second offense ................................... 2 years

Third offense ..................................... Indefinite. 

The sale of a controlled 

substance: Ineligibility period is: 

First offense ...................................... 2 years

Second offense ................................... Indefinite. 

* * * * * * * 

SEC. 484A. STATUTE OF LIMITATIONS, AND STATE COURT JUDGMENTS. 

(a) * * * 

(b) ASSESSMENT OF COSTS AND OTHER CHARGES.—Notwithstanding any provision of State law to the contrary—

(1) * * * 

(2) in collecting any obligation arising from a loan made 

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518 

anty agency or the Secretary shall not be subject to a defense 

raised by any borrower based on a claim of infancy. 

* * * * * * * 

SEC. 484B. INSTITUTIONAL REFUNDS. 

(a) RETURN OF TITLE IV FUNDS.—

(1) IN GENERAL.—If a recipient of assistance under this title 

withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the 

amount of grant or loan assistance (other than assistance received under subpart 4 of part A or part C) to be returned to 

the title IV programs is calculated according to paragraph (3) 

and returned in accordance with subsection (b). 

(2) LEAVE OF ABSENCE.—

(A) LEAVE NOT TREATED AS WITHDRAWAL.—In the case of 

a student who øtakes a leave¿ takes one or more leaves of 

absence from an institution for not more than a total of 

180 days in any 12-month period, the institution may consider the student as not having withdrawn from the institution during the leave of absence, and not calculate the 

amount of grant and loan assistance provided under this 

title that is to be returned in accordance with this section 

if—

(i) * * * 

* * * * * * * 

(3) CALCULATION OF AMOUNT OF TITLE IV ASSISTANCE

EARNED.—

(A) * * * 

(B) PERCENTAGE EARNED.—For purposes of subparagraph (A)(i), the percentage of grant or loan assistance 

under this title that has been earned by the student is— (i) * * * 

(ii) 100 percent, if the day the student withdrew occurs after the student has completed (as determined in 

accordance with subsection (d)) 60 percent of the payment period or period of enrollment. 

* * * * * * * 

(4) DIFFERENCES BETWEEN AMOUNTS EARNED AND AMOUNTS

RECEIVED.—

ø(A) IN GENERAL.—If the student has received less grant 

or loan assistance than the amount earned as calculated 

under subparagraph (A) of paragraph (3), the institution of 

higher education shall comply with the procedures for late 

disbursement specified by the Secretary in regulations.¿ 

(A) IN GENERAL.—After determining the eligibility of the 

student for a late disbursement or post-withdrawal disbursement (as required in regulations prescribed by the 

Secretary), the institution of higher education shall contact 

the borrower and obtain confirmation that the loan funds 

are still required by the borrower. In making such contact, 

the institution shall explain to the borrower the borrower’s 

obligation to repay the funds following any such disbursement. The institution shall document in the borrower’s file 

519 

the result of such contact and the final determination made 

concerning such disbursement. 

* * * * * * * 

(b) RETURN OF TITLE IV PROGRAM FUNDS.— (1) RESPONSIBILITY OF THE INSTITUTION.—The institution 

shall return no later than 45 days from the determination of 

withdrawal, in the order specified in paragraph (3), the lesser 

of— (A) * * * 

* * * * * * * 

(2) RESPONSIBILITY OF THE STUDENT.— (A) * * * 

* * * * * * * 

ø(C) REQUIREMENT.—Notwithstanding subparagraphs 

(A) and (B), a student shall not be required to return 50 

percent of the grant assistance received by the student 

under this title, for a payment period or period of enrollment, that is the responsibility of the student to repay 

under this section.¿ 

(C) GRANT OVERPAYMENT REQUIREMENTS.— (i) IN GENERAL.—Notwithstanding subparagraphs 

(A) and (B), a student shall only be required to return 

grant assistance in the amount (if any) by which— (I) the amount to be returned by the student (as 

determined under subparagraphs (A) and (B)), exceeds 

(II) 50 percent of the total grant assistance received by the student under this title for the payment period or period of enrollment. 

(ii) MINIMUM.—A student shall not be required to re- turn amounts of $50 or less. 

(D) WAIVERS OF PELL GRANT REPAYMENT BY STUDENTS

AFFECTED BY DISASTERS.—The Secretary may waive the 

amounts that students are required to return under this 

section with respect to Pell grants if the withdrawals on 

which the returns are based are withdrawals by students—

(i) who were residing in, employed in, or attending 

an institution of higher education that is located in an 

area in which the President has declared that a major 

disaster exists, in accordance with section 401 of the 

Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170); 

(ii) whose attendance was interrupted because of the 

impact of the disaster on the student or the institution; 

and 

(iii) whose withdrawal ended within the academic 

year during which the designation occurred or during 

the next succeeding academic year. 

* * * * * * * 

(d) PERCENTAGE OF THE PAYMENT PERIOD OR PERIOD OF ENROLLMENT COMPLETED.—For purposes of subsection ø(a)(3)(B)(i)¿ 

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520 

ment for which assistance was awarded that was completed, is determined— (1) * * * 

* * * * * * * 

SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION 

FOR STUDENTS. 

(a) INFORMATION DISSEMINATION ACTIVITIES.—(1) Each eligible 

institution participating in any program under this title shall carry 

out information dissemination activities for prospective and enrolled students (including those attending or planning to attend 

less than full time) regarding the institution and all financial assistance under this title. øThe information required by this section 

shall be produced and be made readily available upon request, 

through appropriate publications, mailings, and electronic media, 

to an enrolled student and to any prospective student.¿ The information required by this section shall be produced and be made publicly available to an enrolled student and to any prospective student, 

through appropriate publications, mailings, electronic media, and 

the reports required by the institution’s accrediting agency under 

section 496(c)(9). Each eligible institution shall, on an annual basis, 

provide to all enrolled students a list of the information that is required to be provided by institutions to students by this section and 

section 444 of the General Education Provisions Act (also referred 

to as the Family Educational Rights and Privacy Act of 1974), together with a statement of the procedures required to obtain such 

information. The information required by this section shall accurately describe— (A) * * * 

* * * * * * * 

ø(G) the academic program of the institution, including (i) 

the current degree programs and other educational and training programs, (ii) the instructional, laboratory, and other physical plant facilities which relate to the academic program, and 

(iii) the faculty and other instructional personnel;¿ 

(G) the academic programs of the institution, including—

(i) the current degree programs and other educational 

and training programs; 

(ii) the institution’s educational mission and goals; 

(iii) the instructional, laboratory, and other physical 

plant facilities which relate to the academic programs; and 

(iv) the faculty and other instructional personnel; 

* * * * * * * 

(J) the names of associations, agencies, or governmental bodies which accredit, approve, or license the institution and its 

programs, and the procedures under which any current or prospective student may obtain or review upon request a copy of 

the documents describing the institution’s accreditation, approval, or licensing, and the process for students to register 

complaints with the accrediting agencies or associations; 

* * * * * * * 

ø(L) the completion or graduation rate of certificate- or degree-seeking, full-time, undergraduate students entering such 

institutions;¿ 

521 

(L) a summary of student outcomes for full-time undergraduate students, including— (i) the completion or graduation rates of certificate- or degree-seeking undergraduate students entering such institutions; and 

(ii) any other student outcome data, qualitative or quantitative, including data regarding distance education, 

deemed by the institution to be appropriate to its stated 

educational mission and goals, and, when applicable, licensing and placement rates for professional and vocational 

programs; 

(M) the terms and conditions under which students receiving 

øguaranteed student loans under part B of this title or direct 

student loans under part E of this title, or both,¿ student loans 

under part B, D, or E of this title may— (i) * * * 

* * * * * * * 

(N) that enrollment in a program of study abroad approved 

for credit by the home institution may be considered enrollment in the home institution for purposes of applying for Federal student financial assistance; øand¿ 

(O) the campus crime report prepared by the institution pursuant to subsection (f ), including all required reporting 

categoriesø.¿; 

(P) the penalties contained in subsection 484(r) regarding suspension of eligibility for drug related offenses; 

(Q) the policies of the institution regarding the acceptance or 

denial of academic credit earned at another institution of higher education, which shall include a statement that such decisions will not be based solely on the source of accreditation of 

a sending institution, provided that the sending institution is 

accredited by an agency or association that is recognized by the 

Secretary pursuant to section 496 to be a reliable authority as 

to the quality of the education or training offered, and except 

that nothing in this subparagraph shall be construed to—

(i) authorize an officer or employee of the Department to 

exercise any direction, supervision, or control over the curriculum, program of instruction, administration, or personnel of any institution of higher education, or over any 

accrediting agency or association; 

(ii) limit the application of the General Education Provisions Act; or 

(iii) create any legally enforceable right; and 

(R) the fire safety report prepared by the institution pursuant 

to subsection (h). 

* * * * * * * 

ø(6) Each institution may provide supplemental information to 

enrolled and prospective students showing the completion or graduation rate for students described in paragraph (4) or for students 

transferring into the institution or information showing the rate at 

which students transfer out of the institution.¿ 

(6) Each institution may provide supplemental information to enrolled and prospective students showing the completion or graduation rate for students described in paragraph (4). For the purpose 

522 

of this paragraph, the definitions provided in the Integrated Postsecondary Education Data System shall apply. 

(7) Each eligible institution participating in any program under 

this title may publicly report to currently enrolled and prospective 

students the voluntary information collected by the National Survey 

of Student Engagement (NSSE), the Community College Survey of 

Student Engagement (CCSSE), or other instruments that provide 

evidence of student participation in educationally purposeful activities. The information shall be produced and made available in a 

uniform and comprehensible manner, through appropriate publications, mailings, and electronic media, and may be included in reports required by the institution’s accrediting agency. 

(b) EXIT COUNSELING FOR BORROWERS.—(1) * * * 

* * * * * * * 

(3) Each eligible institution shall, during the exit interview required by this subsection, provide to a borrower of a loan made 

under part B, D, or E a clear and conspicuous notice describing the 

effect of using a consolidation loan to discharge the borrower’s student loans, including—

(A) the effects of consolidation on total interest to be paid, fees 

to be paid, and length of repayment; 

(B) the effects of consolidation on a borrower’s underlying 

loan benefits, including loan forgiveness, cancellation, and 

deferment; 

(C) the ability for the borrower to prepay the loan, pay on a 

shorter schedule, and to change repayment plans, and that borrower benefit programs may vary among different loan holders; 

(D) the tax benefits for which the borrower may be eligible; 

and 

(E) the consequences of default. 

* * * * * * * 

(f) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS CRIME

STATISTICS.—(1) Each eligible institution participating in any program under this title, other than a foreign institution of higher education, shall on August 1, 1991, begin to collect the following information with respect to campus crime statistics and campus security policies of that institution, and beginning September 1, 1992, 

and each year thereafter, prepare, publish, and distribute, through 

appropriate publications or mailings, to all current students and 

employees, and to any applicant for enrollment or employment 

upon request, an annual security report containing at least the following information with respect to the campus security policies and 

campus crime statistics of that institution: 

(A) * * * 

* * * * * * * 

(5) On an annual basis, each institution participating in any program under this title shall submit to the Secretary a copy of the 

statistics required to be made available under paragraph (1)(F). 

The Secretary shall—

(A) review such statistics and report to the øCommittee on 

Education and the Workforce of the House of Representatives 

and the Committee on Labor and Human Resources of the SenVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00526 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
523 

ate¿ authorizing committees on campus crime statistics by September 1, 2000; 

* * * * * * * 

(g) DATA REQUIRED.—

(1) * * * 

* * * * * * * 

(4) SUBMISSION; REPORT; INFORMATION AVAILABILITY.—

(A) * * * 

(B) The Secretary shall prepare a report regarding the information received under subparagraph (A) and submit such report to the øCommittee on Education and the Workforce of the 

House of Representatives and the Committee on Labor and 

Human Resources of the Senate¿ authorizing committees by 

April 1, 2000. The report shall—

(i) * * * 

* * * * * * * 

(h) DISCLOSURE OF FIRE SAFETY STANDARDS AND MEASURES.—

(1) ANNUAL FIRE SAFETY REPORTS REQUIRED.—Each institution participating in any program under this title shall, beginning in the first academic year that begins after the date of enactment of the College Access and Opportunity Act of 2005, and 

each year thereafter, prepare, publish, and distribute, through 

appropriate publications (including the Internet) or mailings, to 

all current students and employees, and to any applicant for enrollment or employment upon request, an annual fire safety report. Such reports shall contain at least the following information with respect to the campus fire safety practices and standards of that institution: 

(A) A statement that identifies each institution-owned or 

controlled student housing facility, and whether or not such 

facility is equipped with a fire sprinkler system or other fire 

safety system, or has fire escape planning or protocols. 

(B) Statistics for each such facility concerning the occurrence of fires and false alarms in such facility during the 

2 preceding calendar years for which data are available. 

(C) For each such occurrence in each such facility, a summary of the human injuries or deaths, structural or property damage, or combination thereof. 

(D) Information regarding rules on portable electrical appliances, smoking and open flames (such as candles), regular mandatory supervised fire drills, and planned and future improvements in fire safety. 

(E) Information about fire safety education and training 

provided to students, faculty, and staff. 

(F) Information concerning fire safety at any housing facility owned or controlled by a fraternity, sorority, or student group that is recognized by the institution, including—

(i) information reported to the institution under 

paragraph (4); and 

(ii) a statement concerning whether and how the institution works with recognized student fraternities 

and sororities, and other recognized student groups 

524 

owning or controlling housing facilities, to make each 

building and property owned or controlled by such fraternities, sororities, and groups more fire safe. 

(2) FRATERNITIES, SORORITIES, AND OTHER GROUPS.—Each 

institution participating in a program under this title shall request each fraternity and sorority that is recognized by the institution, and any other student group that is recognized by the 

institution and that owns or controls housing facilities, to collect and report to the institution the information described in 

subparagraphs (A) through (E) of paragraph (1), as applied to 

the fraternity, sorority, or recognized student group, respectively, for each building and property owned or controlled by 

the fraternity, sorority, or group, respectively. 

(3) CURRENT INFORMATION TO CAMPUS COMMUNITY.—Each 

institution participating in any program under this title shall 

make, keep, and maintain a log, written in a form that can be 

easily understood, recording all on-campus fires, including the 

nature, date, time, and general location of each fire and all 

false fire alarms. All entries that are required pursuant to this 

paragraph shall, except where disclosure of such information is 

prohibited by law, be open to public inspection, and each such 

institution shall make annual reports to the campus community 

on such fires and false fire alarms in a manner that will aid 

the prevention of similar occurrences. 

(4) REPORTS TO THE SECRETARY.—On an annual basis, each 

institution participating in any program under this title shall 

submit to the Secretary a copy of the statistics required to be 

made available under paragraph (1)(B). The Secretary shall— (A) review such statistics; 

(B) make copies of the statistics submitted to the Secretary available to the public; and 

(C) in coordination with nationally recognized fire organizations and representatives of institutions of higher education, identify exemplary fire safety policies, procedures, 

and practices and disseminate information concerning 

those policies, procedures, and practices that have proven 

effective in the reduction of campus fires. 

(5) RULE OF CONSTRUCTION.—Nothing in this subsection 

shall be construed to authorize the Secretary to require particular policies, procedures, or practices by institutions of higher 

education with respect to fire safety. 

(6) DEFINITIONS.—In this subsection, the term ‘‘campus’’ has 

the meaning provided in subsection (f)(6). 

* * * * * * * 

SEC. 485B. NATIONAL STUDENT LOAN DATA SYSTEM. 

(a) DEVELOPMENT OF THE SYSTEM.—The Secretary shall consult 

with a representative group of guaranty agencies, eligible lenders, 

and eligible institutions to develop a mutually agreeable proposal 

for the establishment of a National Student Loan Data System containing information regarding loans made, insured, or guaranteed 

under part B and loans made under parts D and E, and for allowing the electronic exchange of data between program participants 

and the system. In establishing such data system, the Secretary 

shall place a priority on providing for the monitoring of enrollment, 

525 

student status, information about current loan holders and 

servicers, and internship and residency information. Such data system shall also permit borrowers to use the system to identify the 

current loan holders and servicers of such borrower’s loan not later 

than one year after the date of enactment of the Higher Education 

Amendments of 1998. The information in the data system shall include (but is not limited to)— (1) * * * 

* * * * * * * 

(5) the exact amount of loans partially or totally canceled or 

in deferment for service under the Peace Corps Act ø(22 U.S.C. 

2501 et seq.)),¿ (22 U.S.C. 2501 et seq.), for service under the 

Domestic Volunteer Service Act of 1973 (42 U.S.C. 4951 et 

seq.), and for comparable full-time service as a volunteer for a 

tax-exempt organization of demonstrated effectivenessø.¿; 

ø(5)¿ (6) the eligible institution in which the student was enrolled or accepted for enrollment at the time the loan was 

made, and any additional institutions attended by the 

borrower; 

ø(6)¿ (7) the total amount of loans made to any borrower and 

the remaining balance of the loans; 

ø(7)¿ (8) the lender, holder, and servicer of such loans; 

ø(8)¿ (9) information concerning the date of any default on 

the loan and the collection of the loan, including any information concerning the repayment status of any defaulted loan on 

which the Secretary has made a payment pursuant to section 

430(a) or the guaranty agency has made a payment to the previous holder of the loan; 

ø(9)¿ (10) information regarding any deferments or forbearance granted on such loans; and 

ø(10)¿ (11) the date of cancellation of the note upon completion of repayment by the borrower of the loan or payment by 

the Secretary pursuant to section 437. 

* * * * * * * 

SEC. 485D. COLLEGE ACCESS INITIATIVE. 

(a) STATE-BY-STATE INFORMATION.—The Secretary shall direct 

each guaranty agency with which the Secretary has an agreement 

under section 428(c) to provide to the Secretary the information necessary for the development of web links and access for students and 

families to a comprehensive listing of the postsecondary education 

opportunities, programs, publications, Internet Web sites, and other 

services available in the States for which such agency serves as the 

designated guarantor. 

(b) GUARANTY AGENCY ACTIVITIES.— (1) PLAN AND ACTIVITY REQUIRED.—Each guaranty agency 

with which the Secretary has an agreement under section 428(c) 

shall develop a plan and undertake the activity necessary to 

gather the information required under subsection (a) and to 

make such information available to the public and to the Secretary in a form and manner as prescribed by the Secretary. 

(2) ACTIVITIES.—Each guaranty agency shall undertake such 

activities as are necessary to promote access to postsecondary 

education for students through providing information on college 

planning, career preparation, and paying for college. The guarVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00529 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
526 

anty agency shall publicize such information and coordinate 

such activities with other entities that either provide or distribute such information in the States for which such guaranty 

agency serves as the designated guarantor. 

(3) FUNDING.—The activities required by this section may be 

funded from the guaranty agency’s operating account established pursuant to section 422B and, to the extent funds remain, from earnings on the restricted account established pursuant to section 422(h)(4). 

(c) ACCESS TO INFORMATION.— (1) SECRETARY’S RESPONSIBILITY.—The Secretary shall ensure 

the availability of the information provided by the guaranty 

agencies in accordance with this section to students, parents, 

and other interested individuals, through web links or other 

methods prescribed by the Secretary. 

(2) GUARANTY AGENCY RESPONSIBILITY.—The guaranty agencies shall ensure that the information required by this section 

is available without charge in printed format for students and 

parents requesting such information. 

(3) PUBLICITY.—Within 270 days after the date of enactment 

of the College Access and Opportunity Act of 2005, the Secretary 

and guaranty agencies shall publicize the availability of the information required by this section, with special emphasis on ensuring that populations that are traditionally underrepresented 

in postsecondary education are made aware of the availability 

of such information. 

SEC. 486. DISTANCE EDUCATION DEMONSTRATION PROGRAMS. 

(a) * * * 

(b) DEMONSTRATION PROGRAMS AUTHORIZED.— (1) * * * 

(2) WAIVERS.—The Secretary is authorized to waive for any 

institution of higher education, system of institutions of higher 

education, or consortium participating in a Distance Education 

Demonstration Program, the requirements of section 472(5) as 

the section relates to computer costs, sections 481(a) and 

481(b) as such sections relate to requirements for a minimum 

number of weeks of instruction, sections ø102(a)(3)(A), 

102(a)(3)(B)¿ 101(b)(4)(A), 101(b)(4)(B), and 484(l)(1), or one or 

more of the regulations prescribed under this part or part F 

which inhibit the operation of quality distance education programs. 

(3) ELIGIBLE APPLICANTS.—

(A) * * * 

(B) PROHIBITION.—An institution of higher education described in øsection 102(a)(1)(C)¿ section 102 shall not be eligible to participate in the demonstration program authorized under this section. 

(C) SPECIAL RULE.—Subject to subparagraph (B), an institution of higher education that meets the requirements 

of øsubsection (a) of section 102, other than the requirement of paragraph (3)(A) or (3)(B) of such subsection,¿ section 101, other than the requirements of subparagraph (A) 

or (B) of subsection (b)(4) of such section and that provides 

a 2-year or 4-year program of instruction for which the institution awards an associate or baccalaureate degree, 

527 

shall be eligible to participate in the demonstration program authorized under this section. 

* * * * * * * 

(d) SELECTION.—

(1) IN GENERAL.—For the first year of the demonstration program authorized under this section, the Secretary is authorized 

to select for participation in the program not more than 15 institutions, systems of institutions, or consortia of institutions. 

For øthe third year¿ subsequent years of the demonstration 

program authorized under this section, the Secretary may select not more than ø35¿ 100 institutions, systems, or consortia, 

in addition to the institutions, systems, or consortia selected 

pursuant to the preceding sentence, to participate in the demonstration program if the Secretary determines that such expansion is warranted based on the evaluations conducted in accordance with subsections (f ) and (g). Not more than 5 of such 

institutions, systems, or consortia may be accredited, degreegranting correspondence schools. 

* * * * * * * 

(e) NOTIFICATION.—The Secretary shall make available to the 

public and to the øCommittee on Labor and Human Resources of 

the Senate and the Committee on Education and the Workforce of 

the House of Representatives¿ authorizing committees a list of institutions, systems or consortia selected to participate in the demonstration program authorized by this section. Such notice shall include a listing of the specific statutory and regulatory requirements 

being waived for each institution, system or consortium and a description of the distance education courses to be offered. 

(f ) EVALUATIONS AND REPORTS.—

(1) * * * 

* * * * * * * 

(3) REPORTS.—

(A) IN GENERAL.—Within 18 months of the initiation of 

the demonstration program, the Secretary shall report to 

the øCommittee on Labor and Human Resources of the 

Senate and the Committee on Education and the Workforce of the House of Representatives¿ authorizing committees with respect to—

(i) * * * 

* * * * * * * 

(B) ADDITIONAL REPORTS.—The Secretary shall provide 

additional reports to the øCommittee on Labor and Human 

Resources of the Senate and the Committee on Education 

and the Workforce of the House of Representatives¿ authorizing committees on an annual basis regarding—

(i) * * * 

* * * * * * * 

SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM. 

(a) PURPOSE.—It is the purpose of this section— (1) to provide, through a college affordability demonstration 

program, for increased innovation in the delivery of higher education and student financial aid in a manner resulting in reVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00531 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
528 

duced costs for students as well as the institution by employing 

one or more strategies including accelerating degree or program 

completion, increasing availability of, and access to, distance 

components of education delivery, engaging in collaborative arrangements with other institutions and organizations, and 

other alternative methodologies; and 

(2) to help determine—

(A) the most effective means of delivering student financial aid as well as quality education; 

(B) the specific statutory and regulatory requirements 

that should be altered to provide for more efficient and effective delivery of student financial aid, as well as access 

to high quality distance education programs, resulting in a 

student more efficiently completing postsecondary education; and 

(C) the most effective methods of obtaining and managing institutional resources. 

(b) DEMONSTRATION PROGRAM AUTHORIZED.—

(1) IN GENERAL.—In accordance with the purposes described 

in subsection (a) and the provisions of subsection (d), the Secretary is authorized to select not more than 100 institutions of 

higher education, including those applying as part of systems 

or consortia of such institutions, for voluntary participation in 

the College Affordability Demonstration Program in order to enable participating institutions to carry out such purposes by 

providing programs of postsecondary education, and making 

available student financial assistance under this title to students enrolled in those programs, in a manner that would not 

otherwise meet the requirements of this title. 

(2) WAIVERS.—The Secretary is authorized to waive for any 

institutions of higher education, or any system or consortia of 

institutions of higher education, selected for participation in the 

College Affordability Demonstration Program, any requirements 

of this Act or the regulations thereunder as deemed necessary 

by the Secretary to meet the purpose described in subsection 

(a)(1), and shall make a determination that the waiver can reasonably be expected to result in reduced costs to students or institutions without an increase in Federal program costs. The 

Secretary may not waive under this paragraph the maximum 

award amounts for an academic year or loan period. 

(3) ELIGIBLE APPLICANTS.—

(A) ELIGIBLE INSTITUTIONS.—Except as provided in subparagraph (B), only an institution of higher education that 

is eligible to participate in programs under this title shall 

be eligible to participate in the demonstration program authorized under this section. 

(B) PROHIBITION.—An institution of higher education described in section 102 shall not be eligible to participate in 

the demonstration program authorized under this section. 

(c) APPLICATION.—

(1) IN GENERAL.—Each institution or system of institutions 

desiring to participate in the demonstration program under this 

section shall submit an application to the Secretary at such 

time and in such manner as the Secretary may require. 

529 

(2) CONTENTS OF APPLICATIONS.—Each application for the 

college affordability demonstration program shall include at 

least the following: 

(A) a description of the institution or system or consortium of institutions and what quality assurance mechanisms are in place to insure the integrity of the Federal financial aid programs; 

(B) a description of the innovation or innovations being 

proposed and the affected programs and students, including— (i) a description of any collaborative arrangements 

with other institutions or organizations to reduce costs; 

(ii) a description of any expected economic impact of 

participation in the program within the community in 

which the institution is located; and 

(iii) a description of any means the institution will 

employ to reduce the costs of instructional materials, 

such as textbooks; 

(C) a description of each regulatory or statutory requirement for which waivers are sought, with a reason for each 

waiver; 

(D) a description of the expected outcomes of the program 

changes proposed, including the estimated reductions in 

costs both for the institution and for students; 

(E) a description of the quality assurance mechanisms in 

place to ensure the integrity of the Federal financial aid 

programs; 

(F) an assurance from each institution in a system or 

consortium of a commitment to fulfill its role as described 

in the application; 

(G) an assurance that the participating institution or system of institutions will offer full cooperation with the ongoing evaluations of the demonstration program provided for 

in this section; and 

(H) any other information or assurances the Secretary 

may require. 

(d) SELECTION.—In selecting institutions to participate in the 

demonstration program under this section, the Secretary shall take 

into account— (1) the number and quality of applications received, determined on the basis of the contents required by subsection (c)(2); 

(2) the Department’s capacity to oversee and monitor each institution’s participation; 

(3) an institution’s— (A) financial responsibility; 

(B) administrative capability; 

(C) program or programs being offered via distance education, if applicable; 

(D) student completion rates; and 

(E) student loan default rates; and 

(4) the participation of a diverse group of institutions with respect to size, mission, and geographic distribution. 

(e) NOTIFICATION.—The Secretary shall make available to the 

public and to the authorizing committees a list of institutions selected to participate in the demonstration program authorized by 

530 

this section. Such notice shall include a listing of the specific statutory and regulatory requirements being waived for each institution 

and a description of the innovations being demonstrated. 

