II

103D CONGRESS

1ST SESSION S. 240

To accelerate implementation of loan forgiveness incentives for student

borrowers who perform certain full-time, low-paid national community service.

IN THE SENATE OF THE UNITED STATES

JANUARY 27 (legislative day, JANUARY 5), 1993

Mr. BUMPERS introduced the following bill; which was read twice and referred

to the Committee on Labor and Human Resources

A BILL

To accelerate implementation of loan forgiveness incentives

for student borrowers who perform certain full-time, lowpaid national community service.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Service Im5 plementation Act of 1993’’.
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1 SEC. 2. INAPPLICABILITY OF DEMONSTRATION PROGRAM

2 LOAN FORGIVENESS TO INDIVIDUALS PER3 FORMING NATIONAL COMMUNITY SERVICE.

4 Section 428J of the Higher Education Act of 1965

5 (hereafter in this Act referred to as the ‘‘Act’’) (20 U.S.C.

6 1078–10) is amended—

7 (1) in the heading for subsection (b), by strik8 ing ‘‘DEMONSTRATION PROGRAM’’ and inserting

9 ‘‘PROGRAM AUTHORIZED’’;

10 (2) in the heading for paragraph (1) of sub11 section (b), by striking ‘‘IN GENERAL’’ and inserting

12 ‘‘DEMONSTRATION PROGRAM’’;

13 (3) in subsection (b)—

14 (A) in clause (ii) of subparagraph (A), by

15 inserting ‘‘or’’ after the semicolon at the end

16 thereof;

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

18 (C) by redesignating subparagraph (C) as

19 subparagraph (B); and

20 (4) in subsection (g)—

21 (A) in paragraph (1), by striking ‘‘pro22 gram’’ and inserting ‘‘programs’’;

23 (B) in paragraph (3)—

24 (i) in subparagraph (A), by striking

25 ‘‘program’’ and inserting ‘‘programs’’;
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1 (ii) in subparagraph (C), by striking

2 ‘‘program’’ and inserting ‘‘programs’’;

3 (iii) in subparagraph (D), by striking

4 ‘‘program’’ each place such term appears

5 and inserting ‘‘programs’’; and

6 (iv) in subparagraph (E), by striking

7 ‘‘program’’ each place such term appears

8 and inserting ‘‘programs’’; and

9 (C) in paragraph (5) of subsection (g)—

10 (i) by striking ‘‘to carry out this sec11 tion’’; and

12 (ii) by inserting ‘‘to carry out the

13 demonstration program described in sub14 section (b)(2)’’ after ‘‘succeeding fiscal

15 years’’.

16 SEC. 3. LOAN FORGIVENESS ENTITLEMENT PROGRAM.

17 Subsection (b) of section 428J of the Act (20 U.S.C.

18 1078–10(b)) is further amended—

19 (1) by redesignating paragraph (2) as para20 graph (3); and

21 (2) by inserting after paragraph (1) the follow22 ing new paragraph:

23 ‘‘(2) ENTITLEMENT PROGRAM.—(A) The Sec24 retary, in consultation with the Secretary of Health

25 and Human Services, shall assume the obligation to
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1 repay, and repay, a loan made, insured or guaran2 teed under this part (excluding loans made under

3 sections 428A, 428B, or 428C) for any borrower

4 having an application approved under subsection (e)

5 who agrees in writing to volunteer for service under

6 the Peace Corps Act or under the Domestic Volun7 teer Service Act of 1973, or to perform comparable

8 service as a full-time employee of an organization

9 which is exempt from taxation under section

10 501(c)(3) of the Internal Revenue Code of 1986, if

11 the borrower does not receive compensation which

12 exceeds the greater of—

13 ‘‘(i) the minimum wage rate described in

14 section 6 of the Fair Labor Standards Act of

15 1938; or

16 ‘‘(ii) an amount equal to 100 percent of

17 the poverty line for a family of two (as defined

18 in section 673(2) of the Community Services

19 Block Grant Act.

20 ‘‘(B) ENTITLEMENT PROVISIONS.—Each bor21 rower described in subparagraph (A) having an ap22 plication approved under subsection (e) shall be enti23 tled to receive loan repayment in accordance with

24 the provisions of this section. Each such borrower

25 shall be deemed to have a contractual right, as
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1 against the United States, to receive from the Sec2 retary such loan repayment.’’.

3 SEC. 4. NUMBER OF LOANS WHICH MAY BE FORGIVEN;

4 LOAN REPAYMENT.

5 Subsection (c) of section 428J of the Act (20 U.S.C.

6 1078–10(c)) is amended—

7 (1) in the heading for paragraph (1), by strik8 ing ‘‘IN GENERAL’’ and inserting ‘‘DEMONSTRATION

9 PROGRAM’’;

10 (2) in the matter preceding subparagraph (A)

11 of paragraph (1), by striking ‘‘The Secretary’’ and

12 inserting ‘‘In the case of individuals described in

13 subparagraphs (A) and (B) of subsection (b)(1), the

14 Secretary’’;

15 (3) in subparagraph (A) of paragraph (1), by

16 striking ‘‘subsection (a)’’ and inserting ‘‘subsection

17 (b)(1)’’;

18 (4) by redesignating paragraphs (2), (3), and

19 (4) as paragraphs (3), (4), and (5), respectively; and

20 (5) by inserting after paragraph (1) the follow21 ing new paragraph:

22 ‘‘(1) ENTITLEMENT PROGRAM.—In the case of

23 individuals described in subsection (b)(2)(A), the

24 Secretary shall assume the obligation to repay—
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1 ‘‘(A) 15 percent of the total amount of

2 Stafford loans incurred by the student borrower

3 for the first academic year in which such bor4 rower meets the requirements described in sub5 section (b)(2)(A);

6 ‘‘(B) 20 percent of such total amount for

7 such second academic year;

8 ‘‘(C) 25 percent of such total amount for

9 such third academic year; and

10 ‘‘(D) 30 percent of such total amount for

11 such fourth academic year.’’.

12 SEC. 5. LOAN CANCELLATION APPLICABILITY FOR PER13 KINS LOAN BORROWERS WHO PERFORM NA14 TIONAL SERVICE.

15 Section 465(a)(2) of the Act (20 U.S.C.

16 1087ee(a)(2)) is amended—

17 (1) by striking ‘‘or’’ at the end of subparagraph

18 (H);

19 (2) by striking the period at the end of sub20 paragraph (I) and inserting ‘‘; or’’; and

21 (3) by adding at the end the following new sub22 paragraph:

23 ‘‘(J) as a full-time volunteer under the

24 Peace Corps Act or under the Domestic Volun25 teer Service Act of 1973, or for comparable
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1 service as a full-time employee of an organiza2 tion which is exempt from taxation under sec3 tion 501(c)(3) of the Internal Revenue Code of

4 1986, if the borrower does not receive com5 pensation which exceeds the greater of—

6 ‘‘(i) the minimum wage rate described

7 in section 6 of the Fair Labor Standards

8 Act of 1938; or

9 ‘‘(ii) an amount equal to 100 percent

10 of the poverty line for a family of two (as

11 defined in section 673(2) of the Commu12 nity Service Block Grant Act).’’.

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