II 

Calendar No. 722 

110TH CONGRESS 

2D SESSION H. R. 5715 

IN THE SENATE OF THE UNITED STATES 

APRIL 28, 2008 

Received; read the first time 

APRIL 29, 2008 

Read the second time and placed on the calendar 

AN ACT 

To ensure continued availability of access to the Federal 

student loan program for students and families. 

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 title may be cited as the ‘‘Ensuring Continued 

5 Access to Student Loans Act of 2008’’. 


jbell on PROD1PC66 with BILLS
2 

HR 5715 PCS 

1 SEC. 2. INCREASING UNSUBSIDIZED STAFFORD LOAN LIM2 ITS FOR UNDERGRADUATE AND GRADUATE 

3 STUDENTS. 

4 (a) AMENDMENTS.—Subsection (d) of section 428H 

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

6 8(d)) is amended to read as follows: 

7 ‘‘(d) LOAN LIMITS.— 

8 ‘‘(1) IN GENERAL.—Except as provided in para9 graphs (2), (3), and (4), the annual and aggregate 

10 limits for loans under this section shall be the same 

11 as those established under section 428(b)(1), less 

12 any amount received by such student pursuant to 

13 the subsidized loan program established under sec14 tion 428. 

15 ‘‘(2) LIMITS FOR GRADUATE AND PROFES16 SIONAL STUDENTS.— 

17 ‘‘(A) ANNUAL LIMITS.—The maximum an18 nual amount of loans under this section a grad19 uate or professional student may borrow in any 

20 academic year (as defined in section 481(a)(2)) 

21 or its equivalent shall be the amount deter22 mined under paragraph (1), plus— 

23 ‘‘(i) in the case of such a student who 

24 is a graduate or professional student at25 tending an eligible institution, $12,000; 

26 and 


jbell on PROD1PC66 with BILLS
3 

HR 5715 PCS 

1 ‘‘(ii) in the case of a graduate student 

2 enrolled in coursework specified in sections 

3 484(b)(3)(B) and 484(b)(4)(B), $7,000; 

4 except in cases where the Secretary determines 

5 that a higher amount is warranted in order to 

6 carry out the purpose of this part with respect 

7 to students engaged in specialized training re8 quiring exceptionally high costs of education, 

9 but the annual insurable limit per student shall 

10 not be deemed to be exceeded by a line of credit 

11 under which actual payments by the lender to 

12 the borrower will not be made in any years in 

13 excess of the annual limit. 

14 ‘‘(B) AGGREGATE LIMIT.—The maximum 

15 aggregate amount of loans under this section a 

16 student described in subparagraph (A) may 

17 borrow shall be the amount described in para18 graph (1), adjusted to reflect the increased an19 nual limits described in subparagraph (A), as 

20 prescribed by the Secretary by regulation. 

21 ‘‘(3) LIMITS FOR UNDERGRADUATE DEPEND22 ENT STUDENTS.— 

23 ‘‘(A) ANNUAL LIMITS.—The maximum an24 nual amount of loans under this section an un25 dergraduate dependent student (except an unVerDate Aug 31 2005 03:33 Apr 30, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5715.PCS H5715

jbell on PROD1PC66 with BILLS
4 

HR 5715 PCS 

1 dergraduate dependent student whose parents 

2 are unable to borrow under section 428B or the 

3 Federal Direct PLUS Loan Program) may bor4 row in any academic year (as defined in section 

5 481(a)(2)) or its equivalent shall be the sum of 

6 the amount determined under paragraph (1), 

7 plus $2,000. 

8 ‘‘(B) AGGREGATE LIMITS.—The maximum 

9 aggregate amount of loans under this section a 

10 student described in subparagraph (A) may 

11 borrow shall be $31,000. 