(f) EVALUATIONS AND REPORTS.—

(1) EVALUATION.—The Secretary shall evaluate the demonstration program authorized under this section on a biennial 

basis. Such evaluations specifically shall review—

(A) the extent to which expected outcomes, including the 

estimated reductions in cost, were achieved; 

(B) the number and types of students participating in the 

programs offered, including the progress of participating 

students toward recognized certificates or degrees and the 

extent to which participation in such programs increased; 

(C) issues related to student financial assistance associated with the innovations undertaken; 

(D) effective technologies and alternative methodologies 

for delivering student financial assistance; 

(E) the extent of the cost savings to the institution, the 

student, and the Federal Government by virtue of the waivers provided, and an estimate as to future cost savings for 

the duration of the demonstration program; 

(F) the extent to which students saved money by virtue of 

completing their postsecondary education sooner; 

(G) the extent to which the institution reduced its tuition 

and fees and its costs by virtue of participation in the demonstration program; 

(H) the extent to which any collaborative arrangements 

with other institutions or organizations have reduced the 

participating institution’s costs; and 

(I) the extent to which statutory or regulatory requirements not waived under the demonstration program 

present difficulties for students or institutions. 

(2) POLICY ANALYSIS.—The Secretary shall review current 

policies and identify those policies that present impediments to 

the implementation of innovations that result in cost savings 

and in expanding access to education. 

(3) REPORTS.—The Secretary shall provide a report to the authorizing committees on a biennial basis regarding—

(A) the demonstration program authorized under this section; 

(B) the results of the evaluations conducted under paragraph (1); 

(C) the cost savings to the Federal Government by the 

demonstration program authorized by this section; and 

(D) recommendations for changes to increase the efficiency and effective delivery of financial aid. 

(g) OVERSIGHT.—In conducting the demonstration program authorized under this section, the Secretary shall, on a continuing 

basis—

(1) ensure compliance of institutions or systems of institutions 

with the requirements of this title (other than the sections and 

regulations that are waived under subsection (b)(2)); 

(2) provide technical assistance to institutions in their application to and participation in the demonstration program; 

531 

(3) monitor fluctuations in the student population enrolled in 

the participating institutions or systems of institutions; 

(4) monitor changes in financial assistance provided at the 

institution; and 

(5) consult with appropriate accrediting agencies or associations and appropriate State regulatory authorities. 

(h) TERMINATION OF AUTHORITY.—The authority of the Secretary 

under this section shall cease to be effective on October 1, 2011. 

SEC. 487. PROGRAM PARTICIPATION AGREEMENTS. 

(a) REQUIRED FOR PROGRAMS OF ASSISTANCE; CONTENTS.—In 

order to be an eligible institution for the purposes of any program 

authorized under this title, an institution must be an institution of 

higher education or an eligible institution (as that term is defined 

for the purpose of that program) and shall, except with respect to 

a program under subpart 4 of part A, enter into a program participation agreement with the Secretary. The agreement shall condition the initial and continuing eligibility of an institution to participate in a program upon compliance with the following requirements: 

(1) * * * 

* * * * * * * 

(16)(A) The institution will not knowingly employ an individual in a capacity that involves the administration of programs under this title, or the receipt of program funds under 

this title or other Federal, State, or local government funds, who has been convicted of, or has pled nolo contendere or 

guilty to, a crime involving the acquisition, use, or expenditure 

of funds under this title or other Federal, State, or local government funds, or has been judicially determined to have committed fraud involving funds under this title or other Federal, 

State, or local government funds or contract with an institution 

or third party servicer that has been terminated under section 

432 involving the acquisition, use, or expenditure of funds 

under this title or other Federal, State, or local government 

funds, or who has been judicially determined to have committed fraud involving funds under this title or other Federal, 

State, or local government funds. (B) The institution will not knowingly contract with or employ any individual, agency, or organization that has been, or 

whose officers or employees have been— (i) convicted of, or pled nolo contendere or guilty to, a 

crime involving the acquisition, use, or expenditure of 

funds under this title or other Federal, State, or local government funds; or 

(ii) judicially determined to have committed fraud involving funds under this title or other Federal, State, or 

local government funds. 

* * * * * * * 

(22) The institution will comply with the ørefund policy¿ policy on the return of title IV funds established pursuant to section 484B. 

(23)(A) * * * 

* * * * * * * 

532 

(C) This paragraph shall apply to general and special elections for Federal office, as defined in section 301(3) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(3)), and to 

the elections for Governor or other chief executive within such 

State). 

(D) An institution shall be considered in compliance with the 

requirements of subparagraph (A) for any student to whom the 

institution electronically transmits a message containing a voter 

registration form acceptable for use in the State in which the 

institution is located, or an Internet address where such a form 

can be downloaded, provided such information is in an electronic message devoted to voter registration. 

(24) The institution will, as calculated in accordance with 

subsection (f)(1), have at least 10 percent of its revenues from 

sources other than funds provided under this title, or will be 

subject to the sanctions described in subsection (f)(2). 

(25) The institution will disclose to the alleged victim of any 

crime of violence (as that term is defined in section 16 of title 

18), or a nonforcible sex offense, the final results of any disciplinary proceeding conducted by such institution against a student 

who is the alleged perpetrator of such crime or offense with respect to such crime or offense. If the alleged victim of such 

crime or offense is deceased, the next of kin of such victim shall 

be treated as the alleged victim for purposes of this paragraph. 

* * * * * * * 

(c) AUDITS; FINANCIAL RESPONSIBILITY; ENFORCEMENT OF STAND- ARDS.—(1) Notwithstanding any other provisions of this title, the 

Secretary shall prescribe such regulations as may be necessary to 

provide for— (A)(i) except as provided in clauses (ii) and (iii), a financial 

audit of an eligible institution with regard to the financial condition of the institution in its entirety, and a compliance audit 

of such institution with regard to any funds obtained by it 

under this title or obtained from a student or a parent who has 

a loan insured or guaranteed by the Secretary under this title, 

on at least an annual basis and covering the period since the 

most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by 

the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted 

to the Secretary and shall be available to cognizant guaranty 

agencies, eligible lenders, State agencies, and the appropriate 

State agency notifying the Secretary under subpart 1 of part 

H, except that the Secretary may modify the requirements of 

this clause with respect to institutions of higher education that 

are foreign institutions, and may waive such requirements with 

respect to a foreign institution whose students receive less than 

$500,000 in loans under this title during the award year preceding the audit period; 

* * * * * * * 

(iii) at the discretion of the Secretary, with regard to an eligible institution (other than an eligible institution described in 

øsection 102(a)(1)(C)¿ section 102) that has obtained less than 

533 

$200,000 in funds under this title during each of the 2 award 

years that precede the audit period and submits a letter of 

credit payable to the Secretary equal to not less than 1⁄2 of the 

annual potential liabilities of such institution as determined by 

the Secretary, deeming an audit conducted every 3 years to 

satisfy the requirements of clause (i), except for the award year 

immediately preceding renewal of the institution’s eligibility 

under section 498(g); 

* * * * * * * 

(d) DEFINITION OF ELIGIBLE INSTITUTION.—For the purpose of 

this section, the term ‘‘eligible institution’’ means any such institution described in section ø102¿ 101 of this Act. 

* * * * * * * 

(f) IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.— (1) CALCULATION.—In carrying out subsection (a)(24), an institution shall use the cash basis of accounting and count the 

following funds toward the 10 percent of revenues from sources 

of funds other than funds provided under this title: 

(A) funds used by students to pay tuition, fees, and other 

institutional charges from sources other than funds provided under this title as long as the institution can reasonably demonstrate that such funds were used for such purposes; 

(B) institutional funds used to satisfy matching-fund requirements for programs under this title; 

(C) funds from savings plans for educational expenses established pursuant to the Internal Revenue Code of 1986; 

(D) funds paid by a student, or on behalf of a student by 

a party other than the institution, for an education or 

training program that is not eligible for funds under this 

title, so long as the program is approved or licensed by the 

appropriate State agency or an accrediting agency recognized by the Secretary; and 

(E) institutional aid, as follows: 

(i) in the case of institutional loans, only the amount 

of loan repayments received during the fiscal year; and 

(ii) in the case of institutional scholarships, only 

those provided by the institution in the form of monetary aid or tuition discounts based upon the academic 

achievements or financial need of students, disbursed 

during the fiscal year from an established restricted account, and only to the extent that the funds in that account represent designated funds from an outside 

source or from income earned on those funds. 

(2) SANCTIONS.—An institution that fails to meet the requirements of subsection (a)(24) for 3 consecutive years shall become 

ineligible to participate in the programs authorized by this title. 

In addition to such other means of enforcing the requirements 

of this title as may be available to the Secretary, if an institution fails to meet the requirements of subsection (a)(24) in any 

year, the Secretary may impose one or more of the following 

sanctions on the institution: 

(A) Place the institution on provisional certification in accordance with section 498(h) until the institution demVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00537 Fmt 6659 Sfmt 6603 E:\HR\OC\HR231.XXX HR231
534 

onstrates, to the satisfaction of the Secretary, that it is in 

compliance with subsection (a)(24). 

(B) Require such other increased monitoring and reporting requirements as the Secretary determines necessary 

until the institution demonstrates, to the satisfaction of the 

Secretary, that it is in compliance with subsection (a)(24). 

(3) PUBLICATION ON COOL WEBSITE.—The Secretary shall 

identify, on the College Opportunities On-Line website under 

section 131(b), any institution that fails to meet the requirements of subsection (a)(24) in any year as an institution that is 

failing to meet the minimum non-Federal source of revenue requirements of that subsection. 

SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT. 

(a) QUALITY ASSURANCE PROGRAM.— (1) * * * 

* * * * * * * 

(5) REVIEW AND EVALUATION.—The Secretary shall review 

and evaluate the Quality Assurance Program conducted by 

each participating institution and, on the basis of that evaluation, make recommendations regarding amendments to this 

Act that will streamline the administration and enhance the 

integrity of Federal student assistance programs. Such recommendations shall be submitted to the øCommittee on Labor 

and Human Resources of the Senate and the Committee on 

Education and the Workforce of the House of Representatives¿ 

authorizing committees. (b) REGULATORY IMPROVEMENT AND STREAMLINING EXPERI- MENTS.—

(1) IN GENERAL.—The Secretary may continue any experimental sites in existence on the date of enactment of the 

øHigher Education Amendments of 1998¿ College Access and 

Opportunity Act of 2005. øAny activities approved by the Secretary prior to such date that are inconsistent with this section 

shall be discontinued not later than June 30, 1999.¿ 

(2) REPORT.—The Secretary shall review and evaluate the 

experience of institutions participating as experimental sites 

during the period of ø1993 through 1998¿ 1998 through 2004 

under this section ø(as such section was in effect on the day 

before the date of enactment of the Higher Education Amendments of 1998)¿, and shall submit a report based on this review and evaluation to the øCommittee on Labor and Human 

Resources of the Senate and the Committee on Education and 

the Workforce of the House of Representatives¿ authorizing 

committees not later than 6 months after the enactment of the 

øHigher Education Amendments of 1998.¿ College Access and 

Opportunity Act of 2005. Such report shall include—

(A) * * * 

* * * * * * * 

(3) SELECTION.—

(A) IN GENERAL.—øUpon the submission of the report required by paragraph (2), the Secretary is authorized to select a limited number of additional institutions for voluntary participation¿ The Secretary is authorized to continue the voluntary participation of institutions particiVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00538 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
535 

pating as of July 1, 2005, as experimental sites to provide 

recommendations to the Secretary on the impact and effectiveness of proposed regulations or new management initiatives, and shall continue the participation of any such 

institution unless the Secretary determines that such institution’s participation has not been successful in carrying 

out the purposes of this section. (B) CONSULTATION.—Prior to approving any additional 

experimental sites, the Secretary shall consult with the 

øCommittee on Labor and Human Resources of the Senate 

and the Committee on Education and the Workforce of the 

House of Representatives¿ authorizing committees and 

shall provide to such Committees— (i) * * * 

* * * * * * * 

SEC. 491. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE. 

(a) * * * 

* * * * * * * 

(c) MEMBERSHIP.—(1) * * * 

* * * * * * * 

(3) The appointment of members under subparagraphs (A) and 

(B) of paragraph (1) shall be effective upon publication of the appointment in the Congressional Record. 

* * * * * * * 

(h) PERSONNEL AND RESOURCES.—(1) The Advisory Committee 

may appoint such personnel as may be determined necessary by 

the Chairman without regard to the provisions of title 5, United 

States Code, governing appointments in the competitive service, 

and may be paid without regard to the provisions of chapter 51 and 

subchapter III of chapter 53 of such title relating to classification 

and General Schedule pay rates, but no individual so appointed 

shall be paid in excess of øthe rate authorized for GS–18 of the 

General Schedule¿ the maximum rate payable under section 5376 

of such title. The Advisory Committee may appoint not more than 

1 full-time equivalent, nonpermanent, consultant without regard to 

the provisions of title 5, United States Code. The Advisory Committee shall not be required by the Secretary to reduce personnel 

to meet agency personnel reduction goals. 

* * * * * * * 

(k) TERM OF THE COMMITTEE.—Notwithstanding the sunset and 

charter provisions of the Federal Advisory Committee Act (5 U.S.C. 

App. I) or any other statute or regulation, the Advisory Committee 

shall be authorized until October 1, ø2004¿ 2011. 

* * * * * * * 

øSEC. 493A. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT. 

ø(a) PREPARATIONS FOR YEAR 2000.—In order to ensure that the 

processing, delivery, and administration of grant, loan, and work 

assistance provided under this title is not interrupted due to operational problems related to the inability of computer systems to inVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00539 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
536 

dicate accurately dates after December 31, 1999, the Secretary of 

Education shall—

ø(1) take such actions as are necessary to ensure that all internal and external systems, hardware, and data exchange infrastructure administered by the Department that are necessary for the processing, delivery, and administration of the 

grant, loan, and work assistance are Year 2000 compliant by 

March 31, 1999, such that there will be no business interruption after December 31, 1999; 

ø(2) ensure that the Robert T. Stafford Federal Student Loan 

Program and the William D. Ford Federal Direct Loan Program are equal in level of priority with respect to addressing, 

and that resources are managed to equally provide for successful resolution of, the Year 2000 computer problem in both programs by December 31, 1999; 

ø(3) work with the Department’s various data exchange partners under this title to fully test all data exchange routes for 

Year 2000 compliance via end-to-end testing, and submit a report describing the parameters and results of such tests to the 

Comptroller General not later than March 31, 1999; 

ø(4) ensure that the Inspector General of the Department (or 

an external, independent entity selected by the Inspector General) performs and publishes a risk assessment of the systems 

and hardware under the Department’s management, that has 

been reviewed by an independent entity, and make such assessment publicly available not later than 60 days after the 

date of enactment of the Higher Education Amendments of 

1998; 

ø(5) not later than June 30, 1999, ensure that the Inspector 

General (or an external, independent entity selected by the Inspector General) conducts a review of the Department’s Year 

2000 compliance for the processing, delivery, and administration of grant, loan, and work assistance, and submits a report 

reflecting the results of that review to the Chairperson of the 

Committee on Labor and Human Resources of the Senate and 

the Chairperson of the Committee on Education and the Workforce of the House of Representatives; 

ø(6) develop a contingency plan to ensure the programs 

under this title will continue to run uninterrupted in the event 

of widespread disruptions in the flow of accurate computerized 

data, which contingency plan shall include a prioritization of 

mission critical systems and strategies to allow data partners 

to transfer data through alternate means; and 

ø(7) alert Congress at the earliest possible time if mission 

critical deadlines will not be met. 

ø(b) POSTPONEMENT AUTHORITY FOR THE YEAR 2000.—

ø(1) PURPOSE.—It is the purpose of this subsection to 

provide the Secretary with the flexibility necessary to—

ø(A) ensure that the resources and capabilities of institutions, lenders, and guaranty agencies are not overburdened by the combination of student aid processing and 

delivery requirements added or modified by the amendments made by the Higher Education Amendments of 1998 

and by the changes required to ensure that the systems of 

537 

the institutions, lenders and guaranty agencies are Year 

2000 compliant; and 

ø(B) avoid the disruption of grant, loan, or work assistance funds awarded to students because of Year 2000 compliance problems at a substantial number of institutions, 

lenders, and guaranty agencies. 

ø(2) AUTHORITY TO POSTPONE.—The Secretary may postpone, 

for a period of time described in paragraph (3), the implementation of any requirements under part B, D, E, or G that are 

added or modified by the amendments made by the Higher 

Education Amendments of 1998 related to the processing or delivery of grant, loan, and work assistance (which shall not include the determination of need for such assistance) provided 

under this title, if the Secretary—

ø(A) determines that—

ø(i) implementation of such requirements would require extensive changes to the existing systems of institutions, lenders, or guaranty agencies; and 

ø(ii) postponement is necessary to avoid jeopardizing 

the ability of a substantial number of institutions, 

lenders, or guaranty agencies to ensure that all of the 

systems of the institutions, lenders, or guaranty agencies related to the processing or delivery of such assistance function successfully after December 31, 1999; 

and 

ø(B) promptly publishes in the Federal Register a list of, 

and notifies Congress of, any provisions, the implementation of which the Secretary intends to postpone, with the 

reasons for such postponement. 

ø(3) EXCEPTIONS TO AUTHORITY.—The Secretary may not 

postpone the implementation of one or more provisions described in this subsection longer than the earlier of—

ø(A) the period of time that the Secretary determines 

necessary to ensure that the processing and delivery systems of the institutions, lenders, and guaranty agencies referred to in paragraph (1)(A)(ii) are capable of functioning 

successfully after December 31, 1999; or 

ø(B) one award year after the effective date applicable to 

such provision under the Higher Education Amendments 

of 1998.¿ 

Subpart 2—Accrediting Agency Recognition 

SEC. 496. RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION. 

(a) CRITERIA REQUIRED.—No accrediting agency or association 

may be determined by the Secretary to be a reliable authority as 

to the quality of education or training offered for the purposes of 

this Act or for other Federal purposes, unless the agency or association meets criteria established by the Secretary pursuant to this 

section. The Secretary shall, after notice and opportunity for a 

hearing, establish criteria for such determinations. Such criteria 

shall include an appropriate measure or measures of student 

achievement. Such criteria shall require that—

538 

(1) * * * 

* * * * * * * 

(3) if such agency or association is an agency or association 

described in— (A) subparagraph (A)(i) of paragraph (2), then such 

agency or association is separate and independent, both 

administratively and financially of any related, associated, 

or affiliated trade association or membership organization; 

or 

ø(B) subparagraph (B) of paragraph (2), then such agency or association has been recognized by the Secretary on 

or before October 1, 1991; or¿ 

ø(C)¿ (B) subparagraph (C) of paragraph (2) and such 

agency or association has been recognized by the Secretary 

on or before October 1, 1991, then the Secretary may 

waive the requirement that such agency or association is 

separate and independent, both administratively and financially of any related, associated, or affiliated trade association or membership organization upon a demonstration that the existing relationship has not served to compromise the independence of its accreditation process; 

(4)(A) such agency or association consistently applies and enforces standards that consider the stated missions of institutions of higher education, including such missions as inculcation of religious values, and that ensure that the courses or 

programs of instruction, training, or study offered by the institution of higher education, including distance education 

courses or programs, are of sufficient quality to achieve, for the 

duration of the accreditation period, the stated objective for 

which the courses or the programs are offered; and 

(B) if such agency or association already has or seeks to include within its scope of recognition the evaluation of the quality of institutions or programs offering distance education, such 

agency or association shall, in addition to meeting the other requirements of this subpart, demonstrate to the Secretary that— (i) the accreditation agency’s or association’s standards 

effectively address the quality of an institution’s distance 

education programs in the areas identified in paragraph 

(5) of this subsection, except that the agency or association 

shall not be required to have separate standards, procedures, or policies for the evaluation of distance education 

institutions or programs in order to meet the requirements 

of this subparagraph; and 

(ii) the agency or association requires that an institution 

that offers distance education programs to have processes 

by which it establishes that the student who registers in a 

distance education course or program is the same student 

who participates, completes academic work, and receives 

academic credit; 

(5) the standards for accreditation of the agency or association assess the institution’s— ø(A) success with respect to student achievement in relation to the institution’s mission, including, as appropriate, 

consideration of course completion, State licensing examinations, and job placement rates;¿ 

539 

(A) success with respect to student achievement in relation to the institution’s mission, including, as appropriate, 

consideration of student academic achievement as determined by the institution (in accordance with standards of 

the accrediting agency or association), retention, course and 

program completion, State licensing examinations, and job 

placement rates, and other student performance information selected by the institution, particularly that information used by the institution to evaluate or strengthen its 

programs; 

* * * * * * * 

ø(E) fiscal and administrative capacity as appropriate to 

the specified scale of operations;¿ 

(E) fiscal, administrative capacity, as appropriate to the 

specified scale of operations, and, for an agency or association where its approval for such institution determines eligibility for student assistance under this title, board governance, within the context of the institution’s mission; 

* * * * * * * 

ø(6) such agency or association shall apply procedures 

throughout the accrediting process, including evaluation and 

withdrawal proceedings, that comply with due process, including— ø(A) adequate specification of requirements and deficiencies at the institution of higher education or program 

being examined; 

ø(B) notice of an opportunity for a hearing by any such 

institution; 

ø(C) the right to appeal any adverse action against any 

such institution; and 

ø(D) the right to representation by counsel for any such 

institution;¿ 

(6) such an agency or association shall establish and apply 

review procedures throughout the accrediting process, including 

evaluation and withdrawal proceedings that comply with due 

process that provides for—

(A) adequate specification of requirements and deficiencies at the institution of higher education or program 

being examined; 

(B) an opportunity for a written response by any such institution to be included in the evaluation and withdrawal 

proceedings; 

(C) upon the written request of an institution, an opportunity for the institution to appeal any adverse action at a 

hearing prior to such action becoming final before an appeals panel that—

(i) shall not include current members of the agency 

or association’s underlying decision-making body that 

made the adverse decision; and 

(ii) is subject to a conflict of interest of policy; and 

(D) the right to representation by counsel for an such institution; 

* * * * * * * 

540 

ø(8) such agency or association shall make available to the 

public, upon request, and to the Secretary, and the State licensing or authorizing agency a summary of any review resulting in a final accrediting decision involving denial, termination, 

or suspension of accreditation, together with the comments of 

the affected institution.¿ 

(8) such agency or association shall make available to the 

public and submit to the Secretary and the State licensing or 

authorizing agency, together with the comments of the affected 

institution, a summary of agency or association actions, involving—

(A) final denial, withdrawal, suspension, or termination 

of accreditation; and 

(B) any other final adverse action taken with respect to 

an institution. 

* * * * * * * 

(c) OPERATING PROCEDURES REQUIRED.—No accrediting agency or 

association may be recognized by the Secretary as a reliable authority as to the quality of education or training offered by an institution seeking to participate in the programs authorized under this 

title, unless the agency or association—

(1) performs, at regularly established intervals, on-site inspections and reviews of institutions of higher education 

(which may include unannounced site visits) with particular 

focus on educational quality and program effectiveness, and ensures that accreditation team members are well-trained and 

knowledgeable with respect to their responsibilities (including 

those regarding distance education); 

* * * * * * * 

(5) maintains and makes publicly available written materials 

regarding standards and procedures for accreditation, appeal 

procedures, and the accreditation status of each institution 

subject to its jurisdiction; øand¿ 

(6) discloses publicly whenever an institution of higher education subject to its jurisdiction is being considered for accreditation or reaccreditationø.¿; 

(7) ensures that its onsite comprehensive reviews for accreditation or reaccreditation include evaluation of the substance of 

the information required in subparagraph (H) of section 

485(a)(1); 

(8) confirms as a part of its review for accreditation or reaccreditation that the institution has transfer policies—

(A) that are publicly disclosed; and 

(B) that do not deny transfer of credit based solely on the 

accreditation of the sending institution as long as the association or agency is recognized by the Secretary pursuant to 

section 496; 

(9) develops a brief summary, available to the public, of final 

adverse actions in accordance with the requirements of subsection (a)(8); 

(10) monitors the enrollment growth of distance education to 

ensure that an institution experiencing signficant growth has 

the capacity to serve its students effectively; 

541 

(11) discloses publicly, on the agency’s website or through 

other similar dissemination— (A) a list of the individuals who comprised the evaluation 

teams during the prior calendar year for each agency or association and the title and institutional affiliation of such 

individuals, although such list shall not be required to 

identify those individuals who comprised the evaluation 

team used for any specific institution; 

(B) a description of the agency’s or association’s process 

for selecting, preparing, and evaluating such individuals; 

and 

(C) any statements related to the accreditation responsibilities of such individuals; and 

(12) reviews the record of student complaints resulting from 

the student information process described in section 

485(a)(1)(J). 

* * * * * * * 

(j) IMPACT OF LOSS OF ACCREDITATION.—An institution may not 

be certified or recertified as an institution of higher education 

under øsection 102¿ section 101 and subpart 3 of this part or participate in any of the other programs authorized by this Act if such 

institution—

(1) * * * 

* * * * * * * 

(k) RELIGIOUS INSTITUTION RULE.—Notwithstanding subsection 

(j), the Secretary shall allow an institution that has had its accreditation withdrawn, revoked, or otherwise terminated, or has voluntarily withdrawn from an accreditation agency, to remain certified 

as an institution of higher education under øsection 102¿ section 

101 and subpart 3 of this part for a period sufficient to allow such 

institution to obtain alternative accreditation, if the Secretary determines that the reason for the withdrawal, revocation, or termination—

(1) * * * 

* * * * * * * 

(l) LIMITATION, SUSPENSION, OR TERMINATION OF RECOGNITION.—

(1) * * * 

* * * * * * * 

(3) The Secretary shall provide an annual report to Congress on 

the status of any agency or association for which the Secretary has 

limited, suspended or terminated recognition under this subsection. 

Subpart 3—Eligibility and Certification 

Procedures 

SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES. 

(a) * * * 

* * * * * * * 

(c) FINANCIAL RESPONSIBILITY STANDARDS.—(1) * * * 

(2) Notwithstanding paragraph (1), if an institution fails to meet 

criteria prescribed by the Secretary regarding ratios that demonstrate financial responsibility, then the institution shall provide 

542 

the Secretary with satisfactory evidence of its financial responsibility in accordance with paragraph (3). Such criteria shall take 

into account any differences in generally accepted accounting principles, and the financial statements required thereunder, that are 

applicable to øfor profit,¿ for-profit, public, and nonprofit institutions. The Secretary shall take into account an institution’s total financial circumstances in making a determination of its ability to 

meet the standards herein required. 

(d) ADMINISTRATIVE CAPACITY STANDARD.—The Secretary is authorized—

(1) to establish procedures and requirements relating to the 

administrative capacities of institutions of higher education, 

including— (A) * * * 

(B) maintenance of records; and 

* * * * * * * 

(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY.— (1) * * * 

* * * * * * * 

(3) INSTITUTIONS OUTSIDE THE UNITED STATES.—The 

Secretary shall promulgate regulations regarding the recertification requirements applicable to an institution of higher education outside of the United States that meets the requirements of øsection 102(a)(1)(C)¿ section 102 and received less 

than $500,000 in funds under part B for the most recent year 

for which data are available. 

* * * * * * * 

(i) TREATMENT OF CHANGES OF OWNERSHIP.—(1) An eligible institution of higher education that has had a change in ownership resulting in a change of control shall not qualify to participate in programs under this title after the change in control (except as provided in paragraph (3)) unless it establishes that it meets the requirements of øsection 102¿ section 101 (other than the requirements in subsections (b)(5) and (c)(3)) and this section after such 

change in control. 

