Calendar No. 354

105TH CONGRESS

2D SESSION S. 1882

[Report No. 105–181]

A BILL

To reauthorize the Higher Education Act of 1965,

and for other purposes.

MAY 4, 1998

Reported with an amendment
II

Calendar No. 354

105TH CONGRESS

2D SESSION S. 1882

[Report No. 105–181]

To reauthorize the Higher Education Act of 1965, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 30, 1998

Mr. JEFFORDS (for himself, Mr. KENNEDY, Mr. COATS, Mr. DODD, Ms. COLLINS, and Mr. DEWINE) introduced the following bill; which was read

twice and referred to the Committee on Labor and Human Resources

MAY 4, 1998

Reported by Mr. JEFFORDS, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To reauthorize the Higher Education Act of 1965, 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 ‘‘Higher Education

5 Amendments of 1998’’.
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1 SEC. 2. REFERENCES.

2 Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of the Higher Education Act of

7 1965 (20 U.S.C. 1001 et seq.).

8 TITLE I—GENERAL PROVISIONS

9 SEC. 101. GENERAL PROVISIONS.

10 (a) REPEAL; TRANSFER AND REDESIGNATION.—The

11 Act (20 U.S.C. 1001 et seq.) is amended—

12 (1) by repealing title I (20 U.S.C. 1001 et

13 seq.);

14 (2) by repealing sections 1203, 1206, 1211, and

15 1212 (20 U.S.C. 1143, 1145a, 1145e, and 1145f);

16 (3) by striking the heading for title XII (20

17 U.S.C. 1141 et seq.);

18 (4) by inserting before title III (20 U.S.C. 1051

19 et seq.) the following:

20 ‘‘TITLE I—GENERAL

21 PROVISIONS’’;

22 (5) by transferring sections 1201, 1202, 1204

23 (as renumbered by Public Law 90–575), 1204 (as

24 added by Public Law 96–374), 1205, 1207, 1208,

25 1209, 1210, and 1213 (20 U.S.C. 1141, 1142,

26 1144, 1144a, 1145, 1145b, 1145c, 1145d, 1145d–1,
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1 and 1145g) to follow the heading for title I (as in2 serted by paragraph (4)); and

3 (6) by redesignating sections 1201, 1202, 1204

4 (as renumbered by Public Law 90–575), 1204 (as

5 added by Public Law 96–374), 1205, 1207, 1208,

6 1209, 1210, and 1213 as sections 101, 102, 103,

7 104, 105, 106, 107, 108, 109, and 110, respectively.

8 SEC. 102. FEDERAL CONTROL OF EDUCATION PROHIBITED.

9 Section 103 (as redesignated by section 101(a)(6))

10 (20 U.S.C. 1144) is amended by striking ‘‘(b)’’.

11 SEC. 103. NATIONAL ADVISORY COMMITTEE ON INSTITU12 TIONAL QUALITY AND INTEGRITY.

13 Section 105 (as redesignated by section 101(a)(6))

14 (20 U.S.C. 1145) is amended—

15 (1) by striking the last sentence of subsection

16 (a);

17 (2) by redesignating subsections (c) through (f)

18 as subsections (d) through (g), respectively;

19 (3) by inserting after subsection (b) the follow20 ing:

21 ‘‘(c) PUBLIC NOTICE.—The Secretary shall—

22 ‘‘(1) annually publish in the Federal Register a

23 list containing the name of each member of the

24 Committee and the date of the expiration of the

25 term of office of the member; and
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1 ‘‘(2) publicly solicit nominations for each vacant

2 position or expiring term of office on the Commit3 tee.’’;

4 (4) in subsection (d) (as redesignated by para5 graph (2))—

6 (A) by striking paragraph (6); and

7 (B) by redesignating paragraphs (7) and

8 (8) as paragraphs (6) and (7), respectively; and

9 (5) in subsection (g) (as redesignated by para10 graph (2)), by striking ‘‘1998’’ and inserting

11 ‘‘2004’’.

12 SEC. 104. PRIOR RIGHTS AND OBLIGATIONS; RECOVERY OF

13 PAYMENTS.

14 Title I (20 U.S.C. 1001 et seq.) is amended by adding

15 after section 110 (as redesignated by section 101(a)(6))

16 the following:

17 ‘‘SEC. 111. PRIOR RIGHTS AND OBLIGATIONS.

18 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—

19 ‘‘(1) PRE-1987 PARTS C AND D OF TITLE VII.—

20 There are authorized to be appropriated such sums

21 as may be necessary for fiscal year 1999 and for

22 each of the 4 succeeding fiscal years to pay obliga23 tions incurred prior to 1987 under parts C and D

24 of title VII, as such parts were in effect before the
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1 effective date of the Higher Education Amendments

2 of 1992.

3 ‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE

4 VII.—There are authorized to be appropriated such

5 sums as may be necessary for fiscal year 1999 and

6 for each of the 4 succeeding fiscal years to pay obli7 gations incurred prior to the date of enactment of

8 the Higher Education Amendments of 1998 under

9 part C of title VII, as such part was in effect during

10 the period—

11 ‘‘(A) after the effective date of the Higher

12 Education Amendments of 1992; and

13 ‘‘(B) prior to the date of enactment of the

14 Higher Education Amendments of 1998.

15 ‘‘(b) LEGAL RESPONSIBILITIES.—

16 ‘‘(1) PRE-1987 TITLE VII.—All entities with con17 tinuing obligations incurred under parts A, B, C,

18 and D of title VII, as such parts were in effect be19 fore the effective date of the Higher Education

20 Amendments of 1992, shall be subject to the re21 quirements of such part as in effect before the effec22 tive date of the Higher Education Amendments of

23 1992.

24 ‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE

25 VII.—All entities with continuing obligations in-
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1 curred under part C of title VII, as such part was

2 in effect during the period—

3 ‘‘(A) after the effective date of the Higher

4 Education Amendments of 1992; and

5 ‘‘(B) prior to the date of enactment of the

6 Higher Education Amendments of 1998,

7 shall be subject to the requirements of such part as

8 such part was in effect during such period.

9 ‘‘SEC. 112. RECOVERY OF PAYMENTS.

10 ‘‘(a) PUBLIC BENEFIT.—Congress declares that, if a

11 facility constructed with the aid of a grant under part A

12 of title VII as such part A was in effect prior to the date

13 of enactment of the Higher Education Amendments of

14 1998, or part B of such title as such part B was in effect

15 prior to the date of enactment of the Higher Education

16 Amendments of 1992, is used as an academic facility for

17 20 years following completion of such construction, the

18 public benefit accruing to the United States will equal in

19 value the amount of the grant. The period of 20 years

20 after completion of such construction shall therefore be

21 deemed to be the period of Federal interest in such facility

22 for the purposes of such title as so in effect.

23 ‘‘(b) RECOVERY UPON CESSATION OF PUBLIC BENE24 FIT.—If, within 20 years after completion of construction

25 of an academic facility which has been constructed, in part
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1 with a grant under part A of title VII as such part A

2 was in effect prior to the date of enactment of the Higher

3 Education Amendments of 1998, or part B of title VII

4 as such part B was in effect prior to the date of enactment

5 of the Higher Education Amendments of 1992—

6 ‘‘(1) the applicant under such parts as so in ef7 fect (or the applicant’s successor in title or posses8 sion) ceases or fails to be a public or nonprofit insti9 tution, or

10 ‘‘(2) the facility ceases to be used as an aca11 demic facility, or the facility is used as a facility ex12 cluded from the term ‘academic facility’ (as such

13 term was defined under title VII, as so in effect),

14 unless the Secretary determines that there is good

15 cause for releasing the institution from its obliga16 tion,

17 the United States shall be entitled to recover from such

18 applicant (or successor) an amount which bears to the

19 value of the facility at that time (or so much thereof as

20 constituted an approved project or projects) the same ratio

21 as the amount of Federal grant bore to the cost of the

22 facility financed with the aid of such grant. The value shall

23 be determined by agreement of the parties or by action

24 brought in the United States district court for the district

25 in which such facility is situated.
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1 ‘‘(c) PROHIBITION ON USE FOR RELIGION.—Not2 withstanding the provisions of subsections (a) and (b), no

3 project assisted with funds under title VII (as in effect

4 prior to the date of enactment of the Higher Education

5 Amendments of 1998) shall ever be used for religious wor6 ship or a sectarian activity or for a school or department

7 of divinity.’’.

8 SEC. 105. TECHNICAL AND CONFORMING AMENDMENTS.

9 (a) CONFORMING AMENDMENTS CORRECTING REF10 ERENCES TO SECTION 1201.—

11 (1) AGRICULTURE.—

12 (A) STUDENT INTERNSHIP PROGRAMS.—

13 Section 922 of the Federal Agriculture Im14 provement and Reform Act of 1996 (7 U.S.C.

15 2279c) is amended—

16 (i) in subsection (a)(1)(B)—

17 (I) by striking ‘‘1201’’ and in18 serting ‘‘101’’; and

19 (II) by striking ‘‘(20 U.S.C.

20 1141)’’; and

21 (ii) in subsection (b)(1)—

22 (I) by striking ‘‘1201’’ and in23 serting ‘‘101’’; and

24 (II) by striking ‘‘(20 U.S.C.

25 1141)’’.
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1 (B) AGRICULTURAL SCIENCES EDU2 CATION.—Section 1417(h)(1)(A) of the Na3 tional Agricultural Research, Extension, and

4 Teaching Policy Act of 1977 (7 U.S.C.

5 3152(h)(1)(A)) is amended—

6 (i) by striking ‘‘1201(a)’’ and insert7 ing ‘‘101(a)’’; and

8 (ii) by striking ‘‘(20 U.S.C.

9 1141(a))’’.

10 (2) ARMED FORCES.—

11 (A) SCIENCE AND MATHEMATICS EDU12 CATION IMPROVEMENT PROGRAM.—Section

13 2193(c)(1) of title 10, United States Code, is

14 amended—

15 (i) by striking ‘‘1201(a)’’ and insert16 ing ‘‘101(a)’’; and

17 (ii) by striking ‘‘(20 U.S.C.

18 1141(a))’’.

19 (B) SUPPORT OF SCIENCE, MATHEMATICS,

20 AND ENGINEERING EDUCATION.—Section

21 2199(2) of title 10, United States Code, is

22 amended—

23 (i) by striking ‘‘1201(a)’’ and insert24 ing ‘‘101(a)’’; and
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1 (ii) by striking ‘‘(20 U.S.C.

2 1141(a))’’.

3 (C) ALLOWABLE COSTS UNDER DEFENSE

4 CONTRACTS.—Section 841(c)(2) of the National

5 Defense Authorization Act for fiscal year 1994

6 (10 U.S.C. 2324 note) is amended—

7 (i) by striking ‘‘1201(a)’’ and insert8 ing ‘‘101(a)’’; and

9 (ii) by striking ‘‘(20 U.S.C.

10 1141(a))’’.

11 (D) ENVIRONMENTAL RESTORATION INSTI12 TUTIONAL GRANTS FOR TRAINING DISLOCATED

13 DEFENSE WORKERS AND YOUNG ADULTS.—Sec14 tion 1333(i)(3) of the National Defense Author15 ization Act for fiscal year 1994 (10 U.S.C.

16 2701 note) is amended—

17 (i) by striking ‘‘1201(a)’’ and insert18 ing ‘‘101(a)’’; and

19 (ii) by striking ‘‘(20 U.S.C.

20 1141(a))’’.

21 (E) ENVIRONMENTAL EDUCATION OPPOR22 TUNITIES PROGRAM.—Section 1334(k)(3) of the

23 National Defense Authorization Act for fiscal

24 year 1994 (10 U.S.C. 2701 note) is amended—
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1 (i) by striking ‘‘1201(a)’’ and insert2 ing ‘‘101(a)’’; and

3 (ii) by striking ‘‘(20 U.S.C.

4 1141(a))’’.

5 (F) ENVIRONMENTAL SCHOLARSHIP AND

6 FELLOWSHIP PROGRAMS.—Section 4451(b)(1)

7 of the National Defense Authorization Act for

8 1993 (10 U.S.C. 2701 note) is amended—

9 (i) by striking ‘‘1201(a)’’ and insert10 ing ‘‘101(a)’’; and

11 (ii) by striking ‘‘(20 U.S.C.

12 1141(a))’’.

13 (3) APPLICATION OF ANTITRUST LAWS TO

14 AWARD OF NEED-BASED EDUCATIONAL AID.—Sec15 tion 568(c)(3) of the Improving America’s Schools

16 Act of 1994 (15 U.S.C. 1 note) is amended—

17 (A) by striking ‘‘1201(a)’’ and inserting

18 ‘‘101(a)’’; and

19 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

20 (4) RESTRICTIONS ON FORMER OFFICERS, EM21 PLOYEES, AND ELECTED OFFICIALS OF THE EXECU22 TIVE AND LEGISLATIVE BRANCHES.—Section

23 207(j)(2)(B) of title 18, United States Code, is

24 amended by striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’.
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1 (5) EDUCATION.—

2 (A) HIGHER EDUCATION AMENDMENTS OF

3 1992.—Section 1(c) of the Higher Education

4 Amendments of 1992 (20 U.S.C. 1001 note) is

5 amended by striking ‘‘1201’’ and inserting

6 ‘‘101’’.

7 (B) PART F DEFINITIONS.—Section 481 of

8 the Higher Education Act of 1965 (20 U.S.C.

9 1088) is amended—

10 (i) in subsection (a)—

11 (I) in the matter preceding para12 graph (1)(A), by striking ‘‘1201(a)’’

13 and inserting ‘‘101(a)’’;

14 (II) in paragraph (1)(C), by

15 striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’;

17 (III) in the first sentence of the

18 matter preceding clause (i) of para19 graph (2)(A), by striking ‘‘1201(a)’’

20 and inserting ‘‘101(a)’’; and

21 (IV) in the matter following

22 paragraph (2)(B)(ii), by striking

23 ‘‘1201(a)’’ and inserting ‘‘101(a)’’;

24 (ii) in subsection (b)—

25 (I) in the first sentence—
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1 (aa) in paragraph (2), by

2 striking ‘‘1201(a)’’ and inserting

3 ‘‘101(a)’’; and

4 (bb) in paragraph (3), by

5 striking ‘‘1201(a)’’ and inserting

6 ‘‘101(a)’’; and

7 (II) in the second sentence, by

8 striking ‘‘1201(a)’’ and inserting

9 ‘‘101(a)’’; and

10 (iii) in subsection (c)—

11 (I) in the first sentence, by strik12 ing ‘‘1201(a)’’ and inserting

13 ‘‘101(a)’’; and

14 (II) in the second sentence, by

15 striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’.

17 (C) TREATMENT OF BRANCHES.—Section

18 498(j)(2) of the Higher Education Act of 1965

19 (20 U.S.C. 1099c(j)(2)) is amended by striking

20 ‘‘1201(a)(2)’’ and inserting ‘‘101(a)(2)’’.

21 (D) SMALL STATE TEACHING INITIA22 TIVE.—Section 591(d)(2) of the Higher Edu23 cation Act of 1965 (20 U.S.C. 1115(d)(2)) is

24 amended by striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’.
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1 (E) INTERNATIONAL EDUCATION PRO2 GRAMS.—Section 631(a)(8) of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1132(a)(8)) is

4 amended by striking ‘‘1201(a)’’ each place it

5 appears and inserting ‘‘101(a)’’.

6 (F) DWIGHT D. EISENHOWER LEADERSHIP

7 PROGRAM.—Section 1081(d) of the Higher

8 Education Act of 1965 (20 U.S.C. 1135f(d)) is

9 amended by striking ‘‘1201’’ and inserting

10 ‘‘101’’.

11 (G) DISCLOSURE REQUIREMENTS.—Sec12 tion 429(d)(2)(B)(ii) of the General Education

13 Provisions Act (20 U.S.C. 1228c(d)(2)(B)(ii))

14 is amended by striking ‘‘1201(a)’’ and inserting

15 ‘‘101(a)’’.

16 (H) HARRY S. TRUMAN SCHOLARSHIPS.—

17 Section 3(4) of the Harry S. Truman Memorial

18 Scholarship Act (20 U.S.C. 2002(4)) is amend19 ed by striking ‘‘1201(a)’’ and inserting

20 ‘‘101(a)’’.

21 (I) TECH-PREP EDUCATION.—Section

22 347(2)(A) of the Carl D. Perkins Vocational

23 and Applied Technology Education Act (20

24 U.S.C. 2394e(2)(A)) is amended by striking

25 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.
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1 (J) EDUCATION FOR ECONOMIC SECU2 RITY.—Section 3(6) of the Education for Eco3 nomic Security Act (20 U.S.C. 3902(6)) is

4 amended by striking ‘‘1201(a)’’ and inserting

5 ‘‘101(a)’’.

6 (K) JAMES MADISON MEMORIAL FELLOW7 SHIPS.—Section 815 of the James Madison Me8 morial Fellowship Act (20 U.S.C. 4514) is

9 amended—

10 (i) in paragraph (3), by striking

11 ‘‘1201(a)’’ and inserting ‘‘101(a)’’; and

12 (ii) in paragraph (4), by striking

13 ‘‘1201(d) of the Higher Education Act of

14 1965’’ and inserting ‘‘14101 of the Ele15 mentary and Secondary Education Act of

16 1965’’.

17 (L) BARRY GOLDWATER SCHOLARSHIPS.—

18 Section 1403(4) of the Barry Goldwater Schol19 arship and Excellence in Education Act (20

20 U.S.C. 4702(4)) is amended—

21 (i) by striking ‘‘1201(a)’’ and insert22 ing ‘‘101(a)’’; and

23 (ii) by striking ‘‘(20 U.S.C.

24 1141(a))’’.
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1 (M) MORRIS K. UDALL SCHOLARSHIPS.—

2 Section 4(6) of the Morris K. Udall Scholarship

3 and Excellence in National Environmental and

4 Native American Public Policy Act of 1992 (20

5 U.S.C. 5602(6)) is amended by striking

6 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

7 (N) BILINGUAL EDUCATION, AND LAN8 GUAGE ENHANCEMENT AND ACQUISITION.—

9 Section 7501(4) of the Elementary and Second10 ary Education Act of 1965 (20 U.S.C. 7601(4))

11 is amended by striking ‘‘1201(a)’’ and inserting

12 ‘‘101(a)’’.

13 (O) GENERAL DEFINITIONS.—Section

14 14101(17) of the Elementary and Secondary

15 Education Act of 1965 (20 U.S.C. 8801(17)) is

16 amended by striking ‘‘1201(a)’’ and inserting

17 ‘‘101(a)’’.

18 (P) NATIONAL EDUCATION STATISTICS.—

19 Section 402(c)(3) of the National Education

20 Statistics Act of 1994 (20 U.S.C. 9001(c)(3)) is

21 amended by striking ‘‘1201(a)’’ and inserting

22 ‘‘101(a)’’.

23 (6) FOREIGN RELATIONS.—

24 (A) ENVIRONMENT AND SUSTAINABLE DE25 VELOPMENT EXCHANGE PROGRAM.—Section
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1 240(d) of the Foreign Relations Authorization

2 Act, Fiscal Years 1994 and 1995 (22 U.S.C.

3 2452 note) is amended by striking ‘‘1201(a)’’

4 and inserting ‘‘101(a)’’.

5 (B) SAMANTHA SMITH MEMORIAL EX6 CHANGE PROGRAM.—Section 112(a)(8) of the

7 Mutual Educational and Cultural Exchange Act

8 of 1961 (22 U.S.C. 2460(a)(8)) is amended—

9 (i) by striking ‘‘1201(a)’’ and insert10 ing ‘‘101(a)’’; and

11 (ii) by striking ‘‘(20 U.S.C.

12 1141(a))’’.

13 (C) SOVIET-EASTERN EUROPEAN TRAIN14 ING.—Section 803(1) of the Soviet-Eastern Eu15 ropean Research and Training Act of 1983 (22

16 U.S.C. 4502(1)) is amended by striking

17 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

18 (D) DEVELOPING COUNTRY SCHOLAR19 SHIPS.—Section 603(d) of the Foreign Rela20 tions Authorization Act, Fiscal Years 1986 and

21 1987 (22 U.S.C. 4703(d)) is amended by strik22 ing ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

23 (7) INDIANS.—

24 (A) SNYDER ACT.—The last paragraph of

25 section 410 of the Act entitled ‘‘An Act author-
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1 izing appropriations and expenditures for the

2 administration of Indian Affairs, and for other

3 purposes’’, approved November 2, 1921 (25

4 U.S.C. 13) (commonly known as the Snyder

5 Act) is amended by striking ‘‘1201’’ and insert6 ing ‘‘101’’.

7 (B) TRIBALLY CONTROLLED COMMUNITY

8 COLLEGE ASSISTANCE.—Section 2(a)(5) of the

9 Tribally Controlled Community College Assist10 ance Act (25 U.S.C. 1801(a)(5)) is amended by

11 striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

12 (C) CONSTRUCTION OF NEW FACILITIES.—

13 Section 113(b)(2) of the Tribally Controlled

14 Community College Assistance Act (25 U.S.C.

15 1813(b)(2)) is amended—

16 (i) by striking ‘‘1201(a)’’ and insert17 ing ‘‘101(a)’’; and

18 (ii) by striking ‘‘(20 U.S.C.

19 1141(a))’’.

20 (D) AMERICAN INDIAN TEACHER TRAIN21 ING.—Section 1371(a)(1)(B) of the Higher

22 Education Amendments of 1992 (25 U.S.C.

23 3371(a)(1)(B)) is amended by striking

24 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

25 (8) LABOR.—
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1 (A) REHABILITATION DEFINITIONS.—Sec2 tion 7(32) of the Rehabilitation Act of 1973

3 (29 U.S.C. 706(32)) is amended—

4 (i) by striking ‘‘1201(a)’’ and insert5 ing ‘‘101(a)’’; and

6 (ii) by striking ‘‘(20 U.S.C.

7 1141(a))’’.

8 (B) STATE PLANS.—Section

9 101(a)(7)(A)(iv)(II) of the Rehabilitation Act of

10 1973 (29 U.S.C. 721(a)(7)(A)(iv)(II)) is

11 amended—

12 (i) by striking ‘‘1201(a)’’ and insert13 ing ‘‘101(a)’’; and

14 (ii) by striking ‘‘(20 U.S.C.

15 1141(a))’’.

16 (C) JTPA DEFINITIONS.—Section 4(12) of

17 the Job Training Partnership Act (29 U.S.C.

18 1503(12)) is amended by striking ‘‘1201(a)’’

19 and inserting ‘‘101(a)’’.

20 (D) TUITION CHARGES.—Section

21 141(d)(3)(B) of the Job Training Partnership

22 Act (29 U.S.C. 1551(d)(3)(B)) is amended—

23 (i) by striking ‘‘1201(a)’’ and insert24 ing ‘‘101(a)’’; and
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1 (ii) by striking ‘‘(20 U.S.C.

2 1141(a))’’.

3 (9) SURFACE MINING CONTROL.—Section

4 701(32) of the Surface Mining Control and Rec5 lamation Act of 1977 (30 U.S.C. 1291(32)) is

6 amended by striking ‘‘1201(a)’’ and inserting

7 ‘‘101(a)’’.

8 (10) POLLUTION PREVENTION.—Section

9 112(a)(1) of the Federal Water Pollution Control

10 Act (33 U.S.C. 1262(a)(1)) is amended by striking

11 ‘‘1201’’ and inserting ‘‘101’’.

12 (11) POSTAL SERVICE.—Section 3626(b)(3) of

13 title 39, United States Code, is amended—

14 (A) by striking ‘‘1201(a)’’ and inserting

15 ‘‘101(a)’’; and

16 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

17 (12) BLOCK GRANTS TO STATES.—Section

18 404(h)(5)(A)(i) of the Social Security Act (42

19 U.S.C. 604(h)(5)(A)(i)) is amended—

20 (A) by striking ‘‘1201(a)’’ and inserting

21 ‘‘101(a)’’; and

22 (B) by striking ‘‘(20 U.S.C. 1088(a)(1) or

23 1141(a))’’.

24 (13) PUBLIC HEALTH AND WELFARE.—
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1 (A) SCIENTIFIC AND TECHNICAL EDU2 CATION.—Section 3(g) of the Scientific and Ad3 vanced-Technology Act of 1992 (42 U.S.C.

4 1862i(g)) is amended—

5 (i) in paragraph (2)—

6 (I) by striking ‘‘1201(a)’’ and in7 serting ‘‘101(a)’’; and

8 (II) by striking ‘‘(20 U.S.C.

9 1141(a))’’; and

10 (ii) in paragraph (3)—

11 (I) by striking ‘‘1201(a)’’ and in12 serting ‘‘101(a)’’; and

13 (II) by striking ‘‘(20 U.S.C.

14 1141(a))’’.

15 (B) OLDER AMERICANS.—Section 102(32)

16 of the Older Americans Act of 1965 (42 U.S.C.

17 3002(32)) is amended—

18 (i) by striking ‘‘1201(a)’’ and insert19 ing ‘‘101(a)’’; and

20 (ii) by striking ‘‘(20 U.S.C.

21 1141(a))’’.

22 (C) JUSTICE SYSTEM IMPROVEMENT.—

23 Section 901(17) of the Omnibus Crime Control

24 and Safe Streets Act of 1968 (42 U.S.C.

25 3791(17)) is amended—
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1 (i) by striking ‘‘1201(a)’’ and insert2 ing ‘‘101(a)’’; and

3 (ii) by striking ‘‘(20 U.S.C.

4 1141(a))’’.

5 (D) ENERGY TECHNOLOGY COMMER6 CIALIZATION SERVICES PROGRAM.—Section

7 362(f)(5)(A) of the Energy Policy and Con8 servation Act (42 U.S.C. 6322(f)(5)(A)) is

9 amended—

10 (i) by striking ‘‘1201(a)’’ and insert11 ing ‘‘101(a)’’; and

12 (ii) by striking ‘‘(20 U.S.C.

13 1141(a))’’.

14 (E) ENVIRONMENTAL RESTORATION AND

15 WASTE MANAGEMENT.—Section 3132(b)(1) of

16 the National Defense Authorization Act for Fis17 cal Years 1992 and 1993 (42 U.S.C.

18 7274e(b)(1)) is amended—

19 (i) by striking ‘‘1201(a)’’ and insert20 ing ‘‘101(a)’’; and

21 (ii) by striking ‘‘(20 U.S.C.

22 1141(a))’’.

23 (F) HEAD START.—Section 649(c)(3) of

24 the Head Start Act (42 U.S.C. 9844(c)(3)) is

25 amended—
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1 (i) by striking ‘‘1201(a)’’ and insert2 ing ‘‘101(a)’’; and

3 (ii) by striking ‘‘(20 U.S.C.

4 1141(a))’’.

5 (G) STATE DEPENDENT CARE DEVELOP6 MENT GRANTS.—Section 670G(5) of the Child

7 Care and Development Block Grant Act of

8 1990 (42 U.S.C. 9877(5)) is amended by strik9 ing ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

10 (H) INSTRUCTIONAL ACTIVITIES FOR LOW11 INCOME YOUTH.—The matter preceding sub12 paragraph (A) of section 682(b)(1) of the Com13 munity Services Block Grant Act (42 U.S.C.

14 9910c(b)(1)) is amended by striking ‘‘1201(a)’’

15 and inserting ‘‘101(a)’’.

16 (I) DRUG ABUSE EDUCATION.—Section

17 3601(7) of the Anti-Drug Abuse Act of 1988

18 (42 U.S.C. 11851(7)) is amended—

19 (i) by striking ‘‘1201(a)’’ and insert20 ing ‘‘101(a)’’; and

21 (ii) by striking ‘‘(20 U.S.C.

22 1141(a))’’.

23 (J) NATIONAL AND COMMUNITY SERV24 ICE.—Section 101(13) of the National and
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1 Community Service Act of 1990 (42 U.S.C.

2 12511(13)) is amended—

3 (i) by striking ‘‘1201(a)’’ and insert4 ing ‘‘101(a)’’; and

5 (ii) by striking ‘‘(20 U.S.C.

6 1141(a))’’.

7 (K) CIVILIAN COMMUNITY CORPS.—Section

8 166(6) of the National and Community Service

9 Act of 1990 (42 U.S.C. 12626(6)) is amend10 ed—

11 (i) by striking ‘‘1201(a)’’ and insert12 ing ‘‘101(a)’’; and

13 (ii) by striking ‘‘(20 U.S.C.

14 1141(a))’’.

15 (L) COMMUNITY SCHOOLS YOUTH SERV16 ICES AND SUPERVISION GRANT PROGRAM.—The

17 definition of public school in section 30401(b)

18 of the Community Schools Youth Services and

19 Supervision Grant Program Act of 1994 (42

20 U.S.C. 13791(b)) is amended—

21 (i) by striking ‘‘1201’’ each place it

22 appears and inserting ‘‘101’’; and

23 (ii) by striking ‘‘(20 U.S.C. 1141(i))’’.

24 (M) POLICE CORPS.—The definition of in25 stitution of higher education in section 200103
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1 of the Police Corps Act (42 U.S.C. 14092) is

2 amended—

3 (i) by striking ‘‘1201(a)’’ and insert4 ing ‘‘101(a)’’; and

5 (ii) by striking ‘‘(20 U.S.C.

6 1141(a))’’.

7 (N) LAW ENFORCEMENT SCHOLARSHIP

8 PROGRAM.—The definition of institution of

9 higher education in section 200202 of the Law

10 Enforcement Scholarship and Recruitment Act

11 (42 U.S.C. 14111) is amended—

12 (i) by striking ‘‘1201(a)’’ and insert13 ing ‘‘101(a)’’; and

14 (ii) by striking ‘‘(20 U.S.C.

15 1141(a))’’.

16 (14) T E L E C O M M U N I C A T I O N S.—Section

17 223(h)(4) of the Telecommunications Act of 1934

18 (47 U.S.C. 223(h)(4)) is amended—

19 (A) by striking ‘‘1201’’ and inserting

20 ‘‘101’’; and

21 (B) by striking ‘‘(20 U.S.C. 1141)’’.

22 (15) WAR AND NATIONAL DEFENSE.—Section

23 808(3) of the David L. Boren National Security

24 Education Act of 1991 (50 U.S.C. 1908(3)) is

25 amended—
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1 (A) by striking ‘‘1201(a)’’ and inserting

2 ‘‘101(a)’’; and

3 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

4 (b) CROSS REFERENCES.—The Act (20 U.S.C. 1001

5 et seq.) is amended—

6 (1) in section 402A(c)(2) (20 U.S.C. 1070a–

7 11(c)(2)), by striking ‘‘1210’’ and inserting ‘‘110’’;

8 (2) in section 481 (20 U.S.C. 1088)—

9 (A) in subsection (a)—

10 (i) in paragraph (1)—

11 (I) in the matter preceding sub12 paragraph (A), by striking ‘‘1201(a)’’

13 and inserting ‘‘101(a)’’; and

14 (II) in subparagraph (C), by

15 striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’; and

17 (ii) in paragraph (2)—

18 (I) in the matter preceding clause

19 (i) of subparagraph (A), by striking

20 ‘‘1201(a)’’ and inserting ‘‘101(a)’’;

21 and

22 (II) in the matter following

23 clause (ii) of subparagraph (B), by

24 striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’;
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1 (B) in subsection (b), by striking

2 ‘‘1201(a)’’ each place the term appears and in3 serting ‘‘101(a)’’; and

4 (C) in subsection (c), by striking

5 ‘‘1201(a)’’ each place the term appears and in6 serting ‘‘101(a)’’;

7 (3) in section 485(f)(1)(I) (20 U.S.C.

8 1092(f)(1)(I)), by striking ‘‘1213’’ and inserting

9 ‘‘111’’;

10 (4) in section 498(j)(2) (20 U.S.C.

11 1099c(j)(2)), by striking ‘‘1201(a)(2)’’ and inserting

12 ‘‘101(a)(2)’’;

13 (5) in section 591(d)(2) (20 U.S.C.

14 1115(d)(2)), by striking ‘‘1201(a)’’ and inserting

15 ‘‘101(a)’’;

16 (6) in section 631(a)(8) (20 U.S.C.

17 1132(a)(8))—

18 (A) by striking ‘‘section 1201(a)’’ each

19 place the term appears and inserting ‘‘section

20 101(a)’’; and

21 (B) by striking ‘‘of 1201(a)’’ and inserting

22 ‘‘of section 101(a)’’; and

23 (7) in section 1081(d) (20 U.S.C. 1135f(d)), by

24 striking ‘‘1201’’ and inserting ‘‘101(a)’’.
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1 TITLE II—IMPROVING TEACHER

2 QUALITY

3 SEC. 201. IMPROVING TEACHER QUALITY.

4 The Act (20 U.S.C. 1001) is amended by inserting

5 after section 112 (as added by section 104) the following:

6 ‘‘TITLE II—IMPROVING TEACHER

7 QUALITY

8 ‘‘SEC. 201. PURPOSES.

9 ‘‘The purpose of this title is to—

10 ‘‘(1) improve student achievement;

11 ‘‘(2) improve the quality of the current and fu12 ture teaching force by improving the preparation of

13 prospective teachers and enhancing professional de14 velopment activities; and

15 ‘‘(3) hold institutions of higher education ac16 countable for preparing teachers who have the nec17 essary teaching skills and are highly competent in

18 the academic content areas in which the teachers

19 plan to teach, including training in the effective uses

20 of technologies in the classroom.

21 ‘‘PART A—TEACHER QUALITY

22 ‘‘Subpart 1—Teacher Quality Enhancement Grants

23 ‘‘SEC. 211. GRANTS AUTHORIZED.

24 ‘‘(a) IN GENERAL.—The Secretary is authorized to

25 award grants to States to enable the States to carry out
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1 the activities described in section 212. Each grant may

2 be awarded for a period of not more than 5 years.

3 ‘‘(b) STATE DESIGNATION.—

4 ‘‘(1) IN GENERAL.—A State desiring a grant

5 under this subpart shall, consistent with State law,

6 designate the chief individual or entity in the State

7 responsible for the State supervision of education, to

8 administer the activities assisted under this subpart.

9 ‘‘(2) CONSULTATION.—The individual or entity

10 designated under paragraph (1) shall consult with

11 the Governor, State board of education, or State

12 educational agency, as appropriate.

13 ‘‘(3) CONSTRUCTION.—Nothing in this subpart

14 shall be construed to negate or supersede the legal

15 authority under State law of any State agency, State

16 entity, or State public official over programs that

17 are under the jurisdiction of the agency, entity, or

18 official.

19 ‘‘(c) MATCHING REQUIREMENT.—Each State receiv20 ing a grant under this subpart shall provide, from nonFederal sources, an amount equal to 1 21 ⁄2 of the amount

22 of the grant, in cash or in kind, to carry out the activities

23 supported through the grant.
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1 ‘‘SEC. 212. USE OF FUNDS.

2 ‘‘A State that receives a grant under this subpart

3 shall use the grant funds to reform teacher preparation

4 requirements, and to ensure that current and future

5 teachers possess the necessary teaching skills and aca6 demic content knowledge in the subject areas in which the

7 teachers are assigned to teach, by carrying out 1 or more

8 of the following activities:

9 ‘‘(1) REFORMS.—Implementing reforms that

10 hold institutions of higher education with teacher

11 preparation programs accountable for preparing

12 teachers who are highly competent in the academic

13 content areas in which the teachers plan to teach,

14 which may include the use of rigorous subject matter

15 competency tests and the requirement that a teacher

16 have an academic major in the subject area, or relat17 ed discipline, in which the teacher plans to teach.

18 ‘‘(2) CERTIFICATION OR LICENSURE REQUIRE19 MENTS.—Reforming teacher certification or licen20 sure requirements to ensure that new teachers have

21 the necessary teaching skills and academic content

22 knowledge in the subject areas in which teachers are

23 assigned to teach.

24 ‘‘(3) ALTERNATIVES TO TRADITIONAL PREPA25 RATION FOR TEACHING.—Providing prospective

26 teachers alternatives to traditional preparation for
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1 teaching through programs at colleges of arts and

2 sciences or at nonprofit organizations.

3 ‘‘(4) ALTERNATIVE ROUTES.—Funding pro4 grams that establish, expand, or improve alternative

5 routes to State certification for highly qualified indi6 viduals from other occupations and recent college

7 graduates with records of academic distinction, in8 cluding support during the initial teaching experi9 ence.

10 ‘‘(5) RECRUITMENT; PAY; REMOVAL.—Develop11 ing and implementing effective mechanisms to en12 sure that schools are able to effectively recruit highly

13 qualified teachers, to financially reward those teach14 ers and principals whose students have made signifi15 cant progress toward high academic performance,

16 such as through performance-based compensation

17 systems and access to ongoing professional develop18 ment opportunities for teachers and administrators,

19 and to remove teachers who are not qualified.

20 ‘‘(6) INNOVATIVE EFFORTS.—Development and

21 implementation of innovative efforts aimed at reduc22 ing the shortage of highly qualified teachers in high

23 poverty urban and rural areas, that may include the

24 recruitment of highly qualified individuals from
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1 other occupations through alternative certification

2 programs.

3 ‘‘(7) SOCIAL PROMOTION.—Development and

4 implementation of efforts to address the problem of

5 social promotion and to prepare teachers to effec6 tively address the issues raised by ending the prac7 tice of social promotion.

8 ‘‘SEC. 213. COMPETITIVE AWARDS.

9 ‘‘(a) ANNUAL AWARDS; COMPETITIVE BASIS.—The

10 Secretary shall award grants under this subpart annually

11 and on a competitive basis.

12 ‘‘(b) PEER REVIEW PANEL.—The Secretary shall

13 provide the applications submitted by States under section

14 214 to a peer review panel for evaluation. With respect

15 to each application, the peer review panel shall initially

16 recommend the application for funding or for disapproval.

17 ‘‘(c) PRIORITY.—In recommending applications for

18 funding to the Secretary, the panel shall give priority to

19 applications from States that describe activities that—

20 ‘‘(1) include innovative reforms to hold institu21 tions of higher education with teacher preparation

22 programs accountable for preparing teachers who

23 are highly competent in the academic content areas

24 in which the teachers plan to teach; and
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1 ‘‘(2) involve the development of innovative ef2 forts aimed at reducing the shortage of highly quali3 fied teachers in high poverty urban and rural areas.

4 ‘‘SEC. 214. APPLICATIONS.

5 ‘‘(a) IN GENERAL.—Each State desiring a grant

6 under this subpart shall submit an application to the Sec7 retary at such time, in such manner and accompanied by

8 such information as the Secretary may require.

9 ‘‘(b) CONTENT OF APPLICATIONS.—Such application

10 shall include a description of how the State intends to use

11 funds provided under this subpart.

12 ‘‘Subpart 2—Teacher Training Partnerships Grants

13 ‘‘SEC. 221. GRANTS AUTHORIZED.

14 ‘‘(a) IN GENERAL.—The Secretary is authorized to

15 award grants to teacher training partnerships to enable

16 the partnerships to carry out the activities described in

17 section 222. Each grant may be awarded for a period of

18 not more than 5 years.

19 ‘‘(b) TEACHER TRAINING PARTNERSHIPS.—For the

20 purpose of this part the term ‘teacher training partner21 ship’ means a partnership that—

22 ‘‘(1) shall include a school of arts and sciences,

23 a school or program of education, a local educational

24 agency, and a kindergarten through grade 12 school;

25 and
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1 ‘‘(2) may include a State educational agency, a

2 pre-kindergarten program, a nonprofit group, a busi3 ness, or a teacher organization.

4 ‘‘(c) PRIORITY.—

5 ‘‘(1) IN GENERAL.—In awarding grants under

6 this subpart the Secretary shall give priority to part7 nerships that—

8 ‘‘(A) involve businesses; or

9 ‘‘(B) include a high need local educational

10 agency, elementary school or secondary school.

11 ‘‘(2) HIGH NEED.—A local educational agency,

12 elementary school or secondary school shall be con13 sidered high need for purposes of paragraph (1)(B)

14 if the agency or school serves an area within a State

15 in which there is—

16 ‘‘(A) a large number of individuals from

17 families with incomes below the poverty line;

18 ‘‘(B) a high percentage of teachers not

19 teaching in the content area in which the teach20 ers were trained to teach; or

21 ‘‘(C) a high teacher turnover.

22 ‘‘(d) CONSIDERATION.—In awarding grants under

23 this subpart the Secretary will take into consideration—

24 ‘‘(1) providing an equitable geographic distribu25 tion of the grants throughout the United States; and
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1 ‘‘(2) the proposed project’s potential for creat2 ing improvement and positive change.

3 ‘‘(e) MATCHING FUNDS.—Each partnership receiving

4 a grant under this subpart shall provide, from sources

5 other than this subpart, an amount equal to 25 percent

6 of the grant in the first year, 35 percent in the second

7 such year, and 50 percent in each succeeding such year,

8 of the amount of the grant, in cash or in kind, to carry

9 out the activities supported by the grant.

10 ‘‘(f) ONE-TIME AWARD.—A partnership may receive

11 a grant under this section only once.

12 ‘‘SEC. 222. USE OF FUNDS.

13 ‘‘(a) IN GENERAL.—Grant funds under this part

14 shall be used to—

15 ‘‘(1) coordinate with the activities of the Gov16 ernor, State board of education, and State edu17 cational agency, as appropriate;

18 ‘‘(2) provide sustained and high quality

19 preservice clinical experiences including the mentor20 ing of prospective teachers by veteran teachers;

21 ‘‘(3) work with a school of arts and sciences to

22 provide increased academic study in a proposed

23 teaching specialty area, through activities such as—

24 ‘‘(A) restructuring curriculum;

25 ‘‘(B) changing core course requirements;
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1 ‘‘(C) increasing liberal arts focus;

2 ‘‘(D) providing preparation for board cer3 tification; and

4 ‘‘(E) assessing and improving alternative

5 certification, including mentoring and induction

6 support;

7 ‘‘(4) substantially increasing interaction and 2-

8 way collaboration between—

9 ‘‘(A) faculty at institutions of higher edu10 cation; and

11 ‘‘(B) new and experienced teachers, prin12 cipals, and other administrators at elementary

13 schools or secondary schools;

14 ‘‘(5) prepare teachers to use technology effec15 tively in the classroom;

16 ‘‘(6) integrate reliable research-based teaching

17 methods into the curriculum;

18 ‘‘(7) broadly disseminate information on effec19 tive practices used by the partnership; and

20 ‘‘(8) provide support, including preparation

21 time, for interaction between faculty at an institu22 tion of higher education and classroom teachers.

23 ‘‘(b) SPECIAL RULE.—No individual member of a

24 partnership shall retain more than 50 percent of the funds

25 made available to the partnership under this subpart.
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1 ‘‘SEC. 223. APPLICATIONS.

2 ‘‘Each teacher training partnership desiring a grant

3 under this subpart shall submit an application to the Sec4 retary at such time, in such manner, and accompanied by

5 such information as the Secretary may require. Each such

6 application shall—

7 ‘‘(1) describe the composition of the partnership

8 and the involvement of each partner in the develop9 ment of the application;

10 ‘‘(2) contain a needs assessment that includes

11 an analysis of the needs of all the partners with re12 spect to teaching and learning;

13 ‘‘(3) contain a resource assessment that in14 cludes—

15 ‘‘(A) an analysis of resources available to

16 the partnership;

17 ‘‘(B) a description of the intended use of

18 the grant funds;

19 ‘‘(C) a description of how the partnership

20 will coordinate with other teacher training or

21 professional development programs, including

22 Federal, State, local, private, and other pro23 grams;

24 ‘‘(D) a description of how the activities as25 sisted under this subpart are consistent with
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1 educational reform activities that promote stu2 dent achievement; and

3 ‘‘(E) a description of the commitment of

4 the resources of the partnership to the activities

5 assisted under this subpart, including financial

6 support, faculty participation, and time commit7 ments;

8 ‘‘(4) describe how the partnership will include

9 the participation of the schools, colleges, or depart10 ments of arts and sciences within an institution of

11 higher education to ensure the integration of teach12 ing techniques and content in teaching preparation;

13 ‘‘(5) describe how the partnership will restruc14 ture and improve teaching, teacher training, and de15 velopment programs, and how such systemic changes

16 will contribute to increased student achievement;

17 ‘‘(6) describe how the partnership will prepare

18 teachers to work with diverse student populations,

19 including individuals with disabilities and limited

20 English proficient individuals;

21 ‘‘(7) describe how the partnership will prepare

22 teachers to use technology;

23 ‘‘(8) contain a dissemination plan regarding

24 knowledge and information with respect to effective

25 teaching practices, and a description of how such
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1 knowledge and information will be implemented in

2 elementary schools or secondary schools as well as

3 institutions of higher education;

4 ‘‘(9) describe the commitment of the partner5 ship to continue the activities assisted under this

6 subpart without grant funds provided under this

7 subpart; and

8 ‘‘(10) describe how the partnership will involve

9 and include parents in the reform process.

10 ‘‘Subpart 3—General Provisions

11 ‘‘SEC. 231. ACCOUNTABILITY AND EVALUATION.

12 ‘‘(a) TEACHER QUALITY ENHANCEMENT GRANTS.—

13 ‘‘(1) ACCOUNTABILITY REPORT.—A State that

14 receives a grant under subpart 1 shall submit an an15 nual accountability report to the Secretary, the Com16 mittee on Labor and Human Resources of the Sen17 ate, and the Committee on Education and the Work18 force of the House of Representatives. Such report

19 shall include a description of the degree to which the

20 State, in using funds provided under subpart 1, has

21 made substantial progress in meeting the following

22 goals:

23 ‘‘(A) STUDENT ACHIEVEMENT.—Increas24 ing student achievement for all students, as

25 measured by increased graduation rates, de-
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1 creased dropout rates, or higher scores on local,

2 State or other assessments.

3 ‘‘(B) RAISING STANDARDS.—Raising the

4 State academic standards required to enter the

5 teaching profession, including, where appro6 priate, incentives to incorporate the requirement

7 of an academic major in the subject, or related

8 discipline, in which the teacher plans to teach.

9 ‘‘(C) INITIAL CERTIFICATION OR LICEN10 SURE.—Increasing success in the passage rate

11 for initial State teacher certification or licen12 sure, or increasing numbers of highly qualified

13 individuals being certified or licensed as teach14 ers through alternative programs.

15 ‘‘(D) CORE ACADEMIC SUBJECTS.—In16 creasing the percentage of classes taught in

17 core academic subject areas by teachers highly

18 competent in those subject areas.

19 ‘‘(E) DECREASING SHORTAGES FOR PRO20 FESSIONAL DEVELOPMENT.—Decreasing short21 ages of qualified teachers in poor urban and

22 rural areas.

23 ‘‘(F) INCREASING OPPORTUNITIES.—In24 creasing opportunities for enhanced and ongo25 ing professional development that improves the
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1 academic content knowledge of teachers in the

2 subject areas in which the teachers are certified

3 to teach or in which the teachers are working

4 toward certification to teach.

5 ‘‘(G) TECHNOLOGY INTEGRATION.—In6 creasing the number of teachers prepared to in7 tegrate technology in the classroom.

8 ‘‘(2) TEACHER QUALIFICATIONS PROVIDED TO

9 PARENT UPON REQUEST.—Any local educational

10 agency that benefits from the activities assisted

11 under subpart 1 shall make available, upon request

12 and in an understandable and uniform format, to

13 any parent of a student attending any school served

14 by the local educational agency, information regard15 ing the qualifications of the student’s classroom

16 teacher with regard to the subject matter in which

17 the teacher provides instruction. The local edu18 cational agency shall inform parents that the par19 ents are entitled to receive the information upon re20 quest.

21 ‘‘(b) TEACHER TRAINING PARTNERSHIP EVALUA22 TION PLAN.—Each teacher training partnership receiving

23 a grant under subpart 2 shall establish an evaluation plan

24 that includes strong performance objectives established in

25 negotiation with the Secretary at the time of the grant
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1 award. The plan shall include objectives and measures

2 for—

3 ‘‘(1) increased student achievement for all stu4 dents as measured by increased graduation rates,

5 decreased dropout rates, or higher scores on local,

6 State, or other assessments for a year compared to

7 student achievement as determined by the rates or

8 scores, as the case may be, for the year prior to the

9 year for which a grant under this part is received;

10 ‘‘(2) increased teacher retention in the first 3

11 years of a teacher’s career;

12 ‘‘(3) increased success in the passage rate for

13 initial State certification or licensure of teachers;

14 ‘‘(4) increased number of academic courses

15 taken in core subject areas;

16 ‘‘(5) increased integration of technology in

17 teacher preparation and in classroom instruction;

18 ‘‘(6) restructuring or change of methodology

19 courses to reflect best practices learned from ele20 mentary schools, secondary schools or other entities;

21 ‘‘(7) increased dissemination of information

22 about effective teaching strategies and practices; and

23 ‘‘(8) other effects of increased integration

24 among members of the partnership.
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1 ‘‘SEC. 232. REVOCATION OF GRANT.

2 ‘‘Each State or teacher training partnership receiving

3 a grant under this part shall report annually on progress

4 toward meeting the purposes of this part, and the goals,

5 objectives and measures described in section 231. If the

6 Secretary, after consultation with the peer review panel

7 described in section 213(b) determines that the State or

8 partnership is not making substantial progress in meeting

9 the purposes, goals, objectives and measures, as appro10 priate, by the end of the second year of the grant, the

11 grant shall not be continued for the third year of the

12 grant.

13 ‘‘SEC. 233. EVALUATION AND DISSEMINATION.

14 ‘‘The Secretary shall evaluate the activities funded

15 under this part and report the Secretary’s findings to the

16 Committee on Labor and Human Resources of the Senate

17 and the Committee on Education and the Workforce of

18 the House of Representatives. The Secretary shall broadly

19 disseminate successful practices developed by the States

20 and teacher training partnerships under this part, and

21 shall broadly disseminate information regarding such

22 practices so developed that were found to be ineffective.

23 ‘‘SEC. 234. INTERNATIONAL STUDY AND REPORT.

24 ‘‘(a) STUDY.—The Secretary shall conduct a study

25 through the National Center for Education Statistics re26 garding the ways teachers are trained and the extent to
44

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1 which teachers in the United States and other comparable

2 countries are teaching in areas other than the teachers’

3 field of study or expertise. The study will examine specific

4 fields and will outline the nature and extent of the problem

5 of out-of-field teaching in the United States and in other

6 countries that are considered comparable to the United

7 States. The study shall include, at a minimum, all the

8 countries that participated in the Third International

9 Mathematics and Science Study (TIMSS).

10 ‘‘(b) REPORT.—The Secretary shall report to Con11 gress regarding the results of the study described in sub12 section (a).

13 ‘‘SEC. 235. AUTHORIZATION OF APPROPRIATIONS.

14 ‘‘There are authorized to be appropriated to carry out

15 this part $300,000,000 for fiscal year 1999 and such sums

16 as necessary for each of the 4 succeeding fiscal years, of

17 which—

18 ‘‘(1) 50 percent shall be available for each fiscal

19 year to carry out subpart 1; and

20 ‘‘(2) 50 percent shall be available for each fiscal

21 year to carry out subpart 2.

22 ‘‘PART B—RECRUITING NEW TEACHERS FOR

23 UNDERSERVED AREAS

24 ‘‘SEC. 251. STATEMENT OF PURPOSE.

25 ‘‘It is the purpose of this part to—
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1 ‘‘(1) provide scholarships and, as necessary,

2 support services for students with high potential to

3 become effective teachers, particularly minority stu4 dents;

5 ‘‘(2) increase the quality and number of new

6 teachers nationally; and

7 ‘‘(3) increase the ability of schools in under8 served areas to recruit a qualified teaching staff.

9 ‘‘SEC. 252. DEFINITIONS.

10 ‘‘In this part—

11 ‘‘(1) ELIGIBLE PARTNERSHIP.—

12 ‘‘(A) IN GENERAL.—The term ‘eligible

13 partnership’ means a partnership consisting

14 of—

15 ‘‘(i) an institution of higher education

16 that awards baccalaureate degrees and pre17 pares teachers for their initial entry into

18 the teaching profession; and

19 ‘‘(ii) one or more local educational

20 agencies that serve underserved areas.

21 ‘‘(B) ADDITIONAL PARTNERS.—Such a

22 partnership may also include—

23 ‘‘(i) 2-year institutions of higher edu24 cation that operate teacher preparation

25 programs and maintain articulation agree-
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1 ments, with the institutions of higher edu2 cation that award baccalaureate degrees

3 for the transfer of credits in teacher prepa4 ration;

5 ‘‘(ii) State agencies that have respon6 sibility for policies related to teacher prep7 aration and teacher certification or licen8 sure; and

9 ‘‘(iii) other public and private, non10 profit agencies and organizations that

11 serve, or are located in, communities

12 served by the local educational agencies in

13 the partnership, and that have an interest

14 in teacher recruitment, preparation, and

15 induction.

16 ‘‘(2) SUPPORT SERVICES.—The term ‘support

17 services’ means—

18 ‘‘(A) academic advice and counseling;

19 ‘‘(B) tutorial services;

20 ‘‘(C) mentoring; and

21 ‘‘(D) child care and transportation, if

22 funding for those services cannot be arranged

23 from other sources.

24 ‘‘(3) UNDERSERVED AREA.—The term ‘under25 served area’ means—
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1 ‘‘(A) the area served by the 3 local edu2 cational agencies in the State that have the

3 highest numbers of children, ages 5 through 17,

4 from families below the poverty level (based on

5 data satisfactory to the Secretary); and

6 ‘‘(B) the area served by any other local

7 educational agency in which the percentage of

8 such children is at least 20 percent, or the

9 number of such children is at least 10,000.

10 ‘‘SEC. 253. GRANT AUTHORITY AND CONDITIONS.

11 ‘‘(a) GRANTS AUTHORIZED.—

12 ‘‘(1) GRANTS.—

13 ‘‘(A) IN GENERAL.—From amounts appro14 priated under section 262 the Secretary shall

15 award grants, on a competitive basis, to eligible

16 partnerships to enable the eligible partnerships

17 to pay the Federal share of the cost of carrying

18 out the activities described in section 255.

19 ‘‘(B) DURATION.—Each grant awarded

20 under subparagraph (A) shall be awarded for a

21 period not to exceed 5 years.

22 ‘‘(2) CONTINUING ELIGIBILITY; REVIEW OF

23 PROGRESS.—The Secretary shall—

24 ‘‘(A) continue to make grant payments for

25 the second and succeeding years of a grant
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1 awarded under this part, only after determining

2 that the eligible partnership is making satisfac3 tory progress in carrying out the activities

4 under the grant; and

5 ‘‘(B) conduct an intensive review of the eli6 gible partnerships’s progress under the grant,

7 with the assistance of outside experts, before

8 making grant payments for the fourth year of

9 the grant.

10 ‘‘(3) MAXIMUM NUMBER.—No eligible partner11 ship may receive more than 2 grants under this sub12 section.

13 ‘‘(b) MATCHING REQUIREMENT.—

14 ‘‘(1) FEDERAL SHARE.—The Federal share of

15 the cost of activities carried out under a grant made

16 under subsection (a) shall not exceed—

17 ‘‘(A) 70 percent of the cost in the first

18 year of the grant;

19 ‘‘(B) 60 percent in the second year;

20 ‘‘(C) 60 percent in the third year;

21 ‘‘(D) 50 percent in the fourth year; and

22 ‘‘(E) 50 percent in the fifth year and any

23 succeeding year (including each year of the sec24 ond grant, if any).
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1 ‘‘(2) NON-FEDERAL SHARE.—The non-Federal

2 share of activities carried out with a grant under

3 subsection (a) may be provided in cash or in kind,

4 fairly evaluated, and may be obtained from any non5 Federal public or private source.

6 ‘‘(c) PLANNING GRANTS.—

7 ‘‘(1) IN GENERAL.—The Secretary may award

8 planning grants to eligible partnerships that are not

9 ready to implement programs under subsection (a).

10 ‘‘(2) DURATION.—Each planning grant shall be

11 for a period of not more than 1 year, which shall be

12 in addition to the period of any grant under sub13 section (a).

14 ‘‘(3) REQUIREMENT.—Any recipient of a plan15 ning grant under this subsection that wishes to re16 ceive a grant under subsection (a)(1) shall sepa17 rately apply for a grant under that subsection.

18 ‘‘SEC. 254. GRANT APPLICATIONS.

19 ‘‘(a) APPLICATIONS REQUIRED.—Any eligible part20 nership desiring to receive a grant under this part shall

21 submit an application to the Secretary at such time, in

22 such form, and containing such information as the Sec23 retary may require.

24 ‘‘(b) APPLICATION CONTENTS.—Each application for

25 a grant under section 253(a) shall include—
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1 ‘‘(1) a designation of the institution or agency,

2 within the eligible partnership, that will serve as the

3 fiscal agent for the grant;

4 ‘‘(2) information on the quality of the teacher

5 preparation program of the institution of higher edu6 cation participating in the eligible partnership and

7 how the eligible partnership will ensure, through im8 provements in the eligible partnership’s teacher

9 preparation practices or other appropriate strategies,

10 that scholarship recipients will receive high-quality

11 preparation;

12 ‘‘(3) a description of the assessment the mem13 bers of the eligible partnership have undertaken—

14 ‘‘(A) to determine—

15 ‘‘(i) the most critical needs of the

16 local educational agencies, particularly the

17 needs of schools in high-poverty areas, for

18 new teachers (which may include teachers

19 in particular subject areas or at certain

20 grade levels); and

21 ‘‘(ii) how the project carried out

22 under the grant will address those needs;

23 and

24 ‘‘(B) that reflects the input of all signifi25 cant entities in the community (including orga-
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1 nizations representing teachers and parents)

2 that have an interest in teacher recruitment,

3 preparation, and induction;

4 ‘‘(4) a description of the project the eligible

5 partnership will carry out with the grant, including

6 information regarding—

7 ‘‘(A) the recruitment and outreach efforts

8 the eligible partnership will undertake to pub9 licize the availability of scholarships and other

10 assistance under the program;

11 ‘‘(B)(i) the number and types of students

12 that the eligible partnership will serve under the

13 program, which may include education para14 professionals seeking to achieve full teacher cer15 tification or licensure; teachers whom the part16 ner local educational agencies have hired under

17 emergency certification or licensure procedures;

18 or former military personnel, mid-career profes19 sionals, or AmeriCorps or Peace Corps volun20 teers, who desire to enter teaching; and

21 ‘‘(ii) the criteria that the eligible partner22 ship will use in selecting the students, including

23 criteria to determine whether individuals have

24 the capacity to benefit from the program, com-
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1 plete teacher certification requirements, and be2 come effective teachers;

3 ‘‘(C) the activities the eligible partnership

4 will carry out under the grant, including a de5 scription of, and justification for, any support

6 services the institution of higher education par7 ticipating in the eligible partnership will offer to

8 participating students;

9 ‘‘(D) the number and funding range of the

10 scholarships the institution will provide to stu11 dents; and

12 ‘‘(E) the procedures the institution will es13 tablish for entering into, and enforcing, agree14 ments with scholarship recipients regarding the

15 recipients’ fulfillment of the service commitment

16 described in section 259;

17 ‘‘(5) a description of how the institution will

18 use funds provided under the grant only—

19 ‘‘(A) to increase the number of students—

20 ‘‘(i) with high potential to be effective

21 teachers;

22 ‘‘(ii) participating in the institution’s

23 teacher preparation programs; or
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1 ‘‘(iii) in the particular type or types of

2 preparation programs that the grant will

3 support; or

4 ‘‘(B) to increase the number of graduates,

5 who are minority individuals, with high poten6 tial to be effective teachers;

7 ‘‘(6) a description of the commitments, by the

8 local educational agencies participating in the part9 nership, to hire qualified scholarship recipients in

10 the schools served by the agencies and in the subject

11 areas or grade levels for which the scholarship re12 cipients will be trained, and a description of the ac13 tions the participating institution of higher edu14 cation, the participating local educational agencies,

15 and the other partners will take to facilitate the suc16 cessful transition of the recipients into teaching; and

17 ‘‘(7) a description of the eligible partnership’s

18 plan for institutionalizing the activities the partner19 ship is carrying out under this part, so that the ac20 tivities will continue once Federal funding ceases.

21 ‘‘SEC. 255. USES OF FUNDS.

22 ‘‘(a) IN GENERAL.—Each eligible partnership receiv23 ing a grant under section 523(a) shall use the grant funds

24 for the following:
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1 ‘‘(1) SCHOLARSHIPS.—Scholarships to help stu2 dents pay the costs of tuition, room, board, and

3 other expenses of completing a teacher preparation

4 program.

5 ‘‘(2) SUPPORT SERVICES.—Support services, if

6 needed to enable scholarship recipients to complete

7 postsecondary education programs.

8 ‘‘(3) FOLLOWUP SERVICES.—Followup services

9 provided to former scholarship recipients during the

10 recipients’ first 3 years of teaching.

11 ‘‘(4) PAYMENTS.—Payments to partner local

12 educational agencies, if needed to enable the agen13 cies to permit paraprofessional staff to participate in

14 teacher preparation programs (such as the cost of

15 release time for the staff).

16 ‘‘(5) ADDITIONAL COURSES.—If appropriate,

17 and if no other funds are available for, paying the

18 costs of additional courses taken by former scholar19 ship recipients during the recipients’ initial 3 years

20 of teaching.

21 ‘‘(b) PLANNING GRANTS.—A recipient of a planning

22 grant under section 253(c) shall use the grant funds for

23 the costs of planning for the implementation of a grant

24 under section 253(a).
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1 ‘‘SEC. 256. SELECTION OF APPLICANTS.

2 ‘‘(a) PEER REVIEW.—The Secretary, using a peer re3 view process, shall select eligible partnerships to receive

4 funding under this part on the basis of—

5 ‘‘(1) the quality of the teacher preparation pro6 gram offered by the institution participating in the

7 partnership;

8 ‘‘(2) the quality of the program carried out

9 under the application; and

10 ‘‘(3) the capacity of the partnership to carry

11 out the grant successfully.

12 ‘‘(b) CRITERIA.—

13 ‘‘(1) IN GENERAL.—In awarding grants under

14 section 253(a), the Secretary shall seek to ensure

15 that—

16 ‘‘(A) in the aggregate, eligible partnerships

17 carry out a variety of approaches to preparing

18 new teachers; and

19 ‘‘(B) there is an equitable geographic dis20 tribution of the grants.

21 ‘‘(2) SPECIAL CONSIDERATION.—In addition to

22 complying with paragraph (1), the Secretary shall

23 give special consideration to—

24 ‘‘(A) applications most likely to result in

25 the preparation of increased numbers of individ-
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•S 1882 RS

1 uals with high potential for effective teaching

2 who are minority individuals; and

3 ‘‘(B) applications from partnerships that

4 have as members of the partnerships histori5 cally Black colleges and universities, Hispanic6 serving institutions, and Tribal Colleges and

7 Universities.

8 ‘‘(c) SECOND FIVE-YEAR GRANTS.—In selecting eli9 gible partnerships to receive second year grant payments

10 under this part, the Secretary shall give a preference to

11 eligible partnerships whose projects have resulted in—

12 ‘‘(1) the placement and retention of a substan13 tial number of high-quality graduates in teaching po14 sitions in underserved, high-poverty schools;

15 ‘‘(2) the adoption of effective programs that

16 meet the teacher preparation needs of high-poverty

17 urban and rural areas; and

18 ‘‘(3) effective partnerships with elementary

19 schools and secondary schools that are supporting

20 improvements in student achievement.

21 ‘‘SEC. 257. DURATION AND AMOUNT OF ASSISTANCE; RELA22 TION TO OTHER ASSISTANCE.

23 ‘‘(a) DURATION OF ASSISTANCE.—No individual may

24 receive scholarship assistance under this part—
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1 ‘‘(1) for more than 5 years of postsecondary

2 education; and

3 ‘‘(2) unless that individual satisfies the require4 ments of section 484(a)(5).

5 ‘‘(b) AMOUNT OF ASSISTANCE.—No individual may

6 receive a scholarship awarded under this part that exceeds

7 the cost of attendance, as defined in section 472, at the

8 institution of higher education the individual is attending.

9 ‘‘(c) RELATION TO OTHER ASSISTANCE.—A scholar10 ship awarded under this part—

11 ‘‘(1) shall not be reduced on the basis of the in12 dividual’s receipt of other forms of Federal student

13 financial assistance; and

14 ‘‘(2) shall be regarded as other financial assist15 ance available to the student, within the meaning of

16 sections 471(3) and 480(j)(1), in determining the

17 student’s eligibility for grant, loan, or work assist18 ance under title IV.

19 ‘‘SEC. 258. SCHOLARSHIP CONDITIONS.

20 ‘‘(a) IN GENERAL.—A recipient of a scholarship

21 under this part shall continue to receive the scholarship

22 assistance only as long as the recipient is—

23 ‘‘(1) enrolled as a full-time student and pursu24 ing a course of study leading to teacher certification,

25 unless the recipient is working in a public school (as
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1 a paraprofessional, or as a teacher under emergency

2 credentials) while participating in the program; and

3 ‘‘(2) maintaining satisfactory progress as deter4 mined by the institution of higher education partici5 pating in the partnership.

6 ‘‘(b) SPECIAL RULE.—Each eligible partnership shall

7 modify the application of section 257(a)(1) and of sub8 section (a)(1) to the extent necessary to accommodate the

9 rights of individuals with disabilities under section 504 of

10 the Rehabilitation Act of 1973.

11 ‘‘SEC. 259. SERVICE REQUIREMENTS.

12 ‘‘(a) REQUIREMENT.—Each eligible partnership re13 ceiving a grant under this part shall enter into an agree14 ment, with each student to whom the partnership awards

15 a scholarship under this part, providing that a scholarship

16 recipient who completes a teacher preparation program

17 under this part shall, within 7 years of completing that

18 program, teach full-time for at least 5 years in a high19 poverty school in an underserved geographic area or repay

20 the amount of the scholarship, under the terms and condi21 tions established by the Secretary.

22 ‘‘(b) REGULATIONS.—The Secretary shall prescribe

23 regulations relating to the requirements of subsection (a),

24 including any provisions for waiver of those requirements.
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1 ‘‘SEC. 260. EVALUATION.

2 ‘‘The Secretary shall provide for an evaluation of the

3 program carried out under this part, which shall asses

4 such issues as—

5 ‘‘(1) whether institutions participating in the el6 igible partnerships are successful in preparing schol7 arship recipients to teach to high State and local

8 standards;

9 ‘‘(2) whether scholarship recipients are success10 ful in completing teacher preparation programs, be11 coming fully certified teachers, and obtaining teach12 ing positions in underserved areas, and whether the

13 recipients continue teaching in those areas over a pe14 riod of years;

15 ‘‘(3) the national impact of the program in as16 sisting local educational agencies in underserved

17 areas to recruit, prepare, and retain diverse, high18 quality teachers in the areas in which the agencies

19 have the greatest needs;

20 ‘‘(4) the long-term impact of the grants on

21 teacher preparation programs conducted by institu22 tions of higher education participating in the eligible

23 partnership and on the institutions’ relationships

24 with their partner local educational agencies and

25 other members of the partnership; and
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1 ‘‘(5) the relative effectiveness of different ap2 proaches for preparing new teachers to teach in un3 derserved areas, including their effectiveness in pre4 paring new teachers to teach to high content and

5 performance standards.

6 ‘‘SEC. 261. NATIONAL ACTIVITIES.

7 ‘‘The Secretary may reserve not more than 5 percent

8 of the funds appropriated for this part for any fiscal year

9 for—

10 ‘‘(1) peer review of applications;

11 ‘‘(2) conducting the evaluation required under

12 section 260; and

13 ‘‘(3) technical assistance.

14 ‘‘SEC. 262. AUTHORIZATION OF APPROPRIATIONS.

15 ‘‘There are authorized to be appropriated to carry out

16 this part $37,000,000 for fiscal year 1999 and such sums

17 as may be necessary for each of the 4 succeeding fiscal

18 years.’’.

19 TITLE III—INSTITUTIONAL AID

20 SEC. 301. TRANSFERS AND REDESIGNATIONS.

21 (a) IN GENERAL.—Title III (20 U.S.C. 1051 et seq.)

22 is amended—

23 (1) by redesignating part D as part F;

24 (2) by redesignating sections 351, 352, 353,

25 354, 356, 357, 358, and 360 (20 U.S.C. 1066,
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•S 1882 RS

1 1067, 1068, 1069, 1069b, 1069c, 1069d, and 1069f)

2 as sections 391, 392, 393, 394, 395, 396, 397, and

3 398, respectively;

4 (3) by transferring part B of title VII (20

5 U.S.C. 1132c et seq.) to title III to follow part C of

6 title III (20 U.S.C. 1065 et seq.), and redesignating

7 such part B as part D;

8 (4) by redesignating sections 721 through 728

9 (20 U.S.C. 1132c and 1132c–7) as sections 341

10 through 348, respectively;

11 (5) by transferring subparts 1 and 3 of part B

12 of title X (20 U.S.C. 1135b et seq. and 1135d et

13 seq.) to title III to follow part D of title III (as re14 designated by paragraph (3)), and redesignating

15 such subpart 3 as subpart 2;

16 (6) by inserting after part D of title III (as re17 designated by paragraph (3)) the following:

18 ‘‘PART E—MINORITY SCIENCE IMPROVEMENT

19 PROGRAM’’;

20 (7) by redesignating sections 1021 through

21 1024 (20 U.S.C. 1135b and 1135b–3), and sections

22 1041, 1042, 1043, 1044, 1046, and 1047 (20

23 U.S.C. 1135d, 1135d–1, 1135d–2, 1135d–3, 1135d–

24 5, and 1135d–6) as sections 351 through 354, and
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1 sections 361, 362, 363, 364, 365, and 366, respec2 tively; and

3 (8) by repealing section 366 (as redesignated by

4 paragraph (7)) (20 U.S.C. 1135d–6).

5 (b) CONFORMING AMENDMENT.—Section 361 (as re6 designated by subsection (a)(7)) (20 U.S.C. 1135d) is

7 amended—

8 (1) in paragraph (1), by inserting ‘‘and’’ after

9 the semicolon;

10 (2) in paragraph (2), by striking ‘‘; and’’ and

11 inserting a period; and

12 (3) by striking paragraph (3).

13 (c) CROSS REFERENCES.—Title III (20 U.S.C. 1051

14 et seq.) is amended—

15 (1) in section 311(b) (20 U.S.C. 1057(b)), by

16 striking ‘‘360(a)(1)’’ and inserting ‘‘398(a)(1)’’;

17 (2) in section 312 (20 U.S.C. 1058)—

18 (A) in subsection (b)(1)(B), by striking

19 ‘‘352(b)’’ and inserting ‘‘392(b)’’; and

20 (B) in subsection (c)(2), by striking

21 ‘‘352(a)’’ and inserting ‘‘392(a)’’;

22 (3) in section 313(b) (20 U.S.C. 1059(b)), by

23 striking ‘‘354(a)(1)’’ and inserting ‘‘394(a)(1)’’;

24 (4) in section 342 (as redesignated by sub25 section (a)(4)) (20 U.S.C. 1132c–1)—
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1 (A) in paragraph (3), by striking ‘‘723(b)’’

2 and inserting ‘‘343(b)’’;

3 (B) in paragraph (4), by striking ‘‘723’’

4 and inserting ‘‘343’’;

5 (C) in the matter preceding subparagraph

6 (A) of paragraph (5), by striking ‘‘724(b)’’ and

7 inserting ‘‘344(b)’’;

8 (D) in paragraph (8), by striking ‘‘725(1)’’

9 and inserting ‘‘345(1)’’; and

10 (E) in paragraph (9), by striking ‘‘727’’

11 and inserting ‘‘347’’;

12 (5) in section 343 (as redesignated by sub13 section (a)(4)) (20 U.S.C. 1132c–2)—

14 (A) in subsection (a), by striking ‘‘724’’

15 and inserting ‘‘344’’; and

16 (B) in subsection (b)—

17 (i) in the matter preceding paragraph

18 (1), by striking ‘‘725(1) and 726’’ and in19 serting ‘‘345(1) and 346’’;

20 (ii) in paragraph (10), by striking

21 ‘‘724’’ and inserting ‘‘344’’; and

22 (iii) in subsection (d), by striking

23 ‘‘723(c)(1)’’ and inserting ‘‘343(c)(1)’’;
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1 (6) in section 345(2) (as redesignated by sub2 section (a)(4)) (20 U.S.C. 1132c–4(2)), by striking

3 ‘‘723’’ and inserting ‘‘343’’;

4 (7) in section 348 (as redesignated by sub5 section (a)(4)) (20 U.S.C. 1132c–7), by striking

6 ‘‘725(1)’’ and inserting ‘‘345(1)’’;

7 (8) in section 353(a) (as redesignated by sub8 section (a)(7)) (20 U.S.C. 1135b–2(a))—

9 (A) in paragraph (1), by striking

10 ‘‘1046(6)’’ and inserting ‘‘365(6)’’;

11 (B) in paragraph (2), by striking

12 ‘‘1046(7)’’ and inserting ‘‘365(7)’’;

13 (C) in paragraph (3), by striking

14 ‘‘1046(8)’’ and inserting ‘‘365(8)’’; and

15 (D) in paragraph (4), by striking

16 ‘‘1046(9)’’ and inserting ‘‘365(9)’’;

17 (9) in section 361(1) (as redesignated by sub18 section (a)(7)) (20 U.S.C. 1135d(1)), by striking

19 ‘‘1046(3)’’ and inserting ‘‘365(3)’’;

20 (10) in section 362(a) (as redesignated by sub21 section (a)(7)) (20 U.S.C. 1135d–1(a))—

22 (A) in the matter preceding paragraph (1),

23 by striking ‘‘1041’’ and inserting ‘‘361’’; and

24 (B) in paragraph (1), by striking

25 ‘‘1021(b)’’ and inserting ‘‘351(b)’’; and
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1 (11) in section 391(b)(6) (as redesignated by

2 subsection (a)(2)), by striking ‘‘357’’ and inserting

3 ‘‘396’’.

4 SEC. 302. FINDINGS.

5 Section 301(a) (20 U.S.C. 1051(a)) is amended—

6 (1) by redesignating paragraphs (3) through

7 (7) as paragraphs (4) through (8), respectively; and

8 (2) by inserting after paragraph (2) the follow9 ing:

10 ‘‘(3) in order to be competitive and provide a

11 high-quality education for all, institutions of higher

12 education should improve their technological capac13 ity and make effective use of technology;’’.

14 SEC. 303. STRENGTHENING INSTITUTIONS.

15 (a) GRANTS.—Section 311 (20 U.S.C. 1057) is

16 amended—

17 (1) in subsection (b)(3)(D), by inserting ‘‘, in18 cluding high technology equipment,’’ after ‘‘equip19 ment’’; and

20 (2) by adding at the end the following:

21 ‘‘(c) ENDOWMENT FUND.—

22 ‘‘(1) IN GENERAL.—An eligible institution may

23 use not more than 20 percent of the grant funds

24 provided under this part to establish or increase an

25 endowment fund at such institution.
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1 ‘‘(2) MATCHING REQUIREMENT.—In order to be

2 eligible to use grant funds in accordance with para3 graph (1), the eligible institution shall provide

4 matching funds, in an amount equal to the Federal

5 funds used in accordance with paragraph (1), for the

6 establishment or increase of the endowment fund.

7 ‘‘(3) COMPARABILITY.—The provisions of part

8 C, regarding the establishment or increase of an en9 dowment fund, that the Secretary determines are

10 not inconsistent with this subsection, shall apply to

11 funds used under paragraph (1).’’.

12 (b) DURATION OF GRANT.—Section 313 (20 U.S.C.

13 1059) is amended by adding at the end the following:

14 ‘‘(d) WAIT-OUT-PERIOD.—Each eligible institution

15 that received a grant under this part for a 5-year period

16 shall not be eligible to receive an additional grant under

17 this part until 2 years after the date on which the 5-year

18 grant period terminates.’’.

19 (c) HISPANIC-SERVING INSTITUTIONS.—Section 316

20 (20 U.S.C. 1059c) is amended—

21 (1) in subsection (b)(1), by amending subpara22 graph (C) to read as follows:

23 ‘‘(C) provides assurances that not less than

24 50 percent of the institution’s Hispanic stu-
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1 dents are low-income individuals who are first

2 generation college students;’’;

3 (2) in subsection (c), by adding at the end the

4 following:

5 ‘‘(3) ENDOWMENT FUND.—

6 ‘‘(A) IN GENERAL.—A Hispanic-serving in7 stitution may use not more than 20 percent of

8 the grant funds provided under this part to es9 tablish or increase an endowment fund at the

10 institution.

11 ‘‘(B) MATCHING REQUIREMENT.—In order

12 to be eligible to use grant funds in accordance

13 with subparagraph (A), the Hispanic-serving in14 stitution shall provide matching funds, in an

15 amount equal to the Federal funds used in ac16 cordance with paragraph (1), for the establish17 ment or increase of the endowment fund.

18 ‘‘(C) COMPARABILITY.—The provisions of

19 part C regarding the establishment or increase

20 of an endowment fund, that the Secretary de21 termines are not inconsistent with this para22 graph, shall apply to funds used under subpara23 graph (A).’’; and

24 (3) in subsection (d)(3)—
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1 (A) by inserting ‘‘or community-based or2 ganization’’ after ‘‘educational agency’’; and

3 (B) by inserting ‘‘or organization’’ after

4 ‘‘such agency’’.

5 SEC. 304. STRENGTHENING HBCU’S.

6 (a) GRANTS.—Section 323 (20 U.S.C. 1062) is

7 amended—

8 (1) by redesignating subsection (b) as sub9 section (c); and

10 (2) by inserting after subsection (a) the follow11 ing:

12 ‘‘(b) ENDOWMENT FUND.—

13 ‘‘(1) IN GENERAL.—An institution may use not

14 more than 20 percent of the grant funds provided

15 under this part to establish or increase an endow16 ment fund at the institution.

17 ‘‘(2) MATCHING REQUIREMENT.—In order to be

18 eligible to use grant funds in accordance with para19 graph (1), the eligible institution shall provide

20 matching funds, in an amount equal to the Federal

21 funds used in accordance with paragraph (1), for the

22 establishment or increase of the endowment fund.

23 ‘‘(3) COMPARABILITY.—The provisions of part

24 C regarding the establishment or increase of an en25 dowment fund, that the Secretary determines are
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1 not inconsistent with this subsection, shall apply to

2 funds used under paragraph (1).’’.

3 (b) PROFESSIONAL OR GRADUATE INSTITUTIONS.—

4 Section 326 (20 U.S.C. 1063b) is amended—

5 (1) in subsection (a), by adding at the end of

6 paragraph (2) the following: ‘‘If a grant of less than

7 $500,000 is made under this section, matching

8 funds provided from non-Federal sources are not re9 quired. If a grant equal to or in excess of $500,000

10 is made under this section, matching funds provided

11 from non-Federal sources are required only with re12 spect to the amount of the grant that exceeds

13 $500,000.’’; and

14 (2) in subsection (e)(1)—

15 (A) in subparagraph (E), by inserting

16 ‘‘, and any Tuskegee University qualified grad17 uate program’’ before the semicolon;

18 (B) in subparagraph (F), by inserting

19 ‘‘, and any Xavier University qualified graduate

20 program’’ before the semicolon;

21 (C) in subparagraph (G), by inserting

22 ‘‘, and any Southern University qualified grad23 uate program’’ before the semicolon;
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1 (D) in subparagraph (H), by inserting

2 ‘‘, and any Texas Southern University qualified

3 graduate program’’ before the semicolon;

4 (E) in subparagraph (I), by inserting

5 ‘‘, and any Florida A&M University qualified

6 graduate program’’ before the semicolon; and

7 (F) in subparagraph (J), by inserting

8 ‘‘, and any North Carolina Central University

9 qualified graduate program’’ before the semi10 colon.

11 SEC. 305. ENDOWMENT CHALLENGE GRANTS.

12 Paragraph (2) of section 331(b) (20 U.S.C. 1065(b))

13 is amended by striking subparagraphs (B) and (C) and

14 inserting the following:

15 ‘‘(B) The Secretary may make a grant under this

16 part to an eligible institution in any fiscal year in which

17 the amount appropriated to carry out this part is less than

18 $15,000,000, if the institution—

19 ‘‘(i) applies for a grant in an amount not ex20 ceeding $500,000; and

21 ‘‘(ii) has deposited in its endowment fund es22 tablished under this section an amount which is

equal to 1 23 ⁄2 of the amount of such grant.

24 ‘‘(C) An eligible institution of higher education that

25 is awarded a grant under subparagraph (B) shall not be
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1 eligible to receive an additional grant under subparagraph

2 (B) until 10 years after the date on which the grant period

3 terminates.’’.

4 SEC. 306. HBCU CAPITAL FINANCING.

5 (a) DEFINITION.—Section 342(5) (as redesignated

6 by section 301(a)(4)) (20 U.S.C. 1132c–1(5)) is amend7 ed—

8 (1) by redesignating subparagraphs (B), (C),

9 and (D) as subparagraphs (C), (F), and (G);

10 (2) by inserting after subparagraph (A) the fol11 lowing:

12 ‘‘(B) a facility for the administration of an

13 educational program, or a student center or

14 student union, except that not more than 5 per15 cent of the loan proceeds provided under this

16 part may be used for the facility, center or

17 union if the facility, center or union is owned,

18 leased, managed, or operated by a private busi19 ness, that, in return for such use, makes a pay20 ment to the eligible institution;’’;

21 (3) by inserting after subparagraph (C) (as re22 designated by paragraph (1)) the following:

23 ‘‘(D) a maintenance, storage, or utility fa24 cility that is essential to the operation of a fa25 cility, a library, a dormitory, equipment, instru-
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1 mentation, a fixture, real property or an inter2 est therein, described in this paragraph;

3 ‘‘(E) a facility designed to provide pri4 marily outpatient health care for students or

5 faculty;’’; and

6 (4) in subparagraph (G) (as redesignated by

7 paragraph (2)), by striking ‘‘(C)’’ and inserting

8 ‘‘(F)’’.

9 (b) FULL FAITH AND CREDIT.—Section 343 (as re10 designated by section 301(a)(4)) (20 U.S.C. 1132c–2) is

11 amended by adding at the end the following:

12 ‘‘(e) Notwithstanding any other provision of law, the

13 Secretary may sell a qualified bond guaranteed under this

14 part to any party that offers terms that the Secretary de15 termines are in the best interest of the eligible institu16 tion.’’.

17 SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVE18 MENT PROGRAM.

19 Section 365(4) (as redesignated by section 301(a)(7))

20 (20 U.S.C. 1135d–5(4)) is amended by inserting ‘‘behav21 ioral,’’ after ‘‘physical,’’.

22 SEC. 308. GENERAL PROVISIONS.

23 (a) APPLICATIONS.—Paragraph (1) of section 391(b)

24 (as redesignated by section 301(a)(2)) (20 U.S.C.
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1 1066(b)) is amended by inserting ‘‘, D or E’’ after ‘‘part

2 C’’.

3 (b) APPLICATION REVIEW PROCESS.—Section 393

4 (as redesignated by section 301(a)(2)) (20 U.S.C. 1068)

5 is amended by adding at the end the following:

6 ‘‘(d) EXCLUSION.—The provisions of this section

7 shall not apply to applications submitted under part D.’’.

8 (c) WAIVERS.—Paragraph (2) of section 395(b) (as

9 redesignated by section 301(a)(2)) (20 U.S.C. 1069b(b))

10 is amended by striking ‘‘title II, IV, VII, or VIII’’ and

11 inserting ‘‘part D, title IV, or title VIII’’.

12 (d) AUTHORIZATION OF APPROPRIATIONS.—Section

13 398(a) (as redesignated by section 301(a)(2)) (20 U.S.C.

14 1069f) is amended—

15 (1) in paragraph (1)—

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

17 ‘‘1993’’ and inserting ‘‘1999’’; and

18 (B) in subparagraph (B)—

19 (i) in clause (i), by striking ‘‘1993’’

20 and inserting ‘‘1999’’;

21 (ii) by striking clause (ii); and

22 (iii) by striking ‘‘(B)(i) There’’ and

23 inserting ‘‘(B) There’’;

24 (2) in paragraph (2)—
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1 (A) in subparagraph (A), by striking

2 ‘‘1993’’ and inserting ‘‘1999’’; and

3 (B) in subparagraph (B), by striking

4 ‘‘$20,000,000 for fiscal year 1993’’ and insert5 ing ‘‘$30,000,000 for fiscal year 1999’’;

6 (3) in paragraph (3), by striking ‘‘$50,000,000

7 for fiscal year 1993’’ and inserting ‘‘$10,000,000 for

8 fiscal year 1999’’; and

9 (4) by adding at the end the following:

10 ‘‘(4) PART D.—There are authorized to be ap11 propriated to carry out part D, $110,000 for fiscal

12 year 1999, and such sums as may be necessary for

13 each of the 4 succeeding fiscal years.

14 ‘‘(5) PART E.—There are authorized to be ap15 propriated to carry out part E, $10,000,000 for fis16 cal year 1999, and such sums as may be necessary

17 for each of the 4 succeeding fiscal years.’’.

18 TITLE IV—STUDENT ASSISTANCE

19 PART A—GRANTS TO STUDENTS IN ATTENDANCE

20 AT INSTITUTIONS OF HIGHER EDUCATION

21 SEC. 411. REPEALS AND REDESIGNATIONS.

22 Title IV (20 U.S.C. 1070 et seq.) is amended—

23 (1) in part A (20 U.S.C. 1070 et seq.)—
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1 (A) in subpart 2 (20 U.S.C. 1070a–11), by

2 repealing chapters 3 through 8 (20 U.S.C.

3 1070a–31 et seq. and 1070a–81 et seq.); and

4 (B) by repealing subpart 8 (20 U.S.C.

5 1070f); and

6 (2) in part H (20 U.S.C. 1099a et seq.)—

7 (A) by repealing subpart 1 (20 U.S.C.

8 1099a et seq.); and

9 (B) by redesignating subparts 2 and 3 (20

10 U.S.C. 1099b et seq. and 1099c et seq.) as sub11 parts 1 and 2, respectively.

12 SEC. 412. FEDERAL PELL GRANTS.

13 (a) AMENDMENT TO SUBPART HEADING.—The head14 ing for subpart 1 of part A of title IV (20 U.S.C. 1070a

15 et seq.) is amended by striking ‘‘Basic Educational

16 Opportunity Grants’’ and inserting ‘‘Federal Pell

17 Grants’’.

18 (b) FEDERAL PELL GRANTS.—Section 401 (20

19 U.S.C. 1070a) is amended—

20 (1) in the section heading, by striking ‘‘BASIC

21 EDUCATIONAL OPPORTUNITY GRANTS’’ and in22 serting ‘‘FEDERAL PELL GRANTS’’;

23 (2) in subsection (a)(1)—

24 (A) in the first sentence, by striking ‘‘shall,

25 during the period beginning July 1, 1972, and
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1 ending September 30, 1998,’’ and inserting ‘‘,

2 for each fiscal year through fiscal year 2004,

3 shall’’; and

4 (B) in the second sentence, by inserting

5 ‘‘until such time as the Secretary determines

6 and publishes in the Federal Register with an

7 opportunity for comment, an alternative pay8 ment system that provides payments to institu9 tions in an accurate and timely manner,’’ after

10 ‘‘pay eligible students’’;

11 (3) in subsection (b)—

12 (A) in paragraph (2)(A), by striking

13 clauses (i) through (v), and inserting the follow14 ing:

15 ‘‘(i) $5,000 for academic year 1999–

16 2000;

17 ‘‘(ii) $5,200 for academic year 2000–

18 2001;

19 ‘‘(iii) $5,400 for academic year 2001–

20 2002;

21 ‘‘(iv) $5,600 for academic year 2002–

22 2003; and

23 ‘‘(v) $5,800 for academic year 2003–

24 2004.’’;
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1 (B) by amending paragraph (3) to read as

2 follows:

3 ‘‘(3) For any academic year for which an ap4 propriation Act provides a maximum basic grant in

5 an amount in excess of $2,400, the amount of a stu6 dent’s basic grant shall equal $2,400 plus—

7 ‘‘(A) one-half of the amount by which such

8 maximum basic grant exceeds $2,400; plus

9 ‘‘(B) the lesser of—

10 ‘‘(i) the remaining one-half of such ex11 cess; or

12 ‘‘(ii) the sum of the student’s tuition,

13 fees, and if the student has dependent care

14 expenses (as described in section 472(8) or

15 disability-related expenses (as described in

16 section 472(9)), an allowance determined

17 by the institution for such expenses.’’; and

18 (C) in paragraph (5), by striking ‘‘$400,

19 except’’ and all that follows through ‘‘grant of

20 $400’’ and insert ‘‘$200’’; and

21 (4) in subsection (c)—

22 (A) by amending paragraph (1) to read as

23 follows: ‘‘(1)(A) Except as provided in subpara24 graph (B), the period during which a student

25 may receive a basic grant shall be the period,
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1 required for the completion of the first under2 graduate baccalaureate course of study pursued

3 by the student at the institution at which the

4 student is in attendance, that does not exceed

5 150 percent of the period normally required by

6 a full-time student (or the equivalent period, in

7 the case of a part-time student) to complete the

8 course of study at the institution, as determined

9 by the institution.

10 ‘‘(B) A student may receive basic grants

11 under this subpart for a period that exceeds the

12 period described in subparagraph (A) to the ex13 tent the institution in which the student is en14 rolled determines necessary to accommodate the

15 rights of students with disabilities under section

16 504 of the Rehabilitation Act of 1973.’’; and

17 (B) in paragraph (2)—

18 (i) by striking ‘‘Nothing’’ and insert19 ing ‘‘(A) Except as provided in subpara20 graph (B), nothing’’;

21 (ii) by striking ‘‘or, in the case’’ and

22 all that follows through ‘‘or skills’’; and

23 (iii) by adding at the end the follow24 ing:
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1 ‘‘(B)(i) A student may receive a basic

2 grant to attend English language instruction

3 that is a separate course of instruction only

4 if—

5 ‘‘(I) students enrolled in such a course

6 are required to take an independently ad7 ministered standardized test of English

8 language proficiency upon completion of

9 the course; and

10 ‘‘(II) not less than a minimum per11 centage of such students achieve a passing

12 score on that test.

13 ‘‘(ii) The Secretary shall promulgate regu14 lations that specify 1 or more standardized

15 tests of English proficiency, the minimum per16 centage of students who must achieve a passing

17 score on the tests, and such other requirements

18 as the Secretary determines are necessary to

19 implement clause (i).’’.

20 SEC. 413. TRIO PROGRAMS.

21 (a) PROGRAM AUTHORITY.—Section 402A (20

22 U.S.C. 1070a–11) is amended—

23 (1) in subsection (b)(3)—
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1 (A) in subparagraph (A), by striking

2 ‘‘$170,000 for fiscal year 1993’’ and inserting

3 ‘‘$190,000 for each fiscal year’’;

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

5 ‘‘$180,000 for fiscal year 1994’’ and inserting

6 ‘‘$200,000 for each fiscal year’’; and

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

8 ‘‘$190,000 for fiscal year 1995’’ and inserting

9 ‘‘$210,000 for each fiscal year’’;

10 (2) in subsection (c)(6), by amending the last

11 sentence to read as follows: ‘‘The Secretary shall

12 permit a Director of a program assisted under this

13 chapter to also administer 1 or more additional pro14 grams for disadvantaged students operated by the

15 sponsoring entity regardless of the funding source of

16 such additional program.’’; and

17 (3) in subsection (f), by striking ‘‘$650,000,000

18 for fiscal year 1993’’ and inserting ‘‘$700,000,000

19 for fiscal year 1999’’.

20 (b) TALENT SEARCH.—Section 402B(b)(5) (20

21 U.S.C. 1070a–12(b)(5)) is amended by inserting ‘‘, or ac22 tivities designed to acquaint individuals from disadvan23 taged backgrounds with careers in which the individuals

24 are particularly underrepresented’’ before the semicolon.
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1 (c) UPWARD BOUND.—Section 402C (20 U.S.C.

2 1070a–13) is amended—

3 (1) in subsection (b)—

4 (A) in paragraph (9), by striking ‘‘and’’

5 after the semicolon;

6 (B) by redesignating paragraph (10) as

7 paragraph (11);

8 (C) by inserting after paragraph (9) the

9 following:

10 ‘‘(10) work-study positions where youth partici11 pating in the project are exposed to careers requir12 ing a postsecondary degree; and’’; and

13 (D) in paragraph (11) (as redesignated by

14 subparagraph (B)), by striking ‘‘(9)’’ and in15 serting ‘‘(10)’’; and

16 (2) in subsection (e), by striking ‘‘and not in

17 excess of $40 per month during the remaining pe18 riod of the year.’’ and inserting ‘‘except that youth

19 participating in a work-study position under sub20 section (b)(10) may be paid a stipend of $300 per

21 month during June, July, and August. Youths par22 ticipating in a project proposed to be carried out

23 under any application may be paid stipends not in

24 excess of $40 per month during the remaining pe25 riod of the year.’’.
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1 (d) STUDENT SUPPORT SERVICES.—Paragraph (6)

2 of section 402D(c) (20 U.S.C. 1070a–14(c)(6)) is amend3 ed to read as follows:

4 ‘‘(6) consider, in addition to such other criteria

5 as the Secretary may prescribe, the institution’s ef6 fort, and where applicable past history, in—

7 ‘‘(A) providing sufficient financial assist8 ance to meet the full financial need of each stu9 dent at the institution; and

10 ‘‘(B) maintaining the loan burden of each

11 such student at a manageable level.’’.

12 (e) EVALUATION AND DISSEMINATION.—Section

13 402H (20 U.S.C. 1070a–18) is amended to read as fol14 lows:

15 ‘‘SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IM16 PROVEMENT AND DISSEMINATION PARTNER17 SHIP PROJECTS.

18 ‘‘(a) EVALUATIONS.—

19 ‘‘(1) IN GENERAL.—For the purpose of improv20 ing the effectiveness of the programs and projects

21 assisted under this subpart, the Secretary may make

22 grants to or enter into contracts with institutions of

23 higher education and other public and private insti24 tutions and organizations to evaluate the effective-
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1 ness of the programs and projects assisted under

2 this subpart.

3 ‘‘(2) PRACTICES.—The evaluations described in

4 paragraph (1) shall identify institutional, commu5 nity, and program or project practices that are par6 ticularly effective in enhancing the access of low-in7 come individuals and first-generation college stu8 dents to postsecondary education, the preparation of

9 the individuals and students for postsecondary edu10 cation, and the success of the individuals and stu11 dents in postsecondary education.

12 ‘‘(b) GRANTS.—The Secretary may award grants to

13 institutions of higher education or other private and public

14 institutions and organizations, that are carrying out a pro15 gram or project assisted under this subpart prior to the

16 date of enactment of the Higher Education Amendments

17 of 1998, to enable the institutions and organizations to

18 expand and leverage the success of such programs or

19 projects by working in partnership with other institutions,

20 community-based organizations, or combinations of such

21 institutions and organizations, that are not receiving as22 sistance under this subpart and are serving low-income

23 students and first generation college students, in order

24 to—
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1 ‘‘(1) disseminate and replicate best practices of

2 programs or projects assisted under this subpart;

3 and

4 ‘‘(2) provide technical assistance regarding pro5 grams and projects assisted under this subpart.

