I 

109TH CONGRESS 

1ST SESSION H. R. 1293

To amend the Higher Education Act of 1965 to provide access and equity 

in higher education, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 15, 2005

Mr. ANDREWS (for himself, Mrs. MCCARTHY, Mr. HOLT, Mr. OWENS, Ms. 

HOOLEY, Mr. FATTAH, Mr. HINOJOSA, Mr. DAVIS of Tennessee, Mr. 

KANJORSKI, Mr. ROSS, Mr. MCDERMOTT, Mr. CASE, Mr. RUSH, Mr. 

GORDON, Mr. BERMAN, Mr. MEEKS of New York, Mr. NEAL of Massachusetts, Ms. MCCOLLUM of Minnesota, Mr. MICHAUD, Mr. WEXLER, 

Mr. CONYERS, Mr. ALLEN, Mr. POMEROY, and Mr. CARDIN) introduced 

the following bill; which was referred to the Committee on Education and 

the Workforce 

A BILL

To amend the Higher Education Act of 1965 to provide 

access and equity in higher education, and for other 

purposes.

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; REFERENCES; EFFECTIVE DATE. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Access and Equity in Higher Education Act’’. 

6 (b) REFERENCES.—Except as otherwise expressly 

7 provided, whenever in this Act an amendment or repeal 
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1 is expressed in terms of an amendment to, or repeal of, 

2 a section or other provision, the reference shall be consid3 ered to be made to a section or other provision of the 

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

5 (c) EFFECTIVE DATE.—Except as otherwise provided 

6 in this Act, the amendments made by this Act shall apply 

7 with respect to any loan for which the first disbursement 

8 of principal is made on or after the date of enactment of 

9 this Act. 

10 TITLE I—STUDENT ASSISTANCE 

11 SEC. 101. LOAN LIMITS. 

12 (a) FFEL LOANS.—

13 (1) INCREASES IN SUBSIDIZED LOAN LIMITS.—

14 Section 428(b)(1) (20 U.S.C. 1078(b)(1)) is amend15 ed—

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

17 ‘‘$2,625’’ in subclause (I) and inserting 

18 ‘‘$4,000’’; 

19 (B) in subparagraph (A)(ii), by striking 

20 ‘‘$3,500’’ in subclause (I) and inserting 

21 ‘‘$6,000’’; 

22 (C) in subparagraph (A)(iii), by striking 

23 subclause (I) and inserting the following: 

24 ‘‘(I) $20,000 minus any amount 

25 previously borrowed during any pre-
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1 ceding academic year in such remain2 der of such program (but excluding 

3 amounts borrowed under clause (i) or 

4 (ii) for such first and second year); 

5 or’’; 

6 (D) in subparagraph (A)(v), by striking 

7 ‘‘$8,500’’ and inserting ‘‘$10,000’’; 

8 (E) in subparagraph (B)(i), by striking 

9 ‘‘$23,000’’ and inserting ‘‘$30,000’’; and 

10 (F) in subparagraph (B)(ii)—

11 (i) by striking ‘‘$65,500’’ and insert12 ing ‘‘$60,000’’; 

13 (ii) by striking ‘‘and (I) including’’ 

14 and inserting ‘‘but (I) excluding’’; and 

15 (iii) by striking ‘‘but (II)’’ and insert16 ing ‘‘and (II)’’. 

17 (2) INCREASES IN UNSUBSIDIZED LOAN LIM18 ITS.—Section 428H(d)(1) (20 U.S.C. 1078–8(d)(1)) 

19 is amended—

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

21 ‘‘$4,000’’ and inserting ‘‘$5,500’’; 

22 (B) in subparagraph (B)(i), by striking 

23 ‘‘$5,000’’ and inserting ‘‘$20,000 minus any 

24 amount previously borrowed during any pre25 ceding academic year in such remainder of such 
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1 program (but excluding amounts borrowed 

2 under subparagraph (A) for such first and sec3 ond year)’’; and 

4 (C) in subparagraph (C), by striking 

5 ‘‘$10,000’’ and inserting ‘‘$25,000 minus the 

6 amount borrowed for the same academic year in 

7 a subsidized loan under section 428 or part D’’. 

8 (3) AUTHORITY TO REDUCE LOAN LIMITS.—

9 Section 428(a)(2)(D) (20 U.S.C. 1078(a)(2)(D)) is 

10 amended by adding at the end the following new 

11 sentence: ‘‘An eligible institution may, in carrying 

12 out such subparagraphs, provide a statement which 

13 certifies the eligibility of a student for a loan 

14 amount that is less than such maximum amount, 

15 and that is less than the amount for which the stu16 dent shows financial need, if the institution has es17 tablished a lesser amount than such maximum 

18 amount as the loan limit applicable to the students 

19 attending such institution.’’. 