* * * * * * * 

(j) TREATMENT OF BRANCHES.—(1) A branch of an eligible institution of higher education, as defined pursuant to regulations of the 

Secretary, shall be certified under this subpart before it may participate as part of such institution in a program under this title, 

øexcept that such branch shall not be required to meet the requirements of sections 102(b)(1)(E) and 102(c)(1)(C) prior to seeking such 

certification¿ except that such branch shall not be required to be in 

existence for at least 2 years prior to seeking such certification. Such 

branch is required to be in existence at least 2 years after the 

branch is certified by the Secretary as a branch campus participating in a program under this title, prior to seeking certification 

as a main campus or free-standing institution. 

SEC. 498A. PROGRAM REVIEW AND DATA. 

(a) * * * 

(b) SPECIAL ADMINISTRATIVE RULES.—In carrying out paragraphs 

(1) and (2) of subsection (a) and any other relevant provisions of 

this title, the Secretary shall—

543 

(1) * * * 

* * * * * * * 

(4) base any civil penalty assessed against an institution of 

higher education resulting from a program review or audit on 

the gravity of the violation, failure, or misrepresentation; 

øand¿ 

(5) inform the appropriate State and accrediting agency or 

association whenever the Secretary takes action against an institution of higher education under this section, section 498, or 

section 432ø.¿; 

(6) provide to the institution adequate opportunity to review 

and respond to any program review report or audit finding and 

underlying materials related thereto before any final program 

review or audit determination is reached; 

(7) review and take into consideration the institution’s response in any final program review or audit determination, and 

include in the final determination— (A) a written statement addressing the institution’s response and stating the basis for such final determination; 

and 

(B) a copy of the institution’s statement in response, appropriately redacted to protect confidential information; 

(8) maintain and preserve at all times the confidentiality of 

any program review report or audit finding until the requirements of paragraphs (6) and (7) are met, and until a final program review or audit determination has been issued, except to 

the extent required to comply with paragraph (5), provided, 

however, that the Secretary shall promptly disclose any and all 

program review reports and audit findings to the institution 

under review; and 

(9) require that the authority to approve or issue any program 

review report or audit finding, preliminary or otherwise, that 

contains any finding, determination, or proposed assessment 

that exceeds or may exceed $500,000 in liabilities shall not be 

delegated to any official beyond the Chief Operating Officer of 

Federal Student Aid. 

* * * * * * * 

SEC. 498B. REVIEW OF REGULATIONS. 

(a) * * * 

(b) REGULATORY AND STATUTORY RELIEF FOR SMALL VOLUME INSTITUTIONS.—The Secretary shall review and evaluate ways in 

which regulations under and provisions of this Act affecting institution of higher education (other than institutions described in øsection 102(a)(1)(C)¿ section 102), that have received in each of the 

two most recent award years prior to the date of the enactment of 

the Higher Education Amendments of 1998 less than $200,000 in 

funds through this title, may be improved, streamlined, or eliminated. 

* * * * * * * 

(d) REPORTS TO CONGRESS.—

(1) IN GENERAL.—The Secretary shall submit, not later than 

1 year after the date of the enactment of the Higher Education 

Amendments of 1998, a report to the øCommittee on Labor and 

544 

Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives¿ authorizing committees detailing the Secretary’s findings and recommendations based on the reviews conducted under subsections (a) and (b), including a timetable for implementation 

of any recommended changes in regulations and a description 

of any recommendations for legislative changes. 

(2) ADDITIONAL REPORTS.—Not later than January 1, 2003, 

the Secretary shall submit a report to the øCommittee on 

Labor and Human Resources of the Senate and the Committee 

on Education and the Workforce of the House of Representatives¿ authorizing committees detailing the Secretary’s findings 

and recommendations based on the review conducted under 

subsection (a), including a timetable for implementation of any 

recommended changes in regulations and a description of any 

recommendations for legislative changes. 

SEC. 499. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND 

ABUSE IN STUDENT FINANCIAL AID PROGRAMS. 

(a) PURPOSE.—It is the purpose of this section to require the Secretary to commission a nonpartisan, comprehensive study on the 

prevention of fraud and abuse in title IV student financial aid programs, and to report the results of such study to Congress. 

(b) SCOPE OF REPORT.—The study under this section shall thoroughly identify and address the following: 

(1) The impact of fraud and abuse in title IV student financial aid programs upon students and taxpayers, and the nature 

of such fraud and abuse. 

(2) The effectiveness of existing policies and requirements 

under this Act that were put in place to prevent fraud and 

abuse in title IV student financial aid programs, and how such 

policies and requirements should be improved. 

(3) The extent to which existing protections against fraud and 

abuse under this Act are adequately enforced, and how enforcement should be strengthened. 

(4) Areas in which additional information is needed to assess 

the effectiveness of current protections and enforcement against 

fraud and abuse. 

(5) Existing policies and requirements under this Act aimed 

at fraud and abuse that are ineffective, hinder innovation, or 

could be eliminated without reducing effectiveness. 

(6) New policies and enforcement, particularly those suited 

for the current higher education marketplace, needed to protect 

against fraud and abuse in title IV student financial aid programs. 

(7) The extent to which States are implementing regulations 

to protect students from fraud and abuse, and whether changes 

to Federal law will preempt such regulations. 

(c) REPORT.—Not later than December 31, 2007, the Secretary, 

after an opportunity for both the Secretary and the Inspector General of the Department of Education to review the results of the 

study, shall transmit to Congress a report on the study conducted 

under this section. Such report shall—

(1) include clear and specific recommendations for legislative 

and regulatory actions that are likely to significantly reduce the 

545 

fraud and abuse in title IV student financial aid programs 

identified under subsection (b); and 

(2) include both the Secretary’s and the Inspector General’s 

comments on the report. 

TITLE V—DEVELOPING INSTITUTIONS 

PART A—HISPANIC-SERVING INSTITUTIONS 

* * * * * * * 

SEC. 502. DEFINITIONS; ELIGIBILITY. 

(a) DEFINITIONS.—For the purpose of this title: 

(1) * * * 

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

(A) an institution of higher education— (i) * * * 

* * * * * * * 

(v) which provides a program of not less than 2 years 

that is acceptable for full credit toward a bachelor’s degree; 

ø(v)¿ (vi) that meets such other requirements as the 

Secretary may prescribe; and 

ø(vi)¿ (vii) that is located in a State; and 

* * * * * * * 

(5) HISPANIC-SERVING INSTITUTION.—The term ‘‘Hispanicserving institution’’ means an institution of higher education 

that—(A) is an eligible institution; and 

(B) at the time of application, has an enrollment of undergraduate full-time equivalent students that is at least 

25 percent Hispanic studentsø; and¿ at the end of the 

award year immediately preceding the date of application. 

ø(C) provides assurances that not less than 50 percent 

of the institution’s Hispanic students are low-income individuals, which assurances— ø(i) may employ statistical extrapolation using appropriate data from the Bureau of the Census or other 

appropriate Federal or State sources; and 

ø(ii) the Secretary shall consider as meeting the requirements of this subparagraph, unless the Secretary 

determines, based on a preponderance of the evidence, 

that the assurances do not meet the requirements.¿ 

* * * * * * * 

ø(7) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income individual’’ means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an 

amount equal to the poverty level determined by using criteria 

of poverty established by the Bureau of the Census.¿ 

* * * * * * * 

SEC. 503. AUTHORIZED ACTIVITIES. 

(a) * * * 

546 

(b) AUTHORIZED ACTIVITIES.—Grants awarded under this section 

shall be used for one or more of the following activities: 

(1) * * * 

ø(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.¿ 

(2) Construction, maintenance, renovation, and improvement 

in classrooms, libraries, laboratories, and other instructional 

facilities, including purchase or rental of telecommunications 

technology equipment or services, and the acquisition of real 

property adjacent to the campus of the institution on which to 

construct such facilities. 

* * * * * * * 

(5) Education or counseling services designed to improve the 

financial literacy and economic literacy of students and, as appropriate, their parents. 

ø(5)¿ (6) Tutoring, counseling, and student service programs 

designed to improve academic success. 

ø(6)¿ (7) Funds management, administrative management, 

and acquisition of equipment for use in strengthening funds 

management. 

ø(7)¿ (8) Joint use of facilities, such as laboratories and libraries. 

ø(8)¿ (9) Establishing or improving a development office to 

strengthen or improve contributions from alumni and the private sector. 

ø(9)¿ (10) Establishing or improving an endowment fund. 

ø(10)¿ (11) Creating or improving facilities for Internet or 

other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology 

equipment or services. 

ø(11)¿ (12) Establishing or enhancing a program of teacher 

education designed to qualify students to teach in public elementary schools and secondary schools. 

ø(12) Establishing community outreach programs that will 

encourage elementary school and secondary school students to 

develop the academic skills and the interest to pursue postsecondary education.¿ 

(13) Establishing community outreach programs and collaborative partnerships between Hispanic-serving institutions and 

local elementary or secondary schools. Such partnerships may 

include mentoring, tutoring, or other instructional opportunities 

that will boost student academic achievement and assist elementary and secondary school students in developing the academic skills and the interest to pursue postsecondary education. 

ø(13)¿ (14) Expanding the number of Hispanic and other 

underrepresented graduate and professional students that can 

be served by the institution by expanding courses and institutional resources. 

ø(14)¿ (15) Other activities proposed in the application submitted pursuant to section 504 that—

(A) * * * 

* * * * * * * 

547 

SEC. 504. DURATION OF GRANT. 

ø(a) AWARD PERIOD.—

ø(1) IN GENERAL.—The Secretary¿ 

(a) AWARD PERIOD.—The Secretary may award a grant to a Hispanic-serving institution under this title for 5 years. 

ø(2) WAITOUT PERIOD.—A Hispanic-serving institution shall 

not be eligible to secure a subsequent 5-year grant award 

under this title until 2 years have elapsed since the expiration 

of the institution’s most recent 5-year grant award under this 

title, except that for the purpose of this subsection a grant 

under section 514(a) shall not be considered a grant under this 

title.¿ 

* * * * * * * 

PART B—PROMOTING POSTBACCALAUREATE 

OPPORTUNITIES FOR HISPANIC AMERICANS 

SEC. 511. PURPOSES. 

The purposes of this part are—

(1) to expand postbaccalaureate educational opportunities for, 

and improve the academic attainment of, Hispanic students; 

and 

(2) to expand the postbaccalaureate academic offerings and 

enhance the program quality in the institutions that are educating the majority of Hispanic college students and helping 

large numbers of Hispanic and low-income students complete 

postsecondary degrees. 

SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY. 

(a) PROGRAM AUTHORIZED.—Subject to the availability of funds 

appropriated to carry out this part, the Secretary shall award competitive grants to Hispanic-serving institutions determined by the 

Secretary to be making substantive contributions to graduate educational opportunities for Hispanic students. 

(b) ELIGIBILITY.—For the purposes of this part, an ‘‘eligible institution’’ means an institution of higher education that—

(1) is an eligible institution under section 502(a)(2); and 

(2) offers a postbaccalaureate certificate or degree granting 

program. 

SEC. 513. AUTHORIZED ACTIVITIES. 

Grants awarded under this part shall be used for one or more of 

the following activities: 

(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes. 

(2) Construction, maintenance, renovation, and improvement 

of classrooms, libraries, laboratories, and other instructional facilities, including purchase or rental of telecommunications 

technology equipment or services. 

(3) Purchase of library books, periodicals, technical and other 

scientific journals, microfilm, microfiche, and other educational 

materials, including telecommunications program materials. 

(4) Support for needy postbaccalaureate students including 

outreach, academic support services, mentoring, scholarships, 

548 

fellowships, and other financial assistance to permit the enrollment of such students in postbaccalaureate certificate and degree granting programs. 

(5) Support of faculty exchanges, faculty development, faculty 

research, curriculum development, and academic instruction. 

(6) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or 

services. 

(7) Collaboration with other institutions of higher education 

to expand postbaccalaureate certificate and degree offerings. 

(8) Other activities proposed in the application submitted 

pursuant to section 514 that— (A) contribute to carrying out the purposes of this part; 

and 

(B) are approved by the Secretary as part of the review 

and acceptance of such application. 

SEC. 514. APPLICATION AND DURATION. 

(a) APPLICATION.—Any eligible institution may apply for a grant 

under this part by submitting an application to the Secretary at 

such time and in such manner as determined by the Secretary. Such 

application shall demonstrate how the grant funds will be used to 

improve postbaccalaureate education opportunities in programs and 

professions in which Hispanic Americans are underrepresented. 

(b) DURATION.—Grants under this part shall be awarded for a period not to exceed 5 years. 

(c) LIMITATION.—The Secretary shall not award more than one 

grant under this part in any fiscal year to any Hispanic-serving institution. 

PART øB¿ C—GENERAL PROVISIONS 

SEC. ø511¿ 521. ELIGIBILITY; APPLICATIONS. 

(a) * * * 

* * * * * * * 

(c) CONTENTS.—A Hispanic-serving institution, in the institution’s application for a grant, shall—

(1) * * * 

ø(2) include a 5-year plan for improving the assistance provided by the Hispanic-serving institution to Hispanic students 

and other low-income individuals;¿ 

ø(3)¿ (2) set forth policies and procedures to ensure that Federal funds made available under this title for any fiscal year 

will be used to supplement and, to the extent practical, increase the funds that would otherwise be made available for 

the purposes of section 501(b), and in no case supplant those 

funds; 

ø(4)¿ (3) set forth policies and procedures for evaluating the 

effectiveness in accomplishing the purpose of the activities for 

which a grant is sought under this title; 

ø(5)¿ (4) provide for such fiscal control and fund accounting 

procedures as may be necessary to ensure proper disbursement 

of and accounting for funds made available to the institution 

under this title; 

549 

ø(6)¿ (5) provide that the institution will comply with the 

limitations set forth in section 516; 

ø(7)¿ (6) describe in a comprehensive manner any proposed 

project for which funds are sought under the application and 

include—

(A) * * * 

* * * * * * * 

(7) contain such assurances as the Secretary may require that 

the institution has an enrollment of needy students as required 

by section 502(b); 

* * * * * * * 

SEC. ø512¿ 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT. 

(a) * * * 

* * * * * * * 

SEC. ø513¿ 523. APPLICATION REVIEW PROCESS. 

(a) * * * 

* * * * * * * 

SEC. ø514¿ 524. COOPERATIVE ARRANGEMENTS. 

(a) GENERAL AUTHORITY.—The Secretary may make grants to encourage cooperative arrangements with funds available to carry out 

this title, between Hispanic-serving institutions eligible for assistance under this title, and between such institutions and institutions not receiving assistance under this title, for the activities described in section 503 and section 513 so that the resources of the 

cooperating institutions might be combined and shared in order to 

achieve the purposes of this title, to avoid costly duplicative efforts, 

and to enhance the development of Hispanic-serving institutions. 

* * * * * * * 

(c) DURATION.—Grants to Hispanic-serving institutions having a 

cooperative arrangement may be made under this section for a period determined under øsection 505¿ section 504. 

SEC. ø515¿ 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS. 

(a) * * * 

* * * * * * * 

SEC. ø516¿ 526. LIMITATIONS. 

The funds appropriated under section 518 may not be used—

(1) * * * 

* * * * * * * 

SEC. ø517¿ 527. PENALTIES. 

Whoever, being an officer, director, agent, or employee of, or connected in any capacity with, any recipient of Federal financial assistance or grant pursuant to this title embezzles, willfully 

misapplies, steals, or obtains by fraud any of the funds that are the 

subject of such grant or assistance, shall be fined not more than 

$10,000 or imprisoned for not more than 2 years, or both. 

SEC. ø518¿ 528. AUTHORIZATIONS OF APPROPRIATIONS. 

ø(a) AUTHORIZATIONS.—There are authorized to be appropriated 

to carry out this title $62,500,000 for fiscal year 1999 and such 

550 

sums as may be necessary for each of the 4 succeeding fiscal 

years.¿ 

(a) AUTHORIZATIONS.— (1) PART A.—There are authorized to be appropriated to carry out part A and part C of this title $96,000,000 for fiscal year 

2006 and such sums as may be necessary for each of the 5 succeeding fiscal years. 

(2) PART B.—There are authorized to be appropriated to carry out part B of this title $59,000,000 for fiscal year 2006 and 

such sums as may be necessary for each of the 5 succeeding fiscal years. 

* * * * * * * 

TITLE VI—INTERNATIONAL EDUCATION 

PROGRAMS 

PART A—INTERNATIONAL AND FOREIGN 

LANGUAGE STUDIES 

SEC. 601. FINDINGS AND PURPOSES. 

(a) FINDINGS.—Congress finds as follows: 

(1) * * * 

* * * * * * * 

(3) Dramatic øpost-Cold War¿ changes in the world’s geopolitical and economic landscapes are creating needs for American expertise and knowledge about a greater diversity of less 

commonly taught foreign languages and nations of the world. 

(4) The events and aftermath of September 11, 2001, have underscored the need for the Nation to strengthen and enhance 

American knowledge of international relations, world regions, 

and foreign languages. Homeland security and effective United 

States engagement abroad depend upon an increased number of 

Americans who have received such training and are willing to 

serve their Nation. 

ø(4)¿ (5) Systematic efforts are necessary to enhance the capacity of institutions of higher education in the United States 

for— (A) * * * 

* * * * * * * 

ø(5)¿ (6) Cooperative efforts among the Federal Government, 

institutions of higher education, and the private sector are necessary to promote the generation and dissemination of information about world regions, foreign languages, and international 

affairs throughout education, government, business, civic, and 

nonprofit sectors in the United States. 

(b) PURPOSES.—The purposes of this part are—

(1)(A) * * * 

* * * * * * * 

(D) to promote access to research and training overseasø; 

and¿, including through linkages overseas with institutions of 

higher education and relevant organizations that contribute to 

the educational programs assisted under this part; 

551 

(E) to advance the internationalization of a variety of disciplines throughout undergraduate and graduate education; 

and 

(F) to assist the national effort to educate and train citizens 

to participate in the efforts of homeland security; 

* * * * * * * 

(3) to reinforce and coordinate the programs of the Federal 

Government in the areas of foreign language, area studies, and 

other international studies, including professional international affairs education and research, and international business and trade competitiveness. 

SEC. 602. GRADUATE AND UNDERGRADUATE LANGUAGE AND AREA 

CENTERS AND PROGRAMS. 

(a) NATIONAL LANGUAGE AND AREA CENTERS AND PROGRAMS AUTHORIZED.—

(1) CENTERS AND PROGRAMS.—

ø(A) IN GENERAL.—The Secretary is authorized—

ø(i) to make grants to institutions of higher education, or combinations thereof, for the purpose of establishing, strengthening, and operating comprehensive foreign language and area or international studies 

centers and programs; and 

ø(ii) to make grants to such institutions or combinations for the purpose of establishing, strengthening, 

and operating a diverse network of undergraduate foreign language and area or international studies centers and programs.¿ 

(A) IN GENERAL.—The Secretary is authorized to make 

grants to institutions of higher education or consortia of 

such institutions for the purpose of establishing, strengthening, and operating—

(i) comprehensive foreign language and area or international studies centers and programs; and 

(ii) a diverse network of undergraduate foreign language and area or international studies centers and 

programs. 

* * * * * * * 

(2) AUTHORIZED ACTIVITIES.—Any such grant may be used to 

pay all or part of the cost of establishing or operating a center 

or program, including the cost of—

(A) * * * 

* * * * * * * 

(G) summer institutes in the United States or abroad designed to provide language and area training in the center’s field or topic; øand¿ 

(H) support for faculty, staff, and student travel in foreign areas, regions, or countries, and for the development 

and support of educational programs abroad for 

studentsø.¿; 

(I) supporting instructors of the less commonly taught 

languages; 

(J) widely disseminating materials developed by the center or program to local educational agencies and public 

552 

and private elementary and secondary education schools, 

and institutions of higher education, presented from diverse 

perspectives and reflective of a wide range of views on the 

subject matter, except that no more than 50 percent of 

funds awarded to an institution of higher education or consortia of such institutions for purposes under this title may 

be associated with the costs of dissemination; and 

(K) projects that support in students an understanding of 

science and technology in coordination with foreign language proficiency. 

* * * * * * * 

(4) OUTREACH GRANTS AND SUMMER INSTITUTES.—The 

Secretary may make additional grants to centers described in 

paragraph (1) for any one or more of the following purposes: 

(A) * * * 

ø(B) Programs of linkage or outreach with 2- and 4-year 

colleges and universities.¿ 

(B) Partnerships or programs of linkage and outreach 

with 2-year and 4-year colleges and universities, including 

colleges of education and teacher professional development 

programs. 

(C) Partnerships with local educational agencies and 

public and private elementary and secondary education 

schools that are designed to increase student academic 

achievement in foreign language and knowledge of world 

regions, and to facilitate the wide dissemination of materials related to area studies, foreign languages, and international studies that are reflective of a wide range of views 

on the subject matter. 

ø(C) Programs of linkage or outreach¿ (D) Partnerships 

or programs of linkage and outreach with departments or 

agencies of Federal and State governments. 

ø(D)¿ (E) Programs of linkage or outreach with the news 

media, business, professional, or trade associations. 

ø(E)¿ (F) Summer institutes in øforeign area¿ area studies, foreign language, and other international fields designed to carry out the programs øof linkage and outreach¿ described in subparagraphs (A), (B), ø(C), and (D)¿ 

(D), and (E). 

* * * * * * * 

SEC. 603. LANGUAGE RESOURCE CENTERS. 

(a) LANGUAGE RESOURCE CENTERS AUTHORIZED.—The Secretary 

is authorized to make grants to and enter into contracts with institutions of higher education, or øcombinations¿ consortia of such institutions, for the purpose of establishing, strengthening, and operating a small number of national language resource and training 

centers, which shall serve as resources to improve the capacity to 

teach and learn foreign languages effectively. 

* * * * * * * 

(c) CONDITIONS FOR GRANTS.—Grants under this section shall reflect the purposes of this part and be made on such conditions as 

the Secretary determines to be necessary to carry out the provisions of this section. 

553 

SEC. 604. UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN 

LANGUAGE PROGRAMS. 

(a) INCENTIVES FOR THE CREATION OF NEW PROGRAMS AND THE

STRENGTHENING OF EXISTING PROGRAMS IN UNDERGRADUATE

INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS.— (1) AUTHORITY.—The Secretary is authorized to make grants 

to institutions of higher education, øcombinations¿ consortia of 

such institutions, or partnerships between nonprofit educational organizations and institutions of higher education, to 

assist such institutions, øcombinations¿ consortia or partnerships in planning, developing, and carrying out programs to 

improve undergraduate instruction in international studies 

and foreign languages. Such grants shall be awarded to institutions, øcombinations¿ consortia or partnerships seeking to 

create new programs or to strengthen existing programs in foreign languages, area studies, and other international fields. 

(2) USE OF FUNDS.—Grants made under this section may be 

used for Federal share of the cost of projects and activities 

which are an integral part of such a program, such as— (A) * * * 

(B) teaching, research, curriculum development, 

faculty training in the United States or abroad, and other 

related activities, including— (i) the expansion of library and teaching resources; 

and 

(ii) preservice and inservice øteacher training¿ 

teacher professional development; 

* * * * * * * 

(I) the provision of grants for educational programs 

abroad that are closely linked to the program’s overall 

goals and have the purpose of promoting foreign language 

fluency and knowledge of world regions, except that not 

more than 10 percent of a grant recipient’s funds may be 

used for this purpose; 

ø(I)¿ (J) the development of programs designed to integrate professional and technical education with foreign 

languages, area studies, and other international fields; 

ø(J)¿ (K) the establishment of linkages overseas with institutions of higher education and organizations that contribute to the educational programs assisted under this 

subsection; 

ø(K)¿ (L) the conduct of summer institutes in foreign 

area, foreign language, and other international fields to 

provide faculty and curriculum development, including the 

integration of professional and technical education with 

foreign area and other international studies, and to provide foreign area and other international knowledge or 

skills to government personnel or private sector professionals in international activities; 

ø(L)¿ (M) the development of partnerships between— (i) institutions of higher education; and 

(ii) the private sector, government, or øelementary 

and secondary education institutions¿ local educational agencies and public and private elementary 

and secondary education schools, 

554 

in order to enhance international knowledge and skills; 

and 

ø(M)¿ (N) the use of innovative technology to increase 

access to international education programs. 

* * * * * * * 

(4) SPECIAL RULE.—The Secretary may waive or reduce the 

required non-Federal share for institutions that—

(A) are eligible to receive assistance under part A or B 

of title III or under title V; and 

(B) have submitted a grant application under this section that demonstrates a need for a waiver or reduction. 

(5) PRIORITY.—In awarding grants under this section, the 

Secretary shall give priority to applications from institutions of 

higher education, øcombinations¿ consortia or partnerships 

that require entering students to have successfully completed 

at least 2 years of secondary school foreign language instruction or that require each graduating student to earn 2 years 

of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in 

the case of a 2-year degree granting institution, offer 2 years 

of postsecondary credit in a foreign language. 

(6) GRANT CONDITIONS.—Grants under this subsection shall 

reflect the purposes of this part and be made on such conditions 

as the Secretary determines to be necessary to carry out this 

subsection. 

* * * * * * * 

(8) EVALUATION.—The Secretary ømay¿ shall establish requirements for program evaluations and require grant recipients to submit annual reports that evaluate the progress and 

performance of students participating in programs assisted 

under this subsection. 

* * * * * * * 

ø(c) FUNDING SUPPORT.—The Secretary may use not more than 

10 percent of the total amount appropriated for this part for carrying out the purposes of this section.¿ 

SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT. 

(a) AUTHORIZED ACTIVITIES.—The Secretary may, directly or 

through grants or contracts, conduct research and studies that contribute to achieving the purposes of this part, including the systematic collection, analysis, and dissemination of data. Such research 

and studies may include—

(1) * * * 

* * * * * * * 

SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR 

FOREIGN INFORMATION ACCESS. 

(a) AUTHORITY.—The Secretary is authorized to make grants to 

institutions of higher education, public or nonprofit private libraries, øor consortia of such institutions or libraries¿ museums, or consortia of such entities, to develop innovative techniques or programs 

using ønew¿ electronic technologies to collect, organize, preserve, 

and widely disseminate information from foreign sources on world 

regions and countries other than the United States that address 

555 

our Nation’s teaching and research needs in international education and foreign languages. 

(b) AUTHORIZED ACTIVITIES.—Grants under this section may be 

used—

(1) to acquire and facilitate access to or preserve foreign information resources in print or electronic forms; 

(2) to develop new means of immediate, full-text document 

delivery for information and scholarship from abroad; 

(3) to develop ønew means of¿ new means and standards for 

shared electronic access to international data; 

* * * * * * * 

(6) to assist teachers of less commonly taught languages in 

acquiring, via electronic and other means, materials suitable 

for classroom use; øand¿ 

(7) to promote collaborative technology based projects in foreign languages, area studies, and international studies among 

grant recipients under this titleø.¿; 

(8) to establish linkages between grant recipients under subsection (a) with libraries, museums, organizations, or institutions of higher education located overseas to facilitate carrying 

out the purposes of this section; and 

(9) to carry out other activities deemed by the Secretary to be 

consistent with the purposes of this section. 

* * * * * * * 

(e) SPECIAL RULE.—The Secretary may waive or reduce the required non-Federal share for institutions that— (1) are eligible to receive assistance under part A or B of title 

III or under title V; and 

(2) have submitted a grant application under this section that 

demonstrates a need for a waiver or reduction. 

SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS. 