6 ‘‘(c) RESULTS.—In order to improve overall program

7 or project effectiveness, the results of evaluations and

8 grants described in this section shall be disseminated by

9 the Secretary to similar programs or projects assisted

10 under this subpart, as well as other individuals concerned

11 with postsecondary access for and retention of low-income

12 individuals and first-generation college students.’’.

13 SEC. 414. NATIONAL EARLY INTERVENTION SCHOLARSHIP

14 AND PARTNERSHIP PROGRAM.

15 Section 404G (20 U.S.C. 1070a–27) is amended by

16 striking ‘‘1993’’ and inserting ‘‘1999’’.

17 SEC. 415. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR18 TUNITY GRANTS.

19 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

20 413A(b) (20 U.S.C. 1070b) is amended by striking

21 ‘‘$675,000,000 for fiscal year 1993’’ and inserting

22 ‘‘$700,000,000 for fiscal year 1999’’.

23 (b) USE OF FUNDS FOR LESS-THAN-FULL-TIME

24 STUDENTS.—Subsection (d) of section 413C (20 U.S.C.

25 1070b–2) is amended to read as follows:
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1 ‘‘(d) USE OF FUNDS FOR LESS-THAN-FULL-TIME

2 STUDENTS.—If the institution’s allocation under this sub3 part is directly or indirectly based in part on the financial

4 need demonstrated by students who are independent stu5 dents or attending the institution on less than a full-time

6 basis, a reasonable proportion of the allocation shall be

7 made available to such students.’’.

8 (c) CARRYOVER, CARRYBACK, AND REALLOCA9 TION.—Subpart 3 of part A of title IV (20 U.S.C. 1070b

10 et seq.) is amended by adding at the end the following:

11 ‘‘SEC. 413E. CARRYOVER, CARRYBACK, AND REALLOCA12 TION.

13 ‘‘(a) CARRYOVER AUTHORITY.—Of the sums made

14 available to an eligible institution under this subpart for

15 a fiscal year, not more than 10 percent may, at the discre16 tion of the institution, remain available for expenditure

17 during the succeeding fiscal year to carry out the program

18 under this subpart.

19 ‘‘(b) CARRYBACK AUTHORITY.—Of the sums made

20 available to an eligible institution under this subpart for

21 a fiscal year, not more than 10 percent may, at the discre22 tion of the institution, be used by the institution for ex23 penditure for the fiscal year preceding the fiscal year for

24 which the sums were appropriated.
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1 ‘‘(c) REALLOCATION.—Any of the sums made avail2 able to an eligible institution under this subpart for a fis3 cal year that are not needed by the institution to award

4 supplemental grants during that fiscal year, that the insti5 tution does not wish to use during the succeeding fiscal

6 year as authorized in subsection (a), and that the institu7 tion does not wish to use for the preceding fiscal year as

8 authorized in subsection (b), shall be made available to

9 the Secretary for reallocation under section 413D(e) until

10 the end of the second fiscal year after the fiscal year for

11 which such sums were appropriated.’’.

12 SEC. 416. LEVERAGING EDUCATIONAL ASSISTANCE PART13 NERSHIP PROGRAM.

14 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

15 415A(b) (20 U.S.C. 1070c(b)) is amended—

16 (1) in paragraph (1), by striking ‘‘1993’’ and

17 inserting ‘‘1999’’;

18 (2) by redesignating paragraph (2) as para19 graph (3); and

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

22 ‘‘(2) RESERVATION.—For any fiscal year for

23 which the amount appropriated under paragraph (1)

24 exceeds $35,000,000, the excess shall be available to

25 carry out section 415E.’’.
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1 (b) SPECIAL LEVERAGING EDUCATIONAL ASSIST2 ANCE PARTNERSHIP PROGRAM.—Subpart 4 of part A of

3 title IV (20 U.S.C. 1070c et seq.) is amended—

4 (1) by redesignating section 415E as 415F;

5 (2) by inserting after section 415D the follow6 ing:

7 ‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSIST8 ANCE PARTNERSHIP PROGRAM.

9 ‘‘(a) IN GENERAL.—From amounts reserved under

10 section 415A(b)(2) for each fiscal year, the Secretary

11 shall—

12 ‘‘(1) make allotments among States in the same

13 manner as the Secretary makes allotments among

14 States under section 415B; and

15 ‘‘(2) award grants to States, from allotments

16 under paragraph (1), to enable the States to pay the

17 Federal share of the cost of the authorized activities

18 described in subsection (c).

19 ‘‘(b) APPLICABILITY RULE.—The provisions of this

20 subpart which are not inconsistent with this section shall

21 apply to the program authorized by this section.

22 ‘‘(c) AUTHORIZED ACTIVITIES.—Each State receiv23 ing a grant under this section may use the grant funds

24 for—
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1 ‘‘(1) increasing the dollar amount of grants

2 awarded under section 415B to eligible students who

3 demonstrate financial need;

4 ‘‘(2) carrying out transition programs from sec5 ondary school to postsecondary education for eligible

6 students who demonstrate financial need;

7 ‘‘(3) making funds available for community

8 service work-study activities for eligible students who

9 demonstrate financial need;

10 ‘‘(4) creating a postsecondary scholarship pro11 gram for eligible students who demonstrate financial

12 need and wish to enter teaching;

13 ‘‘(5) creating a scholarship program for eligible

14 students who demonstrate financial need and wish to

15 enter a program of study leading to a degree in

16 mathematics, computer science, or engineering;

17 ‘‘(6) carrying out early intervention programs,

18 mentoring programs, and career education programs

19 for eligible students who demonstrate financial need;

20 and

21 ‘‘(7) awarding merit or academic scholarships

22 to eligible students who demonstrate financial need.

23 ‘‘(d) MAINTENANCE OF EFFORT REQUIREMENT.—

24 Each State receiving a grant under this section for a fiscal

25 year shall provide the Secretary an assurance that the ag-
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1 gregate amount expended per student or the aggregate ex2 penditures by the State, from funds derived from non-Fed3 eral sources, for the authorized activities described in sub4 section (c) for the preceding fiscal year were not less than

5 the amount expended per student or the aggregate expend6 itures by the State for the activities for the second preced7 ing fiscal year.

8 ‘‘(e) FEDERAL SHARE.—The Federal share of the

9 cost of the authorized activities described in subsection (c)

for any fiscal year shall be 331 10 ⁄3 percent.’’; and

11 (3) by adding at the end the following:

12 ‘‘SEC. 415G. FEDERAL-STATE RELATIONSHIPS; STATE

13 AGREEMENTS.

14 ‘‘(a) IN GENERAL.—Any State that desires to receive

15 assistance under this subpart shall enter into an agree16 ment with the Secretary pursuant to subsection (b) setting

17 forth the terms and conditions for the relationship be18 tween the Federal Government and that State for the pur19 poses set forth under this subpart.

20 ‘‘(b) CONTENTS.—

21 ‘‘(1) IN GENERAL.—Such agreement shall con22 sist of assurances by the State, including a descrip23 tion of the means to be used by the State to fulfill

24 the assurances, that—
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1 ‘‘(A) the State will provide for such meth2 ods of administration as are necessary for the

3 proper and efficient administration of the pro4 gram under this subpart in keeping with the

5 purposes set forth under this subpart;

6 ‘‘(B) the State will provide for such fiscal

7 control and fund accounting procedures as may

8 be necessary to ensure proper disbursement of,

9 and accounting for, Federal funds paid to the

10 State under this subpart;

11 ‘‘(C) the State will follow policies and prac12 tices of administration that will ensure that

13 non-Federal funds will not be supplanted by

14 Federal funds, and that equitable and appro15 priate criteria will be used in evaluation of ap16 plications or proposals for grants under this

17 subpart; and

18 ‘‘(D) the State has a comprehensive plan19 ning or policy formulation process that—

20 ‘‘(i) considers the relation between

21 State administration of the program under

22 this subpart, and administration of similar

23 State programs or processes;

24 ‘‘(ii) encourages State policies de25 signed to consider effects on declining en-
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1 rollments on all sectors of postsecondary

2 education in the State;

3 ‘‘(iii) considers the postsecondary edu4 cation needs of unserved and underserved

5 individuals within the State, including indi6 viduals beyond the traditional college age;

7 ‘‘(iv) considers the resources of insti8 tutions, organizations, or agencies (both

9 public and private) within the State capa10 ble of providing postsecondary educational

11 opportunities in the State; and

12 ‘‘(v) provides for direct, equitable, and

13 active participation in the comprehensive

14 planning or policy formulation process or

15 processes of representatives of institutions

16 of higher education (including community

17 colleges, proprietary institutions, and inde18 pendent colleges and universities), stu19 dents, other providers of postsecondary

20 education services, and the general public

21 in the State.

22 ‘‘(2) SPECIAL RULE.—Participation under para23 graph (1)(D)(v) shall, consistent with State law, be

24 achieved through membership on State planning

25 commissions, State advisory councils, or other State
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1 entities established by the State to conduct federally

2 assisted comprehensive planning or policy formula3 tion.

4 ‘‘(c) SPECIAL RULE.—The information and assur5 ances provided by a State in accordance with subpara6 graphs (A), (B), and (C) of subsection (b)(1), and regula7 tions issued by the Secretary related directly to such as8 surances, shall be satisfactory for the purposes of, and

9 shall be considered in lieu of, any comparable require10 ments for information and assurances in any program

11 under this subpart.

12 ‘‘(d) AGREEMENT DURATION; COMPLIANCE.—

13 ‘‘(1) AGREEMENT DURATION.—An agreement

14 of a State shall remain in effect subject to modifica15 tion as changes in information or circumstances re16 quire.

17 ‘‘(2) COMPLIANCE.—Whenever the Secretary,

18 after reasonable notice and opportunity for a hear19 ing has been given to the State, finds that there is

20 a failure to comply substantially with the assurances

21 required in subparagraph (A), (B), or (C) of sub22 section (b)(1), the Secretary shall notify the State

23 that the State is no longer eligible to participate in

24 the program under this subpart until the Secretary
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1 is satisfied that there is no longer any such failure

2 to comply.

3 ‘‘(e) SPECIAL RULES.—

4 ‘‘(1) ENTITIES ENTERING INTO AGREE5 MENTS.—For the purpose of this section, the selec6 tion of the State entity or entities authorized to act

7 on behalf of the State for the purpose of entering

8 into an agreement with the Secretary shall be in ac9 cordance with the State law of each individual State

10 with respect to the authority to make legal agree11 ments between the State and the Federal Govern12 ment.

13 ‘‘(2) CONSTRUCTION.—

14 ‘‘(A) STATE STRUCTURE.—Nothing in this

15 section shall be construed to authorize the Sec16 retary to require any State to adopt, as a condi17 tion for entering into an agreement, or for par18 ticipation in a program under this subpart, a

19 specific State organizational structure for

20 achieving participation in the planning, or ad21 ministration of programs, or for statewide plan22 ning, coordination, governing, regulating, or ad23 ministering of postsecondary education agen24 cies, institutions, or programs in the State.
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1 ‘‘(B) STATE AUTHORITY.—Nothing in this

2 section shall be construed as a limitation on the

3 authority of any State to adopt a State organi4 zational structure for postsecondary education

5 agencies, institutions, or programs that is ap6 propriate to the needs, traditions, and cir7 cumstances of that State, or as a limitation on

8 the authority of a State entering into an agree9 ment pursuant to this section to modify the

10 State organizational structure at any time sub11 sequent to entering into such an agreement.’’.

12 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

13 (1) PURPOSE.—Subsection (a) of section 415A

14 (20 U.S.C. 1070c(a)) is amended to read as follows:

15 ‘‘(a) PURPOSE OF SUBPART.—It is the purpose of

16 this subpart to make incentive grants available to States

17 to assist States in—

18 ‘‘(1) providing grants to—

19 ‘‘(A) eligible students attending institu20 tions of higher education or participating in

21 programs of study abroad that are approved for

22 credit by institutions of higher education at

23 which such students are enrolled; and

24 ‘‘(B) eligible students for campus-based

25 community service work-study; and
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1 ‘‘(2) carrying out the activities described in sec2 tion 415F.’’.

3 (2) ALLOTMENT.—Section 415B(a)(1) (20

4 U.S.C. 1070c–1(a)(1)) is amended by inserting ‘‘and

5 not reserved under section 415A(b)(2)’’ after

6 ‘‘415A(b)(1)’’.

7 SEC. 417. HEP AND CAMP.

8 Section 418A(g) (20 U.S.C. 1070d–2(g)) is amend9 ed—

10 (1) in paragraph (1), by striking ‘‘$15,000,000

11 for fiscal year 1993’’ and inserting ‘‘$25,000,000 for

12 fiscal year 1999’’; and

13 (2) in paragraph (2), by striking ‘‘$5,000,000

14 for fiscal year 1993’’ and inserting ‘‘$10,000,000 for

15 fiscal year 1999’’.

16 SEC. 418. ROBERT C. BYRD HONORS SCHOLARSHIP

17 PROGRAM.

18 Section 419K (20 U.S.C. 1070d–41) is amended by

19 striking ‘‘$10,000,000 for fiscal year 1993’’ and inserting

20 ‘‘$45,000,000 for fiscal year 1999’’.

21 SEC. 419. CHILD CARE ACCESS MEANS PARENTS IN

22 SCHOOL.

23 Part A of title IV (20 U.S.C. 1070 et seq.) is amend24 ed by inserting after subpart 6 (20 U.S.C. 1070d–31 et

25 seq.) the following:
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1 ‘‘Subpart 7—Child Care Access Means Parents in

2 School

3 ‘‘SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN

4 SCHOOL.

5 ‘‘(a) PURPOSE.—The purpose of this section is to

6 support the participation of low-income parents in post7 secondary education through the provision of campus8 based child care services.

9 ‘‘(b) PROGRAM AUTHORIZED.—

10 ‘‘(1) AUTHORITY.—The Secretary may award

11 grants to institutions of higher education to assist

12 the institutions in providing campus-based child care

13 services to low-income students.

14 ‘‘(2) AMOUNT OF GRANTS.—

15 ‘‘(A) IN GENERAL.—The amount of a

16 grant awarded to an institution of higher edu17 cation under this section for a fiscal year shall

18 not exceed 1 percent of the total amount of all

19 Federal Pell Grant funds awarded to students

20 enrolled at the institution of higher education

21 for the preceding fiscal year.

22 ‘‘(B) MINIMUM.—A grant under this sec23 tion shall be awarded in an amount that is not

24 less than $10,000.

25 ‘‘(3) DURATION; RENEWAL; AND PAYMENTS.—
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1 ‘‘(A) DURATION.—The Secretary shall

2 award a grant under this section for a period

3 of 3 years.

4 ‘‘(B) RENEWAL.—A grant under this sec5 tion may be renewed for a period of 3 years.

6 ‘‘(C) PAYMENTS.—Subject to subsection

7 (d)(2), the Secretary shall make annual grant

8 payments under this section.

9 ‘‘(4) ELIGIBLE INSTITUTIONS.—An institution

10 of higher education shall be eligible to receive a

11 grant under this section for a fiscal year if the total

12 amount of all Federal Pell Grant funds awarded to

13 students enrolled at the institution of higher edu14 cation for the preceding fiscal year equals or exceeds

15 $350,000.

16 ‘‘(5) USE OF FUNDS.—Grant funds under this

17 section shall be used by an institution of higher edu18 cation to support or establish a campus-based child

19 care program serving the needs of low-income stu20 dents enrolled at the institution of higher education.

21 ‘‘(6) CONSTRUCTION.—Nothing in this section

22 shall be construed to prohibit an institution of high23 er education that receives grant funds under this

24 section from serving the child care needs of the com25 munity served by the institution.
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1 ‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—

2 For the purpose of this section, the term ‘‘low-in3 come student’’ means a student who is eligible to re4 ceive a Federal Pell Grant for the fiscal year for

5 which the determination is made.

6 ‘‘(c) APPLICATIONS.—An institution of higher edu7 cation desiring a grant under this section shall submit an

8 application to the Secretary at such time, in such manner,

9 and accompanied by such information as the Secretary

10 may require. Each application shall—

11 ‘‘(1) demonstrate that the institution is an eligi12 ble institution described in subsection (b)(4);

13 ‘‘(2) specify the amount of funds requested;

14 ‘‘(3) demonstrate the need of low-income stu15 dents at the institution for campus-based child care

16 services by including in the application student de17 mographics and other relevant data;

18 ‘‘(4) contain a description of the activities to be

19 assisted, including whether the grant funds will sup20 port an existing child care program or a new child

21 care program;

22 ‘‘(5) identify the resources the institution will

23 draw upon to support the child care program and

24 the participation of low-income students in the pro25 gram, such as accessing social services funding,
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1 using student activity fees to help pay the costs of

2 child care, using resources obtained by meeting the

3 needs of parents who are not low-income students,

4 and accessing foundation, corporate or other institu5 tional support, and demonstrate that the use of the

6 resources will not result in increases in student tui7 tion;

8 ‘‘(6) contain an assurance that the institution

9 will meet the child care needs of low-income students

10 through the provision of services, or through a con11 tract for the provision of services;

12 ‘‘(7) in the case of an institution seeking assist13 ance for a new child care program—

14 ‘‘(A) provide a timeline, covering the pe15 riod from receipt of the grant through the pro16 vision of the child care services, delineating the

17 specific steps the institution will take to achieve

18 the goal of providing low-income students with

19 child care services;

20 ‘‘(B) specify any measures the institution

21 will take to assist low-income students with

22 child care during the period before the institu23 tion provides child care services; and

24 ‘‘(C) include a plan for identifying re25 sources needed for the child care services, in-
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1 cluding space in which to provide child care

2 services, and technical assistance if necessary;

3 ‘‘(8) contain an assurance that any child care

4 facility assisted under this section will meet the ap5 plicable State or local government licensing, certifi6 cation, approval, or registration requirements; and

7 ‘‘(9) contain a plan for any child care facility

8 assisted under this section to become accredited

9 within 3 years of the date the institution first re10 ceives assistance under this section.

11 ‘‘(d) REPORTING REQUIREMENTS; CONTINUING ELI12 GIBILITY.—

13 ‘‘(1) REPORTING REQUIREMENTS.—

14 ‘‘(A) REPORTS.—Each institution of high15 er education receiving a grant under this sec16 tion shall report to the Secretary 18 months,

17 and 36 months, after receiving the first grant

18 payment under this section.

19 ‘‘(B) CONTENTS.—The report shall in20 clude—

21 ‘‘(i) data on the population served

22 under this section;

23 ‘‘(ii) information on campus and com24 munity resources and funding used to help
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1 low-income students access child care serv2 ices;

3 ‘‘(iii) information on progress made

4 toward accreditation of any child care fa5 cility; and

6 ‘‘(iv) information on the impact of the

7 grant on the quality, availability, and af8 fordability of campus-based child care serv9 ices.

10 ‘‘(2) CONTINUING ELIGIBILITY.—The Secretary

11 shall make the third annual grant payment under

12 this section to an institution of higher education

13 only if the Secretary determines, on the basis of the

14 18-month report submitted under paragraph (1),

15 that the institution is making a good faith effort to

16 ensure that low-income students at the institution

17 have access to affordable, quality child care services.

18 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There

19 are authorized to be appropriated to carry out this section

20 $60,000,000 for fiscal year 1999 and such sums as may

21 be necessary for each of the 4 succeeding fiscal years.’’.

22 PART B—FEDERAL FAMILY EDUCATION LOAN

23 PROGRAM

24 SEC. 421. ADVANCES FOR RESERVE FUNDS.

25 Section 422 (20 U.S.C. 1072) is amended—
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1 (1) in subsection (c)—

2 (A) in paragraph (6)(B)(i), by striking

3 ‘‘written’’ and inserting ‘‘written, electronic’’;

4 and

5 (B) in paragraph (7)(A), by striking ‘‘dur6 ing the transition from the Federal Family

7 Education Loan Program under this part to the

8 Federal Direct Student Loan Program under

9 part D of this title’’;

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

11 of subsection (g)(1), by striking ‘‘or the program au12 thorized by part D of this title’’ each place the term

13 appears; and

14 (3) by adding at the end the following:

15 ‘‘(i) ADDITIONAL RECALL OF RESERVES.—

16 ‘‘(1) IN GENERAL.—Notwithstanding any other

17 provision of law and subject to paragraph (4), the

18 Secretary shall recall $40,000,000 for each of the

19 fiscal years 1999, 2000, 2001, 2002, and 2003 from

20 reserve funds held in the Federal Student Loan Re21 serve Funds established under section 422A by

22 guaranty agencies.

23 ‘‘(2) DEPOSIT.—Funds recalled by the Sec24 retary under this subsection shall be deposited in the

25 Treasury.
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1 ‘‘(3) REQUIRED SHARE.—The Secretary shall

2 require each guaranty agency to return reserve

3 funds under paragraph (1) annually on the basis of

1 4 ⁄5 of the agency’s required share. For purposes of

5 this paragraph, a guaranty agency’s required share

6 shall be determined as follows:

7 ‘‘(A) EQUAL PERCENTAGE.—The Secretary

8 shall require each guaranty agency to return an

9 equal percentage reduction in the amount of re10 serve funds held by the agency on September

11 30, 1996.

12 ‘‘(B) CALCULATION.—The equal percent13 age reduction shall be the percentage obtained

14 by dividing—

15 ‘‘(i) $200,000,000, by

16 ‘‘(ii) the total amount of all guaranty

17 agencies’ reserve funds held on September

18 30, 1996.

19 ‘‘(4) OFFSET OF REQUIRED SHARES.—If any

20 guaranty agency returns to the Secretary any re21 serve funds in excess of the amount required under

22 this subsection or subsection (h), the total amount

23 required to be returned under paragraph (1) shall be

24 reduced by the amount of such excess reserve funds

25 returned.
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1 ‘‘(5) DEFINITION OF RESERVE FUNDS.—The

2 term ‘reserve funds’ when used with respect to a

3 guaranty agency—

4 ‘‘(A) includes any reserve funds in cash or

5 liquid assets held by the guaranty agency, or

6 held by, or under the control of, any other en7 tity; and

8 ‘‘(B) does not include buildings, equip9 ment, or other nonliquid assets.’’.

10 SEC. 422. FEDERAL STUDENT LOAN RESERVE FUND.

11 Part B of title IV (20 U.S.C. 1071 et seq.) is amend12 ed by inserting after section 422 (20 U.S.C. 1072) the

13 following:

14 ‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

15 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

16 not later than 45 days after the date of enactment of this

17 section, deposit all funds, securities, and other liquid as18 sets contained in the reserve fund established pursuant to

19 section 422 into a Federal Student Loan Reserve Fund

20 (in this section referred to as the ‘Federal Fund’), in an

21 account of a type selected by the agency, with the approval

22 of the Secretary.

23 ‘‘(b) INVESTMENT OF FUNDS.—Funds transferred to

24 the Federal Fund shall be invested in obligations issued

25 or guaranteed by the United States or a State, or in other
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1 similarly low-risk securities selected by the guaranty agen2 cy, with the approval of the Secretary. Earnings from the

3 Federal Fund shall be the sole property of the Federal

4 Government.

5 ‘‘(c) ADDITIONAL DEPOSITS.—After the establish6 ment of the Federal Fund, a guaranty agency shall deposit

7 into the Federal Fund—

8 ‘‘(1) all amounts received from the Secretary as

9 payment of reinsurance on loans pursuant to section

10 428(c)(1);

11 ‘‘(2) from amounts collected on behalf of the

12 obligation of a defaulted borrower, a percentage

13 amount equal to the complement of the reinsurance

14 percentage in effect when payment under the guar15 anty agreement was made with respect to the de16 faulted loan pursuant to section 428(c)(6)(A)(i); and

17 ‘‘(3) the amount of the insurance premium col18 lected from borrowers pursuant to section

19 428(b)(1)(H).

20 ‘‘(d) USES OF FUNDS.—Subject to subsection (f), the

21 Federal Fund may only be used by a guaranty agency—

22 ‘‘(1) to pay lender claims pursuant to sections

23 428(b)(1)(G), 428(j), 437, and 439(q); and
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1 ‘‘(2) to pay into the Agency Operating Fund es2 tablished pursuant to section 422B a default preven3 tion fee in accordance with section 428(l).

4 ‘‘(e) OWNERSHIP OF FEDERAL FUND.—The Federal

5 Fund administered by the guaranty agency, regardless of

6 who holds or controls the reserve funds or assets, and any

7 nonliquid assets that were purchased with Federal reserve

8 funds, shall be considered to be the property of the United

9 States to be used in the operation of the program author10 ized by this part, as provided in subsection (d). The Sec11 retary may direct a guaranty agency, or such agency’s of12 ficers or directors, to cease any activity involving expendi13 ture, use, or transfer of the Federal Fund administered

14 by the guaranty agency that the Secretary determines is

15 a misapplication, misuse, or improper expenditure of such

16 funds or assets.

17 ‘‘(f) TRANSITION.—

18 ‘‘(1) IN GENERAL.—In order to establish the

19 Agency Operating Fund established by section

20 422B, each agency may transfer not more than 180

21 days cash expenses for normal operating expenses,

22 as a working capital reserve as defined in Office of

23 Management and Budget Circular A–87 (Cost Ac24 counting Standards) for use in the performance of

25 the agency’s duties under this part. Such transfers
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1 may occur during the first 3 years following the es2 tablishment of the Agency Operating Fund, except

3 that no agency may transfer in excess of 40 percent

4 of the Federal Fund balance to the agency’s Agency

5 Operating Fund during any fiscal year. In determin6 ing the amount necessary for transfer, the agency

7 shall assure that sufficient funds remain in the Fed8 eral Fund to pay lender claims within the required

9 time periods and to meet the reserve funds recall re10 quirements of subsection (b).

11 ‘‘(2) REPAYMENT PROVISIONS.—Each guaranty

12 agency shall begin repayment of sums transferred

13 pursuant to this subsection not later than 3 years

14 after the establishment of the Agency Operating

15 Fund, and shall repay all sums transferred not later

16 than 5 years from the date of the establishment of

17 the Agency Operating Fund. The guaranty agency

18 shall provide to the Secretary a schedule for repay19 ment of the sums transferred and an annual finan20 cial analysis demonstrating the agency’s ability to

21 comply with the schedule and repay all outstanding

22 sums transferred.

23 ‘‘(3) PROHIBITION.—If a guaranty agency

24 transfers funds from the Federal Fund in accord25 ance with this section, and fails to make scheduled
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1 repayments to the Federal Fund, the agency may

2 not receive any other funds under this part until the

3 Secretary determines that the agency has made such

4 repayments.

5 ‘‘(4) WAIVER.—The Secretary may waive the

6 requirements of paragraph (3) for a guaranty agen7 cy described in such paragraph if the Secretary de8 termines there are extenuating circumstances beyond

9 the control of the agency that justify such a waiver.

10 ‘‘(5) INVESTMENT OF FEDERAL FUNDS.—

11 Funds transferred from the Federal Fund to the

12 Agency Operating Fund for operating expenses shall

13 be invested in obligations issued or guaranteed by

14 the United States or a State, or in other similarly

15 low-risk securities selected by the guaranty agency,

16 with the approval of the Secretary.

17 ‘‘(6) SPECIAL RULE.—In applying the minimum

18 reserve level required by section 428(c)(9)(A), the

19 Secretary shall include all amounts owed to the Fed20 eral Fund by the guaranty agency in the calcula21 tion.’’.

22 SEC. 423. AGENCY OPERATING FUND.

23 Part B of title IV (20 U.S.C. 1071 et seq.) is amend24 ed further by inserting after section 422A (as added by

25 section 422) the following:
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1 ‘‘SEC. 422B. AGENCY OPERATING FUND.

2 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

3 not later than 45 days after the date of enactment of this

4 section, establish a fund designated as the Agency Operat5 ing Fund (in this section referred to as the ‘Operating

6 Fund’).

7 ‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into

8 the Operating Fund, with the exception of funds trans9 ferred from the Federal Student Loan Reserve Fund pur10 suant to section 422A(f), shall be invested at the discre11 tion of the guaranty agency.

12 ‘‘(c) ADDITIONAL DEPOSITS.—After the establish13 ment of the Operating Fund, the guaranty agency shall

14 deposit into the Operating Fund—

15 ‘‘(1) the loan processing and issuance fee paid

16 by the Secretary pursuant to section 428(f);

17 ‘‘(2) the portfolio maintenance fee paid by the

18 Secretary in accordance with section 458;

19 ‘‘(3) the default prevention fee paid in accord20 ance with section 428(l); and

21 ‘‘(4) amounts remaining pursuant to section

22 428(c)(6)(A)(ii) from collection on defaulted loans

23 held by the agency, after payment of the Secretary’s

24 equitable share, excluding amounts deposited in the

25 Federal Student Loan Reserve Fund pursuant to

26 section 422A(c)(2).
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1 ‘‘(d) USES OF FUNDS.—

2 ‘‘(1) IN GENERAL.—Funds in the Operating

3 Fund shall be used for application processing, loan

4 disbursement, enrollment and repayment status

5 management, default prevention activities (including

6 those described in section 422(h)(8), default collec7 tion activities, school and lender training, compliance

8 monitoring, and other student financial aid related

9 activities as determined by the Secretary.

10 ‘‘(2) SPECIAL RULE.—The guaranty agency

11 may, in the agency’s discretion, transfer funds from

12 the Operating Fund to the Federal Student Loan

13 Reserve Fund for use pursuant to section 422A.

14 Such transfer shall be irrevocable, and any funds so

15 transferred shall become the sole property of the

16 United States.

17 ‘‘(3) DEFINITIONS.—For purposes of this sub18 section:

19 ‘‘(A) DEFAULT COLLECTION ACTIVITIES.—

20 The term ‘default collection activities’ means

21 activities of a guaranty agency that are directly

22 related to the collection of the loan on which a

23 default claim has been paid to the participating

24 lender, including the attributable compensation

25 of collection personnel (and in the case of per-
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1 sonnel who perform several functions for such

2 an agency only the portion of the compensation

3 attributable to the collection activity), attor4 ney’s fees, fees paid to collection agencies, post5 age, equipment, supplies, telephone, and similar

6 charges.

7 ‘‘(B) DEFAULT PREVENTION ACTIVI8 TIES.—The term ‘default prevention activities’

9 means activities of a guaranty agency, including

10 those described in section 422(h)(8), that are

11 directly related to providing collection assist12 ance to the lender on a delinquent loan, prior

13 to the loan’s being in a default status, including

14 the attributable compensation of appropriate

15 personnel (and in the case of personnel who

16 perform several functions for such an agency

17 only the portion of compensation attributable to

18 the default prevention activity), fees paid to lo19 cate a missing borrower, postage, equipment,

20 supplies, telephone, and similar charges.

21 ‘‘(C) ENROLLMENT AND REPAYMENT STA22 TUS MANAGEMENT.—The term ‘enrollment and

23 repayment status management’ means activities

24 of a guaranty agency that are directly related

25 to ascertaining the student’s enrollment status,
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1 including prompt notification to the lender of

2 such status, an audit of the note or written

3 agreement to determine if the provisions of that

4 note or agreement are consistent with the

5 records of the guaranty agency as to the prin6 cipal amount of the loan guaranteed, and an ex7 amination of the note or agreement to assure

8 that the repayment provisions are consistent

9 with the provisions of this title.

10 ‘‘(e) OWNERSHIP OF OPERATING FUND.—The Oper11 ating Fund, with the exception of funds transferred from

12 the Federal Student Loan Reserve Fund in accordance

13 with section 422A(f), shall be considered to be the prop14 erty of the guaranty agency. The Secretary may not regu15 late the uses or expenditure of moneys in the Operating

16 Fund, but the Secretary may require such necessary re17 ports and audits as provided in section 428(b)(2). How18 ever, during any period in which funds are owed to the

19 Federal Student Loan Reserve Fund as a result of trans20 fer under 422A(f), moneys in the Operating Fund may

21 only be used for expenses related to the student loan pro22 grams authorized under this part.

23 ‘‘(f) AUTHORITY OF SECRETARY TO DISPOSE OF

24 NONLIQUID ASSETS.—The Secretary may allow a guar25 anty agency to purchase nonliquid assets of the agency
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1 originally acquired with student loan reserve funds, except

2 that an agency may not purchase any nonliquid assets

3 during any period in which funds are owed to the Federal

4 Student Loan Reserve Fund as a result of a transfer

5 under section 422A(f). The purchase amount shall be

6 available for expenditure under section 458.’’.

7 SEC. 424. APPLICABLE INTEREST RATES.

8 (a) APPLICABLE INTEREST RATES.—

9 (1) AMENDMENT.—Section 427A (20 U.S.C.

10 1077a et seq.) is amended to read as follows:

11 ‘‘SEC. 427A. APPLICABLE INTEREST RATES.

12 ‘‘(a) INTEREST RATES FOR NEW LOANS ON OR

13 AFTER JULY 1, 1998.—

14 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

15 with respect to any loan made, insured, or guaran16 teed under this part (other than a loan made pursu17 ant to section 428B or 428C) for which the first dis18 bursement is made on or after July 1, 1998, the ap19 plicable rate of interest shall, during any 12-month

20 period beginning on July 1 and ending on June 30,

21 be determined on the preceding June 1 and be equal

22 to—

23 ‘‘(A) the bond equivalent rate of 91-day

24 Treasury bills auctioned at the final auction

25 held prior to such June 1; plus
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1 ‘‘(B) 2.3 percent,

2 except that such rate shall not exceed 8.25 percent.

3 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

4 With respect to any loan under this part (other than

5 a loan made pursuant to section 428B or 428C) for

6 which the first disbursement is made on or after

7 July 1, 1998, the applicable rate of interest for in8 terest which accrues—

9 ‘‘(A) prior to the beginning of the repay10 ment period of the loan; or

11 ‘‘(B) during the period in which principal

12 need not be paid (whether or not such principal

13 is in fact paid) by reason of a provision de14 scribed in section 428(b)(1)(M) or

15 427(a)(2)(C),

16 shall be determined under paragraph (1) by sub17 stituting ‘1.7 percent’ for ‘2.3 percent’.

18 ‘‘(3) PLUS LOANS.—With respect to any loan

19 under section 428B for which the first disbursement

20 is made on or after July 1, 1998, the applicable rate

21 of interest shall be determined under paragraph

22 (1)—

23 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

24 percent’; and
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1 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

2 percent’.

3 ‘‘(b) LESSER RATES PERMITTED.—Nothing in this

4 section or section 428C shall be construed to prohibit a

5 lender from charging a borrower interest at a rate less

6 than the rate which is applicable under this part.

7 ‘‘(c) CONSULTATION.—The Secretary shall determine

8 the applicable rate of interest under this section after con9 sultation with the Secretary of the Treasury and shall

10 publish such rate in the Federal Register as soon as prac11 ticable after the date of determination.’’.

12 (2) CONFORMING AMENDMENT.—Section

13 428B(d)(4) (20 U.S.C. 1078–2(d)(4)) is amended by

14 striking ‘‘section 427A(c)’’ and inserting ‘‘section

15 427A(a)(3)’’.

16 (b) SPECIAL ALLOWANCES.—

17 (1) AMENDMENT.—Section 438(b)(2)(F) (20

18 U.S.C. 1087–1(b)(2)(F)) is amended to read as fol19 lows:

20 ‘‘(F) LOANS DISBURSED AFTER JULY 1, 1998.—

21 ‘‘(i) IN GENERAL.—Subject to paragraph

22 (4) and clauses (ii), (iii), and (iv) of this sub23 paragraph, the special allowance paid pursuant

24 to this subsection on loans for which the first
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1 disbursement is made on or after July 1, 1998,

2 shall be computed—

3 ‘‘(I) by determining the average of the

4 bond equivalent rates of 91-day Treasury

5 bills auctioned for such 3-month period;

6 ‘‘(II) by subtracting the applicable in7 terest rates on such loans from such aver8 age bond equivalent rate;

9 ‘‘(III) by adding 2.8 percent to the re10 sultant percent; and

11 ‘‘(IV) by dividing the resultant per12 cent by 4.

13 ‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In

14 the case of any loan for which the first dis15 bursement is made on or after July 1, 1998,

16 and for which the applicable rate of interest is

17 described in section 427A(a)(2), clause (i)(III)

18 of this subparagraph shall be applied by sub19 stituting ‘2.2 percent’ for ‘2.8 percent’.

20 ‘‘(iii) PLUS LOANS.—In the case of any

21 loan for which the first disbursement is made

22 on or after July 1, 1998, and for which the ap23 plicable rate of interest is described in section

24 427A(a)(3), clause (i)(III) of this subparagraph

25 shall be applied by substituting ‘3.1 percent’ for
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1 ‘2.8 percent’, subject to clause (iv) of this sub2 paragraph.

3 ‘‘(iv) LIMITATION ON SPECIAL ALLOW4 ANCES FOR PLUS LOANS.—In the case of loans

5 disbursed on or after July 1, 1998, for which

6 the interest rate is determined under section

7 427A(a)(3), a special allowance shall not be

8 paid for a loan made under section 428B unless

9 the rate determined for any 12-month period

10 under section 427A(a)(3) exceeds 9 percent.’’.

11 (2) CONFORMING AMENDMENT.—Section

12 438(b)(2)(C)(ii) is amended by striking ‘‘In the

13 case’’ and inserting ‘‘Subject to subparagraph (F),

14 in the case’’.

15 (c) EFFECTIVE DATE.—The amendments made by

16 this section shall apply with respect to any loan made, in17 sured, or guaranteed under part B of title IV of the High18 er Education Act of 1965 for which the first disbursement

19 is made on or after July 1, 1998.

20 SEC. 425. FEDERAL PAYMENTS TO REDUCE STUDENT IN21 TEREST COSTS.

22 (a) FEDERAL INTEREST SUBSIDIES.—Section 428(a)

23 (20 U.S.C. 1078(a)) is amended—

24 (1) in paragraph (2)—

25 (A) in subparagraph (A)—
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1 (i) in clause (i), by striking subclauses

2 (I), (II), and (III) and inserting the follow3 ing:

4 ‘‘(I) sets forth the loan amount for

5 which the student shows financial need;

6 and

7 ‘‘(II) sets forth a schedule for dis8 bursement of the proceeds of the loan in

9 installments, consistent with the require10 ments of section 428G; and’’; and

11 (ii) by amending clause (ii) to read as

12 follows:

13 ‘‘(ii) meets the requirements of subpara14 graph (B); and’’;

15 (B) by amending subparagraph (B) to read

16 as follows:

17 ‘‘(B) For the purpose of clause (ii) of subpara18 graph (A), a student shall qualify for a portion of

19 an interest payment under paragraph (1) (and a

20 loan amount pursuant to section 428H) if the eligi21 ble institution has determined and documented the

22 student’s amount of need for a loan based on the

23 student’s estimated cost of attendance, estimated fi24 nancial assistance, and, for the purpose of an inter25 est payment pursuant to this section, the expected
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1 family contribution (as determined under part F),

2 subject to the provisions of subparagraph (D).’’; and

3 (C) by amending subparagraph (C) to read

4 as follows:

5 ‘‘(C) For the purpose of subparagraph (B) and

6 this paragraph—

7 ‘‘(i) a student’s cost of attendance shall be

8 determined under section 472;

9 ‘‘(ii) a student’s estimated financial assist10 ance means, for the period for which the loan

11 is sought, the amount of assistance such stu12 dent will receive under subpart 1 of part A (as

13 determined in accordance with section 484(b)),

14 subpart 3 of part A, parts C and E, and any

15 veterans’ education benefits paid because of en16 rollment in a postsecondary education institu17 tion, including veterans’ education benefits (as

18 defined in section 480(c)), plus other scholar19 ship, grant, or loan assistance; and

20 ‘‘(iii) the determination of need and of the

21 amount of a loan by an eligible institution

22 under subparagraph (B) with respect to a stu23 dent shall, with the exception of loans made

24 under section 428H, be calculated in accord25 ance with part F.’’; and
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1 (2) in paragraph (3)(A)(v)—

2 (A) in subclause (I), by inserting ‘‘by the

3 institution’’ after ‘‘disbursement’’; and

4 (B) in clause (II), by inserting ‘‘by the in5 stitution’’ after ‘‘disbursement’’.

6 (b) INSURANCE PROGRAM AGREEMENTS.—Section

7 428(b) (20 U.S.C. 1078(b)) is amended—

8 (1) in paragraph (1)—

9 (A) in subparagraph (A)—

10 (i) in the matter preceding clause (i),

11 by inserting ‘‘, as defined in section

12 481(d)(2),’’ after ‘‘academic year’’;

13 (ii) in clause (iv), by striking ‘‘and’’

14 after the semicolon;

15 (iii) in clause (v), by inserting ‘‘and’’

16 after the semicolon; and

17 (iv) by inserting before the matter fol18 lowing clause (v) the following:

19 ‘‘(vi) in the case of a student enrolled

20 in coursework specified in sections

21 484(b)(3)(B) and 484(b)(4)(B)—

22 ‘‘(I) $2,625 for coursework nec23 essary for enrollment in an under24 graduate degree or certificate pro25 gram, and $5,500 for coursework nec-
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1 essary for enrollment in a graduate or

2 professional degree or certification

3 program; and

4 ‘‘(II) $5,500 for coursework nec5 essary for a professional credential or

6 certification from a State required for

7 employment as a teacher in an ele8 mentary or secondary school;’’;

9 (B) by amending subparagraph (E) to read

10 as follows:

11 ‘‘(E) subject to subparagraphs (D) and

12 (L), and except as provided by subparagraph

13 (M), provides that—

14 ‘‘(i) not more than 6 months prior to

15 the date on which the borrower’s first pay16 ment is due, the lender shall offer the bor17 rower of a loan made, insured, or guaran18 teed under this section or section 428H,

19 the option of repaying the loan in accord20 ance with a graduated, income-sensitive, or

21 extended repayment schedule (as described

22 in paragraph (9)) established by the lender

23 in accordance with regulations provided by

24 the Secretary; and
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1 ‘‘(ii) repayment of loans shall be in in2 stallments in accordance with the repay3 ment plan selected under paragraph (9)

4 and commencing at the beginning of the

5 repayment period determined under para6 graph (7)’’;

7 (C) in subparagraph (L)(i), by inserting

8 ‘‘except as otherwise provided by a repayment

9 plan selected by the borrower under clause (ii)

10 or (iii) of paragraph (9)(A),’’ before ‘‘during

11 any’’; and

12 (D) in subparagraph (U)(iii)(I), by insert13 ing ‘‘that originates or holds more than

14 $5,000,000 in loans made under this title for

15 any fiscal year,’’ before ‘‘at least once a year’’;

16 and

17 (2) by adding at the end the following:

18 ‘‘(9) REPAYMENT PLANS.—

19 ‘‘(A) DESIGN AND SELECTION.—In accord20 ance with regulations promulgated by the Sec21 retary, the lender shall offer a borrower of a

22 loan made under this part the plans described

23 in this subparagraph for repayment of such

24 loan, including principal and interest thereon.

25 Except as provided in paragraph (1)(L)(i), no
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1 plan may require a borrower to repay a loan in

2 less than 5 years. The borrower may choose

3 from—

4 ‘‘(i) a standard repayment plan, with

5 a fixed annual repayment amount paid

6 over a fixed period of time, not to exceed

7 10 years;

8 ‘‘(ii) a graduated repayment plan paid

9 over a fixed period of time, not to exceed

10 10 years;

11 ‘‘(iii) an income-sensitive repayment

12 plan, with income-sensitive repayment

13 amounts paid over a fixed period of time,

14 not to exceed 10 years, except that the

15 borrower’s scheduled payments shall not be

16 less than the amount of interest due; and

17 ‘‘(iv) for first-time borrowers on or

18 after the date of enactment of the Higher

19 Education Amendments of 1998 with out20 standing loans under this part totaling

21 more than $30,000, an extended repay22 ment plan, with a fixed annual or grad23 uated repayment amount paid over an ex24 tended period of time, not to exceed 25

25 years, except that the borrower shall repay
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1 annually a minimum amount determined in

2 accordance with paragraph (2)(L).

3 ‘‘(B) LENDER SELECTION OF OPTION IF

4 BORROWER DOES NOT SELECT.—If a borrower

5 of a loan made under this part does not select

6 a repayment plan described in subparagraph

7 (A), the lender shall provide the borrower with

8 a repayment plan described in subparagraph

9 (A)(i).

10 ‘‘(C) CHANGES IN SELECTION.—The bor11 rower of a loan made under this part may

12 change the borrower’s selection of a repayment

13 plan under subparagraph (B), as the case may

14 be, under such conditions as may be prescribed

15 by the Secretary in regulation.

16 ‘‘(D) ACCELERATION PERMITTED.—Under

17 any of the plans described in this paragraph,

18 the borrower shall be entitled to accelerate,

19 without penalty, repayment on the borrower’s

20 loans under this part.’’.

21 (c) GUARANTY AGREEMENTS FOR REIMBURSING

22 LOSSES.—Section 428(c) (20 U.S.C. 1078(c)) is amend23 ed—

24 (1) in paragraph (1)—
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1 (A) in the fourth sentence of subparagraph

2 (A), by striking ‘‘as reimbursement under this

3 subsection shall be equal to 98 percent’’ and in4 serting ‘‘as reimbursement for loans for which

5 the first disbursement is made on or after the

6 date of enactment of the Higher Education

7 Amendments of 1998 shall be equal to 95 per8 cent’’;

9 (B) in subparagraph (B)—

10 (i) in clause (i), by striking ‘‘88 per11 cent of the amount of such excess’’ and in12 serting ‘‘85 percent of the amount of such

13 excess for loans for which the first dis14 bursement is made on or after the date of

15 enactment of the Higher Education

16 Amendments of 1998’’; and

17 (ii) in clause (ii), by striking ‘‘78 per18 cent of the amount of such excess’’ and in19 serting ‘‘75 percent of the amount of such

20 excess for loans for which the first dis21 bursement is made on or after the date of

22 enactment of the Higher Education

23 Amendments of 1998’’;

24 (C) in subparagraph (E)—
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1 (i) in clause (i), by striking ‘‘98 per2 cent’’ and inserting ‘‘95 percent’’;

3 (ii) in clause (ii), by striking ‘‘88 per4 cent’’ and inserting ‘‘85 percent’’; and

5 (iii) in clause (iii), by striking ‘‘78

6 percent’’ and inserting ‘‘75 percent’’; and

7 (D) in subparagraph (F)—

8 (i) in clause (i), by striking ‘‘98 per9 cent’’ and inserting ‘‘95 percent’’; and

10 (ii) in clause (ii), by striking ‘‘88 per11 cent’’ and inserting ‘‘85 percent’’;

12 (2) in paragraph (3)—

13 (A) in subparagraph (A)(i), by inserting

14 ‘‘or electronic’’ after ‘‘written’’;

15 (B) in subparagraph (B), by striking

16 ‘‘and’’ after the semicolon;

17 (C) in subparagraph (C), by striking the

18 period and inserting ‘‘; and’’; and

19 (D) by inserting before the matter follow20 ing subparagraph (C) the following:

21 ‘‘(D) shall contain provisions that specify

22 that forbearance for a period not to exceed 60

23 days may be granted if the lender determines

24 that such a suspension of collection activity is

25 warranted following a borrower’s request for
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1 forbearance in order to collect or process appro2 priate supporting documentation related to the

3 request, and that during such period interest

4 shall not be capitalized.’’;

5 (3) by amending paragraph (6) to read as fol6 lows:

7 ‘‘(6) SECRETARY’S EQUITABLE SHARE.—For

8 the purpose of paragraph (2)(D), the Secretary’s eq9 uitable share of payments made by the borrower

10 shall be that portion of the payments remaining

11 after the guaranty agency with which the Secretary

12 has an agreement under this subsection has de13 ducted from such payments—

14 ‘‘(A) a percentage amount equal to the

15 complement of the reinsurance percentage in ef16 fect when payment in effect when payment

17 under the guaranty agreement was made with

18 respect to the loan; and

19 ‘‘(B) an amount equal to 24 percent of

20 such payments for use in accordance with sec21 tion 422B.’’;

22 (4) in paragraph (8)—

23 (A) by striking ‘‘(A) If’’ and inserting

24 ‘‘If’’; and

25 (B) by striking subparagraph (B); and
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1 (5) in paragraph (9)—

2 (A) in subparagraph (A), by striking

3 ‘‘maintain a current minimum reserve level of

4 at least .5 percent’’ and inserting ‘‘maintain in

5 the agency’s Federal Student Loan Reserve

6 Fund established under section 422A a current

7 minimum reserve level of at least 0.25 percent’’;

8 (B) in subparagraph (C)—

9 (i) by striking ‘‘80 percent’’ and in10 serting ‘‘78 percent’’;

11 (ii) by striking ‘‘, as appropriate,’’;

12 and

13 (iii) by striking ‘‘30 working’’ and in14 serting ‘‘45 working’’;

15 (C) in subparagraph (E)—

16 (i) in clause (iv), by inserting ‘‘or’’

17 after the semicolon;

18 (ii) in clause (v), by striking ‘‘; or’’

19 and inserting a period; and

20 (iii) by striking clause (vi);

21 (D) in subparagraph (F), by amending

22 clause (vii) to read as follows:

23 ‘‘(vii) take any other action the Secretary

24 determines necessary to avoid disruption of the

25 student loan program, to ensure the continued
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1 availability of loans made under this part to

2 residents of each State in which the guaranty

3 agency did business, to ensure the full honoring

4 of all guarantees issued by the guaranty agency

5 prior to the Secretary’s assumption of the func6 tions of such agency, and to ensure the proper

7 servicing of loans guaranteed by the guaranty

8 agency prior to the Secretary’s assumption of

9 the functions of such agency.’’; and

10 (E) in subparagraph (K), by striking ‘‘and

11 the progress of the transition from the loan

12 programs under this part to the direct student

13 loan programs under part D of this title’’.

14 (d) PAYMENT FOR LENDER REFERRAL SERVICES.—

15 Subsection (e) of section 428 (20 U.S.C. 1078) is re16 pealed.

17 (e) PAYMENT OF CERTAIN COSTS.—Subsection (f) of

18 section 428 (20 U.S.C. 1078) is amended to read as fol19 lows:

20 ‘‘(f) PAYMENTS OF CERTAIN COSTS.—

21 ‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—

22 ‘‘(A) IN GENERAL.—The Secretary, for

23 loans originated on or after October 1, 1998,

24 and in accordance with the provisions of this

25 paragraph, shall pay to each guaranty agency,
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•S 1882 RS

1 a loan processing and issuance fee equal to 0.65

2 percent of the total principal amount of the

3 loans on which insurance was issued under this

4 part during such fiscal year by such agency.

5 ‘‘(B) PAYMENT.—The payment required

6 by subparagraph (A) shall be paid on a quar7 terly basis. The guaranty agency shall be

8 deemed to have a contractual right against the

9 United States to receive payments according to

10 the provisions of this subparagraph. Payments

11 shall be made promptly and without administra12 tive delay to any guaranty agency submitting

13 an accurate and complete application therefore

14 under this subparagraph.’’.

15 (f) LENDERS-OF-LAST-RESORT.—Paragraph (3) of

16 section 428(j) (20 U.S.C. 1078(j)) is amended—

17 (1) in the paragraph heading, by striking ‘‘DUR18 ING TRANSITION TO DIRECT LENDING’’; and

19 (2) in subparagraph (A), by striking ‘‘during

20 the transition from the Federal Family Education

21 Loan Program under this part to the Federal Direct

22 Student Loan Program under part D of this title’’;

23 (g) DEFAULT AVERSION ASSISTANCE.—Subsection

24 (l) of section 428 (20 U.S.C. 1078) is amended to read

25 as follows:
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1 ‘‘(l) DEFAULT AVERSION ASSISTANCE.—

2 ‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of

3 a proper request from the lender not earlier than the

4 60th nor later than the 90th day of delinquency, a

5 guaranty agency having an agreement with the Sec6 retary under subsection (c) shall engage in default

7 aversion activities designed to prevent the default by

8 a borrower on a loan covered by such agreement.

9 ‘‘(2) DEFAULT PREVENTION FEE REQUIRED.—

10 ‘‘(A) IN GENERAL.—A guaranty agency, in

11 accordance with the provisions of this para12 graph, may transfer from the Federal Student

13 Loan Reserve Fund to the Agency Operating

14 Fund a default prevention fee. Such fee shall be

15 paid for any loan on which a claim for default

16 has not been presented that the guaranty agen17 cy successfully brings into current repayment

18 status on or before the 210th day after the loan

19 becomes 60 days delinquent.

20 ‘‘(B) AMOUNT.—The default prevention

21 fee shall be equal to 1 percent of the total un22 paid principal and accrued interest on the loan

23 calculated at the time the request is submitted

24 by the lender. Such fee shall not be paid more

25 than once on any loan for which the guaranty
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1 agency averts the default unless the borrower

2 remained current in payments for at least 24

3 months prior to the subsequent delinquency. A

4 guaranty agency may transfer such fees earned

5 under this subsection not more frequently than

6 monthly.

7 ‘‘(C) DEFINITION OF CURRENT REPAY8 MENT STATUS.—For the purpose of this para9 graph, the term ‘current repayment status’

10 means that the borrower is not delinquent, in

11 any respect, in the payment of principal and in12 terest on the loan at the time the guaranty

13 agency qualifies for the default prevention fee.’’.

14 (h) STATE SHARE OF DEFAULT COSTS.—Subsection

15 (n) of section 428 (20 U.S.C. 1078) is repealed.

16 SEC. 426. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUAR17 ANTY AGENCIES.

18 Part B of title IV (20 U.S.C. 1071 et seq.) is amend19 ed by inserting after section 428 (20 U.S.C. 1078) the

20 following:

21 ‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH

22 GUARANTY AGENCIES.

23 ‘‘(a) VOLUNTARY AGREEMENTS.—

24 ‘‘(1) AUTHORITY.—The Secretary may enter

25 into a voluntary, flexible agreement, subject to para-
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1 graph (2), with guaranty agencies under this sec2 tion, in lieu of agreements with a guaranty agency

3 under subsections (b) and (c) of section 428. The

4 Secretary may waive or modify any requirement

5 under such subsections, except that the Secretary

6 may not waive any statutory requirement pertaining

7 to the terms and conditions attached to student

8 loans, default claim payments made to lenders, or

9 the prohibitions on inducements contained in section

10 428(b)(3).

11 ‘‘(2) ELIGIBILITY.—During fiscal years 1999,

12 2000, and 2001, the Secretary may enter into a vol13 untary, flexible agreement with not more than 6

14 guaranty agencies that had 1 or more agreements

15 with the Secretary under subsections (b) and (c) of

16 section 428 as of the day before the date of enact17 ment of the Higher Education Amendments of 1998.

18 Beginning in fiscal year 2002, any guaranty agency

19 or consortium thereof may enter into a similar

20 agreement with the Secretary.

21 ‘‘(3) REPORT REQUIRED.—Not later than Sep22 tember 30, 2001, the Secretary shall report to the

23 Committee on Labor and Human Resources of the

24 Senate and the Committee on Education and the

25 Workforce of the House of Representatives regard-
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1 ing the impact that the voluntary flexible agree2 ments have had upon program integrity, program

3 and cost efficiencies, and the availability and deliv4 ery of student financial aid. Such report shall in5 clude—

6 ‘‘(A) a description of each voluntary flexi7 ble agreement and the performance goals estab8 lished by the Secretary for each agreement;

9 ‘‘(B) a list of participating guaranty agen10 cies and the specific statutory or regulatory

11 waivers provided to each guaranty agency;

12 ‘‘(C) a description of the standards by

13 which each agency’s performance under the

14 agency’s voluntary flexible agreement was as15 sessed and the degree to which each agency

16 achieved the performance standards; and

17 ‘‘(D) an analysis of the fees paid by the

18 Secretary, and the costs and efficiencies

19 achieved under each voluntary agreement.

20 ‘‘(b) TERMS OF AGREEMENT.—An agreement be21 tween the Secretary and a guaranty agency under this sec22 tion—

23 ‘‘(1) shall be developed by the Secretary, in con24 sultation with the guaranty agency, on a case-by

25 case basis;
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1 ‘‘(2) may be secured by the parties;

2 ‘‘(3) may include provisions—

3 ‘‘(A) specifying the responsibilities of the

4 guaranty agency under the agreement, such

5 as—

6 ‘‘(i) administering the issuance of in7 surance on loans made under this part on

8 behalf of the Secretary;

9 ‘‘(ii) monitoring insurance commit10 ments made under this part;

11 ‘‘(iii) default aversion activities;

12 ‘‘(iv) review of default claims made by

13 lenders;

14 ‘‘(v) payment of default claims;

15 ‘‘(vi) collection of defaulted loans;

16 ‘‘(vii) adoption of internal systems of

17 accounting and auditing that are accept18 able to the Secretary, and reporting the re19 sult thereof to the Secretary in a timely

20 manner, and on an accurate, and auditable

21 basis;

22 ‘‘(viii) timely and accurate collection

23 and reporting of such other data as the

24 Secretary may require to carry out the

25 purposes of the programs under this title;
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1 ‘‘(ix) monitoring of institutions and

2 lenders participating in the program under

3 this part;

4 ‘‘(x) the performance of other pro5 gram functions by the guaranty agency or

6 the agency’s affiliates; and

7 ‘‘(xi) informational outreach to

8 schools and students in support of access

9 to higher education;

10 ‘‘(B) regarding the fees the Secretary shall

11 pay, in lieu of revenues that the guaranty agen12 cy may otherwise receive under this part, to the

13 guaranty agency under the agreement, and

14 other funds that the guaranty agency may re15 ceive or retain under the agreement, except that

16 in no case may the cost to the Secretary of the

17 agreement, as reasonably projected by the Sec18 retary, exceed the cost to the Secretary, as

19 similarly projected, in the absence of the agree20 ment;

21 ‘‘(C) regarding the use of net revenues, as

22 described in the agreement under this section,

23 for such other activities in support of post24 secondary education as may be agreed to by the

25 Secretary and the guaranty agency;
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1 ‘‘(D) regarding the standards by which the

2 guaranty agency’s performance of the agency’s

3 responsibilities under the agreement will be as4 sessed, and the consequences for a guaranty

5 agency’s failure to achieve a specified level of

6 performance on one or more performance

7 standards;

8 ‘‘(E) regarding the circumstances in which

9 a guaranty agency’s agreement under this sec10 tion may be ended in advance of the agency’s

11 expiration date;

12 ‘‘(F) regarding such other businesses, pre13 viously purchased or developed with reserve

14 funds, that relate to the program under this

15 part and in which the Secretary permits the

16 guaranty agency to engage; and

17 ‘‘(G) such other provisions as the Sec18 retary may determine to be necessary to protect

19 the United States from the risk of unreasonable

20 loss and to promote the purposes of this part;

21 and

22 ‘‘(4) shall provide for uniform lender participa23 tion with the guaranty agency under the terms of

24 the agreement.
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1 ‘‘(c) TERMINATION.—At the expiration or early ter2 mination of an agreement under this section, the Sec3 retary shall reinstate the guaranty agency’s prior agree4 ments under subsections (b) and (c) of section 428, sub5 ject only to such additional requirements as the Secretary

6 determines to be necessary in order to ensure the efficient

7 transfer of responsibilities between the agreement under

8 this section and the agreements under subsections (b) and

9 (c) of section 428, and including the guaranty agency’s

10 compliance with reserve requirements under sections 422

11 and 428.’’.

12 SEC. 427. FEDERAL PLUS LOANS.

13 Section 428B (20 U.S.C. 1078–2) is amended—

14 (1) by amending subsection (a) to read as fol15 lows:

16 ‘‘(a) AUTHORITY TO BORROW.—

17 ‘‘(1) AUTHORITY AND ELIGIBILITY.—Parents of

18 a dependent student shall be eligible to borrow funds

19 under this section in amounts specified in subsection

20 (b), if—

21 ‘‘(A) the parents do not have an adverse

22 credit history as determined pursuant to regula23 tions promulgated by the Secretary; and

24 ‘‘(B) the parents meet such other eligibility

25 criteria as the Secretary may establish by regu-
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1 lation, after consultation with guaranty agen2 cies, eligible lenders, and other organizations in3 volved in student financial assistance.

4 ‘‘(2) TERMS, CONDITIONS, AND BENEFITS.—

5 Except as provided in subsections (c), (d), and (e),

6 loans made under this section shall have the same

7 terms, conditions, and benefits as all other loans

8 made under this part.

9 ‘‘(3) SPECIAL RULE.—Whenever necessary to

10 carry out the provisions of this section, the terms

11 ‘‘student’’ and ‘‘borrower’’ as used in this part shall

12 include a parent borrower under this section.’’; and

13 (2) by adding at the end the following:

14 ‘‘(f) VERIFICATION OF IMMIGRATION STATUS AND

15 SOCIAL SECURITY NUMBER.—A parent who wishes to

16 borrow funds under this section shall be subject to ver17 ification of the parent’s—

18 ‘‘(1) immigration status in the same manner as

19 immigration status is verified for students under

20 section 484(g); and

21 ‘‘(2) social security number in the same manner

22 as social security numbers are verified for students

23 under section 484(p).’’.
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1 SEC. 428. FEDERAL CONSOLIDATION LOANS.

2 Section 428C(a)(3) (20 U.S.C. 1078–3(a)(3)) is

3 amended—

4 (1) by amending subparagraph (A) to read as

5 follows: ‘‘(A) For the purpose of this section, the

6 term ‘eligible borrower’ means a borrower who—

7 ‘‘(i) is not subject to a judgment secured

8 through litigation or an order for wage garnish9 ment under section 488A; or

10 ‘‘(ii) at the time of application for a con11 solidation loan—

12 ‘‘(I) is in repayment status;

13 ‘‘(II) is in a grace period preceding

14 repayment; or

15 ‘‘(III) is a defaulted borrower who has

16 made arrangements to repay the obligation

17 on the defaulted loans satisfactory to the

18 holders of the defaulted loans.’’; and

19 (2) in subparagraph (B)(i)—

20 (A) in subclause (I), by striking ‘‘and’’

21 after the semicolon;

22 (B) by redesignating subclause (II) as sub23 clause (III);

24 (C) by inserting after subclause (I) the fol25 lowing:
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1 ‘‘(II) with respect to eligible student loans

2 received prior to the date of consolidation that

3 the borrower may wish to include with eligible

4 loans specified in subclause (I) in a later con5 solidation loan; and’’; and

6 (D) in subclause (III) (as redesignated by

7 subparagraph (B)—

8 (i) by striking ‘‘that loans’’ and in9 serting ‘‘with respect to loans’’; and

10 (ii) by inserting ‘‘that’’ before ‘‘may

11 be added’’.

12 SEC. 429. REQUIREMENTS FOR DISBURSEMENTS OF STU13 DENT LOANS.

14 Section 428G (20 U.S.C. 1078G) is amended—

15 (1) in subsection (a)(1), by striking ‘‘The pro16 ceeds’’ and inserting ‘‘Except for a loan made for

17 the final period of enrollment, that is less than an

18 academic year, in a student’s baccalaureate program

19 of study, at an institution with a cohort default rate

20 (as calculated under section 435(m)) that is 5 per21 cent or less, the proceeds’’; and

22 (2) in subsection (b)(1), by striking ‘‘The first’’

23 and inserting ‘‘Except for a loan made to a student

24 borrower entering an institution with a cohort de-
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1 fault rate (as calculated under section 435(m)) of

2 less than 5 percent, the first’’.

3 SEC. 430. DEFAULT REDUCTION PROGRAM.

4 The heading for subsection (b) of section 428F (20

5 U.S.C. 1078–6) is amended by striking ‘‘SPECIAL RULE’’

6 and inserting ‘‘SATISFACTORY REPAYMENT ARRANGE7 MENTS TO RENEW ELIGIBILITY’’.

8 SEC. 431. UNSUBSIDIZED LOANS.

9 Section 428H (20 U.S.C. 1078–8) is amended—

10 (1) by amending subsection (b) to read as fol11 lows:

12 ‘‘(b) ELIGIBLE BORROWERS.—Any student meeting

13 the requirements for student eligibility under section 484

14 (including graduate and professional students as defined

15 in regulations promulgated by the Secretary) shall be enti16 tled to borrow an unsubsidized Stafford loan if the eligible

17 institution at which the student has been accepted for en18 rollment, or at which the student is in attendance, has—

19 ‘‘(1) determined and documented the student’s

20 need for the loan based on the student’s estimated

21 cost of attendance (as determined under section

22 472) and the student’s estimated financial assist23 ance, including a loan which qualifies for interest

24 subsidy payments under section 428; and

25 ‘‘(2) provided the lender a statement—
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1 ‘‘(A) certifying the eligibility of the student

2 to receive a loan under this section and the

3 amount of the loan for which such student is el4 igible, in accordance with subsection (c); and

5 ‘‘(B) setting forth a schedule for disburse6 ment of the proceeds of the loan in install7 ments, consistent with the requirements of sec8 tion 428G.’’;

9 (2) in subsection (d)—

10 (A) in paragraph (2)—

11 (i) in the matter preceding subpara12 graph (A)—

13 (I) by inserting ‘‘, as defined in

14 section 481(d)(2),’’ after ‘‘academic

15 year’’; and

16 (II) by striking ‘‘or in any period

17 of 7 consecutive months, whichever is

18 longer,’’;

19 (ii) in subparagraph (C), by inserting

20 ‘‘and’’ after the semicolon; and

21 (iii) by inserting before the matter fol22 lowing subparagraph (C) the following:

23 ‘‘(D) in the case of a student enrolled in

24 coursework specified in sections 484(b)(3)(B)

25 and 484(b)(4)(B)—
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1 ‘‘(i) $4,000 for coursework necessary

2 for enrollment in an undergraduate degree

3 or certificate program, and $5,000 for

4 coursework necessary for enrollment in a

5 graduate or professional program; and

6 ‘‘(ii) $5,000 for coursework necessary

7 for a professional credential or certification

8 from a State required for employment as a

9 teacher in an elementary or secondary

10 school;’’; and

11 (B) in paragraph (3), by adding at the end

12 the following: ‘‘The maximum aggregate

13 amount shall not include interest capitalized

14 from an in-school period.’’; and

15 (3) in subsection (e)(6), by striking ‘‘10 year

16 repayment period under section 428(b)(1)(D)’’ and

17 inserting ‘‘repayment period under section

18 428(b)(9)’’.

19 SEC. 432. LOAN FORGIVENESS FOR TEACHERS.

20 Section 428J (20 U.S.C. 1078–10) is amended to

21 read as follows:

22 ‘‘SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

23 ‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of

24 this section to encourage individuals to enter and continue

25 in the teaching profession.
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1 ‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au2 thorized to carry out a program, through the holder of

3 the loan, of assuming the obligation to repay a loan made

4 under section 428 that is eligible for interest subsidy, for

5 any new borrower on or after the date of enactment of

6 the Higher Education Amendments of 1998, who—

7 ‘‘(1) has been employed as a full-time teacher

8 for 3 consecutive complete school years—

9 ‘‘(A) in a school that qualifies under sec10 tion 465(a)(2)(A) for loan cancellation for Per11 kins loan recipients who teach in such schools;

12 ‘‘(B) if employed as a secondary school

13 teacher, is teaching a subject area that is rel14 evant to the borrower’s academic major as cer15 tified by the chief administrative officer of the

16 public or nonprofit private secondary school in

17 which the borrower is employed; and

18 ‘‘(C) if employed as an elementary school

19 teacher, has demonstrated, in accordance with

20 State teacher certification or licensing require21 ments and as certified by the chief administra22 tive officer of the public or nonprofit private el23 ementary school in which the borrower is em24 ployed, knowledge and teaching skills in read-
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1 ing, writing, mathematics and other areas of

2 the elementary school curriculum; and

3 ‘‘(2) is not in default on a loan for which the

4 borrower seeks forgiveness.

5 ‘‘(c) REGULATIONS.—The Secretary is authorized to

6 issue such regulations as may be necessary to carry out

7 the provisions of this section.

8 ‘‘(d) LOAN REPAYMENT DURING CONTINUING

9 TEACHING SERVICE.—

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

11 the obligation to repay through reimbursement to

12 the holder—

13 ‘‘(A) 30 percent of the total outstanding

14 amount and applicable interest of subsidized

15 Federal Stafford loans owed by the student bor16 rower after the completion of the fourth or fifth

17 complete school year of service described in sub18 section (b);

19 ‘‘(B) 40 percent of such total amount after

20 the completion of the sixth complete school year

21 of such service; and

22 ‘‘(C) a total amount for any borrower that

23 shall not exceed $10,000.
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1 ‘‘(2) CONSTRUCTION.—Nothing in this section

2 shall be construed to authorize any refunding of any

3 repayment of a loan.

4 ‘‘(e) LIST.—If the list of schools in which a teacher

5 may perform service pursuant to subsection (b) is not

6 available before May 1 of any year, the Secretary may use

7 the list for the year preceding the year for which the deter8 mination is made to make such service determination.

9 ‘‘(f) CONTINUED ELIGIBILITY.—Any teacher who

10 performs service in a school that—

11 ‘‘(1) meets the requirements of subsection

12 (b)(1)(A) in any year during such service; and

13 ‘‘(2) in a subsequent year fails to meet the re14 quirements of such subsection, may continue to

15 teach in such school and shall be eligible for loan

16 forgiveness pursuant to subsection (b).’’.

17 SEC. 433. COMMON FORMS AND FORMATS.

18 Section 432(m)(1) (20 U.S.C. 1082(m)(1)) is amend19 ed—

20 (1) in subparagraph (A), by striking ‘‘a com21 mon application form and promissory note’’ and in22 serting ‘‘common application forms and promissory

23 notes, or multiyear promissory notes,’’;

24 (2) by striking subparagraph (C);
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1 (3) by redesignating subparagraph (D) as sub2 paragraph (C); and

3 (4) in subparagraph (C) (as redesignated by

4 paragraph (3))—

5 (A) by inserting ‘‘, application and other’’

6 after ‘‘electronic’’; and

7 (B) by adding at the end the following:

8 ‘‘Guaranty agencies, borrowers, and lenders

9 may use electronically printed versions of com10 mon forms approved for use by the Secretary.’’.

11 SEC. 434. STUDENT LOAN INFORMATION BY ELIGIBLE

12 LENDERS.

13 Section 433 (20 U.S.C. 1083) is amended—

14 (1) in subsection (a), by amending the matter

15 preceding paragraph (1) to read as follows:

16 ‘‘(a) REQUIRED DISCLOSURE BEFORE DISBURSE17 MENT.—Each eligible lender shall, at or prior to the time

18 such lender disburses a loan that is insured or guaranteed

19 under this part (other than a loan made under section

20 428C), provide thorough and accurate loan information on

21 such loan to the borrower. Any disclosure required by this

22 subsection may be made by an eligible lender by written

23 or electronic means, including as part of the application

24 material provided to the borrower, as part of the promis25 sory note evidencing the loan, or on a separate written
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1 form provided to the borrower. Each lender shall provide

2 a telephone number, and may provide an electronic ad3 dress, to each borrower through which additional loan in4 formation can be obtained. The disclosure shall

5 include—’’; and

6 (2) in subsection (b), by amending the matter

7 preceding paragraph (1) to read as follows:

8 ‘‘(b) REQUIRED DISCLOSURE BEFORE REPAY9 MENT.—Each eligible lender shall, at or prior to the start

10 of the repayment period of the student borrower on loans

11 made, insured, or guaranteed under this part, disclose to

12 the borrower by written or electronic means the informa13 tion required under this subsection. Each eligible lender

14 shall provide a telephone number, and may provide an

15 electronic address, to each borrower through which addi16 tional loan information can be obtained. For any loan

17 made, insured, or guaranteed under this part, other than

18 a loan made under section 428B or 428C, such disclosure

19 required by this subsection shall be made not less than

20 30 days nor more than 240 days before the first payment

21 on the loan is due from the borrower. The disclosure shall

22 include—’’.

23 SEC. 435. DEFINITIONS.

24 (a) ELIGIBLE INSTITUTION.—Section 435(a) (20

25 U.S.C. 1085(a)) is amended—
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1 (1) in paragraph (2)—

2 (A) by adding after the matter following

3 subparagraph (A)(ii) the following:

4 ‘‘If an institution continues to participate in a pro5 gram under this part, and the institution’s appeal of

6 the loss of eligibility is unsuccessful, the institution

7 shall be required to pay to the Secretary an amount

8 equal to the amount of interest, special allowance,

9 reinsurance, and any related payments made by the

10 Secretary (or which the Secretary is obligated to

11 make) with respect to loans made under this part to

12 students attending, or planning to attend, that insti13 tution during the pendency of such appeal. In order

14 to continue to participate during an appeal under

15 this paragraph, the institution shall provide a letter

16 of credit in favor of the Secretary or other third17 party financial guarantees satisfactory to the Sec18 retary in an amount determined by the Secretary to

19 be sufficient to satisfy the institution’s potential li20 ability on such loans under the preceding sentence.’’;

21 and

22 (B) by amending subparagraph (C) to read

23 as follows:

24 ‘‘(C)(i) This paragraph shall not apply to any

25 institution described in clause (ii), and any such in-
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1 stitution that exceeds the threshold percentage in

2 subparagraph (A)(ii) for 2 consecutive years shall

3 submit to the Secretary a default management plan

4 satisfactory to the Secretary and containing criteria

5 designed, in accordance with the regulations of the

6 Secretary, to demonstrate continuous improvement

7 by the institution in the institution’s cohort default

8 rate. If the institution fails to submit the required

9 plan, or to satisfy the criteria in the plan, the insti10 tution shall be subject to a loss of eligibility in ac11 cordance with this paragraph, except as the Sec12 retary may otherwise specify in regulations.

13 ‘‘(ii) An institution referred to in clause (i) is—

14 ‘‘(I) a part B institution within the mean15 ing of section 322(2);

16 ‘‘(II) a tribally controlled community col17 lege within the meaning of section 2(a)(4) of

18 the Tribally Controlled Community College As19 sistance Act of 1978; or

20 ‘‘(III) a Navajo Community College under

21 the Navajo Community College Act.’’;

22 (2) in the matter following subparagraph (C)—

23 (A) by inserting ‘‘for a reasonable period

24 of time, not to exceed 30 days,’’ after ‘‘access’’;

25 and
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1 (B) by striking ‘‘of the affected guaranty

2 agencies and loan servicers for a reasonable pe3 riod of time, not to exceed 30 days’’ and insert4 ing ‘‘used by a guaranty agency in determining

5 whether to pay a claim on a defaulted loan’’;

6 and

7 (3) by adding at the end the following:

8 ‘‘(4) PARTICIPATION RATE INDEX.—

9 ‘‘(A) IN GENERAL.—An institution that

10 demonstrates to the Secretary that the institu11 tion’s participation rate index is equal to or less

12 than 0.0375 for any of the 3 applicable partici13 pation rate indices shall not be subject to para14 graph (2). The participation rate index shall be

15 determined by multiplying the institution’s co16 hort default rate for loans under part B or D,

17 or weighted average cohort rate for loans under

18 parts B and D, by the percentage of the institu19 tion’s regular students, enrolled on at least a

20 half-time basis, who received a loan made under

21 part B or D for a 12-month period ending dur22 ing the 6 months immediately preceding the fis23 cal year for which the cohort of borrowers used

24 to calculate the institution’s cohort default rate

25 is determined.
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1 ‘‘(B) DATA.—An institution shall provide

2 the Secretary with sufficient data to determine

3 the institution’s participation rate index within

4 30 days after receiving an initial notification of

5 the institution’s draft cohort default rate.

6 ‘‘(C) NOTIFICATION.—Prior to publication

7 of a final cohort default rate for an institution

8 that provides the data described in subpara9 graph (B), the Secretary shall notify the insti10 tution of the institution’s compliance or non11 compliance with subparagraph (A).’’.

12 (b) COHORT DEFAULT RATE.—Section

13 435(m)(1)(B) (20 U.S.C. 1085(m)(1)(B)) is amended by

14 striking ‘‘insurance, and, in considering appeals with re15 spect to cohort default rates pursuant to subsection (a)(3),

16 exclude’’ and inserting ‘‘insurance. In considering appeals

17 with respect to cohort default rates pursuant to subsection

18 (a)(3), the Secretary shall exclude, from the calculation

19 of the number of students who entered repayment and

20 from the calculation of the number of students who de21 fault,’’.

22 SEC. 436. DELEGATION OF FUNCTIONS.

23 Section 436 (20 U.S.C. 1086) is amended to read as

24 follows:
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1 ‘‘SEC. 436. DELEGATION OF FUNCTIONS.

2 ‘‘(a) IN GENERAL.—An eligible lender or guaranty

3 agency that contracts with another entity to perform any

4 of the lender’s or agency’s functions under this title, or

5 otherwise delegates the performance of such functions to

6 such other entity—

7 ‘‘(1) shall not be relieved of the lender’s or

8 agency’s duty to comply with the requirements of

9 this title; and

10 ‘‘(2) shall monitor the activities of such other

11 entity for compliance with such requirements.

12 ‘‘(b) SPECIAL RULE.—A lender that holds a loan

13 made under part B in the lender’s capacity as a trustee

14 is responsible for complying with all statutory and regu15 latory requirements imposed on any other holder of a loan

16 made under this part.’’.

17 SEC. 437. SPECIAL ALLOWANCES.

18 (a) AMENDMENTS.—Section 438 (20 U.S.C. 1087–

19 1) is amended—

20 (1) in subsection (c), by amending paragraph

21 (1) to read as follows:

22 ‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL

23 ALLOWANCE SUBSIDIES.—(A) Notwithstanding sub24 section (b), the Secretary shall collect the amount

25 the lender is authorized to charge as an origination
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1 fee in accordance with paragraph (2) of this sub2 section—

3 ‘‘(i) by reducing the total amount of inter4 est and special allowance payable under section

5 428(a)(3)(A) and subsection (b) of this section,

6 respectively, to any holder; or

7 ‘‘(ii) directly from the holder of the loan,

8 if the lender fails or is not required to bill the

9 Secretary for interest and special allowance or

10 withdraws from the program with unpaid loan

11 origination fees.

12 ‘‘(B) If the Secretary collects the origination fee

13 under this subsection through the reduction of inter14 est and special allowance, and the total amount of

15 interest and special allowance payable under section

16 428(a)(3)(A) and subsection (b) of this section, re17 spectively, is less than the amount the lender was

18 authorized to charge borrowers for origination fees

19 in that quarter, the Secretary shall deduct the excess

20 amount from the subsequent quarters’ payments

21 until the total amount has been deducted.’’;

22 (2) in subsection (d), by amending paragraph

23 (1) to read as follows:

24 ‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL

25 ALLOWANCE SUBSIDIES.—
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1 ‘‘(A) IN GENERAL.—Notwithstanding sub2 section (b), the Secretary shall collect a loan fee

3 in an amount determined in accordance with

4 paragraph (2)—

5 ‘‘(i) by reducing the total amount of

6 interest and special allowance payable

7 under section 428(a)(3)(A) and subsection

8 (b), respectively, to any holder of a loan; or

9 ‘‘(ii) directly from the holder of the

10 loan, if the lender—

11 ‘‘(I) fails or is not required to bill

12 the Secretary for interest and special

13 allowance payments; or

14 ‘‘(II) withdraws from the pro15 gram with unpaid loan fees.

16 ‘‘(B) SPECIAL RULE.—If the Secretary col17 lects loan fees under this subsection through

18 the reduction of interest and special allowance

19 payments, and the total amount of interest and

20 special allowance payable under section

21 428(a)(3)(A) and subsection (b), respectively, is

22 less than the amount of such loan fees, then the

23 Secretary shall deduct the amount of the loan

24 fee balance from the amount of interest and

25 special allowance payments that would other-
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1 wise be payable, in subsequent quarterly incre2 ments until the balance has been deducted.’’;

3 and

4 (3) in subsection (e)—

5 (A) by striking paragraphs (1) and (2);

6 and

7 (B) by redesignating paragraphs (3) and

8 (4) as paragraphs (1) and (2), respectively.

9 (b) CONFORMING AMENDMENT.—Section

10 432(f)(1)(D) is amended by striking ‘‘required to file a

11 plan for doing business under section 438(d)’’ and insert12 ing ‘‘that meets the requirements of section 438(e)’’.

13 SEC. 438. STUDY OF MARKET-BASED MECHANISMS FOR DE14 TERMINING STUDENT LOAN INTEREST

15 RATES.

16 (a) STUDY REQUIRED.—

17 (1) IN GENERAL.—The Secretary of the Treas18 ury shall conduct a study of the feasibility of em19 ploying market-based mechanisms, including some

20 form of auction, for determining student loan inter21 est rates under title IV of the Higher Education Act

22 of 1965 (20 U.S.C. 1070 et seq.). The study shall

23 include—
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1 (A) analysis of the potential impact of the

2 mechanisms on the delivery of student financial

3 aid;

4 (B) analysis of the implications of the

5 mechanisms with respect to student and institu6 tional access to student loan capital;

7 (C) analysis of the potential impact of the

8 mechanisms on the costs of the programs under

9 such title for students and the Federal Govern10 ment; and

11 (D) a plan for structuring and implement12 ing the mechanisms in such a manner that en13 sures the cost-effective availability of student

14 loans for students and their families.

15 (b) CONSULTATION.—In conducting the study de16 scribed in paragraph (1), the Secretary shall consult with

17 lenders, secondary markets, guaranty agencies, institu18 tions of higher education, student loan borrowers, and

19 other participants in the student loan programs under title

20 IV of the Higher Education Act of 1965 (20 U.S.C. 1070

21 et seq.).

22 (c) REPORT TO CONGRESS.—The Secretary of the

23 Treasury shall report to the Committee on Labor and

24 Human Resources of the Senate, and the Committee on

25 Education and the Workforce of the House of Representa-
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1 tives not later than September 30, 1999, regarding the

2 results of the study described in subsection (a).

3 PART C—FEDERAL WORK-STUDY PROGRAMS

4 SEC. 441. AUTHORIZATION OF APPROPRIATIONS; COMMU5 NITY SERVICES.

6 Section 441 (20 U.S.C. 2751) is amended—

7 (1) in subsection (b), by striking

8 ‘‘$800,000,000 for fiscal year 1993’’ and inserting

9 ‘‘$900,000,000 for fiscal year 1999’’; and

10 (2) in subsection (c)—

11 (A) in paragraph (1), by inserting ‘‘(in12 cluding child care services provided on cam13 pus)’’ after ‘‘child care’’; and

14 (B) in paragraph (3), by inserting ‘‘, in15 cluding students with disabilities who are en16 rolled at the institution’’ before the semicolon.

17 SEC. 442. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

18 Section 443(b) (20 U.S.C. 2753(b)) is amended—

19 (1) by amending paragraph (3) to read as fol20 lows:

21 ‘‘(3) provide that in the selection of students

22 for employment under such work-study program,

23 only students who demonstrate financial need in ac24 cordance with part F of this title and meet the re25 quirements of section 484 will be assisted, except
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1 that if the institution’s grant under this part is di2 rectly or indirectly based in part on the financial

3 need demonstrated by students who are (A) attend4 ing the institution on less than a full-time basis, or

5 (B) independent students, a reasonable portion of

6 the allocation shall be made available to such stu7 dents;’’;

8 (2) in paragraph (5)—

9 (A) by striking ‘‘provide that’’ and insert10 ing ‘‘(A) provide that’’;

11 (B) by striking ‘‘1993–1994’’ and insert12 ing ‘‘1999–2000’’;

13 (C) by inserting ‘‘and’’ after the semicolon;

14 and

15 (D) by adding at the end the following:

16 ‘‘(B) provide that the Federal share of the com17 pensation of students employed in community service

18 shall not exceed 90 percent;’’; and

19 (3) in paragraph (6), by striking ‘‘, and to

20 make’’ and all that follows through ‘‘such employ21 ment’’.

22 SEC. 443. WORK COLLEGES.

23 Section 448 (20 U.S.C. 2756b) is amended—

24 (1) in subsection (b)(2)—
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1 (A) in subparagraph (C), by striking

2 ‘‘and’’ after the semicolon;

3 (B) in subparagraph (D)(ii), by striking

4 the period and inserting a semicolon; and

5 (C) by adding at the end the following:

6 ‘‘(E) coordinate and carry out joint

7 projects and activities to promote work service

8 learning; and

9 ‘‘(F) carry out a comprehensive, longitu10 dinal study of student academic progress and

11 academic and career outcomes, relative to stu12 dent self-sufficiency in financing their higher

13 education, repayment of student loans, contin14 ued community service, kind and quality of

15 service performed, and career choice and com16 munity service selected after graduation.’’; and

17 (2) in subsection (f), by striking ‘‘$5,000,000

18 for fiscal year 1993’’ and inserting ‘‘$7,000,000 for

19 fiscal year 1999’’.

20 PART D—WILLIAM D. FORD FEDERAL DIRECT

21 LOAN PROGRAM

22 SEC. 451. SELECTION OF INSTITUTIONS.

23 Section 453(c) (20 U.S.C. 1087c(c)) is amended—

24 (1) in paragraph (2)—
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1 (A) in the paragraph heading, by striking

2 ‘‘TRANSITION’’;

3 (B) by striking subparagraph (E); and

4 (C) by redesignating subparagraphs (F),

5 (G), and (H) as subparagraphs (E), (F), and

6 (G), respectively; and

7 (2) in paragraph (3)—

8 (A) in the paragraph heading, by striking

9 ‘‘AFTER TRANSITION’’; and

10 (B) by striking ‘‘For academic year 1995–

11 1996 and subsequent academic years, the’’ and

12 inserting ‘‘The’’.

13 SEC. 452. TERMS AND CONDITIONS.

14 (a) INTEREST RATES.—Section 455(b) (20 U.S.C.

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

16 ‘‘(b) INTEREST RATE.—

17 ‘‘(1) RATES FOR FDSL AND FDUSL.—For Fed18 eral Direct Stafford/Ford Loans and Federal Direct

19 Unsubsidized Stafford/Ford Loans for which the

20 first disbursement is made on or after July 1, 1998,

21 the applicable rate of interest shall, during any 12-

22 month period beginning on July 1 and ending on

23 June 30, be determined on the preceding June 1

24 and be equal to—
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1 ‘‘(A) the bond equivalent rate of 91-day

2 Treasury bills auctioned at the final auction

3 held prior to such June 1; plus

4 ‘‘(B) 2.3 percent,

5 except that such rate shall not exceed 8.25 percent.

6 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

7 With respect to any Federal Direct Stafford/Ford

8 Loan or Federal Direct Unsubsidized Stafford/Ford

9 Loan for which the first disbursement is made on or

10 after July 1, 1995, the applicable rate of interest for

11 interest which accrues—

12 ‘‘(A) prior to the beginning of the repay13 ment period of the loan; or

14 ‘‘(B) during the period in which principal

15 need not be paid (whether or not such principal

16 is in fact paid) by reason of a provision de17 scribed in section 428(b)(1)(M) or

18 427(a)(2)(C),

19 shall be determined under paragraph (1) by sub20 stituting ‘1.7 percent’ for ‘2.3 percent’.

21 ‘‘(3) PLUS LOANS.—With respect to Federal

22 Direct PLUS Loan for which the first disbursement

23 is made on or after July 1, 1998, the applicable rate

24 of interest shall be determined under paragraph

25 (1)—
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1 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

2 percent’; and

3 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

4 percent’.

5 ‘‘(4) PUBLICATION.—The Secretary shall deter6 mine the applicable rates of interest under this sub7 section after consultation with the Secretary of the

8 Treasury and shall publish such rate in the Federal

9 Register as soon as practicable after the date of de10 termination.’’.

11 (b) EFFECTIVE DATE.—The amendments made by

12 this section shall apply with respect to any loan made

13 under part D of title IV of the Higher Education Act of

14 1965 for which the first disbursement is made on or after

15 July 1, 1998.

16 SEC. 453. CONTRACTS.

17 Section 456(b) (20 U.S.C. 1087f(b)) is amended—

18 (1) in paragraph (3), by inserting ‘‘and’’ after

19 the semicolon;

20 (2) by striking paragraph (4); and

21 (3) by redesignating paragraph (5) as para22 graph (4).

23 SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES.

24 Section 458 (20 U.S.C. 1087h) is amended—
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1 (1) by amending subsection (a) to read as fol2 lows:

3 ‘‘(a) ADMINISTRATIVE EXPENSES.—

4 ‘‘(1) IN GENERAL.—Each fiscal year there shall

5 be available to the Secretary, from funds not other6 wise appropriated, funds to be obligated for—

7 ‘‘(A) administrative costs under this part

8 and part B, including the costs of the direct

9 student loan programs under this part; and

10 ‘‘(B) account maintenance fees payable to

11 guaranty agencies under part B and calculated

12 in accordance with paragraph (2), not to exceed

13 (from such funds not otherwise appropriated)

14 $626,000,000 in fiscal year 1999,

15 $726,000,000 in fiscal year 2000,

16 $770,000,000 in fiscal year 2001,

17 $780,000,000 in fiscal year 2002, and

18 $795,000,000 in fiscal year 2003.

19 ‘‘(2) ACCOUNT MAINTENANCE FEES.—Account

20 maintenance fees under subparagraph (B) shall be

21 paid quarterly and deposited in the Agency Operat22 ing Fund established under section 422B.

23 ‘‘(3) CARRYOVER.—The Secretary may carry

24 over funds made available under this section to a

25 subsequent fiscal year.’’; and
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1 (2) by amending subsection (b) to read as fol2 lows:

3 ‘‘(b) CALCULATION BASIS.—Account maintenance

4 fees payable to guaranty agencies under paragraph (1)(B)

5 shall be calculated—

6 ‘‘(1) for fiscal years 1999 and 2000, on the

7 basis of 0.12 percent of the original principal

8 amount of outstanding loans on which insurance was

9 issued under part B; and

10 ‘‘(2) for fiscal year 2001, 2002, and 2003, on

11 the basis of 0.10 percent of the original principal

12 amount of outstanding loans on which insurance was

13 issued under part B.’’.

14 SEC. 455. LOAN CANCELLATION FOR TEACHERS.

15 Part D of title IV (20 U.S.C. 1087a et seq.) is

16 amended by adding at the end the following:

17 ‘‘SEC. 459. LOAN CANCELLATION FOR TEACHERS.

18 ‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of

19 this section to encourage individuals to enter and continue

20 in the teaching profession.

21 ‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au22 thorized to carry out a program of canceling the obligation

23 to repay a Federal Direct Stafford/Ford Loan made under

24 this part that is eligible for an interest subsidy, for any
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1 new borrower on or after the date of enactment of the

2 Higher Education Amendments of 1998, who—

3 ‘‘(1) has been employed as a full-time teacher

4 for 3 consecutive complete school years—

5 ‘‘(A) in a school that qualifies under sec6 tion 465(a)(2)(A) for loan cancellation for Per7 kins loan recipients who teach in such schools;

8 ‘‘(B) if employed as a secondary school

9 teacher, is teaching a subject area that is rel10 evant to the borrower’s academic major as cer11 tified by the chief administrative officer of the

12 public or non-profit private secondary school in

13 which the borrower is employed; and

14 ‘‘(C) if employed as an elementary school

15 teacher, has demonstrated, in accordance with

16 State teacher certification or licensing require17 ments and as certified by the chief administra18 tive officer of the public or nonprofit private el19 ementary school in which the borrower is em20 ployed, knowledge and teaching skills in read21 ing, writing, mathematics and other areas of

22 the elementary school curriculum; and

23 ‘‘(2) is not in default on a loan for which the

24 borrower seeks forgiveness.
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1 ‘‘(c) REGULATIONS.—The Secretary is authorized to

2 issue such regulations as may be necessary to carry out

3 the provisions of this section.

4 ‘‘(d) LOAN CANCELLATION DURING CONTINUING

5 TEACHING SERVICE.—

6 ‘‘(1) IN GENERAL.—The Secretary shall cancel

7 the obligation to repay—

8 ‘‘(A) 30 percent of the total outstanding

9 amount and applicable interest of subsidized

10 Federal Direct Stafford/Ford loans owed by the

11 student borrower after the completion of the

12 fourth or fifth complete school year of service

13 described in subsection (b);

14 ‘‘(B) 40 percent of such total amount after

15 the completion of the sixth complete school year

16 of such service; and

17 ‘‘(C) a total amount for any borrower that

18 shall not exceed $ 10,000.

19 ‘‘(2) CONSTRUCTION.—Nothing in this section

20 shall be construed to authorize any refunding of any

21 canceled loan.

22 ‘‘(e) LIST.—If the list of schools in which a teacher

23 may perform service pursuant to subsection (b) is not

24 available before May 1 of any year, the Secretary may use
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1 the list for the year preceding the year for which the deter2 mination is made to make such service determination.

3 ‘‘(f) CONTINUED ELIGIBILITY.—Any teacher who

4 performs service in a school that—

5 ‘‘(1) meets the requirements of subsection

6 (b)(1)(A) in any year during such service; and

7 ‘‘(2) in a subsequent year fails to meet the re8 quirements of such subsection, may continue to

9 teach in such school and shall be eligible for loan

10 cancellation pursuant to subsection (b).’’.

11 PART E—FEDERAL PERKINS LOANS

12 SEC. 461. AUTHORIZATION OF APPROPRIATIONS.

13 Subsection (b) of section 461 (20 U.S.C. 1087aa) is

14 amended by striking ‘‘1993’’ and inserting ‘‘1999’’.

15 SEC. 462. ALLOCATION OF FUNDS.

16 (a) AMENDMENTS.—Section 462 (20 U.S.C. 1087bb)

17 is amended—

18 (1) in the matter preceding subparagraph (A)

19 of subsection (d)(3), by striking ‘‘the Secretary, for’’

20 and all that follows through ‘‘years,’’;

21 (2) by amending subsection (f) to read as fol22 lows:

23 ‘‘(f) DEFAULT PENALTIES.—

24 ‘‘(1) IN GENERAL.—For fiscal year 1998 and

25 any succeeding fiscal year, any institution with a co-
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1 hort default rate (as defined under subsection (h))

2 that equals or exceeds 25 percent shall have a de3 fault penalty of zero.

4 ‘‘(2) INELIGIBILITY.—

5 ‘‘(A) IN GENERAL.—For fiscal year 1998

6 and any succeeding fiscal year, any institution

7 with a cohort default rate (as defined in sub8 section (h)) that equals or exceeds 50 percent

9 for each of the 3 most recent years for which

10 data are available shall not be eligible to par11 ticipate in a program under this part for the

12 fiscal year for which the determination is made

13 and the 2 succeeding fiscal years, unless, within

14 30 days of receiving notification from the Sec15 retary of the loss of eligibility under this para16 graph, the institution appeals the loss of eligi17 bility to the Secretary. The Secretary shall

18 issue a decision on any such appeal within 45

19 days after the submission of the appeal. Such

20 decision may permit the institution to continue

21 to participate in a program under this part if—

22 ‘‘(i) the institution demonstrates to

23 the satisfaction of the Secretary that the

24 Secretary’s calculation of the institution’s

25 cohort default rate is not accurate, and
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1 that recalculation would reduce the institu2 tion’s cohort default rate for any of the 3

3 fiscal years below 50 percent; or

4 ‘‘(ii) there are, in the judgment of the

5 Secretary, exceptional mitigating cir6 cumstances such as a small number of bor7 rowers entering repayment, that would

8 make the application of this subparagraph

9 inequitable.