20 (4) CONFORMING AMENDMENTS TO FISL.—

21 (A) ANNUAL LIMITS.—Section 

22 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is 

23 amended—
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1 (i) in clause (i)(I), by striking 

2 ‘‘$2,625’’ in subclause (I) and inserting 

3 ‘‘$4,000’’; 

4 (ii) in clause (ii)(I), by striking 

5 ‘‘$3,500’’ in subclause (I) and inserting 

6 ‘‘$6,000’’; 

7 (iii) in clause (iii), by striking sub8 clause (I) and inserting the following: 

9 ‘‘(I) $20,000 minus the amount 

10 previously borrowed during any pre11 ceding academic year in such remain12 der of such program (and excluding 

13 amounts borrowed under clause (i) or 

14 (ii) for such first and second year); 

15 or’’; and 

16 (iv) in clause (iv), by striking 

17 ‘‘$8,500’’ and inserting ‘‘$10,000’’. 

18 (B) AGGREGATE LIMITS.—Section 

19 425(a)(2)(A) is amended—

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

21 and inserting ‘‘$30,000’’; and 

22 (ii) in clause (ii)—

23 (I) by striking ‘‘$65,500’’ and in24 serting ‘‘$60,000’’; 
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1 (II) by striking ‘‘and (I) includ2 ing’’ and inserting ‘‘but (I) exclud3 ing’’; and 

4 (III) by striking ‘‘but (II)’’ and 

5 inserting ‘‘and (II)’’. 

6 SEC. 102. ORIGINATION FEES. 

7 (a) FEDERAL FAMILY EDUCATION LOAN PRO8 GRAM.—Section 438(c) of the Higher Education Act of 

9 1965 (20 U.S.C. 1087–1(c)) is amended by adding at the 

10 end the following new paragraph: 

11 ‘‘(9) ORIGINATION FEES TERMINATED.—

12 ‘‘(A) IN GENERAL.—Notwithstanding any 

13 other provision of this subsection except for 

14 subparagraph (B) of this paragraph, with re15 spect to any loan made, insured, or guaranteed 

16 under this part on or after July 1, 2005, other 

17 than a loan made under section 428B or 

18 428H—

19 ‘‘(i) no eligible lender may collect di20 rectly or indirectly from any borrower any 

21 origination fee with respect to such loan; 

22 and 

23 ‘‘(ii) the Secretary shall not collect 

24 such origination fee from the lender under 

25 this subsection. 
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1 ‘‘(B) UNSUBSIDIZED LOANS.—Notwith2 standing subparagraph (A), with respect to any 

3 loan made under section 428H on or after July 

4 1, 2005—

5 ‘‘(i) an eligible lender may collect an 

6 origination fee with respect to such loan 

7 under paragraph (2), except that such 

8 paragraph shall be applied by substituting 

9 ‘1.5 percent’ for ‘3.0 percent’; and 

10 ‘‘(ii) the Secretary shall collect any 

11 such origination fee from the lender under 

12 paragraph (1) of this subsection.’’. 

13 (b) FEDERAL DIRECT LOAN PROGRAM.—

14 (1) AMENDMENT.—Section 455(c) (20 U.S.C. 

15 1087e(c)) is amended to read as follows: 

16 ‘‘(c) LOAN FEE.—The Secretary shall charge—

17 ‘‘(1) the borrower of a Federal Direct Stafford 

18 Loan an origination fee of 1.0 percent of the prin19 cipal amount of the loan; 

20 ‘‘(2) the borrower of a Federal Direct Stafford 

21 Unsubsidized Stafford Loan an origination fee of 2.5 

22 percent of the principal amount of the loan; and 

23 ‘‘(3) the borrower of a Federal Direct PLUS 

24 loan an origination fee of 4.0 percent of the prin25 cipal amount of the loan.’’. 
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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall apply with respect to any 

3 loan made under part D of title IV on an after July 

4 1, 2005. 

5 SEC. 103. LOAN FLEX. 

6 (a) AMENDMENT.—Section 428(b)(9)(A) (20 U.S.C. 