(a) * * * 

(b) SELECTION CRITERIA.—The Secretary shall set criteria for 

grants awarded under section 602 by which a determination of excellence shall be made to meet the differing øobjectives¿ missions 

of graduate and undergraduate institutions. In keeping with the 

purposes of this part, the Secretary shall take into account the degree to which activities of centers, programs, and fellowships at institutions of higher education address national interests, generate 

and disseminate information, and foster debate on international 

issues from diverse perspectives. 

* * * * * * * 

SEC. 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS. 

(a) SELECTION CRITERIA.—The Secretary shall make excellence 

the criterion for selection of grants awarded under section 602. 

Grants made under section 602 shall also reflect the purposes of 

this part. 

* * * * * * * 

SEC. 610. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part 

$80,000,000 for fiscal year ø1999¿ 2006, and such sums as may be 

necessary for each of the ø4¿ 5 succeeding fiscal years. 

556 

PART B—BUSINESS AND INTERNATIONAL 

EDUCATION PROGRAMS 

* * * * * * * 

SEC. 612. CENTERS FOR INTERNATIONAL BUSINESS EDUCATION. 

(a) PROGRAM AUTHORIZED.— (1) IN GENERAL.—The Secretary is authorized to make grants 

to institutions of higher education, or øcombinations¿ consortia 

of such institutions, to pay the Federal share of the cost of 

planning, establishing and operating centers for international 

business education which— (A) * * * 

* * * * * * * 

(c) AUTHORIZED ACTIVITIES.— (1) MANDATORY ACTIVITIES.—Programs and activities to be 

conducted by centers assisted under this section shall include—

(A) * * * 

* * * * * * * 

(D) collaborative programs, activities, or research involving other institutions of higher education (including those 

that are eligible to receive assistance under part A or B of 

title III or under title V), local educational agencies, professional associations, businesses, firms, or øcombinations¿ 

consortia thereof, to promote the development of international skills, awareness, and expertise among current 

and prospective members of the business community and 

other professionals; 

* * * * * * * 

(d) ADVISORY COUNCIL.— (1) ESTABLISHMENT.—In order to be eligible for assistance 

under this section, an institution of higher education, or øcombination¿ consortium of such institutions, shall establish a center advisory council which will conduct extensive planning 

prior to the establishment of a center concerning the scope of 

the center’s activities and the design of its programs. 

* * * * * * * 

(e) GRANT DURATION; FEDERAL SHARE.— (1) * * * 

* * * * * * * 

(5) SPECIAL RULE.—The Secretary may waive or reduce the 

required non-Federal share for institutions that—

(A) are eligible to receive assistance under part A or B of 

title III or under title V; and 

(B) have submitted a grant application under this section 

that demonstrates a need for a waiver or reduction. 

(f) GRANT CONDITIONS.—Grants under this section shall be made 

on such conditions as the Secretary determines to be necessary to 

carry out the objectives of this section. Such conditions shall include—

(1) evidence that the institution of higher education, or 

øcombination¿ consortium of such institutions, will conduct exVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00560 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
557 

tensive planning prior to the establishment of a center concerning the scope of the center’s activities and the design of its 

programs in accordance with subsection (d)(1); 

* * * * * * * 

(4) assurance that the institution of higher education, or 

øcombination¿ consortium of such institutions, will use the assistance provided under this section to supplement and not to 

supplant activities conducted by institutions of higher education described in subsection (c)(1). 

* * * * * * * 

SEC. 613. EDUCATION AND TRAINING PROGRAMS. 

(a) * * * 

* * * * * * * 

(e) SPECIAL RULE.—The Secretary may waive or reduce the required non-Federal share for institutions that—

(1) are eligible to receive assistance under part A or B of title 

III or under title V; and 

(2) have submitted a grant application under this section that 

demonstrates a need for a waiver or reduction. 

SEC. 614. AUTHORIZATION OF APPROPRIATIONS. 

(a) CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.—There 

are authorized to be appropriated $11,000,000 for the fiscal year 

ø1999¿ 2006 and such sums as may be necessary for each of the 

ø4¿ 5 succeeding fiscal years to carry out the provisions of section 

612. 

(b) EDUCATION AND TRAINING PROGRAMS.—There are authorized 

to be appropriated $7,000,000 for fiscal year ø1999¿ 2006, and such 

sums as may be necessary for the ø4¿ 5 succeeding fiscal years, to 

carry out the provisions of section 613. 

PART C—INSTITUTE FOR INTERNATIONAL 

PUBLIC POLICY 

øSEC. 621. MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT PROGRAM.¿ 

SEC. 621. PROGRAM FOR FOREIGN SERVICE PROFESSIONALS. 

(a) ESTABLISHMENT.—The Secretary is authorized to award a 

grant, on a competitive basis, to an eligible recipient to enable such 

recipient to establish an Institute for International Public Policy 

(hereafter in this part referred to as the ‘‘Institute’’). øThe Institute 

shall conduct a program to significantly increase the numbers of 

African Americans and other underrepresented minorities in the 

international service, including private international voluntary organizations and the foreign service of the United States.¿ The Institute shall conduct a program to enhance the international competitiveness of the United States by increasing the participation of 

underrepresented populations in the international service, including 

private international voluntary organizations and the foreign service of the United States. Such program shall include a program for 

such students to study abroad in their junior year, fellowships for 

graduate study, internships, intensive academic programs such as 

summer institutes, or intensive language training. 

558 

(b) DEFINITION OF ELIGIBLE RECIPIENT.— (1) IN GENERAL.—For the purpose of this part, the term ‘‘eligible recipient’’ means a consortium consisting of 1 or more of 

the following entities: 

ø(A) An institution eligible for assistance under part B 

of title III of this Act. 

ø(B) An institution of higher education which serves substantial numbers of African American or other underrepresented minority students.¿ 

(A) A Tribally Controlled College or University or Alaska 

Native or Native Hawaiian-serving institution eligible for 

assistance under title III, an institution eligible for assistance under part B of title III, or a Hispanic-serving institution eligible for assistance under title V. 

(B) An institution of higher education which serves substantial numbers of underrepresented students. 

* * * * * * * 

SEC. 622. INSTITUTIONAL DEVELOPMENT. 

(a) IN GENERAL.—The Institute shall award grants, from 

amounts available to the Institute for each fiscal year, to historically Black colleges and universities, Hispanic-serving institutions, 

Tribally Controlled Colleges or Universities, and minority institutions, to enable such colleges, universities, and institutions to 

strengthen international affairs programs and promote collaboration with colleges and universities that receive funds under this 

title. 

* * * * * * * 

SEC. 623. STUDY ABROAD PROGRAM. 

(a) PROGRAM AUTHORITY.—The Institute shall conduct, by grant 

or contract, a junior year abroad program. The junior year abroad 

program shall be open to eligible students at institutions of higher 

education, including historically Black colleges and universities as 

defined in section 322 of this Act, tribally controlled Indian community colleges as defined in the Tribally Controlled Community College Assistance Act of 1978, Alaska Native-serving, Native Hawaiian-serving, and Hispanic-serving institutions, and other institutions of higher education with significant minority student populations. Eligible student expenses shall be shared by the Institute 

and the institution at which the student is in attendance. Each student may spend not more than 9 months abroad in a program of 

academic study, as well as social, familial and political interactions 

designed to foster an understanding of and familiarity with the language, culture, economics and governance of the host country. 

* * * * * * * 

SEC. 624. øMASTERS¿ ADVANCED DEGREE IN INTERNATIONAL RELATIONS. 

The Institute shall provide, in cooperation with the other members participating in the eligible recipient consortium, a program of 

study leading to øa masters degree in international relations. The 

masters degree program designed by the consortia¿ an advanced 

degree in international relations, international affairs, international 

economics, or other academic areas related to the Institute fellow’s 

559 

career objectives. The advanced degree study program shall be designed by the consortia, consistent with the fellow’s career objectives, 

and shall be reviewed and approved by the Secretary. The Institute 

may grant fellowships in an amount not to exceed the level of support comparable to that provided by the National Science Foundation graduate fellowships, except such amount shall be adjusted as 

necessary so as not to exceed the fellow’s demonstrated level of 

need according to measurement of need approved by the Secretary. 

A fellowship recipient shall agree to undertake full-time study and 

to enter the international service (including work with private 

international voluntary organizations) or foreign service of the 

United States 

SEC. 625. INTERNSHIPS. 

(a) IN GENERAL.—The Institute shall enter into agreements with 

historically Black colleges and universities as defined in section 

322 of this Act, tribally controlled Indian community colleges as defined in the Tribally Controlled Community College Assistance Act 

of 1978, Alaska Native-serving, Native Hawaiian-serving, and Hispanic-serving institutions, other institutions of higher education 

with significant numbers of minority students, and institutions of 

higher education with programs in training foreign service professionals, to provide academic year internships during the junior and 

senior year and summer internships following the sophomore and 

junior academic years, by work placements with an international 

voluntary or government organizations or agencies, including the 

Agency for International Development, the United States Information Agency, the International Monetary Fund, the National Security Council, the Organization of American States, the Export-Import Bank, the Overseas Private Investment Corporation, the Department of State, Office of the United States Trade Representative, the World Bank, and the United Nations. 

(b) POSTBACCALAUREATE INTERNSHIPS.—The Institute shall enter 

into agreements with institutions of higher education described in 

the first sentence of subsection (a) to conduct internships for students who have completed study for a baccalaureate degree. The 

internship program authorized by this subsection shall—

(1) * * * 

(2) be carried out with the assistance of the Woodrow Wilson 

International Center for Scholars; and 

(3) contain work experience for the students designed to contribute to the students’ preparation for a master’s degree 

programø; and¿. 

ø(4) be assisted by the Interagency Committee on Minority 

Careers in International Affairs established under subsection 

(c). 

ø(c) INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTERNATIONAL AFFAIRS.—

ø(1) ESTABLISHMENT.—There is established in the executive 

branch of the Federal Government an Interagency Committee 

on Minority Careers in International Affairs composed of not 

less than 7 members, including—

ø(A) the Under Secretary for Farm and Foreign Agricultural Services of the Department of Agriculture, or the 

Under Secretary’s designee; 

560 

ø(B) the Assistant Secretary and Director General, of the 

United States and Foreign Commercial Service of the Department of Commerce, or the Assistant Secretary and Director General’s designee; 

ø(C) the Under Secretary of Defense for Personnel and 

Readiness of the Department of Defense, or the Under Secretary’s designee; 

ø(D) the Assistant Secretary for Postsecondary Education in the Department of Education, or the Assistant 

Secretary’s designee; 

ø(E) the Director General of the Foreign Service of the 

Department of State, or the Director General’s designee; 

ø(F) the General Counsel of the Agency for International 

Development, or the General Counsel’s designee; and 

ø(G) the Associate Director for Educational and Cultural 

Affairs of the United States Information Agency, or the Associate Director’s designee. 

ø(2) FUNCTIONS.—The Interagency Committee established by 

this section shall— ø(A) on an annual basis inform the Secretary and the Institute regarding ways to advise students participating in 

the internship program assisted under this section with respect to goals for careers in international affairs; 

ø(B) locate for students potential internship opportunities in the Federal Government related to international affairs; and 

ø(C) promote policies in each department and agency 

participating in the Committee that are designed to carry 

out the objectives of this part.¿ 

(c) RALPH J. BUNCHE FELLOWS.—In order to assure the recognition and commitment of individuals from underrepresented student 

populations who demonstrate special interest in international affairs and language study, eligible students who participate in the 

internship programs authorized under (a) and (b) shall be known 

as the ‘‘Ralph J. Bunche Fellows’’. 

SEC. 626. REPORT. 

The Institute shall øannually prepare a report¿ prepare a report 

biennially on the activities of the Institute and shall submit such 

report to the Secretary of Education and the Secretary of State. 

SEC. 628. AUTHORIZATION. 

There is authorized to be appropriated $10,000,000 for fiscal year 

ø1999¿ 2006 and such sums as may be necessary for each of the 

ø4¿ 5 succeeding fiscal years to carry out this part. 

PART D—GENERAL PROVISIONS 

* * * * * * * 

SEC. 632. EVALUATION, OUTREACH, AND DISSEMINATION. 

The Secretary may use not more than one percent of the funds 

made available for this title for program evaluation, national outreach, and information dissemination activities. 

SEC. 633. INTERNATIONAL HIGHER EDUCATION ADVISORY BOARD. 

(a) ESTABLISHMENT AND PURPOSE.—

561 

(1) ESTABLISHMENT.—There is established in the Department 

an independent International Higher Education Advisory 

Board (hereafter in this section referred to as the ‘‘International 

Advisory Board’’). The International Advisory Board shall provide advice, counsel, and recommendations to the Secretary and 

the Congress on international education issues for higher education. 

(2) PURPOSE.—The purpose of the International Advisory 

Board is—

(A) to provide expertise in the area of national needs for 

proficiency in world regions, foreign languages, international affairs, and international business; 

(B) to make recommendations that will promote the excellence of international education programs and result in the 

growth and development of such programs at the postsecondary education level that will reflect diverse perspectives 

and a wide range of views on world regions, foreign language, international affairs, and international business; 

and 

(C) to advise the Secretary and the Congress with respect 

to needs for expertise in government, the private sector, and 

education in order to enhance America’s understanding of, 

and engagement in, the world. 

(b) INDEPENDENCE OF INTERNATIONAL ADVISORY BOARD.—In the 

exercise of its functions, powers, and duties, the International Advisory Board shall be independent of the Secretary and the other offices and officers of the Department. Except as provided in this subsection and subsection (f), the recommendations of the International 

Advisory Board shall not be subject to review or approval by any 

officer of the Federal Government. Nothing in this title shall be construed to authorize the International Advisory Board to mandate, 

direct, or control an institution of higher education’s specific instructional content, curriculum, or program of instruction or instructor. The International Advisory Board is authorized to assess 

a sample of activities supported under this title, using materials 

that have been submitted to the Department of Education by grant 

recipients under this title, in order to provide recommendations to 

the Secretary and the Congress for the improvement of programs 

under the title and to ensure programs meet the purposes of the title 

to promote the study of and expertise in foreign language and world 

regions, especially with respect to diplomacy, national security, and 

international business and trade competitiveness. The recommendations of the International Advisory Board may address any area in 

need of improvement, except that any recommendation of specific 

legislation to Congress shall be made only if the President deems it 

necessary and expedient. 

(c) MEMBERSHIP.—

(1) APPOINTMENT.—The International Advisory Board shall 

have 7 members of whom—

(A) 3 members shall be appointed by the Secretary; 

(B) 2 members shall be appointed by the Speaker of the 

House of Representatives, upon the recommendation of the 

Majority Leader and the Minority Leader; and 

562 

(C) 2 members shall be appointed by the President pro 

tempore of the Senate, upon the recommendation of the Majority Leader and the Minority Leader. 

(2) REPRESENTATION.—Two of the members appointed by the 

Secretary under paragraph (1)(A) shall be appointed to represent Federal agencies that have diplomacy, national security, 

international commerce, or other international activity responsibilities, after consultation with the heads of such agencies. 

The members of the International Advisory Board shall also include (but not be limited to) persons with international expertise 

representing States, institutions of higher education, cultural 

organizations, educational organizations, international business, local education agencies, students, and private citizens 

with expertise in international concerns. 

(3) QUALIFICATION.—Members of the International Advisory 

Board shall be individuals who have technical qualifications, 

professional standing, experience working in international affairs or foreign service or international business occupations, or 

demonstrated knowledge in the fields of higher education and 

international education, including foreign languages, world regions, or international affairs. 

(d) FUNCTIONS OF THE INTERNATIONAL ADVISORY BOARD.— (1) IN GENERAL.—The International Advisory Board shall 

provide recommendations in accordance with subsection (b) regarding improvement of programs under this title to the Secretary and the Congress for their review. The International Advisory Board may— (A) review and comment upon the regulations for grants 

under this title; 

(B) assess a sample of activities supported under this title 

based on the purposes and objectives of this title, using materials that have been submitted to the Department of Education by grant recipients under this title, in order to provide recommendations for improvement of the programs 

under this title; 

(C) make recommendations that will assist the Secretary 

and the Congress to improve the programs under this title 

to better reflect the national needs related to foreign languages, world regions, diplomacy, national security, and 

international business and trade competitiveness, including 

an assessment of the national needs and the training provided by the institutions of higher education that receive a 

grant under this title for expert and non-expert level foreign 

language training; 

(D) make recommendations to the Secretary and the Congress regarding such studies, surveys, and analyses of 

international education that will provide feedback about 

the programs under this title and assure that their relative 

authorized activities reflect diverse perspectives and a wide 

range of views on world regions, foreign languages, diplomacy, national security, and international business and 

trade competitiveness; 

(E) make recommendations that will strengthen the partnerships between local educational agencies, public and 

private elementary and secondary education schools, and 

563 

grant recipients under this title to ensure that the research 

and knowledge about world regions, foreign languages, and 

international affairs is widely disseminated to local educational agencies; 

(F) make recommendations on how institutions of higher 

education that receive a grant under this title can encourage students to serve the Nation and meet national needs 

in an international affairs, international business, foreign 

language, or national security capacity; 

(G) make recommendations on how linkages between institutions of higher education and public and private organizations that are involved in international education, 

international business and trade competitiveness, language 

training, and international research capacities may fulfill 

the manpower and information needs of United States businesses; and 

(H) make recommendations to the Secretary and the Congress about opportunities for underrepresented populations 

in the areas of foreign language study, diplomacy, international business and trade competitiveness, and international economics, in order to effectively carry out the activities of the Institute under part C. 

(2) HEARINGS.—The International Advisory Board shall provide for public hearing and comment regarding the matter contained in the recommendations described in paragraph (1), 

prior to the submission of those recommendations to the Secretary and the Congress. 

(e) OPERATIONS OF THE COMMITTEE.—

(1) TERMS.—Each member of the International Advisory 

Board shall be appointed for a term of 3 years, except that, of 

the members first appointed (A) 4 shall be appointed for a term 

of 3 years, and (B) 3 shall be appointed for a term of 4 years, 

as designated at the time of appointment by the Secretary. A 

member of the International Advisory Board may be reappointed to successive terms on the International Advisory 

Board. 

(2) VACANCIES.—Any member appointed to fill a vacancy occurring prior to the expiration of the term of a predecessor shall 

be appointed only for the remainder of such term. A member of 

the International Advisory Board shall, upon the Secretary’s request, continue to serve after the expiration of a term until a 

successor has been appointed. 

(3) NO GOVERNMENTAL MEMBERS.—Except for the members 

appointed by the Secretary under subsection (c)(1)(A), no officers or full-time employees of the Federal Government shall 

serve as members of the International Advisory Board. 

(4) MEETINGS.—The International Advisory Board shall meet 

not less than once each year. The International Advisory Board 

shall hold additional meetings at the call of the Chair or upon 

the written request of not less than 3 voting members of the 

International Advisory Board. 

(5) QUORUM.—A majority of the voting members of the International Advisory Board serving at the time of a meeting shall 

constitute a quorum. 

564 

(6) CHAIR.—The International Advisory Board shall elect a 

Chairman or Chairwoman from among the members of the 

International Advisory Board. 

(f) SUBMISSION TO DEPARTMENT FOR COMMENT.—The International Advisory Board shall submit its proposed recommendations to the Secretary of Education for comment for a period not to 

exceed 30 days in each instance. 

(g) PERSONNEL AND RESOURCES.— (1) COMPENSATION AND EXPENSE.—Members of the International Advisory Board shall serve without pay for such service. Members of the International Advisory Board who are officers or employees of the United States may not receive additional pay, allowances, or benefits by reason of their service on 

the International Advisory Board. Members of the International 

Advisory Board may each receive reimbursement for travel expenses incident to attending International Advisory Board meetings, including per diem in lieu of subsistence, as authorized by 

section 5703 of title 5, United States Code, for persons in the 

Government service employed intermittently. 

(2) PERSONNEL.—The International Advisory Board may appoint such personnel as may be determined necessary by the 

Chairman without regard to the provisions of title 5, United 

States Code, governing appointments in the competitive service, 

and may be paid without regard to the provisions of chapter 51 

and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, but no individual so 

appointed shall be paid in excess of the maximum rate payable 

under section 5376 of such title. The International Advisory 

Board may appoint not more than one full-time equivalent, 

nonpermanent, consultant without regard to the provisions of 

title 5, United States Code. The International Advisory Board 

shall not be required by the Secretary to reduce personnel to 

meet agency personnel reduction goals. 

(3) CONSULTATION.—In carrying out its duties under the Act, 

the International Advisory Board shall consult with other Federal agencies, representatives of State and local governments, 

and private organizations to the extent feasible. 

(4) ASSISTANCE FROM OTHER AGENCIES.— (A) INFORMATION.—The International Advisory Board is 

authorized to secure directly from any executive department, bureau, agency, board, commission, office, independent establishment, or instrumentality information, suggestions, estimates, and statistics for the purpose of this 

section and each such department, bureau, agency, board, 

commission, office, independent establishment, or instrumentality is authorized and directed, to the extent permitted by law, to furnish such information, suggestions, estimates, and statistics directly to the International Advisory 

Board, upon request made by the Chairman for the purpose 

of providing expertise in the area of national needs for the 

proficiency in world regions, foreign languages, and international affairs. 

(B) SERVICES AND PERSONNEL.—The head of each Federal agency shall, to the extent not prohibited by law, consult with the International Advisory Board in carrying out 

565 

this section. The International Advisory Board is authorized to utilize, with their consent, the services, personnel, 

information, and facilities of other Federal, State, local, 

and private agencies with or without reimbursement, for 

the purpose of providing expertise in the area of national 

needs for the proficiency in world regions, foreign languages, and international affairs. 

(5) CONTRACTS; EXPERTS AND CONSULTANTS.—The International Advisory Board may enter into contracts for the acquisition of information, suggestions, estimates, and statistics for 

the purpose of this section. The International Advisory Board is 

authorized to obtain the services of experts and consultants 

without regard to section 3109 of title 5, United States Code 

and to set pay in accordance with such section. 

(h) TERMINATION.—Notwithstanding the sunset and charter provisions of the Federal Advisory Committee Act (5 U.S.C. App. I) or 

any other statute or regulation, the International Advisory Board 

shall be authorized through September 30, 2012. 

(i) FUNDS.—The Secretary shall use not more than one-half of the 

funds available to the Secretary under section 632 to carry out this 

section. 

SEC. 634. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING INFORMATION. 

Each institution of higher education that receives a grant under 

this title shall assure that—

(1) recruiters of the United States Government and agencies 

thereof are given the same access to students as is provided generally to other institutions of higher education and prospective 

employers of those students for the purpose of recruiting for 

graduate opportunities or prospective employment; and 

(2) no undue restrictions are placed upon students that seek 

employment with the United States Government or any agency 

thereof. 

SEC. 635. STUDENT SAFETY. 

Applicants seeking funds under this title to support student travel 

and study abroad shall submit as part of their grant application a 

description of safety policies and procedures for students participating in the program while abroad. 

SEC. 636. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES. 

(a) STUDY.—The Secretary of Education, in consultation with the 

International Advisory Board, shall conduct a study to identify foreign language heritage communities, particularly such communities 

that include speakers of languages that are critical to the national 

security of the United States. 

(b) FOREIGN LANGUAGE HERITAGE COMMUNITY.—For purposes of 

this section, the term ‘‘foreign language heritage community’’ means 

a community of residents or citizens of the United States who are 

native speakers of, or who have partial fluency in, a foreign language. 

(c) REPORT.—Not later than one year after the date of the enactment of this Act, the Secretary of Education shall submit a report 

to the Congress on the results of the study conducted under this section. 

566 

TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS 

* * * * * * * 

PART A—GRADUATE EDUCATION PROGRAMS 

Subpart 1—Jacob K. Javits Fellowship Program 

SEC. 701. AWARD OF JACOB K. JAVITS FELLOWSHIPS. 

(a) AUTHORITY AND TIMING OF AWARDS.—The Secretary is authorized to award fellowships in accordance with the provisions of 

this subpart for graduate study in the arts, humanities, and social 

sciences by students of superior ability selected on the basis of 

demonstrated achievement, financial need, and exceptional promise. The fellowships shall be awarded to students who are eligible 

to receive any grant, loan, or work assistance pursuant to section 

484 and intend to pursue a doctoral degree, except that fellowships 

may be granted to students pursuing a master’s degree in those 

fields in which the master’s degree is the terminal highest degree 

awarded in the area of study. For purposes of the exception in the 

preceding sentence, a master’s degree in fine arts shall be considered 

a terminal degree. All funds appropriated in a fiscal year shall be 

obligated and expended to the students for fellowships for use in 

the academic year beginning after July 1 of the fiscal year following the fiscal year for which the funds were appropriated. The 

fellowships shall be awarded for only 1 academic year of study and 

shall be renewable for a period not to exceed 4 years of study. 

* * * * * * * 

(c) INTERRUPTIONS OF STUDY.—The institution of higher education may allow a fellowship recipient to interrupt periods of 

study for a period not to exceed 12 months for the purpose of work, 

travel, or independent study away from the campus, if such independent study is supportive of the fellowship recipient’s academic 

program and shall continue payments for those 12-month periods 

during which the student is pursuing travel or independent study 

supportive of the recipient’s academic program. In the case of other 

exceptional circumstances, such as active duty military service or 

personal or family member illness, the institution of higher education may also permit the fellowship recipient to interrupt periods 

of study for the duration of the tour of duty (in the case of military 

service) or not more than 12 months (in any other case), but without 

payment of the stipend. 

* * * * * * * 

SEC. 702. ALLOCATION OF FELLOWSHIPS. 

(a) FELLOWSHIP BOARD.—

(1) APPOINTMENT.—The Secretary shall appoint a Jacob K. 

Javits Fellows Program Fellowship Board (hereinafter in this 

subpart referred to as the ‘‘Board’’) consisting of 9 individuals 

representative of both public and private institutions of higher 

education from diverse geographic regions who are especially 

qualified to serve on the Board. In making appointments, the 

567 

Secretary shall give due consideration to the appointment of 

individuals who are highly respected in the academic community. The Secretary shall assure that individuals appointed to 

the Board are broadly representative of a range of disciplines 

in graduate education in arts, humanities, and social sciences. 

The Secretary shall also assure that at least one representative 

appointed to the Board represents an institution that is eligible 

for a grant under title III or V of this Act. 

* * * * * * * 

SEC. 703. STIPENDS. 

(a) AWARD BY SECRETARY.—The Secretary shall pay to individuals awarded fellowships under this subpart such stipends as the 

Secretary may establish, reflecting the purpose of this program to 

encourage highly talented students to undertake graduate study as 

described in this subpart. In the case of an individual who receives 

such individual’s first stipend under this subpart in academic year 

ø1999–2000¿ 2006–2007 or any succeeding academic year, such stipend øshall be set¿ may be set at a level of support equal to that 

provided by the National Science øFoundation graduate fellowships¿ Foundation Graduate Research Fellowship Program on February 1 of such academic year, except such amount shall be adjusted as necessary so as not to exceed the fellow’s demonstrated 

level of need determined in accordance with part F of title IV. 