10 ‘‘(B) CONTINUED PARTICIPATION.—Dur11 ing an appeal under subparagraph (A), the Sec12 retary may permit the institution to continue to

13 participate in a program under this part.

14 ‘‘(C) DEFINITION.—For the purposes of

15 subparagraph (A), the term ‘loss of eligibility’

16 shall be defined as the mandatory liquidation of

17 an institution’s student loan fund, and assign18 ment of the institution’s outstanding loan port19 folio to the Secretary.’’;

20 (3) by amending paragraph (1) of subsection

21 (g) to read as follows: ‘‘(1) For award year 1998

22 and subsequent years, the maximum cohort default

23 rate is 25 percent.’’; and

24 (4) in subsection (h)—
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1 (A) in the subsection heading, by striking

2 ‘‘DEFINITIONS OF DEFAULT RATE AND’’ and

3 inserting ‘‘DEFINITION OF’’;

4 (B) by striking paragraphs (1) and (2);

5 (C) by redesignating paragraphs (3) and

6 (4) as paragraphs (1) and (2), respectively;

7 (D) in paragraph (1) (as redesignated by

8 subparagraph (C)—

9 (i) by striking subparagraph (B); and

10 (ii) by redesignating subparagraphs

11 (C) through (G) as subparagraphs (B)

12 through (F), respectively; and

13 (E) in the matter preceding subparagraph

14 (A) of paragraph (2) (as redesignated by sub15 paragraph (C)), by striking ‘‘A loan’’ and in16 serting ‘‘For purposes of calculating the cohort

17 default rate under this subsection, a loan’’.

18 (b) CONFORMING AMENDMENTS.—Section 462 (20

19 U.S.C. 1087bb) is amended—

20 (1) in the matter following paragraphs (1)(B)

21 and (2)(D)(ii) of subsection (a), by inserting ‘‘co22 hort’’ before ‘‘default’’ each place the term appears;

23 (2) in the matter following paragraphs (2)(B)

24 and (3)(C) of subsection (c), by inserting ‘‘cohort’’

25 before ‘‘default’’ each place the term appears;
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1 (3) in subsection (e)(2), by inserting ‘‘cohort’’

2 before ‘‘default’’; and

3 (4) in subsection (h)(1)(F) (as redesignated by

4 subparagraphs (C) and (D)(ii) of subsection (a)(4)),

5 by inserting ‘‘cohort’’ before ‘‘default’’.

6 SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER

7 EDUCATION.

8 Section 463 (20 U.S.C. 1087cc) is amended—

9 (1) by amending subparagraph (B) of sub10 section (a)(2) to read as follows:

11 ‘‘(B) a capital contribution by an institu12 tion in an amount equal to one-third of the

13 Federal capital contributions described in sub14 paragraph (A);’’;

15 (2) in subsection (c)—

16 (A) in paragraph (2)—

17 (i) in the matter preceding subpara18 graph (A), by striking ‘‘by the Secretary’’

19 and all that follows through ‘‘of—’’ and in20 serting ‘‘by the Secretary or an institution,

21 as the case may be, to such organizations,

22 with respect to any loan held by the Sec23 retary or the institution, respectively,

24 of—’’;
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1 (ii) by amending subparagraph (A) to

2 read as follows:

3 ‘‘(A) the date of disbursement and the

4 amount of such loans made to any borrower

5 under this part at the time of disbursement of

6 the loan;’’;

7 (iii) in subparagraph (B)—

8 (I) by inserting ‘‘the repayment

9 and’’ after ‘‘concerning’’; and

10 (II) by striking ‘‘any defaulted’’

11 and inserting ‘‘such’’; and

12 (iv) in subparagraph (C), by inserting

13 ‘‘, or upon cancellation or discharge of the

14 borrower’s obligation on the loan for any

15 reason’’ before the period;

16 (B) in paragraph (3)—

17 (i) in the matter preceding subpara18 graph (A), by striking ‘‘until—’’ and in19 serting ‘‘until the loan is paid in full.’’; and

20 (ii) by striking subparagraphs (A) and

21 (B); and

22 (C) by amending paragraph (4) to read as

23 follows:

24 ‘‘(4)(A) Except as provided in subparagraph

25 (B), an institution of higher education, after con-
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1 sultation with the Secretary and pursuant to the

2 agreements entered into under paragraph (1), shall

3 disclose at least annually to any credit bureau orga4 nization with which the Secretary has such an agree5 ment the information set forth in paragraph (2), and

6 shall disclose promptly to such credit bureau organi7 zation any changes to the information previously dis8 closed.

9 ‘‘(B) The Secretary may promulgate regulations

10 establishing criteria under which an institution of

11 higher education may cease reporting the informa12 tion described in paragraph (2) before a loan is paid

13 in full.’’.

14 SEC. 464. TERMS OF LOANS.

15 Section 464 (20 U.S.C. 1087dd) is amended—

16 (1) in subsection (a), by amending paragraph

17 (2) to read as follows:

18 ‘‘(2)(A) Except as provided in paragraph (4),

19 the total of loans made to a student in any academic

20 year or its equivalent by an institution of higher

21 education from a loan fund established pursuant to

22 an agreement under this part shall not exceed—

23 ‘‘(i) $4,000, in the case of a student who

24 has not successfully completed a program of un25 dergraduate education; or
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1 ‘‘(ii) $6,000, in the case of a graduate or

2 professional student (as defined in regulations

3 issued by the Secretary).

4 ‘‘(B) Except as provided in paragraph (4), the

5 aggregate of the loans for all years made to a stu6 dent by institutions of higher education from loan

7 funds established pursuant to agreements under this

8 part may not exceed—

9 ‘‘(i) $40,000, in the case of any graduate

10 or professional student (as defined by regula11 tions issued by the Secretary, and including any

12 loans from such funds made to such person be13 fore such person became a graduate or profes14 sional student);

15 ‘‘(ii) $20,000, in the case of a student who

16 has successfully completed 2 years of a program

17 of education leading to a bachelor’s degree but

18 who has not completed the work necessary for

19 such a degree (determined under regulations

20 issued by the Secretary, and including any

21 loans from such funds made to such person be22 fore such person became such a student); and

23 ‘‘(iii) $8,000, in the case of any other stu24 dent.
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1 ‘‘(C)(i) The total of loans made to a student de2 scribed in clause (ii) in any academic year or its

3 equivalent by an institution of higher education from

4 loan funds established pursuant to agreements under

5 this part may not exceed—

6 ‘‘(I) $8,000 for each of the third and

7 fourth years of the program of instruction lead8 ing to a bachelor’s degree; or

9 ‘‘(II) $10,000 for the first year of grad10 uate study (as defined in regulations issued by

11 the Secretary).

12 ‘‘(ii) A student referred to in clause (i) is any

13 student—

14 ‘‘(I) who is a junior in a program of in15 struction leading to a bachelor’s degree;

16 ‘‘(II) who states in writing that the stu17 dent will pursue a course of study to become an

18 elementary or secondary school teacher; and

19 ‘‘(III) who states in writing that the stu20 dent intends to become a full-time teacher in a

21 school which meets the requirements of section

22 465(a)(2)(A).

23 ‘‘(iii) Each institution shall provide a report to

24 the Secretary annually containing the number of

25 loans under this subparagraph that are made, the
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1 amount of each loan, and whether students benefit2 ing from the higher loan limits met the requirements

3 for receiving those loans.

4 ‘‘(iv) If 3 years after the date of enactment of

5 the Higher Education Amendments of 1998, the

6 Secretary determines that an institution has engaged

7 in a pattern of abuse of this subparagraph, the Sec8 retary may reduce or terminate the institution’s

9 Federal capital contribution.’’;

10 (2) in subsection (b), by amending paragraph

11 (2) to read as follows:

12 ‘‘(2) If the institution’s capital contribution

13 under section 462 is directly or indirectly based in

14 part on the financial need demonstrated by students

15 who are (A) attending the institution less than full

16 time; or (B) independent students, a reasonable por17 tion of the loans made from the institution’s student

18 loan fund containing the contribution shall be made

19 available to such students.’’;

20 (3) in subsection (c)(1)—

21 (A) in subparagraph (D), by striking ‘‘(i)

22 3 percent’’ and all that follows through ‘‘or

23 (iii)’’;
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1 (B) by redesignating subparagraphs (H)

2 and (I) as subparagraphs (I) and (J), respec3 tively; and

4 (C) by inserting after subparagraph (G)

5 the following:

6 ‘‘(H) shall provide that, in the case of a

7 loan made on or after July 1, 1999, the loan

8 shall be considered in default (except as other9 wise provided in section 462(h)) if the borrower

10 of a loan made under this part fails to make an

11 installment payment when due, or to meet any

12 other term of the promissory note or written re13 payment agreement, and such failure persists

14 for—

15 ‘‘(i) 180 days in the case of a loan

16 that is repayable in monthly installments;

17 or

18 ‘‘(ii) 240 days in the case of a loan

19 that is repayable in less frequent install20 ments;’’; and

21 (4) by adding at the end the following:

22 ‘‘(g) DISCHARGE.—

23 ‘‘(1) IN GENERAL.—If a student borrower who

24 received a loan made under this part on or after

25 January 1, 1986, is unable to complete the program
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1 in which such student is enrolled due to the closure

2 of the institution, then the Secretary shall discharge

3 the borrower’s liability on the loan (including the in4 terest and collection fees) by repaying the amount

5 owed on the loan and shall subsequently pursue any

6 claim available to such borrower against the institu7 tion and the institution’s affiliates and principals, or

8 settle the loan obligation pursuant to the financial

9 responsibility standards described in section 498(c).

10 ‘‘(2) ASSIGNMENT.—A borrower whose loan has

11 been discharged pursuant to this subsection shall be

12 deemed to have assigned to the United States the

13 right to a loan refund in an amount that does not

14 exceed the amount discharged against the institution

15 and the institution’s affiliates and principals.

16 ‘‘(3) ELIGIBILITY FOR ADDITIONAL ASSIST17 ANCE.—The period during which a student was un18 able to complete a course of study due to the closing

19 of the institution shall not be considered for pur20 poses of calculating the student’s period of eligibility

21 for additional assistance under this title.

22 ‘‘(4) SPECIAL RULE.—A borrower whose loan

23 has been discharged pursuant to this subsection

24 shall not be precluded, because of that discharge,

25 from receiving additional grant, loan, or work assist-
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1 ance under this title for which the borrower would

2 be otherwise eligible (but for the default on the dis3 charged loan). The amount discharged under this

4 subsection shall not be considered income for pur5 poses of the Internal Revenue Code of 1986.

6 ‘‘(5) REPORTING.—The Secretary or institu7 tion, as the case may be, shall report to credit bu8 reaus with respect to loans that have been dis9 charged pursuant to this subsection.

10 ‘‘(h) REHABILITATION OF LOANS.—

11 ‘‘(1) REHABILITATION.—

12 ‘‘(A) IN GENERAL.—If the borrower of a

13 loan made under this part who has defaulted on

14 the loan makes 12 ontime, consecutive, monthly

15 payments of amounts owed on the loan, as de16 termined by the institution, the loan shall be

17 considered rehabilitated, and the institution

18 that made that loan (or the Secretary, in the

19 case of a loan held by the Secretary) shall in20 struct any credit bureau organization or credit

21 reporting agency to which the default was re22 ported to remove the default from the borrow23 er’s credit history.

24 ‘‘(B) COMPARABLE CONDITIONS.—As long

25 as the borrower continues to make scheduled
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1 repayments on a loan rehabilitated under this

2 paragraph, the rehabilitated loan shall be sub3 ject to the same terms and conditions, and

4 qualify for the same benefits and privileges, as

5 other loans made under this part.

6 ‘‘(C) ADDITIONAL ASSISTANCE.—The bor7 rower of a rehabilitated loan shall not be pre8 cluded by section 484 from receiving additional

9 grant, loan, or work assistance under this title

10 (for which the borrower is otherwise eligible) on

11 the basis of defaulting on the loan prior to such

12 rehabilitation.

13 ‘‘(D) LIMITATIONS.—A borrower only once

14 may obtain the benefit of this paragraph with

15 respect to rehabilitating a loan under this part.

16 ‘‘(2) RESTORATION OF ELIGIBILITY.—If the

17 borrower of a loan made under this part who has de18 faulted on that loan makes 6 ontime, consecutive,

19 monthly payments of amounts owed on such loan,

20 the borrower’s eligibility for grant, loan, or work as21 sistance under this title shall be restored. A bor22 rower only once may obtain the benefit of this para23 graph with respect to restored eligibility.

24 ‘‘(i) INCENTIVE REPAYMENT PROGRAM.—
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1 ‘‘(1) IN GENERAL.—Each institution of higher

2 education may establish, with the approval of the

3 Secretary, an incentive repayment program designed

4 to reduce default and to replenish student loan

5 funds established under this part. Each such incen6 tive repayment program may—

7 ‘‘(A) offer a reduction of the interest rate

8 on a loan on which the borrower has made 48

9 consecutive monthly repayments, but in no

10 event may the rate be reduced by more than 1

11 percent;

12 ‘‘(B) provide for a discount on the balance

13 owed on a loan on which the borrower pays the

14 principal and interest in full prior to the end of

15 the applicable repayment period, but in no

16 event may the discount exceed 5 percent of the

17 unpaid principal balance due on the loan at the

18 time the early repayment is made; and

19 ‘‘(C) include such other incentive repay20 ment options as the institution determines will

21 carry out the objectives of this subsection.

22 ‘‘(2) LIMITATION.—No incentive repayment op23 tion under an incentive repayment program author24 ized by this subsection may be paid for with Federal

25 funds, including any Federal funds from the student
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1 loan fund, nor can an incentive repayment option be

2 paid for with institutional funds from the student

3 loan fund.’’.

4 SEC. 465. DISTRIBUTION OF ASSETS FROM STUDENT LOAN

5 FUNDS.

6 Section 466 (20 U.S.C. 1087ff) is amended—

7 (1) in subsection (a)—

8 (A) in the matter preceding paragraph

9 (1)—

10 (i) by striking ‘‘1996’’ and inserting

11 ‘‘2003’’; and

12 (ii) by striking ‘‘1997’’ and inserting

13 ‘‘2004’’; and

14 (B) in paragraph (1), by striking ‘‘1996’’

15 and inserting ‘‘2003’’;

16 (2) in subsection (b)—

17 (A) by striking ‘‘2005’’ and inserting

18 ‘‘2012’’; and

19 (B) by striking ‘‘1996’’ and inserting

20 ‘‘2003’’; and

21 (3) in subsection (c), by striking ‘‘1997’’ and

22 inserting ‘‘2004’’.

23 SEC. 466. PERKINS REVOLVING FUND.

24 (a) REPEAL.—Section 467 (20 U.S.C. 1087gg) is re25 pealed.
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1 (b) TRANSFER OF BALANCE.—Any funds in the Per2 kins Revolving Loan Fund on the date of enactment of

3 this Act shall be transferred to and deposited in the Treas4 ury.

5 PART F—NEED ANALYSIS

6 SEC. 471. COST OF ATTENDANCE.

7 Section 472 (20 U.S.C. 1087ll) is amended—

8 (1) in paragraph (3)—

9 (A) in subparagraph (A), by striking ‘‘of

10 not less than $1,500’’ and inserting ‘‘deter11 mined by the institution’’; and

12 (B) in subparagraph (C), by striking ‘‘, ex13 cept that the amount may not be less than

14 $2,500’’; and

15 (2) in paragraph (11), by striking ‘‘placed’’ and

16 inserting ‘‘engaged’’.

17 SEC. 472. FAMILY CONTRIBUTION FOR DEPENDENT STU18 DENTS.

19 Section 475 (20 U.S.C. 1087oo) is amended—

20 (1) in subsection (g)—

21 (A) in paragraph (2)—

22 (i) in subparagraph (D)—

23 (I) by striking ‘‘$1,750’’ and in24 serting ‘‘$2,200’’; and
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1 (II) by striking ‘‘and’’ after the

2 semicolon;

3 (ii) in subparagraph (E), by striking

4 the period and inserting ‘‘; and’’; and

5 (iii) by adding at the end the follow6 ing:

7 ‘‘(F) an allowance for parents’ negative

8 available income, determined in accordance with

9 paragraph (6).’’; and

10 (B) by adding at the end the following:

11 ‘‘(6) ALLOWANCE FOR PARENTS’ NEGATIVE

12 AVAILABLE INCOME.—The allowance for parents’

13 negative available income is the negative amount, if

14 any, remaining after all allowances have been sub15 tracted from parents’ total income under subsection

16 (c)(1).’’; and

17 (2) by adding at the end the following:

18 ‘‘(j) ADJUSTMENTS TO STUDENTS CONTRIBUTION

19 FOR ENROLLMENT PERIODS OF LESS THAN NINE

20 MONTHS.—For periods of enrollment of less than 9

21 months, the student’s contribution from adjusted available

22 income (as determined under subsection (g)) is deter23 mined, for purposes other than subpart 2 of part A, by

24 dividing the amount determined under such subsection by
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1 9, and multiplying the result by the number of months

2 in the period of enrollment.’’.

3 SEC. 473. FAMILY CONTRIBUTION FOR INDEPENDENT STU4 DENTS WITHOUT DEPENDENTS OTHER THAN

5 A SPOUSE.

6 Section 476(b)(1)(A)(iv) (20 U.S.C.

7 1087pp(b)(1)(A)(iv)) is amended—

8 (1) in subclause (I), by striking ‘‘$3,000’’ and

9 inserting ‘‘$4,250’’;

10 (2) in subclause (II), by striking ‘‘$3,000’’ and

11 inserting ‘‘$4,250’’; and

12 (3) in subclause (III), by striking ‘‘$6,000’’ and

13 inserting ‘‘$7,250’’.

14 SEC. 474. REGULATIONS; UPDATED TABLES AND AMOUNTS.

15 Section 478(b) (20 U.S.C. 1087rr(b)) is amended—

16 (1) by striking ‘‘For each academic year’’ and

17 inserting the following:

18 ‘‘(1) REVISED TABLES.—For each academic

19 year’’; and

20 (2) by adding at the end the following new

21 paragraph:

22 ‘‘(2) REVISED AMOUNTS.—For each academic

23 year after academic year 1997–1998, the Secretary

24 shall publish in the Federal Register revised income

25 protection allowances for the purpose of sections
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1 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised al2 lowances shall be developed by increasing each of the

3 dollar amounts contained in such section by a per4 centage equal to the estimated percentage increase

5 in the Consumer Price Index (as determined by the

6 Secretary) between December 1996 and the Decem7 ber next preceding the beginning of such academic

8 year, and rounding the result to the nearest $10.’’.

9 SEC. 475. REFUSAL OR ADJUSTMENT OF LOAN CERTIFI10 CATIONS.

11 Subsection (c) of section 479A (20 U.S.C. 1087tt)

12 is amended to read as follows:

13 ‘‘(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI14 CATIONS.—An eligible institution may refuse to certify a

15 statement that permits a student to receive a loan under

16 part B, or refuse to make a loan under part D, or may

17 certify a loan amount or make a loan that is less than

18 the student’s determination of need (as determined under

19 this part), if the reason for the action is documented and

20 provided in written form to the student. No eligible insti21 tution shall discriminate against any borrower or applicant

22 in obtaining a loan on the basis of race, national origin,

23 religion, sex, marital status, age, or disability status.’’.
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1 PART G—GENERAL PROVISIONS

2 SEC. 481. MASTER CALENDAR.

3 Section 482 (20 U.S.C. 1089) is amended—

4 (1) in subsection (a), by adding at the end the

5 following:

6 ‘‘(3) To the extent feasible, the Secretary shall

7 notify eligible institutions and vendors by December

8 1 prior to the start of an award year of minimal

9 hardware and software requirements necessary to

10 administer programs under this title.’’; and

11 (2) by amending subsection (c) to read as fol12 lows:

13 ‘‘(c) DELAY OF EFFECTIVE DATE OF LATE PUBLI14 CATIONS.—(1) Except as provided in paragraph (2), any

15 regulatory changes initiated by the Secretary affecting the

16 programs under this title that have not been published in

17 final form by November 1 prior to the start of the award

18 year shall not become effective until the beginning of the

19 second award year after such November 1 date.

20 ‘‘(2)(A) The Secretary may designate any regulatory

21 provision that affects the programs under this title and

22 is published in final form after November 1 as one that

23 an entity subject to the provision may, in the entity’s dis24 cretion, choose to implement prior to the effective date de25 scribed in paragraph (1). The Secretary may specify in

26 the designation when, and under what conditions, an en-
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1 tity may implement the provision prior to that effective

2 date. The Secretary shall publish any designation under

3 this subparagraph in the Federal Register.

4 ‘‘(B) If an entity chooses to implement a regulatory

5 provision prior to the effective date described in paragraph

6 (1), as permitted by subparagraph (A), the provision shall

7 be effective with respect to that entity in accordance with

8 the terms of the Secretary’s designation.’’.

9 SEC. 482. FORMS AND REGULATIONS.

10 Section 483 (20 U.S.C. 1090) is amended—

11 (1) in subsection (a)—

12 (A) in the subsection heading, by striking

13 ‘‘FORM’’ and inserting ‘‘FORM DEVELOPMENT’’;

14 (B) by amending paragraph (1) to read as

15 follows:

16 ‘‘(1) SINGLE FORM REQUIREMENTS.—The Sec17 retary, in cooperation with representatives of agen18 cies and organizations involved in student financial

19 assistance, shall produce, distribute, and process free

20 of charge a common financial reporting form (which

21 shall include electronic versions of the form) to be

22 used—

23 ‘‘(A) to determine the need (including the

24 expected family contribution and, if appro25 priate, cost of attendance) and eligibility of a
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1 student for financial assistance under parts A,

2 C, D, and E; and

3 ‘‘(B) to determine the need (including the

4 expected family contribution and cost of attend5 ance) of a student for the purposes of part B.

6 ‘‘(2) STATE DATA ITEMS.—The Secretary shall

7 include on the form developed under this subsection

8 such data items, selected in consultation with the

9 States to assist the States in awarding State student

10 financial assistance, as the Secretary determines are

11 appropriate for inclusion.

12 ‘‘(3) PARENT’S SOCIAL SECURITY NUMBER.—

13 The Secretary shall include on the form developed

14 under this paragraph space for the social security

15 number of parents of dependent students seeking fi16 nancial assistance under this title.

17 ‘‘(4) USE.—The Secretary shall require that

18 the form developed under this paragraph be used for

19 the purpose of collecting eligibility and other data

20 for purposes of part B, including the applicant’s

21 choice of lender.’’; and

22 (C) in paragraph (3)—

23 (i) by striking ‘‘Institutions of higher

24 education and States shall receive’’ and in25 serting ‘‘The Secretary shall provide’’; and
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1 (ii) by striking ‘‘by the Secretary’’;

2 and

3 (2) by adding at the end the following:

4 ‘‘(g) PAYMENT FOR DATA.—The Secretary may pay

5 such charges as the Secretary determines are necessary

6 to obtain data that the Secretary considers essential to

7 the efficient administration of the programs under this

8 title.

9 ‘‘(h) MULTIYEAR PROMISSORY NOTE.—The Sec10 retary shall require, for loans made under this title for

11 periods of enrollment beginning on or after July 1, 2000,

12 the use of a promissory note applicable to more than 1

13 academic year, or more than 1 type of loan made under

14 this title. Prior to implementing this subsection, the Sec15 retary shall develop and test such a promissory note on

16 a limited or pilot basis.’’.

17 SEC. 483. STUDENT ELIGIBILITY.

18 Section 484 (20 U.S.C. 1091) is amended—

19 (1) in subsection (d)—

20 (A) in the matter preceding paragraph (1),

21 by striking ‘‘either’’; and

22 (B) by adding at the end the following:

23 ‘‘(3) The student has completed a high school

24 education in a home school setting and has met any
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1 State requirements with respect to such education in

2 a home school setting.’’; and

3 (2) by adding at the end the following:

4 ‘‘(q) VERIFICATION OF IRS RETURN INFORMA5 TION.—The Secretary shall verify the information re6 ported by all applicants for assistance on the form pre7 scribed under section 483 with the return information (as

8 defined in section 6103 of the Internal Revenue Code of

9 1986) available to the Secretary of the Treasury. Notwith10 standing section 6103 of such Code the Secretary of the

11 Treasury shall provide the return information to the Sec12 retary. In the case of a dependent student the return in13 formation shall include the return information of the par14 ent of the student. The form prescribed by the Secretary

15 under section 483 shall contain a prominent notice of the

16 verification of the information and a warning to all the

17 applicants of the penalties for misrepresentation, with re18 spect to the information, under the United States Code.

19 SEC. 484. INSTITUTIONAL REFUNDS.

20 Section 484B (20 U.S.C. 1091b) is amended—

21 (1) in subsection (b)—

22 (A) in paragraph (1), by inserting ‘‘or’’

23 after the semicolon;

24 (B) by striking paragraph (2); and
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1 (C) by redesignating paragraph (3) as

2 paragraph (2); and

3 (2) in subsection (c)—

4 (A) in paragraph (1), by striking ‘‘last day

5 of attendance by the student’’ and inserting

6 ‘‘day the student withdrew’’;

7 (B) in subparagraph (A) of paragraph (2),

8 by striking ‘‘last recorded day of attendance by

9 the student’’ and inserting ‘‘day the student

10 withdrew’’; and

11 (C) by adding at the end the following:

12 ‘‘(3) For the purpose of this section, the term

13 ‘day a student withdrew’—

14 ‘‘(A) is the date that was the last recorded

15 day of attendance by the student; or

16 ‘‘(B) in instances where attendance is not

17 recorded, is the date on which—

18 ‘‘(i) the student began the withdrawal

19 process prescribed by the institution; or

20 ‘‘(ii) the student otherwise provided

21 notification to the institution of the intent

22 to withdraw.’’.
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1 SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE IN2 FORMATION FOR STUDENTS.

3 (a) INFORMATION DISSEMINATION ACTIVITIES.—

4 Section 485(a) (20 U.S.C. 1092(a)) is amended—

5 (1) in paragraph (1)—

6 (A) in the second sentence, by striking

7 ‘‘and mailings, to all current’’ and inserting ‘‘,

8 mailings, and electronic media, to all enrolled’’;

9 and

10 (B) by inserting after the second sentence

11 the following: ‘‘Each eligible institution annu12 ally shall provide to all students enrolled at the

13 institution, a list of the information that is re14 quired by this section, together with a state15 ment of the procedures required to obtain the

16 information.’’;

17 (2) in paragraph (2), by inserting ‘‘an applica18 tion for’’ after ‘‘concerning’’; and

19 (3) in paragraph (3)—

20 (A) in the matter preceding subparagraph

21 (A)—

22 (i) by inserting ‘‘(graduation rates)’’

23 after ‘‘this subsection’’; and

24 (ii) by inserting ‘‘(student right-to25 know)’’ after ‘‘subsection (e)’’; and
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1 (B) by amending subparagraph (A) to read

2 as follows:

3 ‘‘(A) shall be made available by July 1

4 each year to current and prospective students

5 prior to enrolling or entering into any financial

6 obligation; and’’.

7 (b) EXIT COUNSELING FOR BORROWERS.—Section

8 485(b) (20 U.S.C. 1092(b)) is amended—

9 (1) in paragraph (1)(A), by striking ‘‘(individ10 ually or in groups)’’; and

11 (2) in paragraph (2), by adding at the end the

12 following:

13 ‘‘(C) Nothing in this subsection shall be construed to

14 prohibit an institution of higher education from utilizing

15 electronic means to provide personalized exit counseling.’’.

16 (c) DISCLOSURES REQUIRED WITH RESPECT TO

17 ATHLETICALLY RELATED STUDENT AID.—Section 485(e)

18 (20 U.S.C. 1092(e)) is amended—

19 (1) by amending paragraph (2) to read as fol20 lows:

21 ‘‘(2) When an institution described in para22 graph (1) offers a potential student athlete athlet23 ically related student aid, such institution shall pro24 vide to the student, the student’s parents, the stu25 dent’s guidance counselor, and the student’s coach
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1 the information contained in the report submitted by

2 such institution pursuant to paragraph (1). If the

3 institution is a member of a national collegiate ath4 letic association that compiles graduation rate data

5 on behalf of its member institutions, that the Sec6 retary determines is substantially comparable to the

7 information described in the previous sentence, the

8 distribution of the compilation to all secondary

9 schools shall fulfill the responsibility of the institu10 tion to provide the information to a prospective stu11 dent athlete’s guidance counselor and coach.’’; and

12 (2) by amending paragraph (9) to read as fol13 lows:

14 ‘‘(9) The reports required by this subsection

15 shall be due each July 1 and shall cover the 1-year

16 period ending August 31 of the preceding year.’’.

17 (d) DISCLOSURE OF CAMPUS SECURITY POLICY AND

18 CAMPUS CRIME STATISTICS.—Section 485(f) (20 U.S.C.

19 1092(f)) is amended—

20 (1) by amending subparagraph (F) of para21 graph (1) to read as follows:

22 ‘‘(F) Statistics concerning the occurrence

23 on campus, during the most recent calendar

24 year, and during the 2 preceding calendar years

25 for which data are available—
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1 ‘‘(i) of the following criminal offenses

2 reported to campus security authorities or

3 local police agencies—

4 ‘‘(I) homicide, including murder

5 or nonnegligent manslaughter or neg6 ligent manslaughter;

7 ‘‘(II) sex offenses, forcible or

8 nonforcible;

9 ‘‘(III) robbery;

10 ‘‘(IV) aggravated assault;

11 ‘‘(V) burglary;

12 ‘‘(VI) motor vehicle theft; and

13 ‘‘(VII) arson;

14 ‘‘(ii) of the crimes described in sub15 clauses (I) through (VII), and vandalism

16 and simple assault, that manifest evidence

17 of prejudice based on actual or perceived

18 race, gender, religion, sexual orientation,

19 ethnicity, or disability that are reported to

20 campus security authorities or local police

21 agencies, which data shall be collected and

22 reported according to category of preju23 dice.’’;

24 (2) by redesignating paragraphs (4) through

25 (7) as paragraphs (5) through (8), respectively;
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1 (3) by inserting after paragraph (3) the follow2 ing:

3 ‘‘(4)(A) Each institution participating in any

4 program under this title which maintains either a

5 police or security department of any kind shall

6 make, keep, and maintain a daily log, written in a

7 form that can be easily understood, recording all

8 crimes reported to such police or security depart9 ment, including—

10 ‘‘(i) the nature, date, time, and general lo11 cation of each crime; and

12 ‘‘(ii) the disposition of the complaint, if

13 known.

14 ‘‘(B)(i) All entries that are required pursuant

15 to this paragraph shall, except where disclosure of

16 such information is prohibited by law or such disclo17 sure would jeopardize the confidentiality of the vic18 tim, be open to public inspection within 2 business

19 days of the initial report being made to the depart20 ment or a campus security authority.

21 ‘‘(ii) If new information about an entry into a

22 log becomes available to a police or security depart23 ment, then the new information shall be recorded in

24 the log not later than 2 business days after the in-
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1 formation becomes available to the police or security

2 department.

3 ‘‘(iii) Where there is clear and convincing evi4 dence that the release of such information would

5 jeopardize an ongoing criminal investigation or the

6 safety of an individual, cause a suspect to flee or

7 evade detection, or result in the destruction of evi8 dence, such information may be withheld until that

9 damage is no longer likely to occur from the release

10 of such information.

11 ‘‘(iv) Notwithstanding clause (iii), an institution

12 of higher education shall record all criminal inci13 dents occurring on campus and shall make the re14 ports open to public inspection not later than 2 busi15 ness days after the requirements of clause (iii) are

16 met.’’;

17 (4) in paragraph (7) (as redesignated by sub18 paragraph (B)), by inserting at the end the follow19 ing: ‘‘Such statistics shall not identify victims of

20 crimes or persons accused of crimes, except as per21 mitted by State or local law.’’; and

22 (5) by adding at the end the following:

23 ‘‘(9) STUDY.—

24 ‘‘(A) IN GENERAL.—The Secretary, in con25 sultation with the Attorney General, shall pro-
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1 vide for a national study to examine procedures

2 undertaken after an institution of higher edu3 cation receives a report of sexual assault.

4 ‘‘(B) REPORT.—The study required by

5 subparagraph (A) shall include an analysis of—

6 ‘‘(i) the existence and publication of

7 the institution of higher education’s and

8 State’s definition of sexual assault;

9 ‘‘(ii) the existence and publication of

10 the institution’s policy for campus sexual

11 assaults;

12 ‘‘(iii) the individuals to whom reports

13 of sexual assault are given most often

14 and—

15 ‘‘(I) how the individuals are

16 trained to respond to the reports; and

17 ‘‘(II) the extent to which the in18 dividuals are trained;

19 ‘‘(iv) the reporting options that are

20 articulated to the victim or victims of the

21 sexual assault regarding—

22 ‘‘(I) on-campus reporting and

23 procedure options; and

24 ‘‘(II) off-campus reporting and

25 procedure options;
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1 ‘‘(v) the resources available for vic2 tims’ safety, support, medical health, and

3 confidentiality, including—

4 ‘‘(I) how well the resources are

5 articulated both specifically to the vic6 tim of sexual assault and generally to

7 the campus at large; and

8 ‘‘(II) the security of the re9 sources in terms of confidentiality or

10 reputation;

11 ‘‘(vi) policies and practices that may

12 prevent or discourage the reporting of

13 campus sexual assaults to local crime au14 thorities, or that may otherwise obstruct

15 justice or interfere with the prosecution of

16 perpetrators of campus sexual assaults;

17 ‘‘(vii) policies and practices found suc18 cessful in aiding the report and any ensu19 ing investigation or prosecution of a cam20 pus sexual assault;

21 ‘‘(viii) the on-campus procedures for

22 investigation and disciplining the perpetra23 tor of a sexual assault, including—

24 ‘‘(I) the format for collecting evi25 dence; and
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1 ‘‘(II) the format of the investiga2 tion and disciplinary proceeding, in3 cluding the faculty responsible for

4 running the disciplinary procedure

5 and the persons allowed to attend the

6 disciplinary procedure; and

7 ‘‘(ix) types of punishment for offend8 ers, including—

9 ‘‘(I) whether the case is directed

10 outside for further punishment; and

11 ‘‘(II) how the institution pun12 ishes perpetrators.

13 ‘‘(C) SUBMISSION OF REPORT.—The re14 port required by subparagraph (B) shall be sub15 mitted to Congress not later than September 1,

16 1999.

17 ‘‘(D) DEFINITION.—For purposes of this

18 section, the term ‘campus sexual assaults’

19 means sexual assaults occurring at institutions

20 of higher education and sexual assaults commit21 ted against or by students or employees of such

22 institutions.

23 ‘‘(E) AUTHORIZATION OF APPROPRIA24 TIONS.—There is authorized to be appropriated
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1 to carry out this section $1,000,000 for fiscal

2 year 1999.’’.

3 (e) DATA REQUIRED.—Section 485(g) (20 U.S.C.

4 1092(g)) is amended—

5 (1) in paragraph (1), by adding at the end the

6 following:

7 ‘‘(I)(i) The total revenues, and the reve8 nues from football, men’s basketball, women’s

9 basketball, all other men’s sports combined, and

10 all other women’s sports combined, derived by

11 the institution from the institution’s intercolle12 giate athletics activities.

13 ‘‘(ii) For the purpose of clause (i) revenues

14 from intercollegiate athletics activities allocable

15 to a sport shall include, without limitation, gate

16 receipts, broadcast revenues, appearance guar17 antees and options, concessions and advertising,

18 except that revenues such as student activities

19 fees or alumni contributions not so allocable

20 shall be included in the calculation of total reve21 nues only.

22 ‘‘(J)(i) The total expenses, and the ex23 penses attributable to football, men’s basketball,

24 women’s basketball, all other men’s sports com25 bined and all other women’s sports combined,
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1 made by the institution for the institution’s

2 intercollegiate athletics activities.

3 ‘‘(ii) For the purpose of clause (i) expenses

4 for intercollegiate athletics activities allocable to

5 a sport shall include without limitation grants6 in-aid, salaries, travel, equipment, and supplies,

7 except that expenses such as general and ad8 ministrative overhead not so allocable shall be

9 included in the calculation of total expenses

10 only.

11 ‘‘(K) A statement of any reduction that

12 will, or is likely to, occur during the ensuing 4

13 academic years in the number of athletes that

14 will be permitted to participate in any collegiate

15 sport, or in the financial resources that the in16 stitution will make available for any such sport,

17 and the reasons for any such reduction, to the

18 extent the reduction is known at the time of the

19 preparation of the report.’’; and

20 (2) by striking paragraph (5).’’.

21 (f) GEPA AMENDMENT.—Section 444(a)(4)(B) of

22 the General Education Provisions Act (20 U.S.C.

23 1232g(a)(4)(B)) is amended—

24 (1) by redesignating clauses (iii) and (iv) as

25 clauses (iv) and (v), respectively; and
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1 (2) by inserting after clause (ii) the following:

2 ‘‘(iii) records that are maintained by

3 local police or campus security officers of

4 an educational agency or institution

5 about—

6 ‘‘(I) individuals who have been

7 found guilty of, or have pled guilty to,

8 committing or participating in any

9 criminal activity as defined in Fed10 eral, State, or local law that has oc11 curred while the individual was a stu12 dent in attendance, including audit or

13 noncredit, at an educational institu14 tion; and

15 ‘‘(II) findings of guilt of criminal

16 misconduct and related sanctions from

17 any previously attended educational

18 agencies or institutions where such

19 records were created on or after Sep20 tember 1, 1999, and that are main21 tained by the institution currently or

22 most recently attended by the individ23 ual;’’.
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1 SEC. 486. NATIONAL STUDENT LOAN DATA BANK SYSTEM.

2 Section 485B (20 U.S.C. 1092b) is amended by add3 ing at the end the following:

4 ‘‘(h) STUDENT STATUS CONFIRMATION REPORT.—In

5 order to reduce unnecessary paperwork and to increase the

6 efficient administration, the Secretary shall assure that

7 borrowers under part E are included in the Student Status

8 Confirmation Report in the same manner as borrowers

9 under parts B and D.’’.

10 SEC. 487. TRAINING IN FINANCIAL AID SERVICES.

11 Section 486 (20 U.S.C. 1093) is amended to read as

12 follows:

13 ‘‘SEC. 486. INFORMATION ON THE COSTS OF HIGHER EDU14 CATION.

15 ‘‘(a) IN GENERAL.—For the purpose of providing

16 comparative information to families about the costs of

17 higher education—

18 ‘‘(1) the National Center for Education Statis19 tics shall—

20 ‘‘(A) develop a standard definition for the

21 following data elements:

22 ‘‘(i) Tuition and fees.

23 ‘‘(ii) Total cost of attendance, includ24 ing costs such as housing, books, supplies,

25 and transportation.
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1 ‘‘(iii) Average amount of financial as2 sistance received by a student who attends

3 an institution of higher education, in terms

4 of the following:

5 ‘‘(I) Grants and loans.

6 ‘‘(II) Institutional and other as7 sistance.

8 ‘‘(iv) Percentage of students receiving

9 student financial assistance, in terms of

10 the following:

11 ‘‘(I) Grants and loans.

12 ‘‘(II) Institutional and other as13 sistance;

14 ‘‘(B) report the definitions to each institu15 tion of higher education and the Committee on

16 Labor and Human Resources of the Senate and

17 the Committee on Education and the Workforce

18 of the House of Representatives not later than

19 90 days after the date of enactment of the

20 Higher Education Amendments of 1998;

21 ‘‘(C) collect information regarding the data

22 elements described in subparagraph (A) with

23 respect to all institutions of higher education,

24 and make available the information each year in

25 a timely fashion through the integrated post-
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1 secondary education data system, beginning

2 with the information from the 1999–2000 aca3 demic year;

4 ‘‘(D) provide the public notice when the in5 formation described in subparagraph (C) is

6 available for public inspection; and

7 ‘‘(E) publish in a timely fashion a report

8 after the third year of collection of the informa9 tion described in subparagraph (C) that com10 pares the information described in subpara11 graph (C) longitudinally by institution, which

12 information shall be presented in a form that is

13 easily understandable, including clear defini14 tions of the data elements described in subpara15 graph (A), to allow parents and students to

16 make informed decisions about attending col17 lege; and

18 ‘‘(2) institutions of higher education shall pro19 vide information regarding each data element de20 scribed in paragraph (1)(A) to the National Center

21 for Education Statistics by March 1 of each year,

22 beginning in the year 2000.

23 ‘‘(b) STUDY.—

24 ‘‘(1) IN GENERAL.—In consultation with the

25 Bureau of Labor Statistics, the National Center for
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1 Education Statistics shall conduct a national study

2 of expenditures at institutions of higher education.

3 Such study shall include information about—

4 ‘‘(A) expenditures for—

5 ‘‘(i) faculty salaries and benefits;

6 ‘‘(ii) administrative salaries, benefits,

7 and expenses;

8 ‘‘(iii) academic support services;

9 ‘‘(iv) research;

10 ‘‘(v) construction; and

11 ‘‘(vi) technology;

12 ‘‘(B) how such expenditures change over

13 time; and

14 ‘‘(C) how such expenditures relate to col15 lege costs.

16 ‘‘(2) FINAL REPORT.—The National Center for

17 Education Statistics shall submit a report regarding

18 the findings of the study required by paragraph (1)

19 to the Committee on Labor and Human Resources

20 of the Senate and the Committee on Education and

21 the Workforce of the House of Representatives not

22 later than September 30, 2001.

23 ‘‘(c) HIGHER EDUCATION MARKET BASKET.—In

24 consultation with the Bureau of Labor Statistics, the Na25 tional Center for Education Statistics shall develop a
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1 Higher Education Market Basket that identifies the items

2 that comprise the costs of higher education. The National

3 Center for Education Statistics shall provide a report on

4 the basket to the Committee on Labor and Human Re5 sources of the Senate and the Committee on Education

6 and the Workforce of the House of Representatives not

7 later than September 30, 2002.’’.

8 SEC. 488. PROGRAM PARTICIPATION AGREEMENTS.

9 Section 487 (20 U.S.C. 1094) is amended—

10 (1) in subsection (a)—

11 (A) in paragraph (3)—

12 (i) by striking subparagraph (B); and

13 (ii) by redesignating subparagraphs

14 (C) and (D) as subparagraphs (B) and

15 (C), respectively;

16 (B) in paragraph (9), by striking ‘‘part B’’

17 and inserting ‘‘part B or D’’;

18 (C) in paragraph (14)—

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

20 ‘‘part B’’ and inserting ‘‘part B or D’’;

21 and

22 (ii) in subparagraph (B)—

23 (I) by inserting ‘‘for-profit’’ after

24 ‘‘Any’’;
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1 (II) by striking ‘‘and any eligible

2 institution which’’ and inserting ‘‘or’’;

3 and

4 (III) by striking ‘‘part B’’ and

5 inserting ‘‘part B or D’’;

6 (D) in paragraph (15), by striking ‘‘State

7 review entities’’ and inserting ‘‘the State agen8 cies’’; and

9 (E) by amending paragraph (21) to read

10 as follows:

11 ‘‘(21) The institution will meet the require12 ments established by the Secretary and accrediting

13 agencies or associations, and will provide evidence to

14 the Secretary that the institution has the authority

15 to operate within a State.’’; and

16 (2) in subsection (c)—

17 (A) in paragraph (1)(A)(i), by striking

18 ‘‘State review entities referred to in’’ and in19 serting ‘‘appropriate State agency notifying the

20 Secretary under’’;

21 (B) in paragraph (4), by striking ‘‘, after

22 consultation with each State review entity des23 ignated under subpart 1 of part H,’’; and
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1 (C) in paragraph (5), by striking ‘‘State

2 review entities designated’’ and inserting ‘‘State

3 agencies notifying the Secretary’’.

4 SEC. 489. REGULATORY RELIEF AND IMPROVEMENT.

5 Section 487A (20 U.S.C. 1094a) is amended to read

6 as follows:

7 ‘‘SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

8 ‘‘(a) QUALITY ASSURANCE PROGRAM.—

9 ‘‘(1) IN GENERAL.—The Secretary is authorized

10 to select institutions for voluntary participation in a

11 Quality Assurance Program that provides participat12 ing institutions with an alternative management ap13 proach through which individual schools develop and

14 implement their own comprehensive systems, includ15 ing processing and disbursement of student financial

16 aid, verification of student financial aid application

17 data, and entrance and exit interviews, thereby en18 hancing program integrity within the student aid de19 livery system. The Quality Assurance Program au20 thorized by this section shall be based on criteria

21 that include demonstrated institutional performance,

22 as determined by the Secretary, and shall take into

23 consideration current quality assurance goals, as de24 termined by the Secretary.
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1 ‘‘(2) WAIVER.—The Secretary is authorized to

2 waive for any institution participating in the Quality

3 Assurance Program any regulations dealing with re4 porting or verification requirements in this title that

5 are addressed by the institution’s alternative man6 agement system, and may substitute such quality as7 surance reporting as the Secretary determines nec8 essary to ensure accountability and compliance with

9 the purposes of the programs under this title.

10 ‘‘(3) DETERMINATION.—The Secretary is au11 thorized to determine—

12 ‘‘(A) when an institution that is unable to

13 administer the Quality Assurance Program

14 shall be removed from such program; and

15 ‘‘(B) when institutions desiring to cease

16 participation in such program will be required

17 to complete the current award year under the

18 requirements of the Quality Assurance Pro19 gram.

20 ‘‘(4) REVIEW AND EVALUATION.—The Sec21 retary shall review and evaluate the Quality Assur22 ance Program conducted by each participating insti23 tution and, on the basis of that evaluation, make

24 recommendations regarding amendments to this Act

25 that will streamline the administration and enhance
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1 the integrity of Federal student assistance programs.

2 Such recommendations shall be submitted to the

3 Committee on Labor and Human Resources of the

4 Senate and the Committee on Education and the

5 Workforce of the House of Representatives.

6 ‘‘(b) REGULATORY IMPROVEMENT AND STREAMLIN7 ING EXPERIMENTS.—

8 ‘‘(1) IN GENERAL.—The Secretary shall review

9 and evaluate the experience of institutions partici10 pating as experimental sites during the period of

11 1993 through 1998 under this section (as such sec12 tion was in effect on the day before the date of en13 actment of the Higher Education Amendments of

14 1998), and shall submit a report based on this re15 view and evaluation to the Committee on Labor and

16 Human Resources of the Senate and the Committee

17 on Education and the Workforce of the House of

18 Representatives not later than 6 months after the

19 enactment of the Higher Education Amendments of

20 1998. Such report shall include—

21 ‘‘(A) a list of participating institutions and

22 the specific statutory or regulatory waivers

23 granted to each institution;
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1 ‘‘(B) the findings and conclusions reached

2 regarding each of the experiments conducted;

3 and

4 ‘‘(C) recommendations for amendments to

5 improve and streamline this Act, based on the

6 results of the experiment.

7 ‘‘(2) SELECTION.—

8 ‘‘(A) IN GENERAL.—The Secretary is au9 thorized to select a limited number of institu10 tions for voluntary participation as experi11 mental sites to provide recommendations to the

12 Secretary on the impact and effectiveness of

13 proposed regulations or new management initia14 tives, except that additional institutions may

15 not be selected by the Secretary until the report

16 required by subsection (b)(1) has been submit17 ted to Congress.

18 ‘‘(B) CONSULTATION.—Prior to approving

19 any additional experimental sites, the Secretary

20 shall consult with the Committee on Labor and

21 Human Resources of the Senate and the Com22 mittee on Education and the Workforce of the

23 House of Representatives and shall provide—

24 ‘‘(i) a list of institutions proposed for

25 participation in the experiment and the
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1 specific statutory or regulatory waivers

2 proposed to be granted to each institution;

3 ‘‘(ii) the objectives to be achieved

4 through the experiment; and

5 ‘‘(iii) the period of time over which

6 the experiment is to be conducted.

7 ‘‘(C) WAIVERS.—The Secretary is author8 ized to waive, for any institution participating

9 as an experimental site under subparagraph

10 (A), any requirements in this title, or regula11 tions prescribed under this title, that will bias

12 experimental results.

13 ‘‘(c) DEFINITIONS.—For purposes of this section, the

14 term ‘current award year’ is defined as the award year

15 during which the participating institution indicates the in16 stitution’s intention to cease participation.’’.

17 SEC. 489A. DISTANCE EDUCATION DEMONSTRATION PRO18 GRAMS.

19 Part G (20 U.S.C. 1088 et seq.) is amended by in20 serting after section 487B (20 U.S.C. 1094a) the follow21 ing:

22 ‘‘SEC. 487C. DISTANCE EDUCATION DEMONSTRATION PRO23 GRAMS.

24 ‘‘(a) PURPOSE.—It is the purpose of this section—
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1 ‘‘(1) to allow demonstration programs that are

2 strictly monitored by the Department to test the

3 quality and viability of expanded distance education

4 programs currently restricted under this Act;

5 ‘‘(2) to help determine the specific statutory

6 and regulatory requirements which should be altered

7 to provide greater access to high quality distance

8 education programs; and

9 ‘‘(3) to help determine the appropriate level of

10 Federal assistance for students enrolled in distance

11 education programs.

12 ‘‘(b) DEMONSTRATION PROGRAMS AUTHORIZED.—

13 ‘‘(1) IN GENERAL.—The Secretary, in accord14 ance with the provisions of subsection (d), is author15 ized to select institutions of higher education or con16 sortia of such institutions for voluntary participation

17 in a Distance Education Demonstration Program

18 that provides participating institutions with the abil19 ity to offer distance education programs that do not

20 meet all or a portion of the sections or regulations

21 described in paragraph (2).

22 ‘‘(2) WAIVERS.—The Secretary is authorized to

23 waive, for any institution or consortia participating

24 in a Distance Education Demonstration Program, 1

25 or more of the requirements of section 472(5) as the
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1 section relates to computer costs, sections 472(10),

2 481(a)(3)(A), 481(a)(3)(B), 484(l)(1), or 1 or more

3 of the regulations prescribed for distance education

4 under part F or G.

5 ‘‘(3) SPECIAL RULE.—An institution of higher

6 education, as defined in section 481(a), is eligible to

7 participate in the demonstration program authorized

8 under this section if such institution awards a de9 gree, except that—

10 ‘‘(A) such institutions that are described in

11 section 481(a)(1)(C) shall not be eligible to par12 ticipate; and

13 ‘‘(B) subject to subparagraph (A), such in14 stitutions that meet the requirements of sub15 section (a) of section 481, other than the re16 quirements of paragraph (3)(A) or (3)(B) of

17 such subsection, shall be eligible to participate.

18 ‘‘(c) APPLICATION.—

19 ‘‘(1) IN GENERAL.—Each institution or consor20 tia of institutions desiring to participate in a dem21 onstration program under this section shall submit

22 an application to the Secretary at such time and in

23 such manner as the Secretary may require.

24 ‘‘(2) CONTENTS.—Each application shall in25 clude—
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1 ‘‘(A) a description of the institution or

2 consortium’s consultation with a recognized ac3 crediting agency or association with respect to

4 quality assurances for the distance education

5 programs to be offered;

6 ‘‘(B) a description of the statutory and

7 regulatory requirements described in subsection

8 (b)(2) for which a waiver is sought and the rea9 sons for which the waiver is sought;

10 ‘‘(C) a description of the distance edu11 cation programs to be offered;

12 ‘‘(D) a description of the students to whom

13 distance education programs will be offered;

14 ‘‘(E) an assurance that the institution or

15 consortium will offer full cooperation with the

16 ongoing evaluations of the demonstration pro17 gram provided for in this section; and

18 ‘‘(F) such other information as the Sec19 retary may require.

20 ‘‘(d) SELECTION.—The Secretary is authorized to se21 lect not more than 5 institutions or consortia to partici22 pate in the initial year of the demonstration program au23 thorized under this section. If expansion of the demonstra24 tion program can be supported on the basis of the evalua25 tions conducted pursuant to subsections (f) and (g), the
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1 Secretary may select not more than 10 additional institu2 tions or consortia, taking into account the number and

3 quality of applications received and the Department’s ca4 pacity to oversee and monitor each demonstration pro5 gram. To the extent feasible, the Secretary shall select a

6 representative sample of institutions for participation. In

7 selecting institutions for participation, the Secretary shall

8 take into consideration the institution’s financial and ad9 ministrative capability and the type of program or pro10 grams being offered via distance education course offer11 ings.

12 ‘‘(e) NOTIFICATION.—The Secretary shall make

13 available to the public and to the Committee on Labor and

14 Human Resources of the Senate and the Committee on

15 Education and the Workforce of the House of Representa16 tives a list of institutions or consortia selected to partici17 pate in the demonstration program authorized by this sec18 tion. Such notice shall include a listing of the specific stat19 utory and regulatory requirements being waived for each

20 institution or consortia and a description of the distance

21 education courses to be offered.

22 ‘‘(f) EVALUATIONS AND REPORTS.—

23 ‘‘(1) EVALUATION.—The Secretary, on an an24 nual basis, shall evaluate the demonstration pro-
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1 grams authorized under this section. Such evalua2 tions shall specifically review—

3 ‘‘(A) the number and types of students

4 participating in the programs being offered, in5 cluding the progress of participating students

6 toward recognized associate, bachelor’s, or

7 graduate degrees, and the degree to which par8 ticipation in such programs increased;

9 ‘‘(B) issues related to student financial as10 sistance for distance education; and

11 ‘‘(C) the extent to which statutory or regu12 latory requirements not waived under the dem13 onstration program present difficulties for stu14 dents or institutions.

15 ‘‘(2) POLICY ANALYSIS.—In addition, the Sec16 retary shall review current policies and identify those

17 policies which present impediments to the develop18 ment and use of distance learning and other non19 traditional methods of expanding access to edu20 cation.

21 ‘‘(3) REPORTS.—

22 ‘‘(A) IN GENERAL.—Within 18 months of

23 the initiation of the demonstration program, the

24 Secretary shall report to the Committee on

25 Labor and Human Resources of the Senate and
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1 and the Committee on Education and the

2 Workforce of the House of Representatives with

3 respect to—

4 ‘‘(i) the evaluations of the demonstra5 tion programs authorized under this sec6 tion; and

7 ‘‘(ii) any proposed statutory changes

8 designed to enhance the use of distance

9 education.

10 ‘‘(B) ADDITIONAL REPORTS.—The Sec11 retary shall provide additional reports to the

12 Committee on Labor and Human Resources of

13 the Senate and the Committee on Education

14 and the Workforce of the House of Representa15 tives on an annual basis regarding the dem16 onstration programs authorized under this sec17 tion.

18 ‘‘(g) INDEPENDENT EVALUATION.—

19 ‘‘(1) IN GENERAL.—The Secretary shall enter

20 into a contract with the National Academy of

21 Sciences to study the quality of and student learning

22 outcomes in distance education programs. Such

23 study shall include—

24 ‘‘(A) identification of the elements by

25 which quality in distance education can be as-
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1 sessed, such as subject matter, interactivity,

2 and student outcomes; and

3 ‘‘(B) identification of the types of students

4 which can most benefit from distance education

5 in areas such as access to higher education,

6 persistence, and graduation.

7 ‘‘(2) SCOPE.—Such study shall include distance

8 education programs offered by the institutions or

9 consortia participating in the demonstration pro10 gram authorized by this section, as well as the dis11 tance education programs offered by other institu12 tions.

13 ‘‘(3) INTERIM AND FINAL REPORTS.—The Sec14 retary shall request that the National Academy of

15 Sciences submit an interim report to the Secretary,

16 the Committee on Labor and Human Resources of

17 the Senate, and the Committee on Education and

18 the Workforce of the House of Representatives not

19 later than December 31, 2000, and a final report

20 not later than December 31, 2002, regarding the

21 study.

22 ‘‘(4) FUNDING.—The Secretary shall make

23 available not more than $1,000,000 for the study re24 quired by this subsection.
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1 ‘‘(h) OVERSIGHT.—In conducting the demonstration

2 program authorized under this section, the Secretary

3 shall, on a continuing basis—

4 ‘‘(1) assure compliance of institutions or con5 sortia with the requirements of this title (other than

6 the sections and regulations that are waived under

7 subsection (b)(2));

8 ‘‘(2) provide technical assistance;

9 ‘‘(3) monitor fluctuations in the student popu10 lation enrolled in the participating institutions or

11 consortia; and

12 ‘‘(4) consult with appropriate accrediting agen13 cies or associations and appropriate State regulatory

14 authorities.

15 ‘‘(i) DEFINITION.—For the purpose of this section,

16 the term ‘distance learning’ means an educational process

17 that is characterized by the separation, in time or place,

18 between instructor and student. Distance learning may in19 clude courses offered principally through the use of—

20 ‘‘(1) television, audio, or computer trans21 mission, such as open broadcast, closed circuit,

22 cable, microwave, or satellite transmission;

23 ‘‘(2) audio or computer conferencing;

24 ‘‘(3) video cassettes or discs; or

25 ‘‘(4) correspondence.’’.
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1 SEC. 489B. ADVISORY COMMITTEE ON STUDENT FINANCIAL

2 ASSISTANCE.

3 Section 491 (20 U.S.C. 1098) is amended—

4 (1) in subsection (b)—

5 (A) in the second sentence, by striking

6 ‘‘and expenditures’’ and inserting ‘‘, expendi7 tures and staffing levels’’; and

8 (B) by inserting after the third sentence

9 the following: ‘‘Reports, publications, and other

10 documents, including such reports, publications,

11 and documents in electronic form, shall not be

12 subject to review by the Secretary.’’;

13 (2) in subsection (e)—

14 (A) by redesignating paragraphs (3), (4),

15 and (5), as paragraphs (4), (5), and (6), re16 spectively; and

17 (B) by inserting after paragraph (2) the

18 following:

19 ‘‘(3) No officers or full-time employees of the

20 Federal Government shall serve as members of the

21 Advisory Committee.’’;

22 (3) in subsection (g), by striking ‘‘(1) Mem23 bers’’ and all that follows through ‘‘of the United

24 States may’’ and inserting ‘‘Members of the Advi25 sory Committee may’’;

26 (4) in subsection (h)(1)—
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1 (A) by inserting ‘‘determined’’ after ‘‘as

2 may be’’; and

3 (B) by adding at the end the following:

4 ‘‘The Advisory Committee may appoint not

5 more than 1 full-time equivalent, nonperma6 nent, consultant without regard to the provi7 sions of title 5, United States Code. The Advi8 sory Committee shall not be required by the

9 Secretary to reduce personnel to meet agency

10 personnel reduction goals.’’;

11 (5) in subsection (i), by striking ‘‘$750,000’’

12 and inserting ‘‘$800,000’’;

13 (6) by amending subsection (j) to read as fol14 lows:

15 ‘‘(j) SPECIAL ANALYSES AND ACTIVITIES.—The Ad16 visory Committee shall—

17 ‘‘(1) monitor and evaluate the modernization of

18 student financial aid systems and delivery processes,

19 including the implementation of a performance-based

20 organization within the Department, and report to

21 Congress regarding such modernization on not less

22 than an annual basis, including recommendations for

23 improvement;

24 ‘‘(2) assess the adequacy of current methods for

25 disseminating information about programs under
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1 this title and recommend improvements, as appro2 priate, regarding early needs assessment and infor3 mation for first-year secondary school students;

4 ‘‘(3) assess and make recommendations con5 cerning the feasibility and degree of use of appro6 priate technology in the application for, and delivery

7 and management of, financial assistance under this

8 title, as well as policies that promote use of such

9 technology to reduce cost and enhance service and

10 program integrity, including electronic application

11 and reapplication, just-in-time delivery of funds, re12 porting of disbursements and reconciliation;

13 ‘‘(4) assess the implications of distance learning

14 on student eligibility and other requirements for fi15 nancial assistance under this title, and make rec16 ommendations that will enhance access to post17 secondary education through distance learning while

18 maintaining access, through on-campus instruction

19 at eligible institutions, and program integrity; and

20 ‘‘(5) make recommendations to the Secretary

21 regarding redundant or outdated provisions of and

22 regulations under this Act, consistent with the Sec23 retary’s requirements under section 498A(b)(3).’’;

24 (7) in subsection (k), by striking ‘‘1998’’ and

25 inserting ‘‘2004’’; and
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1 (8) by repealing subsection (l).

2 SEC. 489C. REGIONAL MEETINGS AND NEGOTIATED RULE3 MAKING.

4 Section 492 (20 U.S.C. 1098a) is amended—

5 (1) in subsection (a)—

6 (A) in paragraph (1)—

7 (i) by inserting ‘‘, after the enactment

8 of each Act to reauthorize this Act that

9 contains an amendment to this title,’’ after

10 ‘‘The Secretary’’; and

11 (ii) by inserting ‘‘D,’’ after ‘‘B,’’; and

12 (B) in paragraph (2)—

13 (i) by inserting ‘‘D,’’ after ‘‘B,’’; and

14 (ii) by striking ‘‘1992’’ and inserting

15 ‘‘1998, and for the implementation of this

16 title as amended by each Act to reauthor17 ize this Act enacted after the date of en18 actment of the Higher Education Amend19 ments of 1998 that contains an amend20 ment to this title’’; and

21 (2) in subsection (b)—

22 (A) by striking ‘‘After’’ and inserting the

23 following:

24 ‘‘(1) IN GENERAL.—After’’;
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1 (B) in paragraph (1) (as redesignated by

2 subparagraph (A))—

3 (i) by inserting ‘‘D,’’ after ‘‘B,’’; and

4 (ii) by striking ‘‘1992’’ and inserting

5 ‘‘1998, and for the implementation of this

6 title as amended by each Act to reauthor7 ize this Act enacted after the date of en8 actment of the Higher Education Amend9 ments of 1998 that contains an amend10 ment to this title,’’; and

11 (C) by adding at the end the following:

12 ‘‘(2) EXPANSION OF NEGOTIATED RULEMAKING

13 IN STUDENT LOAN PROGRAMS.—All regulations per14 taining to the student assistance programs in parts

15 B, D, G, and H, that are promulgated after the date

16 of enactment of this paragraph, shall be subject to

17 the negotiated rulemaking process, unless the Sec18 retary determines that exceptional circumstances

19 exist making negotiated rulemaking impractical with

20 respect to given regulations and publishes the basis

21 for such determination in the Federal Register at

22 the same time as the proposed regulations in ques23 tions are first published. All published proposed reg24 ulations shall conform, unless impracticable, to

25 agreements resulting from such negotiated rule-
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1 making. Such negotiated rulemaking shall be con2 ducted in accordance with the provisions of para3 graph (1).’’.

4 PART H—PROGRAM INTEGRITY TRIAD

5 SEC. 491. STATE ROLE AND RESPONSIBILITIES.

6 Subpart 1 of part H of title IV (20 U.S.C. 1099a

7 et seq.) is amended to read as follows:

8 ‘‘Subpart 1—State Role

9 ‘‘SEC. 495. STATE RESPONSIBILITIES.

10 ‘‘(a) STATE RESPONSIBILITIES.—As part of the in11 tegrity program authorized by this part, each State,

12 through 1 State agency or several State agencies selected

13 by the State, shall—

14 ‘‘(1) furnish the Secretary, upon request, infor15 mation with respect to the process for licensing or

16 other authorization for institutions of higher edu17 cation to operate within the State;

18 ‘‘(2) notify the Secretary promptly whenever

19 the State revokes a license or other authority to op20 erate an institution of higher education; and

21 ‘‘(3) notify the Secretary promptly whenever

22 the State has credible evidence that an institution of

23 higher education within the State—
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1 ‘‘(A) has committed fraud in the adminis2 tration of the student assistance programs au3 thorized by this title; or

4 ‘‘(B) has substantially violated a provision

5 of this title.

6 ‘‘(b) INSTITUTIONAL RESPONSIBILITY.—Each insti7 tution of higher education shall provide evidence to the

8 Secretary that the institution has authority to operate

9 within a State at the time the institution is certified under

10 subpart 3.’’.

11 SEC. 492. ACCREDITING AGENCY RECOGNITION.

12 (a) AMENDMENTS TO HEADINGS.—Subpart 2 of part

13 H of title IV (20 U.S.C. 1099b et seq.) is amended—

14 (1) in the subpart heading, by striking ‘‘Ap15 proval’’ and inserting ‘‘Recognition’’; and

16 (2) in the heading for section 496, by striking

17 ‘‘APPROVAL’’ and inserting ‘‘RECOGNITION’’.

18 (b) RECOGNITION OF ACCREDITING AGENCY OR AS19 SOCIATION.—Section 496 (20 U.S.C. 1099b) is amend20 ed—

21 (1) in the heading for subsection (a), by strik22 ing ‘‘STANDARDS’’ and inserting ‘‘CRITERIA’’;

23 (2) in subsection (a)—
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1 (A) in the matter preceding paragraph (1),

2 by striking ‘‘standards’’ each place the term ap3 pears and inserting ‘‘criteria’’;

4 (B) in paragraph (4)—

5 (i) by striking ‘‘at the institution’’ and

6 inserting ‘‘offered by the institution’’; and

7 (ii) by inserting ‘‘, including distance

8 education courses or programs,’’ after

9 ‘‘higher education’’; and

10 (C) in paragraph (5)—

11 (i) by striking subparagraph (I);

12 (ii) by redesignating subparagraphs

13 (A) through (H) as subparagraphs (B)

14 through (I), respectively;

15 (iii) by inserting before subparagraph

16 (B) the following:

17 ‘‘(A) success with respect to student

18 achievement in relation to the institution’s mis19 sion, including, as appropriate, consideration of

20 course completion, State licensing examination,

21 and job placement rates;’’;

22 (iv) in subparagraph (I) (as redesig23 nated by clause (ii)), by striking ‘‘in clock

24 hours or credit hours’’; and

25 (v) in subparagraph (L)—
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1 (I) by inserting ‘‘record of’’ be2 fore ‘‘compliance’’;

3 (II) by striking ‘‘Act, including

4 any’’ and inserting ‘‘Act based on

5 the’’;

6 (III) by inserting ‘‘any’’ after

7 ‘‘reviews, and’’; and

8 (IV) in the matter following sub9 paragraph (L), by striking ‘‘(G),’’;

10 (3) by amending paragraph (1) of subsection (l)

11 to read as follows: ‘‘(1)(A)(i) If the Secretary deter12 mines that an accrediting agency or association has

13 failed to apply effectively the standards in this sec14 tion, or is otherwise not in compliance with the re15 quirements of this section, the Secretary shall—

16 ‘‘(I) after notice and opportunity for a

17 hearing, limit, suspend, or terminate the ap18 proval of the agency or association; or

19 ‘‘(II) require the agency or association to

20 take appropriate action to bring the agency or

21 association into compliance with such require22 ments within a timeframe specified by the Sec23 retary, except that—
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1 ‘‘(aa) such timeframe shall not exceed

2 12 months unless the Secretary extends

3 such period for good cause; and

4 ‘‘(bb) if the agency or association fails

5 to bring the agency or association into

6 compliance within such timeframe, the Sec7 retary shall, after notice and opportunity

8 for a hearing, limit, suspend, or terminate

9 the approval of the agency or association.’’;

10 and

11 (4) in subsection (n)(3), by adding at the end

12 the following: ‘‘When the Secretary decides to recog13 nize an accrediting agency or association, the Sec14 retary shall determine the agency or association’s

15 scope of recognition. If the agency or association re16 views institutions offering distance education courses

17 or programs and the Secretary determines that the

18 agency or association meets the requirements of this

19 section, then the agency shall be recognized and the

20 scope of recognition shall include accreditation of in21 stitutions offering distance education courses or pro22 grams.’’.

23 SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES.

24 (a) SINGLE APPLICATION FORM.—Section 498(b)

25 (20 U.S.C. 1099c(b)) is amended—
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1 (1) in paragraph (1), by striking ‘‘and capabil2 ity’’ and inserting ‘‘financial responsibility, and ad3 ministrative capability’’;

4 (2) by amending paragraph (3) to read as fol5 lows:

6 ‘‘(3) requires—

7 ‘‘(A) a description of the third party

8 servicers of an institution of higher education;

9 and

10 ‘‘(B) the institution to maintain a copy of

11 any contract with a financial aid service pro12 vider or loan servicer, and provide a copy of any

13 such contract to the Secretary upon request;’’;

14 (3) in paragraph (4), by striking the period and

15 inserting ‘‘; and’’; and

16 (4) by adding at the end the following:

17 ‘‘(5) provides, at the option of the institution,

18 for participation in 1 or more of the programs under

19 part B.’’.

20 (b) FINANCIAL RESPONSIBILITY STANDARDS.—Sec21 tion 498(c) (20 U.S.C. 1099c(c)) is amended—

22 (1) in paragraph (2), by striking ‘‘with respect

23 to operating losses, net worth, asset to liabilities ra24 tios, or operating fund deficits’’ and inserting ‘‘re-
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1 garding ratios that demonstrate financial respon2 sibility,’’;

3 (2) in paragraph (3)(A), by striking ‘‘Secretary

4 third party’’ and all that follows through ‘‘payable to

5 the Secretary’’ and inserting ‘‘Secretary any third

6 party guarantees, which the Secretary determines

7 are reasonable, that’’; and

8 (3) in paragraph (4)—

9 (A) in the matter preceding subparagraph

10 (A), by striking ‘‘ratio of current assets to cur11 rent liabilities’’ and inserting ‘‘criteria’’; and

12 (B) in subparagraph (C), by striking ‘‘cur13 rent operating ratio requirement’’ and inserting

14 ‘‘criteria’’.

15 (c) FINANCIAL GUARANTEES FROM OWNERS.—Sec16 tion 498(e) (20 U.S.C. 1099c(e)) is amended—

17 (1) in the subsection heading, by inserting ‘‘OF

18 FOR-PROFIT INSTITUTIONS’’ after ‘‘OWNERS’’;

19 (2) in paragraph (1)(A), by inserting ‘‘from an’’

20 and inserting ‘‘from a for-profit’’;

21 (3) in paragraph (2)—

22 (A) in the matter preceding clause (i) of

23 subparagraph (A), by inserting ‘‘for-profit’’

24 after ‘‘or more’’;
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1 (B) in subparagraph (B), by inserting

2 ‘‘for-profit’’ after ‘‘or more’’; and

3 (4) in paragraph (3), by striking ‘‘operation of,

4 an institution or’’ and inserting ‘‘operation of, a for5 profit institution or the’’.

6 (d) APPLICATIONS AND SITE VISITS.—Section 498(f)

7 (20 U.S.C. 1099c(f)) is amended—

8 (1) in the subsection heading by striking ‘‘;

9 SITE VISITS AND FEES’’ and inserting ‘‘AND SITE

10 VISITS’’;

11 (2) in the second sentence, by striking ‘‘shall’’

12 and inserting ‘‘may’’;

13 (3) in the third sentence, strike ‘‘may’’ and in14 sert ‘‘shall’’; and

15 (4) by striking the fourth sentence.

16 (e) TIME LIMITATIONS ON, AND RENEWAL OF, ELI17 GIBILITY.—Subsection (g) of section 498 (20 U.S.C.

18 1099c) is amended to read as follows:

19 ‘‘(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELI20 GIBILITY.—

21 ‘‘(1) GENERAL RULE.—After the expiration of

22 the certification of any institution under the sched23 ule prescribed under this section (as in effect prior

24 to the enactment of the Higher Education Act

25 Amendments of 1998), or upon request for initial
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1 certification from an institution not previously cer2 tified, the Secretary may certify the eligibility for

3 the purposes of any program authorized under this

4 title of each such institution for a period not to ex5 ceed 6 years.

6 ‘‘(2) NOTIFICATION.—The Secretary shall no7 tify each institution of higher education not later

8 than 6 months prior to the date of the expiration of

9 the institution’s certification.

10 ‘‘(3) INSTITUTIONS OUTSIDE THE UNITED

11 STATES.—The Secretary shall promulgate regula12 tions regarding the recertification requirements ap13 plicable to an institution of higher education outside

14 of the United States that meets the requirements of

15 section 481(a)(1)(C) and received less than

16 $500,000 in funds under part B for the most recent

17 year for which data are available.

18 (f) PROVISIONAL CERTIFICATION.—Section 498(h)

19 (20 U.S.C. 1099c(h)) is amended—

20 (1) in paragraph (1)(B)(ii), by striking ‘‘an eli21 gible’’ and inserting ‘‘a for-profit eligible’’; and

22 (2) in paragraph (2), by striking ‘‘the ap23 proval’’ and inserting ‘‘the recognition’’.

24 (g) TREATMENT OF CHANGES OF OWNERSHIP.—Sec25 tion 498(i) (20 U.S.C. 1099c(i)) is amended—
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1 (1) in the subsection heading, by inserting ‘‘OF

2 FOR-PROFIT INSTITUTIONS’’ after ‘‘OWNERSHIP’’;

3 and

4 (2) in paragraph (2)—

5 (A) in subparagraph (A), by inserting ‘‘for6 profit’’ before ‘‘institution’’;

7 (B) in subparagraph (C), by striking

8 ‘‘two’’ and inserting ‘‘a for-profit institution

9 with one’’;

10 (C) in subparagraph (D), by inserting

11 ‘‘for-profit’’ before ‘‘institutions’’;

12 (D) in subparagraph (E), by inserting

13 ‘‘for-profit’’ before ‘‘institutions’’; and

14 (E) in subparagraph (F), by inserting

15 ‘‘for-profit’’ before ‘‘institution’’.

16 (h) TREATMENT OF BRANCHES.—The second sen17 tence of section 498(j)(1) (20 U.S.C. 1099c(j)(1)) is

18 amended by inserting ‘‘after the branch is certified by the

19 Secretary as a branch campus participating in a program

20 under title IV,’’ after ‘‘2 years’’.

21 SEC. 494. PROGRAM REVIEW AND DATA.

22 Section 498A (20 U.S.C. 1099c–1) is amended—

23 (1) in subsection (a)—

24 (A) in paragraph (2)—
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1 (i) in the matter preceding subpara2 graph (A), by striking ‘‘may’’ and inserting

3 ‘‘shall’’;

4 (ii) by amending subparagraph (C) to

5 read as follows:

6 ‘‘(C) institutions with a significant fluctua7 tion in Federal Stafford Loan volume, Federal

8 Direct Stafford/Ford Loan volume, or Federal

9 Pell Grant award volume, or any combination

10 thereof, in the year for which the determination

11 is made, compared to the year prior to such

12 year, that are not accounted for by changes in

13 the Federal Stafford Loan program, the Fed14 eral Direct Stafford/Ford Loan program, or the

15 Pell Grant program, or any combination there16 of;’’;

17 (iii) by amending subparagraph (D) to

18 read as follows:

19 ‘‘(D) institutions reported to have defi20 ciencies or financial aid problems by the State

21 licensing or authorizing agency, or by the ap22 propriate accrediting agency or association;’’;

23 (iv) in subparagraph (E), by inserting

24 ‘‘and’’ after the semicolon; and
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1 (v) by striking subparagraphs (F) and

2 (G), and inserting the following:

3 ‘‘(F) such other institutions that the Sec4 retary determines may pose a significant risk of

5 failure to comply with the administrative capa6 bility or financial responsibility provisions of

7 this title; and’’; and

8 (B) in paragraph (3)(A), by inserting ‘‘rel9 evant’’ after ‘‘all’’; and

10 (2) by amending subsection (b) to read as fol11 lows:

12 ‘‘(b) SPECIAL ADMINISTRATIVE RULES.—

13 ‘‘(1) IN GENERAL.—In carrying out paragraphs

14 (1) and (2) of subsection (a) and any other relevant

15 provisions of this title, the Secretary shall—

16 ‘‘(A) establish guidelines designed to en17 sure uniformity of practice in the conduct of

18 program reviews of institutions of higher edu19 cation;

20 ‘‘(B) make available to each institution

21 participating in programs authorized under this

22 title complete copies of all review guidelines and

23 procedures used in program reviews;

24 ‘‘(C) permit the institution to correct or

25 cure an administrative, accounting, or record-
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1 keeping error if the error is not part of a pat2 tern of error and there is no evidence of fraud

3 or misconduct related to the error;

4 ‘‘(D) base any civil penalty assessed

5 against an institution of higher education re6 sulting from a program review or audit on the

7 gravity of the violation, failure, or misrepresen8 tation; and

9 ‘‘(E) inform the appropriate State and ac10 crediting agency or association whenever the

11 Secretary takes action against an institution of

12 higher education under this section, section

13 498, or section 432.

14 ‘‘(2) UNIFORMITY OF APPLICATION OF REGULA15 TIONS.—The Secretary shall review the regulations

16 of the Department and the application of such regu17 lations to ensure the uniformity of interpretation

18 and application of the regulations.

19 ‘‘(3) NONDUPLICATION AND COORDINATION.—

20 The Secretary shall establish a process for ensuring

21 that eligibility and compliance issues, such as insti22 tutional audit, program review, and recertification,

23 are considered simultaneously, and shall establish a

24 process for identifying unnecessary duplication of re25 porting and related regulatory requirements. In de-
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1 veloping such processes, the Secretary shall consult

2 with relevant representatives of institutions partici3 pating in the programs authorized by this title.’’.

4 PART I—ADMINISTRATIVE PROVISIONS FOR

5 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

6 SEC. 495. PERFORMANCE-BASED ORGANIZATION FOR THE

7 DELIVERY OF FEDERAL STUDENT FINANCIAL

8 ASSISTANCE.

9 Title IV (20 U.S.C. 1070 et seq.) is amended by add10 ing at the end the following:

11 ‘‘PART I—ADMINISTRATIVE PROVISIONS FOR

12 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

13 ‘‘SEC. 499. PERFORMANCE-BASED ORGANIZATION FOR THE

14 DELIVERY OF FEDERAL STUDENT FINANCIAL

15 ASSISTANCE.

16 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab17 lish in the Department a performance-based organization

18 (hereafter in this part referred to as the ‘PBO’) to admin19 ister various functions relating to student financial assist20 ance programs authorized under this title.

21 ‘‘(b) OVERSIGHT AND AUTHORITY.—

22 ‘‘(1) POLICY OVERSIGHT AND DIRECTION.—The

23 Secretary shall maintain responsibility for the policy

24 relating to functions managed by the PBO, and the
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1 PBO shall remain subject to the Secretary’s over2 sight and direction.

3 ‘‘(2) AUDITS AND REVIEW.—The PBO shall be

4 subject to the usual and customary Federal audit

5 procedures and to review by the Inspector General

6 of the Department.

7 ‘‘(3) CHANGES.—

8 ‘‘(A) IN GENERAL.—The Secretary and the

9 Chief Operating Officer shall consult concerning

10 the effects of policy, market, or other changes

11 on the ability of the PBO to achieve the goals

12 and objectives established in the performance

13 plan described in subsection (e).

14 ‘‘(B) REVISIONS TO AGREEMENT.—The

15 Secretary and the Chief Operating Officer may

16 revise the annual performance agreement de17 scribed in subsection (f)(2) in light of policy,

18 market, or other changes that occur after the

19 Secretary and the PBO enter into the agree20 ment.

21 ‘‘(c) PURPOSES OF PBO.—The purposes of the PBO

22 are—

23 ‘‘(1) to improve service to students and other

24 participants in the student financial assistance pro25 grams authorized under this title, including making
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1 those programs more understandable to students

2 and their parents;

3 ‘‘(2) to reduce the costs of administering those

4 programs;

5 ‘‘(3) to increase the accountability of the offi6 cials responsible for administering those programs;

7 ‘‘(4) to provide greater flexibility in the admin8 istration of those programs;

9 ‘‘(5) to improve and integrate the information

10 and delivery systems that support those programs;

11 and

12 ‘‘(6) to develop and maintain a student finan13 cial assistance system that contains complete, accu14 rate, and timely data to ensure program integrity.

15 ‘‘(d) FUNCTIONS.—

16 ‘‘(1) IN GENERAL.—Subject to subsection (b) of

17 this section, the PBO shall be responsible for admin18 istration of the information and financial systems

19 that support student financial assistance programs

20 authorized under this title, including—

21 ‘‘(A) collecting, processing, and transmit22 ting applicant data to students, institutions,

23 and authorized third parties, as provided for in

24 section 483;
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1 ‘‘(B) contracting for the information and

2 financial systems supporting student financial

3 assistance programs under this title;

4 ‘‘(C) developing technical specifications for

5 software and systems that support those pro6 grams; and

7 ‘‘(D) providing all customer service, train8 ing, and user support related to systems that

9 support those programs.

10 ‘‘(2) ADDITIONAL FUNCTIONS.—The Secretary

11 may allocate to the PBO such additional functions

12 as the Secretary determines necessary or appropriate

13 to achieve the purposes of the PBO.

14 ‘‘(e) PERFORMANCE PLAN AND REPORT.—

15 ‘‘(1) PERFORMANCE PLAN.—

16 ‘‘(A) IN GENERAL.—Each year, the Sec17 retary and Chief Operating Officer shall agree

18 on, and make available to the public, a perform19 ance plan for the PBO for the succeeding 5

20 years that establishes measurable goals and ob21 jectives for the organization.

22 ‘‘(B) CONSULTATION.—In developing the

23 5-year performance plan, the Secretary and the

24 Chief Operating Officer shall consult with stu25 dents, institutions of higher education, Con-
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1 gress, lenders, and other interested parties not

2 less than 30 days prior to the implementation

3 of the performance plan.

4 ‘‘(C) AREAS.—The plan shall address the

5 PBO’s responsibilities in the following areas:

6 ‘‘(i) IMPROVING SERVICE.—Improving

7 service to students and other participants

8 in student financial aid programs author9 ized under this title, including making

10 those programs more understandable to

11 students and their parents.

12 ‘‘(ii) REDUCING COSTS.—Reducing

13 the costs of administering those programs.

14 ‘‘(iii) IMPROVEMENT AND INTEGRA15 TION OF SUPPORT SYSTEMS.—Improving

16 and integrating the information and deliv17 ery systems that support those programs.

18 ‘‘(iv) DELIVERY AND INFORMATION

19 SYSTEM.—Developing an open, common,

20 and integrated delivery and information

21 system for programs authorized under this

22 title.

23 ‘‘(v) OTHER AREAS.—Any other areas

24 identified by the Secretary.
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1 ‘‘(2) ANNUAL REPORT.—Each year, the Chief

2 Operating Officer shall prepare and submit to Con3 gress, through the Secretary, an annual report on

4 the performance of the PBO, including an evaluation

5 of the extent to which the PBO met the goals and

6 objectives contained in the 5-year performance plan

7 described in paragraph (1) for the preceding year.

8 ‘‘(f) CHIEF OPERATING OFFICER.—

9 ‘‘(1) APPOINTMENT.—

10 ‘‘(A) IN GENERAL.—The management of

11 the PBO shall be vested in a Chief Operating

12 Officer who shall be appointed by the Secretary

13 to a term of not less than 3 and not more than

14 5 years and compensated without regard to

15 chapters 33, 51, and 53 of title 5, United

16 States Code.

17 ‘‘(B) BASIS.—The appointment shall be

18 made on the basis of demonstrated ability in

19 management and experience in information

20 technology or financial services, without regard

21 to political affiliation or activity.

22 ‘‘(C) REAPPOINTMENT.—The Secretary

23 may reappoint the Chief Operating Officer to

24 subsequent terms of not less than 3 and not

25 more than 5 years, so long as the performance
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1 of the Chief Operating Officer, as set forth in

2 the performance agreement described in para3 graph (2), is satisfactory.

4 ‘‘(2) PERFORMANCE AGREEMENT.—

5 ‘‘(A) IN GENERAL.—Each year, the Sec6 retary and the Chief Operating Officer shall

7 enter into an annual performance agreement,

8 that shall set forth measurable organization and

9 individual goals for the Chief Operating Officer.

10 ‘‘(B) TRANSMITTAL.—The final agreement

11 shall be transmitted to the Committee on Edu12 cation and the Workforce of the House of Rep13 resentatives and the Committee on Labor and

14 Human Resources of the Senate, and made

15 publicly available.

16 ‘‘(3) COMPENSATION.—

17 ‘‘(A) IN GENERAL.—The Chief Operating

18 Officer is authorized to be paid at an annual

19 rate of basic pay not to exceed the maximum

20 rate of basic pay for the Senior Executive Serv21 ice under section 5382 of title 5, United States

22 Code, including any applicable locality-based

23 comparability payment that may be authorized

24 under section 5304(h)(2)(C) of such title.
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1 ‘‘(B) BONUS.—In addition, the Chief Op2 erating Officer may receive a bonus in an

3 amount that does not exceed 50 percent of such

4 annual rate of basic pay, based upon the Sec5 retary’s evaluation of the Chief Operating Offi6 cer’s performance in relation to the goals set

7 forth in the performance agreement described

8 in paragraph (2).

9 ‘‘(C) PAYMENT.—Payment of a bonus

10 under this subparagraph (B) may be made to

11 the Chief Operating Officer only to the extent

12 that such payment does not cause the Chief Op13 erating Officer’s total aggregate compensation

14 in a calendar year to equal or exceed the

15 amount of the President’s salary under section

16 102 of title 3, United States Code.

17 ‘‘(4) REMOVAL.—The Chief Operating Officer

18 shall be removable—

19 ‘‘(A) by the President; or

20 ‘‘(B) by the Secretary for misconduct or

21 failure to meet the goals set forth in the per22 formance agreement described in paragraph

23 (2).

24 ‘‘(g) SENIOR MANAGEMENT.—

25 ‘‘(1) APPOINTMENT.—
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1 ‘‘(A) IN GENERAL.—The Chief Operating

2 Officer may appoint such senior managers as

3 that officer determines necessary without re4 gard to the provisions of title 5, United States

5 Code, governing appointments in the competi6 tive service.

7 ‘‘(B) COMPENSATION.—The senior man8 agers described in subparagraph (A) may be

9 paid without regard to the provisions of chapter

10 51 and subchapter III of chapter 53 of such

11 title relating to classification and General

12 Schedule pay rates.

13 ‘‘(2) PERFORMANCE AGREEMENT.—Each year,

14 the Chief Operating Officer and each senior man15 ager appointed under this subsection shall enter into

16 an annual performance agreement that sets forth

17 measurable organization and individual goals.

18 ‘‘(3) COMPENSATION.—

19 ‘‘(A) IN GENERAL.—A senior manager ap20 pointed under this subsection may be paid at an

21 annual rate of basic pay of not more than the

22 maximum rate of basic pay for the Senior Exec23 utive Service under section 5382 of title 5,

24 United States Code, including any applicable lo25 cality-based comparability payment that may be
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1 authorized under section 5304(h)(2)(C) of such

2 title 5.

3 ‘‘(B) BONUS.—In addition, a senior man4 ager may receive a bonus in an amount such

5 that the manager’s total annual compensation

6 does not exceed 125 percent of the maximum

7 rate of basic pay for the Senior Executive Serv8 ice, including any applicable locality-based com9 parability payment, based upon the Chief Oper10 ating Officer’s evaluation of the manager’s per11 formance in relation to the goals set forth in

12 the performance agreement described in para13 graph (2).

14 ‘‘(4) REMOVAL.—A senior manager shall be re15 movable by the Secretary or by the Chief Operating

16 Officer.

17 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—The

18 Secretary shall allocate from funds made available under

19 section 458 such funds as are appropriate to the functions

20 assumed by the PBO. In addition, there are authorized

21 to be appropriated such sums as may be necessary to carry

22 out the purposes of this section, including transition

23 costs.’’.
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1 TITLE V—GRADUATE AND POST2 SECONDARY IMPROVEMENT

3 PROGRAMS

4 SEC. 501. REPEALS, TRANSFERS, AND REDESIGNATIONS.

5 (a) IN GENERAL.—Title V (20 U.S.C. 1101 et seq.)

6 is amended—

7 (1) by amending the title heading to read as

8 follows:

9 ‘‘TITLE V—GRADUATE AND

10 POSTSECONDARY IMPROVE11 MENT PROGRAMS’’;

12 (2) by repealing parts A, B, C, D, E, and F of

13 title V (20 U.S.C. 1102 et seq., 1103 et seq., 1104

14 et seq., 1107 et seq., 1111 et seq., and 1113 et

15 seq.);

16 (3) by transferring part C of title IX, part D

17 of title IX, part A of title XI, and part A of title

18 X (20 U.S.C. 1134h et seq., 1134l et seq., 1136 et

19 seq., and 1135 et seq.) to title V and redesignating

20 such parts as parts A, B, C, and D, respectively;

21 (4) by redesignating sections 931 through 935

22 (20 U.S.C. 1134h et seq. and 1134k–1 et seq.) as

23 sections 511 through 515, respectively;
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1 (5) by redesignating sections 941 through 947

2 (20 U.S.C. 1134l and 1134q–1) as section 521

3 through 527, respectively;

4 (6) by redesignating sections 1101 through

5 1109 (20 U.S.C. 1136 through 1136h) as sections

6 531 through 539, respectively; and

7 (7) by redesignating sections 1001, 1002, 1003,

8 1004, and 1011 (20 U.S.C. 1135, 1135a–1, 1135a–

9 2, 1135a–3, and 1135a–11) as sections 541, 542,

10 543, 544, and 551, respectively.

11 (b) CROSS REFERENCE CONFORMING AMEND12 MENTS.—

13 (1) JACOB K. JAVITS FELLOWSHIP PROGRAM.—

14 Section 514(a) (as redesignated by subsection

15 (a)(4)) (20 U.S.C. 1134k(a)) is amended by striking

16 ‘‘933’’ and inserting ‘‘513’’.

17 (2) GRADUATE ASSISTANCE IN AREAS OF NA18 TIONAL NEED.—Part B of title V (as redesignated

19 by paragraphs (3) and (5) of subsection (a)) (20

20 U.S.C. 1134l et seq.) is amended—

21 (A) in section 524(b)(7) (as redesignated

22 by subsection (a)(5)) (20 U.S.C. 1134o(b)(7)),

23 by striking ‘‘945’’ and inserting ‘‘525’’; and

24 (B) in section 525(c) (as redesignated by

25 subsection (a)(5)) (20 U.S.C. 1134p(c))—
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1 (i) by striking ‘‘946(a)’’ and inserting

2 ‘‘526(a)’’; and

3 (ii) by striking ‘‘944(b)(2)’’ and in4 serting ‘‘524(b)(2)’’.

5 (3) URBAN AND COMMUNITY SERVICE.—Part C

6 of title V (as redesignated by paragraphs (3) and (6)

7 of subsection (a)) (20 U.S.C. 1136 et seq.) is

8 amended—

9 (A) in section 532(b) (20 U.S.C.

10 1136a(b)), by striking ‘‘1104’’ and inserting

11 ‘‘534’’;

12 (B) in section 534(12) (20 U.S.C.

13 1136c(12)), by striking ‘‘1103(a)(2)(B)’’ and

14 inserting ‘‘533(a)(2)(B)’’; and

15 (C) in section 538(1) (20 U.S.C.

16 1136g(1)), by striking ‘‘1103’’ and inserting

17 ‘‘533’’.

18 (4) FIPSE.—Subsections (b) and (c) of section

19 544 (as redesignated by subsection (a)(7)) (20

20 U.S.C. 1135a–3) each are amended by striking

21 ‘‘1001(b)’’ and inserting ‘‘541(b)’’.

22 SEC. 502. PURPOSE.

23 Section 500 (20 U.S.C. 1101) is amended to read as

24 follows:
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1 ‘‘SEC. 500. PURPOSE.

2 ‘‘It is the purpose of this title—

3 ‘‘(1) to authorize national graduate fellowship

4 programs—

5 ‘‘(A) in order to attract students of supe6 rior ability and achievement, exceptional prom7 ise, and demonstrated financial need, into high8 quality graduate programs and provide the stu9 dents with the financial support necessary to

10 complete advanced degrees; and

11 ‘‘(B) that are designed to—

12 ‘‘(i) sustain and enhance the capacity

13 for graduate education in areas of national

14 need; and

15 ‘‘(ii) encourage talented students to

16 pursue scholarly careers in the humanities,

17 social sciences, and the arts; and

18 ‘‘(2) to promote postsecondary programs.’’.

19 PART A—JACOB K. JAVITS FELLOWSHIP

20 PROGRAM

21 SEC. 511. AWARD OF FELLOWSHIPS.

22 (a) AWARD OF JACOB K. JAVITS FELLOWSHIPS.—

23 Section 511 (as redesignated by section 501(4)) is amend24 ed—

25 (1) in subsection (a)—
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1 (A) in the first sentence, by inserting ‘‘, fi2 nancial need,’’ after ‘‘demonstrated achieve3 ment’’;

4 (B) in the second sentence—

5 (i) by striking ‘‘students intending’’

6 and inserting ‘‘students who are eligible to

7 receive any grant, loan, or work assistance

8 pursuant to section 484 and intend’’; and

9 (ii) by striking ‘‘commonly accepted’’

10 and all that follows through ‘‘degree-grant11 ing institution’’ and inserting ‘‘the termi12 nal highest degree awarded in the area of

13 study’’; and

14 (C) in the third sentence, by inserting ‘‘fol15 lowing the fiscal year’’ after ‘‘July 1 of the fis16 cal year’’; and

17 (2) by adding at the end the following:

18 ‘‘(d) PROCESS AND TIMING OF COMPETITION.—The

19 Secretary shall make applications for fellowships under

20 this part available not later than October 1 of the aca21 demic year preceding the academic year for which fellow22 ships will be awarded, and shall announce the recipients

23 of fellowships under this section not later than March 1

24 of the academic year preceding the academic year for

25 which the fellowships are awarded.
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1 ‘‘(e) AUTHORITY TO CONTRACT.—The Secretary is

2 authorized to enter into a contract with a nongovern3 mental agency to administer the program assisted under

4 this part if the Secretary determines that entering into

5 the contract is an efficient means of carrying out the pro6 gram.’’.

7 (b) ALLOCATION OF FELLOWSHIPS.—Section 512 (as

8 redesignated by section 501(4)) (20 U.S.C. 1134i) is

9 amended—

10 (1) in subsection (a)—

11 (A) in the third sentence of paragraph (1),

12 by striking ‘‘knowledgeable about and have ex13 perience’’ and inserting ‘‘representative of a

14 range of disciplines’’; and

15 (B) in paragraph (2)—

16 (i) by amending subparagraph (B) to

17 read as follows:

18 ‘‘(B) establish general criteria for the

19 award of fellowships in academic fields identi20 fied by the Board, or, in the event that the Sec21 retary enters into a contract with a nongovern22 mental entity to administer the program as23 sisted under this part, by such nongovernmental

24 entity;’’; and
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1 (ii) in subparagraph (C), by inserting

2 ‘‘except that, in the event that the Sec3 retary enters into a contract with a non4 governmental entity to administer the pro5 gram, such panels may be appointed by

6 such nongovernmental entity’’ before the

7 semicolon; and

8 (2) in the first sentence of subsection (b), by in9 serting ‘‘except that in the event that the Secretary

10 enters into a contract with a nongovernmental entity

11 to administer the program, such panels may be ap12 pointed by such nongovernmental entity’’ before the

13 period.

