I 

109TH CONGRESS 

1ST SESSION H. R. 1338 

To amend the Higher Education Act of 1965 to permit refinancing of student 

consolidation loans, increase Pell Grant maximum awards, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2005 

Ms. DELAURO (for herself, Mr. CROWLEY, Mr. JEFFERSON, Mr. PALLONE, 

Mr. BRADLEY of New Hampshire, Mr. LARSON of Connecticut, Ms. LEE, 

Ms. SLAUGHTER, Mr. CONYERS, Mr. GENE GREEN of Texas, Mr. 

WEXLER, Mr. MICHAUD, Mr. MORAN of Virginia, Mr. ISRAEL, Mr. 

MCDERMOTT, Mr. FARR, Mr. WAXMAN, Mr. STRICKLAND, Mrs. JONES

of Ohio, Mr. LANTOS, Mr. JACKSON of Illinois, and Mr. GONZALEZ) 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 permit 

refinancing of student consolidation loans, increase Pell 

Grant maximum awards, 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. 

4 This Act may be cited as the ‘‘College Loan Assist5 ance Act of 2005’’. 
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1 SEC. 2. REMOVAL OF PROHIBITION ON REFINANCING CON2 SOLIDATION LOANS. 

3 (a) REMOVAL OF PROHIBITION.—Section 428C(a)(3) 

4 the Higher Education Act of 1965 (20 U.S.C. 1078– 

5 3(a)(3)) is amended— 

6 (1) by striking subparagraph (B); 

7 (2) in subparagraph (C), by striking ‘‘subpara8 graphs (A) and (B)’’ and inserting ‘‘subparagraph 

9 (A)’’; and 

10 (3) by redesignating subparagraph (C) as sub11 paragraph (B). 

12 (b) REDUCTION OF CAP ON INTEREST RATE.—Sec13 tion 427A(l)(3) of such Act (20 U.S.C. 1077a(l)(3)) is 

14 amended by striking subparagraph (B) and inserting the 

15 following: 

16 ‘‘(B) 6.8 percent.’’. 

17 SEC. 3. EXTENSION AND INCREASE OF PELL GRANT MAX18 IMUM AMOUNTS. 

19 Section 401(b)(2)(A) of the Higher Education Act of 

20 1965 (20 U.S.C. 1070a(b)(2)(A)) is amended by striking 

21 ‘‘shall be—’’ and all that follows through ‘‘less an 

22 amount’’ and inserting ‘‘shall be $7,000 for academic year 

23 2006–2007 and each of the 4 succeeding academic years, 

24 less an amount’’. 
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1 SEC. 4. ELIMINATION OF LOAN FEES TO BORROWERS. 

2 (a) FEDERAL FAMILY EDUCATION LOAN PRO3 GRAM.—Section 438(c) of the Higher Education Act of 

4 1965 (20 U.S.C. 1087–1(c)) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(9) ORIGINATION FEES TERMINATED.—Not7 withstanding any other provision of this subsection, 

8 with respect to any loan made, insured, or guaran9 teed under this part on or after the first July 1 after 

10 the date of enactment of the College Loan Assist11 ance Act of 2005— 

12 ‘‘(A) no eligible lender may collect directly 

13 or indirectly from any borrower any origination 

14 fee with respect to such loan, or any other fee 

15 relating to the origination of a loan however de16 scribed; and 

17 ‘‘(B) the Secretary shall not collect any 

18 origination fee from the lender under this sub19 section.’’. 

20 (b) FEDERAL DIRECT LOAN PROGRAM.—Section 

21 455(c) of such Act (20 U.S.C. 1087e(c)) is amended to 

22 read as follows: 

23 ‘‘(c) LOAN FEE.— 

24 ‘‘(1) TEMPORARY PROVISION.—Subject to para25 graph (2), the Secretary shall charge the borrower 
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1 of a loan made under this part an origination fee of 

2 4.0 percent of the principal amount of loan. 

3 ‘‘(2) TERMINATION OF ORIGINATION FEE.— 

4 With respect to any loan made under this part on 

5 or after the first July 1 after the date of enactment 

6 of College Loan Assistance Act of 2005, the Sec7 retary shall not collect directly or indirectly from 

8 any borrower any origination fee with respect to 

9 such loan, or any other fee relating to the origina10 tion of a loan however described.’’. 

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