(b) INSTITUTIONAL PAYMENTS.— ø(1) IN GENERAL.—(A) The Secretary shall (in addition to stipends paid to individuals under this subpart) pay to the institution of higher education, for each individual awarded a fellowship under this subpart at such institution, an institutional 

allowance. Except as provided in subparagraph (B), such allowance shall be, for 1999–2000 and succeeding academic years, 

the same amount as the institutional payment made for 1998– 1999 under section 933(b) (as such section was in effect on the 

day before the date of enactment of the Higher Education 

Amendments of 1998) adjusted for 1999–2000 and annually 

thereafter in accordance with inflation as determined by the 

Department of Labor’s Consumer Price Index for the previous 

calendar year.¿ 

(1) IN GENERAL.—(A) The Secretary shall (in addition to stipends paid to individuals under this subpart) pay to the institution of higher education, for each individual awarded a fellowship under this subpart at such institution, an institutional 

allowance. Except as provided in subparagraph (B), such allowance shall be, for 2006–2007 and succeeding academic years, 

the same amount as the institutional payment made for 2005–

2006 adjusted for 2006–2007 and annually thereafter in accordance with inflation as determined by the Department of Labor’s 

Consumer Price Index for All Urban Consumers for the previous calendar year. 

* * * * * * * 

SEC. 705. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated $30,000,000 for øfiscal 

year 1999 and such sums as may be necessary for each of the 4 

succeeding fiscal years¿ fiscal year 2006 and such sums as may be 

568 

necessary for each of the 5 succeeding fiscal years to carry out this 

subpart. 

Subpart 2—Graduate Assistance in Areas of 

National Need 

* * * * * * * 

SEC. 712. INSTITUTIONAL ELIGIBILITY. 

(a) * * * 

(b) DESIGNATION OF AREAS OF NATIONAL NEED.—After consultation with appropriate Federal and nonprofit agencies and organizations, the Secretary shall designate areas of national need. In making such designations, the Secretary shall take into account the extent to which the interest in the area is compelling, the extent to 

which other Federal programs support postbaccalaureate study in 

the area concerned, øand¿ an assessment of how the program could 

achieve the most significant impact with available resources, and 

the priority described in subsection (c) of this section. 

(c) PRIORITY.—The Secretary shall establish a priority for grants 

in order to prepare individuals for the professoriate who will train 

highly-qualified elementary and secondary math and science teachers, special education teachers, and teachers who provide instruction for limited English proficient individuals. Such grants shall 

offer program assistance and graduate fellowships for—

(1) post-baccalaureate study related to teacher preparation 

and pedagogy in math and science for students who have completed a master’s degree or are pursuing a doctorate of philosophy in math and science; 

(2) post-baccalaureate study related to teacher preparation 

and pedagogy in special education and English language acquisition and academic proficiency for limited English proficient 

individuals; and 

(3) support of dissertation research in the fields of math, 

science, special education, or second language pedagogy and 

second language acquisition. 

SEC. 713. CRITERIA FOR APPLICATIONS. 

(a) * * * 

(b) CONTENTS OF APPLICATIONS.—An academic department, program or unit of an institution of higher education, in the department, program or unit’s application for a grant, shall— (1) * * * 

* * * * * * * 

(9) provide assurances that the academic department will 

provide at least 1 year of supervised training in instruction for 

students; øand¿ 

(10) in the case of an application for a grant by a department, 

program, or unit in education or teacher preparation, contain 

assurances that such department, program, or unit collaborates 

with departments, programs, or units in all content areas to assure a successful combination of training in both teaching and 

such content; and 

ø(10)¿ (11) include such other information as the Secretary 

may prescribe. 

569 

SEC. 714. AWARDS TO GRADUATE STUDENTS. 

(a) * * * 

(b) AMOUNT OF STIPENDS.—The Secretary shall make payments 

to institutions of higher education for the purpose of paying stipends to individuals who are awarded fellowships under this subpart. The stipends the Secretary establishes shall reflect the purpose of the program under this subpart to encourage highly talented students to undertake graduate study as described in this 

subpart. In the case of an individual who receives such individual’s 

first stipend under this subpart in academic year ø1999–2000¿ 

2006–2007 or any succeeding academic year, such stipend øshall be 

set¿ may be set at a level of support equal to that provided by the 

National Science øFoundation graduate fellowships¿ Foundation 

Graduate Research Fellowship Program on February 1 of such academic year, except such amount shall be adjusted as necessary so 

as not to exceed the fellow’s demonstrated level of need as determined under part F of title IV. 

(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—An institution of 

higher education that makes institutional payments for tuition and 

fees on behalf of individuals supported by fellowships under this 

subpart in amounts that exceed the institutional payments made 

by the Secretary pursuant to øsection 716(a)¿ section 715(a) may 

count such excess toward the amounts the institution is required 

to provide pursuant to øsection 714(b)(2)¿ section 713(b)(2). 

* * * * * * * 

SEC. 715. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION. 

(a) INSTITUTIONAL PAYMENTS.—

(1) IN GENERAL.—The Secretary shall (in addition to stipends 

paid to individuals under this subpart) pay to the institution 

of higher education, for each individual awarded a fellowship 

under this subpart at such institution, an institutional allowance. Except as provided in paragraph (2), such allowance shall 

be, for ø1999–2000¿ 2006–2007 and succeeding academic years, 

the same amount as the institutional payment made for 

ø1998–1999¿ 2005–2006 adjusted annually thereafter in accordance with inflation as determined by the Department of 

Labor’s Consumer Price Index for All Urban Consumers for the 

previous calendar year. 

* * * * * * * 

SEC. 716. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated $35,000,000 for øfiscal 

year 1999 and such sums as may be necessary for each of the 4 

succeeding fiscal years¿ fiscal year 2006 and such sums as may be 

necessary for each of the 5 succeeding fiscal years to carry out this 

subpart. 

Subpart 3—Thurgood Marshall Legal Educational 

Opportunity Program 

SEC. 721. LEGAL EDUCATIONAL OPPORTUNITY PROGRAM. 

(a) * * * 

* * * * * * * 

570 

(c) CONTRACT OR GRANT AUTHORIZED.—The Secretary is authorized to enter into a contract with, or make a grant to, the Council 

on Legal Education Opportunity, for a period of not less than 5 

years—

(1) * * * 

ø(2) to prepare such students for study at accredited law 

schools;¿ 

(2) to prepare such students for study at accredited law 

schools and assist them with the development of analytical 

skills and study methods to enhance their success and promote 

completion of law school; 

* * * * * * * 

(4) to provide support services to such students who are firstyear law students to improve retention and success in law 

school studies; øand¿ 

(5) to motivate and prepare such students with respect to 

law school studies and practice in low-income communitiesø.¿; 

and 

(6) to award Thurgood Marshall Fellowships to eligible law 

school students—

(A) who participated in summer institutes authorized by 

subsection (d) and who are enrolled in an accredited law 

school; or 

(B) who are eligible law school students who have successfully completed a comparable summer institute program certified by the Council on Legal Educational Opportunity. 

(d) SERVICES PROVIDED.—In carrying out the purposes described 

in subsection (c), the contract or grant shall provide for the delivery 

of services through prelaw information resource centers, summer 

institutes, midyear seminars, and other educational activities, conducted under this section. Such services may include—

(1) information and counseling regarding— (A) * * * 

* * * * * * * 

(D) undergraduate preparatory courses in analytical 

skills and study methods and curriculum selection; 

* * * * * * * 

(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section $5,000,000 for fiscal year 

ø1999 and each of the 4 succeeding fiscal years¿ 2006 and each of 

the 5 succeeding fiscal years. 

* * * * * * * 

Subpart 4—General Provisions 

SEC. 731. ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1, 2, AND 3. 

(a) * * * 

* * * * * * * 

ø(e) CONTINUATION AWARDS.—The Secretary, using funds appropriated to carry out subparts 1 and 2, and before awarding any assistance under such parts to a recipient that did not receive assistVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00574 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
571 

ance under part C or D of title IX (as such parts were in effect 

prior to the date of enactment of the Higher Education Amendments of 1998) shall continue to provide funding to recipients of assistance under such part C or D (as so in effect), as the case may 

be, pursuant to any multiyear award of such assistance.¿ 

PART B—FUND FOR THE IMPROVEMENT OF 

POSTSECONDARY EDUCATION 

SEC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY 

EDUCATION. 

(a) AUTHORITY.—The Secretary is authorized to make grants to, 

or enter into contracts with, institutions of higher education, combinations of such institutions, and other public and private nonprofit institutions and agencies, to enable such institutions, combinations, and agencies to improve postsecondary education opportunities by—

ø(1) encouraging the reform, innovation, and improvement of 

postsecondary education, and providing equal educational opportunity for all;¿ 

(1) the encouragement of the reform and improvement of, and 

innovation in, postsecondary education and the provision of 

educational opportunity for all, especially for the non-traditional student populations; 

(2) the creation of institutions, programs, and joint efforts involving paths to career and professional training, and combinations of academic and experiential learning for postsecondary 

students, especially institutions, programs, and joint efforts that 

provide academic credit for programs; 

ø(3) the establishment of institutions and programs based on 

the technology of communications;¿ 

(3) the establishment of institutions and programs based on 

the technology of communications, including delivery by distance education; 

* * * * * * * 

ø(6) the introduction of institutional reforms designed to expand individual opportunities for entering and reentering institutions and pursuing programs of study tailored to individual 

needs;¿ 

(6) the introduction of institutional reforms designed to expand individual opportunities for entering and reentering postsecondary institutions and pursuing programs of postsecondary 

study tailored to individual needs; 

(7) the introduction of reforms in graduate education, in the 

structure of academic professions, and in the recruitment and 

retention of faculties; øand¿ 

(8) the creation of new institutions and programs for examining and awarding credentials to individuals, and the introduction of reforms in current institutional practices related 

theretoø.¿; 

(9) the provision of support and assistance to programs implementing integrated education reform services in order to improve secondary school graduation and college attendance and 

completion rates for disadvantaged students, and to programs 

572 

that reduce postsecondary remediation rates, and improve degree attainment rates, for low-income students and former high 

school dropouts; and 

(10) the assessment, in partnership with a public or private 

nonprofit institution or agency, of the performance of teacher 

preparation programs within institutions of higher education in 

a State, using an assessment which provides comparisons 

across such schools within the State based upon indicators including teacher candidate knowledge in subject areas in which 

such candidate has been prepared to teach. 

* * * * * * * 

(c) PROHIBITION.—No funds made available under this part may 

be used to provide financial assistance to students who do not meet 

the requirements of section 484(a)(5). 

* * * * * * * 

SEC. 744. SPECIAL PROJECTS. 

(a) * * * 

* * * * * * * 

(c) AREAS OF NATIONAL NEED.—Areas of national need shall initially include, but shall not be limited to, the following: 

(1) * * * 

ø(2) Articulation between 2- and 4-year institutions of higher 

education, including developing innovative methods for ensuring the successful transfer of students from 2- to 4-year institutions of higher education.¿ 

(2)(A) Development of partnerships between local educational 

agencies and institutions of higher education to establish or expand existing dual enrollment programs at institutions of higher education that allow high school students to earn high school 

and transferable college credit. 

(B) Development of consortia of institutions of higher education to create dual enrollment programs including academic 

and student support agreements and comprehensive articulation agreements that would allow for the seamless and timeless 

acquisition of college credits and the transfer of postsecondary 

academic credits between such institutions, particularly from 2- 

year to 4-year institutions of higher education. 

* * * * * * * 

ø(4) International cooperation and student exchange among 

postsecondary educational institutions.¿ 

(4) International cooperation, partnerships, or student exchange among postsecondary educational institutions in the 

United States and abroad. 

(5) Establishment of academic programs including graduate 

and undergraduate courses, seminars and lectures, support of 

research, and development of teaching materials for the purpose 

of supporting faculty and academic programs that teach traditional American history (including significant constitutional, 

political, intellectual, economic, diplomatic, and foreign policy 

trends, issues, and documents; the history, nature, and development of democratic institutions of which American democracy is 

a part; and significant events and individuals in the history of 

the United States). 

573 

(6) Support for planning, applied research, training, resource 

exchanges or technology transfers, the delivery of services, or 

other activities the purpose of which is to design and implement 

programs to enable institutions of higher education to work 

with private and civic organizations to assist communities to 

meet and address their pressing and severe problems, including 

economic development, community infrastructure and housing, 

crime prevention, education, healthcare, self-sufficiency, and 

workforce preparation. Such activities may include support for 

the development of coordinated curriculum and internship opportunities for students in disadvantaged communities. 

SEC. 745. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated to carry out this part 

ø$30,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years¿ $40,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 

5 succeeding fiscal years. 

øPART C—URBAN COMMUNITY SERVICE 

øSEC. 751. FINDINGS. 

øThe Congress finds that— ø(1) the Nation’s urban centers are facing increasingly pressing problems and needs in the areas of economic development, 

community infrastructure and service, social policy, public 

health, housing, crime, education, environmental concerns, 

planning and work force preparation; 

ø(2) there are, in the Nation’s urban institutions, people with 

underutilized skills, knowledge, and experience who are capable of providing a vast range of services toward the amelioration of the problems described in paragraph (1); 

ø(3) the skills, knowledge and experience in these urban institutions, if applied in a systematic and sustained manner, 

can make a significant contribution to the solution of such 

problems; and 

ø(4) the application of such skills, knowledge and experience 

is hindered by the limited funds available to redirect attention 

to solutions to such urban problems. 

øSEC. 752. PURPOSE; PROGRAM AUTHORIZED. 

ø(a) PURPOSE.—It is the purpose of this part to provide incentives to urban academic institutions to enable such institutions to 

work with private and civic organizations to devise and implement 

solutions to pressing and severe problems in their communities. 

ø(b) PROGRAM AUTHORIZED.—The Secretary is authorized to 

carry out a program of providing assistance to eligible institutions 

to enable such institutions to carry out the activities described in 

section 754 in accordance with the provisions of this part. 

øSEC. 753. APPLICATION FOR URBAN COMMUNITY SERVICE GRANTS. 

ø(a) APPLICATION.— ø(1) IN GENERAL.—An eligible institution seeking assistance 

under this part shall submit to the Secretary an application at 

such time, in such form, and containing or accompanied by 

such information and assurances as the Secretary may require 

by regulation. 

574 

ø(2) CONTENTS.—Each application submitted pursuant to 

paragraph (1) shall— ø(A) describe the activities and services for which assistance is sought; and 

ø(B) include a plan that is agreed to by the members of 

a consortium that includes, in addition to the eligible institution, one or more of the following entities: 

ø(i) A community college. 

ø(ii) An urban school system. 

ø(iii) A local government. 

ø(iv) A business or other employer. 

ø(v) A nonprofit institution. 

ø(3) WAIVER.—The Secretary may waive the consortium requirements described in paragraph (2) for any applicant who 

can demonstrate to the satisfaction of the Secretary that the 

applicant has devised an integrated and coordinated plan 

which meets the purpose of this part. 

ø(b) PRIORITY IN SELECTION OF APPLICATIONS.—The Secretary 

shall give priority to applications that propose to conduct joint 

projects supported by other local, State, and Federal programs. In 

addition, the Secretary shall give priority to eligible institutions 

submitting applications that demonstrate the eligible institution’s 

commitment to urban community service. 

ø(c) SELECTION PROCEDURES.—The Secretary shall, by regulation, develop a formal procedure for the submission of applications 

under this part and shall publish in the Federal Register an announcement of that procedure and the availability of funds under 

this part. 

øSEC. 754. ALLOWABLE ACTIVITIES. 

øFunds made available under this part shall be used to support 

planning, applied research, training, resource exchanges or technology transfers, the delivery of services, or other activities the 

purpose of which is to design and implement programs to assist 

urban communities to meet and address their pressing and severe 

problems, such as the following: 

ø(1) Work force preparation. 

ø(2) Urban poverty and the alleviation of such poverty. 

ø(3) Health care, including delivery and access. 

ø(4) Underperforming school systems and students. 

ø(5) Problems faced by the elderly and individuals with disabilities in urban settings. 

ø(6) Problems faced by families and children. 

ø(7) Campus and community crime prevention, including enhanced security and safety awareness measures as well as coordinated programs addressing the root causes of crime. 

ø(8) Urban housing. 

ø(9) Urban infrastructure. 

ø(10) Economic development. 

ø(11) Urban environmental concerns. 

ø(12) Other problem areas which participants in the consortium described in section 753(a)(2)(B) concur are of high priority in the urban area. 

ø(13)(A) Problems faced by individuals with disabilities regarding accessibility to institutions of higher education and 

other public and private community facilities. 

575 

ø(B) Amelioration of existing attitudinal barriers that prevent full inclusion by individuals with disabilities in their community. 

ø(14) Improving access to technology in local communities. 

øSEC. 755. PEER REVIEW. 

øThe Secretary shall designate a peer review panel to review applications submitted under this part and make recommendations 

for funding to the Secretary. In selecting the peer review panel, the 

Secretary may consult with other appropriate Cabinet-level officials 

and with non-Federal organizations, to ensure that the panel will 

be geographically balanced and be composed of representatives 

from public and private institutions of higher education, labor, 

business, and State and local government, who have expertise in 

urban community service or in education. 

øSEC. 756. DISBURSEMENT OF FUNDS. 

ø(a) MULTIYEAR AVAILABILITY.—Subject to the availability of appropriations, grants under this part may be made on a multiyear 

basis, except that no institution, individually or as a participant in 

a consortium of such institutions, may receive such a grant for 

more than 5 years. 

ø(b) EQUITABLE GEOGRAPHIC DISTRIBUTION.—The Secretary shall 

award grants under this part in a manner that achieves an equitable geographic distribution of such grants. 

ø(c) MATCHING REQUIREMENT.—An applicant under this part and 

the local governments associated with the application shall contribute to the conduct of the program supported by the grant an 

amount from non-Federal funds equal to at least one-fourth of the 

amount of the grant, which contribution may be in cash or in kind. 

øSEC. 757. DESIGNATION OF URBAN GRANT INSTITUTIONS. 

øThe Secretary shall publish a list of eligible institutions under 

this part and shall designate these institutions of higher education 

as ‘‘Urban Grant Institutions’’. The Secretary shall establish a national network of Urban Grant Institutions so that the results of 

individual projects achieved in one metropolitan area can then be 

generalized, disseminated, replicated, and applied throughout the 

Nation. The information developed as a result of this section shall 

be made available to Urban Grant Institutions and to any other interested institution of higher education by any appropriate means. 

øSEC. 758. DEFINITIONS. 

øAs used in this part: 

ø(1) URBAN AREA.—The term ‘‘urban area’’ means a metropolitan statistical area having a population of not less than 

350,000, or two contiguous metropolitan statistical areas having a population of not less than 350,000, or, in any State 

which does not have a metropolitan statistical area which has 

such a population, the eligible entity in the State submitting 

an application under section 753, or, if no such entity submits 

an application, the Secretary, shall designate one urban area 

for the purposes of this part. 

ø(2) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’ means—

ø(A) a nonprofit municipal university, established by the 

governing body of the city in which it is located, and operVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00579 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
576 

ating as of the date of enactment of the Higher Education 

Amendments of 1992 under that authority; or 

ø(B) an institution of higher education, or a consortium 

of such institutions any one of which meets all of the requirements of this paragraph, which—

ø(i) is located in an urban area; 

ø(ii) draws a substantial portion of its undergraduate students from the urban area in which such 

institution is located, or from contiguous areas; 

ø(iii) carries out programs to make postsecondary 

educational opportunities more accessible to residents 

of such urban area, or contiguous areas; 

ø(iv) has the present capacity to provide resources 

responsive to the needs and priorities of such urban 

area and contiguous areas; 

ø(v) offers a range of professional, technical, or graduate programs sufficient to sustain the capacity of 

such institution to provide such resources; and 

ø(vi) has demonstrated and sustained a sense of responsibility to such urban area and contiguous areas 

and the people of such areas. 

øSEC. 759. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated $20,000,000 for fiscal 

year 1999 and such sums as may be necessary for each of the 4 

succeeding fiscal years to carry out this part.¿ 

PART D—DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES RECEIVE A QUALITY HIGHER EDUCATION 

* * * * * * * 

SEC. 762. GRANTS AUTHORIZED. 

(a) COMPETITIVE GRANTS AUTHORIZED.—The Secretary may 

award grants, contracts, and cooperative agreements, on a competitive basis, to institutions of higher education, of which at least two 

such grants shall be awarded to institutions that provide professional development and technical assistance in order for østudents 

with learning disabilities¿ students with disabilities to receive a 

quality postsecondary education. 

(b) DURATION; ACTIVITIES.—

(1) * * * 

(2) AUTHORIZED ACTIVITIES.—Grants under this part shall be 

used to carry out one or more of the following activities: 

(A) TEACHING METHODS AND STRATEGIES.—The development of innovative, effective, and efficient teaching methods and strategies to provide faculty and administrators 

with the skills and supports necessary to teach students 

with disabilities in order to improve retention and completion. Such methods and strategies may include inservice 

training, professional development, customized and general technical assistance, workshops, summer institutes, 

distance learning, and training in the use of assistive and 

educational technology. 

577 

(B) EFFECTIVE TRANSITION PRACTICES.—The development 

of innovative, effective, and efficient teaching methods and 

strategies to ensure the smooth transition of students with 

disabilities from high school to postsecondary education. 

ø(B)¿ (C) SYNTHESIZING RESEARCH AND INFORMATION.—

Synthesizing research and other information related to the 

provision of postsecondary educational services to students 

with disabilities. 

(D) DISTANCE LEARNING.—The development of innovative, effective, and efficient teaching methods and strategies 

to provide faculty and administrators with the ability to 

provide accessible distance education programs or classes 

that would enhance access of students with disabilities to 

higher education, including the use of electronic communication for instruction and advisement. 

ø(C)¿ (E) PROFESSIONAL DEVELOPMENT AND TRAINING

SESSIONS.—Conducting professional development and 

training sessions for faculty and administrators from other 

institutions of higher education to enable the faculty and 

administrators to meet the postsecondary educational 

needs of students with disabilities. 

(3) MANDATORY EVALUATION AND DISSEMINATION.—Grants 

under this part shall be used for evaluation, and dissemination 

to other institutions of higher education, of the information obtained through the activities described in øsubparagraphs (A) 

through (C)¿ subparagraphs (A) through (E). 

* * * * * * * 

SEC. 763. APPLICATIONS. 

Each institution of higher education desiring to receive a grant, 

contract, or cooperative agreement under this part shall submit an 

application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require. Each 

application shall include—

ø(1) a description of how such institution plans to address 

each of the activities required under this part;¿ 

(1) a description of how such institution plans to address the 

activities allowed under this part; 

(2) a description of how the institution consulted with a 

broad range of people within the institution to develop activities for which assistance is sought; øand¿ 

(3) a description of how the institution will coordinate and 

collaborate with the office that provides services to students 

with disabilities within the institutionø.¿; and 

(4) a description of the extent to which an institution will 

work to replicate the best practices of institutions of higher education with demonstrated success in serving students with disabilities. 

* * * * * * * 

SEC. 765. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated for this part $10,000,000 

for øfiscal year 1999 and such sums as may be necessary for each 

578 

of the 4 succeeding fiscal years¿ fiscal year 2006 and such sums as 

may be necessary for each of the 5 succeeding fiscal years. 

SECTION 3 OF THE TAXPAYER-TEACHER PROTECTION 

ACT OF 2004 

SEC. 3. LOAN FORGIVENESS FOR TEACHERS. 

(a) * * * 

(b) ADDITIONAL AMOUNTS ELIGIBLE TO BE REPAID.— (1) * * * 

* * * * * * * 

ø(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply only with respect to eligible individuals who 

are new borrowers (as such term is defined in 103 of the Higher Education Act of 1965 (20 U.S.C. 1003)) on or after October 

1, 1998, and before October 1, 2005.¿ 

* * * * * * * 

EDUCATION OF THE DEAF ACT OF 1986 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, øThat this Act 

may be cited as the ‘‘Education of the Deaf Act of 1986’’.¿ 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Gallaudet University and National 

Technical Institute for the Deaf Act’’. 

TITLE I—GALLAUDET UNIVERSITY; NATIONAL TECHNICAL 

INSTITUTE FOR THE DEAF 

PART A—GALLAUDET UNIVERSITY

* * * * * * * 

SEC. 104. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS. 

(a) GENERAL AUTHORITY.—(1)(A) The Board of Trustees of Gallaudet University is authorized, in accordance with the agreement 

under section 105, to maintain and operate, at the Laurent Clerc 

National Deaf Education Center, exemplary elementary and secondary education programs, projects, and activities for the primary 

purpose of developing, evaluating, and disseminating innovative 

curricula, instructional techniques and strategies, and materials 

that can be used in various educational environments serving individuals who are deaf or hard of hearing throughout the Nation. 

* * * * * * * 

(b) ADMINISTRATIVE REQUIREMENTS.—(1) The øelementary and 

secondary education programs¿ Laurent Clerc National Deaf Education Center shall—

(A) * * * 

* * * * * * * 

(2) To the extent possible, the øelementary and secondary education programs¿ Laurent Clerc National Deaf Education Center 

shall provide the services required under paragraph (1)(B) in an eqVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00582 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
579 

uitable manner, based on the national distribution of students who 

are deaf or hard of hearing in educational environments as determined by the Secretary for purposes of section 618(a)(1) of the Individuals with Disabilities Education Act. Such educational environments shall include— (A) * * * 

* * * * * * * 

(5) The University, in consultation with the Secretary and consistent with the mission of the elementary and secondary programs 

operated at the Laurent Clerc National Deaf Education Center, 

shall—

(A) not later than the beginning of the 2007–2008 school year, 

adopt and implement academic content standards, academic 

achievement standards, and academic assessments as described 

in paragraphs (1) and (3) of section 1111(b) of the Elementary 

and Secondary Education Act of 1965 for such Center; 

(B) develop adequate yearly progress standards for such Center as described in section 1111(b)(2)(C) of such Act; and 

(C) publicly report the results of such assessments, except in 

such case in which such reporting would not yield statistically 

reliable information or would reveal personally identifiable information about an individual student. 

PART B—NATIONAL TECHNICAL INSTITUTE FOR THE DEAF

SEC. 111. AUTHORITY. 

For the purpose of providing a residential facility for postsecondary technical training and education for individuals who are 

deaf in order to prepare them for successful employment, øthe institution of higher education with which the Secretary has an 

agreement under this part¿ the Rochester Institute of Technology is 

authorized to operate and maintain a National Technical Institute 

for the Deaf. 

SEC. 112. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE 

FOR THE DEAF. 

(a) GENERAL AUTHORITY.—(1) The Secretary is authorized to establish or continue an agreement with øan institution of higher 

education¿ the Rochester Institute of Technology, Rochester, New 

York, for the establishment and operation, including construction 

and equipment, øof a¿ of the National Technical Institute for the 

Deaf. øThe Secretary, in considering proposals from institutions of 

higher education to enter into an agreement under this part, shall 

give preference to institutions which are located in metropolitan industrial areas.¿ 

(2) The Secretary and øthe institution of higher education with 

which the Secretary has an agreement under this section¿ the 

Rochester Institute of Technology—

(A) * * * 

(B) shall periodically update the agreement as determined 

necessary by the Secretary or øthe institution¿ the Rochester 

Institute of Technology. 