14 (c) STIPENDS.—Section 513 (as redesignated by sec15 tion 501(4)) (20 U.S.C. 1134j) is amended—

16 (1) in subsection (a)—

17 (A) by striking ‘‘1993–1994’’ and inserting

18 ‘‘1999–2000’’; and

19 (B) by striking ‘‘according to measure20 ments of need approved by the Secretary’’ and

21 inserting ‘‘determined in accordance with part

22 F of title IV’’; and

23 (2) in subsection (b)(1)(A)—

24 (A) in clause (i)—
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1 (i) by striking ‘‘$6,000’’ and inserting

2 ‘‘$10,000’’; and

3 (ii) by striking ‘‘1993–1994’’ and in4 serting ‘‘1999–2000’’; and

5 (B) in clause (ii)—

6 (i) in the matter preceding subclause

7 (I), by striking ‘‘1993–1994’’ and inserting

8 ‘‘1999–2000’’;

9 (ii) in subclause (I), by striking

10 ‘‘$9,000 for the academic year 1993–

11 1994’’ and inserting ‘‘$10,000 for the aca12 demic year 1999–2000’’; and

13 (iii) in subclause (II), by striking

14 ‘‘$9,000’’ and inserting ‘‘$10,000’’.

15 (d) AUTHORIZATION OF APPROPRIATIONS.—Section

16 515 (as redesignated by section 501(4)) (20 U.S.C.

17 1134k–1) is amended by striking ‘‘1993’’ and inserting

18 ‘‘1999’’.

19 PART B—GRADUATE ASSISTANCE IN AREAS OF

20 NATIONAL NEED

21 SEC. 521. GRADUATE ASSISTANCE IN AREAS OF NATIONAL

22 NEED.

23 (a) DESIGNATION OF AREAS OF NATIONAL NEED.—

24 Subsection (b) of section 523 (as redesignated by section

25 501(5)) (20 U.S.C. 1134n) is amended to read as follows:
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1 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL

2 NEED.—After consultation with the National Science

3 Foundation, the National Academy of Sciences, and other

4 appropriate Federal and nonprofit agencies and organiza5 tions, the Secretary shall designate areas of national need.

6 In making such designations, the Secretary shall take into

7 consideration—

8 ‘‘(1) the extent to which the national interest in

9 the area is compelling;

10 ‘‘(2) the extent to which other Federal pro11 grams support postbaccalaureate study in the area

12 concerned; and

13 ‘‘(3) an assessment of how the program may

14 achieve the most significant impact with available re15 sources.’’.

16 (b) CONTENT OF APPLICATIONS.—Section 524(b) (as

17 redesignated by section 501(5)) (20 U.S.C. 1134o(b)) is

18 amended—

19 (1) in paragraph (2)—

20 (A) by striking ‘‘funds’’ and inserting

21 ‘‘sources’’; and

22 (B) by inserting ‘‘, which contribution may

23 be in cash or in kind, fairly valued’’ before the

24 semicolon;
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1 (2) by redesignating paragraphs (4) through

2 (9) as paragraphs (5) through (10), respectively;

3 (3) by inserting after paragraph (3) the follow4 ing:

5 ‘‘(4) describe the number, types, and amounts

6 of the fellowships that the applicant intends to offer

7 with grant funds provided under this part;’’ and

8 (4) in paragraph (5)(A) (as redesignated by

9 paragraph (2)), by striking ‘‘criteria developed by

10 the institution’’ and inserting ‘‘part F of title IV’’.

11 (c) AWARDS.—Section 525 (as redesignated by sec12 tion 501(5)) (20 U.S.C. 1134p) is amended—

13 (1) in the third sentence of subsection (b)—

14 (A) by striking ‘‘1993–1994’’ and inserting

15 ‘‘1999–2000’’; and

16 (B) by striking ‘‘according to measure17 ments of need approved by the Secretary’’ and

18 inserting ‘‘determined in accordance with part

19 F of title IV’’; and

20 (2) in subsection (c), by striking ‘‘such pay21 ments’’ and inserting ‘‘such excess’’.

22 (d) INSTITUTIONAL PAYMENTS.—Section 526(a)(1)

23 (as redesignated by section 501(5)) (20 U.S.C.

24 1134q(a)(1)) is amended—

25 (1) in subparagraph (A)—
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1 (A) by striking ‘‘$6,000 annually’’ and in2 serting ‘‘$10,000 for each academic year,’’; and

3 (B) by striking ‘‘1993–1994’’ and insert4 ing ‘‘1999–2000’’; and

5 (2) in subparagraph (B)—

6 (A) in the matter preceding clause (i), by

7 striking ‘‘1993–1994’’ and inserting ‘‘1999–

8 2000’’;

9 (B) in clause (i), by striking ‘‘$9,000 for

10 the academic year 1993–1994’’ and inserting

11 ‘‘$10,000 for the academic year 1999–2000’’;

12 and

13 (C) in clause (ii), by striking ‘‘$9,000’’ and

14 inserting ‘‘$10,000’’.

15 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

16 527 (as redesignated by section 501(5)) (20 U.S.C.

17 1134q–1) is amended by striking ‘‘$40,000,000 for fiscal

18 year 1993’’ and inserting ‘‘$30,000,000 for fiscal year

19 1999’’.

20 PART C—URBAN COMMUNITY SERVICE

21 SEC. 531. URBAN COMMUNITY SERVICE.

22 (a) PRIORITY.—Section 533(b) (as redesignated by

23 section 501(a)(6)) (20 U.S.C. 1136b(b)) is amended by

24 adding at the end the following: ‘‘In addition, the Sec25 retary shall give priority to eligible institutions submitting
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1 applications that demonstrate the eligible institution’s

2 commitment to urban community service.’’.

3 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

4 539 (as redesignated by section 501(a)(6)) (20 U.S.C.

5 1136h) is amended by striking ‘‘1993’’ and inserting

6 ‘‘1999’’.

7 PART D—FUND FOR THE IMPROVEMENT OF

8 POSTSECONDARY EDUCATION

9 SEC. 541. FUND FOR THE IMPROVEMENT OF POSTSECOND10 ARY EDUCATION.

11 (a) AUTHORITY.—Section 541(a) (as redesignated by

12 section 501(a)(7)) (20 U.S.C. 1135(a)) is amended—

13 (1) in the matter preceding paragraph (1)—

14 (A) by striking ‘‘or combinations of such

15 institutions’’ and inserting ‘‘, combinations of

16 such institutions,’’; and

17 (B) by striking ‘‘institutions and combina18 tions of such institutions’’ and inserting ‘‘insti19 tutions, combinations, and agencies’’; and

20 (2) in paragraph (2)—

21 (A) by striking ‘‘and programs involving

22 new’’ and inserting ‘‘, programs and joint ef23 forts involving’’; and

24 (B) by striking ‘‘new combinations’’ and

25 inserting ‘‘combinations’’.
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1 (b) TECHNICAL EMPLOYEES.—Section 543(a) (as re2 designated by section 501(a)(7)) (20 U.S.C. 1135a–2(a))

3 is amended by striking ‘‘5 technical’’ and inserting ‘‘7

4 technical’’.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

6 544 (as redesignated by section 501(a)(7)) (20 U.S.C.

7 1135a–3) is amended—

8 (1) in subsection (a), by striking ‘‘$20,000,000

9 for fiscal year 1993’’ and inserting ‘‘$26,000,000 for

10 fiscal year 1999’’; and

11 (2) in subsection (b), by striking ‘‘1993’’ and

12 inserting ‘‘1999’’.

13 (d) AREAS OF NATIONAL NEED.—

14 (1) AREAS.—Section 551(c) (as redesignated by

15 section 501(a)(7)) (20 U.S.C. 1135a–11(c)) is

16 amended—

17 (A) in paragraph (2), by striking ‘‘Campus

18 climate and culture’’ and inserting ‘‘Institu19 tional restructuring to improve learning and

20 promote cost efficiencies’’;

21 (B) in paragraph (3), by inserting ‘‘of

22 model programs’’ after ‘‘dissemination’’; and

23 (C) by adding at the end the following:

24 ‘‘(4) Articulation between 2-year and 4-year in25 stitutions of higher education, including developing
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1 innovative methods for ensuring the successful

2 transfer of students from 2-year to 4-year institu3 tions of higher education.’’.

4 (2) AUTHORIZATION OF APPROPRIATIONS.—

5 Section 551(d) (as redesignated by section

6 501(a)(7)) (20 U.S.C. 1135a–11(d)) is amended by

7 striking ‘‘1993’’ and inserting ‘‘1999’’.

8 PART E—HIGHER EDUCATION ACCESS FOR STU9 DENTS WITH DISABILITIES; GENERAL PROVI10 SIONS

11 SEC. 551. HIGHER EDUCATION ACCESS FOR STUDENTS

12 WITH DISABILITIES; GENERAL PROVISIONS.

13 Title V (20 U.S.C. 1101 et seq.) is amended further

14 by adding at the end the following:

15 ‘‘PART F—HIGHER EDUCATION ACCESS FOR

16 STUDENTS WITH DISABILITIES

17 ‘‘SEC. 571. HIGHER EDUCATION ACCESS FOR STUDENTS

18 WITH DISABILITIES.

19 ‘‘(a) PURPOSE.—It is the purpose of this part—

20 ‘‘(1) to support the development of model pro21 grams to provide technical assistance or training,

22 and professional development, for faculty and ad23 ministrators in institutions of higher education, as

24 defined in section 481(a), to provide the faculty and
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1 administrators with the skills and assistance to

2 teach effectively students with disabilities; and

3 ‘‘(2) to ensure effective evaluation and dissemi4 nation of such model programs.

5 ‘‘(b) GRANTS AUTHORIZED.—

6 ‘‘(1) IN GENERAL.—The Secretary is authorized

7 to award grants to institutions of higher education

8 to carry out the purposes of this part.

9 ‘‘(2) MODEL PROGRAMS.—To the extent fea10 sible, the model programs developed under this part

11 shall be developed for a range of types and sizes of

12 institutions of higher education.

13 ‘‘(3) GEOGRAPHIC DISTRIBUTION.—In awarding

14 grants under this part, the Secretary shall con15 sider—

16 ‘‘(A) providing an equitable geographic dis17 tribution of such grants; and

18 ‘‘(B) distributing such grants to urban and

19 rural areas.

20 ‘‘(4) APPROACHES.—The Secretary shall award

21 grants under this part for a range of approaches to

22 providing support to faculty and administrators,

23 such as in-service training, professional development,

24 customized and general technical assistance, work-
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1 shops, summer institutes, distance learning and the

2 use of educational technology.

3 ‘‘(c) DISSEMINATION OF GRANTS.—The Secretary

4 may award grants to institutions of higher education that

5 have demonstrated exceptional programs for students with

6 disabilities under this part in order to disseminate those

7 programs.

8 ‘‘(d) APPLICATIONS.—Each institution of higher edu9 cation desiring a grant under this part shall submit an

10 application to the Secretary at such time, in such manner,

11 and accompanied by such information as the Secretary

12 may require. Each such application shall include—

13 ‘‘(1) a plan to assess the needs of the institu14 tion of higher education in order to meet the pur15 poses of this part, in consultation with a broad

16 range of persons within that institution; and

17 ‘‘(2) a plan for coordinating with or collaborat18 ing with the office within the institution that pro19 vides services to students with disabilities, and the

20 equal opportunity office within the institution, if the

21 offices exist.

22 ‘‘(e) USE OF FUNDS.—Any institution of higher edu23 cation receiving a grant under this part—

24 ‘‘(1) shall use the grant funds to—

25 ‘‘(A) meet the purposes of this section; and
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1 ‘‘(B) ensure that projects assisted under

2 this part include components for model develop3 ment, demonstration, evaluation, and dissemi4 nation to other institutions of higher education;

5 and

6 ‘‘(2) may include, to the extent practicable,

7 graduate teaching assistants in the services provided

8 under the grant.

9 ‘‘(f) GRANT AWARDS.—The Secretary shall award

10 grants under this part for a period of 3 years.

11 ‘‘(g) CONSTRUCTION.—Nothing in this section shall

12 be construed to impose any additional duty, obligation, or

13 responsibility on an institution of higher education, or on

14 the institution’s administrators, faculty, or staff, in addi15 tion to the requirements of section 504 of the Rehabilita16 tion Act of 1973 and the Americans with Disabilities Act

17 of 1990.

18 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

19 are authorized to be appropriated to carry out this section

20 $10,000,000 for fiscal year 1999 and such sums as may

21 be necessary for each of the 4 succeeding fiscal years.
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1 ‘‘PART G—GENERAL PROVISIONS

2 ‘‘SEC. 581. ADMINISTRATIVE PROVISIONS FOR PARTS A AND

3 B.

4 ‘‘(a) COORDINATED ADMINISTRATION.—In carrying

5 out the purpose described in section 500(1), the Secretary

6 shall provide for coordinated administration and regula7 tion of graduate programs assisted under parts A and B

8 with other Federal programs providing assistance for

9 graduate education in order to minimize duplication and

10 improve efficiency to ensure that the programs are carried

11 out in a manner most compatible with academic practices

12 and with the standard timetables for applications for, and

13 notifications of acceptance to, graduate programs.

14 ‘‘(b) HIRING AUTHORITY.—For purposes of carrying

15 out parts A and B, the Secretary shall appoint, without

16 regard to the provisions of title 5, United States Code,

17 that govern appointments in the competitive service, such

18 administrative and technical employees, with the appro19 priate educational background, as shall be needed to assist

20 in the administration of such parts. The employees shall

21 be paid without regard to the provisions of chapter 51 and

22 subchapter III of chapter 53 of such title relating to classi23 fication and General Schedule pay rates.

24 ‘‘(c) USE FOR RELIGIOUS PURPOSES PROHIBITED.—

25 No institutional payment or allowance under section

26 513(b) or 526 shall be paid to a school or department of
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1 divinity as a result of the award of a fellowship under part

2 A or B, respectively, to an individual who is studying for

3 a religious vocation.

4 ‘‘(d) EVALUATION.—The Secretary shall evaluate the

5 success of assistance provided to individuals under part

6 A or B with respect to graduating from their degree pro7 grams, and placement in faculty and professional posi8 tions.

9 ‘‘(e) CONTINUATION AWARDS.—The Secretary, using

10 funds appropriated to carry out parts A and B, and before

11 awarding any assistance under such parts to a recipient

12 that did not receive assistance under part C or D of title

13 IX (as such parts were in effect prior to the date of enact14 ment of the Higher Education Amendments of 1998) shall

15 continue to provide funding to recipients of assistance

16 under such part C or D (as so in effect), as the case may

17 be, pursuant to any multiyear award of such assistance.’’.

18 TITLE VI—INTERNATIONAL

19 EDUCATION PROGRAMS

20 SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUD21 IES.

22 Part A of title VI (20 U.S.C. 1121 et seq.) is amend23 ed to read as follows:
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1 ‘‘PART A—INTERNATIONAL AND FOREIGN

2 LANGUAGE STUDIES

3 ‘‘SEC. 601. FINDINGS AND PURPOSES.

4 ‘‘(a) FINDINGS.—The Congress finds that—

5 ‘‘(1) the well-being of the United States, its

6 economy and long-range security, is dependent on

7 the education and training of Americans in inter8 national and foreign language studies and on a

9 strong research base in these areas;

10 ‘‘(2) knowledge of other countries and the abil11 ity to communicate in other languages is essential to

12 the promotion of mutual understanding and coopera13 tion among nations; and

14 ‘‘(3) systematic efforts are necessary to enhance

15 the capacity of institutions of higher education in

16 the United States for—

17 ‘‘(A) producing graduates with inter18 national and foreign language expertise and

19 knowledge; and

20 ‘‘(B) research regarding such expertise and

21 knowledge.

22 ‘‘(b) PURPOSES.—It is the purpose of this part—

23 ‘‘(1) to assist in the development of knowledge,

24 international study, resources and trained personnel;

25 ‘‘(2) to stimulate the attainment of foreign lan26 guage acquisition and fluency;
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1 ‘‘(3) to develop a pool of international experts

2 to meet national needs; and

3 ‘‘(4) to coordinate the programs of the Federal

4 Government in the areas of foreign language, area

5 and other international studies, including profes6 sional international affairs education, and research.

7 ‘‘SEC. 602. GRADUATE AND UNDERGRADUATE LANGUAGE

8 AND AREA CENTERS AND PROGRAMS.

9 ‘‘(a) NATIONAL LANGUAGE AND AREA CENTERS AND

10 PROGRAMS AUTHORIZED.—

11 ‘‘(1) CENTERS AND PROGRAMS.—

12 ‘‘(A) IN GENERAL.—The Secretary is au13 thorized—

14 ‘‘(i) to make grants to institutions of

15 higher education, or combinations thereof,

16 for the purpose of establishing, strengthen17 ing, and operating comprehensive language

18 and area centers and programs; and

19 ‘‘(ii) to make grants to such institu20 tions or combinations for the purpose of

21 establishing, strengthening, and operating

22 a diverse network of undergraduate lan23 guage and area centers and programs.
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1 ‘‘(B) NATIONAL RESOURCES.—The centers

2 and programs referred to in paragraph (1) shall

3 be national resources for—

4 ‘‘(i) teaching of any modern foreign

5 language;

6 ‘‘(ii) instruction in fields needed to

7 provide full understanding of areas, re8 gions, or countries in which such language

9 is commonly used;

10 ‘‘(iii) research and training in inter11 national studies, and the international and

12 foreign language aspects of professional

13 and other fields of study; and

14 ‘‘(iv) instruction and research on

15 issues in world affairs which concern one

16 or more countries.

17 ‘‘(2) AUTHORIZED ACTIVITIES.—Any such

18 grant may be used to pay all or part of the cost of

19 establishing or operating a center or program, in20 cluding the cost of—

21 ‘‘(A) faculty, staff, and student travel in

22 foreign areas, regions, or countries;

23 ‘‘(B) teaching and research materials;

24 ‘‘(C) curriculum planning and develop25 ment;
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1 ‘‘(D) bringing visiting scholars and faculty

2 to the center to teach or to conduct research;

3 ‘‘(E) establishing and maintaining linkages

4 with overseas institutions of higher education

5 and other organizations that may contribute to

6 the teaching and research of the center or pro7 gram; and

8 ‘‘(F) training and improvement of the

9 staff, for the purpose of, and subject to such

10 conditions as the Secretary finds necessary for,

11 carrying out this section.

12 ‘‘(3) GRANTS TO MAINTAIN LIBRARY COLLEC13 TIONS.—The Secretary may make grants to centers

14 described in paragraph (1) having important library

15 collections, as determined by the Secretary, for the

16 maintenance of such collections.

17 ‘‘(4) OUTREACH GRANTS AND SUMMER INSTI18 TUTES.—The Secretary may make additional grants

19 to centers described in paragraph (1) for any one or

20 more of the following purposes:

21 ‘‘(A) Programs of linkage or outreach be22 tween foreign language, area studies, and other

23 international fields and professional schools and

24 colleges.
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1 ‘‘(B) Programs of linkage or outreach with

2 2-year and 4-year colleges and universities.

3 ‘‘(C) Programs of linkage or outreach with

4 departments or agencies of Federal and State

5 Governments.

6 ‘‘(D) Programs of linkage or outreach with

7 the news media, business, professional, or trade

8 associations.

9 ‘‘(E) Summer institutes in foreign area,

10 foreign language, and other international fields

11 designed to carry out the programs of linkage

12 and outreach in subparagraphs (A), (B), (C),

13 and (D).

14 ‘‘(b) STIPENDS FOR FOREIGN LANGUAGE AND AREA

15 STUDIES.—

16 ‘‘(1) IN GENERAL.—The Secretary is authorized

17 to make grants to institutions of higher education or

18 combinations of such institutions for the purpose of

19 paying stipends to individuals undergoing advanced

20 training in any center or program approved by the

21 Secretary.

22 ‘‘(2) REQUIREMENTS.—Students receiving sti23 pends described in paragraph (1) shall be individuals

24 who are engaged in an instructional program with

25 stated performance goals for functional foreign lan-
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1 guage use or in a program developing such perform2 ance goals, in combination with area studies, inter3 national studies, or the international aspects of a

4 professional studies program.

5 ‘‘(3) ALLOWANCES.—Stipends awarded to grad6 uate level recipients may include allowances for de7 pendents and for travel for research and study in

8 the United States and abroad.

9 ‘‘(c) SPECIAL RULE WITH RESPECT TO TRAVEL.—

10 No funds may be expended under this part for under11 graduate travel except in accordance with rules prescribed

12 by the Secretary setting forth policies and procedures to

13 assure that Federal funds made available for such travel

14 are expended as part of a formal program of supervised

15 study.

16 ‘‘SEC. 603. LANGUAGE RESOURCE CENTERS.

17 ‘‘(a) LANGUAGE RESOURCE CENTERS AUTHOR18 IZED.—The Secretary is authorized to make grants to and

19 enter into contracts with institutions of higher education,

20 or combinations of such institutions, for the purpose of

21 establishing, strengthening, and operating a small number

22 of national language resource and training centers, which

23 shall serve as resources to improve the capacity to teach

24 and learn foreign languages effectively.
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1 ‘‘(b) AUTHORIZED ACTIVITIES.—The activities car2 ried out by the centers described in subsection (a)—

3 ‘‘(1) shall include effective dissemination ef4 forts, whenever appropriate; and

5 ‘‘(2) may include—

6 ‘‘(A) the conduct and dissemination of re7 search on new and improved teaching methods,

8 including the use of advanced educational tech9 nology;

10 ‘‘(B) the development and dissemination of

11 new teaching materials reflecting the use of

12 such research in effective teaching strategies;

13 ‘‘(C) the development, application, and dis14 semination of performance testing appropriate

15 to an educational setting for use as a standard

16 and comparable measurement of skill levels in

17 all languages;

18 ‘‘(D) the training of teachers in the admin19 istration and interpretation of performance

20 tests, the use of effective teaching strategies,

21 and the use of new technologies;

22 ‘‘(E) the publication and dissemination to

23 individuals and organizations in the foreign lan24 guage field of instructional materials in the less

25 commonly taught languages;
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1 ‘‘(F) the development and dissemination of

2 materials designed to serve as a resource for

3 foreign language teachers at the elementary and

4 secondary school levels; and

5 ‘‘(G) the operation of intensive summer

6 language institutes to train advanced foreign

7 language students, provide professional develop8 ment, and improve language instruction

9 through preservice and inservice language train10 ing for teachers.

11 ‘‘(c) CONDITIONS FOR GRANTS.—Grants under this

12 section shall be made on such conditions as the Secretary

13 determines to be necessary to carry out the provisions of

14 this section.

15 ‘‘SEC. 604. UNDERGRADUATE INTERNATIONAL STUDIES

16 AND FOREIGN LANGUAGE PROGRAMS.

17 ‘‘(a) INCENTIVES FOR THE CREATION OF NEW PRO18 GRAMS AND THE STRENGTHENING OF EXISTING PRO19 GRAMS IN UNDERGRADUATE INTERNATIONAL STUDIES

20 AND FOREIGN LANGUAGES.—

21 ‘‘(1) AUTHORITY.—The Secretary is authorized

22 to make grants to institutions of higher education,

23 combinations of such institutions, or partnerships

24 between nonprofit educational institutions and insti25 tutions of higher education, to assist such institu-
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1 tions, combinations or partnerships in planning, de2 veloping, and carrying out programs to improve un3 dergraduate instruction in international studies and

4 foreign languages. Such grants shall be awarded to

5 institutions, combinations or partnerships seeking to

6 create new programs or to strengthen existing pro7 grams in area studies, foreign languages, and other

8 international fields.

9 ‘‘(2) FEDERAL SHARE AND USE OF FUNDS.—

10 Grants made under this section may be used to pay

11 not more than 50 percent of the cost of projects and

12 activities which are an integral part of such a pro13 gram, such as—

14 ‘‘(A) planning for the development and ex15 pansion of undergraduate programs in inter16 national studies and foreign languages;

17 ‘‘(B) teaching, research, curriculum devel18 opment, faculty training in the United States or

19 abroad, and other related activities, including

20 the expansion of library and teaching resources;

21 ‘‘(C) expansion of opportunities for learn22 ing foreign languages, including less commonly

23 taught languages;
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1 ‘‘(D) programs under which foreign teach2 ers and scholars may visit institutions as visit3 ing faculty;

4 ‘‘(E) programs designed to develop or en5 hance linkages between 2-year and 4-year insti6 tutions of higher education, or baccalaureate

7 and post-baccalaureate programs or institu8 tions;

9 ‘‘(F) the development of undergraduate

10 study abroad programs in locations abroad in

11 which such study opportunities are not other12 wise available and the integration of these pro13 grams into specific on-campus degree programs;

14 ‘‘(G) the development of model programs

15 to enhance the effectiveness of study abroad, in16 cluding predeparture and post return programs;

17 ‘‘(H) the development of programs de18 signed to integrate professional and technical

19 education with area studies, foreign languages,

20 and other international fields;

21 ‘‘(I) the conduct of summer institutes in

22 foreign area, foreign language, and other inter23 national fields for purposes that are consistent

24 with the projects and activities described in this

25 subsection; and
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1 ‘‘(J) the development of partnerships be2 tween institutions of higher education and the

3 private sector, government, and elementary and

4 secondary education institutions to enhance

5 international knowledge.

6 ‘‘(3) NON-FEDERAL SHARE.—The non-Federal

7 share of the cost of the programs assisted under this

8 subsection may be provided either in cash or in kind.

9 Such assistance may be composed of institutional

10 and noninstitutional funds, including State, private

11 sector, corporation, or foundation contributions.

12 ‘‘(4) PRIORITY.—In awarding grants under this

13 section, the Secretary shall give priority to applica14 tions from institutions of higher education, combina15 tions or partnerships that require entering students

16 to have successfully completed at least 2 years of

17 secondary school foreign language instruction or

18 that require each graduating student to earn 2 years

19 of postsecondary credit in a foreign language (or

20 have demonstrated equivalent competence in the for21 eign language) or, in the case of a 2-year degree

22 granting institution, offer 2 years of postsecondary

23 credit in a foreign language.

24 ‘‘(5) GRANT CONDITIONS.—Grants under this

25 subsection shall be made on such conditions as the
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1 Secretary determines to be necessary to carry out

2 this subsection.

3 ‘‘(6) APPLICATION.—Each application for as4 sistance under this subsection shall include—

5 ‘‘(A) evidence that the applicant has con6 ducted extensive planning prior to submitting

7 the application;

8 ‘‘(B) an assurance that the faculty and ad9 ministrators of all relevant departments and

10 programs served by the applicant are involved

11 in ongoing collaboration with regard to achiev12 ing the stated objectives of the application;

13 ‘‘(C) an assurance that students at the ap14 plicant institutions, as appropriate, will have

15 equal access to, and derive benefits from, the

16 program assisted under this subsection; and

17 ‘‘(D) an assurance that each institution,

18 combination or partnership will use the Federal

19 assistance provided under this subsection to

20 supplement and not supplant funds expended

21 by the institution, prior to the receipt of the

22 Federal assistance, for programs to improve un23 dergraduate instruction in international studies

24 and foreign languages.
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1 ‘‘(7) EVALUATION.—The Secretary may estab2 lish requirements for program evaluations and re3 quire grant recipients to submit annual reports that

4 evaluate the progress and performance of students

5 participating in programs assisted under this sub6 section.

7 ‘‘(b) PROGRAMS OF NATIONAL SIGNIFICANCE.—The

8 Secretary may also award grants to public and private

9 nonprofit agencies and organizations, including profes10 sional and scholarly associations, whenever the Secretary

11 determines such grants will make an especially significant

12 contribution to improving undergraduate international

13 studies and foreign language programs.

14 ‘‘SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

15 ‘‘(a) AUTHORIZED ACTIVITIES.—The Secretary may,

16 directly or through grants or contracts, conduct research

17 and studies that contribute to achieving the purposes of

18 this part. Such research and studies may include—

19 ‘‘(1) studies and surveys to determine needs for

20 increased or improved instruction in foreign lan21 guage, area studies, or other international fields, in22 cluding the demand for foreign language, area, and

23 other international specialists in government, edu24 cation, and the private sector;
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1 ‘‘(2) studies and surveys to assess the utiliza2 tion of graduates of programs supported under this

3 title by governmental, educational, and private sec4 tor organizations and other studies assessing the

5 outcomes and effectiveness of programs so sup6 ported;

7 ‘‘(3) evaluation of the extent to which programs

8 assisted under this title that address national needs

9 would not otherwise be offered;

10 ‘‘(4) comparative studies of the effectiveness of

11 strategies to provide international capabilities at in12 stitutions of higher education;

13 ‘‘(5) research on more effective methods of pro14 viding instruction and achieving competency in for15 eign languages;

16 ‘‘(6) the development and publication of special17 ized materials for use in foreign language, area stud18 ies, and other international fields, or for training

19 foreign language, area, and other international spe20 cialists;

21 ‘‘(7) studies and evaluations of effective prac22 tices in the dissemination of international informa23 tion, materials, research, teaching strategies, and

24 testing techniques throughout the education commu-
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1 nity, including elementary and secondary schools;

2 and

3 ‘‘(8) the application of performance tests and

4 standards across all areas of foreign language in5 struction and classroom use.

6 ‘‘(b) ANNUAL REPORT.—The Secretary shall pre7 pare, publish, and announce an annual report listing the

8 books and research materials produced with assistance

9 under this section.

10 ‘‘SEC. 606. SELECTION OF CERTAIN GRANT RECIPIENTS.

11 ‘‘(a) COMPETITIVE GRANTS.—The Secretary shall

12 award grants under section 602 competitively on the basis

13 of criteria that separately, but not less rigorously, evalu14 ates the applications for comprehensive and undergradu15 ate language and area centers and programs.

16 ‘‘(b) SELECTION CRITERIA.—The Secretary shall set

17 criteria for grants awarded under section 602 by which

18 a determination of excellence shall be made to meet the

19 differing objectives of graduate and undergraduate institu20 tions.

21 ‘‘(c) EQUITABLE DISTRIBUTION OF GRANTS.—The

22 Secretary shall, to the extent practicable, award grants

23 under this part (other than section 602) in such manner

24 as to achieve an equitable distribution of the grant funds

25 throughout the United States, based on the merit of a pro-
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1 posal as determined pursuant to a peer review process in2 volving broadly representative professionals.

3 ‘‘SEC. 607. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

4 ‘‘(a) SELECTION CRITERIA.—The Secretary shall

5 make excellence the criterion for selection of grants award6 ed under section 602.

7 ‘‘(b) EQUITABLE DISTRIBUTION.—To the extent

8 practicable and consistent with the criterion of excellence,

9 the Secretary shall award grants under this part (other

10 than section 602) in such a manner as will achieve an eq11 uitable distribution of funds throughout the United States.

12 ‘‘(c) SUPPORT FOR UNDERGRADUATE EDUCATION.—

13 The Secretary shall also award grants under this part in

14 such manner as to ensure that an appropriate portion of

15 the funds appropriated for this part (as determined by the

16 Secretary) are used to support undergraduate education.

17 ‘‘SEC. 608. AMERICAN OVERSEAS RESEARCH CENTERS.

18 ‘‘(a) CENTERS AUTHORIZED.—The Secretary is au19 thorized to make grants to and enter into contracts with

20 any American overseas research center that is a consor21 tium of institutions of higher education (hereafter in this

22 section referred to as a ‘‘center’’) to enable such center

23 to promote postgraduate research, exchanges and area

24 studies.
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1 ‘‘(b) USE OF GRANTS.—Grants made and contracts

2 entered into pursuant to this section may be used to pay

3 all or a portion of the cost of establishing or operating

4 a center or program, including—

5 ‘‘(1) the cost of faculty and staff stipends and

6 salaries;

7 ‘‘(2) the cost of faculty, staff, and student trav8 el;

9 ‘‘(3) the cost of the operation and maintenance

10 of overseas facilities;

11 ‘‘(4) the cost of teaching and research mate12 rials;

13 ‘‘(5) the cost of acquisition, maintenance, and

14 preservation of library collections;

15 ‘‘(6) the cost of bringing visiting scholars and

16 faculty to a center to teach or to conduct research;

17 ‘‘(7) the cost of organizing and managing con18 ferences; and

19 ‘‘(8) the cost of publication and dissemination

20 of material for the scholarly and general public.

21 ‘‘(c) LIMITATION.—The Secretary shall only award

22 grants to and enter into contracts with centers under this

23 section that—
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1 ‘‘(1) receive more than 50 percent of their

2 funding from public or private United States

3 sources;

4 ‘‘(2) have a permanent presence in the country

5 in which the center is located; and

6 ‘‘(3) are organizations described in section

7 501(c)(3) of the Internal Revenue Code of 1986

8 which are exempt from taxation under section

9 501(a) of such Code.

10 ‘‘(d) DEVELOPMENT GRANTS.—The Secretary is au11 thorized to make grants for the establishment of new cen12 ters. The grants may be used to fund activities that, with13 in 1 year, will result in the creation of a center described

14 in subsection (c).

15 ‘‘SEC. 609. AUTHORIZATION OF APPROPRIATIONS.

16 ‘‘There are authorized to be appropriated to carry out

17 this part $80,000,000 for fiscal year 1999, and such sums

18 as may be necessary for each of the 4 succeeding fiscal

19 years.’’.

20 SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PRO21 GRAMS.

22 Part B of title VI (20 U.S.C. 1130 et seq.) is amend23 ed—

24 (1) in section 612 (20 U.S.C. 1130–1)—

25 (A) in subsection (c)—
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1 (i) in paragraph (1)—

2 (I) in subparagraph (B), by

3 striking ‘‘advanced’’; and

4 (II) in subparagraph (C), by

5 striking ‘‘evening or summer’’; and

6 (ii) in paragraph (2)(C), by inserting

7 ‘‘foreign language,’’ after ‘‘studies,’’; and

8 (B) in subsection (d)(2)(G), by inserting ‘‘,

9 such as a representative of a community college

10 in the region served by the center’’ before the

11 period; and

12 (2) in section 614 (20 U.S.C. 1130b)—

13 (A) in subsection (a), by striking ‘‘1993’’

14 and inserting ‘‘1999’’; and

15 (B) in subsection (b), by striking ‘‘1993’’

16 and inserting ‘‘1999’’.

17 SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

18 Part C of title VI (20 U.S.C. 1131 et seq.) is amend19 ed—

20 (1) in section 621(e) (20 U.S.C. 1131(e))—

21 (A) by striking ‘‘one-fourth’’ and inserting

22 ‘‘one-half’’; and

23 (B) by adding at the end the following:

24 ‘‘The non-Federal contribution shall be made

25 from private sector sources.’’;
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1 (2) by redesignating sections 622 through 627

2 (20 U.S.C. 1131a and 1131f) as sections 623

3 through 628, respectively; and

4 (3) by inserting after section 621 (20 U.S.C.

5 1131) the following:

6 ‘‘SEC. 622. INSTITUTIONAL DEVELOPMENT.

7 ‘‘(a) IN GENERAL.—The Institute shall award

8 grants, from amounts available to the Institute for each

9 fiscal year, to historically Black colleges and universities,

10 Hispanic-serving institutions, tribally controlled commu11 nity colleges, and minority institutions, to enable such col12 leges, universities, and institutions to strengthen inter13 national affairs programs.

14 ‘‘(b) APPLICATION.—No grant may be made by the

15 Institute unless an application is made by the college, uni16 versity, or institution at such time, in such manner, and

17 accompanied by such information as the Institute may re18 quire.

19 ‘‘(c) DEFINITIONS.—In this section—

20 ‘‘(1) the term ‘historically Black college and

21 university’ has the meaning given the term in sec22 tion 322;

23 ‘‘(2) the term ‘Hispanic-serving institution’ has

24 the meaning given the term in section 316(b);
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1 ‘‘(3) the term ‘tribally controlled community

2 college’ has the meaning given the term in section 2

3 of the Tribally Controlled Community College Assist4 ance Act of 1978 (25 U.S.C. 1801); and

5 ‘‘(4) the term ‘minority institution’ has the

6 meaning given the term in section 1046.’’;

7 (4) in section 623 (as redesignated by para8 graph (2))—

9 (A) in the section heading, by striking

10 ‘‘JUNIOR YEAR’’ and inserting ‘‘STUDY’’;

11 (B) in subsection (b)(2)—

12 (i) by inserting ‘‘, or completing the

13 third year of study in the case of a sum14 mer abroad program,’’ after ‘‘study’’; and

15 (ii) by striking ‘‘junior year’’ and in16 serting ‘‘study’’;

17 (C) in subsection (c)—

18 (i) in the matter preceding paragraph

19 (1), by striking ‘‘junior year’’ and inserting

20 ‘‘study’’;

21 (ii) in paragraph (1), by striking

22 ‘‘junior year’’ and inserting ‘‘study’’; and

23 (iii) in paragraph (2)—

24 (I) by striking ‘‘one-half’’ and in25 serting ‘‘one-third’’; and
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1 (II) by striking ‘‘junior year’’

2 and inserting ‘‘study’’;

3 (5) in section 627 (as redesignated by para4 graph (2)) (20 U.S.C. 1131e), by striking ‘‘625’’

5 and inserting ‘‘626’’; and

6 (6) in section 628 (as redesignated by para7 graph (2)) (20 U.S.C. 1131f), by striking ‘‘1993’’

8 and inserting ‘‘1999’’.

9 SEC. 604. GENERAL PROVISIONS.

10 Section 632 (20 U.S.C. 1132–1) is repealed.

11 TITLE VII—RELATED PROGRAMS

12 AND AMENDMENTS TO OTHER

13 ACTS

14 PART A—INDIAN EDUCATION PROGRAMS

15 SEC. 711. TRIBALLY CONTROLLED COMMUNITY COLLEGE

16 ASSISTANCE ACT OF 1978.

17 (a) REAUTHORIZATION.—

18 (1) AMOUNT OF GRANTS.—Section 108(a)(2) of

19 the Tribally Controlled Community College Assist20 ance Act of 1978 (25 U.S.C. 1808(a)(2)) is amend21 ed by striking ‘‘$5,820’’ and inserting ‘‘$6,000’’.

22 (2) AUTHORIZATION OF APPROPRIATIONS.—

23 (A) TITLE I.—Section 110(a) of the Trib24 ally Controlled Community College Assistance

25 Act of 1978 (25 U.S.C. 1810(a)) is amended—
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1 (i) in paragraph (1), by striking

2 ‘‘1993’’ and inserting ‘‘1999’’;

3 (ii) in paragraph (2), by striking

4 ‘‘$30,000,000 for fiscal year 1993’’ and in5 serting ‘‘$40,000,000 for fiscal year

6 1999’’;

7 (iii) in paragraph (3), by striking

8 ‘‘1993’’ and inserting ‘‘1999’’; and

9 (iv) in paragraph (4), by striking

10 ‘‘1993’’ and inserting ‘‘1999’’.

11 (B) TITLE III.—Section 306(a) of the

12 Tribally Controlled Community College Assist13 ance Act of 1978 (25 U.S.C. 1836(a)) is

14 amended by striking ‘‘1993’’ and inserting

15 ‘‘1999’’.

16 (C) TITLE IV.—Section 403 of the Tribal

17 Economic Development and Technology Related

18 Education Assistance Act of 1990 (25 U.S.C.

19 1852) is amended by striking ‘‘1993’’ and in20 serting ‘‘1999’’.

21 (b) NAME CHANGE.—The Tribally Controlled Com22 munity College Assistance Act of 1978 (25 U.S.C. 1801

23 et seq.) is amended—
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1 (1) by striking ‘‘community college’’ each place

2 the term appears and inserting ‘‘college or univer3 sity’’;

4 (2) by striking ‘‘Community College’’ each place

5 the term appears (other than when such term is pre6 ceded by the term ‘‘Navajo’’) and inserting ‘‘College

7 or University’’;

8 (3) by striking ‘‘community colleges’’ each place

9 the term appears and inserting ‘‘colleges or univer10 sities’’;

11 (4) by striking ‘‘such college’’ each place the

12 term appears and inserting ‘‘such college or univer13 sity’’; and

14 (5) by striking ‘‘community college’s’’ and in15 serting ‘‘college or university’s’’.

16 SEC. 712. AMERICAN INDIAN, ALASKA NATIVE, AND NATIVE

17 HAWAIIAN CULTURE AND ART DEVELOP18 MENT.

19 Section 1531 of the American Indian, Alaska Native,

20 and Native Hawaiian Culture and Art Development Act

21 (20 U.S.C. 4451) is amended to read as follows:

22 ‘‘SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

23 ‘‘There is authorized to be appropriated to carry out

24 part A $5,000,000 for fiscal year 1999.’’.
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1 PART B—ADVANCED PLACEMENT

2 INCENTIVE PROGRAM

3 SEC. 721. ADVANCED PLACEMENT INCENTIVE PROGRAM.

4 (a) PROGRAM ESTABLISHED.—The Secretary of

5 Education is authorized to make grants to States having

6 applications approved under subsection (d), from allot7 ments under subsection (b), to enable the States to reim8 burse low-income individuals to cover part or all of the

9 cost of advanced placement test fees, if the low-income in10 dividuals—

11 (1) are enrolled in an advanced placement class;

12 and

13 (2) plan to take an advanced placement test.

14 (b) ALLOTMENT.—From the sum appropriated under

15 subsection (j) for a fiscal year, the Secretary shall allot

16 to each State an amount that bears the same relation to

17 the sum as the number of low-income individuals in the

18 State bears to the number of low-income individuals in all

19 States.

20 (c) INFORMATION DISSEMINATION.—The State edu21 cational agency may use not more than 5 percent of grant

22 funds received for a fiscal year to disseminate information

23 regarding the availability of test fee payments under this

24 section to eligible individuals through secondary school

25 teachers and guidance counselors.
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1 (d) REQUIREMENTS FOR APPROVAL OF APPLICA2 TIONS.—In approving applications for grants the Sec3 retary of Education shall—

4 (1) require that each such application contain a

5 description of the advance placement test fees the

6 State will pay on behalf of individual students;

7 (2) require an assurance that any funds re8 ceived under this section, other than funds used in

9 accordance with subsection (c), shall be used only to

10 pay advanced placement test fees; and

11 (3) contain such information as the Secretary

12 may require to demonstrate that the State will en13 sure that a student is eligible for payments under

14 this section, including the documentation required by

15 chapter 1 of subpart 2 of part A of title IV of the

16 Higher Education Act of 1965 (20 U.S.C. 1070a–11

17 et seq.).

18 (e) FUNDING RULE.—Funds provided under this sec19 tion shall be used to supplement and not supplant other

20 Federal, State, local or private funds available to assist

21 low-income individuals in paying for advanced placement

22 testing, except that such funds may be used to supplant

23 the funds so available if the funds used to supplant are

24 used to increase the participation of low-income individ25 uals in advanced placement courses through teacher train-
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1 ing and other activities directly related to increasing the

2 availability of advanced placement courses.

3 (f) SPECIAL RULE.—The Secretary of Education

4 shall only award grants under this section for a fiscal year

5 if the amount the College Board spends for the College

6 Board’s fee assistance program for low-income students

7 for the fiscal year is not less than the amount the College

8 Board spent for such program for the preceding fiscal

9 year.

10 (g) REGULATIONS.—The Secretary of Education

11 shall prescribe such regulations as are necessary to carry

12 out this section.

13 (h) REPORT.—Each State annually shall report to

14 the Secretary of Education regarding—

15 (1) the number of low-income individuals in the

16 State who receive assistance under this section; and

17 (2) the teacher training and other activities de18 scribed in subsection (e).

19 (i) DEFINITION.—In this section:

20 (1) ADVANCED PLACEMENT TEST.—The term

21 ‘‘advanced placement test’’ includes only an ad22 vanced placement test approved by the Secretary of

23 Education for the purposes of this section.

24 (2) LOW-INCOME INDIVIDUAL.—The term ‘‘low25 income individual’’ has the meaning given the term
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1 in section 402A(g)(2) of the Higher Education Act

2 of 1965 (20 U.S.C. 1070a–11(g)(2)).

3 (j) AUTHORIZATION OF APPROPRIATIONS.—There

4 are authorized to be appropriated $10,000,000 for fiscal

5 year 1999 and such sums as may be necessary for each

6 of the 4 succeeding fiscal years to carry out this section.

7 PART C—INSTITUTE FOR PEACE

8 SEC. 731. AUTHORITIES OF THE UNITED STATES INSTITUTE

9 OF PEACE.

10 The United States Institute of Peace Act (22 U.S.C.

11 4601 et seq.) is amended—

12 (1) in section 1705 (22 U.S.C. 4604)—

13 (A) in subsection (f), by inserting ‘‘per14 sonal service and other’’ after ‘‘may enter into’’;

15 and

16 (B) in subsection (o), by inserting after

17 ‘‘Services’’ the following: ‘‘and use all sources of

18 supply and services of the General Services Ad19 ministration’’;

20 (2) in section 1706(e)(4) (22 U.S.C.

21 4605(e)(4)), by adding at the end the following:

22 ‘‘Service under an appointment of less than 4 years

23 shall not be treated as a term for purposes of this

24 paragraph.’’;
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1 (3) in section 1710(a)(1) (22 U.S.C.

2 4609(a)(1)), by striking ‘‘1993’’ and inserting

3 ‘‘1999’’; and

4 (4) in the second and third sentences of section

5 1712 (22 U.S.C. 4611), by striking ‘‘shall’’ each

6 place it appears and inserting ‘‘may’’.

7 PART D—COMMUNITY SCHOLARSHIP

8 MOBILIZATION

9 SEC. 741. SHORT TITLE.

10 This part may be cited as the ‘‘Community Scholar11 ship Mobilization Act.’’

12 SEC. 742. FINDINGS.

13 Congress finds that—

14 (1) the local community, when properly orga15 nized and challenged, is one of the best sources of

16 academic support, motivation toward achievement,

17 and financial resources for aspiring postsecondary

18 students;

19 (2) local communities, working to complement

20 or augment services currently offered by area

21 schools and colleges, can raise the educational expec22 tations and increase the rate of postsecondary at23 tendance of their youth by forming locally-based or24 ganizations that provide both academic support (in25 cluding guidance, counseling, mentoring, tutoring,
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1 encouragement, and recognition) and tangible, lo2 cally raised, effectively targeted, publicly recognized,

3 financial assistance;

4 (3) proven methods of stimulating these com5 munity efforts can be promoted through Federal

6 support for the establishment of regional, State or

7 community program centers to organize and chal8 lenge community efforts to develop educational in9 centives and support for local students; and

10 (4) using Federal funds to leverage private con11 tributions to help students from low-income families

12 attain educational and career goals is an efficient

13 and effective investment of scarce taxpayer-provided

14 resources.

15 SEC. 743. DEFINITIONS.

16 In this part:

17 (1) REGIONAL, STATE OR COMMUNITY PRO18 GRAM CENTER.—The term ‘‘regional, State or com19 munity program center’’ means an organization

20 that—

21 (A) is a division of, responsible to, and

22 overseen by, the national organization; and

23 (B) is staffed by professionals trained to

24 create, develop, and sustain local entities in

25 towns, cities, and neighborhoods.
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1 (2) LOCAL ENTITY.—The term ‘‘local entity’’

2 means an organization that—

3 (A) is a nonprofit organization that is de4 scribed in section 501(c)(3) of the Internal Rev5 enue Code of 1986, and exempt from taxation

6 under section 501(a) of such Code (or shall

7 meet this criteria through affiliation with the

8 national organization);

9 (B) is formed for the purpose of providing

10 educational scholarships and academic support

11 for residents of the local community served by

12 such organization;

13 (C) solicits broad-based community sup14 port in its academic support and fund-raising

15 activities;

16 (D) is broadly representative of the local

17 community in the structures of its volunteer-op18 erated organization and has a board of direc19 tors that includes leaders from local neighbor20 hood organizations and neighborhood residents,

21 such as school or college personnel, parents,

22 students, community agency representatives, re23 tirees, and representatives of the business com24 munity;
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1 (E) awards scholarships without regard to

2 age, sex, marital status, race, creed, color, reli3 gion, national origin or disability; and

4 (F) gives priority to awarding scholarships

5 for postsecondary education to deserving stu6 dents from low-income families in the local com7 munity.

8 (3) NATIONAL ORGANIZATION.—The term ‘‘na9 tional organization’’ means an organization that—

10 (A) has the capacity to create, develop and

11 sustain local entities and affiliated regional,

12 State or community program centers;

13 (B) has the capacity to sustain newly cre14 ated local entities in towns, cities, and neigh15 borhoods through ongoing training support pro16 grams;

17 (C) is described in section 501(c)(3) of the

18 Internal Revenue Code of 1986, and exempt

19 from taxation under section 501(a) of such

20 Code;

21 (D) is a publicly supported organization

22 within the meaning of section 170(b)(1)(A)(iv)

23 of such Code;
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1 (E) ensures that each of the organization’s

2 local entities meet the criteria described in sub3 paragraphs (C) and (D); and

4 (F) has a program for or experience in co5 operating with secondary and postsecondary in6 stitutions in carrying out the organization’s

7 scholarship and academic support activities.

8 (4) HIGH POVERTY AREA.—The term ‘‘high

9 poverty area’’ means a community with a higher per10 centage of children from low-income families than

11 the national average of such percentage and a lower

12 percentage of children pursuing postsecondary edu13 cation than the national average of such percentage.

14 (5) STUDENTS FROM LOW-INCOME FAMILIES.—

15 The term ‘‘students from low-income families’’

16 means students determined, pursuant to part F of

17 title IV of the Higher Education Act of 1965 (20

18 U.S.C. 1087kk et seq.), to be eligible for a Federal

19 Pell Grant under subpart 1 of part A of title IV of

20 such Act (20 U.S.C. 1070a).

21 SEC. 744. PURPOSE, ENDOWMENT GRANT AUTHORITY.

22 (a) PURPOSE.—It is the purpose of this part to estab23 lish and support regional, State or community program

24 centers to enable such centers to foster the development

25 of local entities in high poverty areas that promote higher
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1 education goals for students from low-income families

2 by—

3 (1) providing academic support, including guid4 ance, counseling, mentoring, tutoring, and recogni5 tion; and

6 (2) providing scholarship assistance for the cost

7 of postsecondary education.

8 (b) ENDOWMENT GRANT AUTHORITY.—From the

9 funds appropriated pursuant to the authority of section

10 746, the Secretary shall award an endowment grant, on

11 a competitive basis, to a national organization to enable

12 such organization to support the establishment or ongoing

13 work of regional, State or community program centers

14 that foster the development of local entities in high pov15 erty areas to improve high school graduation rates and

16 postsecondary attendance through the provision of aca17 demic support services and scholarship assistance for the

18 cost of postsecondary education.

19 SEC. 745. GRANT AGREEMENT AND REQUIREMENTS.

20 (a) IN GENERAL.—The Secretary shall award one or

21 more endowment grants described in section 744(b) pur22 suant to an agreement between the Secretary and a na23 tional organization. Such agreement shall—

24 (1) require the national organization to estab25 lish an endowment fund in the amount of the grant,
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1 the corpus of which shall remain intact and the in2 terest income from which shall be used to support

3 the activities described in paragraphs (2) and (3);

4 (2) require the national organization to use 70

5 percent of the interest income from the endowment

6 fund in any fiscal year to support the establishment

7 or ongoing work of regional, State or community

8 program centers to enable such centers to work with

9 local communities to establish local entities in high

10 poverty areas and provide ongoing technical assist11 ance, training workshops, and other activities to help

12 ensure the ongoing success of the local entities;

13 (3) require the national organization to use 30

14 percent of the interest income from the endowment

15 fund in any fiscal year to provide scholarships for

16 postsecondary education to students from low-in17 come families, which scholarships shall be matched

18 on a dollar-for-dollar basis from funds raised by the

19 local entities;

20 (4) require that at least 50 percent of all the

21 interest income from the endowment be allocated to

22 establish new local entities or support regional, State

23 or community program centers in high poverty

24 areas;
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1 (5) require the national organization to submit,

2 for each fiscal year in which such organization uses

3 the interest from the endowment fund, a report to

4 the Secretary that contains—

5 (A) a description of the programs and ac6 tivities supported by the interest on the endow7 ment fund;

8 (B) the audited financial statement of the

9 national organization for the preceding fiscal

10 year;

11 (C) a plan for the programs and activities

12 to be supported by the interest on the endow13 ment fund as the Secretary may require; and

14 (D) an evaluation of the programs and ac15 tivities supported by the interest on the endow16 ment fund as the Secretary may require; and

17 (E) data indicating the number of students

18 from low-income families who receive scholar19 ships from local entities, and the amounts of

20 such scholarships;

21 (6) contain such assurances as the Secretary

22 may require with respect to the management and op23 eration of the endowment fund; and

24 (7) contain an assurance that if the Secretary

25 determines that such organization is not in substan-
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1 tial compliance with the provisions of this part, then

2 the national organization shall pay to the Secretary

3 an amount equal to the corpus of the endowment

4 fund plus any accrued interest on such fund that is

5 available to the national organization on the date of

6 such determination.

7 (b) RETURNED FUNDS.—All funds returned to the

8 Secretary pursuant to subsection (a)(7) shall be available

9 to the Secretary to carry out any scholarship or grant pro10 gram assisted under title IV of the Higher Education Act

11 of 1965 (20 U.S.C. 1070 et seq.).

12 SEC. 746. AUTHORIZATION OF APPROPRIATIONS.

13 There are authorized to be appropriated to carry out

14 this part $10,000,000 for fiscal year 2000.

15 PART E—GRANTS TO STATES FOR WORK16 PLACE AND COMMUNITY TRANSITION

17 TRAINING FOR INCARCERATED

18 YOUTH OFFENDERS

19 SEC. 751. GRANTS TO STATES FOR WORKPLACE AND COM20 MUNITY TRANSITION TRAINING FOR INCAR21 CERATED YOUTH OFFENDERS.

22 (a) FINDINGS.—Congress makes the following find23 ings:
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1 (1) Over 150,000 youth offenders age 21 and

2 younger are incarcerated in the Nation’s jails, juve3 nile facilities, and prisons.

4 (2) Most youth offenders who are incarcerated

5 have been sentenced as first-time adult felons.

6 (3) Approximately 75 percent of youth offend7 ers are high school dropouts who lack basic literacy

8 and life skills, have little or no job experience, and

9 lack marketable skills.

10 (4) The average incarcerated youth has at11 tended school only through grade 10.

12 (5) Most of these youths can be diverted from

13 a life of crime into productive citizenship with avail14 able educational, vocational, work skills, and related

15 service programs.

16 (6) If not involved with educational programs

17 while incarcerated, almost all of these youths will re18 turn to a life of crime upon release.

19 (7) The average length of sentence for a youth

20 offender is about 3 years. Time spent in prison pro21 vides a unique opportunity for education and train22 ing.

23 (8) Even with quality education and training

24 provided during incarceration, a period of intense

25 supervision, support, and counseling is needed upon
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1 release to ensure effective reintegration of youth of2 fenders into society.

3 (9) Research consistently shows that the vast

4 majority of incarcerated youths will not return to

5 the public schools to complete their education.

6 (10) There is a need for alternative educational

7 opportunities during incarceration and after release.

8 (b) DEFINITION.—For purposes of this part, the

9 term ‘‘youth offender’’ means a male or female offender

10 under the age of 25, who is incarcerated in a State prison,

11 including a prerelease facility.

12 (c) GRANT PROGRAM.—The Secretary of Education

13 (in this section referred to as the ‘‘Secretary’’) shall estab14 lish a program in accordance with this section to provide

15 grants to the State correctional education agencies in the

16 States, from allocations for the States under subsection

17 (i), to assist and encourage incarcerated youths to acquire

18 functional literacy, life, and job skills, through the pursuit

19 of a postsecondary education certificate, or an associate

20 of arts or bachelor’s degree while in prison, and employ21 ment counseling and other related services which start

22 during incarceration and continue through prerelease and

23 while on parole.

24 (d) APPLICATION.—To be eligible for a grant under

25 this section, a State correctional education agency shall
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1 submit to the Secretary a proposal for a youth offender

2 program that—

3 (1) identifies the scope of the problem, includ4 ing the number of incarcerated youths in need of

5 postsecondary education and vocational training;

6 (2) lists the accredited public or private edu7 cational institution or institutions that will provide

8 postsecondary educational services;

9 (3) lists the cooperating agencies, public and

10 private, or businesses that will provide related serv11 ices, such as counseling in the areas of career devel12 opment, substance abuse, health, and parenting

13 skills;

14 (4) describes the evaluation methods and per15 formance measures that the State correctional edu16 cation agency will employ, which methods and meas17 ures—

18 (A) shall be appropriate to meet the goals

19 and objectives of the proposal; and

20 (B) shall include measures of—

21 (i) program completion;

22 (ii) student academic and vocational

23 skill attainment;

24 (iii) success in job placement and re25 tention; and
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1 (iv) recidivism;

2 (5) describes how the proposed programs are to

3 be integrated with existing State correctional edu4 cation programs (such as adult education, graduate

5 education degree programs, and vocational training)

6 and State industry programs;

7 (6) addresses the educational needs of youth of8 fenders who are in alternative programs (such as

9 boot camps); and

10 (7) describes how students will be selected so

11 that only youth offenders eligible under subsection

12 (f) will be enrolled in postsecondary programs.

13 (e) PROGRAM REQUIREMENTS.—Each State correc14 tional education agency receiving a grant under this sec15 tion shall—

16 (1) integrate activities carried out under the

17 grant with the objectives and activities of the school18 to-work programs of such State, including—

19 (A) work experience or apprenticeship pro20 grams;

21 (B) transitional worksite job training for

22 vocational education students that is related to

23 the occupational goals of such students and

24 closely linked to classroom and laboratory in25 struction;
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1 (C) placement services in occupations that

2 the students are preparing to enter;

3 (D) employment-based learning programs;

4 and

5 (E) programs that address State and local

6 labor shortages;

7 (2) annually report to the Secretary and the At8 torney General on the results of the evaluations con9 ducted using the methods and performance measures

10 contained in the proposal; and

11 (3) provide to each State for each student eligi12 ble under subsection (f) not more than $1,500 annu13 ally for tuition, books, and essential materials, and

14 not more than $300 annually for related services

15 such as career development, substance abuse coun16 seling, parenting skills training, and health edu17 cation, for each eligible incarcerated youth.

18 (f) STUDENT ELIGIBILITY.—A youth offender shall

19 be eligible for participation in a program receiving a grant

20 under this section if the youth offender—

21 (1) is eligible to be released within 5 years (in22 cluding a youth offender who is eligible for parole

23 within such time); and

24 (2) is 25 years of age or younger.
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1 (g) LENGTH OF PARTICIPATION.—A State correc2 tional education agency receiving a grant under this sec3 tion shall provide educational and related services to each

4 participating youth offender for a period not to exceed 5

5 years, 1 year of which may be devoted to study in a grad6 uate education degree program or to remedial education

7 services for students who have obtained a secondary school

8 diploma. Educational and related services shall start dur9 ing the period of incarceration in prison or prerelease and

10 may continue during the period of parole.

11 (h) EDUCATION DELIVERY SYSTEMS.—State correc12 tional education agencies and cooperating institutions

13 shall, to the extent practicable, use high-tech applications

14 in developing programs to meet the requirements and

15 goals of this section.

16 (i) ALLOCATION OF FUNDS.—From the amounts ap17 propriated pursuant to subsection (j), the Secretary shall

18 allot to each State an amount that bears the same rela19 tionship to such funds as the total number of students

20 eligible under subsection (f) in such State bears to the

21 total number of such students in all States.

22 (j) AUTHORIZATION OF APPROPRIATIONS.—There

23 are authorized to be appropriated to carry out this section

24 $14,000,000 for fiscal year 1999 and such sums as may

25 be necessary for each of the 4 succeeding fiscal years.
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1 PART F—EDUCATION OF THE DEAF

2 SEC. 761. SHORT TITLE.

3 This part may be cited as the ‘‘Education of the Deaf

4 Amendments of 1998’’.

5 SEC. 762. ELEMENTARY AND SECONDARY EDUCATION PRO6 GRAMS.

7 Section 104(b) of the Education of the Deaf Act of

8 1986 (20 U.S.C. 4034(b)) is amended—

9 (1) in paragraph (1)—

10 (A) in subparagraph (A), by inserting

11 ‘‘and’’ after the semicolon;

12 (B) in subparagraph (B), by striking ‘‘;

13 and’’ and inserting a period; and

14 (C) by striking subparagraph (C);

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

16 of paragraph (2)—

17 (A) by striking ‘‘paragraph (1)’’ and in18 serting ‘‘paragraph (1)(B)’’; and

19 (B) by striking ‘‘section 618(b)’’ and in20 serting ‘‘section 618(a)(1)(A)’’;

21 (3) in paragraph (3), by striking ‘‘intermediate

22 educational unit’’ and inserting ‘‘educational service

23 agency’’;

24 (4) in paragraph (4)—
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1 (A) in subparagraph (A), by striking ‘‘in2 termediate educational unit’’ and inserting

3 ‘‘educational service agency’’; and

4 (B) in subparagraph (B), by striking ‘‘in5 termediate educational units’’ and inserting

6 ‘‘educational service agencies’’; and

7 (5) by amending subparagraph (C) to read as

8 follows:

9 ‘‘(C) provide the child a free appropriate

10 public education in accordance with part B of

11 the Individuals with Disabilities Education Act

12 and procedural safeguards in accordance with

13 the following provisions of section 615 of such

14 Act:

15 ‘‘(i) paragraphs (1), and (3) through

16 (6), of subsection (b).

17 ‘‘(ii) Subsections (c) through (g).

18 ‘‘(iii) Subsection (h), except for the

19 matter in paragraph (4) pertaining to

20 transmission of findings and decisions to a

21 State advisory panel.

22 ‘‘(iv) Paragraphs (1) and (2) of sub23 section (i).

24 ‘‘(v) Subsection (j)—
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1 ‘‘(I) except that such subsection

2 shall not be applicable to a decision by

3 the University to refuse to admit a

4 child; or

5 ‘‘(II) to dismiss a child, except

6 that, before dismissing any child, the

7 University shall give at least 60 days

8 written notice to the child’s parents

9 and to the local educational agency in

10 which the child resides, unless the dis11 missal involves a suspension, expul12 sion, or other change in placement

13 covered under section 615(k).

14 ‘‘(vi) Subsections (k) through (m).’’.

15 SEC. 763. AGREEMENT WITH GALLAUDET UNIVERSITY.

16 Section 105(a) of the Education of the Deaf Act of

17 1986 (20 U.S.C. 4305(a)) is amended—

18 (1) by striking ‘‘within 1 year after enactment

19 of the Education of the Deaf Act Amendments of

20 1992, a new’’ and inserting ‘‘and periodically up21 date, an’’; and

22 (2) by amending the second sentence to read as

23 follows: ‘‘The Secretary or the University shall de24 termine the necessity for the periodic update de25 scribed in the preceding sentence.’’.
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1 SEC. 764. AGREEMENT FOR THE NATIONAL TECHNICAL IN2 STITUTE FOR THE DEAF.

3 Paragraph (2) of section 112(a) of the Education of

4 the Deaf Act of 1986 (20 U.S.C. 4332(a)) is amended

5 to read as follows:

6 ‘‘(2) The Secretary and the institution of higher edu7 cation with which the Secretary has an agreement under

8 this section—

9 ‘‘(A) shall periodically assess the need for modi10 fication of the agreement; and

11 ‘‘(B) shall periodically update the agreement as

12 determined necessary by the Secretary or the insti13 tution.’’.

14 SEC. 765. DEFINITIONS.

15 Section 201 of the Education of the Deaf Act of 1986

16 (20 U.S.C. 4351) is amended—

17 (1) in paragraph (1)(C), by striking ‘‘Palau

18 (but only until the Compact of Free Association with

19 Palau takes effect),’’; and

20 (2) in paragraph (5)—

21 (A) by inserting ‘‘and’’ after ‘‘Virgin Is22 lands,’’; and

23 (B) by striking ‘‘, and Palau (but only

24 until the Compact of Free Association with

25 Palau takes effect)’’.
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1 SEC. 766. GIFTS.

2 Subsection (b) of section 203 of the Education of the

3 Deaf Act of 1986 (20 U.S.C. 4353) is amended to read

4 as follows:

5 ‘‘(b) INDEPENDENT FINANCIAL AND COMPLIANCE

6 AUDIT.—

7 ‘‘(1) IN GENERAL.—Gallaudet University shall

8 have an annual independent financial and compli9 ance audit made of the programs and activities of

10 the University, including the national mission and

11 school operations of the elementary and secondary

12 education programs at Gallaudet. The institution of

13 higher education with which the Secretary has an

14 agreement under section 112 shall have an annual

15 independent financial and compliance audit made of

16 the programs and activities of such institution of

17 higher education, including NTID, and containing

18 specific schedules and analyses for all NTID funds,

19 as determined by the Secretary.

20 ‘‘(2) COMPLIANCE.—As used in paragraph (1),

21 compliance means compliance with sections 102(b),

22 105(b)(4), 112(b)(5), and 203(c), paragraphs (2)

23 and (3) of section 207(b), subsections (b)(2), (b)(3),

24 and (c) through (f), of section 207, and subsections

25 (b) and (c) of section 210.
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1 ‘‘(3) SUBMISSION OF AUDITS.—A copy of each

2 audit described in paragraph (1) shall be provided to

3 the Secretary within 15 days of acceptance of the

4 audit by the University or the institution authorized

5 to establish and operate the NTID under section

6 112(a), as the case may be, but not later than Janu7 ary 10 of each year.’’.

8 SEC. 767. REPORTS.

9 Section 204(3) of the Education of the Deaf Act of

10 1986 (20 U.S.C. 4354(3)) is amended—

11 (1) in subparagraph (A), by striking ‘‘The an12 nual’’ and inserting ‘‘A summary of the annual’’;

13 and

14 (2) in subparagraph (B), by striking ‘‘the an15 nual’’ and inserting ‘‘a summary of the annual’’.

16 SEC. 768. MONITORING, EVALUATION, AND REPORTING.

17 Section 205(c) of the Education of the Deaf Act of

18 1986 (20 U.S.C. 4355(c)) is amended by striking ‘‘1993,

19 1994, 1995, 1996, and 1997’’ and inserting ‘‘1998

20 through 2003’’.

21 SEC. 769. INVESTMENTS.

22 Section 207 of the Education of the Deaf Act of 1986

23 (20 U.S.C. 4357) is amended—

24 (1) in subsection (c)(1), by inserting ‘‘the Fed25 eral contribution of’’ after ‘‘shall invest’’;
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1 (2) in subsection (d)(3)(A), by striking ‘‘prior’’

2 and inserting ‘‘current’’; and

3 (3) in subsection (h)—

4 (A) in paragraph (1), by striking ‘‘1993

5 through 1997’’ and inserting ‘‘1998 through

6 2003’’; and

7 (B) in paragraph (2), by striking ‘‘1993

8 through 1997’’ and inserting ‘‘1998 through

9 2003’’.

10 SEC. 770. INTERNATIONAL STUDENTS.

11 Section 210(a) of the Education of the Deaf Act of

12 1986 (20 U.S.C. 4359a(a)) is amended by inserting before

13 the period ‘‘, except that in any school year no United

14 States citizen who is qualified to be admitted to the Uni15 versity or NTID and applies for admission to the Univer16 sity or NTID shall be denied admission because of the

17 admission of an international student’’.

18 SEC. 771. RESEARCH PRIORITIES.

19 Section 211 of the Education of the Deaf Act of 1986

20 (20 U.S.C. 4360) is amended to read as follows:

21 ‘‘SEC. 211. RESEARCH PRIORITIES.

22 ‘‘(a) RESEARCH PRIORITIES.—Gallaudet University

23 and the National Technical Institute for the Deaf shall

24 each establish and disseminate priorities, that reflect pub25 lic input, through a process that includes consumers, con-
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1 stituent groups, and the heads of other federally funded

2 programs. The priorities for the University shall include

3 activities conducted as part of the University’s elementary

4 and secondary education programs under section 104.

5 ‘‘(b) RESEARCH REPORTS.—The University and

6 NTID shall each prepare and submit an annual research

7 report, to the Secretary, the Committee on Education and

8 the Workforce of the House of Representatives, and the

9 Committee on Labor and Human Resources of the Senate,

10 not later than January 10 of each year, that shall in11 clude—

12 ‘‘(1) a summary of the public input received as

13 part of the establishment and dissemination of prior14 ities required by subsection (a), and the University’s

15 and NTID’s response to the input; and

16 ‘‘(2) a summary description of the research un17 dertaken by the University and NTID, the start and

18 projected end dates for each research project, the

19 projected cost and source or sources of funding for

20 each project, and any products resulting from re21 search completed in the prior fiscal year.’’.

22 SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

23 Title II of the Education of the Deaf Act of 1986

24 (20 U.S.C. 4351 et seq.) is amended by adding at the end

25 the following:
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1 ‘‘SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘(a) GALLAUDET UNIVERSITY.—There are author3 ized to be appropriated such sums as may be necessary

4 for each of the fiscal years 1998 through 2003 to carry

5 out the provisions of titles I and II, relating to—

6 ‘‘(1) Gallaudet University;

7 ‘‘(2) Kendall Demonstration Elementary

8 School; and

9 ‘‘(3) the Model Secondary School for the Deaf.

10 ‘‘(b) NATIONAL TECHNICAL INSTITUTE FOR THE

11 DEAF.—There are authorized to be appropriated such

12 sums as may be necessary for each of the fiscal years 1998

13 through 2003 to carry out the provisions of titles I and

14 II relating to the National Technical Institute for the

15 Deaf.’’.

16 SEC. 773. COMMISSION ON EDUCATION OF THE DEAF.

17 The Education of the Deaf Act of 1986 (20 U.S.C.

18 4301 et seq.) is amended by adding at the end the follow19 ing:

20 ‘‘TITLE III—COMMISSION ON

21 EDUCATION OF THE DEAF

22 ‘‘SEC. 301. COMMISSION ESTABLISHED.

23 ‘‘(a) ESTABLISHMENT.—

24 ‘‘(1) IN GENERAL.—The Secretary shall estab25 lish a Commission on the Education of the Deaf to

26 identify those education-related factors in the lives
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1 of individuals who are deaf that result in barriers to

2 successful postsecondary education experiences and

3 employment, and those education-related factors in

4 the lives of individuals who are deaf that contribute

5 to successful postsecondary education experiences

6 and employment.

7 ‘‘(2) DEFINITION OF INDIVIDUALS WHO ARE

8 DEAF.—In this title, the term ‘individuals who are

9 deaf’ means all persons with hearing impairments,

10 including those who are hard-of-hearing, those deaf11 ened later in life, and those who are profoundly deaf.

12 ‘‘(b) COMPOSITION.—

13 ‘‘(1) IN GENERAL.—The Commission shall be

14 composed of 13 members appointed by the Secretary

15 from recommendations made by the National Asso16 ciation of the Deaf, the American Society for Deaf

17 Children, the Alexander Graham Bell Association,

18 the President of Gallaudet, the Vice President of the

19 National Technical Institute for the Deaf, State

20 Schools for the Deaf, projects to train teachers of

21 the deaf funded under section 673(b) of the Individ22 uals with Disabilities Education Act, parent training

23 and information centers funded under section 682 of

24 such Act, the Regional Centers on Postsecondary

25 Education for Individuals who are Deaf funded
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1 under section 672 of such Act, Self-Help for Hard

2 of Hearing People, and the Cothe Council on Edu3 cation of the Deaf.

4 ‘‘(2) QUALIFICATIONS.—

5 ‘‘(A) IN GENERAL.—Members of the Com6 mission shall be appointed from among individ7 uals who have broad experience and expertise in

8 deafness, program evaluation, education, reha9 bilitation, and job training generally, which ex10 pertise and experience shall be directly relevant

11 to the issues to be addressed by the Commis12 sion.

‘‘(B) DEAF INDIVIDUALS.—At least 1 13 ⁄3 of

14 members of the Commission shall be individuals

15 who are deaf.

16 ‘‘(C) CHAIRPERSON.—The chairperson of

17 the Commission shall be elected by a simple

18 majority of the Commission.

19 ‘‘(D) ASSISTANT SECRETARY.—One mem20 ber of the Commission shall be the Assistant

21 Secretary for Special Education and Rehabilita22 tive Services.

23 ‘‘(3) DATE.—Members of the Commission shall

24 be appointed not later than 90 days after the date
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1 of enactment of the Education of the Deaf Amend2 ments of 1998.

3 ‘‘SEC. 302. DUTIES, REPORT, AND DURATION OF THE COM4 MISSION.

5 ‘‘(a) IDENTIFICATION OF FACTORS.—The Commis6 sion shall identify, with respect to individuals who are

7 deaf, factors that pose barriers to or factors that facili8 tate—

9 ‘‘(1) educational performance and progress of

10 students who are deaf in high school;

11 ‘‘(2) educational performance and progress of

12 students who are deaf in postsecondary education;

13 ‘‘(3) career exploration and selection;

14 ‘‘(4) job performance and satisfaction in initial

15 postsecondary employment; and

16 ‘‘(5) career advancement and satisfaction.

17 ‘‘(b) REPORT.—The Commission shall report to the

18 President and Congress such interim reports that the

19 Commission deems appropriate, and not later than 18

20 months after the date of enactment of the Education of

21 the Deaf Amendments of 1998, a final report containing

22 the findings of the Commission with respect to the factors

23 identified under subsection (a). The final report shall in24 clude recommendations, including legislative proposals,

25 that the Commission deems advisable.
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1 ‘‘(c) TERMINATION.—The Commission shall termi2 nate 90 days after the date on which the Commission sub3 mits the Commission’s final report described in subsection

4 (b).

5 ‘‘SEC. 303. ADMINISTRATIVE PROVISIONS.

6 ‘‘(a) PERSONNEL.—

7 ‘‘(1) IN GENERAL.—The Commission may ap8 point such personnel, including a staff director, as

9 the Commission deems necessary without regard to

10 the provisions of title 5, United States Code, except

11 that the rate pay for any employee of the Commis12 sion may not exceed the rate payable for level V of

13 the Executive Schedule under section 5316 of title

14 5, United States Code.

15 ‘‘(2) PROCUREMENT OF TEMPORARY AND

16 INTERMITTENT SERVICES.—The Chairperson of the

17 Commission may procure temporary and intermit18 tent services under section 3109(b) of title 5, United

19 States Code, at rates for individuals which do not

20 exceed the daily equivalent of the annual rate of

21 basic pay prescribed for level V of the Executive

22 Schedule under section 5316 of such title.

23 ‘‘(b) HEARINGS; QUORUM.—

24 ‘‘(1) HEARINGS.—The Commission or, with the

25 authorization of the Commission, any committee of
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1 the Commission, may, for the purpose of carrying

2 out the provisions of this title, hold such hearings,

3 sit, and act at such times and such places in the

4 United States as the Commission or such committee

5 may deem advisable.

6 ‘‘(2) QUORUM.—Seven members of the Com7 mission shall constitute a quorum, but 2 or more

8 members may conduct hearings.

9 ‘‘(3) HEARINGS AND PUBLIC INPUT.—In con10 ducting hearings and acquiring public input under

11 this title, the Commission may use various tele12 communications media, including teleconferencing,

13 video-conferencing, the Internet, and other media.

14 ‘‘(c) CONSULTATION; INFORMATION AND STATISTICS;

15 AGENCY COOPERATION.—

16 ‘‘(1) IN GENERAL.—In carrying out the Com17 mission’s duties under this title and to the extent

18 not prohibited by Federal law, the Commission is

19 authorized to secure consultation, information, sta20 tistics, and cooperation from Federal agencies, enti21 ties funded by the Federal Government, and other

22 entities the Commission deems advisable.

23 ‘‘(2) SPECIAL RULE.—The Commission is au24 thorized to use, with their consent, the services, per25 sonnel, information, and facilities of other Federal,
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1 State, local, and private agencies with or without re2 imbursement.

3 ‘‘SEC. 304. COMPENSATION OF MEMBERS.

4 ‘‘(a) UNITED STATES OFFICER AND EMPLOYEE

5 MEMBERS.—Members of the Commission who are officers

6 or full-time employees of the United States shall serve

7 without compensation in addition to that received for their

8 services as officers or employees of the United States; but

9 may be allowed travel expenses, including per diem in lieu

10 of subsistence, at rates authorized for employees of agen11 cies under subchapter I of chapter 57 of title 5, United

12 States Code, while away from their homes or regular

13 places of business in the performance of services for the

14 Commission.

15 ‘‘(b) PUBLIC MEMBERS.—Members of the Commis16 sion who are not officers or full-time employees of the

17 United States shall receive compensation at a rate that

18 does not exceed the daily rate payable for level V of the

19 Executive Schedule under section 5316 of title 5, United

20 States Code, for each day (including travel time) during

21 which such members are engaged in the actual perform22 ance of the duties of the Commission. In addition, such

23 members may be allowed travel expenses, including per

24 diem in lieu of subsistence, at rates authorized for employ25 ees of agencies under subchapter I of chapter 57 of title
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1 5, United States Code, while away from their homes or

2 regular places of business in the performance of services

3 for the Commission.

4 ‘‘SEC. 305. AUTHORIZATIONS OF APPROPRIATIONS.

5 ‘‘There is authorized to be appropriated to carry out

6 this title such sums as may be necessary for each of the

7 fiscal years 1999 and 2000.’’.

8 PART G—REPEALS

9 SEC. 781. REPEALS.

10 (a) HIGHER EDUCATION ACT OF 1965.—The follow11 ing provisions of the Act (20 U.S.C. 1001 et seq.) are re12 pealed:

13 (1) The heading for, sections 701 and 702 of,

14 and parts A, C, D, and E of, title VII (20 U.S.C.

15 1132a, 1132a–1, 1132b et seq., 1132d et seq.,

16 1132f et seq., and 1132i et seq.).

17 (2) Title VIII (20 U.S.C. 1133 et seq.).

18 (3) The heading for, section 901 of, and parts

19 A, B, E, F, and G of, title IX (20 U.S.C. 1134,

20 1134a et seq., 1134d et seq., 1134r et seq., 20

21 U.S.C. 1134s et seq., and 1134u et seq.).

22 (4) The heading for, subpart 2 of part B of,

23 and parts C, D and E of, title X (20 U.S.C. 1135c

24 et seq., 1135e et seq., 1135f, and 1135g et seq.).
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1 (5) The heading for, and part B of, title XI (20

2 U.S.C. 1137 et seq.).

3 (b) HIGHER EDUCATION AMENDMENTS OF 1992.—

4 The following provisions of the Higher Education Amend5 ments of 1992 (Public Law 102–325; 106 Stat 448) are

6 repealed:

7 (1) Parts E, F, and G of title XIII of the High8 er Education Amendments of 1992 (25 U.S.C. 3332

9 et seq., 3351 et seq., 3371) are repealed.

10 (2) Title XIV.

11 (3) Title XV.

12 PART H—MISCELLANEOUS

13 SEC. 791. YEAR 2000 COMPUTER PROBLEM.

14 (a) SENSE OF CONGRESS.—With the year 2000 fast

15 approaching, it is the sense of Congress that the Depart16 ment of Education should—

17 (1) assess immediately the extent of the risk to

18 the operations of the student financial aid system

19 posed by the year 2000 computer problem;

20 (2) give the highest priority to correcting all 2-

21 digit date-related problems in the Department’s

22 computer systems to ensure that those systems con23 tinue to operate effectively in the year 2000 and be24 yond; and
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1 (3) develop contingency plans, with respect to

2 the year 2000 computer problem, for those computer

3 systems that the Department is unable to correct in

4 time.

5 (b) REPORT REQUIRED.—Not later than March 1,

6 1999, the Secretary of Education shall provide a report

7 to the Committee on Labor and Human Resources of the

8 Senate and the Committee on Education and the Work9 force of the House of Representatives describing the com10 pliance status of all mission critical systems at the Depart11 ment, and contingency plans for those computer systems

12 in the Department that the Department will be unable to

13 correct in time, with respect to the year 2000 computer

14 problem.

15 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

17 ‘‘Higher Education Amendments of 1998’’.

18 (b) TABLE OF CONTENTS.—The table of contents is as

19 follows:

Sec. 1. Short title; table of contents.

Sec. 2. References.

TITLE I—GENERAL PROVISIONS

Sec. 101. General provisions.

Sec. 102. Federal control of education prohibited.

Sec. 103. National Advisory Committee on Institutional Quality and Integrity.

Sec. 104. Prior rights and obligations; recovery of payments.

Sec. 105. Technical and conforming amendments.

TITLE II—IMPROVING TEACHER QUALITY

Sec. 201. Improving teacher quality.
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TITLE III—INSTITUTIONAL AID

Sec. 301. Transfers and redesignations.

Sec. 302. Findings.

Sec. 303. Strengthening institutions.

Sec. 304. Strengthening HBCU’s.

Sec. 305. Endowment challenge grants.

Sec. 306. HBCU capital financing.

Sec. 307. Minority science and engineering improvement program.

Sec. 308. General provisions.

TITLE IV—STUDENT ASSISTANCE

PART A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER

EDUCATION

Sec. 411. Repeals and redesignations.

Sec. 412. Federal Pell grants.

Sec. 413. TRIO programs.

Sec. 414. National early intervention scholarship and partnership program.

Sec. 415. Federal supplemental educational opportunity grants.

Sec. 416. Leveraging educational assistance partnership program.

Sec. 417. HEP and CAMP.

Sec. 418. Robert C. Byrd honors scholarship program.

Sec. 419. Child care access means parents in school.

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 421. Advances for reserve funds.

Sec. 422. Federal Student Loan Reserve Fund.

Sec. 423. Agency Operating Fund.

Sec. 424. Applicable interest rates.

Sec. 425. Federal payments to reduce student interest costs.

Sec. 426. Voluntary flexible agreements with guaranty agencies.

Sec. 427. Federal PLUS loans.

Sec. 428. Federal consolidation loans.

Sec. 429. Requirements for disbursements of student loans.

Sec. 430. Default reduction program.

Sec. 431. Unsubsidized loans.

Sec. 432. Loan forgiveness for teachers.

Sec. 433. Loan forgiveness for child care providers.

Sec. 434. Common forms and formats.

Sec. 435. Student loan information by eligible lenders.

Sec. 436. Definitions.

Sec. 437. Delegation of functions.

Sec. 438. Special allowances.

Sec. 439. Study of market-based mechanisms for determining student loan interest rates.

PART C—FEDERAL WORK-STUDY PROGRAMS

Sec. 441. Authorization of appropriations; community services.

Sec. 442. Grants for Federal work-study programs.

Sec. 443. Work colleges.
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PART D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

Sec. 451. Selection of institutions.

Sec. 452. Terms and conditions.

Sec. 453. Contracts.

Sec. 454. Funds for administrative expenses.

Sec. 455. Loan cancellation for teachers.

PART E—FEDERAL PERKINS LOANS

Sec. 461. Authorization of appropriations.

Sec. 462. Allocation of funds.

Sec. 463. Agreements with institutions of higher education.

Sec. 464. Terms of loans.

Sec. 465. Distribution of assets from student loan funds.

Sec. 466. Perkins Loan Revolving Fund.

PART F—NEED ANALYSIS

Sec. 471. Cost of attendance.

Sec. 472. Family contribution for dependent students.

Sec. 473. Family contribution for independent students without dependents other

than a spouse.

Sec. 474. Regulations; updated tables and amounts.

Sec. 475. Refusal or adjustment of loan certifications.

PART G—GENERAL PROVISIONS

Sec. 481. Master calendar.

Sec. 482. Forms and regulations.

Sec. 483. Student eligibility.

Sec. 484. Institutional refunds.

Sec. 485. Institutional and financial assistance information for students.

Sec. 486. National student loan data bank system.

Sec. 487. Training in financial aid services.

Sec. 488. Program participation agreements.

Sec. 489. Regulatory relief and improvement.

Sec. 489A. Distance education demonstration programs.

Sec. 489B. Advisory Committee on Student Financial Assistance.

Sec. 489C. Regional meetings and negotiated rulemaking.

PART H—PROGRAM INTEGRITY TRIAD

Sec. 491. State role and responsibilities.

Sec. 492. Accrediting agency recognition.

Sec. 493. Eligibility and certification procedures.

Sec. 494. Program review and data.

PART I—ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL

ASSISTANCE

Sec. 495. Performance-based organization for the delivery of Federal student financial assistance.

TITLE V—GRADUATE AND POSTSECONDARY IMPROVEMENT

PROGRAMS

Sec. 501. Repeals, transfers, and redesignations.
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Sec. 502. Purpose.

PART A—JACOB K. JAVITS FELLOWSHIP PROGRAM

Sec. 511. Award of fellowships.

PART B—GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

Sec. 521. Graduate assistance in areas of national need.

PART C—URBAN COMMUNITY SERVICE

Sec. 531. Urban community service.

PART D—FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

Sec. 541. Fund for the improvement of postsecondary education.

PART E—HIGHER EDUCATION ACCESS FOR STUDENTS WITH DISABILITIES;

HISPANIC-SERVING INSTITUTIONS; GENERAL PROVISIONS

Sec. 551. Higher education access for students with disabilities; Hispanic-serving

institutions; general provisions.

TITLE VI—INTERNATIONAL EDUCATION PROGRAMS

Sec. 601. International and foreign language studies.

Sec. 602. Business and international education programs.

Sec. 603. Institute for International Public Policy.

Sec. 604. General provisions.

TITLE VII—RELATED PROGRAMS AND AMENDMENTS TO OTHER

ACTS

PART A—INDIAN EDUCATION PROGRAMS

Sec. 711. Tribally Controlled Community College Assistance Act of 1978.

Sec. 712. American Indian, Alaska Native, and Native Hawaiian culture and art

development.

PART B—ADVANCED PLACEMENT INCENTIVE PROGRAM

Sec. 721. Advanced placement incentive program.

PART C—UNITED STATES INSTITUTE OF PEACE

Sec. 731. Authorities of the United States Institute of Peace.

PART D—COMMUNITY SCHOLARSHIP MOBILIZATION

Sec. 741. Short title.

Sec. 742. Findings.

Sec. 743. Definitions.

Sec. 744. Purpose, endowment grant authority.

Sec. 745. Grant agreement and requirements.

Sec. 746. Authorization of appropriations.
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PART E—GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION

TRAINING FOR INCARCERATED YOUTH OFFENDERS

Sec. 751. Grants to States for workplace and community transition training for

incarcerated youth offenders.

PART F—EDUCATION OF THE DEAF

Sec. 761. Short title.

Sec. 762. Elementary and secondary education programs.

Sec. 763. Agreement with Gallaudet University.

Sec. 764. Agreement for the National Technical Institute for the Deaf.

Sec. 765. Definitions.

Sec. 766. Gifts.

Sec. 767. Reports.

Sec. 768. Monitoring, evaluation, and reporting.

Sec. 769. Investments.

Sec. 770. International students.

Sec. 771. Research priorities.

Sec. 772. Authorization of appropriations.

Sec. 773. Commission on Education of the Deaf.

PART G—REPEALS

Sec. 781. Repeals.

PART H—MISCELLANEOUS

Sec. 791. Year 2000 computer problem.

1 SEC. 2. REFERENCES.

2 Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms of

4 an amendment to, or repeal of, a section or other provision,

5 the reference shall be considered to be made to a section or

6 other provision of the Higher Education Act of 1965 (20

7 U.S.C. 1001 et seq.).

8 TITLE I—GENERAL PROVISIONS

9 SEC. 101. GENERAL PROVISIONS.

10 (a) REPEAL; TRANSFER AND REDESIGNATION.—The

11 Act (20 U.S.C. 1001 et seq.) is amended—

12 (1) by repealing title I (20 U.S.C. 1001 et seq.);
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1 (2) by repealing sections 1203, 1206, 1211, and

2 1212 (20 U.S.C. 1143, 1145a, 1145e, and 1145f);

3 (3) by striking the heading for title XII (20

4 U.S.C. 1141 et seq.);

5 (4) by inserting before title III (20 U.S.C. 1051

6 et seq.) the following:

7 ‘‘TITLE I—GENERAL

8 PROVISIONS’’;

9 (5) by transferring sections 1201, 1202, 1204 (as

10 renumbered by Public Law 90–575), 1204 (as added

11 by Public Law 96–374), 1205, 1207, 1208, 1209,

12 1210, and 1213 (20 U.S.C. 1141, 1142, 1144, 1144a,

13 1145, 1145b, 1145c, 1145d, 1145d–1, and 1145g) to

14 follow the heading for title I (as inserted by para15 graph (4)); and

16 (6) by redesignating sections 1201, 1202, 1204

17 (as renumbered by Public Law 90–575), 1204 (as

18 added by Public Law 96–374), 1205, 1207, 1208,

19 1209, 1210, and 1213 as sections 101, 102, 103, 104,

20 105, 106, 107, 108, 109, and 110, respectively.

21 SEC. 102. FEDERAL CONTROL OF EDUCATION PROHIBITED.

22 Section 103 (as redesignated by section 101(a)(6)) (20

23 U.S.C. 1144) is amended by striking ‘‘(b)’’.
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1 SEC. 103. NATIONAL ADVISORY COMMITTEE ON INSTITU2 TIONAL QUALITY AND INTEGRITY.

3 Section 105 (as redesignated by section 101(a)(6)) (20

4 U.S.C. 1145) is amended—

5 (1) by striking the last sentence of subsection (a);

6 (2) by redesignating subsections (c) through (f)

7 as subsections (d) through (g), respectively;

8 (3) by inserting after subsection (b) the follow9 ing:

10 ‘‘(c) PUBLIC NOTICE.—The Secretary shall—

11 ‘‘(1) annually publish in the Federal Register a

12 list containing the name of each member of the Com13 mittee and the date of the expiration of the term of

14 office of the member; and

15 ‘‘(2) publicly solicit nominations for each vacant

16 position or expiring term of office on the Commit17 tee.’’;

18 (4) in subsection (d) (as redesignated by para19 graph (2))—

20 (A) by striking paragraph (6); and

21 (B) by redesignating paragraphs (7) and

22 (8) as paragraphs (6) and (7), respectively; and

23 (5) in subsection (g) (as redesignated by para24 graph (2)), by striking ‘‘1998’’ and inserting ‘‘2004’’.
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1 SEC. 104. PRIOR RIGHTS AND OBLIGATIONS; RECOVERY OF

2 PAYMENTS.

3 Title I (20 U.S.C. 1001 et seq.) is amended by adding

4 after section 110 (as redesignated by section 101(a)(6)) the

5 following:

6 ‘‘SEC. 111. PRIOR RIGHTS AND OBLIGATIONS.

7 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—

8 ‘‘(1) PRE-1987 PARTS C AND D OF TITLE VII.—

9 There are authorized to be appropriated such sums as

10 may be necessary for fiscal year 1999 and for each of

11 the 4 succeeding fiscal years to pay obligations in12 curred prior to 1987 under parts C and D of title

13 VII, as such parts were in effect before the effective

14 date of the Higher Education Amendments of 1992.

15 ‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE

16 VII.—There are authorized to be appropriated such

17 sums as may be necessary for fiscal year 1999 and

18 for each of the 4 succeeding fiscal years to pay obliga19 tions incurred prior to the date of enactment of the

20 Higher Education Amendments of 1998 under part C

21 of title VII, as such part was in effect during the pe22 riod—

23 ‘‘(A) after the effective date of the Higher

24 Education Amendments of 1992; and

25 ‘‘(B) prior to the date of enactment of the

26 Higher Education Amendments of 1998.
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1 ‘‘(b) LEGAL RESPONSIBILITIES.—

2 ‘‘(1) PRE-1987 TITLE VII.—All entities with con3 tinuing obligations incurred under parts A, B, C, and

4 D of title VII, as such parts were in effect before the

5 effective date of the Higher Education Amendments of

6 1992, shall be subject to the requirements of such part

7 as in effect before the effective date of the Higher Edu8 cation Amendments of 1992.

9 ‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE

10 VII.—All entities with continuing obligations incurred

11 under part C of title VII, as such part was in effect

12 during the period—

13 ‘‘(A) after the effective date of the Higher

14 Education Amendments of 1992; and

15 ‘‘(B) prior to the date of enactment of the

16 Higher Education Amendments of 1998,

17 shall be subject to the requirements of such part as

18 such part was in effect during such period.

19 ‘‘SEC. 112. RECOVERY OF PAYMENTS.

20 ‘‘(a) PUBLIC BENEFIT.—Congress declares that, if a

21 facility constructed with the aid of a grant under part A

22 of title VII as such part A was in effect prior to the date

23 of enactment of the Higher Education Amendments of 1998,

24 or part B of such title as such part B was in effect prior

25 to the date of enactment of the Higher Education Amend-
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1 ments of 1992, is used as an academic facility for 20 years

2 following completion of such construction, the public benefit

3 accruing to the United States will equal in value the

4 amount of the grant. The period of 20 years after comple5 tion of such construction shall therefore be deemed to be the

6 period of Federal interest in such facility for the purposes

7 of such title as so in effect.

8 ‘‘(b) RECOVERY UPON CESSATION OF PUBLIC BENE9 FIT.—If, within 20 years after completion of construction

10 of an academic facility which has been constructed, in part

11 with a grant under part A of title VII as such part A was

12 in effect prior to the date of enactment of the Higher Edu13 cation Amendments of 1998, or part B of title VII as such

14 part B was in effect prior to the date of enactment of the

15 Higher Education Amendments of 1992—

16 ‘‘(1) the applicant under such parts as so in ef17 fect (or the applicant’s successor in title or possession)

18 ceases or fails to be a public or nonprofit institution,

19 or

20 ‘‘(2) the facility ceases to be used as an academic

21 facility, or the facility is used as a facility excluded

22 from the term ‘academic facility’ (as such term was

23 defined under title VII, as so in effect), unless the Sec24 retary determines that there is good cause for releas25 ing the institution from its obligation,
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1 the United States shall be entitled to recover from such ap2 plicant (or successor) an amount which bears to the value

3 of the facility at that time (or so much thereof as constituted

4 an approved project or projects) the same ratio as the

5 amount of Federal grant bore to the cost of the facility fi6 nanced with the aid of such grant. The value shall be deter7 mined by agreement of the parties or by action brought in

8 the United States district court for the district in which

9 such facility is situated.

10 ‘‘(c) PROHIBITION ON USE FOR RELIGION.—Notwith11 standing the provisions of subsections (a) and (b), no

12 project assisted with funds under title VII (as in effect prior

13 to the date of enactment of the Higher Education Amend14 ments of 1998) shall ever be used for religious worship or

15 a sectarian activity or for a school or department of divin16 ity.’’.

17 SEC. 105. TECHNICAL AND CONFORMING AMENDMENTS.

18 (a) CONFORMING AMENDMENTS CORRECTING REF19 ERENCES TO SECTION 1201.—

20 (1) AGRICULTURE.—

21 (A) STUDENT INTERNSHIP PROGRAMS.—

22 Section 922 of the Federal Agriculture Improve23 ment and Reform Act of 1996 (7 U.S.C. 2279c)

24 is amended—

25 (i) in subsection (a)(1)(B)—
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1 (I) by striking ‘‘1201’’ and insert2 ing ‘‘101’’; and

3 (II) by striking ‘‘(20 U.S.C.

4 1141)’’; and

5 (ii) in subsection (b)(1)—

6 (I) by striking ‘‘1201’’ and insert7 ing ‘‘101’’; and

8 (II) by striking ‘‘(20 U.S.C.

9 1141)’’.