7 1078(b)(9)(A)) is amended by striking clauses (iii) and 

8 (iv) and inserting the following: 

9 ‘‘(iii) an income-sensitive repayment 

10 plan, with income-sensitive repayment 

11 amounts paid over an extended period of 

12 time prescribed by the Secretary, not to 

13 exceed 25 years, except that—

14 ‘‘(I) after 10 years, if the indi15 vidual has not made adequate 

16 progress in repaying the principal of 

17 the loan (defined by the Secretary as 

18 percentage of principal) the lender 

19 may use an alternative formula, to be 

20 determined by the Secretary, by which 

21 the loan could be expected to be re22 paid in full within the remaining 15 

23 years; 

24 ‘‘(II) after 25 years, if the loan is 

25 not repaid, the Secretary shall acquire 
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1 the loan from the lender and admin2 ister the loan under part D of this 

3 title; and 

4 ‘‘(III) the other terms and condi5 tions of which shall be comparable to 

6 the terms and conditions applicable to 

7 income contingent repayment under 

8 section 455(d)(1)(D) and 455(e); and 

9 ‘‘(iv) an extended repayment plan, 

10 with a fixed annual or graduated repay11 ment amount paid over an extended period 

12 of time, not to exceed 25 years, except that 

13 in the first 2 years of repayment, the bor14 rower shall have the option of paying the 

15 interest as it accrues or having such inter16 est be added to principal for repayment 

17 during the remainder of the repayment pe18 riod.’’. 

19 (b) CONFORMING AMENDMENT.—Clause (i) of sec20 tion 428(b)(1)(L) (20 U.S.C. 1078(b)(1)(L)) is amended 

21 to read as follows: 

22 ‘‘(i) except as otherwise provided by a 

23 repayment plan selected by the borrower 

24 under clause (ii), (iii), or (iv) of paragraph 

25 (9)(A), during any year of any repayment 
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1 period with respect to the aggregate 

2 amount of all loans to that borrower which 

3 are insured under this part shall not, un4 less the borrower and the lender otherwise 

5 agree, be less than $600 or the balance of 

6 all such loans (together with interest there7 on), whichever amount is less; and’’. 

8 SEC. 104. CONSOLIDATION LOAN INTEREST RATES. 

9 (a) INTEREST RATE TIED TO INCOME.—Paragraph 

10 (3) of section 427A(l) (20 U.S.C. 1077a(n)) is amended 

11 to read as follows: 

12 ‘‘(3) CONSOLIDATION LOANS.—

13 ‘‘(A) IN GENERAL.—With respect to any 

14 consolidation loan under section 428C for which 

15 the application is received by an eligible lender 

16 on or after the date of enactment of the Access 

17 and Equity in Higher Education Act, the appli18 cable rate of interest shall, during any 12-

19 month period beginning on July 1 and ending 

20 on June 30, be determined on the preceding 

21 June 1 and be equal to—

22 ‘‘(i) the bond equivalent rate of 91-

23 day Treasury bills auctioned at the final 

24 auction held prior to such June 1; plus 

25 ‘‘(ii) 2.3 percent, 
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1 except that such rate shall not exceed 8.25 per2 cent, and except that for any loan under section 

3 428C that is used exclusively to consolidate 

4 loans made under section 428B, clause (ii) shall 

5 be applied by substituting ‘3.1 percent’ for ‘2.3 

6 percent’. 

7 ‘‘(B) VARIATION OF INTEREST RATE

8 BASED ON INCOME.—In the case of—

9 ‘‘(i) a borrower who demonstrates to 

10 the lender, in accordance with regulations 

11 prescribed by the Secretary, that during 

12 such 12-month period, the sum of the bor13 rower’s monthly payments during a year 

14 will exceed—

15 ‘‘(I) 8 percent of the borrower 

16 total income, subparagraph (A)(ii) 

17 shall be applied by substituting ‘1.0 

18 percent’ for ‘2.3 percent’; or 

19 ‘‘(II) 9 percent of the borrower’s 

20 total income, subparagraph (A)(ii) 

21 shall be applied by substituting ‘0.0 

22 percent’ for ‘2.3 percent’; and 

23 ‘‘(ii) a borrower who so demonstrates 

24 that the sum of the borrower’s monthly 

25 payments during a year will exceed—
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1 ‘‘(I) 10 percent of the borrower’s 

2 total income, subparagraph (A) shall 

3 be applied by substituting ‘5 percent’ 

4 for ‘8.25 percent’; 

5 ‘‘(II) 11 percent of the bor6 rower’s total income, subparagraph 

7 (A) shall be applied by substituting ‘4 

8 percent’ for ‘8.25 percent’; or 

9 ‘‘(III) 12 percent of the bor10 rower’s total income, subparagraph 

11 (A) shall be applied by substituting ‘3 

12 percent’ for ‘8.25 percent’.’’. 

13 (b) CONFORMING AMENDMENT.—Section 427A(k)(4) 

14 is amended by striking ‘‘July 1, 2006,’’ and inserting ‘‘the 

15 date of enactment of the Access and Equity in Higher 

16 Education Act’’. 

17 SEC. 105. LOAN FORGIVENESS FOR PUBLIC SERVICE EM18 PLOYEES. 

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

20 read as follows: 

21 ‘‘SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EM22 PLOYEES. 