(b) PROVISIONS OF AGREEMENT.—The agreement shall—

(1) * * * 

(2) provide that the Board of Trustees øor other governing 

body of the institution¿ of the Rochester Institute of Technology, 

580 

subject to the approval of the Secretary, will appoint an advisory group to advise the Director of NTID in formulating and 

carrying out the basic policies governing its establishment and 

operation, which group shall include individuals who are professionally concerned with education and technical training at 

the postsecondary school level, persons who are professionally 

concerned with activities relating to education and training of 

individuals who are deaf, and members of the public familiar 

with the need for services provided by NTID; 

(3) provide that the Board of Trustees øor other governing 

body of the institution¿ of the Rochester Institute of Technology 

will prepare and submit to the Secretary, not later than June 

1 following the fiscal year for which the report is submitted, an 

annual report containing an accounting of all indirect costs 

paid to øthe institution of higher education under the agreement with the Secretary¿ the Rochester Institute of Technology 

by the National Technical Institute for the Deaf, which accounting the Secretary shall transmit to the øCommittee on Education and Labor of the House of Representatives and to the 

Committee on Labor and Human Resources of the Senate¿ 

Committee on Education and the Workforce of the House of 

Representatives and to the Committee on Health, Education, 

Labor, and Pensions of the Senate, with such comments and 

recommendations as the Secretary may deem appropriate; 

* * * * * * * 

(c) LIMITATION.—If, within twenty years after the completion of 

any construction (except minor remodeling or alteration) for which 

such funds have been paid— (1) the facility ceases to be used for the purposes for which 

it was constructed or the agreement is terminated, unless the 

Secretary determines that there is good cause for releasing the 

øinstitution¿ Rochester Institute of Technology from its obligation, or 

(2) the øinstitution¿ Rochester Institute of Technology ceases 

to be the owner of the facility, 

the United States shall be entitled to recover from the applicant or 

other owner of the facility an amount which has the same ratio 

with respect to the current market value of the facility as the 

amount of Federal funds expended for construction of such facility 

bears to the total cost of construction of the facility. The current 

market value of the facility shall be determined by agreement of 

the parties or by action brought in the United States district court 

for the district in which the facility is situated. 

TITLE II—GENERAL PROVISIONS 

SEC. 201. DEFINITIONS. 

As used in this Act—

(1) * * * 

* * * * * * * 

ø(3) The term ‘‘institution of higher education’’ means an 

educational institution in any State which (A) admits as regular students only individuals having a certificate of graduation from a school providing secondary education, or the recogVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00584 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
581 

nized equivalent of such a certificate; (B) is legally authorized 

within such State to provide a program of education beyond 

secondary education; (C) provides an educational program for 

which it awards a bachelor’s degree; (D) includes one or more 

professional or graduate schools; (E) is a public or nonprofit 

private institution; and (F) is accredited by a nationally recognized accrediting agency or association. For the purpose of subparagraph (F), the Secretary shall publish a list of nationally 

recognized accrediting agencies or associations which the Secretary determines to be reliable authority as to the quality of 

training offered.¿ 

ø(4)¿ (3) The term ‘‘Secretary’’ means the Secretary of Education. 

ø(5)¿ (4) The term ‘‘State’’ means each of the several States, 

the District of Columbia, the Commonwealth of Puerto Rico, 

Guam, American Samoa, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands. 

ø(6)¿ (5) The term ‘‘NTID’’ means the National Technical Institute for the Deaf. 

ø(7)¿ (6) The term ‘‘University’’ means Gallaudet University. 

(7) The term ‘‘RIT’’ means the Rochester Institute of Technology. 

* * * * * * * 

SEC. 203. AUDIT. 

(a) øGENERAL ACCOUNTING OFFICE¿ GOVERNMENT ACCOUNT- ABILITY OFFICE AUTHORITY.—All financial transactions and accounts of the corporation or institution of higher education, as the 

case may be, in connection with the expenditure of any moneys appropriated by any law of the United States— (1) * * * 

(2) for the benefit of the National Technical Institute for the 

Deaf or for the construction of facilities for its use, 

shall be settled and adjusted in the øGeneral Accounting Office¿ 

Government Accountability Office. 

(b) INDEPENDENT FINANCIAL AND COMPLIANCE AUDIT.— (1) IN GENERAL.—Gallaudet University shall have an annual 

independent financial and compliance audit made of the programs and activities of the University, including the national 

mission and school operations of the elementary and secondary 

education programs at Gallaudet. øThe institution of higher 

education with which the Secretary has an agreement under 

section 112 shall have an annual independent financial and 

compliance audit made of the programs and activities of such 

institution of higher education, including NTID, and containing 

specific schedules and analyses for all NTID funds, as determined by the Secretary.¿ NTID shall have an annual independent financial and compliance audit made of RIT programs 

and activities, including NTID programs and activities. 

(2) COMPLIANCE.—As used in paragraph (1), compliance 

means compliance with øsections 102(b), 105(b)(4), 112(b)(5), 

and 203(c), paragraphs (2) and (3) of section 207(b), subsections 

(b)(2), (b)(3), and (c) through (f ), of section 207¿ sections 102(b), 

105(b)(4), 112(b)(5), 203(c), 207(b)(2), subsections (c) through (f) 

of section 207, and subsections (b) and (c) of section 210. 

582 

(3) SUBMISSION OF AUDITS.—A copy of each audit described 

in paragraph (1) shall be provided to the Secretary and the 

Committee on Education and the Workforce of the House of 

Representatives and the Committee on Health, Education, 

Labor, and Pensions of the Senate within 15 days of acceptance 

of the audit by the University øor the institution authorized to 

establish and operate the NTID under section 112(a)¿ or RIT, 

as the case may be, but not later than January 10 of each year. 

(c) LIMITATIONS REGARDING EXPENDITURE OF FUNDS.—

(1) * * * 

(2) POLICIES.—

(A) Not later than 180 days after the date of the enactment of the Education of the Deaf Act Amendments of 

1992, the University and NTID shall develop policies, to be 

applied uniformly, for the allowability of expenditures for 

each institution. These policies should reflect the unique 

nature of these institutions. The principles established by 

the Office of Management and Budget for costs of educational institutions may be used as guidance in developing these policies. General principles relating to allowability and reasonableness of all costs associated with the 

operations of the institutions shall be addressed. These 

policies shall be submitted to the Secretary for review and 

comments, and to øthe Committee on Education and Labor 

of the House of Representatives and the Committee on 

Labor and Human Resources of the Senate¿ the Committee 

on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, 

and Pensions of the Senate. 

* * * * * * * 

SEC. 204. REPORTS. 

The Board of Trustees of Gallaudet University and the Board of 

Trustees øor other governing body of the institution of higher education with which the Secretary has an agreement under section 

112¿ of RIT shall prepare and submit an annual report to the Secretary, and to the øCommittee on Education and Labor of the 

House of Representatives and the Committee on Labor and Human 

Resources of the Senate¿ Committee on Education and the Workforce of the House of Representatives and the Committee on Health, 

Education, Labor, and Pensions of the Senate, not later than 100 

days after the end of each fiscal year, which shall include the following: 

(1) * * * 

(2) For the preceding academic year, and to the extent possible, the following data on individuals who are deaf and from 

minority backgrounds and who are students (at all educational 

levels) or employees: 

(A) * * * 

* * * * * * * 

(C) The disposition of these students øupon graduation/ 

completion¿ within one year of graduation/completion of 

programs at NTID and at the University and its elemenVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00586 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
583 

tary and secondary schools in comparison to students from 

non-minority backgrounds. 

* * * * * * * 

(3)(A) A summary of the annual audited financial statements 

and auditor’s report of the University, as required under section 203, and (B) a summary of the annual audited financial 

statements and auditor’s report øof the institution of higher 

education with which the Secretary has an agreement under 

section 112, including specific schedules and analyses for all 

NTID funds, as required under section 203¿ of RIT programs 

and activities, and such supplementary schedules presenting financial information for NTID for the end of the Federal fiscal 

year as determined by the Secretary. 

* * * * * * * 

SEC. 205. MONITORING, EVALUATION, AND REPORTING. 

(a) * * * 

* * * * * * * 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated such sums as may be necessary for each of the 

øfiscal years 1998 through 2003¿ fiscal years 2006 through 2011 to 

carry out the monitoring and evaluation activities authorized under 

this section. 

SEC. 206. LIAISON FOR EDUCATIONAL PROGRAMS. 

(a) DESIGNATION OF LIAISON.—øNot later than 30 days after the 

date of enactment of this Act, the¿ The Secretary shall designate 

an individual in the Office of Special Education and Rehabilitative 

Services of the Department of Education from among individuals 

who have experience in the education of individuals who are deaf 

to serve as liaison between the Department and Gallaudet University, the National Technical Institute for the Deaf, and other postsecondary educational programs for individuals who are deaf under 

the Individuals with Disabilities Education Act, the Rehabilitation 

Act of 1973, and other Federal or non-Federal agencies, institutions, or organizations involved with the education or rehabilitation 

of individuals who are deaf or hard of hearing. 

* * * * * * * 

SEC. 207. FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET UNIVERSITY AND THE NATIONAL TECHNICAL INSTITUTE FOR 

THE DEAF. 

(a) ESTABLISHMENT OF PROGRAMS.— (1) * * * 

(2) The Secretary and the Board of Trustees øor other governing body of the institution of higher education with which 

the Secretary has an agreement under section 112¿ of RIT are 

authorized to establish the National Technical Institute for the 

Deaf Federal Endowment Fund as a permanent endowment 

fund, in accordance with this section, for the purpose of promoting the financial independence of NTID. The Secretary and 

the Board or other governing body may enter into such agreements as may be necessary to carry out the purposes of this 

section with respect to NTID. 

* * * * * * * 

584 

(h) AUTHORIZATION OF APPROPRIATIONS.— (1) In the case of the University, there are authorized to be 

appropriated for the purposes of this section such sums as may 

be necessary for each of the øfiscal years 1998 through 2003¿ 

fiscal years 2006 through 2011. (2) In the case of NTID, there are authorized to be appropriated for the purposes of this section such sums as may be 

necessary for each of the øfiscal years 1998 through 2003¿ fiscal years 2006 through 2011. 

* * * * * * * 

SEC. 208. OVERSIGHT AND EFFECT OF AGREEMENTS. 

(a) OVERSIGHT ACTIVITIES.—Nothing in this Act shall be construed to diminish the oversight activities of the øCommittee on 

Labor and Human Resources of the Senate and the Committee on 

Education and the Workforce of the House of Representatives¿ 

Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and 

Pensions of the Senate with respect to any agreement entered into 

between the Secretary of Education and Gallaudet University, and 

øthe institution of higher education with which the Secretary has 

an agreement under part B of title I¿ RIT. 

* * * * * * * 

SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 

(a) GALLAUDET UNIVERSITY.—There are authorized to be appropriated such sums as may be necessary for each of the øfiscal years 

1998 through 2003¿ fiscal years 2006 through 2011 to carry out the 

provisions of title I and this title, relating to—

(1) * * * 

* * * * * * * 

(b) NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.—There are 

authorized to be appropriated such sums as may be necessary for 

each of the øfiscal years 1998 through 2003¿ fiscal years 2006 

through 2011 to carry out the provisions of title I and this title relating to the National Technical Institute for the Deaf. 

HIGHER EDUCATION AMENDMENTS OF 1998 

* * * * * * * 

TITLE IV—STUDENT ASSISTANCE 

* * * * * * * 

PART B—FEDERAL FAMILY EDUCATION LOAN 

PROGRAM 

* * * * * * * 

SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS. 

(a) * * * 

* * * * * * * 

585 

(d) EFFECTIVE DATE.—The amendments made by subsections (a) 

and (b) shall be effective during the period beginning on October 

1, 1998, and ending on September 30, 2002. Such amendments 

shall also be effective on and after July 1, 2006. 

* * * * * * * 

TITLE VIII—STUDIES, REPORTS, AND 

RELATED PROGRAMS 

PART A—STUDIES 

øSEC. 801. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT 

LOAN PROGRAMS. 

ø(a) STUDY REQUIRED.—The Comptroller General and the Secretary of Education shall convene a study group including the Secretary of the Treasury, the Director of the Office of Management 

and Budget, the Director of the Congressional Budget Office, representatives of entities making loans under part B of title IV of the 

Higher Education Act of 1965, representatives of other entities in 

the financial services community, representatives of other participants in the student loan programs, and such other individuals as 

the Comptroller General and the Secretary may designate. The 

Comptroller General and Secretary, in consultation with the study 

group, shall design and conduct a study to identify and evaluate 

means of establishing a market mechanism for the delivery of loans 

made pursuant to such title IV. 

ø(b) DESIGN OF STUDY.—The study required under this section 

shall identify not fewer than 3 different market mechanisms for 

use in determining lender return on student loans while continuing 

to meet the other objectives of the programs under parts B and D 

of such title IV, including the provision of loans to all eligible students. Consideration may be given to the use of auctions and to the 

feasibility of incorporating income-contingent repayment options 

into the student loan system and requiring borrowers to repay 

through income tax withholding. 

ø(c) EVALUATION OF MARKET MECHANISMS.—The mechanisms 

identified under subsection (b) shall be evaluated in terms of the 

following areas: 

ø(1) The cost or savings of loans to or for borrowers, including parent borrowers. 

ø(2) The cost or savings of the mechanism to the Federal 

Government. 

ø(3) The cost, effect, and distribution of Federal subsidies to 

or for participants in the program. 

ø(4) The ability of the mechanism to accommodate the potential distribution of subsidies to students through an incomecontingent repayment option. 

ø(5) The effect on the simplicity of the program, including 

the effect of the plan on the regulatory burden on students, institutions, lenders, and other program participants. 

ø(6) The effect on investment in human capital and resources, loan servicing capability, and the quality of service to 

the borrower. 

586 

ø(7) The effect on the diversity of lenders, including community-based lenders, originating and secondary market lenders. 

ø(8) The effect on program integrity. 

ø(9) The degree to which the mechanism will provide market 

incentives to encourage continuous improvement in the delivery and servicing of loans. 

ø(10) The availability of loans to students by region, income 

level, and by categories of institutions. 

ø(11) The proposed Federal and State role in the operation 

of the mechanism. 

ø(12) A description of how the mechanism will be administered and operated. 

ø(13) Transition procedures, including the effect on loan 

availability during a transition period. 

ø(14) Any other areas the study group may include. 

ø(d) PRELIMINARY FINDINGS AND PUBLICATION OF STUDY.—Not 

later than November 15, 2000, the study group shall make the 

group’s preliminary findings, including any additional or dissenting 

views, available to the public with a 60-day request for public comment. The study group shall review these comments and the Comptroller General and the Secretary shall transmit a final report, including any additional or dissenting views, to the Committee on 

Education and the Workforce of the House of Representatives, the 

Committee on Labor and Human Resources of the Senate, and the 

Committees on the Budget of the House of Representatives and the 

Senate not later than May 15, 2001. 

øSEC. 802. STUDY OF THE FEASIBILITY OF ALTERNATIVE FINANCIAL 

INSTRUMENTS FOR DETERMINING LENDER YIELDS. 

ø(a) STUDY REQUIRED.—The Comptroller General and the Secretary of Education shall convene a study group including the Secretary of the Treasury, the Director of the Office of Management 

and Budget, the Director of the Congressional Budget Office, representatives of entities making loans under part B of title IV of the 

Higher Education Act of 1965, representatives of other entities in 

the financial services community, representatives of other participants in the student loan programs, and such other individuals as 

the Comptroller General and the Secretary of Education may designate. The Comptroller General and the Secretary of Education, in 

consultation with the study group, shall evaluate the 91-day Treasury bill, 30-day and 90-day commercial paper, and the 90-day London Interbank Offered Rate (in this section referred to as ‘‘LIBOR’’) 

in terms of the following: 

ø(1) The historical liquidity of the market for each, and a 

historical comparison of the spread between: (A) the 30-day 

and 90-day commercial paper rate, respectively, and the 91-day 

Treasury bill rate; and (B) the spread between the LIBOR and 

the 91-day Treasury bill rate. 

ø(2) The historical volatility of the rates and projections of 

future volatility. 

ø(3) Recent changes in the liquidity of the market for each 

such instrument in a balanced Federal budget environment 

and a low-interest rate environment, and projections of future 

liquidity assuming the Federal budget remains in balance. 

ø(4) The cost or savings to lenders with small, medium, and 

large student loan portfolios of basing lender yield on either 

587 

the 30-day or 90-day commercial paper rate or the LIBOR 

while continuing to base the borrower rate on the 91-day 

Treasury bill, and the effect of such change on the diversity of 

lenders participating in the program. 

ø(5) The cost or savings to the Federal Government of basing 

lender yield on either the 30-day or 90-day commercial paper 

rate or the LIBOR while continuing to base the borrower rate 

on the 91-day Treasury bill. 

ø(6) Any possible risks or benefits to the student loan programs under the Higher Education Act of 1965 and to student 

borrowers. 

ø(7) Any other areas the Comptroller General and the 

Secretary of Education agree to include. 

ø(b) REPORT REQUIRED.—Not later than 6 months after the date 

of enactment of this Act, the Comptroller General and the Secretary shall submit a final report regarding the findings of the 

study group to the Committee on Education and the Workforce of 

the House of Representatives and the Committee on Labor and 

Human Resources of the Senate. 

øSEC. 803. STUDENT-RELATED DEBT STUDY REQUIRED. 

ø(a) IN GENERAL.—The Secretary of Education shall conduct a 

study that analyzes the distribution and increase in student-related debt in terms of—

ø(1) demographic characteristics, such as race or ethnicity, 

and family income; 

ø(2) type of institution and whether the institution is a public or private institution; 

ø(3) loan source, such as Federal, State, institutional or 

other, and, if the loan source is Federal, whether the loan is 

or is not subsidized; 

ø(4) academic field of study; 

ø(5) parent loans, and whether the parent loans are federally 

guaranteed, private, or property-secured such as home equity 

loans; and 

ø(6) relation of student debt or anticipated debt to—

ø(A) students’ decisions about whether and where to enroll in college and whether or how much to borrow in order 

to attend college; 

ø(B) the length of time it takes students to earn baccalaureate degrees; 

ø(C) students’ decisions about whether and where to attend graduate school; 

ø(D) graduates’ employment decisions; 

ø(E) graduates’ burden of repayment as reflected by the 

graduates’ ability to save for retirement or invest in a 

home; and 

ø(F) students’ future earnings. 

ø(b) REPORT.—After conclusion of the study required by subsection (a), the Secretary of Education shall submit a final report 

regarding the findings of the study to the Committee on Labor and 

Human Resources of the Senate and the Committee on Education 

and the Workforce of the House of Representatives not later than 

18 months after the date of enactment of the Higher Education 

Amendments of 1998. 

588 

ø(c) INFORMATION.—After the study and report under this section 

are concluded, the Secretary of Education shall determine which 

information described in subsection (a) would be useful for families 

to know and shall include such information as part of the comparative information provided to families about the costs of higher education under the provisions of part C of title I.¿ 

SEC. 804. STUDY OF TRANSFER OF CREDITS. 

(a) * * * 

(b) REPORT.—Not later than øone year after the date of enactment of this Act¿ September 30, 2007, the Secretary of Education 

shall submit a report to the Chairman and Ranking Minority Member of the Committee on Education and the Workforce of the House 

of Representatives and the Committee on Labor and Human Resources of the Senate detailing the Secretary’s findings regarding 

the study conducted under subsection (a). The Secretary’s report 

shall include such recommendation with respect to the recognition 

of accrediting agencies or associations and policies of institutions of 

higher education as the Secretary deems advisable. 

øSEC. 805. STUDY OF OPPORTUNITIES FOR PARTICIPATION IN ATHLETICS PROGRAMS. 

ø(a) STUDY.—The Comptroller General shall conduct a study of 

the opportunities for participation in intercollegiate athletics. The 

study shall address issues including—

ø(1) the extent to which the number of—

ø(A) secondary school athletic teams has increased or decreased in the 20 years preceding 1998 (in aggregate 

terms); and 

ø(B) intercollegiate athletic teams has increased or decreased in the 20 years preceding 1998 (in aggregate 

terms) at 2-year and 4-year institutions of higher education; 

ø(2) the extent to which participation by student-athletes in 

secondary school and intercollegiate athletics has increased or 

decreased in the 20 years preceding 1998 (in aggregate terms); 

ø(3) over the 20-year period preceding 1998, a list of the 

men’s and women’s secondary school and intercollegiate sports, 

ranked in order of the sports most affected by increases or decreases in levels of participation and numbers of teams (in the 

aggregate); 

ø(4) all factors that have influenced campus officials to add 

or discontinue sports teams at secondary schools and institutions of higher education, including— ø(A) institutional mission and priorities; 

ø(B) budgetary pressures; 

ø(C) institutional reforms and restructuring; 

ø(D) escalating liability insurance premiums; 

ø(E) changing student and community interest in a 

sport; 

ø(F) advancement of diversity among students; 

ø(G) lack of necessary level of competitiveness of the 

sports program; 

ø(H) club level sport achieving a level of competitiveness 

to make the sport a viable varsity level sport; 

ø(I) injuries or deaths; and 

589 

ø(J) conference realignment; 

ø(5) the actions that institutions of higher education have 

taken when decreasing the level of participation in intercollegiate sports, or the number of teams, in terms of providing information, advice, scholarship maintenance, counseling, advance warning, and an opportunity for student-athletes to be 

involved in the decisionmaking process; 

ø(6) the administrative processes and procedures used by institutions of higher education when determining whether to increase or decrease intercollegiate athletic teams or participation by student-athletes; 

ø(7) the budgetary or fiscal impact, if any, of a decision by 

an institution of higher education— ø(A) to increase or decrease the number of intercollegiate 

athletic teams or the participation of student-athletes; or 

ø(B) to be involved in a conference realignment; and 

ø(8) the alternatives, if any, institutions of higher education 

have pursued in lieu of eliminating, or severely reducing the 

funding for, an intercollegiate sport, and the success of such alternatives. 

ø(b) REPORT.—The Comptroller General shall submit a report regarding the results of the study to the Committee on Labor and 

Human Resources of the Senate and the Committee on Education 

and the Workforce of the House of Representatives.¿ 

SEC. 806. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT 

RATES FOR INSTITUTIONS WITH FEW STUDENT LOAN 

BORROWERS. 

(a) STUDY REQUIRED.—The Secretary of Education shall conduct 

a study of the effectiveness of cohort default rates as an indicator 

of administrative capability and program quality for institutions of 

øhigher education at which less¿ higher education. The study shall 

also review the effect of cohort default rates specifically on institutions of higher education at which less than 15 percent of students 

eligible to borrow participate in the Federal student loan programs 

under title IV of the Higher Education Act of 1965 and fewer than 

30 borrowers enter repayment in any fiscal year. At a minimum, 

the study shall include—

(1) * * * 

* * * * * * * 

(c) REPORT TO CONGRESS.—The Secretary of Education shall report to the Committee on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the 

House of Representatives not later than øSeptember 30, 1999,¿ 

September 30, 2007, regarding the results of the study described in 

subsection (a). 

* * * * * * * 

øPART C—COMMUNITY SCHOLARSHIP 

MOBILIZATION 

øSEC. 811. SHORT TITLE. 

øThis part may be cited as the ‘‘Community Scholarship Mobilization Act’’. 

590 

øSEC. 812. FINDINGS. 

øCongress finds that— ø(1) the local community, when properly organized and challenged, is one of the best sources of academic support, motivation toward achievement, and financial resources for aspiring 

postsecondary students; 

ø(2) local communities, working to complement or augment 

services currently offered by area schools and colleges, can 

raise the educational expectations and increase the rate of 

postsecondary attendance of their youth by forming locallybased organizations that provide both academic support (including guidance, counseling, mentoring, tutoring, encouragement, and recognition) and tangible, locally raised, effectively 

targeted, publicly recognized, financial assistance; 

ø(3) proven methods of stimulating these community efforts 

can be promoted through Federal support for the establishment of regional, State, or community program centers to organize and challenge community efforts to develop educational 

incentives and support for local students; and 

ø(4) using Federal funds to leverage private contributions to 

help students from low-income families attain educational and 

career goals is an efficient and effective investment of scarce 

taxpayer-provided resources. 

øSEC. 813. DEFINITIONS. 

øIn this part: 

ø(1) REGIONAL, STATE, OR COMMUNITY PROGRAM CENTER.— The term ‘‘regional, State, or community program center’’ means an organization that— ø(A) is a division or member of, responsible to, and overseen by, a national organization; and 

ø(B) is staffed by professionals trained to create, develop, 

and sustain local entities in towns, cities, and neighborhoods. 

ø(2) LOCAL ENTITY.—The term ‘‘local entity’’ means an organization that—

ø(A) is a nonprofit 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 

shall meet this criteria through affiliation with the national organization); 

ø(B) is formed for the purpose of providing educational 

scholarships and academic support for residents of the 

local community served by such organization; 

ø(C) solicits broad-based community support in its academic support and fund-raising activities; 

ø(D) is broadly representative of the local community in 

the structures of its volunteer-operated organization and 

has a board of directors that includes leaders from local 

neighborhood organizations and neighborhood residents, 

such as school or college personnel, parents, students, community agency representatives, retirees, and representatives of the business community; 

ø(E) awards scholarships without regard to age, sex, 

marital status, race, creed, color, religion, national origin, 

or disability; and 

591 

ø(F) gives priority to awarding scholarships for postsecondary education to deserving students from low-income 

families in the local community. 

ø(3) NATIONAL ORGANIZATION.—The term ‘‘national organization’’ means an organization that—

ø(A) has the capacity to create, develop and sustain local 

entities and affiliated regional, State, or community program centers; 

ø(B) has the capacity to sustain newly created local entities in towns, cities, and neighborhoods through ongoing 

training support programs; 

ø(C) 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; 

ø(D) is a publicly supported organization within the 

meaning of section 170(b)(1)(A)(iv) of such Code; 

ø(E) ensures that each of the organization’s local entities 

meet the criteria described in subparagraphs (C) and (D); 

and 

ø(F) has a program for or experience in cooperating with 

secondary and postsecondary institutions in carrying out 

the organization’s scholarship and academic support activities. 

ø(4) HIGH POVERTY AREA.—The term ‘‘high poverty area’’

means a community with a higher percentage of children from 

low-income families than the national average of such percentage and a lower percentage of children pursuing postsecondary 

education than the national average of such percentage. 

ø(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Education. 

ø(6) STUDENTS FROM LOW-INCOME FAMILIES.—The term ‘‘students from low-income families’’ means students determined, 

pursuant to part F of title IV of the Higher Education Act of 

1965 (20 U.S.C. 1087kk et seq.), to be eligible for a Federal 

Pell Grant under subpart 1 of part A of title IV of such Act (20 

U.S.C. 1070a). 

øSEC. 814. PURPOSE; ENDOWMENT GRANT AUTHORITY. 

ø(a) PURPOSE.—It is the purpose of this part to establish and 

support regional, State or community program centers to enable 

such centers to foster the development of local entities in high poverty areas that promote higher education goals for students from 

low-income families by—

ø(1) providing academic support, including guidance, counseling, mentoring, tutoring, and recognition; and 

ø(2) providing scholarship assistance for the cost of postsecondary education. 

ø(b) ENDOWMENT GRANT AUTHORITY.—From the funds appropriated pursuant to the authority of section 816, the Secretary 

shall award an endowment grant, on a competitive basis, to a national organization to enable such organization to support the establishment or ongoing work of regional, State or community program centers that foster the development of local entities in high 

poverty areas to improve secondary school graduation rates and 

postsecondary attendance through the provision of academic supVerDate Aug 31 2005 23:02 Sep 28, 2005 Jkt 023574 PO 00000 Frm 00595 Fmt 6659 Sfmt 6601 E:\HR\OC\HR231.XXX HR231
592 

port services and scholarship assistance for the cost of postsecondary education. 

øSEC. 815. GRANT AGREEMENT AND REQUIREMENTS. 