10 (B) AGRICULTURAL SCIENCES EDU11 CATION.—Section 1417(h)(1)(A) of the National

12 Agricultural Research, Extension, and Teaching

13 Policy Act of 1977 (7 U.S.C. 3152(h)(1)(A)) is

14 amended—

15 (i) by striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’; and

17 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

18 (2) ARMED FORCES.—

19 (A) SCIENCE AND MATHEMATICS EDU20 CATION IMPROVEMENT PROGRAM.—Section

21 2193(c)(1) of title 10, United States Code, is

22 amended—

23 (i) by striking ‘‘1201(a)’’ and inserting

24 ‘‘101(a)’’; and

25 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.
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•S 1882 RS

1 (B) SUPPORT OF SCIENCE, MATHEMATICS,

2 AND ENGINEERING EDUCATION.—Section 2199(2)

3 of title 10, United States Code, is amended—

4 (i) by striking ‘‘1201(a)’’ and inserting

5 ‘‘101(a)’’; and

6 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

7 (C) ALLOWABLE COSTS UNDER DEFENSE

8 CONTRACTS.—Section 841(c)(2) of the National

9 Defense Authorization Act for fiscal year 1994

10 (10 U.S.C. 2324 note) is amended—

11 (i) by striking ‘‘1201(a)’’ and inserting

12 ‘‘101(a)’’; and

13 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

14 (D) ENVIRONMENTAL RESTORATION INSTI15 TUTIONAL GRANTS FOR TRAINING DISLOCATED

16 DEFENSE WORKERS AND YOUNG ADULTS.—Sec17 tion 1333(i)(3) of the National Defense Author18 ization Act for fiscal year 1994 (10 U.S.C. 2701

19 note) is amended—

20 (i) by striking ‘‘1201(a)’’ and inserting

21 ‘‘101(a)’’; and

22 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

23 (E) ENVIRONMENTAL EDUCATION OPPORTU24 NITIES PROGRAM.—Section 1334(k)(3) of the Na-
346

•S 1882 RS

1 tional Defense Authorization Act for fiscal year

2 1994 (10 U.S.C. 2701 note) is amended—

3 (i) by striking ‘‘1201(a)’’ and inserting

4 ‘‘101(a)’’; and

5 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

6 (F) ENVIRONMENTAL SCHOLARSHIP AND

7 FELLOWSHIP PROGRAMS.—Section 4451(b)(1) of

8 the National Defense Authorization Act for 1993

9 (10 U.S.C. 2701 note) is amended—

10 (i) by striking ‘‘1201(a)’’ and inserting

11 ‘‘101(a)’’; and

12 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

13 (3) APPLICATION OF ANTITRUST LAWS TO AWARD

14 OF NEED-BASED EDUCATIONAL AID.—Section

15 568(c)(3) of the Improving America’s Schools Act of

16 1994 (15 U.S.C. 1 note) is amended—

17 (A) by striking ‘‘1201(a)’’ and inserting

18 ‘‘101(a)’’; and

19 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

20 (4) RESTRICTIONS ON FORMER OFFICERS, EM21 PLOYEES, AND ELECTED OFFICIALS OF THE EXECU22 TIVE AND LEGISLATIVE BRANCHES.—Section

23 207(j)(2)(B) of title 18, United States Code, is

24 amended by striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’.
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•S 1882 RS

1 (5) EDUCATION.—

2 (A) HIGHER EDUCATION AMENDMENTS OF

3 1992.—Section 1(c) of the Higher Education

4 Amendments of 1992 (20 U.S.C. 1001 note) is

5 amended by striking ‘‘1201’’ and inserting

6 ‘‘101’’.

7 (B) PART F DEFINITIONS.—Section 481 of

8 the Higher Education Act of 1965 (20 U.S.C.

9 1088) is amended—

10 (i) in subsection (a)—

11 (I) in the matter preceding para12 graph (1)(A), by striking ‘‘1201(a)’’

13 and inserting ‘‘101(a)’’;

14 (II) in paragraph (1)(C), by

15 striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’;

17 (III) in the first sentence of the

18 matter preceding clause (i) of para19 graph (2)(A), by striking ‘‘1201(a)’’

20 and inserting ‘‘101(a)’’; and

21 (IV) in the matter following para22 graph (2)(B)(ii), by striking ‘‘1201(a)’’

23 and inserting ‘‘101(a)’’;

24 (ii) in subsection (b)—

25 (I) in the first sentence—
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•S 1882 RS

1 (aa) in paragraph (2), by

2 striking ‘‘1201(a)’’ and inserting

3 ‘‘101(a)’’; and

4 (bb) in paragraph (3), by

5 striking ‘‘1201(a)’’ and inserting

6 ‘‘101(a)’’; and

7 (II) in the second sentence, by

8 striking ‘‘1201(a)’’ and inserting

9 ‘‘101(a)’’; and

10 (iii) in subsection (c)—

11 (I) in the first sentence, by strik12 ing ‘‘1201(a)’’ and inserting ‘‘101(a)’’;

13 and

14 (II) in the second sentence, by

15 striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’.

17 (C) TREATMENT OF BRANCHES.—Section

18 498(j)(2) of the Higher Education Act of 1965

19 (20 U.S.C. 1099c(j)(2)) is amended by striking

20 ‘‘1201(a)(2)’’ and inserting ‘‘101(a)(2)’’.

21 (D) INTERNATIONAL EDUCATION PRO22 GRAMS.—Section 631(a)(8) of the Higher Edu23 cation Act of 1965 (20 U.S.C. 1132(a)(8)) is

24 amended by striking ‘‘1201(a)’’ each place it ap25 pears and inserting ‘‘101(a)’’.
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•S 1882 RS

1 (E) DWIGHT D. EISENHOWER LEADERSHIP

2 PROGRAM.—Section 1081(d) of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1135f(d)) is

4 amended by striking ‘‘1201’’ and inserting

5 ‘‘101’’.

6 (F) DISCLOSURE REQUIREMENTS.—Section

7 429(d)(2)(B)(ii) of the General Education Provi8 sions Act (20 U.S.C. 1228c(d)(2)(B)(ii)) is

9 amended by striking ‘‘1201(a)’’ and inserting

10 ‘‘101(a)’’.

11 (G) HARRY S. TRUMAN SCHOLARSHIPS.—

12 Section 3(4) of the Harry S. Truman Memorial

13 Scholarship Act (20 U.S.C. 2002(4)) is amended

14 by striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

15 (H) TECH-PREP EDUCATION.—Section

16 347(2)(A) of the Carl D. Perkins Vocational and

17 Applied Technology Education Act (20 U.S.C.

18 2394e(2)(A)) is amended by striking ‘‘1201(a)’’

19 and inserting ‘‘101(a)’’.

20 (I) EDUCATION FOR ECONOMIC SECURITY.—

21 Section 3(6) of the Education for Economic Se22 curity Act (20 U.S.C. 3902(6)) is amended by

23 striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

24 (J) JAMES MADISON MEMORIAL FELLOW25 SHIPS.—Section 815 of the James Madison Me-
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•S 1882 RS

1 morial Fellowship Act (20 U.S.C. 4514) is

2 amended—

3 (i) in paragraph (3), by striking

4 ‘‘1201(a)’’ and inserting ‘‘101(a)’’; and

5 (ii) in paragraph (4), by striking

6 ‘‘1201(d) of the Higher Education Act of

7 1965’’ and inserting ‘‘14101 of the Elemen8 tary and Secondary Education Act of

9 1965’’.

10 (K) BARRY GOLDWATER SCHOLARSHIPS.—

11 Section 1403(4) of the Barry Goldwater Scholar12 ship and Excellence in Education Act (20 U.S.C.

13 4702(4)) is amended—

14 (i) by striking ‘‘1201(a)’’ and inserting

15 ‘‘101(a)’’; and

16 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

17 (L) MORRIS K. UDALL SCHOLARSHIPS.—

18 Section 4(6) of the Morris K. Udall Scholarship

19 and Excellence in National Environmental and

20 Native American Public Policy Act of 1992 (20

21 U.S.C. 5602(6)) is amended by striking

22 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

23 (M) BILINGUAL EDUCATION, AND LANGUAGE

24 ENHANCEMENT AND ACQUISITION.—Section

25 7501(4) of the Elementary and Secondary Edu-
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•S 1882 RS

1 cation Act of 1965 (20 U.S.C. 7601(4)) is

2 amended by striking ‘‘1201(a)’’ and inserting

3 ‘‘101(a)’’.

4 (N) GENERAL DEFINITIONS.—Section

5 14101(17) of the Elementary and Secondary

6 Education Act of 1965 (20 U.S.C. 8801(17)) is

7 amended by striking ‘‘1201(a)’’ and inserting

8 ‘‘101(a)’’.

9 (O) NATIONAL EDUCATION STATISTICS.—

10 Section 402(c)(3) of the National Education Sta11 tistics Act of 1994 (20 U.S.C. 9001(c)(3)) is

12 amended by striking ‘‘1201(a)’’ and inserting

13 ‘‘101(a)’’.

14 (6) FOREIGN RELATIONS.—

15 (A) ENVIRONMENT AND SUSTAINABLE DE16 VELOPMENT EXCHANGE PROGRAM.—Section

17 240(d) of the Foreign Relations Authorization

18 Act, Fiscal Years 1994 and 1995 (22 U.S.C.

19 2452 note) is amended by striking ‘‘1201(a)’’

20 and inserting ‘‘101(a)’’.

21 (B) SAMANTHA SMITH MEMORIAL EX22 CHANGE PROGRAM.—Section 112(a)(8) of the

23 Mutual Educational and Cultural Exchange Act

24 of 1961 (22 U.S.C. 2460(a)(8)) is amended—
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•S 1882 RS

1 (i) by striking ‘‘1201(a)’’ and inserting

2 ‘‘101(a)’’; and

3 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

4 (C) SOVIET-EASTERN EUROPEAN TRAIN5 ING.—Section 803(1) of the Soviet-Eastern Euro6 pean Research and Training Act of 1983 (22

7 U.S.C. 4502(1)) is amended by striking

8 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

9 (D) DEVELOPING COUNTRY SCHOLAR10 SHIPS.—Section 603(d) of the Foreign Relations

11 Authorization Act, Fiscal Years 1986 and 1987

12 (22 U.S.C. 4703(d)) is amended by striking

13 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

14 (7) INDIANS.—

15 (A) SNYDER ACT.—The last paragraph of

16 section 410 of the Act entitled ‘‘An Act authoriz17 ing appropriations and expenditures for the ad18 ministration of Indian Affairs, and for other

19 purposes’’, approved November 2, 1921 (25

20 U.S.C. 13) (commonly known as the Snyder Act)

21 is amended by striking ‘‘1201’’ and inserting

22 ‘‘101’’.

23 (B) TRIBALLY CONTROLLED COMMUNITY

24 COLLEGE ASSISTANCE.—Section 2(a)(5) of the

25 Tribally Controlled Community College Assist-
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•S 1882 RS

1 ance Act (25 U.S.C. 1801(a)(5)) is amended by

2 striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

3 (C) CONSTRUCTION OF NEW FACILITIES.—

4 Section 113(b)(2) of the Tribally Controlled

5 Community College Assistance Act (25 U.S.C.

6 1813(b)(2)) is amended—

7 (i) by striking ‘‘1201(a)’’ and inserting

8 ‘‘101(a)’’; and

9 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

10 (D) AMERICAN INDIAN TEACHER TRAIN11 ING.—Section 1371(a)(1)(B) of the Higher Edu12 cation Amendments of 1992 (25 U.S.C.

13 3371(a)(1)(B)) is amended by striking ‘‘1201(a)’’

14 and inserting ‘‘101(a)’’.

15 (8) LABOR.—

16 (A) REHABILITATION DEFINITIONS.—Sec17 tion 7(32) of the Rehabilitation Act of 1973 (29

18 U.S.C. 706(32)) is amended—

19 (i) by striking ‘‘1201(a)’’ and inserting

20 ‘‘101(a)’’; and

21 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

22 (B) STATE PLANS.—Section

23 101(a)(7)(A)(iv)(II) of the Rehabilitation Act of

24 1973 (29 U.S.C. 721(a)(7)(A)(iv)(II)) is amend25 ed—
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•S 1882 RS

1 (i) by striking ‘‘1201(a)’’ and inserting

2 ‘‘101(a)’’; and

3 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

4 (C) JTPA DEFINITIONS.—Section 4(12) of

5 the Job Training Partnership Act (29 U.S.C.

6 1503(12)) is amended by striking ‘‘1201(a)’’ and

7 inserting ‘‘101(a)’’.

8 (D) TUITION CHARGES.—Section

9 141(d)(3)(B) of the Job Training Partnership

10 Act (29 U.S.C. 1551(d)(3)(B)) is amended—

11 (i) by striking ‘‘1201(a)’’ and inserting

12 ‘‘101(a)’’; and

13 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

14 (9) SURFACE MINING CONTROL.—Section

15 701(32) of the Surface Mining Control and Reclama16 tion Act of 1977 (30 U.S.C. 1291(32)) is amended by

17 striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

18 (10) POLLUTION PREVENTION.—Section

19 112(a)(1) of the Federal Water Pollution Control Act

20 (33 U.S.C. 1262(a)(1)) is amended by striking

21 ‘‘1201’’ and inserting ‘‘101’’.

22 (11) POSTAL SERVICE.—Section 3626(b)(3) of

23 title 39, United States Code, is amended—

24 (A) by striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’; and
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•S 1882 RS

1 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

2 (12) PUBLIC HEALTH AND WELFARE.—

3 (A) SCIENTIFIC AND TECHNICAL EDU4 CATION.—Section 3(g) of the Scientific and Ad5 vanced-Technology Act of 1992 (42 U.S.C.

6 1862i(g)) is amended—

7 (i) in paragraph (2)—

8 (I) by striking ‘‘1201(a)’’ and in9 serting ‘‘101(a)’’; and

10 (II) by striking ‘‘(20 U.S.C.

11 1141(a))’’; and

12 (ii) in paragraph (3)—

13 (I) by striking ‘‘1201(a)’’ and in14 serting ‘‘101(a)’’; and

15 (II) by striking ‘‘(20 U.S.C.

16 1141(a))’’.

17 (B) OLDER AMERICANS.—Section 102(32)

18 of the Older Americans Act of 1965 (42 U.S.C.

19 3002(32)) is amended—

20 (i) by striking ‘‘1201(a)’’ and inserting

21 ‘‘101(a)’’; and

22 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

23 (C) JUSTICE SYSTEM IMPROVEMENT.—Sec24 tion 901(17) of the Omnibus Crime Control and
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•S 1882 RS

1 Safe Streets Act of 1968 (42 U.S.C. 3791(17)) is

2 amended—

3 (i) by striking ‘‘1201(a)’’ and inserting

4 ‘‘101(a)’’; and

5 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

6 (D) ENERGY TECHNOLOGY COMMERCIALIZA7 TION SERVICES PROGRAM.—Section 362(f)(5)(A)

8 of the Energy Policy and Conservation Act (42

9 U.S.C. 6322(f)(5)(A)) is amended—

10 (i) by striking ‘‘1201(a)’’ and inserting

11 ‘‘101(a)’’; and

12 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

13 (E) ENVIRONMENTAL RESTORATION AND

14 WASTE MANAGEMENT.—Section 3132(b)(1) of the

15 National Defense Authorization Act for Fiscal

16 Years 1992 and 1993 (42 U.S.C. 7274e(b)(1)) is

17 amended—

18 (i) by striking ‘‘1201(a)’’ and inserting

19 ‘‘101(a)’’; and

20 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

21 (F) HEAD START.—Section 649(c)(3) of the

22 Head Start Act (42 U.S.C. 9844(c)(3)) is

23 amended—

24 (i) by striking ‘‘1201(a)’’ and inserting

25 ‘‘101(a)’’; and
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•S 1882 RS

1 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

2 (G) STATE DEPENDENT CARE DEVELOP3 MENT GRANTS.—Section 670G(5) of the Child

4 Care and Development Block Grant Act of 1990

5 (42 U.S.C. 9877(5)) is amended by striking

6 ‘‘1201(a)’’ and inserting ‘‘101(a)’’.

7 (H) INSTRUCTIONAL ACTIVITIES FOR LOW8 INCOME YOUTH.—The matter preceding subpara9 graph (A) of section 682(b)(1) of the Community

10 Services Block Grant Act (42 U.S.C.

11 9910c(b)(1)) is amended by striking ‘‘1201(a)’’

12 and inserting ‘‘101(a)’’.

13 (I) DRUG ABUSE EDUCATION.—Section

14 3601(7) of the Anti-Drug Abuse Act of 1988 (42

15 U.S.C. 11851(7)) is amended—

16 (i) by striking ‘‘1201(a)’’ and inserting

17 ‘‘101(a)’’; and

18 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

19 (J) NATIONAL AND COMMUNITY SERVICE.—

20 Section 101(13) of the National and Community

21 Service Act of 1990 (42 U.S.C. 12511(13)) is

22 amended—

23 (i) by striking ‘‘1201(a)’’ and inserting

24 ‘‘101(a)’’; and

25 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.
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•S 1882 RS

1 (K) CIVILIAN COMMUNITY CORPS.—Section

2 166(6) of the National and Community Service

3 Act of 1990 (42 U.S.C. 12626(6)) is amended—

4 (i) by striking ‘‘1201(a)’’ and inserting

5 ‘‘101(a)’’; and

6 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

7 (L) COMMUNITY SCHOOLS YOUTH SERVICES

8 AND SUPERVISION GRANT PROGRAM.—The defini9 tion of public school in section 30401(b) of the

10 Community Schools Youth Services and Super11 vision Grant Program Act of 1994 (42 U.S.C.

12 13791(b)) is amended—

13 (i) by striking ‘‘1201’’ each place it

14 appears and inserting ‘‘101’’; and

15 (ii) by striking ‘‘(20 U.S.C. 1141(i))’’.

16 (M) POLICE CORPS.—The definition of in17 stitution of higher education in section 200103 of

18 the Police Corps Act (42 U.S.C. 14092) is

19 amended—

20 (i) by striking ‘‘1201(a)’’ and inserting

21 ‘‘101(a)’’; and

22 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

23 (N) LAW ENFORCEMENT SCHOLARSHIP PRO24 GRAM.—The definition of institution of higher

25 education in section 200202 of the Law Enforce-
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•S 1882 RS

1 ment Scholarship and Recruitment Act (42

2 U.S.C. 14111) is amended—

3 (i) by striking ‘‘1201(a)’’ and inserting

4 ‘‘101(a)’’; and

5 (ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

6 (13) T ELECOMMUNICATIONS.—Section

7 223(h)(4) of the Telecommunications Act of 1934 (47

8 U.S.C. 223(h)(4)) is amended—

9 (A) by striking ‘‘1201’’ and inserting

10 ‘‘101’’; and

11 (B) by striking ‘‘(20 U.S.C. 1141)’’.

12 (14) WAR AND NATIONAL DEFENSE.—Section

13 808(3) of the David L. Boren National Security Edu14 cation Act of 1991 (50 U.S.C. 1908(3)) is amended—

15 (A) by striking ‘‘1201(a)’’ and inserting

16 ‘‘101(a)’’; and

17 (B) by striking ‘‘(20 U.S.C. 1141(a))’’.

18 (b) CROSS REFERENCES.—The Act (20 U.S.C. 1001

19 et seq.) is amended—

20 (1) in section 402A(c)(2) (20 U.S.C. 1070a–

21 11(c)(2)), by striking ‘‘1210’’ and inserting ‘‘110’’;

22 (2) in section 481 (20 U.S.C. 1088)—

23 (A) in subsection (a)—

24 (i) in paragraph (1)—
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•S 1882 RS

1 (I) in the matter preceding sub2 paragraph (A), by striking ‘‘1201(a)’’

3 and inserting ‘‘101(a)’’; and

4 (II) in subparagraph (C), by

5 striking ‘‘1201(a)’’ and inserting

6 ‘‘101(a)’’; and

7 (ii) in paragraph (2)—

8 (I) in the matter preceding clause

9 (i) of subparagraph (A), by striking

10 ‘‘1201(a)’’ and inserting ‘‘101(a)’’; and

11 (II) in the matter following clause

12 (ii) of subparagraph (B), by striking

13 ‘‘1201(a)’’ and inserting ‘‘101(a)’’;

14 (B) in subsection (b), by striking ‘‘1201(a)’’

15 each place the term appears and inserting

16 ‘‘101(a)’’; and

17 (C) in subsection (c), by striking ‘‘1201(a)’’

18 each place the term appears and inserting

19 ‘‘101(a)’’;

20 (3) in section 485(f)(1)(I) (20 U.S.C.

21 1092(f)(1)(I)), by striking ‘‘1213’’ and inserting

22 ‘‘111’’;

23 (4) in section 498(j)(2) (20 U.S.C. 1099c(j)(2)),

24 by striking ‘‘1201(a)(2)’’ and inserting ‘‘101(a)(2)’’;
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•S 1882 RS

1 (5) in section 591(d)(2) (20 U.S.C. 1115(d)(2)),

2 by striking ‘‘1201(a)’’ and inserting ‘‘101(a)’’;

3 (6) in section 631(a)(8) (20 U.S.C.

4 1132(a)(8))—

5 (A) by striking ‘‘section 1201(a)’’ each place

6 the term appears and inserting ‘‘section 101(a)’’;

7 and

8 (B) by striking ‘‘of 1201(a)’’ and inserting

9 ‘‘of section 101(a)’’; and

10 (7) in section 1081(d) (20 U.S.C. 1135f(d)), by

11 striking ‘‘1201’’ and inserting ‘‘101(a)’’.

12 TITLE II—IMPROVING TEACHER

13 QUALITY

14 SEC. 201. IMPROVING TEACHER QUALITY.

15 The Act (20 U.S.C. 1001) is amended by inserting

16 after section 112 (as added by section 104) the following:

17 ‘‘TITLE II—IMPROVING TEACHER

18 QUALITY

19 ‘‘SEC. 201. PURPOSES.

20 ‘‘The purpose of this title is to—

21 ‘‘(1) improve student achievement;

22 ‘‘(2) improve the quality of the current and fu23 ture teaching force by improving the preparation of

24 prospective teachers and enhancing professional devel25 opment activities; and
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•S 1882 RS

1 ‘‘(3) hold institutions of higher education ac2 countable for preparing teachers who have the nec3 essary teaching skills and are highly competent in the

4 academic content areas in which the teachers plan to

5 teach, including training in the effective uses of tech6 nologies in the classroom.

7 ‘‘PART A—TEACHER QUALITY

8 ‘‘Subpart 1—Teacher Quality Enhancement Grants

9 ‘‘SEC. 211. GRANTS AUTHORIZED.

10 ‘‘(a) IN GENERAL.—The Secretary is authorized to

11 award grants to States to enable the States to carry out

12 the activities described in section 212. Each grant may be

13 awarded for a period of not more than 5 years.

14 ‘‘(b) STATE DESIGNATION.—

15 ‘‘(1) IN GENERAL.—A State desiring a grant

16 under this subpart shall, consistent with State law,

17 designate the chief individual or entity in the State

18 responsible for the State supervision of education, to

19 administer the activities assisted under this subpart.

20 ‘‘(2) CONSULTATION.—The individual or entity

21 designated under paragraph (1) shall consult with the

22 Governor, State board of education, or State edu23 cational agency, as appropriate.

24 ‘‘(3) CONSTRUCTION.—Nothing in this subpart

25 shall be construed to negate or supersede the legal au-
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1 thority under State law of any State agency, State

2 entity, or State public official over programs that are

3 under the jurisdiction of the agency, entity, or offi4 cial.

5 ‘‘(c) MATCHING REQUIREMENT.—Each State receiving

6 a grant under this subpart shall provide, from non-Federal

sources, an amount equal to 1 7 ⁄2 of the amount of the grant,

8 in cash or in kind, to carry out the activities supported

9 through the grant.

10 ‘‘SEC. 212. USE OF FUNDS.

11 ‘‘A State that receives a grant under this subpart shall

12 use the grant funds to reform teacher preparation require13 ments, and to ensure that current and future teachers pos14 sess the necessary teaching skills and academic content

15 knowledge in the subject areas in which the teachers are

16 assigned to teach, by carrying out 1 or more of the following

17 activities:

18 ‘‘(1) REFORMS.—Implementing reforms that

19 hold institutions of higher education with teacher

20 preparation programs accountable for preparing

21 teachers who are highly competent in the academic

22 content areas in which the teachers plan to teach,

23 which may include the use of rigorous subject matter

24 competency tests and the requirement that a teacher
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1 have an academic major in the subject area, or relat2 ed discipline, in which the teacher plans to teach.

3 ‘‘(2) CERTIFICATION OR LICENSURE REQUIRE4 MENTS.—Reforming teacher certification or licensure

5 requirements to ensure that new teachers have the nec6 essary teaching skills and academic content knowledge

7 in the subject areas in which teachers are assigned to

8 teach.

9 ‘‘(3) ALTERNATIVES TO TRADITIONAL PREPARA10 TION FOR TEACHING.—Providing prospective teachers

11 alternatives to traditional preparation for teaching

12 through programs at colleges of arts and sciences or

13 at nonprofit educational organizations.

14 ‘‘(4) ALTERNATIVE ROUTES.—Funding programs

15 that establish, expand, or improve alternative routes

16 to State certification for highly qualified individuals

17 from other occupations and recent college graduates

18 with records of academic distinction, including sup19 port during the initial teaching experience.

20 ‘‘(5) RECRUITMENT; PAY; REMOVAL.—Developing

21 and implementing effective mechanisms to ensure that

22 schools are able to effectively recruit highly qualified

23 teachers, to financially reward those teachers and

24 principals whose students have made significant

25 progress toward high academic performance, such as
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1 through performance-based compensation systems and

2 access to ongoing professional development opportuni3 ties for teachers and administrators, and to remove

4 teachers who are not qualified.

5 ‘‘(6) INNOVATIVE EFFORTS.—Development and

6 implementation of innovative efforts aimed at reduc7 ing the shortage of highly qualified teachers in high

8 poverty urban and rural areas, that may include the

9 recruitment of highly qualified individuals from other

10 occupations through alternative certification pro11 grams.

12 ‘‘(7) SOCIAL PROMOTION.—Development and im13 plementation of efforts to address the problem of social

14 promotion and to prepare teachers to effectively ad15 dress the issues raised by ending the practice of social

16 promotion.

17 ‘‘SEC. 213. COMPETITIVE AWARDS.

18 ‘‘(a) ANNUAL AWARDS; COMPETITIVE BASIS.—The

19 Secretary shall award grants under this subpart annually

20 and on a competitive basis.

21 ‘‘(b) PEER REVIEW PANEL.—The Secretary shall pro22 vide the applications submitted by States under section 214

23 to a peer review panel for evaluation. With respect to each

24 application, the peer review panel shall initially rec25 ommend the application for funding or for disapproval.
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1 ‘‘(c) PRIORITY.—In recommending applications for

2 funding to the Secretary, the panel shall give priority to

3 applications from States that describe activities that—

4 ‘‘(1) include innovative reforms to hold institu5 tions of higher education with teacher preparation

6 programs accountable for preparing teachers who are

7 highly competent in the academic content areas in

8 which the teachers plan to teach; and

9 ‘‘(2) involve the development of innovative efforts

10 aimed at reducing the shortage of highly qualified

11 teachers in high poverty urban and rural areas.

12 ‘‘SEC. 214. APPLICATIONS.

13 ‘‘(a) IN GENERAL.—Each State desiring a grant under

14 this subpart shall submit an application to the Secretary

15 at such time, in such manner and accompanied by such

16 information as the Secretary may require.

17 ‘‘(b) CONTENT OF APPLICATIONS.—Such application

18 shall include a description of how the State intends to use

19 funds provided under this subpart.

20 ‘‘Subpart 2—Teacher Training Partnerships Grants

21 ‘‘SEC. 221. GRANTS AUTHORIZED.

22 ‘‘(a) IN GENERAL.—The Secretary is authorized to

23 award grants to teacher training partnerships to enable the

24 partnerships to carry out the activities described in section
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1 222. Each grant may be awarded for a period of not more

2 than 5 years.

3 ‘‘(b) DEFINITIONS.—In this part:

4 ‘‘(1) TEACHER TRAINING PARTNERSHIPS.—

5 ‘‘(A) IN GENERAL.—The term ‘teacher

6 training partnership’ means a partnership

7 that—

8 ‘‘(i) shall include a school of arts and

9 sciences, a school or program of education,

10 a local educational agency, and a kinder11 garten through grade 12 school;

12 ‘‘(ii) shall include a high need local

13 educational agency or kindergarten through

14 grade 12 school; and

15 ‘‘(iii) may include a State educational

16 agency, a pre-kindergarten program, a non17 profit educational organization, a business,

18 or a teacher organization.

19 ‘‘(B) HIGH NEED.—A local educational

20 agency or kindergarten through grade 12 school

21 shall be considered high need for purposes of sub22 paragraph (A)(ii) if the agency or school serves

23 an area within a State in which there is—
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1 ‘‘(i) a large number of individuals

2 from families with incomes below the pov3 erty line;

4 ‘‘(ii) a high percentage of teachers not

5 teaching in the content area in which the

6 teachers were trained to teach; or

7 ‘‘(iii) a high teacher turnover rate.

8 ‘‘(2) KINDERGARTEN THROUGH GRADE 12

9 SCHOOL.—The term ‘kindergarten through grade 12

10 school’ means a school having any one of the grades

11 kindergarten through grade 12.

12 ‘‘(c) PRIORITY.—In awarding grants under this sub13 part the Secretary shall give priority to partnerships that

14 involve businesses.

15 ‘‘(d) CONSIDERATION.—In awarding grants under this

16 subpart the Secretary shall take into consideration—

17 ‘‘(1) providing an equitable geographic distribu18 tion of the grants throughout the United States; and

19 ‘‘(2) the proposed project’s potential for creating

20 improvement and positive change.

21 ‘‘(e) MATCHING FUNDS.—Each partnership receiving

22 a grant under this subpart shall provide, from sources other

23 than this subpart, an amount equal to 25 percent of the

24 grant in the first year, 35 percent in the second such year,

25 and 50 percent in each succeeding such year, of the amount
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1 of the grant, in cash or in kind, to carry out the activities

2 supported by the grant.

3 ‘‘(f) ONE-TIME AWARD.—A partnership may receive

4 a grant under this section only once.

5 ‘‘SEC. 222. USE OF FUNDS.

6 ‘‘(a) IN GENERAL.—Grant funds under this part shall

7 be used to—

8 ‘‘(1) coordinate with the activities of the Gov9 ernor, State board of education, and State edu10 cational agency, as appropriate;

11 ‘‘(2) provide sustained and high quality

12 preservice clinical experiences including the mentor13 ing of prospective teachers by veteran teachers;

14 ‘‘(3) work with a school of arts and sciences to

15 provide increased academic study in a proposed

16 teaching specialty area, through activities such as—

17 ‘‘(A) restructuring curriculum;

18 ‘‘(B) changing core course requirements;

19 ‘‘(C) increasing liberal arts focus;

20 ‘‘(D) providing preparation for board cer21 tification; and

22 ‘‘(E) assessing and improving alternative

23 certification, including mentoring and induction

24 support;
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1 ‘‘(4) substantially increasing interaction and 2-

2 way collaboration between—

3 ‘‘(A) faculty at institutions of higher edu4 cation; and

5 ‘‘(B) new and experienced teachers, prin6 cipals, and other administrators at elementary

7 schools or secondary schools;

8 ‘‘(5) prepare teachers to use technology effectively

9 in the classroom;

10 ‘‘(6) integrate reliable research-based teaching

11 methods into the curriculum;

12 ‘‘(7) broadly disseminate information on effective

13 practices used by the partnership; and

14 ‘‘(8) provide support, including preparation

15 time, for interaction between faculty at an institution

16 of higher education and classroom teachers.

17 ‘‘(b) SPECIAL RULE.—No individual member of a

18 partnership shall retain more than 50 percent of the funds

19 made available to the partnership under this subpart.

20 ‘‘SEC. 223. APPLICATIONS.

21 ‘‘Each teacher training partnership desiring a grant

22 under this subpart shall submit an application to the Sec23 retary at such time, in such manner, and accompanied by

24 such information as the Secretary may require. Each such

25 application shall—
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1 ‘‘(1) describe the composition of the partnership

2 and the involvement of each partner in the develop3 ment of the application;

4 ‘‘(2) contain a needs assessment that includes an

5 analysis of the needs of all the partners with respect

6 to teaching and learning;

7 ‘‘(3) contain a resource assessment that in8 cludes—

9 ‘‘(A) an analysis of resources available to

10 the partnership;

11 ‘‘(B) a description of the intended use of the

12 grant funds;

13 ‘‘(C) a description of how the partnership

14 will coordinate with other teacher training or

15 professional development programs, including

16 Federal, State, local, private, and other pro17 grams;

18 ‘‘(D) a description of how the activities as19 sisted under this subpart are consistent with

20 educational reform activities that promote stu21 dent achievement; and

22 ‘‘(E) a description of the commitment of the

23 resources of the partnership to the activities as24 sisted under this subpart, including financial
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1 support, faculty participation, and time commit2 ments;

3 ‘‘(4) describe how the partnership will include

4 the participation of the schools, colleges, or depart5 ments of arts and sciences within an institution of

6 higher education to ensure the integration of teaching

7 techniques and content in teaching preparation;

8 ‘‘(5) describe how the partnership will restruc9 ture and improve teaching, teacher training, and de10 velopment programs, and how such systemic changes

11 will contribute to increased student achievement;

12 ‘‘(6) describe how the partnership will prepare

13 teachers to work with diverse student populations, in14 cluding individuals with disabilities and limited

15 English proficient individuals;

16 ‘‘(7) describe how the partnership will prepare

17 teachers to use technology;

18 ‘‘(8) contain a dissemination plan regarding

19 knowledge and information with respect to effective

20 teaching practices, and a description of how such

21 knowledge and information will be implemented in el22 ementary schools or secondary schools as well as insti23 tutions of higher education;
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1 ‘‘(9) describe the commitment of the partnership

2 to continue the activities assisted under this subpart

3 without grant funds provided under this subpart; and

4 ‘‘(10) describe how the partnership will involve

5 and include parents in the reform process.

6 ‘‘Subpart 3—General Provisions

7 ‘‘SEC. 231. ACCOUNTABILITY AND EVALUATION.

8 ‘‘(a) TEACHER QUALITY ENHANCEMENT GRANTS.—

9 ‘‘(1) ACCOUNTABILITY REPORT.—A State that re10 ceives a grant under subpart 1 shall submit an an11 nual accountability report to the Secretary, the Com12 mittee on Labor and Human Resources of the Senate,

13 and the Committee on Education and the Workforce

14 of the House of Representatives. Such report shall in15 clude a description of the degree to which the State,

16 in using funds provided under subpart 1, has made

17 substantial progress in meeting the following goals:

18 ‘‘(A) STUDENT ACHIEVEMENT.—Increasing

19 student achievement for all students, as measured

20 by increased graduation rates, decreased dropout

21 rates, or higher scores on local, State or other as22 sessments.

23 ‘‘(B) RAISING STANDARDS.—Raising the

24 State academic standards required to enter the

25 teaching profession, including, where appro-
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1 priate, incentives to incorporate the requirement

2 of an academic major in the subject, or related

3 discipline, in which the teacher plans to teach.

4 ‘‘(C) INITIAL CERTIFICATION OR LICEN5 SURE.—Increasing success in the passage rate

6 for initial State teacher certification or licen7 sure, or increasing numbers of highly qualified

8 individuals being certified or licensed as teachers

9 through alternative programs.

10 ‘‘(D) CORE ACADEMIC SUBJECTS.—(i) In11 creasing the percentage of secondary school class12 es taught in core academic subject areas by

13 teachers—

14 ‘‘(I) with academic majors in those

15 areas or in a related field;

16 ‘‘(II) who can demonstrate a high level

17 of competence through rigorous academic

18 subject area tests; or

19 ‘‘(III) who can demonstrate high levels

20 of competence through experience in rel21 evant content areas.

22 ‘‘(ii) Increasing the percentage of elemen23 tary school classes taught by teachers—

24 ‘‘(I) with academic majors in the arts

25 and sciences; or
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1 ‘‘(II) who can demonstrate high levels

2 of competence through experience in rel3 evant content areas.

4 ‘‘(E) DECREASING SHORTAGES FOR PRO5 FESSIONAL DEVELOPMENT.—Decreasing short6 ages of qualified teachers in poor urban and

7 rural areas.

8 ‘‘(F) INCREASING OPPORTUNITIES.—In9 creasing opportunities for enhanced and ongoing

10 professional development that improves the aca11 demic content knowledge of teachers in the sub12 ject areas in which the teachers are certified to

13 teach or in which the teachers are working to14 ward certification to teach.

15 ‘‘(G) TECHNOLOGY INTEGRATION.—Increas16 ing the number of teachers prepared to integrate

17 technology in the classroom.

18 ‘‘(2) TEACHER QUALIFICATIONS PROVIDED TO

19 PARENT UPON REQUEST.—Any local educational

20 agency that benefits from the activities assisted under

21 subpart 1 shall make available, upon request and in

22 an understandable and uniform format, to any par23 ent of a student attending any school served by the

24 local educational agency, information regarding the

25 qualifications of the student’s classroom teacher with
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1 regard to the subject matter in which the teacher pro2 vides instruction. The local educational agency shall

3 inform parents that the parents are entitled to receive

4 the information upon request.

5 ‘‘(b) TEACHER TRAINING PARTNERSHIP EVALUATION

6 PLAN.—Each teacher training partnership receiving a

7 grant under subpart 2 shall establish an evaluation plan

8 that includes strong performance objectives established in

9 negotiation with the Secretary at the time of the grant

10 award. The plan shall include objectives and measures for—

11 ‘‘(1) increased student achievement for all stu12 dents as measured by increased graduation rates, de13 creased dropout rates, or higher scores on local, State,

14 or other assessments for a year compared to student

15 achievement as determined by the rates or scores, as

16 the case may be, for the year prior to the year for

17 which a grant under this part is received;

18 ‘‘(2) increased teacher retention in the first 3

19 years of a teacher’s career;

20 ‘‘(3) increased success in the passage rate for ini21 tial State certification or licensure of teachers;

22 ‘‘(4) increased percentages of secondary school

23 classes taught in core academic subject areas by teach24 ers—
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1 ‘‘(A) with academic majors in those areas

2 or in a related field;

3 ‘‘(B) who can demonstrate a high level of

4 competence through rigorous academic subject

5 area tests; and

6 ‘‘(C) increasing the percentage of elemen7 tary school classes taught by teachers with aca8 demic majors in the arts and sciences;

9 ‘‘(5) increased integration of technology in teach10 er preparation and in classroom instruction;

11 ‘‘(6) restructuring or change of methodology

12 courses to reflect best practices learned from elemen13 tary schools, secondary schools or other entities;

14 ‘‘(7) increased dissemination of information

15 about effective teaching strategies and practices; and

16 ‘‘(8) other effects of increased integration among

17 members of the partnership.

18 ‘‘SEC. 232. REVOCATION OF GRANT.

19 ‘‘Each State or teacher training partnership receiving

20 a grant under this part shall report annually on progress

21 toward meeting the purposes of this part, and the goals,

22 objectives and measures described in section 231. If the Sec23 retary, after consultation with the peer review panel de24 scribed in section 213(b) determines that the State or part25 nership is not making substantial progress in meeting the
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1 purposes, goals, objectives and measures, as appropriate, by

2 the end of the second year of the grant, the grant shall not

3 be continued for the third year of the grant.

4 ‘‘SEC. 233. EVALUATION AND DISSEMINATION.

5 ‘‘The Secretary shall evaluate the activities funded

6 under this part and report the Secretary’s findings to the

7 Committee on Labor and Human Resources of the Senate

8 and the Committee on Education and the Workforce of the

9 House of Representatives. The Secretary shall broadly dis10 seminate successful practices developed by the States and

11 teacher training partnerships under this part, and shall

12 broadly disseminate information regarding such practices

13 so developed that were found to be ineffective.

14 ‘‘SEC. 234. INTERNATIONAL STUDY AND REPORT.

15 ‘‘(a) STUDY.—The Secretary shall conduct a study

16 through the National Center for Education Statistics re17 garding the ways teachers are trained and the extent to

18 which teachers in the United States and other comparable

19 countries are teaching in areas other than the teachers’ field

20 of study or expertise. The study will examine specific fields

21 and will outline the nature and extent of the problem of

22 out-of-field teaching in the United States and in other coun23 tries that are considered comparable to the United States.

24 The study shall include, at a minimum, all the countries
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1 that participated in the Third International Mathematics

2 and Science Study (TIMSS).

3 ‘‘(b) REPORT.—The Secretary shall report to Congress

4 regarding the results of the study described in subsection

5 (a).

6 ‘‘SEC. 235. AUTHORIZATION OF APPROPRIATIONS.

7 ‘‘There are authorized to be appropriated to carry out

8 this part $300,000,000 for fiscal year 1999 and such sums

9 as necessary for each of the 4 succeeding fiscal years, of

10 which—

11 ‘‘(1) 50 percent shall be available for each fiscal

12 year to carry out subpart 1; and

13 ‘‘(2) 50 percent shall be available for each fiscal

14 year to carry out subpart 2.

15 ‘‘PART B—RECRUITING NEW TEACHERS FOR

16 UNDERSERVED AREAS

17 ‘‘SEC. 251. STATEMENT OF PURPOSE.

18 ‘‘It is the purpose of this part to—

19 ‘‘(1) provide scholarships and, as necessary, sup20 port services for students with high potential to be21 come effective teachers, particularly minority stu22 dents;

23 ‘‘(2) increase the quality and number of new

24 teachers nationally; and
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1 ‘‘(3) increase the ability of schools in under2 served areas to recruit a qualified teaching staff.

3 ‘‘SEC. 252. DEFINITIONS.

4 ‘‘In this part—

5 ‘‘(1) ELIGIBLE PARTNERSHIP.—

6 ‘‘(A) IN GENERAL.—The term ‘eligible part7 nership’ means a partnership consisting of—

8 ‘‘(i) an institution of higher education

9 that awards baccalaureate degrees and pre10 pares teachers for their initial entry into

11 the teaching profession; and

12 ‘‘(ii) one or more local educational

13 agencies that serve underserved areas.

14 ‘‘(B) ADDITIONAL PARTNERS.—Such a

15 partnership may also include—

16 ‘‘(i) 2-year institutions of higher edu17 cation that operate teacher preparation pro18 grams and maintain articulation agree19 ments, with the institutions of higher edu20 cation that award baccalaureate degrees for

21 the transfer of credits in teacher prepara22 tion;

23 ‘‘(ii) State agencies that have respon24 sibility for policies related to teacher prepa-
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1 ration and teacher certification or licensure;

2 and

3 ‘‘(iii) other public and private, non4 profit agencies and organizations that serve,

5 or are located in, communities served by the

6 local educational agencies in the partner7 ship, and that have an interest in teacher

8 recruitment, preparation, and induction.

9 ‘‘(2) SUPPORT SERVICES.—The term ‘support

10 services’ means—

11 ‘‘(A) academic advice and counseling;

12 ‘‘(B) tutorial services;

13 ‘‘(C) mentoring; and

14 ‘‘(D) child care and transportation, if fund15 ing for those services cannot be arranged from

16 other sources.

17 ‘‘(3) UNDERSERVED AREA.—The term ‘under18 served area’ means—

19 ‘‘(A) the area served by the 3 local edu20 cational agencies in the State that have the high21 est numbers of children, ages 5 through 17, from

22 families below the poverty level (based on data

23 satisfactory to the Secretary); and

24 ‘‘(B) the area served by any other local edu25 cational agency in which the percentage of such
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1 children is at least 20 percent, or the number of

2 such children is at least 10,000.

3 ‘‘SEC. 253. GRANT AUTHORITY AND CONDITIONS.

4 ‘‘(a) GRANTS AUTHORIZED.—

5 ‘‘(1) GRANTS.—

6 ‘‘(A) IN GENERAL.—From amounts appro7 priated under section 262 the Secretary shall

8 award grants, on a competitive basis, to eligible

9 partnerships to enable the eligible partnerships

10 to pay the Federal share of the cost of carrying

11 out the activities described in section 255.

12 ‘‘(B) DURATION.—Each grant awarded

13 under subparagraph (A) shall be awarded for a

14 period not to exceed 5 years.

15 ‘‘(2) CONTINUING ELIGIBILITY; REVIEW OF

16 PROGRESS.—The Secretary shall—

17 ‘‘(A) continue to make grant payments for

18 the second and succeeding years of a grant

19 awarded under this part, only after determining

20 that the eligible partnership is making satisfac21 tory progress in carrying out the activities under

22 the grant; and

23 ‘‘(B) conduct an intensive review of the eli24 gible partnerships’s progress under the grant,

25 with the assistance of outside experts, before
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1 making grant payments for the fourth year of

2 the grant.

3 ‘‘(3) MAXIMUM NUMBER.—No eligible partner4 ship may receive more than 2 grants under this sub5 section.

6 ‘‘(b) MATCHING REQUIREMENT.—

7 ‘‘(1) FEDERAL SHARE.—The Federal share of the

8 cost of activities carried out under a grant made

9 under subsection (a) shall not exceed—

10 ‘‘(A) 70 percent of the cost in the first year

11 of the grant;

12 ‘‘(B) 60 percent in the second year;

13 ‘‘(C) 60 percent in the third year;

14 ‘‘(D) 50 percent in the fourth year; and

15 ‘‘(E) 50 percent in the fifth year and any

16 succeeding year (including each year of the sec17 ond grant, if any).

18 ‘‘(2) NON-FEDERAL SHARE.—The non-Federal

19 share of activities carried out with a grant under sub20 section (a) may be provided in cash or in kind, fairly

21 evaluated, and may be obtained from any non-Fed22 eral public or private source.

23 ‘‘(c) PLANNING GRANTS.—
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1 ‘‘(1) IN GENERAL.—The Secretary may award

2 planning grants to eligible partnerships that are not

3 ready to implement programs under subsection (a).

4 ‘‘(2) DURATION.—Each planning grant shall be

5 for a period of not more than 1 year, which shall be

6 in addition to the period of any grant under sub7 section (a).

8 ‘‘(3) REQUIREMENT.—Any recipient of a plan9 ning grant under this subsection that wishes to re10 ceive a grant under subsection (a)(1) shall separately

11 apply for a grant under that subsection.

12 ‘‘SEC. 254. GRANT APPLICATIONS.

13 ‘‘(a) APPLICATIONS REQUIRED.—Any eligible partner14 ship desiring to receive a grant under this part shall submit

15 an application to the Secretary at such time, in such form,

16 and containing such information as the Secretary may re17 quire.

18 ‘‘(b) APPLICATION CONTENTS.—Each application for

19 a grant under section 253(a) shall include—

20 ‘‘(1) a designation of the institution or agency,

21 within the eligible partnership, that will serve as the

22 fiscal agent for the grant;

23 ‘‘(2) information on the quality of the teacher

24 preparation program of the institution of higher edu25 cation participating in the eligible partnership and
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1 how the eligible partnership will ensure, through im2 provements in the eligible partnership’s teacher prep3 aration practices or other appropriate strategies, that

4 scholarship recipients will receive high-quality prepa5 ration;

6 ‘‘(3) a description of the assessment the members

7 of the eligible partnership have undertaken—

8 ‘‘(A) to determine—

9 ‘‘(i) the most critical needs of the local

10 educational agencies, particularly the needs

11 of schools in high-poverty areas, for new

12 teachers (which may include teachers in

13 particular subject areas or at certain grade

14 levels); and

15 ‘‘(ii) how the project carried out under

16 the grant will address those needs; and

17 ‘‘(B) that reflects the input of all significant

18 entities in the community (including organiza19 tions representing teachers and parents) that

20 have an interest in teacher recruitment, prepara21 tion, and induction;

22 ‘‘(4) a description of the project the eligible part23 nership will carry out with the grant, including in24 formation regarding—
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1 ‘‘(A) the recruitment and outreach efforts

2 the eligible partnership will undertake to pub3 licize the availability of scholarships and other

4 assistance under the program;

5 ‘‘(B)(i) the number and types of students

6 that the eligible partnership will serve under the

7 program, which may include education para8 professionals seeking to achieve full teacher cer9 tification or licensure; teachers whom the partner

10 local educational agencies have hired under

11 emergency certification or licensure procedures;

12 or former military personnel, mid-career profes13 sionals, or AmeriCorps or Peace Corps volun14 teers, who desire to enter teaching; and

15 ‘‘(ii) the criteria that the eligible partner16 ship will use in selecting the students, including

17 criteria to determine whether individuals have

18 the capacity to benefit from the program, com19 plete teacher certification requirements, and be20 come effective teachers;

21 ‘‘(C) the activities the eligible partnership

22 will carry out under the grant, including a de23 scription of, and justification for, any support

24 services the institution of higher education par-
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1 ticipating in the eligible partnership will offer to

2 participating students;

3 ‘‘(D) the number and funding range of the

4 scholarships the institution will provide to stu5 dents; and

6 ‘‘(E) the procedures the institution will es7 tablish for entering into, and enforcing, agree8 ments with scholarship recipients regarding the

9 recipients’ fulfillment of the service commitment

10 described in section 259;

11 ‘‘(5) a description of how the institution will use

12 funds provided under the grant only—

13 ‘‘(A) to increase the number of students—

14 ‘‘(i) with high potential to be effective

15 teachers;

16 ‘‘(ii) participating in the institution’s

17 teacher preparation programs; or

18 ‘‘(iii) in the particular type or types of

19 preparation programs that the grant will

20 support; or

21 ‘‘(B) to increase the number of graduates,

22 who are minority individuals, with high poten23 tial to be effective teachers;

24 ‘‘(6) a description of the commitments, by the

25 local educational agencies participating in the part-
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1 nership, to hire qualified scholarship recipients in the

2 schools served by the agencies and in the subject areas

3 or grade levels for which the scholarship recipients

4 will be trained, and a description of the actions the

5 participating institution of higher education, the par6 ticipating local educational agencies, and the other

7 partners will take to facilitate the successful transi8 tion of the recipients into teaching; and

9 ‘‘(7) a description of the eligible partnership’s

10 plan for institutionalizing the activities the partner11 ship is carrying out under this part, so that the ac12 tivities will continue once Federal funding ceases.

13 ‘‘SEC. 255. USES OF FUNDS.

14 ‘‘(a) IN GENERAL.—Each eligible partnership receiv15 ing a grant under section 523(a) shall use the grant funds

16 for the following:

17 ‘‘(1) SCHOLARSHIPS.—Scholarships to help stu18 dents pay the costs of tuition, room, board, and other

19 expenses of completing a teacher preparation pro20 gram.

21 ‘‘(2) SUPPORT SERVICES.—Support services, if

22 needed to enable scholarship recipients to complete

23 postsecondary education programs.
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1 ‘‘(3) FOLLOWUP SERVICES.—Followup services

2 provided to former scholarship recipients during the

3 recipients’ first 3 years of teaching.

4 ‘‘(4) PAYMENTS.—Payments to partner local

5 educational agencies, if needed to enable the agencies

6 to permit paraprofessional staff to participate in

7 teacher preparation programs (such as the cost of re8 lease time for the staff).

9 ‘‘(5) ADDITIONAL COURSES.—If appropriate,

10 and if no other funds are available for, paying the

11 costs of additional courses taken by former scholar12 ship recipients during the recipients’ initial 3 years

13 of teaching.

14 ‘‘(b) PLANNING GRANTS.—A recipient of a planning

15 grant under section 253(c) shall use the grant funds for the

16 costs of planning for the implementation of a grant under

17 section 253(a).

18 ‘‘SEC. 256. SELECTION OF APPLICANTS.

19 ‘‘(a) PEER REVIEW.—The Secretary, using a peer re20 view process, shall select eligible partnerships to receive

21 funding under this part on the basis of—

22 ‘‘(1) the quality of the teacher preparation pro23 gram offered by the institution participating in the

24 partnership;
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1 ‘‘(2) the quality of the program carried out

2 under the application; and

3 ‘‘(3) the capacity of the partnership to carry out

4 the grant successfully.

5 ‘‘(b) CRITERIA.—

6 ‘‘(1) IN GENERAL.—In awarding grants under

7 section 253(a), the Secretary shall seek to ensure

8 that—

9 ‘‘(A) in the aggregate, eligible partnerships

10 carry out a variety of approaches to preparing

11 new teachers; and

12 ‘‘(B) there is an equitable geographic dis13 tribution of the grants.

14 ‘‘(2) SPECIAL CONSIDERATION.—In addition to

15 complying with paragraph (1), the Secretary shall

16 give special consideration to—

17 ‘‘(A) applications most likely to result in

18 the preparation of increased numbers of individ19 uals with high potential for effective teaching

20 who are minority individuals; and

21 ‘‘(B) applications from partnerships that

22 have as members of the partnerships historically

23 Black colleges and universities, Hispanic-serving

24 institutions, and Tribal Colleges and Univer25 sities.
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1 ‘‘(c) SECOND FIVE-YEAR GRANTS.—In selecting eligi2 ble partnerships to receive second year grant payments

3 under this part, the Secretary shall give a preference to eli4 gible partnerships whose projects have resulted in—

5 ‘‘(1) the placement and retention of a substantial

6 number of high-quality graduates in teaching posi7 tions in underserved, high-poverty schools;

8 ‘‘(2) the adoption of effective programs that meet

9 the teacher preparation needs of high-poverty urban

10 and rural areas; and

11 ‘‘(3) effective partnerships with elementary

12 schools and secondary schools that are supporting im13 provements in student achievement.

14 ‘‘SEC. 257. DURATION AND AMOUNT OF ASSISTANCE; RELA15 TION TO OTHER ASSISTANCE.

16 ‘‘(a) DURATION OF ASSISTANCE.—No individual may

17 receive scholarship assistance under this part—

18 ‘‘(1) for more than 5 years of postsecondary edu19 cation; and

20 ‘‘(2) unless that individual satisfies the require21 ments of section 484(a)(5).

22 ‘‘(b) AMOUNT OF ASSISTANCE.—No individual may

23 receive a scholarship awarded under this part that exceeds

24 the cost of attendance, as defined in section 472, at the in25 stitution of higher education the individual is attending.
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1 ‘‘(c) RELATION TO OTHER ASSISTANCE.—A scholar2 ship awarded under this part—

3 ‘‘(1) shall not be reduced on the basis of the indi4 vidual’s receipt of other forms of Federal student fi5 nancial assistance; and

6 ‘‘(2) shall be regarded as other financial assist7 ance available to the student, within the meaning of

8 sections 471(3) and 480(j)(1), in determining the stu9 dent’s eligibility for grant, loan, or work assistance

10 under title IV.

11 ‘‘SEC. 258. SCHOLARSHIP CONDITIONS.

12 ‘‘(a) IN GENERAL.—A recipient of a scholarship under

13 this part shall continue to receive the scholarship assistance

14 only as long as the recipient is—

15 ‘‘(1) enrolled as a full-time student and pursuing

16 a course of study leading to teacher certification, un17 less the recipient is working in a public school (as a

18 paraprofessional, or as a teacher under emergency

19 credentials) while participating in the program; and

20 ‘‘(2) maintaining satisfactory progress as deter21 mined by the institution of higher education partici22 pating in the partnership.

23 ‘‘(b) SPECIAL RULE. Each eligible partnership shall

24 modify the application of section 257(a)(1) and of sub25 section (a)(1) to the extent necessary to accommodate the
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1 rights of individuals with disabilities under section 504 of

2 the Rehabilitation Act of 1973.

3 ‘‘SEC. 259. SERVICE REQUIREMENTS.

4 ‘‘(a) REQUIREMENT.—Each eligible partnership re5 ceiving a grant under this part shall enter into an agree6 ment, with each student to whom the partnership awards

7 a scholarship under this part, providing that a scholarship

8 recipient who completes a teacher preparation program

9 under this part shall, within 7 years of completing that pro10 gram, teach full-time for at least 5 years in a high-poverty

11 school in an underserved geographic area or repay the

12 amount of the scholarship, under the terms and conditions

13 established by the Secretary.

14 ‘‘(b) REGULATIONS. The Secretary shall prescribe regu15 lations relating to the requirements of subsection (a), in16 cluding any provisions for waiver of those requirements.

17 ‘‘SEC. 260. EVALUATION.

18 ‘‘The Secretary shall provide for an evaluation of the

19 program carried out under this part, which shall asses such

20 issues as—

21 ‘‘(1) whether institutions participating in the el22 igible partnerships are successful in preparing schol23 arship recipients to teach to high State and local

24 standards;
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1 ‘‘(2) whether scholarship recipients are successful

2 in completing teacher preparation programs, becom3 ing fully certified teachers, and obtaining teaching

4 positions in underserved areas, and whether the re5 cipients continue teaching in those areas over a pe6 riod of years;

7 ‘‘(3) the national impact of the program in as8 sisting local educational agencies in underserved

9 areas to recruit, prepare, and retain diverse, high10 quality teachers in the areas in which the agencies

11 have the greatest needs;

12 ‘‘(4) the long-term impact of the grants on teach13 er preparation programs conducted by institutions of

14 higher education participating in the eligible partner15 ship and on the institutions’ relationships with their

16 partner local educational agencies and other members

17 of the partnership; and

18 ‘‘(5) the relative effectiveness of different ap19 proaches for preparing new teachers to teach in un20 derserved areas, including their effectiveness in pre21 paring new teachers to teach to high content and per22 formance standards.
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1 ‘‘SEC. 261. NATIONAL ACTIVITIES.

2 ‘‘The Secretary may reserve not more than 5 percent

3 of the funds appropriated for this part for any fiscal year

4 for—

5 ‘‘(1) peer review of applications;

6 ‘‘(2) conducting the evaluation required under

7 section 260; and

8 ‘‘(3) technical assistance.

9 ‘‘SEC. 262. AUTHORIZATION OF APPROPRIATIONS.

10 ‘‘There are authorized to be appropriated to carry out

11 this part $37,000,000 for fiscal year 1999 and such sums

12 as may be necessary for each of the 4 succeeding fiscal

13 years.’’.

14 TITLE III—INSTITUTIONAL AID

15 SEC. 301. TRANSFERS AND REDESIGNATIONS.

16 (a) IN GENERAL.—Title III (20 U.S.C. 1051 et seq.)

17 is amended—

18 (1) by redesignating part D as part F;

19 (2) by redesignating sections 351, 352, 353, 354,

20 356, 357, 358, and 360 (20 U.S.C. 1066, 1067, 1068,

21 1069, 1069b, 1069c, 1069d, and 1069f) as sections

22 391, 392, 393, 394, 395, 396, 397, and 398, respec23 tively;

24 (3) by transferring part B of title VII (20 U.S.C.

25 1132c et seq.) to title III to follow part C of title III
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1 (20 U.S.C. 1065 et seq.), and redesignating such part

2 B as part D;

3 (4) by redesignating sections 721 through 728

4 (20 U.S.C. 1132c and 1132c–7) as sections 341

5 through 348, respectively;

6 (5) by transferring subparts 1 and 3 of part B

7 of title X (20 U.S.C. 1135b et seq. and 1135d et seq.)

8 to title III to follow part D of title III (as redesig9 nated by paragraph (3)), and redesignating such sub10 part 3 as subpart 2;

11 (6) by inserting after part D of title III (as re12 designated by paragraph (3)) the following:

13 ‘‘PART E—MINORITY SCIENCE IMPROVEMENT

14 PROGRAM’’;

15 (7) by redesignating sections 1021 through 1024

16 (20 U.S.C. 1135b and 1135b–3), and sections 1041,

17 1042, 1043, 1044, 1046, and 1047 (20 U.S.C. 1135d,

18 1135d–1, 1135d–2, 1135d–3, 1135d–5, and 1135d–6)

19 as sections 351 through 354, and sections 361, 362,

20 363, 364, 365, and 366, respectively; and

21 (8) by repealing section 366 (as redesignated by

22 paragraph (7)) (20 U.S.C. 1135d–6).

23 (b) CONFORMING AMENDMENT.—Section 361 (as re24 designated by subsection (a)(7)) (20 U.S.C. 1135d) is

25 amended—
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1 (1) in paragraph (1), by inserting ‘‘and’’ after

2 the semicolon;

3 (2) in paragraph (2), by striking ‘‘; and’’ and

4 inserting a period; and

5 (3) by striking paragraph (3).

6 (c) CROSS REFERENCES.—Title III (20 U.S.C. 1051

7 et seq.) is amended—

8 (1) in section 311(b) (20 U.S.C. 1057(b)), by

9 striking ‘‘360(a)(1)’’ and inserting ‘‘398(a)(1)’’;

10 (2) in section 312 (20 U.S.C. 1058)—

11 (A) in subsection (b)(1)(B), by striking

12 ‘‘352(b)’’ and inserting ‘‘392(b)’’; and

13 (B) in subsection (c)(2), by striking

14 ‘‘352(a)’’ and inserting ‘‘392(a)’’;

15 (3) in section 313(b) (20 U.S.C. 1059(b)), by

16 striking ‘‘354(a)(1)’’ and inserting ‘‘394(a)(1)’’;

17 (4) in section 342 (as redesignated by subsection

18 (a)(4)) (20 U.S.C. 1132c–1)—

19 (A) in paragraph (3), by striking ‘‘723(b)’’

20 and inserting ‘‘343(b)’’;

21 (B) in paragraph (4), by striking ‘‘723’’

22 and inserting ‘‘343’’;

23 (C) in the matter preceding subparagraph

24 (A) of paragraph (5), by striking ‘‘724(b)’’ and

25 inserting ‘‘344(b)’’;
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1 (D) in paragraph (8), by striking ‘‘725(1)’’

2 and inserting ‘‘345(1)’’; and

3 (E) in paragraph (9), by striking ‘‘727’’

4 and inserting ‘‘347’’;

5 (5) in section 343 (as redesignated by subsection

6 (a)(4)) (20 U.S.C. 1132c–2)—

7 (A) in subsection (a), by striking ‘‘724’’ and

8 inserting ‘‘344’’; and

9 (B) in subsection (b)—

10 (i) in the matter preceding paragraph

11 (1), by striking ‘‘725(1) and 726’’ and in12 serting ‘‘345(1) and 346’’;

13 (ii) in paragraph (10), by striking

14 ‘‘724’’ and inserting ‘‘344’’; and

15 (iii) in subsection (d), by striking

16 ‘‘723(c)(1)’’ and inserting ‘‘343(c)(1)’’;

17 (6) in section 345(2) (as redesignated by sub18 section (a)(4)) (20 U.S.C. 1132c–4(2)), by striking

19 ‘‘723’’ and inserting ‘‘343’’;

20 (7) in section 348 (as redesignated by subsection

21 (a)(4)) (20 U.S.C. 1132c–7), by striking ‘‘725(1)’’

22 and inserting ‘‘345(1)’’;

23 (8) in section 353(a) (as redesignated by sub24 section (a)(7)) (20 U.S.C. 1135b–2(a))—
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1 (A) in paragraph (1), by striking ‘‘1046(6)’’

2 and inserting ‘‘365(6)’’;

3 (B) in paragraph (2), by striking

4 ‘‘1046(7)’’ and inserting ‘‘365(7)’’;

5 (C) in paragraph (3), by striking ‘‘1046(8)’’

6 and inserting ‘‘365(8)’’; and

7 (D) in paragraph (4), by striking

8 ‘‘1046(9)’’ and inserting ‘‘365(9)’’;

9 (9) in section 361(1) (as redesignated by sub10 section (a)(7)) (20 U.S.C. 1135d(1)), by striking

11 ‘‘1046(3)’’ and inserting ‘‘365(3)’’;

12 (10) in section 362(a) (as redesignated by sub13 section (a)(7)) (20 U.S.C. 1135d–1(a))—

14 (A) in the matter preceding paragraph (1),

15 by striking ‘‘1041’’ and inserting ‘‘361’’; and

16 (B) in paragraph (1), by striking ‘‘1021(b)’’

17 and inserting ‘‘351(b)’’; and

18 (11) in section 391(b)(6) (as redesignated by sub19 section (a)(2)), by striking ‘‘357’’ and inserting

20 ‘‘396’’.

21 SEC. 302. FINDINGS.

22 Section 301(a) (20 U.S.C. 1051(a)) is amended—

23 (1) by redesignating paragraphs (3) through (7)

24 as paragraphs (4) through (8), respectively; and
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1 (2) by inserting after paragraph (2) the follow2 ing:

3 ‘‘(3) in order to be competitive and provide a

4 high-quality education for all, institutions of higher

5 education should improve their technological capacity

6 and make effective use of technology;’’.

7 SEC. 303. STRENGTHENING INSTITUTIONS.

8 (a) GRANTS.—Section 311 (20 U.S.C. 1057) is amend9 ed—

10 (1) in subsection (b)(3)(D), by inserting ‘‘, in11 cluding high technology equipment,’’ after ‘‘equip12 ment’’; and

13 (2) by adding at the end the following:

14 ‘‘(c) ENDOWMENT FUND.—

15 ‘‘(1) IN GENERAL.—An eligible institution may

16 use not more than 20 percent of the grant funds pro17 vided under this part to establish or increase an en18 dowment fund at such institution.

19 ‘‘(2) MATCHING REQUIREMENT.—In order to be

20 eligible to use grant funds in accordance with para21 graph (1), the eligible institution shall provide match22 ing funds, in an amount equal to the Federal funds

23 used in accordance with paragraph (1), for the estab24 lishment or increase of the endowment fund.
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1 ‘‘(3) COMPARABILITY.—The provisions of part C,

2 regarding the establishment or increase of an endow3 ment fund, that the Secretary determines are not in4 consistent with this subsection, shall apply to funds

5 used under paragraph (1).’’.

6 (b) DURATION OF GRANT.—Section 313 (20 U.S.C.

7 1059) is amended by adding at the end the following:

8 ‘‘(d) WAIT-OUT-PERIOD.—Each eligible institution

9 that received a grant under this part for a 5-year period

10 shall not be eligible to receive an additional grant under

11 this part until 2 years after the date on which the 5-year

12 grant period terminates.

13 (c) AMERICAN INDIAN TRIBALLY CONTROLLED COL14 LEGES AND UNIVERSITIES.—Section 316 (20 U.S.C. 1059c)

15 is amended to read as follows:

16 ‘‘SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COL17 LEGES AND UNIVERSITIES.

18 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall

19 provide grants and related assistance to American Indian

20 Tribal Colleges and Universities to enable such institutions

21 to improve and expand their capacity to serve Indian stu22 dents.

23 ‘‘(b) DEFINITIONS.—In this section:
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1 ‘‘(1) INDIAN.—The term ‘Indian’ has the mean2 ing given the term in section 2 of the Tribally Con3 trolled College or University Assistance Act of 1978.

4 ‘‘(2) INDIAN TRIBE.—The term ‘Indian tribe’ has

5 the meaning given the term in section 2 of the Trib6 ally Controlled College or University Assistance Act of

7 1978.

8 ‘‘(3) TRIBAL COLLEGE OR UNIVERSITY.—The

9 term ‘Tribal College or University’ has the meaning

10 give the term ‘tribally controlled college or university’

11 in section 2 of the Tribally Controlled College or Uni12 versity Assistance Act of 1978, and includes an insti13 tution listed in the Equity in Educational Land

14 Grant Status Act of 1994.

15 ‘‘(4) INSTITUTION OF HIGHER EDUCATION.—The

16 term ‘institution of higher education’ means an insti17 tution of higher education as defined in section

18 1201(a), except that paragraph (2) of such section

19 shall not apply.

20 ‘‘(c) AUTHORIZED ACTIVITIES.—

21 ‘‘(1) IN GENERAL.—Grants awarded under this

22 section shall be used by Tribal Colleges or Universities

23 to assist such institutions to plan, develop, undertake,

24 and carry out activities to improve and expand such

25 institutions’ capacity to serve Indian students.
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1 ‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—

2 The activities described in paragraph (1) may in3 clude—

4 ‘‘(A) purchase, rental, or lease of scientific

5 or laboratory equipment for educational pur6 poses, including instructional and research pur7 poses;

8 ‘‘(B) construction, maintenance, renovation,

9 and improvement in classrooms, libraries, lab10 oratories, and other instructional facilities, in11 cluding purchase or rental of telecommunications

12 technology equipment or services;

13 ‘‘(C) support of faculty exchanges, faculty

14 development, and faculty fellowships to assist in

15 attaining advanced degrees in the faculty’s field

16 of instruction;

17 ‘‘(D) academic instruction in disciplines in

18 which American Indians are underrepresented;

19 ‘‘(E) purchase of library books, periodicals,

20 and other educational materials, including tele21 communications program material;

22 ‘‘(F) tutoring, counseling, and student serv23 ice programs designed to improve academic suc24 cess;
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1 ‘‘(G) funds management, administrative

2 management, and acquisition of equipment for

3 use in strengthening funds management;

4 ‘‘(H) joint use of facilities, such as labora5 tories and libraries;

6 ‘‘(I) establishing or improving a develop7 ment office to strengthen or improve contribu8 tions from alumni and the private sector;

9 ‘‘(J) establishing or enhancing a program of

10 teacher education designed to qualify students to

11 teach in elementary schools or secondary schools,

12 with a particular emphasis on teaching Amer13 ican Indian children and youth, that shall in14 clude, as part of such program, preparation for

15 teacher certification;

16 ‘‘(K) establishing community outreach pro17 grams that encourage American Indian elemen18 tary school and secondary school students to de19 velop the academic skills and the interest to pur20 sue postsecondary education;

21 ‘‘(L) other activities proposed in the appli22 cation submitted pursuant to subsection (d)

23 that—
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1 ‘‘(i) contribute to carrying out the ac2 tivities described in subparagraphs (A)

3 through (K); and

4 ‘‘(ii) are approved by the Secretary as

5 part of the review and acceptance of such

6 application.

7 ‘‘(3) ENDOWMENT FUND.—

8 ‘‘(A) IN GENERAL.—A Tribal College or

9 University may use not more than 20 percent of

10 the grant funds provided under this section to es11 tablish or increase an endowment fund at the in12 stitution.

13 ‘‘(B) MATCHING REQUIREMENT.—In order

14 to be eligible to use grant funds in accordance

15 with subparagraph (A), the Tribal College or

16 University shall provide matching funds, in an

17 amount equal to the Federal funds used in ac18 cordance with subparagraph (A), for the estab19 lishment or increase of the endowment fund.

20 ‘‘(C) COMPARABILITY.—The provisions of

21 part C regarding the establishment or increase of

22 an endowment fund, that the Secretary deter23 mines are not inconsistent with this paragraph,

24 shall apply to funds used under subparagraph

25 (A).
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1 ‘‘(d) APPLICATION PROCESS.—

2 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligible

3 to receive assistance under this section, a Tribal Col4 lege or University shall be an institution that—

5 ‘‘(A) is an eligible institution under section

6 312(b);

7 ‘‘(B) is eligible to receive assistance under

8 the Tribally Controlled College or University As9 sistance Act of 1978; or

10 ‘‘(C) is eligible to receive funds under the

11 Equity in Educational Land Grant Status Act

12 of 1994.

13 ‘‘(2) APPLICATION.—Any Tribal College or Uni14 versity desiring to receive assistance under this sec15 tion shall submit an application to the Secretary at

16 such time, and in such manner, as the Secretary may

17 by regulation reasonably require. Each such applica18 tion shall include—

19 ‘‘(A) a 5-year plan for improving the assist20 ance provided by the Tribal College or Univer21 sity to Indian students, increasing the rates at

22 which Indian secondary school students enroll in

23 higher education, and increasing overall post24 secondary retention rates for Indian students;

25 and
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1 ‘‘(B) such enrollment data and other infor2 mation and assurances as the Secretary may re3 quire to demonstrate compliance with subpara4 graph (A) or (B) of paragraph (1).

5 ‘‘(3) SPECIAL RULE.—For the purposes of this

6 part, no Tribal College or University that is eligible

7 for and receives funds under this section may concur8 rently receive other funds under this part or part B.’’.

9 SEC. 304. STRENGTHENING HBCU’s.

10 (a) GRANTS.—Section 323 (20 U.S.C. 1062) is amend11 ed—

12 (1) by redesignating subsection (b) as subsection

13 (c); and

14 (2) by inserting after subsection (a) the follow15 ing:

16 ‘‘(b) ENDOWMENT FUND.—

17 ‘‘(1) IN GENERAL.—An institution may use not

18 more than 20 percent of the grant funds provided

19 under this part to establish or increase an endowment

20 fund at the institution.

21 ‘‘(2) MATCHING REQUIREMENT.—In order to be

22 eligible to use grant funds in accordance with para23 graph (1), the eligible institution shall provide match24 ing funds, in an amount equal to the Federal funds
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1 used in accordance with paragraph (1), for the estab2 lishment or increase of the endowment fund.

3 ‘‘(3) COMPARABILITY.—The provisions of part C

4 regarding the establishment or increase of an endow5 ment fund, that the Secretary determines are not in6 consistent with this subsection, shall apply to funds

7 used under paragraph (1).’’.

8 (b) PROFESSIONAL OR GRADUATE INSTITUTIONS.—

9 Section 326 (20 U.S.C. 1063b) is amended—

10 (1) in subsection (a), by adding at the end of

11 paragraph (2) the following: ‘‘If a grant of less than

12 $500,000 is made under this section, matching funds

13 provided from non-Federal sources are not required.

14 If a grant equal to or in excess of $500,000 is made

15 under this section, match funds provided from non16 Federal sources are required only with respect to the

17 amount of the grant that exceeds $500,000.’’; and

18 (2) in subsection (e)(1)—

19 (A) in subparagraph (E), by inserting ‘‘,

20 and any Tuskegee University qualified graduate

21 program’’ before the semicolon;

22 (B) in subparagraph (F), by inserting ‘‘,

23 and any Xavier University qualified graduate

24 program’’ before the semicolon;
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1 (C) in subparagraph (G), by inserting ‘‘,

2 and any Southern University qualified graduate

3 program’’ before the semicolon;

4 (D) in subparagraph (H), by inserting ‘‘,

5 and any Texas Southern University qualified

6 graduate program’’ before the semicolon;

7 (E) in subparagraph (I), by inserting ‘‘,

8 and any Florida A&M University qualified

9 graduate program’’ before the semicolon; and

10 (F) in subparagraph (J), by inserting ‘‘,

11 and any North Carolina Central University

12 qualified graduate program’’ before the semi13 colon.

14 SEC. 305. ENDOWMENT CHALLENGE GRANTS.

15 Paragraph (2) of section 331(b) (20 U.S.C. 1065(b))

16 is amended by striking subparagraphs (B) and (C) and in17 serting the following:

18 ‘‘(B) The Secretary may make a grant under this part

19 to an eligible institution in any fiscal year if the institu20 tion—

21 ‘‘(i) applies for a grant in an amount not ex22 ceeding $500,000; and

23 ‘‘(ii) has deposited in the eligible institution’s

24 endowment fund established under this section an
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amount which is equal to 1 1 ⁄2 of the amount of such

2 grant.

3 ‘‘(C) An eligible institution of higher education that

4 is awarded a grant under subparagraph (B) shall not be

5 eligible to receive an additional grant under subparagraph

6 (B) until 10 years after the date on which the grant period

7 terminates.’’.

8 SEC. 306. HBCU CAPITAL FINANCING.

9 (a) DEFINITION.—Section 342(5) (as redesignated by

10 section 301(a)(4)) (20 U.S.C. 1132c–1(5)) is amended—

11 (1) by redesignating subparagraphs (B), (C),

12 and (D) as subparagraphs (C), (F), and (G);

13 (2) by inserting after subparagraph (A) the fol14 lowing:

15 ‘‘(B) a facility for the administration of an

16 educational program, or a student center or stu17 dent union, except that not more than 5 percent

18 of the loan proceeds provided under this part

19 may be used for the facility, center or union if

20 the facility, center or union is owned, leased,

21 managed, or operated by a private business,

22 that, in return for such use, makes a payment to

23 the eligible institution;’’;

24 (3) by inserting after subparagraph (C) (as re25 designated by paragraph (1)) the following:
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1 ‘‘(D) a maintenance, storage, or utility fa2 cility that is essential to the operation of a facil3 ity, a library, a dormitory, equipment, instru4 mentation, a fixture, real property or an interest

5 therein, described in this paragraph;

6 ‘‘(E) a facility designed to provide pri7 marily outpatient health care for students or fac8 ulty;’’; and

9 (4) in subparagraph (G) (as redesignated by

10 paragraph (2)), by striking ‘‘(C)’’ and inserting

11 ‘‘(F)’’.

12 (b) FULL FAITH AND CREDIT.—Section 343 (as redes13 ignated by section 301(a)(4)) (20 U.S.C. 1132c–2) is

14 amended by adding at the end the following:

15 ‘‘(e) Notwithstanding any other provision of law, the

16 Secretary may sell a qualified bond guaranteed under this

17 part to any party that offers terms that the Secretary deter18 mines are in the best interest of the eligible institution.’’.

19 SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVE20 MENT PROGRAM.

21 Section 365(4) (as redesignated by section 301(a)(7))

22 (20 U.S.C. 1135d–5(4)) is amended by inserting ‘‘behav23 ioral,’’ after ‘‘physical,’’.
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1 SEC. 308. GENERAL PROVISIONS.

2 (a) APPLICATIONS.—Paragraph (1) of section 391(b)

3 (as redesignated by section 301(a)(2)) (20 U.S.C. 1066(b))

4 is amended by inserting ‘‘, D or E’’ after ‘‘part C’’.

5 (b) APPLICATION REVIEW PROCESS.—Section 393 (as

6 redesignated by section 301(a)(2)) (20 U.S.C. 1068) is

7 amended by adding at the end the following:

8 ‘‘(d) EXCLUSION.—The provisions of this section shall

9 not apply to applications submitted under part D.’’.

10 (c) WAIVERS.—Paragraph (2) of section 395(b) (as re11 designated by section 301(a)(2)) (20 U.S.C. 1069b(b)) is

12 amended by striking ‘‘title IV, VII, or VIII’’ and inserting

13 ‘‘part D or title IV’’.

14 (d) AUTHORIZATION OF APPROPRIATIONS.—Section

15 398(a) (as redesignated by section 301(a)(2)) (20 U.S.C.

16 1069f) is amended—

17 (1) in paragraph (1)—

18 (A) in subparagraph (A), by striking

19 ‘‘1993’’ and inserting ‘‘1999’’; and

20 (B) in subparagraph (B)—

21 (i) in clause (i), by striking

22 ‘‘$45,000,000 for fiscal year 1993’’ and in23 serting ‘‘$5,000,000 for fiscal year 1999’’;

24 (ii) by striking clause (ii); and

25 (iii) by striking ‘‘(B)(i) There’’ and in26 serting ‘‘(B) There’’;
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1 (2) in paragraph (2)—

2 (A) in subparagraph (A), by striking

3 ‘‘1993’’ and inserting ‘‘1999’’; and

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

5 ‘‘$20,000,000 for fiscal year 1993’’ and inserting

6 ‘‘$30,000,000 for fiscal year 1999’’;

7 (3) in paragraph (3), by striking ‘‘$50,000,000

8 for fiscal year 1993’’ and inserting ‘‘$10,000,000 for

9 fiscal year 1999’’; and

10 (4) by adding at the end the following:

11 ‘‘(4) PART D.—There are authorized to be appro12 priated to carry out part D, $110,000 for fiscal year

13 1999, and such sums as may be necessary for each of

14 the 4 succeeding fiscal years.

15 ‘‘(5) PART E.—There are authorized to be appro16 priated to carry out part E, $10,000,000 for fiscal

17 year 1999, and such sums as may be necessary for

18 each of the 4 succeeding fiscal years.’’.

19 TITLE IV—STUDENT ASSISTANCE

20 PART A—GRANTS TO STUDENTS IN ATTENDANCE

21 AT INSTITUTIONS OF HIGHER EDUCATION

22 SEC. 411. REPEALS AND REDESIGNATIONS.

23 Title IV (20 U.S.C. 1070 et seq.) is amended—

24 (1) in part A (20 U.S.C. 1070 et seq.)—
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1 (A) in subpart 2 (20 U.S.C. 1070a–11), by

2 repealing chapters 3 through 8 (20 U.S.C.

3 1070a–31 et seq. and 1070a–81 et seq.); and

4 (B) by repealing subpart 8 (20 U.S.C.

5 1070f); and

6 (2) in part H (20 U.S.C. 1099a et seq.)—

7 (A) by repealing subpart 1 (20 U.S.C.

8 1099a et seq.); and

9 (B) by redesignating subparts 2 and 3 (20

10 U.S.C. 1099b et seq. and 1099c et seq.) as sub11 parts 1 and 2, respectively.

12 SEC. 412. FEDERAL PELL GRANTS.

13 (a) AMENDMENT TO SUBPART HEADING.—The head14 ing for subpart 1 of part A of title IV (20 U.S.C. 1070a

15 et seq.) is amended by striking ‘‘Basic Educational

16 Opportunity Grants’’ and inserting ‘‘Federal Pell

17 Grants’’.

18 (b) FEDERAL PELL GRANTS.—Section 401 (20 U.S.C.

19 1070a) is amended—

20 (1) in the section heading, by striking ‘‘BASIC

21 EDUCATIONAL OPPORTUNITY GRANTS’’ and in22 serting ‘‘FEDERAL PELL GRANTS’’;

23 (2) in subsection (a)(1)—

24 (A) in the first sentence, by striking ‘‘shall,

25 during the period beginning July 1, 1972, and
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1 ending September 30, 1998,’’ and inserting ‘‘, for

2 each fiscal year through fiscal year 2004, shall’’;

3 and

4 (B) in the second sentence, by inserting

5 ‘‘until such time as the Secretary determines and

6 publishes in the Federal Register with an oppor7 tunity for comment, an alternative payment sys8 tem that provides payments to institutions in an

9 accurate and timely manner,’’ after ‘‘pay eligible

10 students’’;

11 (3) in subsection (b)—

12 (A) in paragraph (2)(A), by striking clauses

13 (i) through (v), and inserting the following:

14 ‘‘(i) $5,000 for academic year 1999–

15 2000;

16 ‘‘(ii) $5,200 for academic year 2000–

17 2001;

18 ‘‘(iii) $5,400 for academic year 2001–

19 2002;

20 ‘‘(iv) $5,600 for academic year 2002–

21 2003; and

22 ‘‘(v) $5,800 for academic year 2003–

23 2004.’’;

24 (B) by amending paragraph (3) to read as

25 follows:
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1 ‘‘(3) For any academic year for which an appro2 priation Act provides a maximum basic grant in an

3 amount in excess of $2,400, the amount of a student’s

4 basic grant shall equal $2,400 plus—

5 ‘‘(A) one-half of the amount by which such

6 maximum basic grant exceeds $2,400; plus

7 ‘‘(B) the lesser of—

8 ‘‘(i) the remaining one-half of such ex9 cess; or

10 ‘‘(ii) the sum of the student’s tuition,

11 fees, and if the student has dependent care

12 expenses (as described in section 472(8) or

13 disability-related expenses (as described in

14 section 472(9)), an allowance determined by

15 the institution for such expenses.’’;

16 (C) in paragraph (5), by striking ‘‘$400, ex17 cept’’ and all that follows through ‘‘grant of

18 $400’’ and insert ‘‘$200’’; and

19 (D) in paragraph (6)—

20 (i) by redesignating subparagraphs (A)

21 and (B) as clauses (i) and (ii), respectively;

22 (ii) by inserting ‘‘(A)’’ after the para23 graph designation; and

24 (iii) by adding at the end the follow25 ing:
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1 ‘‘(B) The Secretary shall promulgate regula2 tions implementing this paragraph.’’; and

3 (4) in subsection (c)—

4 (A) by amending paragraph (1) to read as

5 follows: ‘‘(1)(A) Except as provided in subpara6 graph (B), the period during which a student

7 may receive a basic grant shall be the period, re8 quired for the completion of the first undergradu9 ate baccalaureate course of study pursued by the

10 student at the institution at which the student is

11 in attendance, that does not exceed 150 percent

12 of the period normally required by a full-time

13 student (or the equivalent period, in the case of

14 a part-time student) to complete the course of

15 study at the institution, as determined by the in16 stitution.

17 ‘‘(B) A student may receive basic grants

18 under this subpart for a period that exceeds the

19 period described in subparagraph (A) to the ex20 tent the institution in which the student is en21 rolled determines necessary to accommodate the

22 rights of students with disabilities under section

23 504 of the Rehabilitation Act of 1973.’’; and

24 (B) in paragraph (2)—
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1 (i) by striking ‘‘Nothing’’ and insert2 ing ‘‘(A) Except as provided in subpara3 graph (B), nothing’’;

4 (ii) by striking ‘‘or, in the case’’ and

5 all that follows through ‘‘or skills’’; and

6 (iii) by adding at the end the follow7 ing:

8 ‘‘(B)(i) A student may receive a basic grant

9 to attend English language instruction that is a

10 separate course of instruction only if—

11 ‘‘(I) students enrolled in such a course

12 are required to take an independently ad13 ministered standardized test of English lan14 guage proficiency upon completion of the

15 course; and

16 ‘‘(II) not less than a minimum per17 centage of such students achieve a passing

18 score on that test.

19 ‘‘(ii) The Secretary shall promulgate regula20 tions that specify 1 or more standardized tests of

21 English proficiency, the minimum percentage of

22 students who must achieve a passing score on the

23 tests, and such other requirements as the Sec24 retary determines are necessary to implement

25 clause (i).’’.
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1 SEC. 413. TRIO PROGRAMS.

2 (a) PROGRAM AUTHORITY.—Section 402A (20 U.S.C.

3 1070a–11) is amended—

4 (1) in subsection (b)(3)—

5 (A) in subparagraph (A), by striking

6 ‘‘$170,000 for fiscal year 1993’’ and inserting

7 ‘‘$190,000 for each fiscal year’’;

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

9 ‘‘$180,000 for fiscal year 1994’’ and inserting

10 ‘‘$200,000 for each fiscal year’’; and

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

12 ‘‘$190,000 for fiscal year 1995’’ and inserting

13 ‘‘$210,000 for each fiscal year’’;

14 (2) in subsection (c)(6), by amending the last

15 sentence to read as follows: ‘‘The Secretary shall per16 mit a Director of a program assisted under this chap17 ter to also administer 1 or more additional programs

18 for disadvantaged students operated by the sponsoring

19 entity regardless of the funding source of such addi20 tional program.’’; and

21 (3) in subsection (f), by striking ‘‘$650,000,000

22 for fiscal year 1993’’ and inserting ‘‘$700,000,000 for

23 fiscal year 1999’’.

24 (b) TALENT SEARCH.—Section 402B(b)(5) (20 U.S.C.

25 1070a–12(b)(5)) is amended by inserting ‘‘, or activities de26 signed to acquaint individuals from disadvantaged back-
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1 grounds with careers in which the individuals are particu2 larly underrepresented’’ before the semicolon.

3 (c) UPWARD BOUND.—Section 402C (20 U.S.C.

4 1070a–13) is amended—

5 (1) in subsection (b)—

6 (A) in paragraph (9), by striking ‘‘and’’

7 after the semicolon;

8 (B) by redesignating paragraph (10) as

9 paragraph (11);

10 (C) by inserting after paragraph (9) the fol11 lowing:

12 ‘‘(10) work-study positions where youth partici13 pating in the project are exposed to careers requiring

14 a postsecondary degree; and’’; and

15 (D) in paragraph (11) (as redesignated by

16 subparagraph (B)), by striking ‘‘(9)’’ and insert17 ing ‘‘(10)’’; and

18 (2) in subsection (e), by striking ‘‘and not in ex19 cess of $40 per month during the remaining period of

20 the year.’’ and inserting ‘‘except that youth partici21 pating in a work-study position under subsection

22 (b)(10) may be paid a stipend of $300 per month

23 during June, July, and August. Youths participating

24 in a project proposed to be carried out under any ap-
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1 plication may be paid stipends not in excess of $40

2 per month during the remaining period of the year.’’.

3 (d) STUDENT SUPPORT SERVICES.—Paragraph (6) of

4 section 402D(c) (20 U.S.C. 1070a–14(c)(6)) is amended to

5 read as follows:

6 ‘‘(6) consider, in addition to such other criteria

7 as the Secretary may prescribe, the institution’s ef8 fort, and where applicable past history, in—

9 ‘‘(A) providing sufficient financial assist10 ance to meet the full financial need of each stu11 dent at the institution; and

12 ‘‘(B) maintaining the loan burden of each

13 such student at a manageable level.’’.

14 (e) EVALUATION AND DISSEMINATION.—Section 402H

15 (20 U.S.C. 1070a–18) is amended to read as follows:

16 ‘‘SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IM17 PROVEMENT AND DISSEMINATION PARTNER18 SHIP PROJECTS.

19 ‘‘(a) EVALUATIONS.—

20 ‘‘(1) IN GENERAL.—For the purpose of improv21 ing the effectiveness of the programs and projects as22 sisted under this subpart, the Secretary may make

23 grants to or enter into contracts with institutions of

24 higher education and other public and private insti25 tutions and organizations to evaluate the effectiveness
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1 of the programs and projects assisted under this sub2 part.

3 ‘‘(2) PRACTICES.—The evaluations described in

4 paragraph (1) shall identify institutional, commu5 nity, and program or project practices that are par6 ticularly effective in enhancing the access of low-in7 come individuals and first-generation college students

8 to postsecondary education, the preparation of the in9 dividuals and students for postsecondary education,

10 and the success of the individuals and students in

11 postsecondary education.

12 ‘‘(b) GRANTS.—The Secretary may award grants to

13 institutions of higher education or other private and public

14 institutions and organizations, that are carrying out a pro15 gram or project assisted under this subpart prior to the date

16 of enactment of the Higher Education Amendments of 1998,

17 to enable the institutions and organizations to expand and

18 leverage the success of such programs or projects by working

19 in partnership with other institutions, community-based

20 organizations, or combinations of such institutions and or21 ganizations, that are not receiving assistance under this

22 subpart and are serving low-income students and first gen23 eration college students, in order to—

24 ‘‘(1) disseminate and replicate best practices of

25 programs or projects assisted under this subpart; and
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1 ‘‘(2) provide technical assistance regarding pro2 grams and projects assisted under this subpart.

3 ‘‘(c) RESULTS.—In order to improve overall program

4 or project effectiveness, the results of evaluations and grants

5 described in this section shall be disseminated by the Sec6 retary to similar programs or projects assisted under this

7 subpart, as well as other individuals concerned with post8 secondary access for and retention of low-income individ9 uals and first-generation college students.’’.

10 SEC. 414. NATIONAL EARLY INTERVENTION SCHOLARSHIP

11 AND PARTNERSHIP PROGRAM.

12 Section 404G (20 U.S.C. 1070a–27) is amended by

13 striking ‘‘1993’’ and inserting ‘‘1999’’.

14 SEC. 415. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR15 TUNITY GRANTS.

16 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

17 413A(b) (20 U.S.C. 1070b) is amended by striking

18 ‘‘$675,000,000 for fiscal year 1993’’ and inserting

19 ‘‘$700,000,000 for fiscal year 1999’’.

20 (b) USE OF FUNDS FOR LESS-THAN-FULL-TIME STU21 DENTS.—Subsection (d) of section 413C (20 U.S.C. 1070b–

22 2) is amended to read as follows:

23 ‘‘(d) USE OF FUNDS FOR LESS-THAN-FULL-TIME

24 STUDENTS.—If the institution’s allocation under this sub25 part is directly or indirectly based in part on the financial
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1 need demonstrated by students who are independent stu2 dents or attending the institution on less than a full-time

3 basis, a reasonable proportion of the allocation shall be

4 made available to such students.’’.

5 (c) CARRYOVER, CARRYBACK, AND REALLOCATION.—

6 Subpart 3 of part A of title IV (20 U.S.C. 1070b et seq.)

7 is amended by adding at the end the following:

8 ‘‘SEC. 413E. CARRYOVER, CARRYBACK, AND REALLOCATION.

9 ‘‘(a) CARRYOVER AUTHORITY.—Of the sums made

10 available to an eligible institution under this subpart for

11 a fiscal year, not more than 10 percent may, at the discre12 tion of the institution, remain available for expenditure

13 during the succeeding fiscal year to carry out the program

14 under this subpart.

15 ‘‘(b) CARRYBACK AUTHORITY.—Of the sums made

16 available to an eligible institution under this subpart for

17 a fiscal year, not more than 10 percent may, at the discre18 tion of the institution, be used by the institution for expend19 iture for the fiscal year preceding the fiscal year for which

20 the sums were appropriated.

21 ‘‘(c) REALLOCATION.—Any of the sums made available

22 to an eligible institution under this subpart for a fiscal year

23 that are not needed by the institution to award supple24 mental grants during that fiscal year, that the institution

25 does not wish to use during the succeeding fiscal year as
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1 authorized in subsection (a), and that the institution does

2 not wish to use for the preceding fiscal year as authorized

3 in subsection (b), shall be made available to the Secretary

4 for reallocation under section 413D(e) until the end of the

5 second fiscal year after the fiscal year for which such sums

6 were appropriated.’’.

7 SEC. 416. LEVERAGING EDUCATIONAL ASSISTANCE PART8 NERSHIP PROGRAM.

9 (a) AMENDMENT TO SUBPART HEADING.—

10 (1) IN GENERAL.—The heading for subpart 4 of

11 part A of title IV (20 U.S.C. 1070c et seq.) is amend12 ed to read as follows:

13 ‘‘SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE

14 PARTNERSHIP PROGRAM’’.

15 (2) CONFORMING AMENDMENTS.—Subpart 4 of

16 part A of title IV (20 U.S.C. 1070c et seq.) is amend17 ed—

18 (A) in section 415B(b) (20 U.S.C. 1070c–

19 1(b)), by striking ‘‘State student grant incen20 tive’’ and inserting ‘‘leveraging educational as21 sistance partnership’’; and

22 (B) in the heading for section 415C (20

23 U.S.C. 1070c–2), by striking ‘‘STATE STUDENT

24 INCENTIVE GRANT’’ and inserting
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1 ‘‘LEVERAGING EDUCATIONAL ASSISTANCE

2 PARTNERSHIP’’.

3 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

4 415A(b) (20 U.S.C. 1070c(b)) is amended—

5 (1) in paragraph (1), by striking ‘‘1993’’ and in6 serting ‘‘1999’’;

7 (2) by redesignating paragraph (2) as para8 graph (3); and

9 (3) by inserting after paragraph (1) the follow10 ing:

11 ‘‘(2) RESERVATION.—For any fiscal year for

12 which the amount appropriated under paragraph (1)

13 exceeds $35,000,000, the excess shall be available to

14 carry out section 415E.’’.

15 (c) SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE

16 PARTNERSHIP PROGRAM.—Subpart 4 of part A of title IV

17 (20 U.S.C. 1070c et seq.) is amended—

18 (1) by redesignating section 415E as 415F;

19 (2) by inserting after section 415D the following:

20 ‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSIST21 ANCE PARTNERSHIP PROGRAM.

22 ‘‘(a) IN GENERAL.—From amounts reserved under sec23 tion 415A(b)(2) for each fiscal year, the Secretary shall—
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1 ‘‘(1) make allotments among States in the same

2 manner as the Secretary makes allotments among

3 States under section 415B; and

4 ‘‘(2) award grants to States, from allotments

5 under paragraph (1), to enable the States to pay the

6 Federal share of the cost of the authorized activities

7 described in subsection (c).

8 ‘‘(b) APPLICABILITY RULE.—The provisions of this

9 subpart which are not inconsistent with this section shall

10 apply to the program authorized by this section.