23 ‘‘(a) PURPOSES.—The purposes of this section are—
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1 ‘‘(1) to reduce the burden of student debt, par2 ticularly for Americans who dedicate their careers to 

3 meeting certain urgent national needs; and 

4 ‘‘(2) to attract more excellent individuals into 

5 important public service careers. 

6 ‘‘(b) LOAN FORGIVENESS.—

7 ‘‘(1) IN GENERAL.—The Secretary shall assume 

8 the obligation to repay, pursuant to subsection (c), 

9 a loan made under section 428, 428C, or 428H, a 

10 Federal Direct Stafford Loan or Federal Direct Un11 subsidized Stafford Loan, a Federal Direct Consoli12 dation Loan, to an individual who—

13 ‘‘(A) has been employed full time in a 

14 qualified public service position described in 

15 paragraph (2) for at least 8 years; 

16 ‘‘(B) has been in an income contingent or 

17 income sensitive repayment plan for 15 years; 

18 and 

19 ‘‘(C) is not in default on a loan for which 

20 the borrower seeks forgiveness. 

21 ‘‘(2) QUALIFIED PUBLIC SERVICE POSITIONS.—

22 For purposes of this section, an individual shall be 

23 treated as employed in a qualified public service po24 sition if the individual is employed in—
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1 ‘‘(A) any Federal, State, or local govern2 ment agency; 

3 ‘‘(B) any corporation which is exempt from 

4 income taxation under section 501(c)(3) of the 

5 Internal Revenue Code of 1986; or 

6 ‘‘(C) in any profession identified by the 

7 Secretary of Education, in consultation with the 

8 Secretary of Homeland Security and the Sec9 retary of Health and Human Services, to be 

10 providing important public service to the United 

11 States. 

12 ‘‘(c) LOAN REPAYMENT.—

13 ‘‘(1) IN GENERAL.—The Secretary shall assume 

14 the obligation to repay the remainder of a qualifying 

15 individual’s student obligations. 

16 ‘‘(2) TREATMENT OF CONSOLIDATION LOANS.—

17 A loan amount for a loan made under section 428C 

18 or for a Federal Direct Consolidation Loan may be 

19 a qualified loan amount for the purposes of this sub20 section only to the extent that such loan amount was 

21 used to repay a loan described in subsection (b)(1) 

22 for a borrower who meets the requirements of sub23 section (b), as determined in accordance with regula24 tions prescribed by the Secretary. 
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1 ‘‘(3) CONSTRUCTION.—Nothing in this section 

2 shall be construed to authorize the refunding of any 

3 repayment of a described in subsection (b)(1). 

4 ‘‘(4) INTEREST.—If a portion of a loan is re5 paid by the Secretary under this section for any 

6 year, the proportionate amount of interest on such 

7 loan that accrues for such year shall be repaid by 

8 the Secretary. 

9 ‘‘(5) INELIGIBILITY OF NATIONAL SERVICE

10 AWARD RECIPIENTS.—No student borrower may, for 

11 the same service, receive a benefit under both this 

12 section and subtitle D of title I of the National and 

13 Community Service Act of 1990 (42 U.S.C. 12601 

14 et seq.). 

15 ‘‘(6) INELIGIBILITY FOR DOUBLE BENEFITS.—

16 No borrower may receive a reduction of loan obliga17 tions under both this section and section 428J or 

18 460. 

19 ‘‘(d) REPAYMENT TO ELIGIBLE LENDERS AND

20 HOLDERS.—The Secretary shall pay to each eligible lend21 er or holder for each fiscal year an amount equal to the 

22 aggregate amount of the lender’s or holder’s loans that 

23 are subject to repayment pursuant to this section for such 

24 year. 

25 ‘‘(e) APPLICATION FOR REPAYMENT.—
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1 ‘‘(1) IN GENERAL.—Each eligible individual de2 siring loan repayment under this section shall sub3 mit a complete and accurate application to the Sec4 retary at such time, in such manner, and containing 

5 such information as the Secretary may require. 

6 ‘‘(2) CONDITIONS.—An eligible individual may 

7 apply for loan repayment under this section after 

8 completing the years of qualifying service described 

9 in subsection (c)(2). 

10 ‘‘(f) REGULATIONS.—The Secretary is authorized to 

11 prescribe such regulations as may be necessary to carry 

12 out the provisions of this section.’’. 

13 TITLE II—REAUTHORIZATION OF 

14 HBCU PROGRAMS 

15 SEC. 201. REAUTHORIZATION OF PART B OF TITLE III. 

16 Paragraph (2) of section 399(a) (20 U.S.C. 

17 1068h(a)) is amended to read as follows: 

18 ‘‘(2) PART B.—There are authorized to be ap19 propriated to carry out part B (other than section 

20 326), $335,000,000 for fiscal year 2005, and such 

21 sums as may be necessary for each of the 5 suc22 ceeding fiscal years.’’.

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