ø(a) IN GENERAL.—The Secretary shall award one or more endowment grants described in section 814(b) pursuant to an agreement between the Secretary and a national organization. Such 

agreement shall—

ø(1) require a national organization to establish an endowment fund in the amount of the grant, the corpus of which 

shall remain intact and the interest income from which shall 

be used to support the activities described in paragraphs (2) 

and (3); 

ø(2) require a national organization to use 70 percent of the 

interest income from the endowment fund in any fiscal year to 

support the establishment or ongoing work of regional, State or 

community program centers to enable such centers to work 

with local communities to establish local entities in high poverty areas and provide ongoing technical assistance, training 

workshops, and other activities to help ensure the ongoing success of the local entities; 

ø(3) require a national organization to use 30 percent of the 

interest income from the endowment fund in any fiscal year to 

provide scholarships for postsecondary education to students 

from low-income families, which scholarships shall be matched 

on a dollar-for-dollar basis from funds raised by the local entities; 

ø(4) require that at least 50 percent of all the interest income from the endowment be allocated to establish new local 

entities or support regional, State or community program 

centers in high poverty areas; 

ø(5) require a national organization to submit, for each fiscal 

year in which such organization uses the interest from the endowment fund, a report to the Secretary that contains—

ø(A) a description of the programs and activities supported by the interest on the endowment fund; 

ø(B) the audited financial statement of the national organization for the preceding fiscal year; 

ø(C) a plan for the programs and activities to be supported by the interest on the endowment fund as the Secretary may require; 

ø(D) an evaluation of the programs and activities supported by the interest on the endowment fund as the Secretary may require; and 

ø(E) data indicating the number of students from low-income families who receive scholarships from local entities, 

and the amounts of such scholarships; 

ø(6) contain such assurances as the Secretary may require 

with respect to the management and operation of the endowment fund; and 

ø(7) contain an assurance that if the Secretary determines 

that such organization is not in substantial compliance with 

the provisions of this part, then the national organization shall 

pay to the Secretary an amount equal to the corpus of the endowment fund plus any accrued interest on such fund that is 

593 

available to the national organization on the date of such determination. 

ø(b) RETURNED FUNDS.—All funds returned to the Secretary pursuant to subsection (a)(7) shall be available to the Secretary to 

carry out any scholarship or grant program assisted under title IV 

of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.). 

øSEC. 816. AUTHORIZATION OF APPROPRIATIONS. 

øThere are authorized to be appropriated to carry out this part 

$10,000,000 for fiscal year 2000. 

øPART D—GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 

TRAINING FOR INCARCERATED YOUTH OFFENDERS 

øSEC. 821. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 

TRANSITION TRAINING FOR INCARCERATED YOUTH OFFENDERS. 

ø(a) FINDINGS.—Congress makes the following findings: 

ø(1) Over 150,000 youth offenders age 21 and younger are incarcerated in the Nation’s jails, juvenile facilities, and prisons. 

ø(2) Most youth offenders who are incarcerated have been 

sentenced as first-time adult felons. 

ø(3) Approximately 75 percent of youth offenders are high 

school dropouts who lack basic literacy and life skills, have little or no job experience, and lack marketable skills. 

ø(4) The average incarcerated youth has attended school only 

through grade 10. 

ø(5) Most of these youths can be diverted from a life of crime 

into productive citizenship with available educational, vocational, work skills, and related service programs. 

ø(6) If not involved with educational programs while incarcerated, almost all of these youths will return to a life of crime 

upon release. 

ø(7) The average length of sentence for a youth offender is 

about 3 years. Time spent in prison provides a unique opportunity for education and training. 

ø(8) Even with quality education and training provided during incarceration, a period of intense supervision, support, and 

counseling is needed upon release to ensure effective reintegration of youth offenders into society. 

ø(9) Research consistently shows that the vast majority of incarcerated youths will not return to the public schools to complete their education. 

ø(10) There is a need for alternative educational opportunities during incarceration and after release. 

ø(b) DEFINITION.—For purposes of this part, the term ‘‘youth offender’’ means a male or female offender under the age of 25, who 

is incarcerated in a State prison, including a prerelease facility. 

ø(c) GRANT PROGRAM.—The Secretary of Education (in this section referred to as the ‘‘Secretary’’) shall establish a program in accordance with this section to provide grants to the State correctional education agencies in the States, from allocations for the 

States under subsection (i), to assist and encourage incarcerated 

594 

youths to acquire functional literacy, life, and job skills, through 

the pursuit of a postsecondary education certificate, or an associate 

of arts or bachelor’s degree while in prison, and employment counseling and other related services which start during incarceration 

and continue through prerelease and while on parole. 

ø(d) APPLICATION.—To be eligible for a grant under this section, 

a State correctional education agency shall submit to the Secretary 

a proposal for a youth offender program that— ø(1) identifies the scope of the problem, including the number of incarcerated youths in need of postsecondary education 

and vocational training; 

ø(2) lists the accredited public or private educational institution or institutions that will provide postsecondary educational 

services; 

ø(3) lists the cooperating agencies, public and private, or 

businesses that will provide related services, such as counseling in the areas of career development, substance abuse, 

health, and parenting skills; 

ø(4) describes the evaluation methods and performance 

measures that the State correctional education agency will employ, which methods and measures— ø(A) shall be appropriate to meet the goals and objectives of the proposal; and 

ø(B) shall include measures of— ø(i) program completion; 

ø(ii) student academic and vocational skill attainment; 

ø(iii) success in job placement and retention; and 

ø(iv) recidivism; 

ø(5) describes how the proposed programs are to be integrated with existing State correctional education programs 

(such as adult education, graduate education degree programs, 

and vocational training) and State industry programs; 

ø(6) addresses the educational needs of youth offenders who 

are in alternative programs (such as boot camps); and 

ø(7) describes how students will be selected so that only 

youth offenders eligible under subsection (f ) will be enrolled in 

postsecondary programs. 

ø(e) PROGRAM REQUIREMENTS.—Each State correctional education agency receiving a grant under this section shall— ø(1) integrate activities carried out under the grant with the 

objectives and activities of the school-to-work programs of such 

State, including— ø(A) work experience or apprenticeship programs; 

ø(B) transitional worksite job training for vocational 

education students that is related to the occupational goals 

of such students and closely linked to classroom and laboratory instruction; 

ø(C) placement services in occupations that the students 

are preparing to enter; 

ø(D) employment-based learning programs; and 

ø(E) programs that address State and local labor shortages; 

ø(2) annually report to the Secretary and the Attorney 

General on the results of the evaluations conducted using the 

595 

methods and performance measures contained in the proposal; 

and 

ø(3) provide to each State for each student eligible under subsection (f ) not more than $1,500 annually for tuition, books, 

and essential materials, and not more than $300 annually for 

related services such as career development, substance abuse 

counseling, parenting skills training, and health education, for 

each eligible incarcerated youth. 

ø(f ) STUDENT ELIGIBILITY.—A youth offender shall be eligible for 

participation in a program receiving a grant under this section if 

the youth offender— ø(1) is eligible to be released within 5 years (including a 

youth offender who is eligible for parole within such time); and 

ø(2) is 25 years of age or younger. 

ø(g) LENGTH OF PARTICIPATION.—A State correctional education 

agency receiving a grant under this section shall provide educational and related services to each participating youth offender 

for a period not to exceed 5 years, 1 year of which may be devoted 

to study in a graduate education degree program or to remedial 

education services for students who have obtained a secondary 

school diploma or its recognized equivalent. Educational and related services shall start during the period of incarceration in prison or prerelease and may continue during the period of parole. 

ø(h) EDUCATION DELIVERY SYSTEMS.—State correctional education agencies and cooperating institutions shall, to the extent 

practicable, use high-tech applications in developing programs to 

meet the requirements and goals of this section. 

ø(i) ALLOCATION OF FUNDS.—From the funds appropriated pursuant to subsection ( j) for each fiscal year, the Secretary shall allot 

to each State an amount that bears the same relationship to such 

funds as the total number of students eligible under subsection (f ) 

in such State bears to the total number of such students in all 

States. 

ø( j) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section $17,000,000 for fiscal 

year 1999 and such sums as may be necessary for each of the 4 

succeeding fiscal years.¿ 

* * * * * * * 

PART E—GRANTS TO COMBAT VIOLENT 

CRIMES AGAINST WOMEN ON CAMPUSES 

SEC. 826. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON 

CAMPUSES. 

(a) * * * 

* * * * * * * 

ø(f )¿ (e) DEFINITIONS.—In this section—

(1) * * * 

* * * * * * * 

ø(g)¿ (f) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of 

carrying out this part, there are authorized to be appropriated 

$10,000,000 øfor each of fiscal years 2001 through 2005¿ fiscal year 

2006 and each of the 5 succeeding fiscal years. 

596 

øPART F—IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, AND 

TECHNOLOGY IN EAST ASIA 

øSEC. 831. IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, 

ENGINEERING, AND TECHNOLOGY IN EAST ASIA. 

ø(a) ESTABLISHMENT.—The Director of the National Science 

Foundation is authorized, beginning in fiscal year 2000, to carry 

out an interdisciplinary program of education and research on East 

Asian science, engineering, and technology. The Director shall 

carry out the interdisciplinary program in consultation with the 

Secretary of Education. 

ø(b) PURPOSES.—The purposes of the program established under 

this section shall be to— ø(1) increase understanding of East Asian research, and innovation for the creative application of science and technology 

to the problems of society; 

ø(2) provide scientists, engineers, technology managers, and 

students with training in East Asian languages, and with an 

understanding of research, technology, and management of innovation, in East Asian countries; 

ø(3) provide program participants with opportunities to be 

directly involved in scientific and engineering research, and activities related to the management of scientific and technological innovation, in East Asia; and 

ø(4) create mechanisms for cooperation and partnerships 

among United States industry, universities, colleges, not-forprofit institutions, Federal laboratories (within the meaning of 

section 4(6) of the Stevenson-Wydler Technology Innovation 

Act of 1980 (15 U.S.C. 3703(6))), and government, to disseminate the results of the program assisted under this section for 

the benefit of United States research and innovation. 

ø(c) PARTICIPATION BY FEDERAL SCIENTISTS, ENGINEERS, AND

MANAGERS.—Scientists, engineers, and managers of science and engineering programs in Federal agencies and the Federal laboratories shall be eligible to participate in the program assisted under 

this section on a reimbursable basis. 

ø(d) REQUIREMENT FOR MERIT REVIEW.—Awards made under the 

program established under this section shall only be made using a 

competitive, merit-based review process. 

ø(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated to carry out this section $10,000,000 for fiscal year 

2000.¿ 

* * * * * * * 

PART H—UNDERGROUND RAILROAD 

SEC. 841. UNDERGROUND RAILROAD EDUCATIONAL AND CULTURAL 

PROGRAM. 

(a) * * * 

* * * * * * * 

ø(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section $6,000,000 for fiscal 

597 

year 1999, $6,000,000 for fiscal year 2000, $6,000,000 for fiscal 

year 2001, $3,000,000 for fiscal year 2002, and $3,000,000 for fiscal 

year 2003.¿ 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated to carry out this section $3,000,000 for fiscal year 

2006 and such sums as may be necessary for each of the 5 succeeding fiscal years. 

* * * * * * * 

øPART J—WEB-BASED EDUCATION 

COMMISSION 

øSEC. 851. DEFINITIONS. 

ø(a) IN GENERAL.—This part may be cited as the ‘‘Web-Based 

Education Commission Act’’. 

ø(b) DEFINITIONS.—In this part: 

ø(1) COMMISSION.—The term ‘‘Commission’’ means the WebBased Education Commission established under section 852. 

ø(2) INFORMATION TECHNOLOGY.—The term ‘‘information 

technology’’ has the meaning given that term in section 5002 

of the Information Technology Management Reform Act of 

1996 (110 Stat. 679). 

ø(3) STATE.—The term ‘‘State’’ means each of the several 

States of the United States and the District of Columbia. 

øSEC. 852. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION. 

ø(a) ESTABLISHMENT.—There is established a commission to be 

known as the Web-Based Education Commission. 

ø(b) MEMBERSHIP.—

ø(1) COMPOSITION.—The Commission shall be composed of 16 

members, of which—

ø(A) three members shall be appointed by the President, 

from among individuals representing the Internet technology industry; 

ø(B) three members shall be appointed by the Secretary, 

from among individuals with expertise in accreditation, establishing statewide curricula, and establishing information technology networks pertaining to education curricula; 

ø(C) two members shall be appointed by the Majority 

Leader of the Senate; 

ø(D) two members shall be appointed by the Minority 

Leader of the Senate; 

ø(E) two members shall be appointed by the Speaker of 

the House of Representatives; 

ø(F) two members shall be appointed by the Minority 

Leader of the House of Representatives; 

ø(G) one member shall be appointed by the Chairperson 

of the Committee on Health, Education, Labor, and Pensions of the Senate from among members of the Senate; 

and 

ø(H) one member shall be appointed by the Chairperson 

of the Committee on Education and the Workforce of the 

House of Representatives from among members of the 

House of Representatives. 

598 

ø(2) DATE.—The appointments of the members of the Commission shall be made not later than 45 days after the date of 

enactment of this Act. 

ø(c) PERIOD OF APPOINTMENT; VACANCIES.—Members shall be appointed for the life of the Commission. Any vacancy in the Commission shall not affect its powers, but shall be filled in the same manner as the original appointment. 

ø(d) INITIAL MEETING.—Not later than 30 days after the date on 

which all members of the Commission have been appointed, the 

Commission shall hold the Commission’s first meeting. 

ø(e) MEETINGS.—The Commission shall meet at the call of the 

Chairperson. 

ø(f ) QUORUM.—A majority of the members of the Commission 

shall constitute a quorum, but a lesser number of members may 

hold hearings. 

ø(g) CHAIRPERSON AND VICE CHAIRPERSON.—The Commission 

shall select a chairperson and vice chairperson from among the 

members of the Commission. 

øSEC. 853. DUTIES OF THE COMMISSION. 

ø(a) STUDY.—

ø(1) IN GENERAL.—The Commission shall conduct a thorough 

study to assess the educational software available in retail 

markets for secondary and postsecondary students who choose 

to use such software. 

ø(2) PUBLIC HEARINGS.—As part of the study conducted 

under this subsection, the Commission shall hold public hearings in each region of the United States concerning the assessment referred to in paragraph (1). 

ø(3) EXISTING INFORMATION.—To the extent practicable, in 

carrying out the study under this subsection, the Commission 

shall identify and use existing information related to the assessment referred to in paragraph (1). 

ø(b) REPORT.—Not later than 12 months after the first meeting 

of the Commission, the Commission shall submit a report to the 

President and Congress that shall contain a detailed statement of 

the findings and conclusions of the Commission resulting from the 

study, together with the Commission’s recommendations—

ø(1) for such legislation and administrative actions as the 

Commission considers to be appropriate; and 

ø(2) regarding the appropriate Federal role in determining 

quality educational software products. 

ø(c) FACILITATION OF EXCHANGE OF INFORMATION.—In carrying 

out the study under subsection (a), the Commission shall, to the extent practicable, facilitate the exchange of information concerning 

the issues that are the subject of the study among— ø(1) officials of the Federal Government, and State governments and political subdivisions of States; and 

ø(2) educators from Federal, State, and local institutions of 

higher education and secondary schools. 

øSEC. 854. POWERS OF THE COMMISSION. 

ø(a) HEARINGS.—The Commission may hold such hearings, sit 

and act at such times and places, take such testimony, and receive 

such evidence as the Commission considers advisable to carry out 

the duties of the Commission. 

599 

ø(b) INFORMATION FROM FEDERAL AGENCIES.—The Commission 

may request from the head of any Federal agency or instrumentality such information as the Commission considers necessary to 

carry out the provisions of this part. Each such agency or instrumentality shall, to the extent permitted by law and subject to the 

exceptions set forth in section 552 of title 5, United States Code 

(commonly referred to as the Freedom of Information Act), furnish 

such information to the Commission upon request. 

ø(c) POSTAL SERVICES.—The Commission may use the United 

States mails in the same manner and under the same conditions 

as other departments and agencies of the Federal Government. 

ø(d) GIFTS.—The Commission may accept, use, and dispose of 

gifts or donations of services or property. 

øSEC. 855. COMMISSION PERSONNEL MATTERS. 

ø(a) COMPENSATION OF MEMBERS.—Except as provided in subsection (b), each member of the Commission who is not an officer 

or employee of the Federal Government shall serve without compensation. All members of the Commission who are officers or employees of the United States shall serve without compensation in 

addition to that received for their services as officers or employees 

of the United States. 

ø(b) TRAVEL EXPENSES.—The members of the Commission shall 

be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away 

from their homes or regular places of business in the performance 

of services for the Commission. 

ø(c) STAFF.—

ø(1) IN GENERAL.—The Chairperson of the Commission may, 

without regard to the civil service laws and regulations, appoint and terminate an executive director and such other additional personnel as may be necessary to enable the Commission to perform the Commission’s duties. The employment of 

an executive director shall be subject to confirmation by the 

Commission. 

ø(2) COMPENSATION.—The Chairperson of the Commission 

may fix the compensation of the executive director and other 

personnel without regard to the provisions of chapter 51 and 

subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay 

rates, except that the rate of pay for the executive director and 

other personnel may not exceed the rate payable for level V of 

the Executive Schedule under section 5316 of such title. 

ø(d) DETAIL OF GOVERNMENT EMPLOYEES.—Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of 

civil service status or privilege. 

ø(e) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The Chairperson of the Commission may procure temporary 

and intermittent services under section 3109(b) of title 5, United 

States Code, at rates for individuals that do not exceed the daily 

equivalent of the annual rate of basic pay prescribed for level V of 

the Executive Schedule under section 5316 of such title. 

600 

øSEC. 856. TERMINATION OF THE COMMISSION. 

øThe Commission shall terminate on the date that is 90 days 

after the date on which the Commission submits the Commission’s 

report under section 853(b). 

øSEC. 857. AUTHORIZATION OF APPROPRIATIONS. 

ø(a) IN GENERAL.—There are authorized to be appropriated 

$450,000 for fiscal year 1999 to the Commission to carry out this 

part. 

ø(b) AVAILABILITY.—Any sums appropriated under the authorization contained in this section shall remain available, without fiscal 

year limitation, until expended.¿ 

* * * * * * * 

TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY 

ASSISTANCE ACT OF 1978 

* * * * * * * 

DEFINITIONS

SEC. 2. (a) For purposes of this Act, the term—

(1) * * * 

* * * * * * * 

(6) ‘‘national Indian organization’’ means an organization 

which the Secretary finds is nationally based, represents a substantial Indian constituency, and has expertise øin the field of 

Indian education¿ in the field of Tribal Colleges and Universities and Indian higher education; 

* * * * * * * 

(b) The following conditions shall apply for the purpose of determining the Indian student count pursuant to paragraph (7) of subsection (a): 

(1) * * * 

* * * * * * * 

ø(5) Credits earned in a continuing education program shall 

be converted to a credit-hour basis in accordance with the tribally controlled college or university’s system for providing credit for participation in such program.¿ 

(5) Eligible credits earned in a continuing education program 

shall be determined as one credit for every 10 contact hours for 

institutions on a quarter system, and 15 contact hours for institutions on a semester system, of participation in an organized 

continuing education experience under responsible sponsorship, 

capable direction, and qualified instruction, as described in the 

criteria established by the International Association for Continuing Education and Training, and may not exceed 20 percent of an institution’s total Indian student count. 

* * * * * * * 

TITLE I—TRIBALLY CONTROLLED COLLEGES OR 

UNIVERSITIES 

* * * * * * * 

601 

ELIGIBLE GRANT RECIPIENTS

SEC. 103. To be eligible for assistance under this title, a tribally 

controlled college or university must be one which—

(1) * * * 

(2) demonstrates adherence to stated goals, a philosophy, or 

a plan of operation which is directed to meet the needs of Indians; øand¿ 

(3) if in operation for more than one year, has students a 

majority of whom are Indiansø.¿; and 

(4) has been accredited by a nationally recognized accrediting 

agency or association determined by the Secretary of Education 

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. 

* * * * * * * 

APPROPRIATION AUTHORIZATION

SEC. 110. (a)(1) There is authorized to be appropriated, for the 

purpose of carrying out section 105, $3,200,000 for fiscal year 

ø1999¿ 2006 and such sums as may be necessary for each of the 

ø4¿ 5 succeeding fiscal years. 

(2) There is authorized to be appropriated for the purpose of carrying out section 107, $40,000,000 for fiscal year ø1999¿ 2006 and 

such sums as may be necessary for each of the ø4¿ 5 succeeding 

fiscal years. 

(3) There is authorized to be appropriated for the purpose of carrying out sections 112(b) and 113, $10,000,000 for fiscal year 

ø1999¿ 2006 and such sums as may be necessary for each of the 

ø4¿ 5 succeeding fiscal years. 

(4) Funds appropriated pursuant to the authorizations under this 

section for the fiscal year ø1999¿ 2006 and for each of the succeeding 4 fiscal years shall be transferred by the Secretary of the 

Treasury through the most expeditious method available, with each 

of the tribally controlled colleges or universities being designated 

as its own certifying agency. 

* * * * * * * 

TITLE III—TRIBALLY CONTROLLED COLLEGE OR 

UNIVERSITY ENDOWMENT PROGRAM 

* * * * * * * 

AUTHORIZATION OF APPROPRIATIONS

SEC. 306. (a) There are authorized to be appropriated to carry 

out the provisions of this title, $10,000,000 for fiscal year ø1999¿ 

2006 and such sums as may be necessary for each of the ø4¿ 5 succeeding fiscal years. 

* * * * * * * 

602 

TITLE IV—TRIBAL ECONOMIC DEVELOPMENT 

SEC. 401. SHORT TITLE. 

This title may be cited as the ‘‘Tribal Economic Development and 

Technology Related Education Assistance Act of 1990’’. 

* * * * * * * 

SEC. 403. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated for grants under this 

title, $2,000,000 for fiscal year ø1999¿ 2006 and such sums as may 

be necessary for each of the ø4¿ 5 succeeding fiscal years. 

SECTION 5 OF THE NAVAJO COMMUNITY COLLEGE ACT 

AUTHORIZATION OF APPROPRIATIONS

SEC. 5. (a)(1) For the purpose of making construction grants 

under this Act, there are authorized to be appropriated $2,000,000 

for fiscal year ø1999¿ 2006 and such sums as may be necessary for 

each of the ø4¿ 5 succeeding fiscal years. 

* * * * * * * 

SECTION 1543 OF THE EDUCATION AMENDMENTS OF 

1992 

SEC. 1543. OLYMPIC SCHOLARSHIPS. 

(a) * * * 

* * * * * * * 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated $5,000,000 for fiscal year ø1999¿ 2006 and such 

sums as may be necessary for each of the ø4¿ 5 succeeding fiscal 

years to carry out this section. 

* * * * * * * 

(603) 

MINORITY VIEWS 

INTRODUCTION

Every year millions of hardworking American families and students fall short when paying for college costs, even after grants, 

loans, family savings and work. The weakened economy, huge tax 

cuts for the super rich, and massive federal budget cuts have hurt 

state budgets, driving up tuition prices for students—more than 75 

percent of whom attend public institutions. 

The typical low-income student at a 4-year public college already 

falls short by $3,800, and the typical middle-income student falls 

$2,300 short, when paying for college each year. 

Rather than helping these students and families, H.R. 609 makes 

students pay even more for their college education. The bill cuts 

$8.7 billion from the student aid programs and fails to significantly 

boost affordable college opportunities. Due to these shortcomings, 

we oppose the Committee passage of this legislation. 

H.R. 609—Makes college more expensive by raising student loan interest rate caps 

In 2002, Congress made a promise to students to lower the interest rate cap on student loans to 6.8 percent in 2006. H.R. 609 goes 

back on this promise, and sets the cap at 8.25 percent. As a result, 

the typical student borrower, with $17,500 in debt, would be forced 

to pay as much as $2,600 more for his or her loans. 

Democrats offered an amendment that would have maintained 

Congress’ bipartisan promise to lower the student loan interest 

rate cap, with a variable interest rate (for all non-consolidation 

loans), at no additional cost to taxpayers or students. The committee rejected this amendment. 

H.R. 609—Forces students and families to pay for the National 

Budget Crisis 

The bill saves $8.7 billion by: raising interest rates on student 

consolidation loans; raising the interest rate cap on student loans; 

eliminating borrower benefits that lower the cost of borrowing; cutting critical student aid delivery funds; and, eliminating some of 

the excessive subsidies paid to student lenders. This raid on student aid represents the single largest cuts to the nation’s federal 

student aid programs ever. As a result of these cuts, the typical 

student borrower, with $17,500 in debt, could be forced to pay up 

to $5,800 more for his or her college loans, than compared to current law. 

604 

After widespread criticism from Democrats, students and editorial writers, the Majority finally agreed to reduce excessive subsidies to large lending institutions. But instead of recycling those 

dollars into low-interest loans and additional grants, the Majority 

plans to use the $8.7 billion in cuts—to lender subsidies and student aid—for alleged deficit reduction. They believed for years it 

was acceptable to spend billions in excessive subsidies on profitable 

banks, but now they refuse to spend this money on students. 

The Majority claims that these cuts must be made in the budget 

reconciliation process to reduce the federal deficit—yet the budget 

reconciliation actually increases the federal deficit by $35 billion 

over 5 years. 

This budget scheme balances the irresponsible management of 

our nation’s budget on the backs of students and families who are 

already struggling to pay for college. 

We should be doing more, not less, to increase affordable college 

opportunities not just because it is the right thing to do but because it is critical to the economic prosperity and well-being of the 

nation. 

Since the passage of the Higher Education Act in 1965, Federal 

grants, loans and work-study have helped to send millions of students to college, many of whom would not have gone to college 

without the help. 

This investment has been critical in making the U.S. the world 

economic leader it is today. However, the global economy has become significantly more competitive since 1965. Whether the U.S. 

retains its preeminence in this fiercely competitive environment 

will depend more and more on having a highly skilled workforce. 

Higher education is the critical tool for building that workforce. 

This raid on student aid misses a golden opportunity to re-direct 

billions of dollars in savings by recycling the excessive subsidies 

paid to student lenders into additional grant aid for students—

without any additional costs to taxpayers. This opportunity is an 

essential step towards ensuring that all college qualified students 

receive an affordable top quality higher education and that the 

U.S. is competitive in the global economy. 


Insert offset folio 622 here HR231.042 Insert offset folio 622 here HR231.043
605 

H.R. 609—Makes student borrowers pay more for consolidation 

loans 

Committee members adopted a Petri-Boehner amendment that 

will give students the choice of a fixed or variable interest rate on 

consolidation—but that raises the interest rate on fixed consolidation loans by 1.0 percent (to 91-day Treasury bill + 3.3 percent, 

capped at 8.25 percent) and forces students to pay a .5 percent fee 

on fixed consolidation loans. 

While this change improved the base bill, it would still result in 

the typical student borrower paying $2,800 more for his or her college loans, than under current law. 

Democrats opposed raising rates on consolidation loans, but offered a 2nd degree amendment that would have kept cost increases 

to student borrowers much lower and raised almost the same 

amount of savings. The Miller 2nd degree amendment would have 

lowered the interest rate on fixed consolidation loans and eliminated the .5 percent origination fee. Republicans rejected the 

Democratic alternative. 

COMPARISON OF CONSOLIDATION LOAN AMENDMENTS 

Current law Petri-Boehner amendment Miller 2nd degree amendment 

Student Consolidation Interest Rate Formula—In Repayment.

91-Day Treasury bill + 2.3 

percent, capped at 8.25 

percent.

91-Day Treasury bill + 3.3 

percent, capped at 8.25 

percent.

91-Day Treasury bill + 2.8 

percent, capped at 8.25 

percent. 

Student Fee for Consolidation 

Loan.

No fee ................................... 0.50% ................................... No fee. 