11 ‘‘(c) AUTHORIZED ACTIVITIES.—Each State receiving

12 a grant under this section may use the grant funds for—

13 ‘‘(1) increasing the dollar amount of grants

14 awarded under section 415B to eligible students who

15 demonstrate financial need;

16 ‘‘(2) carrying out transition programs from sec17 ondary school to postsecondary education for eligible

18 students who demonstrate financial need;

19 ‘‘(3) making funds available for community serv20 ice work-study activities for eligible students who

21 demonstrate financial need;

22 ‘‘(4) creating a postsecondary scholarship pro23 gram for eligible students who demonstrate financial

24 need and wish to enter teaching;
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1 ‘‘(5) creating a scholarship program for eligible

2 students who demonstrate financial need and wish to

3 enter a program of study leading to a degree in math4 ematics, computer science, or engineering;

5 ‘‘(6) carrying out early intervention programs,

6 mentoring programs, and career education programs

7 for eligible students who demonstrate financial need;

8 and

9 ‘‘(7) awarding merit or academic scholarships to

10 eligible students who demonstrate financial need.

11 ‘‘(d) MAINTENANCE OF EFFORT REQUIREMENT.—

12 Each State receiving a grant under this section for a fiscal

13 year shall provide the Secretary an assurance that the ag14 gregate amount expended per student or the aggregate ex15 penditures by the State, from funds derived from non-Fed16 eral sources, for the authorized activities described in sub17 section (c) for the preceding fiscal year were not less than

18 the amount expended per student or the aggregate expendi19 tures by the State for the activities for the second preceding

20 fiscal year.

21 ‘‘(e) FEDERAL SHARE.—The Federal share of the cost

22 of the authorized activities described in subsection (c) for

any fiscal year shall be 331 23 ⁄3 percent.’’; and

24 (3) by adding at the end the following:
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1 ‘‘SEC. 415G. FEDERAL-STATE RELATIONSHIPS; STATE

2 AGREEMENTS.

3 ‘‘(a) IN GENERAL.—Any State that desires to receive

4 assistance under this subpart shall enter into an agreement

5 with the Secretary pursuant to subsection (b) setting forth

6 the terms and conditions for the relationship between the

7 Federal Government and that State for the purposes set

8 forth under this subpart.

9 ‘‘(b) CONTENTS.—

10 ‘‘(1) IN GENERAL.—Such agreement shall consist

11 of assurances by the State, including a description of

12 the means to be used by the State to fulfill the assur13 ances, that—

14 ‘‘(A) the State will provide for such methods

15 of administration as are necessary for the proper

16 and efficient administration of the program

17 under this subpart in keeping with the purposes

18 set forth under this subpart;

19 ‘‘(B) the State will provide for such fiscal

20 control and fund accounting procedures as may

21 be necessary to ensure proper disbursement of,

22 and accounting for, Federal funds paid to the

23 State under this subpart;

24 ‘‘(C) the State will follow policies and prac25 tices of administration that will ensure that non26 Federal funds will not be supplanted by Federal
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1 funds, and that equitable and appropriate cri2 teria will be used in evaluation of applications

3 or proposals for grants under this subpart; and

4 ‘‘(D) the State has a comprehensive plan5 ning or policy formulation process that—

6 ‘‘(i) considers the relation between

7 State administration of the program under

8 this subpart, and administration of similar

9 State programs or processes;

10 ‘‘(ii) encourages State policies designed

11 to consider effects on declining enrollments

12 on all sectors of postsecondary education in

13 the State;

14 ‘‘(iii) considers the postsecondary edu15 cation needs of unserved and underserved

16 individuals within the State, including in17 dividuals beyond the traditional college age;

18 ‘‘(iv) considers the resources of institu19 tions, organizations, or agencies (both pub20 lic and private) within the State capable of

21 providing postsecondary educational oppor22 tunities in the State; and

23 ‘‘(v) provides for direct, equitable, and

24 active participation in the comprehensive

25 planning or policy formulation process or
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1 processes of representatives of institutions of

2 higher education (including community col3 leges, proprietary institutions, and inde4 pendent colleges and universities), students,

5 other providers of postsecondary education

6 services, and the general public in the State.

7 ‘‘(2) SPECIAL RULE.—Participation under para8 graph (1)(D)(v) shall, consistent with State law, be

9 achieved through membership on State planning com10 missions, State advisory councils, or other State enti11 ties established by the State to conduct federally as12 sisted comprehensive planning or policy formulation.

13 ‘‘(c) SPECIAL RULE.—The information and assurances

14 provided by a State in accordance with subparagraphs (A),

15 (B), and (C) of subsection (b)(1), and regulations issued

16 by the Secretary related directly to such assurances, shall

17 be satisfactory for the purposes of, and shall be considered

18 in lieu of, any comparable requirements for information

19 and assurances in any program under this subpart.

20 ‘‘(d) AGREEMENT DURATION; COMPLIANCE.—

21 ‘‘(1) AGREEMENT DURATION.—An agreement of

22 a State shall remain in effect subject to modification

23 as changes in information or circumstances require.

24 ‘‘(2) COMPLIANCE.—Whenever the Secretary,

25 after reasonable notice and opportunity for a hearing
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•S 1882 RS

1 has been given to the State, finds that there is a fail2 ure to comply substantially with the assurances re3 quired in subparagraph (A), (B), or (C) of subsection

4 (b)(1), the Secretary shall notify the State that the

5 State is no longer eligible to participate in the pro6 gram under this subpart until the Secretary is satis7 fied that there is no longer any such failure to com8 ply.

9 ‘‘(e) SPECIAL RULES.—

10 ‘‘(1) ENTITIES ENTERING INTO AGREEMENTS.—

11 For the purpose of this section, the selection of the

12 State entity or entities authorized to act on behalf of

13 the State for the purpose of entering into an agree14 ment with the Secretary shall be in accordance with

15 the State law of each individual State with respect to

16 the authority to make legal agreements between the

17 State and the Federal Government.

18 ‘‘(2) CONSTRUCTION.—

19 ‘‘(A) STATE STRUCTURE.—Nothing in this

20 section shall be construed to authorize the Sec21 retary to require any State to adopt, as a condi22 tion for entering into an agreement, or for par23 ticipation in a program under this subpart, a

24 specific State organizational structure for

25 achieving participation in the planning, or ad-
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1 ministration of programs, or for statewide plan2 ning, coordination, governing, regulating, or ad3 ministering of postsecondary education agencies,

4 institutions, or programs in the State.

5 ‘‘(B) STATE AUTHORITY.—Nothing in this

6 section shall be construed as a limitation on the

7 authority of any State to adopt a State organi8 zational structure for postsecondary education

9 agencies, institutions, or programs that is appro10 priate to the needs, traditions, and cir11 cumstances of that State, or as a limitation on

12 the authority of a State entering into an agree13 ment pursuant to this section to modify the

14 State organizational structure at any time subse15 quent to entering into such an agreement.’’.

16 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

17 (1) PURPOSE.—Subsection (a) of section 415A

18 (20 U.S.C. 1070c(a)) is amended to read as follows:

19 ‘‘(a) PURPOSE OF SUBPART.—It is the purpose of this

20 subpart to make incentive grants available to States to as21 sist States in—

22 ‘‘(1) providing grants to—

23 ‘‘(A) eligible students attending institutions

24 of higher education or participating in programs

25 of study abroad that are approved for credit by
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1 institutions of higher education at which such

2 students are enrolled; and

3 ‘‘(B) eligible students for campus-based

4 community service work-study; and

5 ‘‘(2) carrying out the activities described in sec6 tion 415F.’’.

7 (2) ALLOTMENT.—Section 415B(a)(1) (20 U.S.C.

8 1070c–1(a)(1)) is amended by inserting ‘‘and not re9 served under section 415A(b)(2)’’ after ‘‘415A(b)(1)’’.

10 SEC. 417. HEP AND CAMP.

11 Section 418A(g) (20 U.S.C. 1070d–2(g)) is amended—

12 (1) in paragraph (1), by striking ‘‘$15,000,000

13 for fiscal year 1993’’ and inserting ‘‘$25,000,000 for

14 fiscal year 1999’’; and

15 (2) in paragraph (2), by striking ‘‘$5,000,000 for

16 fiscal year 1993’’ and inserting ‘‘$10,000,000 for fis17 cal year 1999’’.

18 SEC. 418. ROBERT C. BYRD HONORS SCHOLARSHIP PRO19 GRAM.

20 Section 419K (20 U.S.C. 1070d–41) is amended by

21 striking ‘‘$10,000,000 for fiscal year 1993’’ and inserting

22 ‘‘$45,000,000 for fiscal year 1999’’.
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1 SEC. 419. CHILD CARE ACCESS MEANS PARENTS IN

2 SCHOOL.

3 Part A of title IV (20 U.S.C. 1070 et seq.) is amended

4 by inserting after subpart 6 (20 U.S.C. 1070d–31 et seq.)

5 the following:

6 ‘‘Subpart 7—Child Care Access Means Parents in

7 School

8 ‘‘SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN

9 SCHOOL.

10 ‘‘(a) PURPOSE.—The purpose of this section is to sup11 port the participation of low-income parents in postsecond12 ary education through the provision of campus-based child

13 care services.

14 ‘‘(b) PROGRAM AUTHORIZED.—

15 ‘‘(1) AUTHORITY.—The Secretary may award

16 grants to institutions of higher education to assist the

17 institutions in providing campus-based child care

18 services primarily to low-income students.

19 ‘‘(2) AMOUNT OF GRANTS.—

20 ‘‘(A) IN GENERAL.—The amount of a grant

21 awarded to an institution of higher education

22 under this section for a fiscal year shall not ex23 ceed 1 percent of the total amount of all Federal

24 Pell Grant funds awarded to students enrolled at

25 the institution of higher education for the preced26 ing fiscal year.
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1 ‘‘(B) MINIMUM.—A grant under this section

2 shall be awarded in an amount that is not less

3 than $10,000.

4 ‘‘(3) DURATION; RENEWAL; AND PAYMENTS.—

5 ‘‘(A) DURATION.—The Secretary shall

6 award a grant under this section for a period of

7 3 years.

8 ‘‘(B) RENEWAL.—A grant under this sec9 tion may be renewed for a period of 3 years.

10 ‘‘(C) PAYMENTS.—Subject to subsection

11 (e)(2), the Secretary shall make annual grant

12 payments under this section.

13 ‘‘(4) ELIGIBLE INSTITUTIONS.—An institution of

14 higher education shall be eligible to receive a grant

15 under this section for a fiscal year if the total amount

16 of all Federal Pell Grant funds awarded to students

17 enrolled at the institution of higher education for the

18 preceding fiscal year equals or exceeds $350,000.

19 ‘‘(5) USE OF FUNDS.—Grant funds under this

20 section shall be used by an institution of higher edu21 cation to support or establish a campus-based child

22 care program primarily serving the needs of low-in23 come students enrolled at the institution of higher

24 education.
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1 ‘‘(6) CONSTRUCTION.—Nothing in this section

2 shall be construed to prohibit an institution of higher

3 education that receives grant funds under this section

4 from serving the child care needs of the community

5 served by the institution.

6 ‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—

7 For the purpose of this section, the term ‘‘low-income

8 student’’ means a student who is eligible to receive a

9 Federal Pell Grant for the fiscal year for which the

10 determination is made.

11 ‘‘(c) APPLICATIONS.—An institution of higher edu12 cation desiring a grant under this section shall submit an

13 application to the Secretary at such time, in such manner,

14 and accompanied by such information as the Secretary

15 may require. Each application shall—

16 ‘‘(1) demonstrate that the institution is an eligi17 ble institution described in subsection (b)(4);

18 ‘‘(2) specify the amount of funds requested;

19 ‘‘(3) demonstrate the need of low-income students

20 at the institution for campus-based child care services

21 by including in the application—

22 ‘‘(A) information regarding student demo23 graphics;

24 ‘‘(B) an assessment of child care capacity

25 on or near campus;
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1 ‘‘(C) information regarding the existence of

2 waiting lists for existing child care;

3 ‘‘(D) information regarding additional

4 needs created by concentrations of poverty or by

5 geographic isolation; and

6 ‘‘(E) other relevant data;

7 ‘‘(4) contain a description of the activities to be

8 assisted, including whether the grant funds will sup9 port an existing child care program or a new child

10 care program;

11 ‘‘(5) identify the resources, including technical

12 expertise and financial support, the institution will

13 draw upon to support the child care program and the

14 participation of low-income students in the program,

15 such as accessing social services funding, using stu16 dent activity fees to help pay the costs of child care,

17 using resources obtained by meeting the needs of par18 ents who are not low-income students, and accessing

19 foundation, corporate or other institutional support,

20 and demonstrate that the use of the resources will not

21 result in increases in student tuition;

22 ‘‘(6) contain an assurance that the institution

23 will meet the child care needs of low-income students

24 through the provision of services, or through a con25 tract for the provision of services;
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1 ‘‘(7) describe the extent to which the child care

2 program will coordinate with the institution’s early

3 childhood education curriculum, to the extent the cur4 riculum is available, to meet the needs of the students

5 in the early childhood education program at the insti6 tution, and the needs of the parents and children par7 ticipating in the child care program assisted under

8 this section;

9 ‘‘(8) in the case of an institution seeking assist10 ance for a new child care program—

11 ‘‘(A) provide a timeline, covering the period

12 from receipt of the grant through the provision

13 of the child care services, delineating the specific

14 steps the institution will take to achieve the goal

15 of providing low-income students with child care

16 services;

17 ‘‘(B) specify any measures the institution

18 will take to assist low-income students with child

19 care during the period before the institution pro20 vides child care services; and

21 ‘‘(C) include a plan for identifying re22 sources needed for the child care services, includ23 ing space in which to provide child care services,

24 and technical assistance if necessary;
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1 ‘‘(9) contain an assurance that any child care

2 facility assisted under this section will meet the ap3 plicable State or local government licensing, certifi4 cation, approval, or registration requirements; and

5 ‘‘(10) contain a plan for any child care facility

6 assisted under this section to become accredited with7 in 3 years of the date the institution first receives as8 sistance under this section.

9 ‘‘(d) PRIORITY.—The Secretary shall give priority in

10 awarding grants under this section to institutions of higher

11 education that submit applications describing programs

12 that—

13 ‘‘(1) leverage significant local or institutional re14 sources, including in-kind contributions, to support

15 the activities assisted under this section; and

16 ‘‘(2) utilize a sliding fee scale for child care serv17 ices provided under this section in order to support

18 a high number of low-income parents pursuing post19 secondary education at the institution.

20 ‘‘(e) REPORTING REQUIREMENTS; CONTINUING ELIGI21 BILITY.—

22 ‘‘(1) REPORTING REQUIREMENTS.—

23 ‘‘(A) REPORTS.—Each institution of higher

24 education receiving a grant under this section

25 shall report to the Secretary 18 months, and 36
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1 months, after receiving the first grant payment

2 under this section.

3 ‘‘(B) CONTENTS.—The report shall in4 clude—

5 ‘‘(i) data on the population served

6 under this section;

7 ‘‘(ii) information on campus and com8 munity resources and funding used to help

9 low-income students access child care serv10 ices;

11 ‘‘(iii) information on progress made

12 toward accreditation of any child care facil13 ity; and

14 ‘‘(iv) information on the impact of the

15 grant on the quality, availability, and af16 fordability of campus-based child care serv17 ices.

18 ‘‘(2) CONTINUING ELIGIBILITY.—The Secretary

19 shall make the third annual grant payment under

20 this section to an institution of higher education only

21 if the Secretary determines, on the basis of the 18-

22 month report submitted under paragraph (1), that the

23 institution is making a good faith effort to ensure

24 that low-income students at the institution have ac25 cess to affordable, quality child care services.
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1 ‘‘(f) CONSTRUCTION.—No funds provided under this

2 section shall be used for construction, except for minor ren3 ovation or repair to meet applicable State or local health

4 or safety requirements.

5 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There

6 are authorized to be appropriated to carry out this section

7 $60,000,000 for fiscal year 1999 and such sums as may be

8 necessary for each of the 4 succeeding fiscal years.’’.

9 PART B—FEDERAL FAMILY EDUCATION LOAN

10 PROGRAM

11 SEC. 421. ADVANCES FOR RESERVE FUNDS.

12 Section 422 (20 U.S.C. 1072) is amended—

13 (1) in subsection (c)—

14 (A) in paragraph (6)(B)(i), by striking

15 ‘‘written’’ and inserting ‘‘written, electronic’’;

16 and

17 (B) in paragraph (7)(A), by striking ‘‘dur18 ing the transition from the Federal Family Edu19 cation Loan Program under this part to the Fed20 eral Direct Student Loan Program under part D

21 of this title’’;

22 (2) in the matter preceding subparagraph (A) of

23 subsection (g)(1), by striking ‘‘or the program author24 ized by part D of this title’’ each place the term ap25 pears; and
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1 (3) by adding at the end the following:

2 ‘‘(i) ADDITIONAL RECALL OF RESERVES.—

3 ‘‘(1) IN GENERAL.—Notwithstanding any other

4 provision of law and subject to paragraph (4), the

5 Secretary shall recall $40,000,000 for each of the fis6 cal years 1999, 2000, 2001, 2002, and 2003 from re7 serve funds held in the Federal Student Loan Reserve

8 Funds established under section 422A by guaranty

9 agencies.

10 ‘‘(2) DEPOSIT.—Funds recalled by the Secretary

11 under this subsection shall be deposited in the Treas12 ury.

13 ‘‘(3) REQUIRED SHARE.—The Secretary shall re14 quire each guaranty agency to return reserve funds

under paragraph (1) annually on the basis of 1 15 ⁄5 of

16 the agency’s required share. For purposes of this

17 paragraph, a guaranty agency’s required share shall

18 be determined as follows:

19 ‘‘(A) EQUAL PERCENTAGE.—The Secretary

20 shall require each guaranty agency to return an

21 equal percentage reduction in the amount of re22 serve funds held by the agency on September 30,

23 1996.
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1 ‘‘(B) CALCULATION.—The equal percentage

2 reduction shall be the percentage obtained by di3 viding—

4 ‘‘(i) $200,000,000, by

5 ‘‘(ii) the total amount of all guaranty

6 agencies’ reserve funds held on September

7 30, 1996.

8 ‘‘(4) OFFSET OF REQUIRED SHARES.—If any

9 guaranty agency returns to the Secretary any reserve

10 funds in excess of the amount required under this sub11 section or subsection (h), the total amount required to

12 be returned under paragraph (1) shall be reduced by

13 the amount of such excess reserve funds returned.

14 ‘‘(5) DEFINITION OF RESERVE FUNDS.—The term

15 ‘reserve funds’ when used with respect to a guaranty

16 agency—

17 ‘‘(A) includes any reserve funds in cash or

18 liquid assets held by the guaranty agency, or

19 held by, or under the control of, any other entity;

20 and

21 ‘‘(B) does not include buildings, equipment,

22 or other nonliquid assets.’’.
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1 SEC. 422. FEDERAL STUDENT LOAN RESERVE FUND.

2 Part B of title IV (20 U.S.C. 1071 et seq.) is amended

3 by inserting after section 422 (20 U.S.C. 1072) the follow4 ing:

5 ‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

6 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

7 not later than 45 days after the date of enactment of this

8 section, deposit all funds, securities, and other liquid assets

9 contained in the reserve fund established pursuant to sec10 tion 422 into a Federal Student Loan Reserve Fund (in

11 this section referred to as the ‘Federal Fund’), in an account

12 of a type selected by the agency, with the approval of the

13 Secretary.

14 ‘‘(b) INVESTMENT OF FUNDS.—Funds transferred to

15 the Federal Fund shall be invested in obligations issued or

16 guaranteed by the United States or a State, or in other

17 similarly low-risk securities selected by the guaranty agen18 cy, with the approval of the Secretary. Earnings from the

19 Federal Fund shall be the sole property of the Federal Gov20 ernment.

21 ‘‘(c) ADDITIONAL DEPOSITS.—After the establishment

22 of the Federal Fund, a guaranty agency shall deposit into

23 the Federal Fund—

24 ‘‘(1) all amounts received from the Secretary as

25 payment of reinsurance on loans pursuant to section

26 428(c)(1);
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1 ‘‘(2) from amounts collected on behalf of the obli2 gation of a defaulted borrower, a percentage amount

3 equal to the complement of the reinsurance percentage

4 in effect when payment under the guaranty agreement

5 was made with respect to the defaulted loan pursuant

6 to section 428(c)(6)(A)(i); and

7 ‘‘(3) the amount of the insurance premium col8 lected from borrowers pursuant to section

9 428(b)(1)(H).

10 ‘‘(d) USES OF FUNDS.—Subject to subsection (f), the

11 Federal Fund may only be used by a guaranty agency—

12 ‘‘(1) to pay lender claims pursuant to sections

13 428(b)(1)(G), 428(j), 437, and 439(q); and

14 ‘‘(2) to pay into the Agency Operating Fund es15 tablished pursuant to section 422B a default preven16 tion fee in accordance with section 428(l).

17 ‘‘(e) OWNERSHIP OF FEDERAL FUND.—The Federal

18 Fund administered by the guaranty agency, regardless of

19 who holds or controls the reserve funds or assets, and any

20 nonliquid assets that were purchased with Federal reserve

21 funds, shall be considered to be the property of the United

22 States to be used in the operation of the program authorized

23 by this part, as provided in subsection (d). The Secretary

24 may direct a guaranty agency, or such agency’s officers or

25 directors, to cease any activity involving expenditure, use,
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1 or transfer of the Federal Fund administered by the guar2 anty agency that the Secretary determines is a

3 misapplication, misuse, or improper expenditure of such

4 funds or assets.

5 ‘‘(f) TRANSITION.—

6 ‘‘(1) IN GENERAL.—In order to establish the

7 Agency Operating Fund established by section 422B,

8 each agency may transfer not more than 180 days

9 cash expenses for normal operating expenses, as a

10 working capital reserve as defined in Office of Man11 agement and Budget Circular A–87 (Cost Accounting

12 Standards) for use in the performance of the agency’s

13 duties under this part. Such transfers may occur dur14 ing the first 3 years following the establishment of the

15 Agency Operating Fund, except that no agency may

16 transfer in excess of 40 percent of the Federal Fund

17 balance to the agency’s Agency Operating Fund dur18 ing any fiscal year. In determining the amount nec19 essary for transfer, the agency shall assure that suffi20 cient funds remain in the Federal Fund to pay lender

21 claims within the required time periods and to meet

22 the reserve funds recall requirements of subsection (b).

23 ‘‘(2) REPAYMENT PROVISIONS.—Each guaranty

24 agency shall begin repayment of sums transferred

25 pursuant to this subsection not later than 3 years
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1 after the establishment of the Agency Operating Fund,

2 and shall repay all sums transferred not later than

3 5 years from the date of the establishment of the

4 Agency Operating Fund. The guaranty agency shall

5 provide to the Secretary a schedule for repayment of

6 the sums transferred and an annual financial analy7 sis demonstrating the agency’s ability to comply with

8 the schedule and repay all outstanding sums trans9 ferred.

10 ‘‘(3) PROHIBITION.—If a guaranty agency trans11 fers funds from the Federal Fund in accordance with

12 this section, and fails to make scheduled repayments

13 to the Federal Fund, the agency may not receive any

14 other funds under this part until the Secretary deter15 mines that the agency has made such repayments.

16 ‘‘(4) WAIVER.—The Secretary may waive the re17 quirements of paragraph (3) for a guaranty agency

18 described in such paragraph if the Secretary deter19 mines there are extenuating circumstances beyond the

20 control of the agency that justify such a waiver.

21 ‘‘(5) INVESTMENT OF FEDERAL FUNDS.—Funds

22 transferred from the Federal Fund to the Agency Op23 erating Fund for operating expenses shall be invested

24 in obligations issued or guaranteed by the United

25 States or a State, or in other similarly low-risk secu-
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1 rities selected by the guaranty agency, with the ap2 proval of the Secretary.

3 ‘‘(6) SPECIAL RULE.—In applying the minimum

4 reserve level required by section 428(c)(9)(A), the Sec5 retary shall include all amounts owed to the Federal

6 Fund by the guaranty agency in the calculation.’’.

7 SEC. 423. AGENCY OPERATING FUND.

8 Part B of title IV (20 U.S.C. 1071 et seq.) is amended

9 further by inserting after section 422A (as added by section

10 422) the following:

11 ‘‘SEC. 422B. AGENCY OPERATING FUND.

12 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

13 not later than 45 days after the date of enactment of this

14 section, establish a fund designated as the Agency Operating

15 Fund (in this section referred to as the ‘Operating Fund’).

16 ‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into

17 the Operating Fund, with the exception of funds transferred

18 from the Federal Student Loan Reserve Fund pursuant to

19 section 422A(f), shall be invested at the discretion of the

20 guaranty agency.

21 ‘‘(c) ADDITIONAL DEPOSITS.—After the establishment

22 of the Operating Fund, the guaranty agency shall deposit

23 into the Operating Fund—

24 ‘‘(1) the loan processing and issuance fee paid by

25 the Secretary pursuant to section 428(f);
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1 ‘‘(2) the portfolio maintenance fee paid by the

2 Secretary in accordance with section 458;

3 ‘‘(3) the default prevention fee paid in accord4 ance with section 428(l); and

5 ‘‘(4) amounts remaining pursuant to section

6 428(c)(6)(A)(ii) from collection on defaulted loans

7 held by the agency, after payment of the Secretary’s

8 equitable share, excluding amounts deposited in the

9 Federal Student Loan Reserve Fund pursuant to sec10 tion 422A(c)(2).

11 ‘‘(d) USES OF FUNDS.—

12 ‘‘(1) IN GENERAL.—Funds in the Operating

13 Fund shall be used for application processing, loan

14 disbursement, enrollment and repayment status man15 agement, default prevention activities (including those

16 described in section 422(h)(8), default collection ac17 tivities, school and lender training, compliance mon18 itoring, and other student financial aid related ac19 tivities as determined by the Secretary.

20 ‘‘(2) SPECIAL RULE.—The guaranty agency

21 may, in the agency’s discretion, transfer funds from

22 the Operating Fund to the Federal Student Loan Re23 serve Fund for use pursuant to section 422A. Such

24 transfer shall be irrevocable, and any funds so trans-
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1 ferred shall become the sole property of the United

2 States.

3 ‘‘(3) DEFINITIONS.—For purposes of this sub4 section:

5 ‘‘(A) DEFAULT COLLECTION ACTIVITIES.—

6 The term ‘default collection activities’ means ac7 tivities of a guaranty agency that are directly

8 related to the collection of the loan on which a

9 default claim has been paid to the participating

10 lender, including the attributable compensation

11 of collection personnel (and in the case of person12 nel who perform several functions for such an

13 agency only the portion of the compensation at14 tributable to the collection activity), attorney’s

15 fees, fees paid to collection agencies, postage,

16 equipment, supplies, telephone, and similar

17 charges.

18 ‘‘(B) DEFAULT PREVENTION ACTIVITIES.—

19 The term ‘default prevention activities’ means

20 activities of a guaranty agency, including those

21 described in section 422(h)(8), that are directly

22 related to providing collection assistance to the

23 lender on a delinquent loan, prior to the loan’s

24 being in a default status, including the attrib25 utable compensation of appropriate personnel
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1 (and in the case of personnel who perform sev2 eral functions for such an agency only the por3 tion of compensation attributable to the default

4 prevention activity), fees paid to locate a miss5 ing borrower, postage, equipment, supplies, tele6 phone, and similar charges.

7 ‘‘(C) ENROLLMENT AND REPAYMENT STATUS

8 MANAGEMENT.—The term ‘enrollment and repay9 ment status management’ means activities of a

10 guaranty agency that are directly related to

11 ascertaining the student’s enrollment status, in12 cluding prompt notification to the lender of such

13 status, an audit of the note or written agreement

14 to determine if the provisions of that note or

15 agreement are consistent with the records of the

16 guaranty agency as to the principal amount of

17 the loan guaranteed, and an examination of the

18 note or agreement to assure that the repayment

19 provisions are consistent with the provisions of

20 this title.

21 ‘‘(e) OWNERSHIP OF OPERATING FUND.—The Operat22 ing Fund, with the exception of funds transferred from the

23 Federal Student Loan Reserve Fund in accordance with

24 section 422A(f), shall be considered to be the property of

25 the guaranty agency. The Secretary may not regulate the
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1 uses or expenditure of moneys in the Operating Fund, but

2 the Secretary may require such necessary reports and au3 dits as provided in section 428(b)(2). However, during any

4 period in which funds are owed to the Federal Student

5 Loan Reserve Fund as a result of transfer under 422A(f),

6 moneys in the Operating Fund may only be used for ex7 penses related to the student loan programs authorized

8 under this part.

9 ‘‘(f) AUTHORITY OF SECRETARY TO DISPOSE OF NON10 LIQUID ASSETS.—The Secretary may allow a guaranty

11 agency to purchase nonliquid assets of the agency originally

12 acquired with student loan reserve funds, except that an

13 agency may not purchase any nonliquid assets during any

14 period in which funds are owed to the Federal Student

15 Loan Reserve Fund as a result of a transfer under section

16 422A(f). The purchase amount shall be available for expend17 iture under section 458.’’.

18 SEC. 424. APPLICABLE INTEREST RATES.

19 (a) APPLICABLE INTEREST RATES.—

20 (1) AMENDMENT.—Section 427A (20 U.S.C.

21 1077a et seq.) is amended to read as follows:

22 ‘‘SEC. 427A. APPLICABLE INTEREST RATES.

23 ‘‘(a) INTEREST RATES FOR NEW LOANS ON OR AFTER

24 JULY 1, 1998.—
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

2 with respect to any loan made, insured, or guaranteed

3 under this part (other than a loan made pursuant to

4 section 428B or 428C) for which the first disburse5 ment is made on or after July 1, 1998, the applicable

6 rate of interest shall, during any 12-month period be7 ginning on July 1 and ending on June 30, be deter8 mined on the preceding June 1 and be equal to—

9 ‘‘(A) the bond equivalent rate of 91-day

10 Treasury bills auctioned at the final auction held

11 prior to such June 1; plus

12 ‘‘(B) 2.3 percent,

13 except that such rate shall not exceed 8.25 percent.

14 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

15 With respect to any loan under this part (other than

16 a loan made pursuant to section 428B or 428C) for

17 which the first disbursement is made on or after July

18 1, 1998, the applicable rate of interest for interest

19 which accrues—

20 ‘‘(A) prior to the beginning of the repay21 ment period of the loan; or

22 ‘‘(B) during the period in which principal

23 need not be paid (whether or not such principal

24 is in fact paid) by reason of a provision de25 scribed in section 428(b)(1)(M) or 427(a)(2)(C),
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1 shall be determined under paragraph (1) by substitut2 ing ‘1.7 percent’ for ‘2.3 percent’.

3 ‘‘(3) PLUS LOANS.—With respect to any loan

4 under section 428B for which the first disbursement

5 is made on or after July 1, 1998, the applicable rate

6 of interest shall be determined under paragraph (1)—

7 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

8 percent’; and

9 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

10 percent’.

11 ‘‘(b) LESSER RATES PERMITTED.—Nothing in this

12 section or section 428C shall be construed to prohibit a lend13 er from charging a borrower interest at a rate less than

14 the rate which is applicable under this part.

15 ‘‘(c) CONSULTATION.—The Secretary shall determine

16 the applicable rate of interest under this section after con17 sultation with the Secretary of the Treasury and shall pub18 lish such rate in the Federal Register as soon as practicable

19 after the date of determination.’’.

20 (2) CONFORMING AMENDMENT.—Section

21 428B(d)(4) (20 U.S.C. 1078–2(d)(4)) is amended by

22 striking ‘‘section 427A(c)’’ and inserting ‘‘section

23 427A(a)(3)’’.

24 (b) SPECIAL ALLOWANCES.—
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1 (1) AMENDMENT.—Section 438(b)(2)(F) (20

2 U.S.C. 1087–1(b)(2)(F)) is amended to read as fol3 lows:

4 ‘‘(F) LOANS DISBURSED AFTER JULY 1, 1998.—

5 ‘‘(i) IN GENERAL.—Subject to paragraph

6 (4) and clauses (ii), (iii), and (iv) of this sub7 paragraph, the special allowance paid pursuant

8 to this subsection on loans for which the first dis9 bursement is made on or after July 1, 1998,

10 shall be computed—

11 ‘‘(I) by determining the average of the

12 bond equivalent rates of 91-day Treasury

13 bills auctioned for such 3-month period;

14 ‘‘(II) by subtracting the applicable in15 terest rates on such loans from such average

16 bond equivalent rate;

17 ‘‘(III) by adding 2.8 percent to the re18 sultant percent; and

19 ‘‘(IV) by dividing the resultant percent

20 by 4.

21 ‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In

22 the case of any loan for which the first disburse23 ment is made on or after July 1, 1998, and for

24 which the applicable rate of interest is described

25 in section 427A(a)(2), clause (i)(III) of this sub-
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1 paragraph shall be applied by substituting ‘2.2

2 percent’ for ‘2.8 percent’.

3 ‘‘(iii) PLUS LOANS.—In the case of any

4 loan for which the first disbursement is made on

5 or after July 1, 1998, and for which the applica6 ble rate of interest is described in section

7 427A(a)(3), clause (i)(III) of this subparagraph

8 shall be applied by substituting ‘3.1 percent’ for

9 ‘2.8 percent’, subject to clause (iv) of this sub10 paragraph.

11 ‘‘(iv) LIMITATION ON SPECIAL ALLOWANCES

12 FOR PLUS LOANS.—In the case of loans disbursed

13 on or after July 1, 1998, for which the interest

14 rate is determined under section 427A(a)(3), a

15 special allowance shall not be paid for a loan

16 made under section 428B unless the rate deter17 mined for any 12-month period under section

18 427A(a)(3) exceeds 9 percent.’’.

19 (2) CONFORMING AMENDMENT.—Section

20 438(b)(2)(C)(ii) is amended by striking ‘‘In the case’’

21 and inserting ‘‘Subject to subparagraph (F), in the

22 case’’.

23 (c) EFFECTIVE DATE.—The amendments made by this

24 section shall apply with respect to any loan made, insured,

25 or guaranteed under part B of title IV of the Higher Edu-
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1 cation Act of 1965 for which the first disbursement is made

2 on or after July 1, 1998.

3 SEC. 425. FEDERAL PAYMENTS TO REDUCE STUDENT IN4 TEREST COSTS.

5 (a) FEDERAL INTEREST SUBSIDIES.—Section 428(a)

6 (20 U.S.C. 1078(a)) is amended—

7 (1) in paragraph (2)—

8 (A) in subparagraph (A)—

9 (i) in clause (i), by striking subclauses

10 (I), (II), and (III) and inserting the follow11 ing:

12 ‘‘(I) sets forth the loan amount for

13 which the student shows financial need; and

14 ‘‘(II) sets forth a schedule for disburse15 ment of the proceeds of the loan in install16 ments, consistent with the requirements of

17 section 428G; and’’; and

18 (ii) by amending clause (ii) to read as

19 follows:

20 ‘‘(ii) meets the requirements of subpara21 graph (B); and’’;

22 (B) by amending subparagraph (B) to read

23 as follows:

24 ‘‘(B) For the purpose of clause (ii) of subpara25 graph (A), a student shall qualify for a portion of an
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1 interest payment under paragraph (1) (and a loan

2 amount pursuant to section 428H) if the eligible in3 stitution has determined and documented the stu4 dent’s amount of need for a loan based on the stu5 dent’s estimated cost of attendance, estimated finan6 cial assistance, and, for the purpose of an interest

7 payment pursuant to this section, the expected family

8 contribution (as determined under part F), subject to

9 the provisions of subparagraph (D).’’;

10 (C) by amending subparagraph (C) to read

11 as follows:

12 ‘‘(C) For the purpose of subparagraph (B) and

13 this paragraph—

14 ‘‘(i) a student’s cost of attendance shall be

15 determined under section 472;

16 ‘‘(ii) a student’s estimated financial assist17 ance means, for the period for which the loan is

18 sought, the amount of assistance such student

19 will receive under subpart 1 of part A (as deter20 mined in accordance with section 484(b)), sub21 part 3 of part A, parts C and E, and any veter22 ans’ education benefits paid because of enroll23 ment in a postsecondary education institution,

24 including veterans’ education benefits (as defined
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1 in section 480(c)), plus other scholarship, grant,

2 or loan assistance; and

3 ‘‘(iii) the determination of need and of the

4 amount of a loan by an eligible institution

5 under subparagraph (B) with respect to a stu6 dent shall, with the exception of loans made

7 under section 428H, be calculated in accordance

8 with part F.’’; and

9 (D) by striking subparagraph (F); and

10 (2) in paragraph (3)(A)(v)—

11 (A) in subclause (I), by inserting ‘‘by the

12 institution’’ after ‘‘disbursement’’; and

13 (B) in clause (II), by inserting ‘‘by the in14 stitution’’ after ‘‘disbursement’’.

15 (b) INSURANCE PROGRAM AGREEMENTS.—Section

16 428(b) (20 U.S.C. 1078(b)) is amended—

17 (1) in paragraph (1)—

18 (A) in subparagraph (A)—

19 (i) in the matter preceding clause (i),

20 by inserting ‘‘, as defined in section

21 481(d)(2),’’ after ‘‘academic year’’;

22 (ii) in clause (iv), by striking ‘‘and’’

23 after the semicolon;

24 (iii) in clause (v), by inserting ‘‘and’’

25 after the semicolon; and
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1 (iv) by inserting before the matter fol2 lowing clause (v) the following:

3 ‘‘(vi) in the case of a student enrolled

4 in coursework specified in sections

5 484(b)(3)(B) and 484(b)(4)(B)—

6 ‘‘(I) $2,625 for coursework nec7 essary for enrollment in an under8 graduate degree or certificate program,

9 and $5,500 for coursework necessary

10 for enrollment in a graduate or profes11 sional degree or certification program;

12 and

13 ‘‘(II) $5,500 for coursework nec14 essary for a professional credential or

15 certification from a State required for

16 employment as a teacher in an elemen17 tary or secondary school;’’;

18 (B) by amending subparagraph (E) to read

19 as follows:

20 ‘‘(E) subject to subparagraphs (D) and (L),

21 and except as provided by subparagraph (M),

22 provides that—

23 ‘‘(i) not more than 6 months prior to

24 the date on which the borrower’s first pay25 ment is due, the lender shall offer the bor-
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1 rower of a loan made, insured, or guaran2 teed under this section or section 428H, the

3 option of repaying the loan in accordance

4 with a graduated, income-sensitive, or ex5 tended repayment schedule (as described in

6 paragraph (9)) established by the lender in

7 accordance with regulations provided by the

8 Secretary; and

9 ‘‘(ii) repayment of loans shall be in in10 stallments in accordance with the repay11 ment plan selected under paragraph (9) and

12 commencing at the beginning of the repay13 ment period determined under paragraph

14 (7)’’;

15 (C) in subparagraph (L)(i), by inserting

16 ‘‘except as otherwise provided by a repayment

17 plan selected by the borrower under clause (ii) or

18 (iii) of paragraph (9)(A),’’ before ‘‘during any’’;

19 and

20 (D) in subparagraph (U)(iii)(I), by insert21 ing ‘‘that originates or holds more than

22 $5,000,000 in loans made under this title for

23 any fiscal year (except that each lender described

24 in section 435(d)(1)(A)(ii)(III) shall annually
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1 submit the results of an audit required by this

2 clause),’’ before ‘‘at least once a year’’; and

3 (2) by adding at the end the following:

4 ‘‘(9) REPAYMENT PLANS.—

5 ‘‘(A) DESIGN AND SELECTION.—In accord6 ance with regulations promulgated by the Sec7 retary, the lender shall offer a borrower of a loan

8 made under this part the plans described in this

9 subparagraph for repayment of such loan, in10 cluding principal and interest thereon. Except as

11 provided in paragraph (1)(L)(i), no plan may

12 require a borrower to repay a loan in less than

13 5 years. The borrower may choose from—

14 ‘‘(i) a standard repayment plan, with

15 a fixed annual repayment amount paid

16 over a fixed period of time, not to exceed 10

17 years;

18 ‘‘(ii) a graduated repayment plan paid

19 over a fixed period of time, not to exceed 10

20 years;

21 ‘‘(iii) an income-sensitive repayment

22 plan, with income-sensitive repayment

23 amounts paid over a fixed period of time,

24 not to exceed 10 years, except that the bor-
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1 rower’s scheduled payments shall not be less

2 than the amount of interest due; and

3 ‘‘(iv) for first-time borrowers on or

4 after the date of enactment of the Higher

5 Education Amendments of 1998 with out6 standing loans under this part totaling

7 more than $30,000, an extended repayment

8 plan, with a fixed annual or graduated re9 payment amount paid over an extended pe10 riod of time, not to exceed 25 years, except

11 that the borrower shall repay annually a

12 minimum amount determined in accord13 ance with paragraph (2)(L).

14 ‘‘(B) LENDER SELECTION OF OPTION IF

15 BORROWER DOES NOT SELECT.—If a borrower of

16 a loan made under this part does not select a re17 payment plan described in subparagraph (A),

18 the lender shall provide the borrower with a re19 payment plan described in subparagraph (A)(i).

20 ‘‘(C) CHANGES IN SELECTION.—The bor21 rower of a loan made under this part may

22 change the borrower’s selection of a repayment

23 plan under subparagraph (B), as the case may

24 be, under such conditions as may be prescribed

25 by the Secretary in regulation.
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1 ‘‘(D) ACCELERATION PERMITTED.—Under

2 any of the plans described in this paragraph, the

3 borrower shall be entitled to accelerate, without

4 penalty, repayment on the borrower’s loans

5 under this part.’’.

6 (c) GUARANTY AGREEMENTS FOR REIMBURSING

7 LOSSES.—Section 428(c) (20 U.S.C. 1078(c)) is amended—

8 (1) in paragraph (1)—

9 (A) in the fourth sentence of subparagraph

10 (A), by striking ‘‘as reimbursement under this

11 subsection shall be equal to 98 percent’’ and in12 serting ‘‘as reimbursement for loans for which

13 the first disbursement is made on or after the

14 date of enactment of the Higher Education

15 Amendments of 1998 shall be equal to 95 per16 cent’’;

17 (B) in subparagraph (B)—

18 (i) in clause (i), by striking ‘‘88 per19 cent of the amount of such excess’’ and in20 serting ‘‘85 percent of the amount of such

21 excess for loans for which the first disburse22 ment is made on or after the date of enact23 ment of the Higher Education Amendments

24 of 1998’’; and
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1 (ii) in clause (ii), by striking ‘‘78 per2 cent of the amount of such excess’’ and in3 serting ‘‘75 percent of the amount of such

4 excess for loans for which the first disburse5 ment is made on or after the date of enact6 ment of the Higher Education Amendments

7 of 1998’’;

8 (C) in subparagraph (E)—

9 (i) in clause (i), by striking ‘‘98 per10 cent’’ and inserting ‘‘95 percent’’;

11 (ii) in clause (ii), by striking ‘‘88 per12 cent’’ and inserting ‘‘85 percent’’; and

13 (iii) in clause (iii), by striking ‘‘78

14 percent’’ and inserting ‘‘75 percent’’; and

15 (D) in subparagraph (F)—

16 (i) in clause (i), by striking ‘‘98 per17 cent’’ and inserting ‘‘95 percent’’; and

18 (ii) in clause (ii), by striking ‘‘88 per19 cent’’ and inserting ‘‘85 percent’’;

20 (2) in paragraph (3)—

21 (A) in subparagraph (A)(i), by inserting

22 ‘‘or electronic’’ after ‘‘written’’;

23 (B) in subparagraph (B), by striking ‘‘and’’

24 after the semicolon;
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•S 1882 RS

1 (C) in subparagraph (C), by striking the

2 period and inserting ‘‘; and’’; and

3 (D) by inserting before the matter following

4 subparagraph (C) the following:

5 ‘‘(D) shall contain provisions that specify

6 that forbearance for a period not to exceed 60

7 days may be granted if the lender determines

8 that such a suspension of collection activity is

9 warranted following a borrower’s request for for10 bearance in order to collect or process appro11 priate supporting documentation related to the

12 request, and that during such period interest

13 shall not be capitalized.’’;

14 (3) by amending paragraph (6) to read as fol15 lows:

16 ‘‘(6) SECRETARY’S EQUITABLE SHARE.—For the

17 purpose of paragraph (2)(D), the Secretary’s equitable

18 share of payments made by the borrower shall be that

19 portion of the payments remaining after the guaranty

20 agency with which the Secretary has an agreement

21 under this subsection has deducted from such pay22 ments—

23 ‘‘(A) a percentage amount equal to the com24 plement of the reinsurance percentage in effect
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1 when payment under the guaranty agreement

2 was made with respect to the loan; and

3 ‘‘(B) an amount equal to 24 percent of such

4 payments for use in accordance with section

5 422B.’’;

6 (4) in paragraph (8)—

7 (A) by striking ‘‘(A) If’’ and inserting ‘‘If’’;

8 and

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

10 (5) in paragraph (9)—

11 (A) in subparagraph (A), by striking

12 ‘‘maintain a current minimum reserve level of at

13 least .5 percent’’ and inserting ‘‘maintain in the

14 agency’s Federal Student Loan Reserve Fund es15 tablished under section 422A a current mini16 mum reserve level of at least 0.25 percent’’;

17 (B) in subparagraph (C)—

18 (i) by striking ‘‘80 percent’’ and in19 serting ‘‘78 percent’’;

20 (ii) by striking ‘‘, as appropriate,’’;

21 and

22 (iii) by striking ‘‘30 working’’ and in23 serting ‘‘45 working’’;

24 (C) in subparagraph (E)—
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1 (i) in clause (iv), by inserting ‘‘or’’

2 after the semicolon;

3 (ii) in clause (v), by striking ‘‘; or’’

4 and inserting a period; and

5 (iii) by striking clause (vi);

6 (D) in subparagraph (F), by amending

7 clause (vii) to read as follows:

8 ‘‘(vii) take any other action the Secretary

9 determines necessary to avoid disruption of the

10 student loan program, to ensure the continued

11 availability of loans made under this part to

12 residents of each State in which the guaranty

13 agency did business, to ensure the full honoring

14 of all guarantees issued by the guaranty agency

15 prior to the Secretary’s assumption of the func16 tions of such agency, and to ensure the proper

17 servicing of loans guaranteed by the guaranty

18 agency prior to the Secretary’s assumption of the

19 functions of such agency.’’; and

20 (E) in subparagraph (K), by striking ‘‘and

21 the progress of the transition from the loan pro22 grams under this part to the direct student loan

23 programs under part D of this title’’.

24 (d) PAYMENT FOR LENDER REFERRAL SERVICES.—

25 Subsection (e) of section 428 (20 U.S.C. 1078) is repealed.
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1 (e) PAYMENT OF CERTAIN COSTS.—Subsection (f) of

2 section 428 (20 U.S.C. 1078) is amended to read as follows:

3 ‘‘(f) PAYMENTS OF CERTAIN COSTS.—

4 ‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—

5 ‘‘(A) IN GENERAL.—The Secretary, for

6 loans originated on or after October 1, 1998, and

7 in accordance with the provisions of this para8 graph, shall pay to each guaranty agency, a loan

9 processing and issuance fee equal to 0.65 percent

10 of the total principal amount of the loans on

11 which insurance was issued under this part dur12 ing such fiscal year by such agency.

13 ‘‘(B) PAYMENT.—The payment required by

14 subparagraph (A) shall be paid on a quarterly

15 basis. The guaranty agency shall be deemed to

16 have a contractual right against the United

17 States to receive payments according to the pro18 visions of this subparagraph. Payments shall be

19 made promptly and without administrative

20 delay to any guaranty agency submitting an ac21 curate and complete application therefore under

22 this subparagraph.’’.

23 (f) LENDERS-OF-LAST-RESORT.—Paragraph (3) of

24 section 428(j) (20 U.S.C. 1078(j)) is amended—
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1 (1) in the paragraph heading, by striking ‘‘DUR2 ING TRANSITION TO DIRECT LENDING’’; and

3 (2) in subparagraph (A), by striking ‘‘during the

4 transition from the Federal Family Education Loan

5 Program under this part to the Federal Direct Stu6 dent Loan Program under part D of this title’’;

7 (g) DEFAULT AVERSION ASSISTANCE.—Subsection (l)

8 of section 428 (20 U.S.C. 1078) is amended to read as fol9 lows:

10 ‘‘(l) DEFAULT AVERSION ASSISTANCE.—

11 ‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of a

12 proper request from the lender not earlier than the

13 60th nor later than the 90th day of delinquency, a

14 guaranty agency having an agreement with the Sec15 retary under subsection (c) shall engage in default

16 aversion activities designed to prevent the default by

17 a borrower on a loan covered by such agreement.

18 ‘‘(2) DEFAULT PREVENTION FEE REQUIRED.—

19 ‘‘(A) IN GENERAL.—A guaranty agency, in

20 accordance with the provisions of this para21 graph, may transfer from the Federal Student

22 Loan Reserve Fund to the Agency Operating

23 Fund a default prevention fee. Such fee shall be

24 paid for any loan on which a claim for default

25 has not been presented that the guaranty agency
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1 successfully brings into current repayment status

2 on or before the 210th day after the loan becomes

3 60 days delinquent.

4 ‘‘(B) AMOUNT.—The default prevention fee

5 shall be equal to 1 percent of the total unpaid

6 principal and accrued interest on the loan cal7 culated at the time the request is submitted by

8 the lender. Such fee shall not be paid more than

9 once on any loan for which the guaranty agency

10 averts the default unless the borrower remained

11 current in payments for at least 24 months prior

12 to the subsequent delinquency. A guaranty agen13 cy may transfer such fees earned under this sub14 section not more frequently than monthly.

15 ‘‘(C) DEFINITION OF CURRENT REPAYMENT

16 STATUS.—For the purpose of this paragraph, the

17 term ‘current repayment status’ means that the

18 borrower is not delinquent, in any respect, in the

19 payment of principal and interest on the loan at

20 the time the guaranty agency qualifies for the de21 fault prevention fee.’’.

22 (h) STATE SHARE OF DEFAULT COSTS.—Subsection

23 (n) of section 428 (20 U.S.C. 1078) is repealed.
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•S 1882 RS

1 SEC. 426. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUAR2 ANTY AGENCIES.

3 Part B of title IV (20 U.S.C. 1071 et seq.) is amended

4 by inserting after section 428 (20 U.S.C. 1078) the follow5 ing:

6 ‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH

7 GUARANTY AGENCIES.

8 ‘‘(a) VOLUNTARY AGREEMENTS.—

9 ‘‘(1) AUTHORITY.—The Secretary may enter into

10 a voluntary, flexible agreement, subject to paragraph

11 (2), with guaranty agencies under this section, in lieu

12 of agreements with a guaranty agency under sub13 sections (b) and (c) of section 428. The Secretary may

14 waive or modify any requirement under such sub15 sections, except that the Secretary may not waive any

16 statutory requirement pertaining to the terms and

17 conditions attached to student loans, default claim

18 payments made to lenders, or the prohibitions on in19 ducements contained in section 428(b)(3).

20 ‘‘(2) ELIGIBILITY.—During fiscal years 1999,

21 2000, and 2001, the Secretary may enter into a vol22 untary, flexible agreement with not more than 6 guar23 anty agencies that had 1 or more agreements with the

24 Secretary under subsections (b) and (c) of section 428

25 as of the day before the date of enactment of the High26 er Education Amendments of 1998. Beginning in fis-
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1 cal year 2002, any guaranty agency or consortium

2 thereof may enter into a similar agreement with the

3 Secretary.

4 ‘‘(3) REPORT REQUIRED.—Not later than Sep5 tember 30, 2001, the Secretary shall report to the

6 Committee on Labor and Human Resources of the

7 Senate and the Committee on Education and the

8 Workforce of the House of Representatives regarding

9 the impact that the voluntary flexible agreements have

10 had upon program integrity, program and cost effi11 ciencies, and the availability and delivery of student

12 financial aid. Such report shall include—

13 ‘‘(A) a description of each voluntary flexible

14 agreement and the performance goals established

15 by the Secretary for each agreement;

16 ‘‘(B) a list of participating guaranty agen17 cies and the specific statutory or regulatory

18 waivers provided to each guaranty agency;

19 ‘‘(C) a description of the standards by

20 which each agency’s performance under the agen21 cy’s voluntary flexible agreement was assessed

22 and the degree to which each agency achieved the

23 performance standards; and
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1 ‘‘(D) an analysis of the fees paid by the

2 Secretary, and the costs and efficiencies achieved

3 under each voluntary agreement.

4 ‘‘(b) TERMS OF AGREEMENT.—An agreement between

5 the Secretary and a guaranty agency under this section—

6 ‘‘(1) shall be developed by the Secretary, in con7 sultation with the guaranty agency, on a case-by case

8 basis;

9 ‘‘(2) may be secured by the parties;

10 ‘‘(3) may include provisions—

11 ‘‘(A) specifying the responsibilities of the

12 guaranty agency under the agreement, such as—

13 ‘‘(i) administering the issuance of in14 surance on loans made under this part on

15 behalf of the Secretary;

16 ‘‘(ii) monitoring insurance commit17 ments made under this part;

18 ‘‘(iii) default aversion activities;

19 ‘‘(iv) review of default claims made by

20 lenders;

21 ‘‘(v) payment of default claims;

22 ‘‘(vi) collection of defaulted loans;

23 ‘‘(vii) adoption of internal systems of

24 accounting and auditing that are acceptable

25 to the Secretary, and reporting the result
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1 thereof to the Secretary in a timely manner,

2 and on an accurate, and auditable basis;

3 ‘‘(viii) timely and accurate collection

4 and reporting of such other data as the Sec5 retary may require to carry out the pur6 poses of the programs under this title;

7 ‘‘(ix) monitoring of institutions and

8 lenders participating in the program under

9 this part;

10 ‘‘(x) the performance of other program

11 functions by the guaranty agency or the

12 agency’s affiliates; and

13 ‘‘(xi) informational outreach to schools

14 and students in support of access to higher

15 education;

16 ‘‘(B) regarding the fees the Secretary shall

17 pay, in lieu of revenues that the guaranty agen18 cy may otherwise receive under this part, to the

19 guaranty agency under the agreement, and other

20 funds that the guaranty agency may receive or

21 retain under the agreement, except that in no

22 case may the cost to the Secretary of the agree23 ment, as reasonably projected by the Secretary,

24 exceed the cost to the Secretary, as similarly pro25 jected, in the absence of the agreement;
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1 ‘‘(C) regarding the use of net revenues, as

2 described in the agreement under this section, for

3 such other activities in support of postsecondary

4 education as may be agreed to by the Secretary

5 and the guaranty agency;

6 ‘‘(D) regarding the standards by which the

7 guaranty agency’s performance of the agency’s

8 responsibilities under the agreement will be as9 sessed, and the consequences for a guaranty

10 agency’s failure to achieve a specified level of

11 performance on one or more performance stand12 ards;

13 ‘‘(E) regarding the circumstances in which

14 a guaranty agency’s agreement under this sec15 tion may be ended in advance of the agreement’s

16 expiration date;

17 ‘‘(F) regarding such other businesses, pre18 viously purchased or developed with reserve

19 funds, that relate to the program under this part

20 and in which the Secretary permits the guaranty

21 agency to engage; and

22 ‘‘(G) such other provisions as the Secretary

23 may determine to be necessary to protect the

24 United States from the risk of unreasonable loss

25 and to promote the purposes of this part; and
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1 ‘‘(4) shall provide for uniform lender participa2 tion with the guaranty agency under the terms of the

3 agreement.

4 ‘‘(c) TERMINATION.—At the expiration or early termi5 nation of an agreement under this section, the Secretary

6 shall reinstate the guaranty agency’s prior agreements

7 under subsections (b) and (c) of section 428, subject only

8 to such additional requirements as the Secretary determines

9 to be necessary in order to ensure the efficient transfer of

10 responsibilities between the agreement under this section

11 and the agreements under subsections (b) and (c) of section

12 428, and including the guaranty agency’s compliance with

13 reserve requirements under sections 422 and 428.’’.

14 SEC. 427. FEDERAL PLUS LOANS.

15 Section 428B (20 U.S.C. 1078–2) is amended—

16 (1) by amending subsection (a) to read as fol17 lows:

18 ‘‘(a) AUTHORITY TO BORROW.—

19 ‘‘(1) AUTHORITY AND ELIGIBILITY.—Parents of a

20 dependent student shall be eligible to borrow funds

21 under this section in amounts specified in subsection

22 (b), if—

23 ‘‘(A) the parents do not have an adverse

24 credit history as determined pursuant to regula25 tions promulgated by the Secretary; and
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1 ‘‘(B) the parents meet such other eligibility

2 criteria as the Secretary may establish by regu3 lation, after consultation with guaranty agen4 cies, eligible lenders, and other organizations in5 volved in student financial assistance.

6 ‘‘(2) TERMS, CONDITIONS, AND BENEFITS.—Ex7 cept as provided in subsections (c), (d), and (e), loans

8 made under this section shall have the same terms,

9 conditions, and benefits as all other loans made under

10 this part.

11 ‘‘(3) SPECIAL RULE.—Whenever necessary to

12 carry out the provisions of this section, the terms

13 ‘‘student’’ and ‘‘borrower’’ as used in this part shall

14 include a parent borrower under this section.’’; and

15 (2) by adding at the end the following:

16 ‘‘(f) VERIFICATION OF IMMIGRATION STATUS AND SO17 CIAL SECURITY NUMBER.—A parent who wishes to borrow

18 funds under this section shall be subject to verification of

19 the parent’s—

20 ‘‘(1) immigration status in the same manner as

21 immigration status is verified for students under sec22 tion 484(g); and

23 ‘‘(2) social security number in the same manner

24 as social security numbers are verified for students

25 under section 484(p).’’.
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1 SEC. 428. FEDERAL CONSOLIDATION LOANS.

2 Section 428C(a)(3) (20 U.S.C. 1078–3(a)(3)) is

3 amended—

4 (1) by amending subparagraph (A) to read as

5 follows: ‘‘(A) For the purpose of this section, the term

6 ‘eligible borrower’ means a borrower who—

7 ‘‘(i) is not subject to a judgment secured

8 through litigation or an order for wage garnish9 ment under section 488A; or

10 ‘‘(ii) at the time of application for a con11 solidation loan—

12 ‘‘(I) is in repayment status;

13 ‘‘(II) is in a grace period preceding re14 payment; or

15 ‘‘(III) is a defaulted borrower who has

16 made arrangements to repay the obligation

17 on the defaulted loans satisfactory to the

18 holders of the defaulted loans.’’; and

19 (2) in subparagraph (B)(i)—

20 (A) in subclause (I), by striking ‘‘and’’ after

21 the semicolon;

22 (B) by redesignating subclause (II) as sub23 clause (III);

24 (C) by inserting after subclause (I) the fol25 lowing:
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1 ‘‘(II) with respect to eligible student loans

2 received prior to the date of consolidation that

3 the borrower may wish to include with eligible

4 loans specified in subclause (I) in a later con5 solidation loan; and’’; and

6 (D) in subclause (III) (as redesignated by

7 subparagraph (B)—

8 (i) by striking ‘‘that loans’’ and insert9 ing ‘‘with respect to loans’’; and

10 (ii) by inserting ‘‘that’’ before ‘‘may be

11 added’’.

12 SEC. 429. REQUIREMENTS FOR DISBURSEMENTS OF STU13 DENT LOANS.

14 Section 428G (20 U.S.C. 1078G) is amended—

15 (1) in subsection (a)(1), by striking ‘‘The pro16 ceeds’’ and inserting ‘‘Except for a loan made for the

17 final period of enrollment, that is less than an aca18 demic year, in a student’s baccalaureate program of

19 study, at an institution with a cohort default rate (as

20 calculated under section 435(m)) that is 5 percent or

21 less, the proceeds’’; and

22 (2) in subsection (b)(1), by striking ‘‘The first’’

23 and inserting ‘‘Except for a loan made to a student

24 borrower entering an institution with a cohort default
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1 rate (as calculated under section 435(m)) of less than

2 5 percent, the first’’.

3 SEC. 430. DEFAULT REDUCTION PROGRAM.

4 The heading for subsection (b) of section 428F (20

5 U.S.C. 1078–6) is amended by striking ‘‘SPECIAL RULE’’

6 and inserting ‘‘SATISFACTORY REPAYMENT ARRANGE7 MENTS TO RENEW ELIGIBILITY’’.

8 SEC. 431. UNSUBSIDIZED LOANS.

9 Section 428H (20 U.S.C. 1078–8) is amended—

10 (1) by amending subsection (b) to read as fol11 lows:

12 ‘‘(b) ELIGIBLE BORROWERS.—Any student meeting

13 the requirements for student eligibility under section 484

14 (including graduate and professional students as defined in

15 regulations promulgated by the Secretary) shall be entitled

16 to borrow an unsubsidized Stafford loan if the eligible insti17 tution at which the student has been accepted for enroll18 ment, or at which the student is in attendance, has—

19 ‘‘(1) determined and documented the student’s

20 need for the loan based on the student’s estimated cost

21 of attendance (as determined under section 472) and

22 the student’s estimated financial assistance, including

23 a loan which qualifies for interest subsidy payments

24 under section 428; and

25 ‘‘(2) provided the lender a statement—
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1 ‘‘(A) certifying the eligibility of the student

2 to receive a loan under this section and the

3 amount of the loan for which such student is eli4 gible, in accordance with subsection (c); and

5 ‘‘(B) setting forth a schedule for disburse6 ment of the proceeds of the loan in installments,

7 consistent with the requirements of section

8 428G.’’;

9 (2) in subsection (d)—

10 (A) in paragraph (2)—

11 (i) in the matter preceding subpara12 graph (A)—

13 (I) by inserting ‘‘, as defined in

14 section 481(d)(2),’’ after ‘‘academic

15 year’’; and

16 (II) by striking ‘‘or in any period

17 of 7 consecutive months, whichever is

18 longer,’’;

19 (ii) in subparagraph (C), by inserting

20 ‘‘and’’ after the semicolon; and

21 (iii) by inserting before the matter fol22 lowing subparagraph (C) the following:

23 ‘‘(D) in the case of a student enrolled in

24 coursework specified in sections 484(b)(3)(B) and

25 484(b)(4)(B)—
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1 ‘‘(i) $4,000 for coursework necessary

2 for enrollment in an undergraduate degree

3 or certificate program, and $5,000 for

4 coursework necessary for enrollment in a

5 graduate or professional program; and

6 ‘‘(ii) $5,000 for coursework necessary

7 for a professional credential or certification

8 from a State required for employment as a

9 teacher in an elementary or secondary

10 school;’’; and

11 (B) in paragraph (3), by adding at the end

12 the following: ‘‘The maximum aggregate amount

13 shall not include interest capitalized from an in14 school period.’’; and

15 (3) in subsection (e)(6), by striking ‘‘10 year re16 payment period under section 428(b)(1)(D)’’ and in17 serting ‘‘repayment period under section 428(b)(9)’’.

18 SEC. 432. LOAN FORGIVENESS FOR TEACHERS.

19 Section 428J (20 U.S.C. 1078–10) is amended to read

20 as follows:

21 ‘‘SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

22 ‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of

23 this section to encourage individuals to enter and continue

24 in the teaching profession.
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1 ‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au2 thorized to carry out a program, through the holder of the

3 loan, of assuming the obligation to repay a loan made

4 under section 428 that is eligible for interest subsidy, for

5 any new borrower on or after the date of enactment of the

6 Higher Education Amendments of 1998, who—

7 ‘‘(1) has been employed as a full-time teacher for

8 3 consecutive complete school years—

9 ‘‘(A) in a school that qualifies under section

10 465(a)(2)(A) for loan cancellation for Perkins

11 loan recipients who teach in such schools;

12 ‘‘(B) if employed as a secondary school

13 teacher, is teaching a subject area that is rel14 evant to the borrower’s academic major as cer15 tified by the chief administrative officer of the

16 public or nonprofit private secondary school in

17 which the borrower is employed; and

18 ‘‘(C) if employed as an elementary school

19 teacher, has demonstrated, in accordance with

20 State teacher certification or licensing require21 ments and as certified by the chief administra22 tive officer of the public or nonprofit private ele23 mentary school in which the borrower is em24 ployed, knowledge and teaching skills in reading,
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1 writing, mathematics and other areas of the ele2 mentary school curriculum; and

3 ‘‘(2) is not in default on a loan for which the

4 borrower seeks forgiveness.

5 ‘‘(c) REGULATIONS.—The Secretary is authorized to

6 issue such regulations as may be necessary to carry out the

7 provisions of this section.

8 ‘‘(d) LOAN REPAYMENT DURING CONTINUING TEACH9 ING SERVICE.—

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

11 the obligation to repay through reimbursement to the

12 holder—

13 ‘‘(A) 30 percent of the total outstanding

14 amount and applicable interest of subsidized

15 Federal Stafford loans owed by the student bor16 rower after the completion of the fourth or fifth

17 complete school year of service described in sub18 section (b);

19 ‘‘(B) 40 percent of such total amount after

20 the completion of the sixth complete school year

21 of such service; and

22 ‘‘(C) a total amount for any borrower that

23 shall not exceed $10,000.
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1 ‘‘(2) CONSTRUCTION.—Nothing in this section

2 shall be construed to authorize any refunding of any

3 repayment of a loan.

4 ‘‘(e) LIST.—If the list of schools in which a teacher

5 may perform service pursuant to subsection (b) is not avail6 able before May 1 of any year, the Secretary may use the

7 list for the year preceding the year for which the determina8 tion is made to make such service determination.

9 ‘‘(f) CONTINUED ELIGIBILITY.—Any teacher who per10 forms service in a school that—

11 ‘‘(1) meets the requirements of subsection

12 (b)(1)(A) in any year during such service; and

13 ‘‘(2) in a subsequent year fails to meet the re14 quirements of such subsection, may continue to teach

15 in such school and shall be eligible for loan forgiveness

16 pursuant to subsection (b).’’.

17 SEC. 433. LOAN FORGIVENESS FOR CHILD CARE PROVID18 ERS.

19 Part B (20 U.S.C. 1071 et seq.) is amended by insert20 ing after section 428J (as added by section 432) (20 U.S.C.

21 1078–10) the following:

22 ‘‘SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVID23 ERS.

24 ‘‘(a) PURPOSE.—It is the purpose of this section—
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1 ‘‘(1) to bring more highly trained individuals

2 into the early child care profession; and

3 ‘‘(2) to keep more highly trained child care pro4 viders in the early child care field for longer periods

5 of time.

6 ‘‘(b) DEFINITIONS.—In this section:

7 ‘‘(1) CHILD CARE FACILITY.—The term ‘child

8 care facility’ means a facility, including a home,

9 that—

10 ‘‘(A) provides child care services; and

11 ‘‘(B) meets applicable State or local govern12 ment licensing, certification, approval, or reg13 istration requirements, if any.

14 ‘‘(2) CHILD CARE SERVICES.—The term ‘child

15 care services’ means activities and services provided

16 for the education and care of children from birth

17 through age 5 by an individual who has a degree in

18 early childhood education.

19 ‘‘(3) DEGREE.—The term ‘degree’ means an as20 sociate’s or bachelor’s degree awarded by an institu21 tion of higher education.

22 ‘‘(4) EARLY CHILDHOOD EDUCATION.—The term

23 ‘early childhood education’ means education in the

24 areas of early child education, child care, or any
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1 other educational area related to child care that the

2 Secretary determines appropriate.

3 ‘‘(5) INSTITUTION OF HIGHER EDUCATION.—The

4 term ‘institution of higher education’ has the meaning

5 given the term in section 101.

6 ‘‘(c) DEMONSTRATION PROGRAM.—

7 ‘‘(1) IN GENERAL.—The Secretary may carry out

8 a demonstration program of assuming the obligation

9 to repay, pursuant to subsection (d), a loan made, in10 sured or guaranteed under this part or part D (ex11 cluding loans made under sections 428B and 428C)

12 for any new borrower after the date of enactment of

13 the Higher Education Amendments of 1998, who—

14 ‘‘(A) completes a degree in early childhood

15 education;

16 ‘‘(B) obtains employment in a child care fa17 cility; and

18 ‘‘(C) is working full-time and is earning an

19 amount which does not exceed the greater of an

20 amount equal to 100 percent of the poverty line

21 for a family of 2 as determined in accordance

22 with section 673(2) of the Community Services

23 Block Grant Act.

24 ‘‘(2) AWARD BASIS; PRIORITY.—
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1 ‘‘(A) AWARD BASIS.—Subject to subpara2 graph (B), loan repayment under this section

3 shall be on a first-come, first-served basis and

4 subject to the availability of appropriations.

5 ‘‘(B) PRIORITY.—The Secretary shall give

6 priority in providing loan repayment under this

7 section for a fiscal year to student borrowers who

8 received loan repayment under this section for

9 the preceding fiscal year.

10 ‘‘(3) REGULATIONS.—The Secretary is author11 ized to prescribe such regulations as may be necessary

12 to carry out the provisions of this section.

13 ‘‘(d) LOAN REPAYMENT.—

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

15 the obligation to repay—

16 ‘‘(A) after the second year of employment

17 described in subparagraphs (B) and (C) of sub18 section (c)(1), 20 percent of the total amount of

19 all loans made after date of enactment of the

20 Higher Education Amendments of 1998, to a

21 student under this part or part D;

22 ‘‘(B) after the third year of such employ23 ment, 20 percent of the total amount of all such

24 loans; and
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1 ‘‘(C) after each of the fourth and fifth years

2 of such employment, 30 percent of the total

3 amount of all such loans.

4 ‘‘(2) CONSTRUCTION.—Nothing in this section

5 shall be construed to authorize the refunding of any

6 repayment of a loan made under this part or part D.

7 ‘‘(3) INTEREST.—If a portion of a loan is repaid

8 by the Secretary under this section for any year, the

9 proportionate amount of interest on such loan which

10 accrues for such year shall be repaid by the Secretary.

11 ‘‘(4) SPECIAL RULE.—In the case where a stu12 dent borrower who is not participating in loan repay13 ment pursuant to this section returns to an institu14 tion of higher education after graduation from an in15 stitution of higher education for the purpose of ob16 taining a degree in early childhood education, the

17 Secretary is authorized to assume the obligation to

18 repay the total amount of loans made under this part

19 or part D incurred for a maximum of two academic

20 years in returning to an institution of higher edu21 cation for the purpose of obtaining a degree in early

22 childhood education. Such loans shall only be repaid

23 for borrowers who qualify for loan repayment pursu24 ant to the provisions of this section, and shall be re-
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1 paid in accordance with the provisions of paragraph

2 (1).

3 ‘‘(5) INELIGIBILITY OF NATIONAL SERVICE

4 AWARD RECIPIENTS.—No student borrower may, for

5 the same volunteer service, receive a benefit under

6 both this section and subtitle D of title I of the Na7 tional and Community Service Act of 1990 (42

8 U.S.C. 12601 et seq.).

9 ‘‘(e) REPAYMENT TO ELIGIBLE LENDERS.—The Sec10 retary shall pay to each eligible lender or holder for each

11 fiscal year an amount equal to the aggregate amount of

12 loans which are subject to repayment pursuant to this sec13 tion for such year.

14 ‘‘(f) APPLICATION FOR REPAYMENT.—

15 ‘‘(1) IN GENERAL.—Each eligible individual de16 siring loan repayment under this section shall submit

17 a complete and accurate application to the Secretary

18 at such time, in such manner, and containing such

19 information as the Secretary may require.

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

21 apply for loan repayment under this section after

22 completing each year of qualifying employment. The

23 borrower shall receive forbearance while engaged in

24 qualifying employment unless the borrower is in

25 deferment while so engaged.
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1 ‘‘(g) EVALUATION.—

2 ‘‘(1) IN GENERAL.—The Secretary shall conduct,

3 by grant or contract, an independent national evalua4 tion of the impact of the demonstration program as5 sisted under this section on the field of early child6 hood education.

7 ‘‘(2) COMPETITIVE BASIS.—The grant or con8 tract described in subsection (b) shall be awarded on

9 a competitive basis.

10 ‘‘(3) CONTENTS.—The evaluation described in

11 this subsection shall—

12 ‘‘(A) determine the number of individuals

13 who were encouraged by the demonstration pro14 gram assisted under this section to pursue early

15 childhood education;

16 ‘‘(B) determine the number of individuals

17 who remain employed in a child care facility as

18 a result of participation in the program;

19 ‘‘(C) identify the barriers to the effectiveness

20 of the program;

21 ‘‘(D) assess the cost-effectiveness of the pro22 gram in improving the quality of—

23 ‘‘(i) early childhood education; and

24 ‘‘(ii) child care services;
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1 ‘‘(E) identify the reasons why participants

2 in the program have chosen to take part in the

3 program;

4 ‘‘(F) identify the number of individuals

5 participating in the program who received an

6 associate’s degree and the number of such indi7 viduals who received a bachelor’s degree; and

8 ‘‘(G) identify the number of years each in9 dividual participates in the program.

10 ‘‘(4) INTERIM AND FINAL EVALUATION RE11 PORTS.—The Secretary shall prepare and submit to

12 the President and the Congress such interim reports

13 regarding the evaluation described in this subsection

14 as the Secretary deems appropriate, and shall prepare

15 and so submit a final report regarding the evaluation

16 by January 1, 2002.

17 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

18 are authorized to be appropriated to carry out this section

19 $10,000,000 for fiscal year 1999, and such sums as may

20 be necessary for each of the 4 succeeding fiscal years.’’.

21 SEC. 434. COMMON FORMS AND FORMATS.

22 Section 432 (20 U.S.C. 1082) is amended—

23 (1) in subsection (m)(1)—

24 (A) in subparagraph (A), by striking ‘‘a

25 common application form and promissory note’’
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1 and inserting ‘‘common application forms and

2 promissory notes, or multiyear promissory

3 notes,’’;

4 (B) by striking subparagraph (C);

5 (C) by redesignating subparagraph (D) as

6 subparagraph (C); and

7 (D) in subparagraph (C) (as redesignated

8 by subparagraph (C))—

9 (i) by inserting ‘‘, application and

10 other’’ after ‘‘electronic’’; and

11 (ii) by adding at the end the following:

12 ‘‘Guaranty agencies, borrowers, and lenders

13 may use electronically printed versions of

14 common forms approved for use by the Sec15 retary.’’; and

16 (2) in subsection (p), by striking ‘‘State post17 secondary reviewing entities designated under subpart

18 1 of part H,’’.

19 SEC. 435. STUDENT LOAN INFORMATION BY ELIGIBLE

20 LENDERS.

21 Section 433 (20 U.S.C. 1083) is amended—

22 (1) in subsection (a), by amending the matter

23 preceding paragraph (1) to read as follows:

24 ‘‘(a) REQUIRED DISCLOSURE BEFORE DISBURSE25 MENT.—Each eligible lender shall, at or prior to the time
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1 such lender disburses a loan that is insured or guaranteed

2 under this part (other than a loan made under section

3 428C), provide thorough and accurate loan information on

4 such loan to the borrower. Any disclosure required by this

5 subsection may be made by an eligible lender by written

6 or electronic means, including as part of the application

7 material provided to the borrower, as part of the promissory

8 note evidencing the loan, or on a separate written form pro9 vided to the borrower. Each lender shall provide a telephone

10 number, and may provide an electronic address, to each

11 borrower through which additional loan information can

12 be obtained. The disclosure shall include—’’; and

13 (2) in subsection (b), by amending the matter

14 preceding paragraph (1) to read as follows:

15 ‘‘(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—

16 Each eligible lender shall, at or prior to the start of the

17 repayment period of the student borrower on loans made,

18 insured, or guaranteed under this part, disclose to the bor19 rower by written or electronic means the information re20 quired under this subsection. Each eligible lender shall pro21 vide a telephone number, and may provide an electronic

22 address, to each borrower through which additional loan in23 formation can be obtained. For any loan made, insured,

24 or guaranteed under this part, other than a loan made

25 under section 428B or 428C, such disclosure required by
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1 this subsection shall be made not less than 30 days nor more

2 than 240 days before the first payment on the loan is due

3 from the borrower. The disclosure shall include—’’.

4 SEC. 436. DEFINITIONS.

5 (a) ELIGIBLE INSTITUTION.—Section 435(a) (20

6 U.S.C. 1085(a)) is amended—

7 (1) in paragraph (2)—

8 (A) by adding after the matter following

9 subparagraph (A)(ii) the following:

10 ‘‘If an institution continues to participate in a pro11 gram under this part, and the institution’s appeal of

12 the loss of eligibility is unsuccessful, the institution

13 shall be required to pay to the Secretary an amount

14 equal to the amount of interest, special allowance, re15 insurance, and any related payments made by the

16 Secretary (or which the Secretary is obligated to

17 make) with respect to loans made under this part to

18 students attending, or planning to attend, that insti19 tution during the pendency of such appeal. In order

20 to continue to participate during an appeal under

21 this paragraph, the institution shall provide a letter

22 of credit in favor of the Secretary or other third-party

23 financial guarantees satisfactory to the Secretary in

24 an amount determined by the Secretary to be suffi-
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1 cient to satisfy the institution’s potential liability on

2 such loans under the preceding sentence.’’; and

3 (B) by amending subparagraph (C) to read

4 as follows:

5 ‘‘(C)(i) This paragraph shall not apply to any

6 institution described in clause (ii), and any such in7 stitution that exceeds the threshold percentage in sub8 paragraph (A)(ii) for 2 consecutive years shall submit

9 to the Secretary a default management plan satisfac10 tory to the Secretary and containing criteria de11 signed, in accordance with the regulations of the Sec12 retary, to demonstrate continuous improvement by the

13 institution in the institution’s cohort default rate. If

14 the institution fails to submit the required plan, or to

15 satisfy the criteria in the plan, the institution shall

16 be subject to a loss of eligibility in accordance with

17 this paragraph, except as the Secretary may otherwise

18 specify in regulations.

19 ‘‘(ii) An institution referred to in clause (i) is—

20 ‘‘(I) a part B institution within the mean21 ing of section 322(2);

22 ‘‘(II) a Tribally Controlled College or Uni23 versity within the meaning of section 2(a)(4) of

24 the Tribally Controlled College or University As25 sistance Act of 1978; or
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1 ‘‘(III) a Navajo Community College under

2 the Navajo Community College Act.’’;

3 (2) in the matter following subparagraph (C)—

4 (A) by inserting ‘‘for a reasonable period of

5 time, not to exceed 30 days,’’ after ‘‘access’’; and

6 (B) by striking ‘‘of the affected guaranty

7 agencies and loan servicers for a reasonable pe8 riod of time, not to exceed 30 days’’ and insert9 ing ‘‘used by a guaranty agency in determining

10 whether to pay a claim on a defaulted loan’’;

11 and

12 (3) by adding at the end the following:

13 ‘‘(4) PARTICIPATION RATE INDEX.—

14 ‘‘(A) IN GENERAL.—An institution that

15 demonstrates to the Secretary that the institu16 tion’s participation rate index is equal to or less

17 than 0.0375 for any of the 3 applicable partici18 pation rate indices shall not be subject to para19 graph (2). The participation rate index shall be

20 determined by multiplying the institution’s co21 hort default rate for loans under part B or D,

22 or weighted average cohort default rate for loans

23 under parts B and D, by the percentage of the

24 institution’s regular students, enrolled on at least

25 a half-time basis, who received a loan made
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1 under part B or D for a 12-month period ending

2 during the 6 months immediately preceding the

3 fiscal year for which the cohort of borrowers used

4 to calculate the institution’s cohort default rate

5 is determined.

6 ‘‘(B) DATA.—An institution shall provide

7 the Secretary with sufficient data to determine

8 the institution’s participation rate index within

9 30 days after receiving an initial notification of

10 the institution’s draft cohort default rate.

11 ‘‘(C) NOTIFICATION.—Prior to publication

12 of a final cohort default rate for an institution

13 that provides the data described in subparagraph

14 (B), the Secretary shall notify the institution of

15 the institution’s compliance or noncompliance

16 with subparagraph (A).’’.

17 (b) ELIGIBLE LENDER.—Section 435(d)(1)(A)(ii) (20

18 U.S.C. 1085(d)(1)(A)(ii) is amended—

19 (1) by striking ‘‘or’’ after ‘‘1992,’’; and

20 (2) by inserting before the semicolon the follow21 ing: ‘‘, or (III) it is a bank (as defined in section

22 3(a)(1) of the Federal Deposit Insurance Act (12

23 U.S.C. 1813(a)(1)) that is a wholly owned subsidiary

24 of a nonprofit foundation, the foundation is described

25 in section 501(c)(3) of the Internal Revenue Code of
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1 1986 and exempt from taxation under section 501(1)

2 of such Code, and the bank makes loans under this

3 part only to undergraduate students who are age 22

4 or younger and has a portfolio of such loans that is

5 not more than $5,000,000’’.

6 (c) COHORT DEFAULT RATE.—Section 435(m)(1)(B)

7 (20 U.S.C. 1085(m)(1)(B)) is amended by striking ‘‘insur8 ance, and, in considering appeals with respect to cohort de9 fault rates pursuant to subsection (a)(3), exclude’’ and in10 serting ‘‘insurance. In considering appeals with respect to

11 cohort default rates pursuant to subsection (a)(3), the Sec12 retary shall exclude, from the calculation of the number of

13 students who entered repayment and from the calculation

14 of the number of students who default,’’.

15 SEC. 437. DELEGATION OF FUNCTIONS.

16 Section 436 (20 U.S.C. 1086) is amended to read as

17 follows:

18 ‘‘SEC. 436. DELEGATION OF FUNCTIONS.

19 ‘‘(a) IN GENERAL.—An eligible lender or guaranty

20 agency that contracts with another entity to perform any

21 of the lender’s or agency’s functions under this title, or oth22 erwise delegates the performance of such functions to such

23 other entity—
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1 ‘‘(1) shall not be relieved of the lender’s or agen2 cy’s duty to comply with the requirements of this

3 title; and

4 ‘‘(2) shall monitor the activities of such other en5 tity for compliance with such requirements.

6 ‘‘(b) SPECIAL RULE.—A lender that holds a loan made

7 under part B in the lender’s capacity as a trustee is respon8 sible for complying with all statutory and regulatory re9 quirements imposed on any other holder of a loan made

10 under this part.’’.

11 SEC. 438. SPECIAL ALLOWANCES.

12 (a) AMENDMENTS.—Section 438 (20 U.S.C. 1087–1)

13 is amended—

14 (1) in subsection (c), by amending paragraph

15 (1) to read as follows:

16 ‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL

17 ALLOWANCE SUBSIDIES.—(A) Notwithstanding sub18 section (b), the Secretary shall collect the amount the

19 lender is authorized to charge as an origination fee

20 in accordance with paragraph (2) of this subsection—

21 ‘‘(i) by reducing the total amount of interest

22 and special allowance payable under section

23 428(a)(3)(A) and subsection (b) of this section,

24 respectively, to any holder; or
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1 ‘‘(ii) directly from the holder of the loan, if

2 the lender fails or is not required to bill the Sec3 retary for interest and special allowance or with4 draws from the program with unpaid loan origi5 nation fees.

6 ‘‘(B) If the Secretary collects the origination fee

7 under this subsection through the reduction of interest

8 and special allowance, and the total amount of inter9 est and special allowance payable under section

10 428(a)(3)(A) and subsection (b) of this section, respec11 tively, is less than the amount the lender was author12 ized to charge borrowers for origination fees in that

13 quarter, the Secretary shall deduct the excess amount

14 from the subsequent quarters’ payments until the total

15 amount has been deducted.’’;

16 (2) in subsection (d), by amending paragraph

17 (1) to read as follows:

18 ‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL

19 ALLOWANCE SUBSIDIES.—

20 ‘‘(A) IN GENERAL.—Notwithstanding sub21 section (b), the Secretary shall collect a loan fee

22 in an amount determined in accordance with

23 paragraph (2)—

24 ‘‘(i) by reducing the total amount of

25 interest and special allowance payable
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1 under section 428(a)(3)(A) and subsection

2 (b), respectively, to any holder of a loan; or

3 ‘‘(ii) directly from the holder of the

4 loan, if the lender—

5 ‘‘(I) fails or is not required to bill

6 the Secretary for interest and special

7 allowance payments; or

8 ‘‘(II) withdraws from the program

9 with unpaid loan fees.

10 ‘‘(B) SPECIAL RULE.—If the Secretary col11 lects loan fees under this subsection through the

12 reduction of interest and special allowance pay13 ments, and the total amount of interest and spe14 cial allowance payable under section

15 428(a)(3)(A) and subsection (b), respectively, is

16 less than the amount of such loan fees, then the

17 Secretary shall deduct the amount of the loan fee

18 balance from the amount of interest and special

19 allowance payments that would otherwise be

20 payable, in subsequent quarterly increments

21 until the balance has been deducted.’’; and

22 (3) in subsection (e)—

23 (A) by striking paragraphs (1) and (2); and

24 (B) by redesignating paragraphs (3) and

25 (4) as paragraphs (1) and (2), respectively.
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1 (b) CONFORMING AMENDMENT.—Section 432(f)(1)(D)

2 is amended by striking ‘‘required to file a plan for doing

3 business under section 438(d)’’ and inserting ‘‘that meets

4 the requirements of section 438(e)’’.

5 SEC. 439. STUDY OF MARKET-BASED MECHANISMS FOR DE6 TERMINING STUDENT LOAN INTEREST

7 RATES.

8 (a) STUDY REQUIRED.—

9 (1) IN GENERAL.—The Secretary of the Treasury

10 shall conduct a study of the feasibility of employing

11 market-based mechanisms, including some form of

12 auction, for determining student loan interest rates

13 under title IV of the Higher Education Act of 1965

14 (20 U.S.C. 1070 et seq.). The study shall include—

15 (A) analysis of the potential impact of the

16 mechanisms on the delivery of student financial

17 aid;

18 (B) analysis of the implications of the

19 mechanisms with respect to student and institu20 tional access to student loan capital;

21 (C) analysis of the potential impact of the

22 mechanisms on the costs of the programs under

23 such title for students and the Federal Govern24 ment; and
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1 (D) a plan for structuring and implement2 ing the mechanisms in such a manner that en3 sures the cost-effective availability of student

4 loans for students and their families.

5 (b) CONSULTATION.—In conducting the study de6 scribed in paragraph (1), the Secretary shall consult with

7 lenders, secondary markets, guaranty agencies, institutions

8 of higher education, student loan borrowers, and other par9 ticipants in the student loan programs under title IV of

10 the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).

11 (c) REPORT TO CONGRESS.—The Secretary of the

12 Treasury shall report to the Committee on Labor and

13 Human Resources of the Senate, and the Committee on

14 Education and the Workforce of the House of Representa15 tives not later than September 30, 1999, regarding the re16 sults of the study described in subsection (a).

17 PART C—FEDERAL WORK-STUDY PROGRAMS

18 SEC. 441. AUTHORIZATION OF APPROPRIATIONS; COMMU19 NITY SERVICES.

20 Section 441 (20 U.S.C. 2751) is amended—

21 (1) in subsection (b), by striking ‘‘$800,000,000

22 for fiscal year 1993’’ and inserting ‘‘$900,000,000 for

23 fiscal year 1999’’; and

24 (2) in subsection (c)—
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1 (A) in paragraph (1), by inserting ‘‘(in2 cluding child care services provided on campus)’’

3 after ‘‘child care’’; and

4 (B) in paragraph (3), by inserting ‘‘, in5 cluding students with disabilities who are en6 rolled at the institution’’ before the semicolon.

7 SEC. 442. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

8 Section 443(b) (20 U.S.C. 2753(b)) is amended—

9 (1) in paragraph (1), by inserting ‘‘, including

10 internships or research assistanceships as determined

11 by the Secretary,’’ after ‘‘part-time employment’’;

12 (2) by amending paragraph (3) to read as fol13 lows:

14 ‘‘(3) provide that in the selection of students for

15 employment under such work-study program, only

16 students who demonstrate financial need in accord17 ance with part F of this title and meet the require18 ments of section 484 will be assisted, except that if the

19 institution’s grant under this part is directly or indi20 rectly based in part on the financial need dem21 onstrated by students who are (A) attending the insti22 tution on less than a full-time basis, or (B) independ23 ent students, a reasonable portion of the allocation

24 shall be made available to such students;’’;

25 (3) in paragraph (5)—
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1 (A) by striking ‘‘provide that’’ and insert2 ing ‘‘(A) provide that’’;

3 (B) by striking ‘‘1993–1994’’ and inserting

4 ‘‘1999–2000’’;

5 (C) by inserting ‘‘and’’ after the semicolon;

6 and

7 (D) by adding at the end the following:

8 ‘‘(B) provide that the Federal share of the com9 pensation of students employed in community service

10 shall not exceed 90 percent;’’; and

11 (4) in paragraph (6), by striking ‘‘, and to

12 make’’ and all that follows through ‘‘such employ13 ment’’.

14 SEC. 443. WORK COLLEGES.

15 Section 448 (20 U.S.C. 2756b) is amended—

16 (1) in subsection (b)(2)—

17 (A) in subparagraph (C), by striking ‘‘and’’

18 after the semicolon;

19 (B) in subparagraph (D)(ii), by striking the

20 period and inserting a semicolon; and

21 (C) by adding at the end the following:

22 ‘‘(E) coordinate and carry out joint projects

23 and activities to promote work service learning;

24 and
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1 ‘‘(F) carry out a comprehensive, longitu2 dinal study of student academic progress and

3 academic and career outcomes, relative to stu4 dent self-sufficiency in financing their higher

5 education, repayment of student loans, continued

6 community service, kind and quality of service

7 performed, and career choice and community

8 service selected after graduation.’’; and

9 (2) in subsection (f), by striking ‘‘$5,000,000 for

10 fiscal year 1993’’ and inserting ‘‘$7,000,000 for fiscal

11 year 1999’’.

12 PART D—WILLIAM D. FORD FEDERAL DIRECT

13 LOAN PROGRAM

14 SEC. 451. SELECTION OF INSTITUTIONS.

15 Section 453(c) (20 U.S.C. 1087c(c)) is amended—

16 (1) in paragraph (2)—

17 (A) in the paragraph heading, by striking

18 ‘‘TRANSITION’’;

19 (B) by striking subparagraph (E); and

20 (C) by redesignating subparagraphs (F),

21 (G), and (H) as subparagraphs (E), (F), and

22 (G), respectively; and

23 (2) in paragraph (3)—

24 (A) in the paragraph heading, by striking

25 ‘‘AFTER TRANSITION’’; and
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1 (B) by striking ‘‘For academic year 1995–

2 1996 and subsequent academic years, the’’ and

3 inserting ‘‘The’’.

4 SEC. 452. TERMS AND CONDITIONS.

5 (a) INTEREST RATES.—Section 455(b) (20 U.S.C.

6 1087e(b)) is amended to read as follows:

7 ‘‘(b) INTEREST RATE.—

8 ‘‘(1) RATES FOR FDSL AND FDUSL.—For Federal

9 Direct Stafford/Ford Loans and Federal Direct Un10 subsidized Stafford/Ford Loans for which the first

11 disbursement is made on or after July 1, 1998, the

12 applicable rate of interest shall, during any 12-month

13 period beginning on July 1 and ending on June 30,

14 be determined on the preceding June 1 and be equal

15 to—

16 ‘‘(A) the bond equivalent rate of 91-day

17 Treasury bills auctioned at the final auction held

18 prior to such June 1; plus

19 ‘‘(B) 2.3 percent,

20 except that such rate shall not exceed 8.25 percent.

21 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

22 With respect to any Federal Direct Stafford/Ford

23 Loan or Federal Direct Unsubsidized Stafford/Ford

24 Loan for which the first disbursement is made on or
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1 after July 1, 1998, the applicable rate of interest for

2 interest which accrues—

3 ‘‘(A) prior to the beginning of the repay4 ment period of the loan; or

5 ‘‘(B) during the period in which principal

6 need not be paid (whether or not such principal

7 is in fact paid) by reason of a provision de8 scribed in section 428(b)(1)(M) or 427(a)(2)(C),

9 shall be determined under paragraph (1) by substitut10 ing ‘1.7 percent’ for ‘2.3 percent’.

11 ‘‘(3) PLUS LOANS.—With respect to Federal Di12 rect PLUS Loan for which the first disbursement is

13 made on or after July 1, 1998, the applicable rate of

14 interest shall be determined under paragraph (1)—

15 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

16 percent’; and

17 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

18 percent’.

19 ‘‘(4) PUBLICATION.—The Secretary shall deter20 mine the applicable rates of interest under this sub21 section after consultation with the Secretary of the

22 Treasury and shall publish such rate in the Federal

23 Register as soon as practicable after the date of the

24 determination.

25 ‘‘(5) REPAYMENT INCENTIVES.—
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1 ‘‘(A) IN GENERAL.—Notwithstanding any

2 other provision of this part, the Secretary is au3 thorized to prescribe by regulation such reduc4 tions in the interest rate paid by a borrower of

5 a loan made under this part as the Secretary de6 termines appropriate to encourage on-time re7 payment of the loan. Such reductions may be of8 fered only if the Secretary determines the reduc9 tions are cost neutral and in the best financial

10 interest of the Federal Government. Any increase

11 in subsidy costs resulting from such reductions

12 shall be completely offset by corresponding sav13 ings in funds available for the William D. Ford

14 Federal Direct Loan Program in that fiscal year

15 from section 458 and other administrative ac16 counts.

17 ‘‘(B) ACCOUNTABILITY.—The Secretary

18 shall ensure the cost neutrality of such reductions

19 by obtaining an official report from the Director

20 of the Office of Management and Budget and the

21 Director of the Congressional Budget Office that

22 any such reductions will be completely cost neu23 tral. The reports shall be transmitted to the Com24 mittee on Labor and Human Resources of the

25 Senate and the Committee on Education and the
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1 Workforce of the House of Representatives not

2 less than 60 days prior to the publication of reg3 ulations proposing such reductions.’’.

4 (b) EFFECTIVE DATE.—The amendments made by this

5 section shall apply with respect to any loan made under

6 part D of title IV of the Higher Education Act of 1965 for

7 which the first disbursement is made on or after July 1,

8 1998.

9 SEC. 453. CONTRACTS.

10 Section 456(b) (20 U.S.C. 1087f(b)) is amended—

11 (1) in paragraph (3), by inserting ‘‘and’’ after

12 the semicolon;

13 (2) by striking paragraph (4); and

14 (3) by redesignating paragraph (5) as para15 graph (4).

16 SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES.

17 Section 458 (20 U.S.C. 1087h) is amended—

18 (1) by amending subsection (a) to read as fol19 lows:

20 ‘‘(a) ADMINISTRATIVE EXPENSES.—

21 ‘‘(1) IN GENERAL.—Each fiscal year there shall

22 be available to the Secretary, from funds not other23 wise appropriated, funds to be obligated for—
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1 ‘‘(A) administrative costs under this part

2 and part B, including the costs of the direct stu3 dent loan programs under this part; and

4 ‘‘(B) account maintenance fees payable to

5 guaranty agencies under part B and calculated

6 in accordance with paragraph (2), not to exceed

7 (from such funds not otherwise appropriated)

8 $626,000,000 in fiscal year 1999, $726,000,000

9 in fiscal year 2000, $770,000,000 in fiscal year

10 2001, $780,000,000 in fiscal year 2002, and

11 $795,000,000 in fiscal year 2003.

12 ‘‘(2) ACCOUNT MAINTENANCE FEES.—Account

13 maintenance fees under subparagraph (B) shall be

14 paid quarterly and deposited in the Agency Operat15 ing Fund established under section 422B.

16 ‘‘(3) CARRYOVER.—The Secretary may carry

17 over funds made available under this section to a sub18 sequent fiscal year.’’; and

19 (2) by amending subsection (b) to read as fol20 lows:

21 ‘‘(b) CALCULATION BASIS.—Account maintenance fees

22 payable to guaranty agencies under paragraph (1)(B) shall

23 be calculated—

24 ‘‘(1) for fiscal years 1999 and 2000, on the basis

25 of 0.12 percent of the original principal amount of
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1 outstanding loans on which insurance was issued

2 under part B; and

3 ‘‘(2) for fiscal year 2001, 2002, and 2003, on the

4 basis of 0.10 percent of the original principal amount

5 of outstanding loans on which insurance was issued

6 under part B.’’.

7 SEC. 455. LOAN CANCELLATION FOR TEACHERS.

8 Part D of title IV (20 U.S.C. 1087a et seq.) is amended

9 by adding at the end the following:

10 ‘‘SEC. 459. LOAN CANCELLATION FOR TEACHERS.

11 ‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of

12 this section to encourage individuals to enter and continue

13 in the teaching profession.

14 ‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au15 thorized to carry out a program of canceling the obligation

16 to repay a Federal Direct Stafford/Ford Loan made under

17 this part that is eligible for an interest subsidy, for any

18 new borrower on or after the date of enactment of the High19 er Education Amendments of 1998, who—

20 ‘‘(1) has been employed as a full-time teacher for

21 3 consecutive complete school years—

22 ‘‘(A) in a school that qualifies under section

23 465(a)(2)(A) for loan cancellation for Perkins

24 loan recipients who teach in such schools;
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1 ‘‘(B) if employed as a secondary school

2 teacher, is teaching a subject area that is rel3 evant to the borrower’s academic major as cer4 tified by the chief administrative officer of the

5 public or non-profit private secondary school in

6 which the borrower is employed; and

7 ‘‘(C) if employed as an elementary school

8 teacher, has demonstrated, in accordance with

9 State teacher certification or licensing require10 ments and as certified by the chief administra11 tive officer of the public or nonprofit private ele12 mentary school in which the borrower is em13 ployed, knowledge and teaching skills in reading,

14 writing, mathematics and other areas of the ele15 mentary school curriculum; and

16 ‘‘(2) is not in default on a loan for which the

17 borrower seeks forgiveness.

18 ‘‘(c) REGULATIONS.—The Secretary is authorized to

19 issue such regulations as may be necessary to carry out the

20 provisions of this section.

21 ‘‘(d) LOAN CANCELLATION DURING CONTINUING

22 TEACHING SERVICE.—

23 ‘‘(1) IN GENERAL.—The Secretary shall cancel

24 the obligation to repay—
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1 ‘‘(A) 30 percent of the total outstanding

2 amount and applicable interest of subsidized

3 Federal Direct Stafford/Ford loans owed by the

4 student borrower after the completion of the

5 fourth or fifth complete school year of service de6 scribed in subsection (b);

7 ‘‘(B) 40 percent of such total amount after

8 the completion of the sixth complete school year

9 of such service; and

10 ‘‘(C) a total amount for any borrower that

11 shall not exceed $ 10,000.

12 ‘‘(2) CONSTRUCTION.—Nothing in this section

13 shall be construed to authorize any refunding of any

14 canceled loan.

15 ‘‘(e) LIST.—If the list of schools in which a teacher

16 may perform service pursuant to subsection (b) is not avail17 able before May 1 of any year, the Secretary may use the

18 list for the year preceding the year for which the determina19 tion is made to make such service determination.

20 ‘‘(f) CONTINUED ELIGIBILITY.—Any teacher who per21 forms service in a school that—

22 ‘‘(1) meets the requirements of subsection

23 (b)(1)(A) in any year during such service; and

24 ‘‘(2) in a subsequent year fails to meet the re25 quirements of such subsection, may continue to teach
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1 in such school and shall be eligible for loan cancella2 tion pursuant to subsection (b).’’.

3 PART E—FEDERAL PERKINS LOANS

4 SEC. 461. AUTHORIZATION OF APPROPRIATIONS.

5 Subsection (b) of section 461 (20 U.S.C. 1087aa) is

6 amended—

7 (1) in paragraph (1), by striking ‘‘1993’’ and in8 serting ‘‘1999’’; and

9 (2) in paragraph (2), by striking ‘‘1997’’ each

10 place the term appears and inserting ‘‘2003’’.

11 SEC. 462. ALLOCATION OF FUNDS.

12 (a) AMENDMENTS.—Section 462 (20 U.S.C. 1087bb) is

13 amended—

14 (1) in the matter preceding subparagraph (A) of

15 subsection (d)(3), by striking ‘‘the Secretary, for’’ and

16 all that follows through ‘‘years,’’;

17 (2) by amending subsection (f) to read as follows:

18 ‘‘(f) DEFAULT PENALTIES.—

19 ‘‘(1) IN GENERAL.—For fiscal year 1998 and

20 any succeeding fiscal year, any institution with a co21 hort default rate (as defined under subsection (h))

22 that equals or exceeds 25 percent shall have a default

23 penalty of zero.

24 ‘‘(2) INELIGIBILITY.—
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1 ‘‘(A) IN GENERAL.—For fiscal year 1998

2 and any succeeding fiscal year, any institution

3 with a cohort default rate (as defined in sub4 section (h)) that equals or exceeds 50 percent for

5 each of the 3 most recent years for which data

6 are available shall not be eligible to participate

7 in a program under this part for the fiscal year

8 for which the determination is made and the 2

9 succeeding fiscal years, unless, within 30 days of

10 receiving notification from the Secretary of the

11 loss of eligibility under this paragraph, the insti12 tution appeals the loss of eligibility to the Sec13 retary. The Secretary shall issue a decision on

14 any such appeal within 45 days after the sub15 mission of the appeal. Such decision may permit

16 the institution to continue to participate in a

17 program under this part if—

18 ‘‘(i) the institution demonstrates to the

19 satisfaction of the Secretary that the cal20 culation of the institution’s cohort default

21 rate is not accurate, and that recalculation

22 would reduce the institution’s cohort default

23 rate for any of the 3 fiscal years below 50

24 percent; or
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1 ‘‘(ii) there are, in the judgment of the

2 Secretary, exceptional mitigating cir3 cumstances such as a small number of bor4 rowers entering repayment, that would

5 make the application of this subparagraph

6 inequitable.

7 ‘‘(B) CONTINUED PARTICIPATION.—During

8 an appeal under subparagraph (A), the Sec9 retary may permit the institution to continue to

10 participate in a program under this part.

11 ‘‘(C) DEFINITION.—For the purposes of sub12 paragraph (A), the term ‘loss of eligibility’ shall

13 be defined as the mandatory liquidation of an

14 institution’s student loan fund, and assignment

15 of the institution’s outstanding loan portfolio to

16 the Secretary.’’;

17 (3) by amending paragraph (1) of subsection (g)

18 to read as follows: ‘‘(1) For award year 1998 and

19 subsequent years, the maximum cohort default rate is

20 25 percent.’’; and

21 (4) in subsection (h)—

22 (A) in the subsection heading, by striking

23 ‘‘DEFINITIONS OF DEFAULT RATE AND’’ and in24 serting ‘‘DEFINITION OF’’;

25 (B) by striking paragraphs (1) and (2);
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1 (C) by redesignating paragraphs (3) and

2 (4) as paragraphs (1) and (2), respectively;

3 (D) in paragraph (1) (as redesignated by

4 subparagraph (C))—

5 (i) by striking subparagraph (B); and

6 (ii) by redesignating subparagraphs

7 (C) through (G) as subparagraphs (B)

8 through (F), respectively; and

9 (E) in the matter preceding subparagraph

10 (A) of paragraph (2) (as redesignated by sub11 paragraph (C)), by striking ‘‘A loan’’ and insert12 ing ‘‘For purposes of calculating the cohort de13 fault rate under this subsection, a loan’’.

14 (b) CONFORMING AMENDMENTS.—Section 462 (20

15 U.S.C. 1087bb) is amended—

16 (1) in the matter following paragraphs (1)(B)

17 and (2)(D)(ii) of subsection (a), by inserting ‘‘cohort’’

18 before ‘‘default’’ each place the term appears;

19 (2) in the matter following paragraphs (2)(B)

20 and (3)(C) of subsection (c), by inserting ‘‘cohort’’ be21 fore ‘‘default’’ each place the term appears;

22 (3) in subsection (e)(2), by inserting ‘‘cohort’’ be23 fore ‘‘default’’; and
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1 (4) in subsection (h)(1)(F) (as redesignated by

2 subparagraphs (C) and (D)(ii) of subsection (a)(4)),

3 by inserting ‘‘cohort’’ before ‘‘default’’.

4 SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER

5 EDUCATION.

6 Section 463 (20 U.S.C. 1087cc) is amended—

7 (1) by amending subparagraph (B) of subsection

8 (a)(2) to read as follows:

9 ‘‘(B) a capital contribution by an institu10 tion in an amount equal to one-third of the Fed11 eral capital contributions described in subpara12 graph (A);’’;

13 (2) in subsection (c)—

14 (A) in paragraph (2)—

15 (i) in the matter preceding subpara16 graph (A), by striking ‘‘by the Secretary’’

17 and all that follows through ‘‘of—’’ and in18 serting ‘‘by the Secretary or an institution,

19 as the case may be, to such organizations,

20 with respect to any loan held by the Sec21 retary or the institution, respectively,

22 of—’’;

23 (ii) by amending subparagraph (A) to

24 read as follows:
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1 ‘‘(A) the date of disbursement and the

2 amount of such loans made to any borrower

3 under this part at the time of disbursement of

4 the loan;’’;

5 (iii) in subparagraph (B)—

6 (I) by inserting ‘‘the repayment

7 and’’ after ‘‘concerning’’; and

8 (II) by striking ‘‘any defaulted’’

9 and inserting ‘‘such’’; and

10 (iv) in subparagraph (C), by inserting

11 ‘‘, or upon cancellation or discharge of the

12 borrower’s obligation on the loan for any

13 reason’’ before the period;

14 (B) in paragraph (3)—

15 (i) in the matter preceding subpara16 graph (A), by striking ‘‘until—’’ and in17 serting ‘‘until the loan is paid in full.’’; and

18 (ii) by striking subparagraphs (A) and

19 (B); and

20 (C) by amending paragraph (4) to read as

21 follows:

22 ‘‘(4)(A) Except as provided in subparagraph

23 (B), an institution of higher education, after con24 sultation with the Secretary and pursuant to the

25 agreements entered into under paragraph (1), shall
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1 disclose at least annually to any credit bureau orga2 nization with which the Secretary has such an agree3 ment the information set forth in paragraph (2), and

4 shall disclose promptly to such credit bureau organi5 zation any changes to the information previously dis6 closed.

7 ‘‘(B) The Secretary may promulgate regulations

8 establishing criteria under which an institution of

9 higher education may cease reporting the information

10 described in paragraph (2) before a loan is paid in

11 full.’’.

12 SEC. 464. TERMS OF LOANS.

13 Section 464 (20 U.S.C. 1087dd) is amended—

14 (1) in subsection (a), by amending paragraph

15 (2) to read as follows:

16 ‘‘(2)(A) Except as provided in paragraph (4),

17 the total of loans made to a student in any academic

18 year or its equivalent by an institution of higher edu19 cation from a loan fund established pursuant to an

20 agreement under this part shall not exceed—

21 ‘‘(i) $4,000, in the case of a student who has

22 not successfully completed a program of under23 graduate education; or
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1 ‘‘(ii) $6,000, in the case of a graduate or

2 professional student (as defined in regulations

3 issued by the Secretary).

4 ‘‘(B) Except as provided in paragraph (4), the

5 aggregate of the loans for all years made to a student

6 by institutions of higher education from loan funds

7 established pursuant to agreements under this part

8 may not exceed—

9 ‘‘(i) $40,000, in the case of any graduate or

10 professional student (as defined by regulations

11 issued by the Secretary, and including any loans

12 from such funds made to such person before such

13 person became a graduate or professional stu14 dent);

15 ‘‘(ii) $20,000, in the case of a student who

16 has successfully completed 2 years of a program

17 of education leading to a bachelor’s degree but

18 who has not completed the work necessary for

19 such a degree (determined under regulations

20 issued by the Secretary, and including any loans

21 from such funds made to such person before such

22 person became such a student); and

23 ‘‘(iii) $8,000, in the case of any other stu24 dent.
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1 ‘‘(C)(i) The total of loans made to a student de2 scribed in clause (ii) in any academic year or its

3 equivalent by an institution of higher education from

4 loan funds established pursuant to agreements under

5 this part may not exceed—

6 ‘‘(I) $8,000 for each of the third and fourth

7 years of the program of instruction leading to a

8 bachelor’s degree; or

9 ‘‘(II) $10,000 for the first year of graduate

10 study (as defined in regulations issued by the

11 Secretary).

12 ‘‘(ii) A student referred to in clause (i) is any

13 student—

14 ‘‘(I) who is a junior in a program of in15 struction leading to a bachelor’s degree;

16 ‘‘(II) who states in writing that the student

17 will pursue a course of study to become an ele18 mentary or secondary school teacher; and

19 ‘‘(III) who states in writing that the student

20 intends to become a full-time teacher in a school

21 which meets the requirements of section

22 465(a)(2)(A).

23 ‘‘(iii) Each institution shall provide a report to

24 the Secretary annually containing the number of

25 loans under this subparagraph that are made, the
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1 amount of each loan, and whether students benefiting

2 from the higher loan limits met the requirements for

3 receiving those loans.

4 ‘‘(iv) If 3 years after the date of enactment of the

5 Higher Education Amendments of 1998, the Secretary

6 determines that an institution has engaged in a pat7 tern of abuse of this subparagraph, the Secretary may

8 reduce or terminate the institution’s Federal capital

9 contribution.’’;

10 (2) in subsection (b), by amending paragraph

11 (2) to read as follows:

12 ‘‘(2) If the institution’s capital contribution

13 under section 462 is directly or indirectly based in

14 part on the financial need demonstrated by students

15 who are (A) attending the institution less than full

16 time; or (B) independent students, a reasonable por17 tion of the loans made from the institution’s student

18 loan fund containing the contribution shall be made

19 available to such students.’’;

20 (3) in subsection (c)(1)—

21 (A) in subparagraph (D), by striking ‘‘(i) 3

22 percent’’ and all that follows through ‘‘or (iii)’’;

23 (B) by redesignating subparagraphs (H)

24 and (I) as subparagraphs (I) and (J), respec25 tively; and
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1 (C) by inserting after subparagraph (G) the

2 following:

3 ‘‘(H) shall provide that, in the case of a

4 loan made on or after July 1, 1999, the loan

5 shall be considered in default (except as other6 wise provided in section 462(h)) if the borrower

7 of a loan made under this part fails to make an

8 installment payment when due, or to meet any

9 other term of the promissory note or written re10 payment agreement, and such failure persists

11 for—

12 ‘‘(i) 180 days in the case of a loan that

13 is repayable in monthly installments; or

14 ‘‘(ii) 240 days in the case of a loan

15 that is repayable in less frequent install16 ments;’’; and

17 (4) by adding at the end the following:

18 ‘‘(g) DISCHARGE.—

19 ‘‘(1) IN GENERAL.—If a student borrower who

20 received a loan made under this part on or after Jan21 uary 1, 1986, is unable to complete the program in

22 which such student is enrolled due to the closure of the

23 institution, then the Secretary shall discharge the bor24 rower’s liability on the loan (including the interest

25 and collection fees) by repaying the amount owed on
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1 the loan and shall subsequently pursue any claim

2 available to such borrower against the institution and

3 the institution’s affiliates and principals, or settle the

4 loan obligation pursuant to the financial responsibil5 ity standards described in section 498(c).

6 ‘‘(2) ASSIGNMENT.—A borrower whose loan has

7 been discharged pursuant to this subsection shall be

8 deemed to have assigned to the United States the right

9 to a loan refund in an amount that does not exceed

10 the amount discharged against the institution and the

11 institution’s affiliates and principals.

12 ‘‘(3) ELIGIBILITY FOR ADDITIONAL ASSIST13 ANCE.—The period during which a student was un14 able to complete a course of study due to the closing

15 of the institution shall not be considered for purposes

16 of calculating the student’s period of eligibility for ad17 ditional assistance under this title.

18 ‘‘(4) SPECIAL RULE.—A borrower whose loan has

19 been discharged pursuant to this subsection shall not

20 be precluded, because of that discharge, from receiving

21 additional grant, loan, or work assistance under this

22 title for which the borrower would be otherwise eligi23 ble (but for the default on the discharged loan). The

24 amount discharged under this subsection shall not be
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1 considered income for purposes of the Internal Reve2 nue Code of 1986.

3 ‘‘(5) REPORTING.—The Secretary or institution,

4 as the case may be, shall report to credit bureaus with

5 respect to loans that have been discharged pursuant to

6 this subsection.

7 ‘‘(h) REHABILITATION OF LOANS.—

8 ‘‘(1) REHABILITATION.—

9 ‘‘(A) IN GENERAL.—If the borrower of a

10 loan made under this part who has defaulted on

11 the loan makes 12 ontime, consecutive, monthly

12 payments of amounts owed on the loan, as deter13 mined by the institution, the loan shall be con14 sidered rehabilitated, and the institution that

15 made that loan (or the Secretary, in the case of

16 a loan held by the Secretary) shall instruct any

17 credit bureau organization or credit reporting

18 agency to which the default was reported to re19 move the default from the borrower’s credit his20 tory.

21 ‘‘(B) COMPARABLE CONDITIONS.—As long

22 as the borrower continues to make scheduled re23 payments on a loan rehabilitated under this

24 paragraph, the rehabilitated loan shall be subject

25 to the same terms and conditions, and qualify
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1 for the same benefits and privileges, as other

2 loans made under this part.

3 ‘‘(C) ADDITIONAL ASSISTANCE.—The bor4 rower of a rehabilitated loan shall not be pre5 cluded by section 484 from receiving additional

6 grant, loan, or work assistance under this title

7 (for which the borrower is otherwise eligible) on

8 the basis of defaulting on the loan prior to such

9 rehabilitation.

10 ‘‘(D) LIMITATIONS.—A borrower only once

11 may obtain the benefit of this paragraph with

12 respect to rehabilitating a loan under this part.

13 ‘‘(2) RESTORATION OF ELIGIBILITY.—If the bor14 rower of a loan made under this part who has de15 faulted on that loan makes 6 ontime, consecutive,

16 monthly payments of amounts owed on such loan, the

17 borrower’s eligibility for grant, loan, or work assist18 ance under this title shall be restored. A borrower

19 only once may obtain the benefit of this paragraph

20 with respect to restored eligibility.

21 ‘‘(i) INCENTIVE REPAYMENT PROGRAM.—

22 ‘‘(1) IN GENERAL.—Each institution of higher

23 education may establish, with the approval of the Sec24 retary, an incentive repayment program designed to

25 reduce default and to replenish student loan funds es-
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1 tablished under this part. Each such incentive repay2 ment program may—

3 ‘‘(A) offer a reduction of the interest rate on

4 a loan on which the borrower has made 48

5 ontime, consecutive, monthly repayments, but in

6 no event may the rate be reduced by more than

7 1 percent;

8 ‘‘(B) provide for a discount on the balance

9 owed on a loan on which the borrower pays the

10 principal and interest in full prior to the end of

11 the applicable repayment period, but in no event

12 may the discount exceed 5 percent of the unpaid

13 principal balance due on the loan at the time the

14 early repayment is made; and

15 ‘‘(C) include such other incentive repayment

16 options as the institution determines will carry

17 out the objectives of this subsection.

18 ‘‘(2) LIMITATION.—No incentive repayment op19 tion under an incentive repayment program author20 ized by this subsection may be paid for with Federal

21 funds, including any Federal funds from the student

22 loan fund, nor can an incentive repayment option be

23 paid for with institutional funds from the student

24 loan fund.’’.
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1 SEC. 465. DISTRIBUTION OF ASSETS FROM STUDENT LOAN

2 FUNDS.

3 Section 466 (20 U.S.C. 1087ff) is amended—

4 (1) in subsection (a)—

5 (A) in the matter preceding paragraph

6 (1)—

7 (i) by striking ‘‘1996’’ and inserting

8 ‘‘2003’’; and

9 (ii) by striking ‘‘1997’’ and inserting

10 ‘‘2004’’; and

11 (B) in paragraph (1), by striking ‘‘1996’’

12 and inserting ‘‘2003’’;

13 (2) in subsection (b)—

14 (A) by striking ‘‘2005’’ and inserting

15 ‘‘2012’’; and

16 (B) by striking ‘‘1996’’ and inserting

17 ‘‘2003’’; and

18 (3) in subsection (c), by striking ‘‘1997’’ and in19 serting ‘‘2004’’.

20 SEC. 466. PERKINS LOAN REVOLVING FUND.

21 (a) REPEAL.—Subsection (c) of section 467 (20 U.S.C.

22 1087gg(c)) is repealed.

23 (b) TRANSFER OF BALANCE.—Any funds in the Per24 kins Loan Revolving Fund on the date of enactment of this

25 Act shall be transferred to and deposited in the Treasury.
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1 PART F—NEED ANALYSIS

2 SEC. 471. COST OF ATTENDANCE.

3 Section 472 (20 U.S.C. 1087ll) is amended—

4 (1) in paragraph (3)—

5 (A) in subparagraph (A), by striking ‘‘of

6 not less than $1,500’’ and inserting ‘‘determined

7 by the institution’’; and

8 (B) in subparagraph (C), by striking ‘‘, ex9 cept that the amount may not be less than

10 $2,500’’; and

11 (2) in paragraph (11), by striking ‘‘placed’’ and

12 inserting ‘‘engaged’’.

13 SEC. 472. FAMILY CONTRIBUTION FOR DEPENDENT STU14 DENTS.

15 Section 475 (20 U.S.C. 1087oo) is amended—

16 (1) in subsection (g)—

17 (A) in paragraph (2)—

18 (i) in subparagraph (D)—

19 (I) by striking ‘‘$1,750’’ and in20 serting ‘‘$2,200’’; and

21 (II) by striking ‘‘and’’ after the

22 semicolon;

23 (ii) in subparagraph (E), by striking

24 the period and inserting ‘‘; and’’; and

25 (iii) by adding at the end the follow26 ing:
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1 ‘‘(F) an allowance for parents’ negative

2 available income, determined in accordance with

3 paragraph (6).’’; and

4 (B) by adding at the end the following:

5 ‘‘(6) ALLOWANCE FOR PARENTS’ NEGATIVE

6 AVAILABLE INCOME.—The allowance for parents’ neg7 ative available income is the amount, if any, by

8 which the sum of the amounts deducted under sub9 paragraphs (A) through (F) of paragraph (1) exceeds

10 the parents’ total income (as defined in section

11 480).’’; and

12 (2) by adding at the end the following:

13 ‘‘(j) ADJUSTMENTS TO STUDENTS CONTRIBUTION FOR

14 ENROLLMENT PERIODS OF LESS THAN NINE MONTHS.—

15 For periods of enrollment of less than 9 months, the stu16 dent’s contribution from adjusted available income (as de17 termined under subsection (g)) is determined, for purposes

18 other than subpart 2 of part A, by dividing the amount

19 determined under such subsection by 9, and multiplying the

20 result by the number of months in the period of enroll21 ment.’’.
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1 SEC. 473. FAMILY CONTRIBUTION FOR INDEPENDENT STU2 DENTS WITHOUT DEPENDENTS OTHER THAN

3 A SPOUSE.

4 Section 476(b)(1)(A)(iv) (20 U.S.C.

5 1087pp(b)(1)(A)(iv)) is amended—

6 (1) in subclause (I), by striking ‘‘$3,000’’ and

7 inserting ‘‘$4,250’’;

8 (2) in subclause (II), by striking ‘‘$3,000’’ and

9 inserting ‘‘$4,250’’; and

10 (3) in subclause (III), by striking ‘‘$6,000’’ and

11 inserting ‘‘$7,250’’.

12 SEC. 474. REGULATIONS; UPDATED TABLES AND AMOUNTS.

13 Section 478(b) (20 U.S.C. 1087rr(b)) is amended—

14 (1) by striking ‘‘For each academic year’’ and

15 inserting the following:

16 ‘‘(1) REVISED TABLES.—For each academic

17 year’’; and

18 (2) by adding at the end the following new para19 graph:

20 ‘‘(2) REVISED AMOUNTS.—For each academic

21 year after academic year 1999–2000, the Secretary

22 shall publish in the Federal Register revised income

23 protection allowances for the purpose of sections

24 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised al25 lowances shall be developed by increasing each of the

26 dollar amounts contained in such section by a per-
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1 centage equal to the estimated percentage increase in

2 the Consumer Price Index (as determined by the Sec3 retary) between December 1998 and the December

4 next preceding the beginning of such academic year,

5 and rounding the result to the nearest $10.’’.

6 SEC. 475. REFUSAL OR ADJUSTMENT OF LOAN CERTIFI7 CATIONS.

8 Subsection (c) of section 479A (20 U.S.C. 1087tt) is

9 amended to read as follows:

10 ‘‘(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI11 CATIONS.—An eligible institution may refuse to certify a

12 statement that permits a student to receive a loan under

13 part B, or refuse to make a loan under part D, or may

14 certify a loan amount or make a loan that is less than the

15 student’s determination of need (as determined under this

16 part), if the reason for the action is documented and pro17 vided in written form to the student. No eligible institution

18 shall discriminate against any borrower or applicant in ob19 taining a loan on the basis of race, national origin, reli20 gion, sex, marital status, age, or disability status.’’.

21 PART G—GENERAL PROVISIONS

22 SEC. 481. MASTER CALENDAR.

23 Section 482 (20 U.S.C. 1089) is amended—

24 (1) in subsection (a), by adding at the end the

25 following:
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1 ‘‘(3) To the extent feasible, the Secretary shall

2 notify eligible institutions and vendors by December

3 1 prior to the start of an award year of minimal

4 hardware and software requirements necessary to ad5 minister programs under this title.’’; and

6 (2) by amending subsection (c) to read as fol7 lows:

8 ‘‘(c) DELAY OF EFFECTIVE DATE OF LATE PUBLICA9 TIONS.—(1) Except as provided in paragraph (2), any reg10 ulatory changes initiated by the Secretary affecting the pro11 grams under this title that have not been published in final

12 form by November 1 prior to the start of the award year

13 shall not become effective until the beginning of the second

14 award year after such November 1 date.

15 ‘‘(2)(A) The Secretary may designate any regulatory

16 provision that affects the programs under this title and is

17 published in final form after November 1 as one that an

18 entity subject to the provision may, in the entity’s discre19 tion, choose to implement prior to the effective date de20 scribed in paragraph (1). The Secretary may specify in the

21 designation when, and under what conditions, an entity

22 may implement the provision prior to that effective date.

23 The Secretary shall publish any designation under this sub24 paragraph in the Federal Register.
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1 ‘‘(B) If an entity chooses to implement a regulatory

2 provision prior to the effective date described in paragraph

3 (1), as permitted by subparagraph (A), the provision shall

4 be effective with respect to that entity in accordance with

5 the terms of the Secretary’s designation.’’.

6 SEC. 482. FORMS AND REGULATIONS.

7 Section 483 (20 U.S.C. 1090) is amended—

8 (1) in subsection (a)—

9 (A) in the subsection heading, by striking

10 ‘‘FORM’’ and inserting ‘‘FORM DEVELOPMENT’’;

11 (B) by amending paragraph (1) to read as

12 follows:

13 ‘‘(1) SINGLE FORM REQUIREMENTS.—The Sec14 retary, in cooperation with representatives of agencies

15 and organizations involved in student financial as16 sistance, shall produce, distribute, and process free of

17 charge a common financial reporting form (which

18 shall include electronic versions of the form) to be

19 used—

20 ‘‘(A) to determine the need (including the

21 expected family contribution and, if appropriate,

22 cost of attendance) and eligibility of a student

23 for financial assistance under parts A, C, D, and

24 E; and
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1 ‘‘(B) to determine the need (including the

2 expected family contribution and cost of attend3 ance) of a student for the purposes of part B.

4 ‘‘(2) STATE DATA ITEMS.—The Secretary shall

5 include on the form developed under this subsection

6 such data items, selected in consultation with the

7 States to assist the States in awarding State student

8 financial assistance, as the Secretary determines are

9 appropriate for inclusion.

10 ‘‘(3) PARENT’S SOCIAL SECURITY NUMBER.—The

11 Secretary shall include on the form developed under

12 this paragraph space for the social security number

13 of parents of dependent students seeking financial as14 sistance under this title.

15 ‘‘(4) USE.—The Secretary shall require that the

16 form developed under this paragraph be used for the

17 purpose of collecting eligibility and other data for

18 purposes of part B, including the applicant’s choice

19 of lender.’’; and

20 (C) in paragraph (3)—

21 (i) by striking ‘‘Institutions of higher

22 education and States shall receive’’ and in23 serting ‘‘The Secretary shall provide’’; and

24 (ii) by striking ‘‘by the Secretary’’;

25 and
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1 (2) by adding at the end the following:

2 ‘‘(g) PAYMENT FOR DATA.—The Secretary may pay

3 such charges as the Secretary determines are necessary to

4 obtain data that the Secretary considers essential to the effi5 cient administration of the programs under this title.

6 ‘‘(h) MULTIYEAR PROMISSORY NOTE.—The Secretary

7 shall require, for loans made under this title for periods

8 of enrollment beginning on or after July 1, 2000, the use

9 of a promissory note applicable to more than 1 academic

10 year, or more than 1 type of loan made under this title.

11 Prior to implementing this subsection, the Secretary shall

12 develop and test such a promissory note on a limited or

13 pilot basis.’’.

14 SEC. 483. STUDENT ELIGIBILITY.

15 (a) AMENDMENTS.—Section 484 (20 U.S.C. 1091) is

16 amended—

17 (1) in subsection (d)—

18 (A) in the matter preceding paragraph (1),

19 by striking ‘‘either’’; and

20 (B) by adding at the end the following:

21 ‘‘(3) The student has completed a high school

22 education in a home school setting and has met any

23 State requirements with respect to such education in

24 a home school setting.’’; and

25 (2) by adding at the end the following:
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1 ‘‘(q) VERIFICATION OF IRS RETURN INFORMATION.—

2 The Secretary shall verify the information reported by all

3 applicants for assistance on the form prescribed under sec4 tion 483 with the return information (as defined in section

5 6103 of the Internal Revenue Code of 1986) available to

6 the Secretary of the Treasury. Notwithstanding section 6103

7 of such Code the Secretary of the Treasury shall provide

8 the return information to the Secretary. In the case of a

9 dependent student the return information shall include the

10 return information of the parent of the student. The form

11 prescribed by the Secretary under section 483 shall contain

12 a prominent notice of the verification of the information

13 and a warning to all the applicants of the penalties for

14 misrepresentation, with respect to the information, under

15 the United States Code.

16 ‘‘(r) SUSPENSION OF ELIGIBILITY FOR DRUG-RELAT17 ED OFFENSES.—

18 ‘‘(1) IN GENERAL.—A student who has been con19 victed of any offense under any Federal or State law

20 involving the possession or sale of a controlled sub21 stance shall not be eligible to receive any grant, loan,

22 or work assistance under this title during the period

23 beginning on the date of such conviction and ending

24 after the interval specified in the following table:
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‘‘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.

1 ‘‘(2) REHABILITATION.—A student whose eligi2 bility has been suspended under paragraph (1) may

3 resume eligibility before the end of the ineligibility pe4 riod determined under such paragraph if the student

5 satisfactorily completes a drug rehabilitation program

6 that complies with such criteria as the Secretary shall

7 prescribe in regulations for purposes of this para8 graph.

9 ‘‘(3) DEFINITIONS.—In this subsection, the term

10 ‘controlled substance’ has the meaning given the term

11 in section 102(6) of the Controlled Substances Act (21

12 U.S.C. 802(6)).’’.

13 (b) EFFECTIVE DATE.—The amendment made by sub14 section (a)(2) regarding suspension of eligibility for drug15 related offenses, shall apply with respect to financial assist16 ance to cover the costs of attendance for periods of enroll17 ment beginning after the date of enactment of this Act.

18 SEC. 484. INSTITUTIONAL REFUNDS.

19 Section 484B (20 U.S.C. 1091b) is amended—

20 (1) in subsection (b)—
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1 (A) in paragraph (1), by inserting ‘‘or’’

2 after the semicolon;

3 (B) by striking paragraph (2); and

4 (C) by redesignating paragraph (3) as

5 paragraph (2); and

6 (2) in subsection (c)—

7 (A) in paragraph (1), by striking ‘‘last day

8 of attendance by the student’’ and inserting ‘‘day

9 the student withdrew’’;

10 (B) in subparagraph (A) of paragraph (2),

11 by striking ‘‘last recorded day of attendance by

12 the student’’ and inserting ‘‘day the student

13 withdrew’’; and

14 (C) by adding at the end the following:

15 ‘‘(3) For the purpose of this section, the term

16 ‘day a student withdrew’—

17 ‘‘(A) is the date that was the last recorded

18 day of attendance by the student; or

19 ‘‘(B) in instances where attendance is not

20 recorded, is the date on which—

21 ‘‘(i) the student began the withdrawal

22 process prescribed by the institution; or

23 ‘‘(ii) the student otherwise provided no24 tification to the institution of the intent to

25 withdraw.’’.
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1 SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE IN2 FORMATION FOR STUDENTS.

3 (a) INFORMATION DISSEMINATION ACTIVITIES.—Sec4 tion 485(a) (20 U.S.C. 1092(a)) is amended—

5 (1) in paragraph (1)—

6 (A) in the second sentence, by striking ‘‘and

7 mailings, to all current’’ and inserting ‘‘, mail8 ings, and electronic media, to all enrolled’’;

9 (B) by inserting after the second sentence

10 the following: ‘‘Each eligible institution annually

11 shall provide to all students enrolled at the insti12 tution, a list of the information that is required

13 by this section, together with a statement of the

14 procedures required to obtain the information.’’;

15 (C) in subparagraph (M)(ii), by striking

16 ‘‘and’’ after the semicolon;

17 (D) in subparagraph (N), by striking the

18 period and inserting ‘‘; and’’; and

19 (E) by adding at the end the following:

20 ‘‘(O) the requirements and procedures for

21 student withdrawal prior to the end of a period

22 of enrollment and the consequences to the stu23 dent, with respect to receipt of a refund, of the

24 student’s failing to provide notification of with25 drawal.’’;
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1 (2) in paragraph (2), by inserting ‘‘an applica2 tion for’’ after ‘‘concerning’’; and

3 (3) in paragraph (3), by amending subpara4 graph (A) to read as follows:

5 ‘‘(A) shall be made available by July 1 each

6 year to current and prospective students prior to

7 enrolling or entering into any financial obliga8 tion; and’’.

9 (b) EXIT COUNSELING FOR BORROWERS.—Section

10 485(b) (20 U.S.C. 1092(b)) is amended—

11 (1) in paragraph (1)(A), by striking ‘‘(individ12 ually or in groups)’’; and

13 (2) in paragraph (2), by adding at the end the

14 following:

15 ‘‘(C) Nothing in this subsection shall be construed to

16 prohibit an institution of higher education from utilizing

17 electronic means to provide personalized exit counseling.’’.

18 (c) DISCLOSURES REQUIRED WITH RESPECT TO ATH19 LETICALLY RELATED STUDENT AID.—Section 485(e) (20

20 U.S.C. 1092(e)) is amended—

21 (1) by amending paragraph (2) to read as fol22 lows:

23 ‘‘(2) When an institution described in paragraph

24 (1) offers a potential student athlete athletically relat25 ed student aid, such institution shall provide to the
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1 student, the student’s parents, the student’s guidance

2 counselor, and the student’s coach the information

3 contained in the report submitted by such institution

4 pursuant to paragraph (1). If the institution is a

5 member of a national collegiate athletic association

6 that compiles graduation rate data on behalf of its

7 member institutions, that the Secretary determines is

8 substantially comparable to the information described

9 in the previous sentence, the distribution of the com10 pilation to all secondary schools shall fulfill the re11 sponsibility of the institution to provide the informa12 tion to a prospective student athlete’s guidance coun13 selor and coach.’’; and

14 (2) by amending paragraph (9) to read as fol15 lows:

16 ‘‘(9) The reports required by this subsection shall

17 be due each July 1 and shall cover the 1-year period

18 ending August 31 of the preceding year.’’.

19 (d) DISCLOSURE OF CAMPUS SECURITY POLICY AND

20 CAMPUS CRIME STATISTICS.—Section 485(f) (20 U.S.C.

21 1092(f)) is amended—

22 (1) by amending subparagraph (F) of paragraph

23 (1) to read as follows:

24 ‘‘(F) Statistics concerning the occurrence on

25 campus, during the most recent calendar year,
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1 and during the 2 preceding calendar years for

2 which data are available—

3 ‘‘(i) of the following criminal offenses

4 reported to campus security authorities or

5 local police agencies—

6 ‘‘(I) homicide, including murder

7 or nonnegligent manslaughter or neg8 ligent manslaughter;

9 ‘‘(II) sex offenses, forcible or non10 forcible;

11 ‘‘(III) robbery;

12 ‘‘(IV) aggravated assault;

13 ‘‘(V) burglary;

14 ‘‘(VI) motor vehicle theft; and

15 ‘‘(VII) arson;

16 ‘‘(ii) of the crimes described in sub17 clauses (I) through (VII), and vandalism

18 and simple assault, that manifest evidence

19 of prejudice based on actual or perceived

20 race, gender, religion, sexual orientation,

21 ethnicity, or disability that are reported to

22 campus security authorities or local police

23 agencies, which data shall be collected and

24 reported according to category of preju25 dice.’’;
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1 (2) by redesignating paragraphs (4) through (7)

2 as paragraphs (5) through (8), respectively;

3 (3) by inserting after paragraph (3) the follow4 ing:

5 ‘‘(4)(A) Each institution participating in any

6 program under this title which maintains either a po7 lice or security department of any kind shall make,

8 keep, and maintain a daily log, written in a form

9 that can be easily understood, recording all crimes re10 ported to such police or security department, includ11 ing—

12 ‘‘(i) the nature, date, time, and general lo13 cation of each crime; and

14 ‘‘(ii) the disposition of the complaint, if

15 known.

16 ‘‘(B)(i) All entries that are required pursuant to

17 this paragraph shall, except where disclosure of such

18 information is prohibited by law or such disclosure

19 would jeopardize the confidentiality of the victim, be

20 open to public inspection within 2 business days of

21 the initial report being made to the department or a

22 campus security authority.

23 ‘‘(ii) If new information about an entry into a

24 log becomes available to a police or security depart25 ment, then the new information shall be recorded in
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1 the log not later than 2 business days after the infor2 mation becomes available to the police or security de3 partment.

4 ‘‘(iii) Where there is clear and convincing evi5 dence that the release of such information would jeop6 ardize an ongoing criminal investigation or the safety

7 of an individual, cause a suspect to flee or evade de8 tection, or result in the destruction of evidence, such

9 information may be withheld until that damage is no

10 longer likely to occur from the release of such infor11 mation.

12 ‘‘(iv) Notwithstanding clause (iii), an institution

13 of higher education shall record all criminal incidents

14 occurring on campus and shall make the reports open

15 to public inspection not later than 2 business days

16 after the requirements of clause (iii) are met.’’;

17 (4) in paragraph (7) (as redesignated by sub18 paragraph (B)), by inserting at the end the following:

19 ‘‘Such statistics shall not identify victims of crimes or

20 persons accused of crimes, except as permitted by

21 State or local law.’’; and

22 (5) by adding at the end the following:

23 ‘‘(9) STUDY.—

24 ‘‘(A) IN GENERAL.—The Secretary, in con25 sultation with the Attorney General, shall pro-
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1 vide for a national study to examine procedures

2 undertaken after an institution of higher edu3 cation receives a report of sexual assault.

4 ‘‘(B) REPORT.—The study required by sub5 paragraph (A) shall include an analysis of—

6 ‘‘(i) the existence and publication of

7 the institution of higher education’s and

8 State’s definition of sexual assault;

9 ‘‘(ii) the existence and publication of

10 the institution’s policy for campus sexual

11 assaults;

12 ‘‘(iii) the individuals to whom reports

13 of sexual assault are given most often and—

14 ‘‘(I) how the individuals are

15 trained to respond to the reports; and

16 ‘‘(II) the extent to which the indi17 viduals are trained;

18 ‘‘(iv) the reporting options that are ar19 ticulated to the victim or victims of the sex20 ual assault regarding—

21 ‘‘(I) on-campus reporting and

22 procedure options; and

23 ‘‘(II) off-campus reporting and

24 procedure options;
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1 ‘‘(v) the resources available for victims’

2 safety, support, medical health, and con3 fidentiality, including—

4 ‘‘(I) how well the resources are ar5 ticulated both specifically to the victim

6 of sexual assault and generally to the

7 campus at large; and

8 ‘‘(II) the security of the resources

9 in terms of confidentiality or reputa10 tion;

11 ‘‘(vi) policies and practices that may

12 prevent or discourage the reporting of cam13 pus sexual assaults to local crime authori14 ties, or that may otherwise obstruct justice

15 or interfere with the prosecution of per16 petrators of campus sexual assaults;

17 ‘‘(vii) policies and practices found suc18 cessful in aiding the report and any ensu19 ing investigation or prosecution of a cam20 pus sexual assault;

21 ‘‘(viii) the on-campus procedures for

22 investigation and disciplining the perpetra23 tor of a sexual assault, including—

24 ‘‘(I) the format for collecting evi25 dence; and
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1 ‘‘(II) the format of the investiga2 tion and disciplinary proceeding, in3 cluding the faculty responsible for run4 ning the disciplinary procedure and

5 the persons allowed to attend the dis6 ciplinary procedure; and

7 ‘‘(ix) types of punishment for offenders,

8 including—

9 ‘‘(I) whether the case is directed

10 outside for further punishment; and

11 ‘‘(II) how the institution punishes

12 perpetrators.

13 ‘‘(C) SUBMISSION OF REPORT.—The report

14 required by subparagraph (B) shall be submitted

15 to Congress not later than September 1, 1999.

16 ‘‘(D) DEFINITION.—For purposes of this

17 section, the term ‘campus sexual assaults’ means

18 sexual assaults occurring at institutions of high19 er education and sexual assaults committed

20 against or by students or employees of such insti21 tutions.

22 ‘‘(E) AUTHORIZATION OF APPROPRIA23 TIONS.—There is authorized to be appropriated

24 to carry out this section $1,000,000 for fiscal

25 year 1999.’’.
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1 (e) DATA REQUIRED.—Section 485(g) (20 U.S.C.

2 1092(g)) is amended—

3 (1) in paragraph (1), by adding at the end the

4 following:

5 ‘‘(I)(i) The total revenues, and the revenues

6 from football, men’s basketball, women’s basket7 ball, all other men’s sports combined, and all

8 other women’s sports combined, derived by the

9 institution from the institution’s intercollegiate

10 athletics activities.

11 ‘‘(ii) For the purpose of clause (i) revenues

12 from intercollegiate athletics activities allocable

13 to a sport shall include, without limitation, gate

14 receipts, broadcast revenues, appearance guaran15 tees and options, concessions and advertising, ex16 cept that revenues such as student activities fees

17 or alumni contributions not so allocable shall be

18 included in the calculation of total revenues

19 only.

20 ‘‘(J)(i) The total expenses, and the expenses

21 attributable to football, men’s basketball, wom22 en’s basketball, all other men’s sports combined

23 and all other women’s sports combined, made by

24 the institution for the institution’s intercollegiate

25 athletics activities.
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1 ‘‘(ii) For the purpose of clause (i) expenses

2 for intercollegiate athletics activities allocable to

3 a sport shall include without limitation grants4 in-aid, salaries, travel, equipment, and supplies,

5 except that expenses such as general and admin6 istrative overhead not so allocable shall be in7 cluded in the calculation of total expenses only.

8 ‘‘(K) A statement of any reduction that

9 will, or is likely to, occur during the ensuing 4

10 academic years in the number of athletes that

11 will be permitted to participate in any collegiate

12 sport, or in the financial resources that the insti13 tution will make available for any such sport,

14 and the reasons for any such reduction, to the

15 extent the reduction is known.’’;

16 (2) by striking paragraph (5);

17 (3) by redesignating paragraph (4) as para18 graph (5); and

19 (4) by inserting after paragraph (3) the follow20 ing:

21 ‘‘(4) SUBMISSION; REPORT; INFORMATION AVAIL22 ABILITY.—(A) Each institution of higher education

23 described in paragraph (1) shall provide to the Sec24 retary, within 15 days of the date that the institution
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1 makes available the report under paragraph (1), the

2 information contained in the report.

3 ‘‘(B) The Secretary shall prepare a report re4 garding the information received under subparagraph

5 (A) for each year by April 1 of the year. The report

6 shall—

7 ‘‘(i) summarize the information and iden8 tify trends in the information;

9 ‘‘(ii) aggregate the information by divisions

10 of the National Collegiate Athletic Association;

11 and

12 ‘‘(iii) contain information on each individ13 ual institution of higher education.

14 ‘‘(C) The Secretary shall ensure that the report

15 described in subparagraph (B) is made available on

16 the Internet within a reasonable period of time.

17 ‘‘(D) The Secretary shall notify, not later than

18 180 days after the date of enactment of the Higher

19 Education Amendments of 1998, all secondary schools

20 in all States regarding the availability of the infor21 mation reported under subparagraph (B) and the in22 formation made available under paragraph (1), and

23 how such information may be accessed.’’.
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1 (f) GEPA AMENDMENT.—Section 444(a)(4)(B) of the

2 General Education Provisions Act (20 U.S.C.

3 1232g(a)(4)(B)) is amended—

4 (1) by redesignating clauses (iii) and (iv) as

5 clauses (iv) and (v), respectively; and

6 (2) by inserting after clause (ii) the following:

7 ‘‘(iii) records that are maintained by

8 local police or campus security officers of an

9 educational agency or institution about—

10 ‘‘(I) individuals who have been

11 found guilty of, or have pled guilty to,

12 committing or participating in any

13 criminal activity as defined in Fed14 eral, State, or local law that has oc15 curred while the individual was a stu16 dent in attendance, including audit or

17 noncredit, at an educational institu18 tion; and

19 ‘‘(II) findings of guilt of criminal

20 misconduct and related sanctions from

21 any previously attended educational

22 agencies or institutions where such

23 records were created on or after Sep24 tember 1, 1999, and that are main25 tained by the institution currently or
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1 most recently attended by the individ2 ual;’’.

3 SEC. 486. NATIONAL STUDENT LOAN DATA BANK SYSTEM.

4 Section 485B (20 U.S.C. 1092b) is amended by adding

5 at the end the following:

6 ‘‘(h) STUDENT STATUS CONFIRMATION REPORT.—In

7 order to reduce unnecessary paperwork and to increase the

8 efficient administration, the Secretary shall assure that bor9 rowers under part E are included in the Student Status

10 Confirmation Report in the same manner as borrowers

11 under parts B and D.’’.

12 SEC. 487. TRAINING IN FINANCIAL AID SERVICES.

13 Section 486 (20 U.S.C. 1093) is amended to read as

14 follows:

15 ‘‘SEC. 486. INFORMATION ON THE COSTS OF HIGHER EDU16 CATION.

17 ‘‘(a) IN GENERAL.—For the purpose of providing com18 parative information to families about the costs of higher

19 education—

20 ‘‘(1) the National Center for Education Statistics

21 shall—

22 ‘‘(A) develop a standard definition for the

23 following data elements:

24 ‘‘(i) Tuition and fees.
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1 ‘‘(ii) Total cost of attendance, includ2 ing costs such as housing, books, supplies,

3 and transportation.

4 ‘‘(iii) Average amount of financial as5 sistance received by a student who attends

6 an institution of higher education, in terms

7 of the following:

8 ‘‘(I) Grants and loans.

9 ‘‘(II) Institutional and other as10 sistance.

11 ‘‘(iv) Percentage of students receiving

12 student financial assistance, in terms of the

13 following:

14 ‘‘(I) Grants and loans.

15 ‘‘(II) Institutional and other as16 sistance;

17 ‘‘(B) report the definitions to each institu18 tion of higher education and the Committee on

19 Labor and Human Resources of the Senate and

20 the Committee on Education and the Workforce

21 of the House of Representatives not later than 90

22 days after the date of enactment of the Higher

23 Education Amendments of 1998;

24 ‘‘(C) collect information regarding the data

25 elements described in subparagraph (A) with re-
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1 spect to all institutions of higher education, and

2 make available the information each year in a

3 timely fashion through the integrated postsecond4 ary education data system, beginning with the

5 information from the 1999–2000 academic year;

6 ‘‘(D) provide the public notice when the in7 formation described in subparagraph (C) is

8 available for public inspection; and

9 ‘‘(E) publish in a timely fashion a report

10 after the third year of collection of the informa11 tion described in subparagraph (C) that com12 pares the information described in subparagraph

13 (C) longitudinally by institution, which infor14 mation shall be presented in a form that is eas15 ily understandable, including clear definitions of

16 the data elements described in subparagraph (A),

17 to allow parents and students to make informed

18 decisions about attending college; and

19 ‘‘(2) institutions of higher education shall pro20 vide information regarding each data element de21 scribed in paragraph (1)(A) to the National Center

22 for Education Statistics by March 1 of each year, be23 ginning in the year 2000.

24 ‘‘(b) STUDY.—
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1 ‘‘(1) IN GENERAL.—In consultation with the Bu2 reau of Labor Statistics, the National Center for Edu3 cation Statistics shall conduct a national study of ex4 penditures at institutions of higher education. Such

5 study shall include information about—

6 ‘‘(A) expenditures for—

7 ‘‘(i) faculty salaries and benefits;

8 ‘‘(ii) administrative salaries, benefits,

9 and expenses;

10 ‘‘(iii) academic support services;

11 ‘‘(iv) research;

12 ‘‘(v) construction; and

13 ‘‘(vi) technology;

14 ‘‘(B) how such expenditures change over

15 time; and

16 ‘‘(C) how such expenditures relate to college

17 costs.

18 ‘‘(2) FINAL REPORT.—The National Center for

19 Education Statistics shall submit a report regarding

20 the findings of the study required by paragraph (1)

21 to the Committee on Labor and Human Resources of

22 the Senate and the Committee on Education and the

23 Workforce of the House of Representatives not later

24 than September 30, 2001.
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1 ‘‘(c) HIGHER EDUCATION MARKET BASKET.—In con2 sultation with the Bureau of Labor Statistics, the National

3 Center for Education Statistics shall develop a Higher Edu4 cation Market Basket that identifies the items that comprise

5 the costs of higher education. The National Center for Edu6 cation Statistics shall provide a report on the market basket

7 to the Committee on Labor and Human Resources of the

8 Senate and the Committee on Education and the Workforce

9 of the House of Representatives not later than September

10 30, 2002.

11 ‘‘(d) FINES.—In addition to the actions authorized in

12 section 487(c), the Secretary may impose a fine in an

13 amount not to exceed $25,000 on an institution of higher

14 education for failure to provide the information described

15 in subsection (a)(2) in a timely or accurate manner, or for

16 failure to otherwise cooperate with the National Center for

17 Education Statistics regarding efforts to obtain data on the

18 cost of higher education under such subsection.’’.

19 SEC. 488. PROGRAM PARTICIPATION AGREEMENTS.

20 Section 487 (20 U.S.C. 1094) is amended—

21 (1) in subsection (a)—

22 (A) in paragraph (3)—

23 (i) by striking subparagraph (B); and
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1 (ii) by redesignating subparagraphs

2 (C) and (D) as subparagraphs (B) and (C),

3 respectively;

4 (B) in paragraph (9), by striking ‘‘part B’’

5 and inserting ‘‘part B or D’’;

6 (C) in paragraph (14)—

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

8 ‘‘part B’’ and inserting ‘‘part B or D’’; and

9 (ii) in subparagraph (B)—

10 (I) by inserting ‘‘for-profit’’ after

11 ‘‘Any’’;

12 (II) by striking ‘‘and any eligible

13 institution which’’ and inserting ‘‘or’’;

14 and

15 (III) by striking ‘‘part B’’ and in16 serting ‘‘part B or D’’;

17 (D) in paragraph (15), by striking ‘‘State

18 review entities’’ and inserting ‘‘the State agen19 cies’’;

20 (E) by striking paragraph (18);

21 (F) by redesignating paragraphs (19)

22 through (22) as paragraphs (18) through (21),

23 respectively; and

24 (G) by amending paragraph (20) (as redes25 ignated by subparagraph (F)) to read as follows:
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1 ‘‘(20) The institution will meet the requirements

2 established by the Secretary and accrediting agencies

3 or associations, and will provide evidence to the Sec4 retary that the institution has the authority to oper5 ate within a State.’’; and

6 (2) in subsection (c)—

7 (A) in paragraph (1)(A)(i), by striking

8 ‘‘State review entities referred to in’’ and insert9 ing ‘‘appropriate State agency notifying the Sec10 retary under’’;

11 (B) in paragraph (4), by striking ‘‘, after

12 consultation with each State review entity des13 ignated under subpart 1 of part H,’’; and

14 (C) in paragraph (5), by striking ‘‘State re15 view entities designated’’ and inserting ‘‘State

16 agencies notifying the Secretary’’.

17 SEC. 489. REGULATORY RELIEF AND IMPROVEMENT.

18 Section 487A (20 U.S.C. 1094a) is amended to read

19 as follows:

20 ‘‘SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

21 ‘‘(a) QUALITY ASSURANCE PROGRAM.—

22 ‘‘(1) IN GENERAL.—The Secretary is authorized

23 to select institutions for voluntary participation in a

24 Quality Assurance Program that provides participat25 ing institutions with an alternative management ap-
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1 proach through which individual schools develop and

2 implement their own comprehensive systems, includ3 ing processing and disbursement of student financial

4 aid, verification of student financial aid application

5 data, and entrance and exit interviews, thereby en6 hancing program integrity within the student aid de7 livery system. The Quality Assurance Program au8 thorized by this section shall be based on criteria that

9 include demonstrated institutional performance, as

10 determined by the Secretary, and shall take into con11 sideration current quality assurance goals, as deter12 mined by the Secretary.

13 ‘‘(2) WAIVER.—The Secretary is authorized to

14 waive for any institution participating in the Qual15 ity Assurance Program any regulations dealing with

16 reporting or verification requirements in this title

17 that are addressed by the institution’s alternative

18 management system, and may substitute such quality

19 assurance reporting as the Secretary determines nec20 essary to ensure accountability and compliance with

21 the purposes of the programs under this title.

22 ‘‘(3) DETERMINATION.—The Secretary is author23 ized to determine—
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1 ‘‘(A) when an institution that is unable to

2 administer the Quality Assurance Program shall

3 be removed from such program; and

4 ‘‘(B) when institutions desiring to cease

5 participation in such program will be required

6 to complete the current award year under the re7 quirements of the Quality Assurance Program.

8 ‘‘(4) REVIEW AND EVALUATION.—The Secretary

9 shall review and evaluate the Quality Assurance Pro10 gram conducted by each participating institution

11 and, on the basis of that evaluation, make rec12 ommendations regarding amendments to this Act that

13 will streamline the administration and enhance the

14 integrity of Federal student assistance programs.

15 Such recommendations shall be submitted to the Com16 mittee on Labor and Human Resources of the Senate

17 and the Committee on Education and the Workforce

18 of the House of Representatives.

19 ‘‘(b) REGULATORY IMPROVEMENT AND STREAMLINING

20 EXPERIMENTS.—

21 ‘‘(1) IN GENERAL.—The Secretary shall review

22 and evaluate the experience of institutions participat23 ing as experimental sites during the period of 1993

24 through 1998 under this section (as such section was

25 in effect on the day before the date of enactment of
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1 the Higher Education Amendments of 1998), and

2 shall submit a report based on this review and eval3 uation to the Committee on Labor and Human Re4 sources of the Senate and the Committee on Edu5 cation and the Workforce of the House of Representa6 tives not later than 6 months after the enactment of

7 the Higher Education Amendments of 1998. Such re8 port shall include—

9 ‘‘(A) a list of participating institutions and

10 the specific statutory or regulatory waivers

11 granted to each institution;

12 ‘‘(B) the findings and conclusions reached

13 regarding each of the experiments conducted; and

14 ‘‘(C) recommendations for amendments to

15 improve and streamline this Act, based on the

16 results of the experiment.

17 ‘‘(2) SELECTION.—

18 ‘‘(A) IN GENERAL.—The Secretary is au19 thorized to select a limited number of institu20 tions for voluntary participation as experi21 mental sites to provide recommendations to the

22 Secretary on the impact and effectiveness of pro23 posed regulations or new management initia24 tives, except that additional institutions may not

25 be selected by the Secretary until the report re-
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1 quired by subsection (b)(1) has been submitted to

2 Congress.

3 ‘‘(B) CONSULTATION.—Prior to approving

4 any additional experimental sites, the Secretary

5 shall consult with the Committee on Labor and

6 Human Resources of the Senate and the Com7 mittee on Education and the Workforce of the

8 House of Representatives and shall provide—

9 ‘‘(i) a list of institutions proposed for

10 participation in the experiment and the

11 specific statutory or regulatory waivers pro12 posed to be granted to each institution;

13 ‘‘(ii) the objectives to be achieved

14 through the experiment; and

15 ‘‘(iii) the period of time over which the

16 experiment is to be conducted.

17 ‘‘(C) WAIVERS.—The Secretary is author18 ized to waive, for any institution participating

19 as an experimental site under subparagraph (A),

20 any requirements in this title, or regulations

21 prescribed under this title, that will bias experi22 mental results.

23 ‘‘(c) DEFINITIONS.—For purposes of this section, the

24 term ‘current award year’ is defined as the award year dur-
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1 ing which the participating institution indicates the insti2 tution’s intention to cease participation.’’.

3 SEC. 489A. DISTANCE EDUCATION DEMONSTRATION PRO4 GRAMS.

5 Part G (20 U.S.C. 1088 et seq.) is amended by insert6 ing after section 487B (20 U.S.C. 1094a) the following:

7 ‘‘SEC. 487C. DISTANCE EDUCATION DEMONSTRATION PRO8 GRAMS.

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

10 ‘‘(1) to allow demonstration programs that are

11 strictly monitored by the Department to test the qual12 ity and viability of expanded distance education pro13 grams currently restricted under this Act;

14 ‘‘(2) to help determine the specific statutory and

15 regulatory requirements which should be altered to

16 provide greater access to high quality distance edu17 cation programs; and

18 ‘‘(3) to help determine the appropriate level of

19 Federal assistance for students enrolled in distance

20 education programs.

21 ‘‘(b) DEMONSTRATION PROGRAMS AUTHORIZED.—

22 ‘‘(1) IN GENERAL.—The Secretary, in accordance

23 with the provisions of subsection (d), is authorized to

24 select institutions of higher education or consortia of

25 such institutions for voluntary participation in a
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1 Distance Education Demonstration Program that

2 provides participating institutions with the ability to

3 offer distance education programs that do not meet all

4 or a portion of the sections or regulations described

5 in paragraph (2).

6 ‘‘(2) WAIVERS.—The Secretary is authorized to

7 waive, for any institution or consortia participating

8 in a Distance Education Demonstration Program, 1

9 or more of the requirements of section 472(5) as the

10 section relates to computer costs, sections 472(10),

11 481(a)(3)(A), 481(a)(3)(B), 484(l)(1), or 1 or more of

12 the regulations prescribed for distance education

13 under part F or G.

14 ‘‘(3) SPECIAL RULE.—An institution of higher

15 education, as defined in section 481(a), is eligible to

16 participate in the demonstration program authorized

17 under this section if such institution awards a degree,

18 except that—

19 ‘‘(A) such institutions that are described in

20 section 481(a)(1)(C) shall not be eligible to par21 ticipate; and

22 ‘‘(B) subject to subparagraph (A), such in23 stitutions that meet the requirements of sub24 section (a) of section 481, other than the require-
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1 ments of paragraph (3)(A) or (3)(B) of such sub2 section, shall be eligible to participate.

3 ‘‘(c) APPLICATION.—

4 ‘‘(1) IN GENERAL.—Each institution or consortia

5 of institutions desiring to participate in a demonstra6 tion program under this section shall submit an ap7 plication to the Secretary at such time and in such

8 manner as the Secretary may require.

9 ‘‘(2) CONTENTS.—Each application shall in10 clude—

11 ‘‘(A) a description of the institution or con12 sortium’s consultation with a recognized accred13 iting agency or association with respect to qual14 ity assurances for the distance education pro15 grams to be offered;

16 ‘‘(B) a description of the statutory and reg17 ulatory requirements described in subsection

18 (b)(2) for which a waiver is sought and the rea19 sons for which the waiver is sought;

20 ‘‘(C) a description of the distance education

21 programs to be offered;

22 ‘‘(D) a description of the students to whom

23 distance education programs will be offered;

24 ‘‘(E) an assurance that the institution or

25 consortium will offer full cooperation with the
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1 ongoing evaluations of the demonstration pro2 gram provided for in this section; and

3 ‘‘(F) such other information as the Sec4 retary may require.

5 ‘‘(d) SELECTION.—The Secretary is authorized to se6 lect not more than 5 institutions or consortia to participate

7 in the initial year of the demonstration program authorized

8 under this section. If expansion of the demonstration pro9 gram can be supported on the basis of the evaluations con10 ducted pursuant to subsections (f) and (g), the Secretary

11 may select not more than 10 additional institutions or con12 sortia, taking into account the number and quality of ap13 plications received and the Department’s capacity to oversee

14 and monitor each demonstration program. To the extent

15 feasible, the Secretary shall select a representative sample

16 of institutions for participation. In selecting institutions

17 for participation, the Secretary shall take into consider18 ation the institution’s financial and administrative capa19 bility and the type of program or programs being offered

20 via distance education course offerings.

21 ‘‘(e) NOTIFICATION.—The Secretary shall make avail22 able to the public and to the Committee on Labor and

23 Human Resources of the Senate and the Committee on Edu24 cation and the Workforce of the House of Representatives

25 a list of institutions or consortia selected to participate in
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1 the demonstration program authorized by this section. Such

2 notice shall include a listing of the specific statutory and

3 regulatory requirements being waived for each institution

4 or consortia and a description of the distance education

5 courses to be offered.

6 ‘‘(f) EVALUATIONS AND REPORTS.—

7 ‘‘(1) EVALUATION.—The Secretary, on an an8 nual basis, shall evaluate the demonstration programs

9 authorized under this section. Such evaluations shall

10 specifically review—

11 ‘‘(A) the number and types of students par12 ticipating in the programs being offered, includ13 ing the progress of participating students toward

14 recognized associate, bachelor’s, or graduate de15 grees, and the degree to which participation in

16 such programs increased;

17 ‘‘(B) issues related to student financial as18 sistance for distance education; and

19 ‘‘(C) the extent to which statutory or regu20 latory requirements not waived under the dem21 onstration program present difficulties for stu22 dents or institutions.

23 ‘‘(2) POLICY ANALYSIS.—In addition, the Sec24 retary shall review current policies and identify those

25 policies which present impediments to the develop-
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1 ment and use of distance education and other non2 traditional methods of expanding access to education.

3 ‘‘(3) REPORTS.—

4 ‘‘(A) IN GENERAL.—Within 18 months of

5 the initiation of the demonstration program, the

6 Secretary shall report to the Committee on Labor

7 and Human Resources of the Senate and the

8 Committee on Education and the Workforce of

9 the House of Representatives with respect to—

10 ‘‘(i) the evaluations of the demonstra11 tion programs authorized under this section;

12 and

13 ‘‘(ii) any proposed statutory changes

14 designed to enhance the use of distance edu15 cation.

16 ‘‘(B) ADDITIONAL REPORTS.—The Secretary

17 shall provide additional reports to the Committee

18 on Labor and Human Resources of the Senate

19 and the Committee on Education and the Work20 force of the House of Representatives on an an21 nual basis regarding the demonstration pro22 grams authorized under this section.

23 ‘‘(g) INDEPENDENT EVALUATION.—

24 ‘‘(1) IN GENERAL.—The Secretary shall enter

25 into a contract with the National Academy of
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1 Sciences to study the quality of and student learning

2 outcomes in distance education programs. Such study

3 shall include—

4 ‘‘(A) identification of the elements by which

5 quality in distance education can be assessed,

6 such as subject matter, interactivity, and student

7 outcomes; and

8 ‘‘(B) identification of the types of students

9 which can most benefit from distance education

10 in areas such as access to higher education, per11 sistence, and graduation.

12 ‘‘(2) SCOPE.—Such study shall include distance

13 education programs offered by the institutions or con14 sortia participating in the demonstration program

15 authorized by this section, as well as the distance edu16 cation programs offered by other institutions.

17 ‘‘(3) INTERIM AND FINAL REPORTS.—The Sec18 retary shall request that the National Academy of

19 Sciences submit an interim report to the Secretary,

20 the Committee on Labor and Human Resources of the

21 Senate, and the Committee on Education and the

22 Workforce of the House of Representatives not later

23 than December 31, 2000, and a final report not later

24 than December 31, 2002, regarding the study.
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1 ‘‘(4) FUNDING.—The Secretary shall make avail2 able not more than $1,000,000 for the study required

3 by this subsection.

4 ‘‘(h) OVERSIGHT.—In conducting the demonstration

5 program authorized under this section, the Secretary shall,

6 on a continuing basis—

7 ‘‘(1) assure compliance of institutions or consor8 tia with the requirements of this title (other than the

9 sections and regulations that are waived under sub10 section (b)(2));

11 ‘‘(2) provide technical assistance;

12 ‘‘(3) monitor fluctuations in the student popu13 lation enrolled in the participating institutions or

14 consortia; and

15 ‘‘(4) consult with appropriate accrediting agen16 cies or associations and appropriate State regulatory

17 authorities.

18 ‘‘(i) DEFINITION.—For the purpose of this section, the

19 term ‘distance education’ means an educational process that

20 is characterized by the separation, in time or place, between

21 instructor and student. Distance education may include

22 courses offered principally through the use of—

23 ‘‘(1) television, audio, or computer transmission,

24 such as open broadcast, closed circuit, cable, micro25 wave, or satellite transmission;
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1 ‘‘(2) audio or computer conferencing;

2 ‘‘(3) video cassettes or discs; or

3 ‘‘(4) correspondence.’’.

4 SEC. 489B. ADVISORY COMMITTEE ON STUDENT FINANCIAL

5 ASSISTANCE.

6 Section 491 (20 U.S.C. 1098) is amended—

7 (1) in subsection (b)—

8 (A) in the second sentence, by striking ‘‘and

9 expenditures’’ and inserting ‘‘, expenditures and

10 staffing levels’’; and

11 (B) by inserting after the third sentence the

12 following: ‘‘Reports, publications, and other doc13 uments, including such reports, publications,

14 and documents in electronic form, shall not be

15 subject to review by the Secretary.’’;

16 (2) in subsection (e)—

17 (A) by redesignating paragraphs (3), (4),

18 and (5), as paragraphs (4), (5), and (6), respec19 tively; and

20 (B) by inserting after paragraph (2) the fol21 lowing:

22 ‘‘(3) No officers or full-time employees of the

23 Federal Government shall serve as members of the Ad24 visory Committee.’’;
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1 (3) in subsection (g), by striking ‘‘(1) Members’’

2 and all that follows through ‘‘of the United States

3 may’’ and inserting ‘‘Members of the Advisory Com4 mittee may’’;

5 (4) in subsection (h)(1)—

6 (A) by inserting ‘‘determined’’ after ‘‘as

7 may be’’; and

8 (B) by adding at the end the following:

9 ‘‘The Advisory Committee may appoint not more

10 than 1 full-time equivalent, nonpermanent, con11 sultant without regard to the provisions of title

12 5, United States Code. The Advisory Committee

13 shall not be required by the Secretary to reduce

14 personnel to meet agency personnel reduction

15 goals.’’;

16 (5) in subsection (i), by striking ‘‘$750,000’’ and

17 inserting ‘‘$800,000’’;

18 (6) by amending subsection (j) to read as follows:

19 ‘‘(j) SPECIAL ANALYSES AND ACTIVITIES.—The Advi20 sory Committee shall—

21 ‘‘(1) monitor and evaluate the modernization of

22 student financial aid systems and delivery processes,

23 including the implementation of a performance-based

24 organization within the Department, and report to

25 Congress regarding such modernization on not less
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1 than an annual basis, including recommendations for

2 improvement;

3 ‘‘(2) assess the adequacy of current methods for

4 disseminating information about programs under this

5 title and recommend improvements, as appropriate,

6 regarding early needs assessment and information for

7 first-year secondary school students;

8 ‘‘(3) assess and make recommendations concern9 ing the feasibility and degree of use of appropriate

10 technology in the application for, and delivery and

11 management of, financial assistance under this title,

12 as well as policies that promote use of such technology

13 to reduce cost and enhance service and program integ14 rity, including electronic application and reapplica15 tion, just-in-time delivery of funds, reporting of dis16 bursements and reconciliation;

17 ‘‘(4) assess the implications of distance education

18 on student eligibility and other requirements for fi19 nancial assistance under this title, and make rec20 ommendations that will enhance access to postsecond21 ary education through distance education while main22 taining access, through on-campus instruction at eli23 gible institutions, and program integrity; and

24 ‘‘(5) make recommendations to the Secretary re25 garding redundant or outdated provisions of and reg-
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1 ulations under this Act, consistent with the Sec2 retary’s requirements under section 498A(b)(3).’’;

3 (7) in subsection (k), by striking ‘‘1998’’ and in4 serting ‘‘2004’’; and

5 (8) by repealing subsection (l).

6 SEC. 489C. REGIONAL MEETINGS AND NEGOTIATED RULE7 MAKING.

8 Section 492 (20 U.S.C. 1098a) is amended—

9 (1) in subsection (a)—

10 (A) in paragraph (1)—

11 (i) by inserting ‘‘, after the enactment

12 of each Act to reauthorize this Act that con13 tains an amendment to this title,’’ after

14 ‘‘The Secretary’’; and

15 (ii) by inserting ‘‘D,’’ after ‘‘B,’’; and

16 (B) in paragraph (2)—

17 (i) by inserting ‘‘D,’’ after ‘‘B,’’; and

18 (ii) by striking ‘‘1992’’ and inserting

19 ‘‘1998, and for the implementation of this

20 title as amended by each Act to reauthorize

21 this Act enacted after the date of enactment

22 of the Higher Education Amendments of

23 1998 that contains an amendment to this

24 title’’; and

25 (2) in subsection (b)—
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1 (A) by striking ‘‘After’’ and inserting the

2 following:

3 ‘‘(1) IN GENERAL.—After’’;

4 (B) in paragraph (1) (as redesignated by

5 subparagraph (A))—

6 (i) by inserting ‘‘D,’’ after ‘‘B,’’; and

7 (ii) by striking ‘‘1992’’ and inserting

8 ‘‘1998, and for the implementation of this

9 title as amended by each Act to reauthorize

10 this Act enacted after the date of enactment

11 of the Higher Education Amendments of

12 1998 that contains an amendment to this

13 title,’’; and

14 (C) by adding at the end the following:

15 ‘‘(2) EXPANSION OF NEGOTIATED RULEMAKING

16 IN STUDENT LOAN PROGRAMS.—All regulations per17 taining to the student assistance programs in parts

18 B, D, G, and H, that are promulgated after the date

19 of enactment of this paragraph, shall be subject to the

20 negotiated rulemaking process, unless the Secretary

21 determines that exceptional circumstances exist mak22 ing negotiated rulemaking impractical with respect to

23 given regulations and publishes the basis for such de24 termination in the Federal Register at the same time

25 as the proposed regulations in questions are first pub-
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1 lished. All published proposed regulations shall con2 form, unless impracticable, to agreements resulting

3 from such negotiated rulemaking. Such negotiated

4 rulemaking shall be conducted in accordance with the

5 provisions of paragraph (1).’’.

6 PART H—PROGRAM INTEGRITY TRIAD

7 SEC. 491. STATE ROLE AND RESPONSIBILITIES.

8 Subpart 1 of part H of title IV (20 U.S.C. 1099a et

9 seq.) is amended to read as follows:

10 ‘‘Subpart 1—State Role

11 ‘‘SEC. 495. STATE RESPONSIBILITIES.

12 ‘‘(a) STATE RESPONSIBILITIES.—As part of the integ13 rity program authorized by this part, each State, through

14 1 State agency or several State agencies selected by the

15 State, shall—

16 ‘‘(1) furnish the Secretary, upon request, infor17 mation with respect to the process for licensing or

18 other authorization for institutions of higher edu19 cation to operate within the State;

20 ‘‘(2) notify the Secretary promptly whenever the

21 State revokes a license or other authority to operate

22 an institution of higher education; and

23 ‘‘(3) notify the Secretary promptly whenever the

24 State has credible evidence that an institution of

25 higher education within the State—
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1 ‘‘(A) has committed fraud in the adminis2 tration of the student assistance programs au3 thorized by this title; or

4 ‘‘(B) has substantially violated a provision

5 of this title.

6 ‘‘(b) INSTITUTIONAL RESPONSIBILITY.—Each institu7 tion of higher education shall provide evidence to the Sec8 retary that the institution has authority to operate within

9 a State at the time the institution is certified under subpart

10 3.’’.

11 SEC. 492. ACCREDITING AGENCY RECOGNITION.

12 (a) AMENDMENTS TO HEADINGS.—Subpart 2 of part

13 H of title IV (20 U.S.C. 1099b et seq.) is amended—

14 (1) in the subpart heading, by striking ‘‘Ap15 proval’’ and inserting ‘‘Recognition’’; and

16 (2) in the heading for section 496, by striking

17 ‘‘APPROVAL’’ and inserting ‘‘RECOGNITION’’.

18 (b) RECOGNITION OF ACCREDITING AGENCY OR ASSO19 CIATION.—Section 496 (20 U.S.C. 1099b) is amended—

20 (1) in the heading for subsection (a), by striking

21 ‘‘STANDARDS’’ and inserting ‘‘CRITERIA’’;

22 (2) in subsection (a)—

23 (A) in the matter preceding paragraph (1),

24 by striking ‘‘standards’’ each place the term ap25 pears and inserting ‘‘criteria’’;
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1 (B) in paragraph (4)—

2 (i) by striking ‘‘at the institution’’ and

3 inserting ‘‘offered by the institution’’; and

4 (ii) by inserting ‘‘, including distance

5 education courses or programs,’’ after

6 ‘‘higher education’’; and

7 (C) in paragraph (5)—

8 (i) by striking subparagraph (I);

9 (ii) by redesignating subparagraphs

10 (A) through (H) as subparagraphs (B)

11 through (I), respectively;

12 (iii) by inserting before subparagraph

13 (B) the following:

14 ‘‘(A) success with respect to student achieve15 ment in relation to the institution’s mission, in16 cluding, as appropriate, consideration of course

17 completion, State licensing examination, and job

18 placement rates;’’;

19 (iv) in subparagraph (I) (as redesig20 nated by clause (ii)), by striking ‘‘in clock

21 hours or credit hours’’; and

22 (v) in subparagraph (L)—

23 (I) by inserting ‘‘record of’’ before

24 ‘‘compliance’’;
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1 (II) by striking ‘‘Act, including

2 any’’ and inserting ‘‘Act based on the’’;

3 (III) by inserting ‘‘any’’ after ‘‘re4 views, and’’; and

5 (IV) in the matter following sub6 paragraph (L), by striking ‘‘(G),’’;

7 (3) by amending paragraph (1) of subsection (l)

8 to read as follows: ‘‘(1)(A)(i) If the Secretary deter9 mines that an accrediting agency or association has

10 failed to apply effectively the standards in this sec11 tion, or is otherwise not in compliance with the re12 quirements of this section, the Secretary shall—

13 ‘‘(I) after notice and opportunity for a

14 hearing, limit, suspend, or terminate the ap15 proval of the agency or association; or

16 ‘‘(II) require the agency or association to

17 take appropriate action to bring the agency or

18 association into compliance with such require19 ments within a timeframe specified by the Sec20 retary, except that—

21 ‘‘(aa) such timeframe shall not exceed

22 12 months unless the Secretary extends such

23 period for good cause; and

24 ‘‘(bb) if the agency or association fails

25 to bring the agency or association into com-
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1 pliance within such timeframe, the Sec2 retary shall, after notice and opportunity

3 for a hearing, limit, suspend, or terminate

4 the approval of the agency or association.’’;

5 and

6 (4) in subsection (n)(3), by adding at the end the

7 following: ‘‘When the Secretary decides to recognize

8 an accrediting agency or association, the Secretary

9 shall determine the agency or association’s scope of

10 recognition. If the agency or association reviews insti11 tutions offering distance education courses or pro12 grams and the Secretary determines that the agency

13 or association meets the requirements of this section,

14 then the agency shall be recognized and the scope of

15 recognition shall include accreditation of institutions

16 offering distance education courses or programs.’’.

17 SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES.

18 (a) SINGLE APPLICATION FORM.—Section 498(b) (20

19 U.S.C. 1099c(b)) is amended—

20 (1) in paragraph (1), by striking ‘‘and capabil21 ity’’ and inserting ‘‘financial responsibility, and ad22 ministrative capability’’;

23 (2) by amending paragraph (3) to read as fol24 lows:

25 ‘‘(3) requires—
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1 ‘‘(A) a description of the third party

2 servicers of an institution of higher education;

3 and

4 ‘‘(B) the institution to maintain a copy of

5 any contract with a financial aid service pro6 vider or loan servicer, and provide a copy of any

7 such contract to the Secretary upon request;’’;

8 (3) in paragraph (4), by striking the period and

9 inserting ‘‘; and’’; and

10 (4) by adding at the end the following:

11 ‘‘(5) provides, at the option of the institution, for

12 participation in 1 or more of the programs under

13 part B or D.’’.

14 (b) FINANCIAL RESPONSIBILITY STANDARDS.—Section

15 498(c) (20 U.S.C. 1099c(c)) is amended—

16 (1) in paragraph (2), by striking ‘‘with respect

17 to operating losses, net worth, asset to liabilities ra18 tios, or operating fund deficits’’ and inserting ‘‘re19 garding ratios that demonstrate financial responsibil20 ity,’’;

21 (2) in paragraph (3)(A), by striking ‘‘Secretary

22 third party’’ and all that follows through ‘‘payable to

23 the Secretary’’ and inserting ‘‘Secretary any third

24 party guarantees, which the Secretary determines are

25 reasonable, that’’; and
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1 (3) in paragraph (4)—

2 (A) in the matter preceding subparagraph

3 (A), by striking ‘‘ratio of current assets to cur4 rent liabilities’’ and inserting ‘‘criteria’’; and

5 (B) in subparagraph (C), by striking ‘‘cur6 rent operating ratio requirement’’ and inserting

7 ‘‘criteria’’.

8 (c) FINANCIAL GUARANTEES FROM OWNERS.—Section

9 498(e) (20 U.S.C. 1099c(e)) is amended—

10 (1) in the subsection heading, by inserting ‘‘OF

11 FOR-PROFIT INSTITUTIONS’’ after ‘‘OWNERS’’;

12 (2) in paragraph (1)(A), by striking ‘‘from an’’

13 and inserting ‘‘from a for-profit’’;

14 (3) in paragraph (2)—

15 (A) in the matter preceding clause (i) of

16 subparagraph (A), by inserting ‘‘for-profit’’ after

17 ‘‘or more’’;

18 (B) in subparagraph (B), by inserting ‘‘for19 profit’’ after ‘‘or more’’; and

20 (4) in paragraph (3), by striking ‘‘operation of,

21 an institution or’’ and inserting ‘‘operation of, a for22 profit institution or the’’.

23 (d) APPLICATIONS AND SITE VISITS.—Section 498(f)

24 (20 U.S.C. 1099c(f)) is amended—
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1 (1) in the subsection heading by striking ‘‘; SITE

2 VISITS AND FEES’’ and inserting ‘‘AND SITE VISITS’’;

3 (2) in the second sentence, by striking ‘‘shall’’

4 and inserting ‘‘may’’;

5 (3) in the third sentence, strike ‘‘may’’ and in6 sert ‘‘shall’’; and

7 (4) by striking the fourth sentence.

8 (e) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGI9 BILITY.—Subsection (g) of section 498 (20 U.S.C. 1099c)

10 is amended to read as follows:

11 ‘‘(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGI12 BILITY.—

13 ‘‘(1) GENERAL RULE.—After the expiration of

14 the certification of any institution under the schedule

15 prescribed under this section (as in effect prior to the

16 enactment of the Higher Education Act Amendments

17 of 1998), or upon request for initial certification from

18 an institution not previously certified, the Secretary

19 may certify the eligibility for the purposes of any pro20 gram authorized under this title of each such institu21 tion for a period not to exceed 6 years.

22 ‘‘(2) NOTIFICATION.—The Secretary shall notify

23 each institution of higher education not later than 6

24 months prior to the date of the expiration of the insti25 tution’s certification.
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1 ‘‘(3) INSTITUTIONS OUTSIDE THE UNITED

2 STATES.—The Secretary shall promulgate regulations

3 regarding the recertification requirements applicable

4 to an institution of higher education outside of the

5 United States that meets the requirements of section

6 481(a)(1)(C) and received less than $500,000 in funds

7 under part B for the most recent year for which data

8 are available.’’.

9 (f) PROVISIONAL CERTIFICATION.—Section 498(h) (20

10 U.S.C. 1099c(h)) is amended—

11 (1) in paragraph (1)(B)(ii), by striking ‘‘an eli12 gible’’ and inserting ‘‘a for-profit eligible’’; and

13 (2) in paragraph (2), by striking ‘‘the approval’’

14 and inserting ‘‘the recognition’’.

15 (g) TREATMENT OF CHANGES OF OWNERSHIP.—Sec16 tion 498(i) (20 U.S.C. 1099c(i)) is amended—

17 (1) in the subsection heading, by inserting ‘‘OF

18 FOR-PROFIT INSTITUTIONS’’ after ‘‘OWNERSHIP’’; and

19 (2) in paragraph (2)—

20 (A) in subparagraph (A), by inserting ‘‘for21 profit’’ before ‘‘institution’’;

22 (B) in subparagraph (C), by striking ‘‘two’’

23 and inserting ‘‘a for-profit institution with one’’;

24 (C) in subparagraph (D), by inserting ‘‘for25 profit’’ before ‘‘institutions’’;
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1 (D) in subparagraph (E), by inserting ‘‘for2 profit’’ before ‘‘institutions’’; and

3 (E) in subparagraph (F), by inserting ‘‘for4 profit’’ before ‘‘institution’’.

5 (h) TREATMENT OF BRANCHES.—The second sentence

6 of section 498(j)(1) (20 U.S.C. 1099c(j)(1)) is amended by

7 inserting ‘‘after the branch is certified by the Secretary as

8 a branch campus participating in a program under title

9 IV,’’ after ‘‘2 years’’.

10 SEC. 494. PROGRAM REVIEW AND DATA.

11 Section 498A (20 U.S.C. 1099c–1) is amended—

12 (1) in subsection (a)—

13 (A) in paragraph (2)—

14 (i) in the matter preceding subpara15 graph (A), by striking ‘‘may’’ and inserting

16 ‘‘shall’’;

17 (ii) by amending subparagraph (C) to

18 read as follows:

19 ‘‘(C) institutions with a significant fluctua20 tion in Federal Stafford Loan volume, Federal

21 Direct Stafford/Ford Loan volume, or Federal

22 Pell Grant award volume, or any combination

23 thereof, in the year for which the determination

24 is made, compared to the year prior to such

25 year, that are not accounted for by changes in
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1 the Federal Stafford Loan program, the Federal

2 Direct Stafford/Ford Loan program, or the Pell

3 Grant program, or any combination thereof;’’;

4 (iii) by amending subparagraph (D) to

5 read as follows:

6 ‘‘(D) institutions reported to have defi7 ciencies or financial aid problems by the State

8 licensing or authorizing agency, or by the appro9 priate accrediting agency or association;’’;

10 (iv) in subparagraph (E), by inserting

11 ‘‘and’’ after the semicolon; and

12 (v) by striking subparagraphs (F) and

13 (G), and inserting the following:

14 ‘‘(F) such other institutions that the Sec15 retary determines may pose a significant risk of

16 failure to comply with the administrative capa17 bility or financial responsibility provisions of

18 this title; and’’; and

19 (B) in paragraph (3)(A), by inserting ‘‘rel20 evant’’ after ‘‘all’’; and

21 (2) by amending subsection (b) to read as fol22 lows:

23 ‘‘(b) SPECIAL ADMINISTRATIVE RULES.—
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1 ‘‘(1) IN GENERAL.—In carrying out paragraphs

2 (1) and (2) of subsection (a) and any other relevant

3 provisions of this title, the Secretary shall—

4 ‘‘(A) establish guidelines designed to ensure

5 uniformity of practice in the conduct of program

6 reviews of institutions of higher education;

7 ‘‘(B) make available to each institution par8 ticipating in programs authorized under this

9 title complete copies of all review guidelines and

10 procedures used in program reviews;

11 ‘‘(C) permit the institution to correct or

12 cure an administrative, accounting, or record13 keeping error if the error is not part of a pattern

14 of error and there is no evidence of fraud or mis15 conduct related to the error;

16 ‘‘(D) base any civil penalty assessed against

17 an institution of higher education resulting from

18 a program review or audit on the gravity of the

19 violation, failure, or misrepresentation; and

20 ‘‘(E) inform the appropriate State and ac21 crediting agency or association whenever the Sec22 retary takes action against an institution of

23 higher education under this section, section 498,

24 or section 432.
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1 ‘‘(2) UNIFORMITY OF APPLICATION OF REGULA2 TIONS.—The Secretary shall review the regulations of

3 the Department and the application of such regula4 tions to ensure the uniformity of interpretation and

5 application of the regulations.

6 ‘‘(3) NONDUPLICATION AND COORDINATION.—The

7 Secretary shall establish a process for ensuring that

8 eligibility and compliance issues, such as institu9 tional audit, program review, and recertification, are

10 considered simultaneously, and shall establish a proc11 ess for identifying unnecessary duplication of report12 ing and related regulatory requirements. In develop13 ing such processes, the Secretary shall consult with

14 relevant representatives of institutions participating

15 in the programs authorized by this title.’’.

16 PART I—ADMINISTRATIVE PROVISIONS FOR

17 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

18 SEC. 495. PERFORMANCE-BASED ORGANIZATION FOR THE

19 DELIVERY OF FEDERAL STUDENT FINANCIAL

20 ASSISTANCE.

21 Title IV (20 U.S.C. 1070 et seq.) is amended by adding

22 at the end the following:
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1 ‘‘PART I—ADMINISTRATIVE PROVISIONS FOR

2 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

3 ‘‘SEC. 499. PERFORMANCE-BASED ORGANIZATION FOR THE

4 DELIVERY OF FEDERAL STUDENT FINANCIAL

5 ASSISTANCE.

6 ‘‘(a) ESTABLISHMENT.—The Secretary shall establish

7 in the Department a performance-based organization (here8 after in this part referred to as the ‘PBO’) to administer

9 various functions relating to student financial assistance

10 programs authorized under this title.

11 ‘‘(b) OVERSIGHT AND AUTHORITY.—

12 ‘‘(1) POLICY OVERSIGHT AND DIRECTION.—The

13 Secretary shall maintain responsibility for the policy

14 relating to functions managed by the PBO, and the

15 PBO shall remain subject to the Secretary’s oversight

16 and direction.

17 ‘‘(2) AUDITS AND REVIEW.—The PBO shall be

18 subject to the usual and customary Federal audit pro19 cedures and to review by the Inspector General of the

20 Department.

21 ‘‘(3) CHANGES.—

22 ‘‘(A) IN GENERAL.—The Secretary and the

23 Chief Operating Officer shall consult concerning

24 the effects of policy, market, or other changes on

25 the ability of the PBO to achieve the goals and
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1 objectives established in the performance plan de2 scribed in subsection (e).

3 ‘‘(B) REVISIONS TO AGREEMENT.—The Sec4 retary and the Chief Operating Officer may re5 vise the annual performance agreement described

6 in subsection (f)(2) in light of policy, market, or

7 other changes that occur after the Secretary and

8 the PBO enter into the agreement.

9 ‘‘(c) PURPOSES OF PBO.—The purposes of the PBO

10 are—

11 ‘‘(1) to improve service to students and other

12 participants in the student financial assistance pro13 grams authorized under this title, including making

14 those programs more understandable to students and

15 their parents;

16 ‘‘(2) to reduce the costs of administering those

17 programs;

18 ‘‘(3) to increase the accountability of the officials

19 responsible for administering those programs;

20 ‘‘(4) to provide greater flexibility in the adminis21 tration of those programs;

22 ‘‘(5) to improve and integrate the information

23 and delivery systems that support those programs;

24 and
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1 ‘‘(6) to develop and maintain a student financial

2 assistance system that contains complete, accurate,

3 and timely data to ensure program integrity.

4 ‘‘(d) FUNCTIONS.—

5 ‘‘(1) IN GENERAL.—Subject to subsection (b) of

6 this section, the PBO shall be responsible for adminis7 tration of the information and financial systems that

8 support student financial assistance programs author9 ized under this title, including—

10 ‘‘(A) collecting, processing, and transmit11 ting applicant data to students, institutions, and

12 authorized third parties, as provided for in sec13 tion 483;

14 ‘‘(B) contracting for the information and fi15 nancial systems supporting student financial as16 sistance programs under this title;

17 ‘‘(C) developing technical specifications for

18 software and systems that support those pro19 grams; and

20 ‘‘(D) providing all customer service, train21 ing, and user support related to systems that

22 support those programs.

23 ‘‘(2) ADDITIONAL FUNCTIONS.—The Secretary

24 may allocate to the PBO such additional functions as
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1 the Secretary determines necessary or appropriate to

2 achieve the purposes of the PBO.

3 ‘‘(e) PERFORMANCE PLAN AND REPORT.—

4 ‘‘(1) PERFORMANCE PLAN.—

5 ‘‘(A) IN GENERAL.—Each year, the Sec6 retary and Chief Operating Officer shall agree

7 on, and make available to the public, a perform8 ance plan for the PBO for the succeeding 5 years

9 that establishes measurable goals and objectives

10 for the organization.

11 ‘‘(B) CONSULTATION.—In developing the 5-

12 year performance plan, the Secretary and the

13 Chief Operating Officer shall consult with stu14 dents, institutions of higher education, Congress,

15 lenders, and other interested parties not less than

16 30 days prior to the implementation of the per17 formance plan.

18 ‘‘(C) AREAS.—The plan shall address the

19 PBO’s responsibilities in the following areas:

20 ‘‘(i) IMPROVING SERVICE.—Improving

21 service to students and other participants in

22 student financial aid programs authorized

23 under this title, including making those

24 programs more understandable to students

25 and their parents.
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1 ‘‘(ii) REDUCING COSTS.—Reducing the

2 costs of administering those programs.

3 ‘‘(iii) IMPROVEMENT AND INTEGRATION

4 OF SUPPORT SYSTEMS.—Improving and in5 tegrating the information and delivery sys6 tems that support those programs.

7 ‘‘(iv) DELIVERY AND INFORMATION

8 SYSTEM.—Developing an open, common,

9 and integrated delivery and information

10 system for programs authorized under this

11 title.

12 ‘‘(v) OTHER AREAS.—Any other areas

13 identified by the Secretary.

14 ‘‘(2) ANNUAL REPORT.—Each year, the Chief

15 Operating Officer shall prepare and submit to Con16 gress, through the Secretary, an annual report on the

17 performance of the PBO, including an evaluation of

18 the extent to which the PBO met the goals and objec19 tives contained in the 5-year performance plan de20 scribed in paragraph (1) for the preceding year.

21 ‘‘(f) CHIEF OPERATING OFFICER.—

22 ‘‘(1) APPOINTMENT.—

23 ‘‘(A) IN GENERAL.—The management of the

24 PBO shall be vested in a Chief Operating Officer

25 who shall be appointed by the Secretary to a
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1 term of not less than 3 and not more than 5

2 years and compensated without regard to chap3 ters 33, 51, and 53 of title 5, United States Code.

4 ‘‘(B) BASIS.—The appointment shall be

5 made on the basis of demonstrated ability in

6 management and experience in information tech7 nology or financial services, without regard to

8 political affiliation or activity.

9 ‘‘(C) REAPPOINTMENT.—The Secretary may

10 reappoint the Chief Operating Officer to subse11 quent terms of not less than 3 and not more than

12 5 years, so long as the performance of the Chief

13 Operating Officer, as set forth in the perform14 ance agreement described in paragraph (2), is

15 satisfactory.

16 ‘‘(2) PERFORMANCE AGREEMENT.—

17 ‘‘(A) IN GENERAL.—Each year, the Sec18 retary and the Chief Operating Officer shall

19 enter into an annual performance agreement,

20 that shall set forth measurable organization and

21 individual goals for the Chief Operating Officer.

22 ‘‘(B) TRANSMITTAL.—The final agreement

23 shall be transmitted to the Committee on Edu24 cation and the Workforce of the House of Rep25 resentatives and the Committee on Labor and
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1 Human Resources of the Senate, and made pub2 licly available.

3 ‘‘(3) COMPENSATION.—

4 ‘‘(A) IN GENERAL.—The Chief Operating

5 Officer is authorized to be paid at an annual

6 rate of basic pay not to exceed the maximum

7 rate of basic pay for the Senior Executive Serv8 ice under section 5382 of title 5, United States

9 Code, including any applicable locality-based

10 comparability payment that may be authorized

11 under section 5304(h)(2)(C) of such title.

12 ‘‘(B) BONUS.—In addition, the Chief Oper13 ating Officer may receive a bonus in an amount

14 that does not exceed 50 percent of such annual

15 rate of basic pay, based upon the Secretary’s

16 evaluation of the Chief Operating Officer’s per17 formance in relation to the goals set forth in the

18 performance agreement described in paragraph

19 (2).

20 ‘‘(C) PAYMENT.—Payment of a bonus under

21 this subparagraph (B) may be made to the Chief

22 Operating Officer only to the extent that such

23 payment does not cause the Chief Operating Of24 ficer’s total aggregate compensation in a cal25 endar year to equal or exceed the amount of the
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1 President’s salary under section 102 of title 3,

2 United States Code.

3 ‘‘(4) REMOVAL.—The Chief Operating Officer

4 shall be removable—

5 ‘‘(A) by the President; or

6 ‘‘(B) by the Secretary for misconduct or

7 failure to meet the goals set forth in the perform8 ance agreement described in paragraph (2).

9 ‘‘(g) SENIOR MANAGEMENT.—

10 ‘‘(1) APPOINTMENT.—

11 ‘‘(A) IN GENERAL.—The Chief Operating

12 Officer may appoint such senior managers as

13 that officer determines necessary without regard

14 to the provisions of title 5, United States Code,

15 governing appointments in the competitive serv16 ice.