CBO Savings ......................... n/a ........................................ $11.5 billion over 6 years .... $11.5 billion over 6 years. 

H.R. 609—Fails to provide a real increase in the maximum Pell 

Grant Scholarship 

The declining buying power of Pell grant scholarships and rising 

tuition prices are forcing millions of students to assume high debt, 

work long hours or even forgo college. The Committee has missed 

another opportunity to restore the original buying power of Pell 

grant scholarships. Last year the maximum Pell grant scholarship 

was worth $800 less, in inflation-adjusted terms, than it was in 

1975–76. 

Not only does H.R. 609 fail to restore the Pell grants to the level 

of its original value, but it fails to make good on the Republican 

promise of an actual $5,100 maximum Pell grant scholarship. Instead, the bill raises the authorizing level by a mere $200 dollars 

over 6 years. 

Democrats offered an amendment that would have provided a 

guaranteed boost, with mandatory funds, of $500 the maximum 

Pell grant over 5 years, raising the overall Pell Maximum award 


Insert offset folio 624 here HR231.044
606 

to $4,500—at no new cost to taxpayers. Republicans rejected this 

modest Pell increase. 

H.R. 609—Changes the formula for campus based aid allocation 

and as a result takes aid from one needy student to pay for another needy student 

H.R. 609 alters the formula for distributing funding for campusbased aid programs (Supplemental Educational Opportunity 

Grants, Work Study and Perkins Loans) and will significantly decrease aid to students in 29 states. The elimination of the base 

guarantee in the funding formula will harm thousands of students 

because it will simply take funds from disadvantaged students and 

shift those funds to another group of disadvantaged students. Any 

reallocation of the formula must include a significant increase in 

the overall investment of these successful programs, so that we 

don’t rob one student in need to provide for another student in 

need. 

Reps. Tierney and Kind offered an amendment to boost and 

equalize campus based aid funding. This amendment would require 

the Secretary of Education to phase in changes to the based guarantee in accordance with the necessary investment to the programs 

to ensure a level playing field. This amendment was narrowly defeated by a vote of 24–24. 

ESTIMATED CHANGE IN CAMPUS-BASED AID FUNDING—BASE GUARANTEE ELIMINATION PROPOSAL 

SEOG change in 

allocation 

$ 

FWS change in 

allocation 

$ 

Perkins change 

in allocation 

$ 

Total change 

$ Percent change 

Alabama ............................................ 319,328 1,366,249 193,908 ¥853,013 ¥2.9 

Alaska ................................................ ¥357,194 ¥292,672 0 ¥649,866 ¥39.1 

Arizona ............................................... 184,692 191,795 495,118 871,605 3.5 

Arkansas ............................................ ¥109,651 ¥847,811 ¥223,204 ¥1,180,666 ¥8.8 

California ........................................... 5,346,622 6,981,497 1,367,670 13,695,789 7.0 

Colorado ............................................ 354,210 ¥35,688 ¥224,410 94,112 0.4 

Connecticut ....................................... 68,743 744,203 ¥2,244 810,702 3.8 

Delaware ............................................ 184,837 170,007 ¥4,868 349,976 10.5 

District of Columbia .......................... 17,425 1,884,291 240,916 2,142,632 11.3 

Florida ............................................... 1,894,571 2,956,506 1,975,050 6,826,127 9.1 

Georgia .............................................. 1,172,369 ¥896,299 414,028 690,098 1.7 

Hawaii ............................................... ¥109,763 ¥161,240 ¥16,180 ¥287,183 ¥7.4 

Idaho ................................................. ¥68,365 276,785 ¥146,554 61,866 1.2 

Illinois ................................................ 1,582,535 1,975,747 ¥703,749 2,854,533 3.0 

Indiana .............................................. 875,175 1,201,143 ¥164,648 1,911,670 5.0 

Iowa ................................................... 268,598 1,088 ¥391,244 ¥121,558 ¥0.5 

Kansas ............................................... ¥609,378 ¥821,312 ¥693,636 ¥2,124,326 ¥14.6 

Kentucky ............................................ 803,328 ¥1,518,496 ¥11,330 ¥726,498 ¥3.2 

Louisiana ........................................... 915,018 ¥1,193,153 99,218 ¥178,917 ¥0.7 

Maine ................................................. ¥3,346,280 ¥3,425,036 ¥460,794 ¥7,232,110 ¥46.5 

Maryland ............................................ ¥262,256 272,230 43,102 53,076 0.2 

Massachusetts .................................. ¥4,398,750 ¥4,886,369 ¥96,665 ¥9,381,784 ¥11.7 

Michigan ............................................ ¥1,798,914 752,152 ¥1,213,575 ¥2,260,337 ¥4.0 

Minnesota .......................................... ¥2,377,299 ¥1,248,027 ¥452,806 ¥4,078,132 ¥11.1 

Mississippi ........................................ ¥1,282,404 ¥2,487,498 ¥700,467 ¥4,470,369 ¥20.0 

Missouri ............................................. 923,933 945,748 ¥63,658 1,806,023 5.0 

Montana ............................................ 241,460 ¥378,709 ¥177,076 ¥314,325 ¥5.2 

Nebraska ........................................... 52,045 ¥138,681 ¥268,659 ¥355,295 ¥3.1 

Nevada .............................................. 195,286 295,456 66,199 556,941 13.2 

New Hampshire ................................. ¥769,185 ¥1,502,087 ¥156,759 ¥2,428,031 ¥18.7 

New Jersey ......................................... 501,889 450,066 106,108 1,058,063 2.8 

New Mexico ........................................ ¥586,005 ¥2,183,573 ¥204,870 ¥2,974,448 ¥26.2 

New York ........................................... 7,189,176 7,766,963 3,204,027 18,160,166 9.7 

607 

ESTIMATED CHANGE IN CAMPUS-BASED AID FUNDING—BASE GUARANTEE ELIMINATION 

PROPOSAL—Continued 

SEOG change in 

allocation 

$ 

FWS change in 

allocation 

$ 

Perkins change 

in allocation 

$ 

Total change 

$ Percent change 

North Carolina ................................... ¥1,820,724 ¥1,384,785 ¥88,970 ¥3,294,479 ¥8.0 

North Dakota ..................................... ¥965,544 ¥577,921 2,866,841 1,323,376 19.9 

Ohio ................................................... 775,727 46,677 620,384 1,442,788 2.0 

Oklahoma .......................................... 36,553 ¥619,493 ¥456,089 ¥1,039,029 ¥5.3 

Oregon ............................................... ¥1,738,961 ¥889,047 ¥185,769 ¥2,813,777 ¥11.2 

Pennsylvania ..................................... 2,514,303 4,595,845 1,265,707 8,375,855 7.5 

Puerto Rico ........................................ 1,650,308 432,023 442,540 2,524,871 7.1 

Rhode Island ..................................... 21,779 ¥533,551 36,572 ¥475,200 ¥2.8 

South Carolina .................................. 100,627 ¥789,970 97,811 ¥591,532 ¥2.5 

South Dakota ..................................... ¥635,011 ¥1,360,964 ¥234,921 ¥2,230,896 ¥27.7 

Tennessee .......................................... 5,768 ¥452,951 ¥6,719 ¥453,902 ¥1.4 

Texas ................................................. 647,894 1,103,488 ¥1,236,695 514,687 0.5 

Utah ................................................... ¥422,039 214,156 ¥477,662 ¥685,545 ¥6.4 

Vermont ............................................. ¥2,382,485 ¥1,778,571 ¥264,202 ¥4,425,258 ¥37.7 

Virginia .............................................. 854,144 ¥174,968 12,640 691,816 2.0 

Washington ........................................ ¥844,292 771,689 ¥229,162 ¥301,765 ¥1.0 

West Virginia ..................................... ¥76,805 ¥302,606 ¥127,184 ¥506,595 ¥4.1 

Wisconsin .......................................... ¥4,769,861 ¥1,419,305 ¥1,192,894 ¥7,382,060 ¥19.3 

Wyoming ............................................ 16,325 112,844 ¥80,097 49,072 1.9 

**Total 29 states would lose funding under this proposal. 

Source: American Council on Education, Center for Policy Analysis. 

H.R. 609—Fails to provide real relief for rising College costs 

Under the bill, the earliest that students and families could receive any relief from rising college costs would be five years after 

enactment, at which point colleges and universities with rapidly increasing tuition would be required to increase their reporting and 

disclosures to the public and federal government. 

In addition, the bill fails to engage states and encourage them to 

grow funds for higher education, so that college tuition is more affordable to the more than 75 percent of students who attend public, 

state supported institutions. 

Reps. Tierney and McCollum offered an amendment to address 

rising college tuition that would provide immediate relief to students and families by: promoting affordable tuition by encouraging 

states to grow funds for higher education; providing incentives to 

public and private colleges to make tuition more affordable; ensuring colleges curb their costs—and tuition prices—through cost containment strategies; and, putting students and families in control 

by providing easy to understand information about college costs 

through accessible public disclosures. 

The Committee rejected this amendment on a party line vote of 

27 to 19. 

H.R. 609—Fails to meet the growing demand for additional investments in College and Universities that serve predominantly minority, low-income and first generation students 

Millions of minority and first-generation students cannot afford 

to attend college, while the institutions that traditionally serve 

these students struggle to expand their infrastructure, student support services and academic programs. Additionally, we face a shortage of minority teachers and an immediate need to encourage more 

Latinos to pursue advanced degrees. 

608 

We strongly support the passage of the Hinojosa-GrijalvaFortuno-Tiberi amendment to establish the graduate Hispanic 

Serving Institutions program to significantly increase the number 

of Latino students earning advanced degrees—though we are dis- appointed that the full authorization level of $125 million was not 

passed. We believe that the passage of this amendment was only 

a first step in boosting the college participation of these students. 

We must significantly boost our investment in all minority serving 

institutions to ensure that all college qualified students can access 

an affordable top quality education. 

H.R. 609—Raises student loan fees 

While the bill provides for a gradual phase out of the 3 percent 

origination fee charged to student and parent borrowers, it effectively doubles the current 1.5 percent origination fee that Direct 

Loan borrowers pay in the first year of the phase out (2006). In the 

second year of the phase out, the origination fee is 1 percent higher, and in the third year, .5 percent higher than borrowers in the 

Direct Loan program currently pay. While we strongly support 

elimination of these student taxes, which Democratic members 

have been urging for years, we cannot support legislation that 

raises fees, and the cost of college, for students, before eliminating 

them. 

H.R. 609 also requires guaranty agencies to charge student and 

parent borrowers a 1 percent insurance fee on their loans. Most 

guaranty agencies currently waive this fee, but the bill requires 

borrowers to pay this tax. According to the Congressional Budget 

Office, this change will raise $3.6 billion over 10 years from borrowers. 

H.R. 609—Eliminates critical borrower benefits that encourage ontime repayment and lower interest rates 

The bill eliminates the Secretary of Education’s authority to provide benefits, such as lower interest rates, to student borrowers in 

the Direct Loan program who make a certain number of on-time 

payments. Private banks who participate in the Federal Family 

Education Loan (FFEL) program currently offer similar benefits to 

their student borrowers. 

The bill also eliminates the in-school consolidation benefit, which 

allows student borrowers (in both the Direct Loan and FFEL programs) who are still in school or in their six month grace period, 

to consolidate their loans at a lower interest rate (60 basis points 

lower). The elimination of this benefit will cost the typical student 

borrower nearly $1,000 in additional interest rate charges, compared to current law. 

H.R. 609—Closes the 9.5 percent loan loophole 

Led by Reps. Kildee and Van Hollen, last year Congress voted to 

partially close the loophole with student lenders to collect a guaranteed 9.5 percent rate of return on certain student loans. This 

rate of return is 4 percent higher (and was 6 percent higher last 

year) than the return which lenders receive on regular student 

loans. However, this partial closure still allowed lenders to ‘‘recycle,’’ or use the interest payments and the excessive subsides paid 

609 

on their outstanding 9.5 percent loans to make new loans which 

also receive the 9.5 percent rate of return. The Government Accountability Office estimated that recycling alone is responsible for 

up to 40 percent of the current loan volume which is guaranteed 

this 9.5 percent rate of return. 

At the urging of Committee Democrats, H.R. 609 completely 

closes the 9.5 percent loophole which generated billions of dollars 

in excessive profits to lenders. The closure of this loophole will generate over $2 billion dollars in savings over the next 6 years— money which should be reinvested into student aid. Unfortunately, 

the Majority is using these savings to pay for alleged deficit reduction. 

H.R. 609—Promotes the suppression of free speech on College campuses 

We agree that it is critical that students, faculty and other members of the campus community have the ability to exercise their 

right to free speech, whether it is in the classroom or an event on 

campus. 

Democrats believe that any attempts to stifle the free speech 

rights of students and faculty should be taken seriously. However, 

without a conclusive body of evidence regarding this issue, it is unclear what problem this bill is trying to fix. 

SIGNIFICANT CHANGES TO STUDENT AID SAFEGUARDS

Several changes were made to the key student aid safeguards, 

such as the 50 percent rules, the 90–10 rule, and the single definition of an institution of higher education. While we support expanding college opportunities for students, a number of our members remain concerned that some of these changes, absent strong 

alternative safeguards, may result in increased fraud and abuse in 

the student aid programs. We are also very concerned at the Committee’s overall failure to perform its oversight duties to ensure that the nearly $80 billion of federal student aid that is disbursed 

each year is done so with the utmost integrity. 

We encourage the Chairman to carry out the necessary oversight 

to ensure both the integrity of the student aid programs and to ensure that all students receive a top quality education. 

PETRI-MILLER AMENDMENT

Reps. Petri and Miller offered an amendment to incentivize colleges and universities to use the lowest-cost federal lending program, whether it is the Direct Loan program or the Federal Family 

Education Loan program. Under this amendment, colleges that 

switch to the cheaper of the two lending programs, as determined 

by the secretary of Education, will be given half of the savings generated from the switch. Colleges must use those savings to increase 

Pell grant scholarships or need-based graduate student fellowships. 

Colleges that already use the lowest-cost federal lending program 

at the time of enactment share the savings generated by the 

schools that switch to the less expensive program and must use the 

savings to increase Pell grant scholarships or need-based graduate 

student fellowships. Analysis by the Congressional Budget Office 

found that if passed, this provision would boost student grant aid 

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1Footnote 4 of the American Psychological Association’s Guidelines and Principles for Accreditation of Programs in Professional Psychology states, ‘‘This requirement does not exclude programs from having a religious affiliation or purpose and adopting and applying admission and 

employment policies that directly relate to this affiliation or purpose so long as (1) Public notice 

of these policies has been made to applicants, students, faculty, or staff before their application 

or affiliation with the program; and (2) the policies do not contravene the intent of other relevant portions of this document or the concept of academic freedom. These policies may provide 

a preference for persons adhering to the religious purpose or affiliation of the program, but they 

shall not be used to preclude the admission, hiring, or retention of individuals because of the 

personal and demographic characteristics described in Domain A, Section 5 of this document 

(and referred to as cultural and individual diversity). This footnote is intended to permit religious policies as to admission, retention, and employment only to the extent that they are protected by the U.S. Constitution. It will be administered as if the U.S. Constitution governed its 

application.’’

by $17 billion dollars over 10 years, at no additional cost to taxpayers. Republicans rejected the amendment. 

ACCREDITATION

Our members continue to have serious reservations about the 

McKeon Amendment to require accrediting agencies, as part of the 

accreditation process, to consider the ‘‘stated missions of institutions of higher education, including but not limited to such missions as inculcation of religious values * * * ’’. This amendment 

deserves close scrutiny as for the first time it would require the 

Federal Government, as part of their determination of the acceptability of accrediting agencies, to evaluate whether an accrediting 

agency has appropriately considered an institution’s religious affiliation in its review of the program under consideration for accreditation. We believe that the amendment is not warranted in light 

of current practices by accrediting agencies and could have tremendous implications for the independence of accrediting agencies in 

determining appropriate standards for accreditation. 

The Majority has not presented evidence that this amendment is 

necessary. In fact, institutions of higher education, accrediting 

agencies and the faith community have, in the past, debated this 

issue and found an appropriate balance that preserves both religious and academic freedom. In 2000, the American Psychological 

Association (APA), the accrediting agency for doctoral and graduate 

programs in psychology, was presented with a proposal to eliminate 

an exemption 1 for religiously affiliated institutions relating to the 

APA guidelines on ‘‘cultural and individual diversity’’. The exemption allowed such institutions to continue to uphold their right to 

safeguard their religious teachings and tenets and still achieve the 

standards set by the APA. Elimination of this exemption was 

soundly opposed by a broad coalition of groups. Other accrediting 

agencies such as the American Bar Association, the Middle States 

Association of Colleges and Schools and the Western Association of 

Colleges and Schools have also seen fit to provide exemptions for 

religiously affiliated institutions. 

The provision currently included in the bill does not reflect our 

view that such a change from current law is unnecessary. We continue to support the rights of religiously affiliated institutions of 

higher education to retain their religious and academic freedom 

while according accrediting agencies their abilities to set appropriate academic standards of excellence for their programs. 

611 

CONCLUSION

American students and families need more affordable college opportunities. Significantly boosting these opportunities is critical to 

the success of the American economy and the nation’s ability to 

maintain and grow our competitive edge in the global economy. 

Not only does this bill fail on this account, but it actually makes 

the largest single cut to the student aid programs ever. As a result, 

students will be forced to pay thousands of dollars more for college. 

This bill, squanders a rare chance to re-deploy billions of dollars, 

saved from cuts to excessive lender subsidies, toward boosting 

grant aid and lowering the cost of borrowing to students. Rather 

than advance this partisan legislation, which is opposed by students, colleges, and consumer groups alike, we should be focused 

on increasing affordable college opportunities to all Americans. 

The reauthorization of the Higher Education Act offered the 

Committee an opportunity to ensure college access to all Americans. Unfortunately, the Majority chose to pass up this golden opportunity and instead, is making college students and families pay 

for the irresponsible budget management of the Congress. 

DEMOCRATIC AMENDMENTS OFFERED IN FULL COMMITTEE MARKUP OF

H.R. 609

Mr. Miller, Mr. Kildee, Mr. Kind, Mr. Van Hollen and Mr. Barrow offered an amendment that would maintain Congress’ promise 

to lower the student loan interest rate caps to 6.8 percent in 2005, 

offered student borrowers the choice of a variable or low fixed interest rate on their consolidation loans, and restore the value of 

Pell grant scholarships to their maximum buying power. The 

amendment was defeated. 

Mr. Miller offered a second degree amendment to the Petri 

amendment on loan consolidation to lower interest rates and to 

eliminate the .5 percent origination fee charged to students. The 

amendment was defeated. 

Mr. Tierney and Ms. McCollum offered an amendment to make 

college tuition more affordable. The amendment was defeated. 

Mr. Holt and Mr. Bishop offered an amendment to grant rebates 

to students who will have their Pell awards reduced or eliminated 

this fall, due to the recent student aid reduction from the Bush administration. The amendment was defeated. 

Mr. Tierney and Mr. Kind offered an amendment to boost and 

equalize campus based aid funding. The amendment was defeated. 

Mr. Andrews offered a hold harmless amendment on campus 

based aid. The amendment was defeated. 

Mr. Kildee and Mr. Van Hollen offered an amendment to provide 

additional safeguards to schools acting as lenders. The amendment 

was accepted under unanimous consent. 

Mr. Miller offered a second degree amendment to the Petri 

amendment on guaranty agencies to require that the Bush proposals on eliminating excessive subsidies to guaranty agencies. The 

amendment was defeated. 

Mr. Hinojosa and Mr. Grijalva offered an amendment on graduate HSI programs that would establish a program to significantly 

612 

increase the number of Latino students earning advanced degrees. 

The amendment passed by recorded vote. 

Mr. Van Hollen offered an amendment to strike the provision 

that forces students to pay the insurance fee on their student 

loans. The amendment was defeated. 

Mr. Holt and Mr. Kind offered an amendment to provide up front 

tuition assistance for students pursuing careers in math, science or 

engineering. The amendment was defeated by voice vote. 

Mr. Scott offered an amendment to expand teaching centers of 

excellence at minority serving institutions. The amendment failed 

by voice vote. 

Mr. Miller and Mr. Petri offered an amendment to include the 

Student Aid Reward Act as part of the Higher Education Act. The 

amendment was defeated. 

Mr. Miller offered an amendment on teacher quality to: increase 

the supply of outstanding teachers; ensure that all children have 

teachers with expertise in the subjects they teach; identifying and 

reward our best teachers; and, keeping the best teachers and principals in our schools. The amendment was defeated. 

Mr. Grijalva and Ms. McCollum offered an amendment to retain 

the separate definitions of institutions of higher education. The 

amendment was withdrawn. 

Mr. Davis offered an amendment to create a study on minority 

males, their graduation rates, why they are not attending college, 

and ways to address the problem. The amendment was agreed to 

by voice vote. 

Mrs. Davis offered an amendment to reduce fees for student borrowers. The amendment was defeated. 

Mr. Kind and Mr. Van Hollen offered an amendment on FLAS 

award that would establish undergraduate scholarships to students 

studying high priority languages. The amendment was withdrawn. 

Mr. Holt offered an amendment to on Title 6 dealing with 

science, technology and foreign languages. The amendment was defeated. 

Mr. Ryan offered an amendment on the college textbook rental 

expansion program. The amendment was defeated. 

Ms. Woolsey offered an amendment on the Pasty Mink Fellowship that would increase the number of women and minorities pursuing advanced degrees in priority fields of study. The amendment 

was defeated. 

Mr. Wu offered an amendment to establish a grant program to 

encourage institutions of higher education to create partnerships 

with community colleges. The amendment was accepted by unanimous consent. 

Mr. Wu offered an amendment on university sustainability centers. The amendment was defeated. 

Mr. Bishop and Mr. Tierney offered an amendment to establish 

a cooperative education program. The amendment was defeated. 

Ms. Woolsey offered an amendment to prohibit the Secretary of 

Education from enforcing recent guidance that would allow institutions to demonstrate equal athletic opportunities solely on the basis 

of a survey and to count on non-responses to such a survey as a 

lack of interest in athletic opportunities. The amendment was defeated. 

613 

Mrs. Davis offered an amendment on veterans. The amendment 

was withdrawn. 

Mr. Tierney offered an amendment on the academic bill of rights, 

striking section 103. The amendment was defeated. 

Mr. Andrews offered an amendment on campus fire safety. The 

amendment passed by recorded vote. 

Ms. McCarthy offered an amendment on graduation/completion 

rates that would add language to section (K) of the College Consumer Profile. The language would identify whether completion or 

graduation rates are from a 2-year or a 4-year school. The amendment was accepted under unanimous consent. 

Ms. McCarthy offered an amendment to clarify language in the 

affordability section. The amendment was accepted under unanimous consent. 

Mr. Owens offered an amendment to establish predominantly 

Black Serving Institutions under title 3 of the HEA. The amendment was defeated. 

Mr. Owens offered an amendment to strike minimum grants for 

HBCUs. The amendment was defeated. 

Mr. Wu offered an amendment on refinancing consolidation 

loans. The amendment was defeated. 

Mr. Grijalva offered an amendment en bloc on: (a) providing loan 

forgiveness for librarians and (b) additional areas of need, dealing 

with highly qualified teachers in bilingual education in low-income 

communities. The amendment was agreed to by voice vote. 

Mr. Davis offered on amendment to allow prisoners to receive financial aid while in prison. The amendment was defeated. 

Mr. Tierney offered an amendment to ensure Pell equity, striking 

the State Scholars language. The amendment was defeated. 

Mr. Scott and Mr. Grijalva offered an amendment on hate crimes 

so that an institution’s data that is collected matches with data 

from the FBI. The amendment was defeated by voice vote. 

Ms. McCarthy and Mr. Tiberi offered an amendment on Project 

GRAD. The amendment was withdrawn. 

Mr. Davis, Mr. Andrews and Mr. Kucinich offered an amendment 

to repeal the drug question on the federal student aid application. 

The amendment was defeated. 

Mr. Holt offered an amendment to expand affordable child care 

assistance for low-income students. The amendment was defeated. 

Mr. Ryan and Mr. Tierney offered an amendment with Mr. 

McKeon to simplify the student aid application process. The 

amendment was agreed to by voice vote. 

Mr. Bishop offered an amendment to ensure the transfer of college credits. The amendment was defeated. 

Mr. Van Hollen offered an amendment on regulatory relief experimental sites. The amendment was agreed to by voice vote. 

Mr. Andrews offered an en bloc amendment on: (a) additional 

deferments up to two years for individuals who participate in an 

internship program following graduation; (b) residency program 

deferments for medical and dental residents; and restrict students’

ability to consolidate their loans at a low fixed rate, eliminate origination fees, and change borrow repayment terms. The amendment 

was defeated. 

614 

Mr. Andrews and Mr. Holt offered an amendment on over award 

that provides that federal aid be given without regard to university 

aid, which could then be given on top. The amendment was defeated by voice vote. 

Mr. Andrews offered an amendment on Bryan’s Law, dealing 

with missing person procedures. The amendment was defeated. 

Mr. Andrews offered an amendment requiring a meningitis vaccine for all incoming students. The amendment was defeated. 

Mr. Andrews offered an amendment on technology asset disposal 

that would require personal computers disposed of by the institution of higher education to be fully scrubbed of personal information and also in an environmentally friendly manner. The amendment was defeated. 

Mr. Andrews offered an amendment to amend the definition of 

clock hours. The amendment was agreed to by voice vote. 

Mr. Andrews offered an amendment to direct the Education Secretary to support effort to create an American university in Jordan. 

The amendment was withdrawn. 

Mr. Bishop offered on an amendment on pre-competitive innovation that would develop a grant program for institutions of higher 

education to help bridge the gap between laboratory discoveries 

and community viable researching. The amendment was defeated. 

Mr. Wu offered an amendment on college textbook affordability 

and prices. The amendment was agreed to by voice vote. 

Mr. Wu offered an amendment on the National Commission on 

College Textbook Affordability. The amendment was withdrawn. 

Mr. Kind offered an amendment on creating a GAG study for 

older adult learners. The amendment was agreed to by voice vote. 

Mr. Kind offered an amendment on the education grant program. 

The amendment was defeated by voice vote. 

Mr. Andrews offered an amendment on uncooperative parents 

that would allow students whose parents won’t provide financial information on the FAFSA to receive unsubsidized loans. The amendment was withdrawn. 

Mr. Andrews offered an amendment on student assistance. The 

amendment was withdrawn. 

Ms. McCarthy and Mr. Porter offered an amendment to provide 

up to $5,000 in loan forgiveness for individuals who have completed 

a baccalaureate or advanced degree and who serve for 5 consecutive years in ‘‘areas of national need’’ as designated by the Secretary of Education. The amendment was accepted by voice vote. 

615 

Ms. McCarthy offered an amendment to ensure that degrees 

from Rabbincal schools will be able to continue to be recognized as 

the equivalent of Baccalaureate degrees. This amendment was accepted by voice vote. 

GEORGE MILLER. TIMOTHY BISHOP. RAU ́ L M. GRIJALVA. CHRIS VAN HOLLEN. DENNIS J. KUCINICH. RUBERT E. ANDREWS. RUSH HOLT. LYNN WOOLSEY. 

SUSAN DAVIS. 

MAJOR R. OWENS. 

DALE E. KILDEE. 

JOHN F. TIERNEY. 

DANNY K. DAVIS. 

CAROLYN MCCARTHY. TIM RYAN. 

BETTY MCCOLLUM. 

RON KIND. DAVID WU. DONALD M. PAYNE. ROBERT C. ‘‘BOBBY’’ SCOTT. 

Æ