17 ‘‘(B) COMPENSATION.—The senior managers

18 described in subparagraph (A) may be paid

19 without regard to the provisions of chapter 51

20 and subchapter III of chapter 53 of such title re21 lating to classification and General Schedule pay

22 rates.

23 ‘‘(2) PERFORMANCE AGREEMENT.—Each year,

24 the Chief Operating Officer and each senior manager

25 appointed under this subsection shall enter into an
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1 annual performance agreement that sets forth measur2 able organization and individual goals.

3 ‘‘(3) COMPENSATION.—

4 ‘‘(A) IN GENERAL.—A senior manager ap5 pointed under this subsection may be paid at an

6 annual rate of basic pay of not more than the

7 maximum rate of basic pay for the Senior Exec8 utive Service under section 5382 of title 5,

9 United States Code, including any applicable lo10 cality-based comparability payment that may be

11 authorized under section 5304(h)(2)(C) of such

12 title 5.

13 ‘‘(B) BONUS.—In addition, a senior man14 ager may receive a bonus in an amount such

15 that the manager’s total annual compensation

16 does not exceed 125 percent of the maximum rate

17 of basic pay for the Senior Executive Service, in18 cluding any applicable locality-based com19 parability payment, based upon the Chief Oper20 ating Officer’s evaluation of the manager’s per21 formance in relation to the goals set forth in the

22 performance agreement described in paragraph

23 (2).
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1 ‘‘(4) REMOVAL.—A senior manager shall be re2 movable by the Secretary or by the Chief Operating

3 Officer.

4 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—The Sec5 retary shall allocate from funds made available under sec6 tion 458 such funds as are appropriate to the functions as7 sumed by the PBO. In addition, there are authorized to be

8 appropriated such sums as may be necessary to carry out

9 the purposes of this section, including transition costs.’’.

10 TITLE V—GRADUATE AND POST11 SECONDARY IMPROVEMENT

12 PROGRAMS

13 SEC. 501. REPEALS, TRANSFERS, AND REDESIGNATIONS.

14 (a) IN GENERAL.—Title V (20 U.S.C. 1101 et seq.) is

15 amended—

16 (1) by amending the title heading to read as fol17 lows:

18 ‘‘TITLE V—GRADUATE AND POST19 SECONDARY IMPROVEMENT

20 PROGRAMS’’;

21 (2) by repealing parts A, B, C, D, E, and F of

22 title V (20 U.S.C. 1102 et seq., 1103 et seq., 1104 et

23 seq., 1107 et seq., 1111 et seq., and 1113 et seq.);

24 (3) by transferring part C of title IX, part D of

25 title IX, part A of title XI, and part A of title X (20
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1 U.S.C. 1134h et seq., 1134l et seq., 1136 et seq., and

2 1135 et seq.) to title V and redesignating such parts

3 as parts A, B, C, and D, respectively;

4 (4) by redesignating sections 931 through 935

5 (20 U.S.C. 1134h et seq. and 1134k–1 et seq.) as sec6 tions 511 through 515, respectively;

7 (5) by redesignating sections 941 through 947

8 (20 U.S.C. 1134l and 1134q–1) as section 521

9 through 527, respectively;

10 (6) by redesignating sections 1101 through 1109

11 (20 U.S.C. 1136 through 1136h) as sections 531

12 through 539, respectively; and

13 (7) by redesignating sections 1001, 1002, 1003,

14 1004, and 1011 (20 U.S.C. 1135, 1135a–1, 1135a–2,

15 1135a–3, and 1135a–11) as sections 541, 542, 543,

16 544, and 551, respectively.

17 (b) CROSS REFERENCE CONFORMING AMENDMENTS.—

18 (1) JACOB K. JAVITS FELLOWSHIP PROGRAM.—

19 Section 514(a) (as redesignated by subsection (a)(4))

20 (20 U.S.C. 1134k(a)) is amended by striking ‘‘933’’

21 and inserting ‘‘513’’.

22 (2) GRADUATE ASSISTANCE IN AREAS OF NA23 TIONAL NEED.—Part B of title V (as redesignated by

24 paragraphs (3) and (5) of subsection (a)) (20 U.S.C.

25 1134l et seq.) is amended—
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1 (A) in section 524(b)(7) (as redesignated by

2 subsection (a)(5)) (20 U.S.C. 1134o(b)(7)), by

3 striking ‘‘945’’ and inserting ‘‘525’’; and

4 (B) in section 525(c) (as redesignated by

5 subsection (a)(5)) (20 U.S.C. 1134p(c))—

6 (i) by striking ‘‘946(a)’’ and inserting

7 ‘‘526(a)’’; and

8 (ii) by striking ‘‘944(b)(2)’’ and insert9 ing ‘‘524(b)(2)’’.

10 (3) URBAN AND COMMUNITY SERVICE.—Part C

11 of title V (as redesignated by paragraphs (3) and (6)

12 of subsection (a)) (20 U.S.C. 1136 et seq.) is amend13 ed—

14 (A) in section 532(b) (20 U.S.C. 1136a(b)),

15 by striking ‘‘1104’’ and inserting ‘‘534’’;

16 (B) in section 534(12) (20 U.S.C.

17 1136c(12)), by striking ‘‘1103(a)(2)(B)’’ and in18 serting ‘‘533(a)(2)(B)’’; and

19 (C) in section 538(1) (20 U.S.C. 1136g(1)),

20 by striking ‘‘1103’’ and inserting ‘‘533’’.

21 (4) FIPSE.—Subsections (b) and (c) of section

22 544 (as redesignated by subsection (a)(7)) (20 U.S.C.

23 1135a–3) each are amended by striking ‘‘1001(b)’’

24 and inserting ‘‘541(b)’’.
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1 SEC. 502. PURPOSE.

2 Section 500 (20 U.S.C. 1101) is amended to read as

3 follows:

4 ‘‘SEC. 500. PURPOSE.

5 ‘‘It is the purpose of this title—

6 ‘‘(1) to authorize national graduate fellowship

7 programs—

8 ‘‘(A) in order to attract students of superior

9 ability and achievement, exceptional promise,

10 and demonstrated financial need, into high-qual11 ity graduate programs and provide the students

12 with the financial support necessary to complete

13 advanced degrees; and

14 ‘‘(B) that are designed to—

15 ‘‘(i) sustain and enhance the capacity

16 for graduate education in areas of national

17 need; and

18 ‘‘(ii) encourage talented students to

19 pursue scholarly careers in the humanities,

20 social sciences, and the arts; and

21 ‘‘(2) to promote postsecondary programs.’’.

22 PART A—JACOB K. JAVITS FELLOWSHIP

23 PROGRAM

24 SEC. 511. AWARD OF FELLOWSHIPS.

25 (a) AWARD OF JACOB K. JAVITS FELLOWSHIPS.—Sec26 tion 511 (as redesignated by section 501(4)) is amended—
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1 (1) in subsection (a)—

2 (A) in the first sentence, by inserting ‘‘, fi3 nancial need,’’ after ‘‘demonstrated achieve4 ment’’;

5 (B) in the second sentence—

6 (i) by striking ‘‘students intending’’

7 and inserting ‘‘students who are eligible to

8 receive any grant, loan, or work assistance

9 pursuant to section 484 and intend’’; and

10 (ii) by striking ‘‘commonly accepted’’

11 and all that follows through ‘‘degree-grant12 ing institution’’ and inserting ‘‘the terminal

13 highest degree awarded in the area of

14 study’’; and

15 (C) in the third sentence, by inserting ‘‘fol16 lowing the fiscal year’’ after ‘‘July 1 of the fiscal

17 year’’; and

18 (2) by adding at the end the following:

19 ‘‘(d) PROCESS AND TIMING OF COMPETITION.—The

20 Secretary shall make applications for fellowships under this

21 part available not later than October 1 of the academic year

22 preceding the academic year for which fellowships will be

23 awarded, and shall announce the recipients of fellowships

24 under this section not later than March 1 of the academic
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1 year preceding the academic year for which the fellowships

2 are awarded.

3 ‘‘(e) AUTHORITY TO CONTRACT.—The Secretary is au4 thorized to enter into a contract with a nongovernmental

5 agency to administer the program assisted under this part

6 if the Secretary determines that entering into the contract

7 is an efficient means of carrying out the program.’’.

8 (b) ALLOCATION OF FELLOWSHIPS.—Section 512 (as

9 redesignated by section 501(4)) (20 U.S.C. 1134i) is amend10 ed—

11 (1) in subsection (a)—

12 (A) in the third sentence of paragraph (1),

13 by striking ‘‘knowledgeable about and have expe14 rience’’ and inserting ‘‘representative of a range

15 of disciplines’’; and

16 (B) in paragraph (2)—

17 (i) by amending subparagraph (B) to

18 read as follows:

19 ‘‘(B) establish general criteria for the award

20 of fellowships in academic fields identified by the

21 Board, or, in the event that the Secretary enters

22 into a contract with a nongovernmental entity to

23 administer the program assisted under this part,

24 by such nongovernmental entity;’’; and
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1 (ii) in subparagraph (C), by inserting

2 ‘‘except that, in the event that the Secretary

3 enters into a contract with a nongovern4 mental entity to administer the program,

5 such panels may be appointed by such non6 governmental entity’’ before the semicolon;

7 and

8 (2) in the first sentence of subsection (b), by in9 serting ‘‘except that in the event that the Secretary

10 enters into a contract with a nongovernmental entity

11 to administer the program, such panels may be ap12 pointed by such nongovernmental entity’’ before the

13 period.

14 (c) STIPENDS.—Section 513 (as redesignated by sec15 tion 501(4)) (20 U.S.C. 1134j) is amended—

16 (1) in subsection (a)—

17 (A) by striking ‘‘1993–1994’’ and inserting

18 ‘‘1999–2000’’; and

19 (B) by striking ‘‘according to measurements

20 of need approved by the Secretary’’ and inserting

21 ‘‘determined in accordance with part F of title

22 IV’’; and

23 (2) in subsection (b)(1)(A)—

24 (A) in clause (i)—
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1 (i) by striking ‘‘$6,000’’ and inserting

2 ‘‘$10,000’’; and

3 (ii) by striking ‘‘1993–1994’’ and in4 serting ‘‘1999–2000’’; and

5 (B) in clause (ii)—

6 (i) in the matter preceding subclause

7 (I), by striking ‘‘1993–1994’’ and inserting

8 ‘‘1999–2000’’;

9 (ii) in subclause (I), by striking

10 ‘‘$9,000 for the academic year 1993–1994’’

11 and inserting ‘‘$10,000 for the academic

12 year 1999–2000’’; and

13 (iii) in subclause (II), by striking

14 ‘‘$9,000’’ and inserting ‘‘$10,000’’.

15 (d) AUTHORIZATION OF APPROPRIATIONS.—Section

16 515 (as redesignated by section 501(4)) (20 U.S.C. 1134k–

17 1) is amended by striking ‘‘1993’’ and inserting ‘‘1999’’.

18 PART B—GRADUATE ASSISTANCE IN AREAS OF

19 NATIONAL NEED

20 SEC. 521. GRADUATE ASSISTANCE IN AREAS OF NATIONAL

21 NEED.

22 (a) DESIGNATION OF AREAS OF NATIONAL NEED.—

23 Subsection (b) of section 523 (as redesignated by section

24 501(5)) (20 U.S.C. 1134n) is amended to read as follows:
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1 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL NEED.—

2 After consultation with the National Science Foundation,

3 the National Academy of Sciences, and other appropriate

4 Federal and nonprofit agencies and organizations, the Sec5 retary shall designate areas of national need. In making

6 such designations, the Secretary shall take into consider7 ation—

8 ‘‘(1) the extent to which the national interest in

9 the area is compelling;

10 ‘‘(2) the extent to which other Federal programs

11 support postbaccalaureate study in the area con12 cerned; and

13 ‘‘(3) an assessment of how the program may

14 achieve the most significant impact with available re15 sources.’’.

16 (b) CONTENT OF APPLICATIONS.—Section 524(b) (as

17 redesignated by section 501(5)) (20 U.S.C. 1134o(b)) is

18 amended—

19 (1) in paragraph (2)—

20 (A) by striking ‘‘funds’’ and inserting

21 ‘‘sources’’; and

22 (B) by inserting ‘‘, which contribution may

23 be in cash or in kind, fairly valued’’ before the

24 semicolon;
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1 (2) by redesignating paragraphs (4) through (9)

2 as paragraphs (5) through (10), respectively;

3 (3) by inserting after paragraph (3) the follow4 ing:

5 ‘‘(4) describe the number, types, and amounts of

6 the fellowships that the applicant intends to offer with

7 grant funds provided under this part;’’ and

8 (4) in paragraph (5)(A) (as redesignated by

9 paragraph (2)), by striking ‘‘criteria developed by the

10 institution’’ and inserting ‘‘part F of title IV’’.

11 (c) AWARDS.—Section 525 (as redesignated by section

12 501(5)) (20 U.S.C. 1134p) is amended—

13 (1) in the third sentence of subsection (b)—

14 (A) by striking ‘‘1993–1994’’ and inserting

15 ‘‘1999–2000’’; and

16 (B) by striking ‘‘according to measurements

17 of need approved by the Secretary’’ and inserting

18 ‘‘determined in accordance with part F of title

19 IV’’; and

20 (2) in subsection (c), by striking ‘‘such pay21 ments’’ and inserting ‘‘such excess’’.

22 (d) INSTITUTIONAL PAYMENTS.—Section 526(a)(1) (as

23 redesignated by section 501(5)) (20 U.S.C. 1134q(a)(1)) is

24 amended—

25 (1) in subparagraph (A)—
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1 (A) by striking ‘‘$6,000 annually’’ and in2 serting ‘‘$10,000 for each academic year,’’; and

3 (B) by striking ‘‘1993–1994’’ and inserting

4 ‘‘1999–2000’’; and

5 (2) in subparagraph (B)—

6 (A) in the matter preceding clause (i), by

7 striking ‘‘1993–1994’’ and inserting ‘‘1999–

8 2000’’;

9 (B) in clause (i), by striking ‘‘$9,000 for the

10 academic year 1993–1994’’ and inserting

11 ‘‘$10,000 for the academic year 1999–2000’’; and

12 (C) in clause (ii), by striking ‘‘$9,000’’ and

13 inserting ‘‘$10,000’’.

14 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

15 527 (as redesignated by section 501(5)) (20 U.S.C. 1134q–

16 1) is amended by striking ‘‘$40,000,000 for fiscal year

17 1993’’ and inserting ‘‘$30,000,000 for fiscal year 1999’’.

18 PART C—URBAN COMMUNITY SERVICE

19 SEC. 531. URBAN COMMUNITY SERVICE.

20 (a) PRIORITY.—Section 533(b) (as redesignated by sec21 tion 501(a)(6)) (20 U.S.C. 1136b(b)) is amended by adding

22 at the end the following: ‘‘In addition, the Secretary shall

23 give priority to eligible institutions submitting applications

24 that demonstrate the eligible institution’s commitment to

25 urban community service.’’.
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

2 539 (as redesignated by section 501(a)(6)) (20 U.S.C.

3 1136h) is amended by striking ‘‘1993’’ and inserting

4 ‘‘1999’’.

5 PART D—FUND FOR THE IMPROVEMENT OF

6 POSTSECONDARY EDUCATION

7 SEC. 541. FUND FOR THE IMPROVEMENT OF POSTSECOND8 ARY EDUCATION.

9 (a) AUTHORITY.—Section 541(a) (as redesignated by

10 section 501(a)(7)) (20 U.S.C. 1135(a)) is amended—

11 (1) in the matter preceding paragraph (1)—

12 (A) by striking ‘‘or combinations of such in13 stitutions’’ and inserting ‘‘, combinations of such

14 institutions,’’; and

15 (B) by striking ‘‘institutions and combina16 tions of such institutions’’ and inserting ‘‘insti17 tutions, combinations, and agencies’’; and

18 (2) in paragraph (2)—

19 (A) by striking ‘‘and programs involving

20 new’’ and inserting ‘‘, programs and joint efforts

21 involving’’; and

22 (B) by striking ‘‘new combinations’’ and in23 serting ‘‘combinations’’.

24 (b) TECHNICAL EMPLOYEES.—Section 543(a) (as re25 designated by section 501(a)(7)) (20 U.S.C. 1135a–2(a)) is
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1 amended by striking ‘‘5 technical’’ and inserting ‘‘7 tech2 nical’’.

3 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

4 544 (as redesignated by section 501(a)(7)) (20 U.S.C.

5 1135a–3) is amended—

6 (1) in subsection (a), by striking ‘‘$20,000,000

7 for fiscal year 1993’’ and inserting ‘‘$26,000,000 for

8 fiscal year 1999’’; and

9 (2) in subsection (b), by striking ‘‘1993’’ and in10 serting ‘‘1999’’.

11 (d) AREAS OF NATIONAL NEED.—

12 (1) AREAS.—Section 551(c) (as redesignated by

13 section 501(a)(7)) (20 U.S.C. 1135a–11(c)) is amend14 ed—

15 (A) in paragraph (2), by striking ‘‘Campus

16 climate and culture’’ and inserting ‘‘Institu17 tional restructuring to improve learning and

18 promote cost efficiencies’’;

19 (B) in paragraph (3), by inserting ‘‘of

20 model programs’’ after ‘‘dissemination’’; and

21 (C) by adding at the end the following:

22 ‘‘(4) Articulation between 2-year and 4-year in23 stitutions of higher education, including developing

24 innovative methods for ensuring the successful trans-
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1 fer of students from 2-year to 4-year institutions of

2 higher education.’’.

3 (2) AUTHORIZATION OF APPROPRIATIONS.—Sec4 tion 551(d) (as redesignated by section 501(a)(7)) (20

5 U.S.C. 1135a–11(d)) is amended by striking ‘‘1993’’

6 and inserting ‘‘1999’’.

7 PART E—HIGHER EDUCATION ACCESS FOR STU8 DENTS WITH DISABILITIES; HISPANIC-SERV9 ING INSTITUTIONS; GENERAL PROVISIONS

10 SEC. 551. HIGHER EDUCATION ACCESS FOR STUDENTS

11 WITH DISABILITIES; HISPANIC-SERVING IN12 STITUTIONS; GENERAL PROVISIONS.

13 Title V (20 U.S.C. 1101 et seq.) is amended further

14 by adding at the end the following:

15 ‘‘PART E—HIGHER EDUCATION ACCESS FOR

16 STUDENTS WITH DISABILITIES

17 ‘‘SEC. 571. HIGHER EDUCATION ACCESS FOR STUDENTS

18 WITH DISABILITIES.

19 ‘‘(a) PURPOSE.—It is the purpose of this part—

20 ‘‘(1) to support the development of model pro21 grams to provide technical assistance or training, and

22 professional development, for faculty and administra23 tors in institutions of higher education, as defined in

24 section 481(a), to provide the faculty and administra-
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1 tors with the skills and assistance to teach effectively

2 students with disabilities; and

3 ‘‘(2) to ensure effective evaluation and dissemi4 nation of such model programs.

5 ‘‘(b) GRANTS AUTHORIZED.—

6 ‘‘(1) IN GENERAL.—The Secretary is authorized

7 to award grants to institutions of higher education to

8 carry out the purposes of this part.

9 ‘‘(2) MODEL PROGRAMS.—To the extent feasible,

10 the model programs developed under this part shall be

11 developed for a range of types and sizes of institutions

12 of higher education.

13 ‘‘(3) GEOGRAPHIC DISTRIBUTION.—In awarding

14 grants under this part, the Secretary shall consider—

15 ‘‘(A) providing an equitable geographic dis16 tribution of such grants; and

17 ‘‘(B) distributing such grants to urban and

18 rural areas.

19 ‘‘(4) APPROACHES.—The Secretary shall award

20 grants under this part for a range of approaches to

21 providing support to faculty and administrators, such

22 as in-service training, professional development, cus23 tomized and general technical assistance, workshops,

24 summer institutes, distance learning and the use of

25 educational technology.
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1 ‘‘(c) DISSEMINATION OF GRANTS.—The Secretary may

2 award grants to institutions of higher education that have

3 demonstrated exceptional programs for students with dis4 abilities under this part in order to disseminate those pro5 grams.

6 ‘‘(d) APPLICATIONS.—Each institution of higher edu7 cation desiring a grant under this part shall submit an ap8 plication to the Secretary at such time, in such manner,

9 and accompanied by such information as the Secretary

10 may require. Each such application shall include—

11 ‘‘(1) a plan to assess the needs of the institution

12 of higher education in order to meet the purposes of

13 this part, in consultation with a broad range of per14 sons within that institution; and

15 ‘‘(2) a plan for coordinating with or collaborat16 ing with the office within the institution that pro17 vides services to students with disabilities, and the

18 equal opportunity office within the institution, if the

19 offices exist.

20 ‘‘(e) USE OF FUNDS.—Any institution of higher edu21 cation receiving a grant under this part—

22 ‘‘(1) shall use the grant funds to—

23 ‘‘(A) meet the purposes of this section; and

24 ‘‘(B) ensure that projects assisted under this

25 part include components for model development,
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1 demonstration, evaluation, and dissemination to

2 other institutions of higher education; and

3 ‘‘(2) may include, to the extent practicable, grad4 uate teaching assistants in the services provided

5 under the grant.

6 ‘‘(f) GRANT AWARDS.—The Secretary shall award

7 grants under this part for a period of 3 years.

8 ‘‘(g) CONSTRUCTION.—Nothing in this section shall be

9 construed to impose any additional duty, obligation, or re10 sponsibility on an institution of higher education, or on

11 the institution’s administrators, faculty, or staff, in addi12 tion to the requirements of section 504 of the Rehabilitation

13 Act of 1973 and the Americans with Disabilities Act of

14 1990.

15 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

16 are authorized to be appropriated to carry out this section

17 $10,000,000 for fiscal year 1999 and such sums as may be

18 necessary for each of the 4 succeeding fiscal years.

19 ‘‘PART F—HISPANIC-SERVING INSTITUTIONS

20 ‘‘SEC. 581. PURPOSE.

21 ‘‘The purpose of this part is to—

22 ‘‘(1) expand educational opportunities for, and

23 improve the academic attainment of, Hispanic stu24 dents; and
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1 ‘‘(2) expand and enhance the academic offerings,

2 program quality, and institutional stability of col3 leges and universities that are educating the majority

4 of Hispanic college students and helping large num5 bers of Hispanic students and other low-income indi6 viduals complete postsecondary degrees.

7 ‘‘SEC. 582. PROGRAM AUTHORIZED.

8 ‘‘(a) IN GENERAL.—The Secretary shall provide grants

9 and related assistance to Hispanic-serving institutions to

10 enable such institutions to improve and expand their capac11 ity to serve Hispanic students and other low-income indi12 viduals.

13 ‘‘(b) AUTHORIZED ACTIVITIES.—

14 ‘‘(1) TYPES OF ACTIVITIES AUTHORIZED.—

15 Grants awarded under this section shall be used by

16 Hispanic-serving institutions of higher education to

17 assist such institutions to plan, develop, undertake,

18 and carry out programs to improve and expand such

19 institutions’ capacity to serve Hispanic students and

20 other low-income students.

21 ‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—

22 The programs described in paragraph (1) may in23 clude—

24 ‘‘(A) purchase, rental, or lease of scientific

25 or laboratory equipment for educational pur-
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1 poses, including instructional and research pur2 poses;

3 ‘‘(B) renovation and improvement in class4 room, library, laboratory, and other instruc5 tional facilities;

6 ‘‘(C) support of faculty exchanges, and fac7 ulty development and faculty fellowships to as8 sist in attaining advanced degrees in their field

9 of instruction;

10 ‘‘(D) curriculum development and academic

11 instruction;

12 ‘‘(E) purchase of library books, periodicals,

13 microfilm, and other educational materials;

14 ‘‘(F) funds and administrative manage15 ment, and acquisition of equipment for use in

16 strengthening funds management;

17 ‘‘(G) joint use of facilities such as labora18 tories and libraries;

19 ‘‘(H) academic tutoring and counseling pro20 grams and student support services; and

21 ‘‘(I) expanding the number of Hispanic and

22 other underrepresented graduate and professional

23 students that can be served by the institution by

24 expanding courses and institutional resources.

25 ‘‘(3) ENDOWMENT FUND.—
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1 ‘‘(A) IN GENERAL.—A Hispanic-serving in2 stitution may use not more than 20 percent of

3 the grant funds provided under this part to es4 tablish or increase an endowment fund at the in5 stitution.

6 ‘‘(B) MATCHING REQUIREMENT.—In order

7 to be eligible to use grant funds in accordance

8 with subparagraph (A), the Hispanic-serving in9 stitution shall provide matching funds, in an

10 amount equal to the Federal funds used in ac11 cordance with subparagraph (A), for the estab12 lishment or increase of the endowment fund.

13 ‘‘(C) COMPARABILITY.—The provisions of

14 part C of title III regarding the establishment or

15 increase of an endowment fund, that the Sec16 retary determines are not inconsistent with this

17 paragraph, shall apply to funds used under sub18 paragraph (A).

19 ‘‘(c) WAIT-OUT-PERIOD.—Each Hispanic-serving in20 stitution that receives a grant under this part shall not be

21 eligible to receive an additional grant under this part until

22 2 years after the date on which the preceding grant period

23 terminates.
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1 ‘‘SEC. 583. APPLICATION PROCESS.

2 ‘‘(a) INSTITUTIONAL ELIGIBILITY.—Each Hispanic3 serving institution desiring to receive assistance under this

4 part shall submit to the Secretary such enrollment data as

5 may be necessary to demonstrate that the institution is a

6 Hispanic-serving institution as defined in section 585,

7 along with such other data and information as the Sec8 retary may by regulation require.

9 ‘‘(b) APPLICATIONS.—Any institution which is deter10 mined by the Secretary to be a Hispanic-serving institution

11 (on the basis of the data and information submitted under

12 subsection (a)) may submit an application for assistance

13 under this part to the Secretary. Such application shall in14 clude—

15 ‘‘(1) a 5-year plan for improving the assistance

16 provided by the Hispanic-serving institution to His17 panic students and other low-income individuals; and

18 ‘‘(2) such other information and assurance as the

19 Secretary may require.

20 ‘‘(c) PRIORITY.—With respect to applications for as21 sistance under this section, the Secretary shall give priority

22 to an application that contains satisfactory evidence that

23 the Hispanic-serving institution has entered into or will

24 enter into a collaborative arrangement with at least one

25 local educational agency or community-based organization

26 to provide such agency or organization with assistance
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1 (from funds other than funds provided under this part) in

2 reducing dropout rates for Hispanic students, improving

3 rates of academic achievement for Hispanic students, and

4 increasing the rates at which Hispanic secondary school

5 graduates enroll in higher education.

6 ‘‘SEC. 584. SPECIAL RULE.

7 ‘‘No Hispanic-serving institution that is eligible for

8 and receives funds under this part may receive funds under

9 part A or B of title III during the period for which funds

10 under this part are awarded.

11 ‘‘SEC. 585. DEFINITIONS.

12 ‘‘For purposes of this part:

13 ‘‘(1) HISPANIC-SERVING INSTITUTION.—The term

14 ‘Hispanic-serving institution’ means an institution of

15 higher education which—

16 ‘‘(A) is an eligible institution under section

17 312(b);

18 ‘‘(B) at the time of application, has an en19 rollment of undergraduate full-time equivalent

20 students that is at least 25 percent Hispanic stu21 dents; and

22 ‘‘(C) provides assurances that not less than

23 50 percent of its Hispanic students are low-in24 come individuals.
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1 ‘‘(2) LOW-INCOME INDIVIDUAL.—The term ‘low2 income individual’ means an individual from a fam3 ily whose taxable income for the preceding year did

4 not exceed 150 percent of an amount equal to the pov5 erty level determined by using criteria of poverty es6 tablished by the Bureau of the Census.

7 ‘‘SEC. 586. AUTHORIZATION OF APPROPRIATIONS.

8 ‘‘There are authorized to be appropriated to carry out

9 this part $45,000,000 for fiscal year 1999 and such sums

10 as may be necessary for each of the 4 succeeding fiscal years.

11 ‘‘PART G—GENERAL PROVISIONS

12 ‘‘SEC. 591. ADMINISTRATIVE PROVISIONS FOR PARTS A AND

13 B.

14 ‘‘(a) COORDINATED ADMINISTRATION.—In carrying

15 out the purpose described in section 500(1), the Secretary

16 shall provide for coordinated administration and regulation

17 of graduate programs assisted under parts A and B with

18 other Federal programs providing assistance for graduate

19 education in order to minimize duplication and improve

20 efficiency to ensure that the programs are carried out in

21 a manner most compatible with academic practices and

22 with the standard timetables for applications for, and noti23 fications of acceptance to, graduate programs.

24 ‘‘(b) HIRING AUTHORITY.—For purposes of carrying

25 out parts A and B, the Secretary shall appoint, without
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1 regard to the provisions of title 5, United States Code, that

2 govern appointments in the competitive service, such ad3 ministrative and technical employees, with the appropriate

4 educational background, as shall be needed to assist in the

5 administration of such parts. The employees shall be paid

6 without regard to the provisions of chapter 51 and sub7 chapter III of chapter 53 of such title relating to classifica8 tion and General Schedule pay rates.

9 ‘‘(c) USE FOR RELIGIOUS PURPOSES PROHIBITED.—

10 No institutional payment or allowance under section 513(b)

11 or 526 shall be paid to a school or department of divinity

12 as a result of the award of a fellowship under part A or

13 B, respectively, to an individual who is studying for a reli14 gious vocation.

15 ‘‘(d) EVALUATION.—The Secretary shall evaluate the

16 success of assistance provided to individuals under part A

17 or B with respect to graduating from their degree programs,

18 and placement in faculty and professional positions.

19 ‘‘(e) CONTINUATION AWARDS.—The Secretary, using

20 funds appropriated to carry out parts A and B, and before

21 awarding any assistance under such parts to a recipient

22 that did not receive assistance under part C or D of title

23 IX (as such parts were in effect prior to the date of enact24 ment of the Higher Education Amendments of 1998) shall

25 continue to provide funding to recipients of assistance
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1 under such part C or D (as so in effect), as the case may

2 be, pursuant to any multiyear award of such assistance.’’.

3 TITLE VI—INTERNATIONAL

4 EDUCATION PROGRAMS

5 SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUD6 IES.

7 Part A of title VI (20 U.S.C. 1121 et seq.) is amended

8 to read as follows:

9 ‘‘PART A—INTERNATIONAL AND FOREIGN

10 LANGUAGE STUDIES

11 ‘‘SEC. 601. FINDINGS AND PURPOSES.

12 ‘‘(a) FINDINGS.—The Congress finds that—

13 ‘‘(1) the well-being of the United States, its econ14 omy and long-range security, is dependent on the edu15 cation and training of Americans in international

16 and foreign language studies and on a strong research

17 base in these areas;

18 ‘‘(2) knowledge of other countries and the ability

19 to communicate in other languages is essential to the

20 promotion of mutual understanding and cooperation

21 among nations; and

22 ‘‘(3) systematic efforts are necessary to enhance

23 the capacity of institutions of higher education in the

24 United States for—
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1 ‘‘(A) producing graduates with inter2 national and foreign language expertise and

3 knowledge; and

4 ‘‘(B) research regarding such expertise and

5 knowledge.

6 ‘‘(b) PURPOSES.—It is the purpose of this part—

7 ‘‘(1) to assist in the development of knowledge,

8 international study, resources and trained personnel;

9 ‘‘(2) to stimulate the attainment of foreign lan10 guage acquisition and fluency;

11 ‘‘(3) to develop a pool of international experts to

12 meet national needs; and

13 ‘‘(4) to coordinate the programs of the Federal

14 Government in the areas of foreign language, area

15 and other international studies, including profes16 sional international affairs education, and research.

17 ‘‘SEC. 602. GRADUATE AND UNDERGRADUATE LANGUAGE

18 AND AREA CENTERS AND PROGRAMS.

19 ‘‘(a) NATIONAL LANGUAGE AND AREA CENTERS AND

20 PROGRAMS AUTHORIZED.—

21 ‘‘(1) CENTERS AND PROGRAMS.—

22 ‘‘(A) IN GENERAL.—The Secretary is au23 thorized—

24 ‘‘(i) to make grants to institutions of

25 higher education, or combinations thereof,
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1 for the purpose of establishing, strengthen2 ing, and operating comprehensive language

3 and area centers and programs; and

4 ‘‘(ii) to make grants to such institu5 tions or combinations for the purpose of es6 tablishing, strengthening, and operating a

7 diverse network of undergraduate language

8 and area centers and programs.

9 ‘‘(B) NATIONAL RESOURCES.—The centers

10 and programs referred to in paragraph (1) shall

11 be national resources for—

12 ‘‘(i) teaching of any modern foreign

13 language;

14 ‘‘(ii) instruction in fields needed to

15 provide full understanding of areas, regions,

16 or countries in which such language is com17 monly used;

18 ‘‘(iii) research and training in inter19 national studies, and the international and

20 foreign language aspects of professional and

21 other fields of study; and

22 ‘‘(iv) instruction and research on

23 issues in world affairs which concern one or

24 more countries.
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1 ‘‘(2) AUTHORIZED ACTIVITIES.—Any such grant

2 may be used to pay all or part of the cost of establish3 ing or operating a center or program, including the

4 cost of—

5 ‘‘(A) faculty, staff, and student travel in

6 foreign areas, regions, or countries;

7 ‘‘(B) teaching and research materials;

8 ‘‘(C) curriculum planning and development;

9 ‘‘(D) bringing visiting scholars and faculty

10 to the center to teach or to conduct research;

11 ‘‘(E) establishing and maintaining linkages

12 with overseas institutions of higher education

13 and other organizations that may contribute to

14 the teaching and research of the center or pro15 gram; and

16 ‘‘(F) training and improvement of the staff,

17 for the purpose of, and subject to such conditions

18 as the Secretary finds necessary for, carrying out

19 this section.

20 ‘‘(3) GRANTS TO MAINTAIN LIBRARY COLLEC21 TIONS.—The Secretary may make grants to centers

22 described in paragraph (1) having important library

23 collections, as determined by the Secretary, for the

24 maintenance of such collections.
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1 ‘‘(4) OUTREACH GRANTS AND SUMMER INSTI2 TUTES.—The Secretary may make additional grants

3 to centers described in paragraph (1) for any one or

4 more of the following purposes:

5 ‘‘(A) Programs of linkage or outreach be6 tween foreign language, area studies, and other

7 international fields and professional schools and

8 colleges.

9 ‘‘(B) Programs of linkage or outreach with

10 2-year and 4-year colleges and universities.

11 ‘‘(C) Programs of linkage or outreach with

12 departments or agencies of Federal and State

13 Governments.

14 ‘‘(D) Programs of linkage or outreach with

15 the news media, business, professional, or trade

16 associations.

17 ‘‘(E) Summer institutes in foreign area,

18 foreign language, and other international fields

19 designed to carry out the programs of linkage

20 and outreach in subparagraphs (A), (B), (C),

21 and (D).

22 ‘‘(b) STIPENDS FOR FOREIGN LANGUAGE AND AREA

23 STUDIES.—

24 ‘‘(1) IN GENERAL.—The Secretary is authorized

25 to make grants to institutions of higher education or
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1 combinations of such institutions for the purpose of

2 paying stipends to individuals undergoing advanced

3 training in any center or program approved by the

4 Secretary.

5 ‘‘(2) REQUIREMENTS.—Students receiving sti6 pends described in paragraph (1) shall be individuals

7 who are engaged in an instructional program with

8 stated performance goals for functional foreign lan9 guage use or in a program developing such perform10 ance goals, in combination with area studies, inter11 national studies, or the international aspects of a pro12 fessional studies program.

13 ‘‘(3) ALLOWANCES.—Stipends awarded to grad14 uate level recipients may include allowances for de15 pendents and for travel for research and study in the

16 United States and abroad.

17 ‘‘(c) SPECIAL RULE WITH RESPECT TO TRAVEL.—No

18 funds may be expended under this part for undergraduate

19 travel except in accordance with rules prescribed by the Sec20 retary setting forth policies and procedures to assure that

21 Federal funds made available for such travel are expended

22 as part of a formal program of supervised study.

23 ‘‘SEC. 603. LANGUAGE RESOURCE CENTERS.

24 ‘‘(a) LANGUAGE RESOURCE CENTERS AUTHORIZED.—

25 The Secretary is authorized to make grants to and enter
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1 into contracts with institutions of higher education, or com2 binations of such institutions, for the purpose of establish3 ing, strengthening, and operating a small number of na4 tional language resource and training centers, which shall

5 serve as resources to improve the capacity to teach and

6 learn foreign languages effectively.

7 ‘‘(b) AUTHORIZED ACTIVITIES.—The activities carried

8 out by the centers described in subsection (a)—

9 ‘‘(1) shall include effective dissemination efforts,

10 whenever appropriate; and

11 ‘‘(2) may include—

12 ‘‘(A) the conduct and dissemination of re13 search on new and improved teaching methods,

14 including the use of advanced educational tech15 nology;

16 ‘‘(B) the development and dissemination of

17 new teaching materials reflecting the use of such

18 research in effective teaching strategies;

19 ‘‘(C) the development, application, and dis20 semination of performance testing appropriate to

21 an educational setting for use as a standard and

22 comparable measurement of skill levels in all

23 languages;

24 ‘‘(D) the training of teachers in the admin25 istration and interpretation of performance tests,
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1 the use of effective teaching strategies, and the

2 use of new technologies;

3 ‘‘(E) the publication and dissemination to

4 individuals and organizations in the foreign lan5 guage field of instructional materials in the less

6 commonly taught languages;

7 ‘‘(F) the development and dissemination of

8 materials designed to serve as a resource for for9 eign language teachers at the elementary and

10 secondary school levels; and

11 ‘‘(G) the operation of intensive summer lan12 guage institutes to train advanced foreign lan13 guage students, provide professional development,

14 and improve language instruction through

15 preservice and inservice language training for

16 teachers.

17 ‘‘(c) CONDITIONS FOR GRANTS.—Grants under this

18 section shall be made on such conditions as the Secretary

19 determines to be necessary to carry out the provisions of

20 this section.

21 ‘‘SEC. 604. UNDERGRADUATE INTERNATIONAL STUDIES

22 AND FOREIGN LANGUAGE PROGRAMS.

23 ‘‘(a) INCENTIVES FOR THE CREATION OF NEW PRO24 GRAMS AND THE STRENGTHENING OF EXISTING PROGRAMS
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1 IN UNDERGRADUATE INTERNATIONAL STUDIES AND FOR2 EIGN LANGUAGES.—

3 ‘‘(1) AUTHORITY.—The Secretary is authorized

4 to make grants to institutions of higher education,

5 combinations of such institutions, or partnerships be6 tween nonprofit educational institutions and institu7 tions of higher education, to assist such institutions,

8 combinations or partnerships in planning, develop9 ing, and carrying out programs to improve under10 graduate instruction in international studies and for11 eign languages. Such grants shall be awarded to insti12 tutions, combinations or partnerships seeking to cre13 ate new programs or to strengthen existing programs

14 in area studies, foreign languages, and other inter15 national fields.

16 ‘‘(2) FEDERAL SHARE AND USE OF FUNDS.—

17 Grants made under this section may be used to pay

18 not more than 50 percent of the cost of projects and

19 activities which are an integral part of such a pro20 gram, such as—

21 ‘‘(A) planning for the development and ex22 pansion of undergraduate programs in inter23 national studies and foreign languages;

24 ‘‘(B) teaching, research, curriculum develop25 ment, faculty training in the United States or
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1 abroad, and other related activities, including

2 the expansion of library and teaching resources;

3 ‘‘(C) expansion of opportunities for learning

4 foreign languages, including less commonly

5 taught languages;

6 ‘‘(D) programs under which foreign teachers

7 and scholars may visit institutions as visiting

8 faculty;

9 ‘‘(E) programs designed to develop or en10 hance linkages between 2-year and 4-year insti11 tutions of higher education, or baccalaureate and

12 post-baccalaureate programs or institutions;

13 ‘‘(F) the development of undergraduate

14 study abroad programs in locations abroad in

15 which such study opportunities are not otherwise

16 available and the integration of these programs

17 into specific on-campus degree programs;

18 ‘‘(G) the development of model programs to

19 enhance the effectiveness of study abroad, includ20 ing predeparture and post return programs;

21 ‘‘(H) the development of programs designed

22 to integrate professional and technical education

23 with area studies, foreign languages, and other

24 international fields;
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1 ‘‘(I) the conduct of summer institutes in for2 eign area, foreign language, and other inter3 national fields for purposes that are consistent

4 with the projects and activities described in this

5 subsection; and

6 ‘‘(J) the development of partnerships be7 tween institutions of higher education and the

8 private sector, government, and elementary and

9 secondary education institutions to enhance

10 international knowledge.

11 ‘‘(3) NON-FEDERAL SHARE.—The non-Federal

12 share of the cost of the programs assisted under this

13 subsection may be provided either in cash or in kind.

14 Such assistance may be composed of institutional and

15 noninstitutional funds, including State, private sec16 tor, corporation, or foundation contributions.

17 ‘‘(4) PRIORITY.—In awarding grants under this

18 section, the Secretary shall give priority to applica19 tions from institutions of higher education, combina20 tions or partnerships that require entering students to

21 have successfully completed at least 2 years of second22 ary school foreign language instruction or that re23 quire each graduating student to earn 2 years of post24 secondary credit in a foreign language (or have dem25 onstrated equivalent competence in the foreign lan-
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1 guage) or, in the case of a 2-year degree granting in2 stitution, offer 2 years of postsecondary credit in a

3 foreign language.

4 ‘‘(5) GRANT CONDITIONS.—Grants under this

5 subsection shall be made on such conditions as the

6 Secretary determines to be necessary to carry out this

7 subsection.

8 ‘‘(6) APPLICATION.—Each application for assist9 ance under this subsection shall include—

10 ‘‘(A) evidence that the applicant has con11 ducted extensive planning prior to submitting

12 the application;

13 ‘‘(B) an assurance that the faculty and ad14 ministrators of all relevant departments and

15 programs served by the applicant are involved in

16 ongoing collaboration with regard to achieving

17 the stated objectives of the application;

18 ‘‘(C) an assurance that students at the ap19 plicant institutions, as appropriate, will have

20 equal access to, and derive benefits from, the pro21 gram assisted under this subsection; and

22 ‘‘(D) an assurance that each institution,

23 combination or partnership will use the Federal

24 assistance provided under this subsection to sup25 plement and not supplant funds expended by the
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1 institution, prior to the receipt of the Federal as2 sistance, for programs to improve undergraduate

3 instruction in international studies and foreign

4 languages.

5 ‘‘(7) EVALUATION.—The Secretary may establish

6 requirements for program evaluations and require

7 grant recipients to submit annual reports that evalu8 ate the progress and performance of students partici9 pating in programs assisted under this subsection.

10 ‘‘(b) PROGRAMS OF NATIONAL SIGNIFICANCE.—The

11 Secretary may also award grants to public and private

12 nonprofit agencies and organizations, including profes13 sional and scholarly associations, whenever the Secretary

14 determines such grants will make an especially significant

15 contribution to improving undergraduate international

16 studies and foreign language programs.

17 ‘‘SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

18 ‘‘(a) AUTHORIZED ACTIVITIES.—The Secretary may,

19 directly or through grants or contracts, conduct research

20 and studies that contribute to achieving the purposes of this

21 part. Such research and studies may include—

22 ‘‘(1) studies and surveys to determine needs for

23 increased or improved instruction in foreign lan24 guage, area studies, or other international fields, in25 cluding the demand for foreign language, area, and
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1 other international specialists in government, edu2 cation, and the private sector;

3 ‘‘(2) studies and surveys to assess the utilization

4 of graduates of programs supported under this title by

5 governmental, educational, and private sector organi6 zations and other studies assessing the outcomes and

7 effectiveness of programs so supported;

8 ‘‘(3) evaluation of the extent to which programs

9 assisted under this title that address national needs

10 would not otherwise be offered;

11 ‘‘(4) comparative studies of the effectiveness of

12 strategies to provide international capabilities at in13 stitutions of higher education;

14 ‘‘(5) research on more effective methods of pro15 viding instruction and achieving competency in for16 eign languages;

17 ‘‘(6) the development and publication of special18 ized materials for use in foreign language, area stud19 ies, and other international fields, or for training for20 eign language, area, and other international special21 ists;

22 ‘‘(7) studies and evaluations of effective practices

23 in the dissemination of international information,

24 materials, research, teaching strategies, and testing
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1 techniques throughout the education community, in2 cluding elementary and secondary schools; and

3 ‘‘(8) the application of performance tests and

4 standards across all areas of foreign language instruc5 tion and classroom use.

6 ‘‘(b) ANNUAL REPORT.—The Secretary shall prepare,

7 publish, and announce an annual report listing the books

8 and research materials produced with assistance under this

9 section.

10 ‘‘SEC. 606. SELECTION OF CERTAIN GRANT RECIPIENTS.

11 ‘‘(a) COMPETITIVE GRANTS.—The Secretary shall

12 award grants under section 602 competitively on the basis

13 of criteria that separately, but not less rigorously, evaluates

14 the applications for comprehensive and undergraduate lan15 guage and area centers and programs.

16 ‘‘(b) SELECTION CRITERIA.—The Secretary shall set

17 criteria for grants awarded under section 602 by which a

18 determination of excellence shall be made to meet the differ19 ing objectives of graduate and undergraduate institutions.

20 ‘‘(c) EQUITABLE DISTRIBUTION OF GRANTS.—The

21 Secretary shall, to the extent practicable, award grants

22 under this part (other than section 602) in such manner

23 as to achieve an equitable distribution of the grant funds

24 throughout the United States, based on the merit of a pro-
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1 posal as determined pursuant to a peer review process in2 volving broadly representative professionals.

3 ‘‘SEC. 607. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

4 ‘‘(a) SELECTION CRITERIA.—The Secretary shall make

5 excellence the criterion for selection of grants awarded

6 under section 602.

7 ‘‘(b) EQUITABLE DISTRIBUTION.—To the extent prac8 ticable and consistent with the criterion of excellence, the

9 Secretary shall award grants under this part (other than

10 section 602) in such a manner as will achieve an equitable

11 distribution of funds throughout the United States.

12 ‘‘(c) SUPPORT FOR UNDERGRADUATE EDUCATION.—

13 The Secretary shall also award grants under this part in

14 such manner as to ensure that an appropriate portion of

15 the funds appropriated for this part (as determined by the

16 Secretary) are used to support undergraduate education.

17 ‘‘SEC. 608. AMERICAN OVERSEAS RESEARCH CENTERS.

18 ‘‘(a) CENTERS AUTHORIZED.—The Secretary is au19 thorized to make grants to and enter into contracts with

20 any American overseas research center that is a consortium

21 of institutions of higher education (hereafter in this section

22 referred to as a ‘‘center’’) to enable such center to promote

23 postgraduate research, exchanges and area studies.

24 ‘‘(b) USE OF GRANTS.—Grants made and contracts

25 entered into pursuant to this section may be used to pay
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1 all or a portion of the cost of establishing or operating a

2 center or program, including—

3 ‘‘(1) the cost of faculty and staff stipends and

4 salaries;

5 ‘‘(2) the cost of faculty, staff, and student travel;

6 ‘‘(3) the cost of the operation and maintenance

7 of overseas facilities;

8 ‘‘(4) the cost of teaching and research materials;

9 ‘‘(5) the cost of acquisition, maintenance, and

10 preservation of library collections;

11 ‘‘(6) the cost of bringing visiting scholars and

12 faculty to a center to teach or to conduct research;

13 ‘‘(7) the cost of organizing and managing con14 ferences; and

15 ‘‘(8) the cost of publication and dissemination of

16 material for the scholarly and general public.

17 ‘‘(c) LIMITATION.—The Secretary shall only award

18 grants to and enter into contracts with centers under this

19 section that—

20 ‘‘(1) receive more than 50 percent of their fund21 ing from public or private United States sources;

22 ‘‘(2) have a permanent presence in the country

23 in which the center is located; and

24 ‘‘(3) are organizations described in section

25 501(c)(3) of the Internal Revenue Code of 1986 which
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1 are exempt from taxation under section 501(a) of

2 such Code.

3 ‘‘(d) DEVELOPMENT GRANTS.—The Secretary is au4 thorized to make grants for the establishment of new centers.

5 The grants may be used to fund activities that, within 1

6 year, will result in the creation of a center described in

7 subsection (c).

8 ‘‘SEC. 609. AUTHORIZATION OF APPROPRIATIONS.

9 ‘‘There are authorized to be appropriated to carry out

10 this part $80,000,000 for fiscal year 1999, and such sums

11 as may be necessary for each of the 4 succeeding fiscal

12 years.’’.

13 SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PRO14 GRAMS.

15 Part B of title VI (20 U.S.C. 1130 et seq.) is amend16 ed—

17 (1) in section 612 (20 U.S.C. 1130–1)—

18 (A) in subsection (c)—

19 (i) in paragraph (1)—

20 (I) in subparagraph (B), by strik21 ing ‘‘advanced’’; and

22 (II) in subparagraph (C), by

23 striking ‘‘evening or summer’’; and

24 (ii) in paragraph (2)(C), by inserting

25 ‘‘foreign language,’’ after ‘‘studies,’’; and
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1 (B) in subsection (d)(2)(G), by inserting ‘‘,

2 such as a representative of a community college

3 in the region served by the center’’ before the pe4 riod; and

5 (2) in section 614 (20 U.S.C. 1130b)—

6 (A) in subsection (a), by striking ‘‘1993’’

7 and inserting ‘‘1999’’; and

8 (B) in subsection (b), by striking ‘‘1993’’

9 and inserting ‘‘1999’’.

10 SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

11 Part C of title VI (20 U.S.C. 1131 et seq.) is amend12 ed—

13 (1) in section 621(e) (20 U.S.C. 1131(e))—

14 (A) by striking ‘‘one-fourth’’ and inserting

15 ‘‘one-half’’; and

16 (B) by adding at the end the following:

17 ‘‘The non-Federal contribution shall be made

18 from private sector sources.’’;

19 (2) by redesignating sections 622 through 627

20 (20 U.S.C. 1131a and 1131f) as sections 623 through

21 628, respectively; and

22 (3) by inserting after section 621 (20 U.S.C.

23 1131) the following:
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1 ‘‘SEC. 622. INSTITUTIONAL DEVELOPMENT.

2 ‘‘(a) IN GENERAL.—The Institute shall award grants,

3 from amounts available to the Institute for each fiscal year,

4 to historically Black colleges and universities, Hispanic5 serving institutions, Tribally Controlled Colleges or Univer6 sities, and minority institutions, to enable such colleges,

7 universities, and institutions to strengthen international af8 fairs programs.

9 ‘‘(b) APPLICATION.—No grant may be made by the In10 stitute unless an application is made by the college, univer11 sity, or institution at such time, in such manner, and ac12 companied by such information as the Institute may re13 quire.

14 ‘‘(c) DEFINITIONS.—In this section—

15 ‘‘(1) the term ‘historically Black college and uni16 versity’ has the meaning given the term in section

17 322;

18 ‘‘(2) the term ‘Hispanic-serving institution’ has

19 the meaning given the term in section 585;

20 ‘‘(3) the term ‘Tribally Controlled College or

21 University’ has the meaning given the term in section

22 2 of the Tribally Controlled College or University As23 sistance Act of 1978 (25 U.S.C. 1801); and

24 ‘‘(4) the term ‘minority institution’ has the

25 meaning given the term in section 365.’’;
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1 (4) in section 623 (as redesignated by paragraph

2 (2))—

3 (A) in the section heading, by striking

4 ‘‘JUNIOR YEAR’’ and inserting ‘‘STUDY’’;

5 (B) in subsection (b)(2)—

6 (i) by inserting ‘‘, or completing the

7 third year of study in the case of a summer

8 abroad program,’’ after ‘‘study’’; and

9 (ii) by striking ‘‘junior year’’ and in10 serting ‘‘study’’;

11 (C) in subsection (c)—

12 (i) in the matter preceding paragraph

13 (1), by striking ‘‘junior year’’ and inserting

14 ‘‘study’’;

15 (ii) in paragraph (1), by striking

16 ‘‘junior year’’ and inserting ‘‘study’’; and

17 (iii) in paragraph (2)—

18 (I) by striking ‘‘one-half’’ and in19 serting ‘‘one-third’’; and

20 (II) by striking ‘‘junior year’’ and

21 inserting ‘‘study’’;

22 (5) in section 627 (as redesignated by paragraph

23 (2)) (20 U.S.C. 1131e), by striking ‘‘625’’ and insert24 ing ‘‘626’’; and
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1 (6) in section 628 (as redesignated by paragraph

2 (2)) (20 U.S.C. 1131f), by striking ‘‘1993’’ and insert3 ing ‘‘1999’’.

4 SEC. 604. GENERAL PROVISIONS.

5 Section 632 (20 U.S.C. 1132–1) is repealed.

6 TITLE VII—RELATED PROGRAMS

7 AND AMENDMENTS TO OTHER

8 ACTS

9 PART A—INDIAN EDUCATION PROGRAMS

10 SEC. 711. TRIBALLY CONTROLLED COMMUNITY COLLEGE

11 ASSISTANCE ACT OF 1978.

12 (a) REAUTHORIZATION.—

13 (1) AMOUNT OF GRANTS.—Section 108(a)(2) of

14 the Tribally Controlled Community College Assistance

15 Act of 1978 (25 U.S.C. 1808(a)(2)) is amended by

16 striking ‘‘$5,820’’ and inserting ‘‘$6,000’’.

17 (2) AUTHORIZATION OF APPROPRIATIONS.—

18 (A) TITLE I.—Section 110(a) of the Trib19 ally Controlled Community College Assistance

20 Act of 1978 (25 U.S.C. 1810(a)) is amended—

21 (i) in paragraph (1), by striking

22 ‘‘1993’’ and inserting ‘‘1999’’;

23 (ii) in paragraph (2), by striking

24 ‘‘$30,000,000 for fiscal year 1993’’ and in25 serting ‘‘$40,000,000 for fiscal year 1999’’;
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1 (iii) in paragraph (3), by striking

2 ‘‘1993’’ and inserting ‘‘1999’’; and

3 (iv) in paragraph (4), by striking

4 ‘‘1993’’ and inserting ‘‘1999’’.

5 (B) TITLE III.—Section 306(a) of the Trib6 ally Controlled Community College Assistance

7 Act of 1978 (25 U.S.C. 1836(a)) is amended by

8 striking ‘‘1993’’ and inserting ‘‘1999’’.

9 (C) TITLE IV.—Section 403 of the Tribal

10 Economic Development and Technology Related

11 Education Assistance Act of 1990 (25 U.S.C.

12 1852) is amended by striking ‘‘1993’’ and insert13 ing ‘‘1999’’.

14 (b) NAME CHANGE.—The Tribally Controlled Commu15 nity College Assistance Act of 1978 (25 U.S.C. 1801 et seq.)

16 is amended—

17 (1) by striking ‘‘community college’’ each place

18 the term appears and inserting ‘‘college or univer19 sity’’;

20 (2) by striking ‘‘Community College’’ each place

21 the term appears (other than when such term is pre22 ceded by the term ‘‘Navajo’’) and inserting ‘‘College or

23 University’’;
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1 (3) by striking ‘‘community colleges’’ each place

2 the term appears and inserting ‘‘colleges or univer3 sities’’;

4 (4) by striking ‘‘such college’’ each place the term

5 appears and inserting ‘‘such college or university’’;

6 and

7 (5) by striking ‘‘community college’s’’ and insert8 ing ‘‘college or university’s’’.

9 SEC. 712. AMERICAN INDIAN, ALASKA NATIVE, AND NATIVE

10 HAWAIIAN CULTURE AND ART DEVELOP11 MENT.

12 Section 1531 of the American Indian, Alaska Native,

13 and Native Hawaiian Culture and Art Development Act

14 (20 U.S.C. 4451) is amended to read as follows:

15 ‘‘SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

16 ‘‘There is authorized to be appropriated to carry out

17 part A $5,000,000 for fiscal year 1999.’’.

18 PART B—ADVANCED PLACEMENT INCENTIVE

19 PROGRAM

20 SEC. 721. ADVANCED PLACEMENT INCENTIVE PROGRAM.

21 (a) PROGRAM ESTABLISHED.—The Secretary of Edu22 cation is authorized to make grants to States having appli23 cations approved under subsection (d), from allotments

24 under subsection (b), to enable the States to reimburse low-
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1 income individuals to cover part or all of the cost of ad2 vanced placement test fees, if the low-income individuals—

3 (1) are enrolled in an advanced placement class;

4 and

5 (2) plan to take an advanced placement test.

6 (b) ALLOTMENT.—From the sum appropriated under

7 subsection (j) for a fiscal year, the Secretary shall allot to

8 each State an amount that bears the same relation to the

9 sum as the number of low-income individuals in the State

10 bears to the number of low-income individuals in all States.

11 (c) INFORMATION DISSEMINATION.—The State edu12 cational agency may use not more than 5 percent of grant

13 funds received for a fiscal year to disseminate information

14 regarding the availability of test fee payments under this

15 section to eligible individuals through secondary school

16 teachers and guidance counselors.

17 (d) REQUIREMENTS FOR APPROVAL OF APPLICA18 TIONS.—In approving applications for grants the Secretary

19 of Education shall—

20 (1) require that each such application contain a

21 description of the advance placement test fees the

22 State will pay on behalf of individual students;

23 (2) require an assurance that any funds received

24 under this section, other than funds used in accord-
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1 ance with subsection (c), shall be used only to pay ad2 vanced placement test fees; and

3 (3) contain such information as the Secretary

4 may require to demonstrate that the State will ensure

5 that a student is eligible for payments under this sec6 tion, including the documentation required by chapter

7 1 of subpart 2 of part A of title IV of the Higher

8 Education Act of 1965 (20 U.S.C. 1070a–11 et seq.).

9 (e) FUNDING RULE.—Funds provided under this sec10 tion shall be used to supplement and not supplant other

11 Federal, State, local or private funds available to assist low12 income individuals in paying for advanced placement test13 ing, except that such funds may be used to supplant the

14 funds so available if the funds used to supplant are used

15 to increase the participation of low-income individuals in

16 advanced placement courses through teacher training and

17 other activities directly related to increasing the availabil18 ity of advanced placement courses.

19 (f) SPECIAL RULE.—The Secretary of Education shall

20 only award grants under this section for a fiscal year if

21 the amount the College Board spends for the College Board’s

22 fee assistance program for low-income students for the fiscal

23 year is not less than the amount the College Board spent

24 for such program for the preceding fiscal year.
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1 (g) REGULATIONS.—The Secretary of Education shall

2 prescribe such regulations as are necessary to carry out this

3 section.

4 (h) REPORT.—Each State annually shall report to the

5 Secretary of Education regarding—

6 (1) the number of low-income individuals in the

7 State who receive assistance under this section; and

8 (2) the teacher training and other activities de9 scribed in subsection (e).

10 (i) DEFINITION.—In this section:

11 (1) ADVANCED PLACEMENT TEST.—The term

12 ‘‘advanced placement test’’ includes only an advanced

13 placement test approved by the Secretary of Edu14 cation for the purposes of this section.

15 (2) LOW-INCOME INDIVIDUAL.—The term ‘‘low16 income individual’’ has the meaning given the term

17 in section 402A(g)(2) of the Higher Education Act of

18 1965 (20 U.S.C. 1070a–11(g)(2)).

19 (j) AUTHORIZATION OF APPROPRIATIONS.—There are

20 authorized to be appropriated $10,000,000 for fiscal year

21 1999 and such sums as may be necessary for each of the

22 4 succeeding fiscal years to carry out this section.
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1 PART C—UNITED STATES INSTITUTE OF PEACE

2 SEC. 731. AUTHORITIES OF THE UNITED STATES INSTITUTE

3 OF PEACE.

4 The United States Institute of Peace Act (22 U.S.C.

5 4601 et seq.) is amended—

6 (1) in section 1705 (22 U.S.C. 4604)—

7 (A) in subsection (f), by inserting ‘‘personal

8 service and other’’ after ‘‘may enter into’’; and

9 (B) in subsection (o), by inserting after

10 ‘‘Services’’ the following: ‘‘and use all sources of

11 supply and services of the General Services Ad12 ministration’’;

13 (2) in section 1710(a)(1) (22 U.S.C.

14 4609(a)(1))—

15 (A) by striking ‘‘1993’’ and inserting

16 ‘‘1999’’; and

17 (B) by striking ‘‘6’’ and inserting ‘‘4’’; and

18 (3) in the second and third sentences of section

19 1712 (22 U.S.C. 4611), by striking ‘‘shall’’ each place

20 the term appears and inserting ‘‘may’’.

21 PART D—COMMUNITY SCHOLARSHIP

22 MOBILIZATION

23 SEC. 741. SHORT TITLE.

24 This part may be cited as the ‘‘Community Scholar25 ship Mobilization Act.’’
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1 SEC. 742. FINDINGS.

2 Congress finds that—

3 (1) the local community, when properly orga4 nized and challenged, is one of the best sources of aca5 demic support, motivation toward achievement, and

6 financial resources for aspiring postsecondary stu7 dents;

8 (2) local communities, working to complement or

9 augment services currently offered by area schools and

10 colleges, can raise the educational expectations and

11 increase the rate of postsecondary attendance of their

12 youth by forming locally-based organizations that

13 provide both academic support (including guidance,

14 counseling, mentoring, tutoring, encouragement, and

15 recognition) and tangible, locally raised, effectively

16 targeted, publicly recognized, financial assistance;

17 (3) proven methods of stimulating these commu18 nity efforts can be promoted through Federal support

19 for the establishment of regional, State or community

20 program centers to organize and challenge community

21 efforts to develop educational incentives and support

22 for local students; and

23 (4) using Federal funds to leverage private con24 tributions to help students from low-income families

25 attain educational and career goals is an efficient
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1 and effective investment of scarce taxpayer-provided

2 resources.

3 SEC. 743. DEFINITIONS.

4 In this part:

5 (1) REGIONAL, STATE OR COMMUNITY PROGRAM

6 CENTER.—The term ‘‘regional, State or community

7 program center’’ means an organization that—

8 (A) is a division of, responsible to, and

9 overseen by, the national organization; and

10 (B) is staffed by professionals trained to

11 create, develop, and sustain local entities in

12 towns, cities, and neighborhoods.

13 (2) LOCAL ENTITY.—The term ‘‘local entity’’

14 means an organization that—

15 (A) is a nonprofit organization that is de16 scribed in section 501(c)(3) of the Internal Reve17 nue Code of 1986, and exempt from taxation

18 under section 501(a) of such Code (or shall meet

19 this criteria through affiliation with the national

20 organization);

21 (B) is formed for the purpose of providing

22 educational scholarships and academic support

23 for residents of the local community served by

24 such organization;
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1 (C) solicits broad-based community support

2 in its academic support and fund-raising activi3 ties;

4 (D) is broadly representative of the local

5 community in the structures of its volunteer-op6 erated organization and has a board of directors

7 that includes leaders from local neighborhood or8 ganizations and neighborhood residents, such as

9 school or college personnel, parents, students,

10 community agency representatives, retirees, and

11 representatives of the business community;

12 (E) awards scholarships without regard to

13 age, sex, marital status, race, creed, color, reli14 gion, national origin or disability; and

15 (F) gives priority to awarding scholarships

16 for postsecondary education to deserving students

17 from low-income families in the local commu18 nity.

19 (3) NATIONAL ORGANIZATION.—The term ‘‘na20 tional organization’’ means an organization that—

21 (A) has the capacity to create, develop and

22 sustain local entities and affiliated regional,

23 State or community program centers;

24 (B) has the capacity to sustain newly cre25 ated local entities in towns, cities, and neighbor-
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1 hoods through ongoing training support pro2 grams;

3 (C) is described in section 501(c)(3) of the

4 Internal Revenue Code of 1986, and exempt from

5 taxation under section 501(a) of such Code;

6 (D) is a publicly supported organization

7 within the meaning of section 170(b)(1)(A)(iv) of

8 such Code;

9 (E) ensures that each of the organization’s

10 local entities meet the criteria described in sub11 paragraphs (C) and (D); and

12 (F) has a program for or experience in co13 operating with secondary and postsecondary in14 stitutions in carrying out the organization’s

15 scholarship and academic support activities.

16 (4) HIGH POVERTY AREA.—The term ‘‘high pov17 erty area’’ means a community with a higher per18 centage of children from low-income families than the

19 national average of such percentage and a lower per20 centage of children pursuing postsecondary education

21 than the national average of such percentage.

22 (5) STUDENTS FROM LOW-INCOME FAMILIES.—

23 The term ‘‘students from low-income families’’ means

24 students determined, pursuant to part F of title IV of

25 the Higher Education Act of 1965 (20 U.S.C. 1087kk
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1 et seq.), to be eligible for a Federal Pell Grant under

2 subpart 1 of part A of title IV of such Act (20 U.S.C.

3 1070a).

4 SEC. 744. PURPOSE, ENDOWMENT GRANT AUTHORITY.

5 (a) PURPOSE.—It is the purpose of this part to estab6 lish and support regional, State or community program

7 centers to enable such centers to foster the development of

8 local entities in high poverty areas that promote higher edu9 cation goals for students from low-income families by—

10 (1) providing academic support, including guid11 ance, counseling, mentoring, tutoring, and recogni12 tion; and

13 (2) providing scholarship assistance for the cost

14 of postsecondary education.

15 (b) ENDOWMENT GRANT AUTHORITY.—From the funds

16 appropriated pursuant to the authority of section 746, the

17 Secretary shall award an endowment grant, on a competi18 tive basis, to a national organization to enable such organi19 zation to support the establishment or ongoing work of re20 gional, State or community program centers that foster the

21 development of local entities in high poverty areas to im22 prove high school graduation rates and postsecondary at23 tendance through the provision of academic support services

24 and scholarship assistance for the cost of postsecondary edu25 cation.
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1 SEC. 745. GRANT AGREEMENT AND REQUIREMENTS.

2 (a) IN GENERAL.—The Secretary shall award one or

3 more endowment grants described in section 744(b) pursu4 ant to an agreement between the Secretary and a national

5 organization. Such agreement shall—

6 (1) require the national organization to establish

7 an endowment fund in the amount of the grant, the

8 corpus of which shall remain intact and the interest

9 income from which shall be used to support the activi10 ties described in paragraphs (2) and (3);

11 (2) require the national organization to use 70

12 percent of the interest income from the endowment

13 fund in any fiscal year to support the establishment

14 or ongoing work of regional, State or community pro15 gram centers to enable such centers to work with local

16 communities to establish local entities in high poverty

17 areas and provide ongoing technical assistance, train18 ing workshops, and other activities to help ensure the

19 ongoing success of the local entities;

20 (3) require the national organization to use 30

21 percent of the interest income from the endowment

22 fund in any fiscal year to provide scholarships for

23 postsecondary education to students from low-income

24 families, which scholarships shall be matched on a

25 dollar-for-dollar basis from funds raised by the local

26 entities;
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1 (4) require that at least 50 percent of all the in2 terest income from the endowment be allocated to es3 tablish new local entities or support regional, State or

4 community program centers in high poverty areas;

5 (5) require the national organization to submit,

6 for each fiscal year in which such organization uses

7 the interest from the endowment fund, a report to the

8 Secretary that contains—

9 (A) a description of the programs and ac10 tivities supported by the interest on the endow11 ment fund;

12 (B) the audited financial statement of the

13 national organization for the preceding fiscal

14 year;

15 (C) a plan for the programs and activities

16 to be supported by the interest on the endowment

17 fund as the Secretary may require; and

18 (D) an evaluation of the programs and ac19 tivities supported by the interest on the endow20 ment fund as the Secretary may require; and

21 (E) data indicating the number of students

22 from low-income families who receive scholar23 ships from local entities, and the amounts of

24 such scholarships;
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1 (6) contain such assurances as the Secretary

2 may require with respect to the management and op3 eration of the endowment fund; and

4 (7) contain an assurance that if the Secretary

5 determines that such organization is not in substan6 tial compliance with the provisions of this part, then

7 the national organization shall pay to the Secretary

8 an amount equal to the corpus of the endowment fund

9 plus any accrued interest on such fund that is avail10 able to the national organization on the date of such

11 determination.

12 (b) RETURNED FUNDS.—All funds returned to the Sec13 retary pursuant to subsection (a)(7) shall be available to

14 the Secretary to carry out any scholarship or grant pro15 gram assisted under title IV of the Higher Education Act

16 of 1965 (20 U.S.C. 1070 et seq.).

17 SEC. 746. AUTHORIZATION OF APPROPRIATIONS.

18 There are authorized to be appropriated to carry out

19 this part $10,000,000 for fiscal year 2000.
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1 PART E—GRANTS TO STATES FOR WORKPLACE

2 AND COMMUNITY TRANSITION TRAINING

3 FOR INCARCERATED YOUTH OFFENDERS

4 SEC. 751. GRANTS TO STATES FOR WORKPLACE AND COM5 MUNITY TRANSITION TRAINING FOR INCAR6 CERATED YOUTH OFFENDERS.

7 (a) FINDINGS.—Congress makes the following findings:

8 (1) Over 150,000 youth offenders age 21 and

9 younger are incarcerated in the Nation’s jails, juve10 nile facilities, and prisons.

11 (2) Most youth offenders who are incarcerated

12 have been sentenced as first-time adult felons.

13 (3) Approximately 75 percent of youth offenders

14 are high school dropouts who lack basic literacy and

15 life skills, have little or no job experience, and lack

16 marketable skills.

17 (4) The average incarcerated youth has attended

18 school only through grade 10.

19 (5) Most of these youths can be diverted from a

20 life of crime into productive citizenship with available

21 educational, vocational, work skills, and related serv22 ice programs.

23 (6) If not involved with educational programs

24 while incarcerated, almost all of these youths will re25 turn to a life of crime upon release.
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1 (7) The average length of sentence for a youth of2 fender is about 3 years. Time spent in prison pro3 vides a unique opportunity for education and train4 ing.

5 (8) Even with quality education and training

6 provided during incarceration, a period of intense su7 pervision, support, and counseling is needed upon re8 lease to ensure effective reintegration of youth offend9 ers into society.

10 (9) Research consistently shows that the vast ma11 jority of incarcerated youths will not return to the

12 public schools to complete their education.

13 (10) There is a need for alternative educational

14 opportunities during incarceration and after release.

15 (b) DEFINITION.—For purposes of this part, the term

16 ‘‘youth offender’’ means a male or female offender under

17 the age of 25, who is incarcerated in a State prison, includ18 ing a prerelease facility.

19 (c) GRANT PROGRAM.—The Secretary of Education

20 (in this section referred to as the ‘‘Secretary’’) shall estab21 lish a program in accordance with this section to provide

22 grants to the State correctional education agencies in the

23 States, from allocations for the States under subsection (i),

24 to assist and encourage incarcerated youths to acquire func25 tional literacy, life, and job skills, through the pursuit of
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1 a postsecondary education certificate, or an associate of arts

2 or bachelor’s degree while in prison, and employment coun3 seling and other related services which start during incar4 ceration and continue through prerelease and while on pa5 role.

6 (d) APPLICATION.—To be eligible for a grant under

7 this section, a State correctional education agency shall sub8 mit to the Secretary a proposal for a youth offender pro9 gram that—

10 (1) identifies the scope of the problem, including

11 the number of incarcerated youths in need of post12 secondary education and vocational training;

13 (2) lists the accredited public or private edu14 cational institution or institutions that will provide

15 postsecondary educational services;

16 (3) lists the cooperating agencies, public and pri17 vate, or businesses that will provide related services,

18 such as counseling in the areas of career development,

19 substance abuse, health, and parenting skills;

20 (4) describes the evaluation methods and per21 formance measures that the State correctional edu22 cation agency will employ, which methods and meas23 ures—

24 (A) shall be appropriate to meet the goals

25 and objectives of the proposal; and
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1 (B) shall include measures of—

2 (i) program completion;

3 (ii) student academic and vocational

4 skill attainment;

5 (iii) success in job placement and re6 tention; and

7 (iv) recidivism;

8 (5) describes how the proposed programs are to

9 be integrated with existing State correctional edu10 cation programs (such as adult education, graduate

11 education degree programs, and vocational training)

12 and State industry programs;

13 (6) addresses the educational needs of youth of14 fenders who are in alternative programs (such as boot

15 camps); and

16 (7) describes how students will be selected so that

17 only youth offenders eligible under subsection (f) will

18 be enrolled in postsecondary programs.

19 (e) PROGRAM REQUIREMENTS.—Each State correc20 tional education agency receiving a grant under this section

21 shall—

22 (1) integrate activities carried out under the

23 grant with the objectives and activities of the school24 to-work programs of such State, including—
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1 (A) work experience or apprenticeship pro2 grams;

3 (B) transitional worksite job training for

4 vocational education students that is related to

5 the occupational goals of such students and close6 ly linked to classroom and laboratory instruc7 tion;

8 (C) placement services in occupations that

9 the students are preparing to enter;

10 (D) employment-based learning programs;

11 and

12 (E) programs that address State and local

13 labor shortages;

14 (2) annually report to the Secretary and the At15 torney General on the results of the evaluations con16 ducted using the methods and performance measures

17 contained in the proposal; and

18 (3) provide to each State for each student eligible

19 under subsection (f) not more than $1,500 annually

20 for tuition, books, and essential materials, and not

21 more than $300 annually for related services such as

22 career development, substance abuse counseling, par23 enting skills training, and health education, for each

24 eligible incarcerated youth.
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1 (f) STUDENT ELIGIBILITY.—A youth offender shall be

2 eligible for participation in a program receiving a grant

3 under this section if the youth offender—

4 (1) is eligible to be released within 5 years (in5 cluding a youth offender who is eligible for parole

6 within such time); and

7 (2) is 25 years of age or younger.

8 (g) LENGTH OF PARTICIPATION.—A State correctional

9 education agency receiving a grant under this section shall

10 provide educational and related services to each participat11 ing youth offender for a period not to exceed 5 years, 1

12 year of which may be devoted to study in a graduate edu13 cation degree program or to remedial education services for

14 students who have obtained a secondary school diploma.

15 Educational and related services shall start during the pe16 riod of incarceration in prison or prerelease and may con17 tinue during the period of parole.

18 (h) EDUCATION DELIVERY SYSTEMS.—State correc19 tional education agencies and cooperating institutions

20 shall, to the extent practicable, use high-tech applications

21 in developing programs to meet the requirements and goals

22 of this section.

23 (i) ALLOCATION OF FUNDS.—From the amounts ap24 propriated pursuant to subsection (j), the Secretary shall

25 allot to each State an amount that bears the same relation-
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1 ship to such funds as the total number of students eligible

2 under subsection (f) in such State bears to the total number

3 of such students in all States.

4 (j) AUTHORIZATION OF APPROPRIATIONS.—There are

5 authorized to be appropriated to carry out this section

6 $14,000,000 for fiscal year 1999 and such sums as may be

7 necessary for each of the 4 succeeding fiscal years.

8 PART F—EDUCATION OF THE DEAF

9 SEC. 761. SHORT TITLE.

10 This part may be cited as the ‘‘Education of the Deaf

11 Amendments of 1998’’.

12 SEC. 762. ELEMENTARY AND SECONDARY EDUCATION PRO13 GRAMS.

14 Section 104(b) of the Education of the Deaf Act of 1986

15 (20 U.S.C. 4034(b)) is amended—

16 (1) in paragraph (1)—

17 (A) in subparagraph (A), by inserting

18 ‘‘and’’ after the semicolon;

19 (B) in subparagraph (B), by striking ‘‘;

20 and’’ and inserting a period; and

21 (C) by striking subparagraph (C);

22 (2) in the matter preceding subparagraph (A) of

23 paragraph (2)—

24 (A) by striking ‘‘paragraph (1)’’ and insert25 ing ‘‘paragraph (1)(B)’’; and
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1 (B) by striking ‘‘section 618(b)’’ and insert2 ing ‘‘section 618(a)(1)(A)’’;

3 (3) in paragraph (3), by striking ‘‘intermediate

4 educational unit’’ and inserting ‘‘educational service

5 agency’’;

6 (4) in paragraph (4)—

7 (A) in subparagraph (A), by striking ‘‘in8 termediate educational unit’’ and inserting ‘‘edu9 cational service agency’’; and

10 (B) in subparagraph (B), by striking ‘‘in11 termediate educational units’’ and inserting

12 ‘‘educational service agencies’’; and

13 (5) by amending subparagraph (C) to read as

14 follows:

15 ‘‘(C) provide the child a free appropriate

16 public education in accordance with part B of

17 the Individuals with Disabilities Education Act

18 and procedural safeguards in accordance with

19 the following provisions of section 615 of such

20 Act:

21 ‘‘(i) paragraphs (1), and (3) through

22 (6), of subsection (b).

23 ‘‘(ii) Subsections (c) through (g).

24 ‘‘(iii) Subsection (h), except for the

25 matter in paragraph (4) pertaining to
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1 transmission of findings and decisions to a

2 State advisory panel.

3 ‘‘(iv) Paragraphs (1) and (2) of sub4 section (i).

5 ‘‘(v) Subsection (j)—

6 ‘‘(I) except that such subsection

7 shall not be applicable to a decision by

8 the University to refuse to admit a

9 child; or

10 ‘‘(II) to dismiss a child, except

11 that, before dismissing any child, the

12 University shall give at least 60 days

13 written notice to the child’s parents

14 and to the local educational agency in

15 which the child resides, unless the dis16 missal involves a suspension, expul17 sion, or other change in placement cov18 ered under section 615(k).

19 ‘‘(vi) Subsections (k) through (m).’’.

20 SEC. 763. AGREEMENT WITH GALLAUDET UNIVERSITY.

21 Section 105(a) of the Education of the Deaf Act of

22 1986 (20 U.S.C. 4305(a)) is amended—

23 (1) by striking ‘‘within 1 year after enactment

24 of the Education of the Deaf Act Amendments of
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1 1992, a new’’ and inserting ‘‘and periodically update,

2 an’’; and

3 (2) by amending the second sentence to read as

4 follows: ‘‘The Secretary or the University shall deter5 mine the necessity for the periodic update described

6 in the preceding sentence.’’.

7 SEC. 764. AGREEMENT FOR THE NATIONAL TECHNICAL IN8 STITUTE FOR THE DEAF.

9 Paragraph (2) of section 112(a) of the Education of

10 the Deaf Act of 1986 (20 U.S.C. 4332(a)) is amended to

11 read as follows:

12 ‘‘(2) The Secretary and the institution of higher edu13 cation with which the Secretary has an agreement under

14 this section—

15 ‘‘(A) shall periodically assess the need for modi16 fication of the agreement; and

17 ‘‘(B) shall periodically update the agreement as

18 determined necessary by the Secretary or the institu19 tion.’’.

20 SEC. 765. DEFINITIONS.

21 Section 201 of the Education of the Deaf Act of 1986

22 (20 U.S.C. 4351) is amended—

23 (1) in paragraph (1)(C), by striking ‘‘Palau (but

24 only until the Compact of Free Association with

25 Palau takes effect),’’; and
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1 (2) in paragraph (5)—

2 (A) by inserting ‘‘and’’ after ‘‘Virgin Is3 lands,’’; and

4 (B) by striking ‘‘, and Palau (but only

5 until the Compact of Free Association with

6 Palau takes effect)’’.

7 SEC. 766. GIFTS.

8 Subsection (b) of section 203 of the Education of the

9 Deaf Act of 1986 (20 U.S.C. 4353) is amended to read as

10 follows:

11 ‘‘(b) INDEPENDENT FINANCIAL AND COMPLIANCE

12 AUDIT.—

13 ‘‘(1) IN GENERAL.—Gallaudet University shall

14 have an annual independent financial and compli15 ance audit made of the programs and activities of the

16 University, including the national mission and school

17 operations of the elementary and secondary education

18 programs at Gallaudet. The institution of higher edu19 cation with which the Secretary has an agreement

20 under section 112 shall have an annual independent

21 financial and compliance audit made of the programs

22 and activities of such institution of higher education,

23 including NTID, and containing specific schedules

24 and analyses for all NTID funds, as determined by

25 the Secretary.
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1 ‘‘(2) COMPLIANCE.—As used in paragraph (1),

2 compliance means compliance with sections 102(b),

3 105(b)(4), 112(b)(5), and 203(c), paragraphs (2) and

4 (3) of section 207(b), subsections (b)(2), (b)(3), and

5 (c) through (f), of section 207, and subsections (b) and

6 (c) of section 210.

7 ‘‘(3) SUBMISSION OF AUDITS.—A copy of each

8 audit described in paragraph (1) shall be provided to

9 the Secretary within 15 days of acceptance of the

10 audit by the University or the institution authorized

11 to establish and operate the NTID under section

12 112(a), as the case may be, but not later than Janu13 ary 10 of each year.’’.

14 SEC. 767. REPORTS.

15 Section 204(3) of the Education of the Deaf Act of

16 1986 (20 U.S.C. 4354(3)) is amended—

17 (1) in subparagraph (A), by striking ‘‘The an18 nual’’ and inserting ‘‘A summary of the annual’’; and

19 (2) in subparagraph (B), by striking ‘‘the an20 nual’’ and inserting ‘‘a summary of the annual’’.

21 SEC. 768. MONITORING, EVALUATION, AND REPORTING.

22 Section 205(c) of the Education of the Deaf Act of 1986

23 (20 U.S.C. 4355(c)) is amended by striking ‘‘1993, 1994,

24 1995, 1996, and 1997’’ and inserting ‘‘1998 through 2003’’.
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1 SEC. 769. INVESTMENTS.

2 Section 207 of the Education of the Deaf Act of 1986

3 (20 U.S.C. 4357) is amended—

4 (1) in subsection (c)(1), by inserting ‘‘the Fed5 eral contribution of’’ after ‘‘shall invest’’;

6 (2) in subsection (d)(3)(A), by striking ‘‘prior’’

7 and inserting ‘‘current’’; and

8 (3) in subsection (h)—

9 (A) in paragraph (1), by striking ‘‘1993

10 through 1997’’ and inserting ‘‘1998 through

11 2003’’; and

12 (B) in paragraph (2), by striking ‘‘1993

13 through 1997’’ and inserting ‘‘1998 through

14 2003’’.

15 SEC. 770. INTERNATIONAL STUDENTS.

16 Section 210(a) of the Education of the Deaf Act of

17 1986 (20 U.S.C. 4359a(a)) is amended by inserting before

18 the period ‘‘, except that in any school year no United

19 States citizen who is qualified to be admitted to the Univer20 sity or NTID and applies for admission to the University

21 or NTID shall be denied admission because of the admission

22 of an international student’’.

23 SEC. 771. RESEARCH PRIORITIES.

24 Section 211 of the Education of the Deaf Act of 1986

25 (20 U.S.C. 4360) is amended to read as follows:
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1 ‘‘SEC. 211. RESEARCH PRIORITIES.

2 ‘‘(a) RESEARCH PRIORITIES.—Gallaudet University

3 and the National Technical Institute for the Deaf shall each

4 establish and disseminate priorities for their national mis5 sion with respect to deafness related research, development,

6 and demonstration activities, that reflect public input,

7 through a process that includes consumers, constituent

8 groups, and the heads of other federally funded programs.

9 The priorities for the University shall include activities

10 conducted as part of the University’s elementary and sec11 ondary education programs under section 104.

12 ‘‘(b) RESEARCH REPORTS.—The University and

13 NTID shall each prepare and submit an annual research

14 report, to the Secretary, the Committee on Education and

15 the Workforce of the House of Representatives, and the Com16 mittee on Labor and Human Resources of the Senate, not

17 later than January 10 of each year, that shall include—

18 ‘‘(1) a summary of the public input received as

19 part of the establishment and dissemination of prior20 ities required by subsection (a), and the University’s

21 and NTID’s response to the input; and

22 ‘‘(2) a summary description of the research un23 dertaken by the University and NTID, the start and

24 projected end dates for each research project, the pro25 jected cost and source or sources of funding for each
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1 project, and any products resulting from research

2 completed in the prior fiscal year.’’.

3 SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

4 Title II of the Education of the Deaf Act of 1986 (20

5 U.S.C. 4351 et seq.) is amended by adding at the end the

6 following:

7 ‘‘SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

8 ‘‘(a) GALLAUDET UNIVERSITY.—There are authorized

9 to be appropriated such sums as may be necessary for each

10 of the fiscal years 1998 through 2003 to carry out the provi11 sions of titles I and II, relating to—

12 ‘‘(1) Gallaudet University;

13 ‘‘(2) Kendall Demonstration Elementary School;

14 and

15 ‘‘(3) the Model Secondary School for the Deaf.

16 ‘‘(b) NATIONAL TECHNICAL INSTITUTE FOR THE

17 DEAF.—There are authorized to be appropriated such sums

18 as may be necessary for each of the fiscal years 1998

19 through 2003 to carry out the provisions of titles I and II

20 relating to the National Technical Institute for the Deaf.’’.

21 SEC. 773. COMMISSION ON EDUCATION OF THE DEAF.

22 The Education of the Deaf Act of 1986 (20 U.S.C. 4301

23 et seq.) is amended by adding at the end the following:
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1 ‘‘TITLE III—COMMISSION ON

2 EDUCATION OF THE DEAF

3 ‘‘SEC. 301. COMMISSION ESTABLISHED.

4 ‘‘(a) ESTABLISHMENT.—

5 ‘‘(1) IN GENERAL.—The Secretary shall establish

6 a Commission on the Education of the Deaf to iden7 tify those education-related factors in the lives of in8 dividuals who are deaf that result in barriers to suc9 cessful postsecondary education experiences and em10 ployment, and those education-related factors in the

11 lives of individuals who are deaf that contribute to

12 successful postsecondary education experiences and

13 employment.

14 ‘‘(2) DEFINITION OF INDIVIDUALS WHO ARE

15 DEAF.—In this title, the term ‘individuals who are

16 deaf’ means all persons with hearing impairments,

17 including those who are hard-of-hearing, those deaf18 ened later in life, and those who are profoundly deaf.

19 ‘‘(b) COMPOSITION.—

20 ‘‘(1) IN GENERAL.—The Commission shall be

21 composed of 13 members appointed by the Secretary

22 from recommendations made by the National Associa23 tion of the Deaf, the American Society for Deaf Chil24 dren, the Alexander Graham Bell Association, the

25 President of Gallaudet, the Vice President of the Na-
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1 tional Technical Institute for the Deaf, State Schools

2 for the Deaf, projects to train teachers of the deaf

3 funded under section 673(b) of the Individuals with

4 Disabilities Education Act, parent training and in5 formation centers funded under section 682 of such

6 Act, the Regional Centers on Postsecondary Edu7 cation for Individuals who are Deaf funded under sec8 tion 672 of such Act, Self-Help for Hard of Hearing

9 People, and the Cothe Council on Education of the

10 Deaf.

11 ‘‘(2) QUALIFICATIONS.—

12 ‘‘(A) IN GENERAL.—Members of the Com13 mission shall be appointed from among individ14 uals who have broad experience and expertise in

15 deafness, program evaluation, education, reha16 bilitation, and job training generally, which ex17 pertise and experience shall be directly relevant

18 to the issues to be addressed by the Commission.

‘‘(B) DEAF INDIVIDUALS.—At least 1 19 ⁄3 of

20 members of the Commission shall be individuals

21 who are deaf.

22 ‘‘(C) CHAIRPERSON.—The chairperson of

23 the Commission shall be elected by a simple ma24 jority of the Commission.
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1 ‘‘(D) ASSISTANT SECRETARY.—One member

2 of the Commission shall be the Assistant Sec3 retary for Special Education and Rehabilitative

4 Services.

5 ‘‘(3) DATE.—Members of the Commission shall

6 be appointed not later than 90 days after the date of

7 enactment of the Education of the Deaf Amendments

8 of 1998.

9 ‘‘SEC. 302. DUTIES, REPORT, AND DURATION OF THE COM10 MISSION.

11 ‘‘(a) IDENTIFICATION OF FACTORS.—The Commission

12 shall identify, with respect to individuals who are deaf, fac13 tors that pose barriers to or factors that facilitate—

14 ‘‘(1) educational performance and progress of

15 students who are deaf in high school;

16 ‘‘(2) educational performance and progress of

17 students who are deaf in postsecondary education;

18 ‘‘(3) career exploration and selection;

19 ‘‘(4) job performance and satisfaction in initial

20 postsecondary employment; and

21 ‘‘(5) career advancement and satisfaction.

22 ‘‘(b) REPORT.—The Commission shall report to the

23 President and Congress such interim reports that the Com24 mission deems appropriate, and not later than 18 months

25 after the date of enactment of the Education of the Deaf
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1 Amendments of 1998, a final report containing the findings

2 of the Commission with respect to the factors identified

3 under subsection (a). The final report shall include rec4 ommendations, including legislative proposals, that the

5 Commission deems advisable.

6 ‘‘(c) TERMINATION.—The Commission shall terminate

7 90 days after the date on which the Commission submits

8 the Commission’s final report described in subsection (b).

9 ‘‘SEC. 303. ADMINISTRATIVE PROVISIONS.

10 ‘‘(a) PERSONNEL.—

11 ‘‘(1) IN GENERAL.—The Commission may ap12 point such personnel, including a staff director, as the

13 Commission deems necessary without regard to the

14 provisions of title 5, United States Code, except that

15 the rate pay for any employee of the Commission may

16 not exceed the rate payable for level V of the Executive

17 Schedule under section 5316 of title 5, United States

18 Code.

19 ‘‘(2) PROCUREMENT OF TEMPORARY AND INTER20 MITTENT SERVICES.—The Chairperson of the Com21 mission may procure temporary and intermittent

22 services under section 3109(b) of title 5, United States

23 Code, at rates for individuals which do not exceed the

24 daily equivalent of the annual rate of basic pay pre-
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1 scribed for level V of the Executive Schedule under

2 section 5316 of such title.

3 ‘‘(b) HEARINGS; QUORUM.—

4 ‘‘(1) HEARINGS.—The Commission or, with the

5 authorization of the Commission, any committee of

6 the Commission, may, for the purpose of carrying out

7 the provisions of this title, hold such hearings, sit,

8 and act at such times and such places in the United

9 States as the Commission or such committee may

10 deem advisable.

11 ‘‘(2) QUORUM.—Seven members of the Commis12 sion shall constitute a quorum, but 2 or more mem13 bers may conduct hearings.

14 ‘‘(3) HEARINGS AND PUBLIC INPUT.—In con15 ducting hearings and acquiring public input under

16 this title, the Commission may use various tele17 communications media, including teleconferencing,

18 video-conferencing, the Internet, and other media.

19 ‘‘(c) CONSULTATION; INFORMATION AND STATISTICS;

20 AGENCY COOPERATION.—

21 ‘‘(1) IN GENERAL.—In carrying out the Commis22 sion’s duties under this title and to the extent not

23 prohibited by Federal law, the Commission is author24 ized to secure consultation, information, statistics,

25 and cooperation from Federal agencies, entities fund-
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1 ed by the Federal Government, and other entities the

2 Commission deems advisable.

3 ‘‘(2) SPECIAL RULE.—The Commission is au4 thorized to use, with their consent, the services, per5 sonnel, information, and facilities of other Federal,

6 State, local, and private agencies with or without re7 imbursement.

8 ‘‘SEC. 304. COMPENSATION OF MEMBERS.

9 ‘‘(a) UNITED STATES OFFICER AND EMPLOYEE MEM10 BERS.—Members of the Commission who are officers or full11 time employees of the United States shall serve without com12 pensation in addition to that received for their services as

13 officers or employees of the United States; but may be al14 lowed travel expenses, including per diem in lieu of subsist15 ence, at rates authorized for employees of agencies under

16 subchapter I of chapter 57 of title 5, United States Code,

17 while away from their homes or regular places of business

18 in the performance of services for the Commission.

19 ‘‘(b) PUBLIC MEMBERS.—Members of the Commission

20 who are not officers or full-time employees of the United

21 States shall receive compensation at a rate that does not

22 exceed the daily rate payable for level V of the Executive

23 Schedule under section 5316 of title 5, United States Code,

24 for each day (including travel time) during which such

25 members are engaged in the actual performance of the du-
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1 ties of the Commission. In addition, such members may be

2 allowed travel expenses, including per diem in lieu of sub3 sistence, at rates authorized for employees of agencies under

4 subchapter I of chapter 57 of title 5, United States Code,

5 while away from their homes or regular places of business

6 in the performance of services for the Commission.

7 ‘‘SEC. 305. AUTHORIZATIONS OF APPROPRIATIONS.

8 ‘‘There is authorized to be appropriated to carry out

9 this title such sums as may be necessary for each of the

10 fiscal years 1999 and 2000.’’.

11 PART G—REPEALS

12 SEC. 781. REPEALS.

13 (a) HIGHER EDUCATION ACT OF 1965.—The following

14 provisions of the Act (20 U.S.C. 1001 et seq.) are repealed:

15 (1) The heading for, sections 701 and 702 of,

16 and parts A, C, D, and E of, title VII (20 U.S.C.

17 1132a, 1132a–1, 1132b et seq., 1132d et seq., 1132f et

18 seq., and 1132i et seq.).

19 (2) Title VIII (20 U.S.C. 1133 et seq.).

20 (3) The heading for, section 901 of, and parts A,

21 B, E, F, and G of, title IX (20 U.S.C. 1134, 1134a

22 et seq., 1134d et seq., 1134r et seq., 20 U.S.C. 1134s

23 et seq., and 1134u et seq.).
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1 (4) The heading for, subpart 2 of part B of, and

2 parts C, D and E of, title X (20 U.S.C. 1135c et seq.,

3 1135e et seq., 1135f, and 1135g et seq.).

4 (5) The heading for, and part B of, title XI (20

5 U.S.C. 1137 et seq.).

6 (b) HIGHER EDUCATION AMENDMENTS OF 1992.—The

7 following provisions of the Higher Education Amendments

8 of 1992 (Public Law 102–325; 106 Stat 448) are repealed:

9 (1) Parts E, F, and G of title XIII of the Higher

10 Education Amendments of 1992 (25 U.S.C. 3332 et

11 seq., 3351 et seq., 3371) are repealed.

12 (2) Title XIV.

13 (3) Title XV.

14 PART H—MISCELLANEOUS

15 SEC. 791. YEAR 2000 COMPUTER PROBLEM.

16 (a) SENSE OF CONGRESS.—With the year 2000 fast

17 approaching, it is the sense of Congress that the Department

18 of Education should—

19 (1) assess immediately the extent of the risk to

20 the operations of the student financial aid system

21 posed by the year 2000 computer problem;

22 (2) give the highest priority to correcting all 2-

23 digit date-related problems in the Department’s com24 puter systems to ensure that those systems continue to

25 operate effectively in the year 2000 and beyond; and
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1 (3) develop contingency plans, with respect to the

2 year 2000 computer problem, for those computer sys3 tems that the Department is unable to correct in time.

4 (b) REPORT REQUIRED.—Not later than March 1,

5 1999, the Secretary of Education shall provide a report to

6 the Committee on Labor and Human Resources of the Sen7 ate and the Committee on Education and the Workforce of

8 the House of Representatives describing the compliance sta9 tus of all mission critical systems at the Department, and

10 contingency plans for those computer systems in the De11 partment that the Department will be unable to correct in

12 time, with respect to the year 2000 computer problem.