12 ‘‘(4) LIMITS FOR UNDERGRADUATE INDE13 PENDENT STUDENTS.— 

14 ‘‘(A) ANNUAL LIMITS.—The maximum an15 nual amount of loans under this section an un16 dergraduate independent student, or an under17 graduate dependent student whose parents are 

18 unable to borrow under section 428B or the 

19 Federal Direct PLUS Loan Program, may bor20 row in any academic year (as defined in section 

21 481(a)(2)) or its equivalent shall be the sum of 

22 the amount determined under paragraph (1), 

23 plus— 

24 ‘‘(i) in the case of such a student at25 tending an eligible institution who has not 


jbell on PROD1PC66 with BILLS
5 

HR 5715 PCS 

1 completed such student’s first 2 years of 

2 undergraduate study— 

3 ‘‘(I) $6,000, if such student is 

4 enrolled in a program whose length is 

5 at least one academic year in length; 

6 or 

7 ‘‘(II) if such student is enrolled 

8 in a program of undergraduate edu9 cation which is less than one academic 

10 year, the maximum annual loan 

11 amount that such student may receive 

12 may not exceed the amount that bears 

13 the same ratio to the amount specified 

14 in subclause (I) as the length of such 

15 program measured in semester, tri16 mester, quarter, or clock hours bears 

17 to one academic year; 

18 ‘‘(ii) in the case of such a student at 

19 an eligible institution who has successfully 

20 completed such first and second years but 

21 has not successfully completed the remain22 der of a program of undergraduate edu23 cation— 

24 ‘‘(I) $7,000; or 


jbell on PROD1PC66 with BILLS
6 

HR 5715 PCS 

1 ‘‘(II) if such student is enrolled 

2 in a program of undergraduate edu3 cation, the remainder of which is less 

4 than one academic year, the maximum 

5 annual loan amount that such student 

6 may receive may not exceed the 

7 amount that bears the same ratio to 

8 the amount specified in subclause (I) 

9 as such remainder measured in semes10 ter, trimester, quarter, or clock hours 

11 bears to one academic year; and 

12 ‘‘(iii) in the case of such a student en13 rolled in coursework specified in sections 

14 484(b)(3)(B) and 484(b)(4)(B), $6,000 for 

15 coursework necessary for enrollment in an 

16 undergraduate degree or certificate pro17 gram. 

18 ‘‘(B) AGGREGATE LIMITS.—The maximum 

19 aggregate amount of loans under this section a 

20 student described in subparagraph (A) may 

21 borrow shall be $57,500. 

22 ‘‘(5) CAPITALIZED INTEREST.—Interest capital23 ized shall not be deemed to exceed a maximum ag24 gregate amount determined under subparagraph (B) 

25 of paragraph (2), (3), or (4).’’. 


jbell on PROD1PC66 with BILLS
7 

HR 5715 PCS 

1 (b) STUDENT ELIGIBILITY.—Loan limit increases 

2 authorized by the amendments made by this section shall 

3 be available only to students who meet the requirements 

4 of section 484(a) of the Higher Education Act of 1965 

5 (20 U.S.C. 1091(a)). 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall be effective for loans issued on or after 

8 July 1, 2008. 

9 SEC. 3. GRACE PERIOD FOR PARENT PLUS LOANS. 

10 (a) AMENDMENT.—Section 428B(d) of the Higher 

11 Education Act of 1965 (20 U.S.C. 1078–2(d)) is amended 

12 by amending paragraphs (1) and (2) to read as follows: 

13 ‘‘(1) COMMENCEMENT OF REPAYMENT.—Re14 payment of principal on loans made under this sec15 tion shall— 

16 ‘‘(A) commence not later than— 

17 ‘‘(i) 60 days after the date such loan 

18 is disbursed by the lender, except as pro19 vided in clause (ii); and 

20 ‘‘(ii) if agreed upon by a parent bor21 rower, the day after 6 months after the 

22 date the student for whom the loan is bor23 rowed ceases to carry at least one-half the 

24 normal full-time academic workload (as de25 termined by the institution); and 


jbell on PROD1PC66 with BILLS
8 

HR 5715 PCS 

1 ‘‘(B) be subject to deferral during any pe2 riod during which the graduate or professional 

3 student or the parent meets the conditions re4 quired for a deferral under section 427(a)(2)(C) 

5 or 428(b)(1)(M). 

6 ‘‘(2) CAPITALIZATION OF INTEREST.— 

7 ‘‘(A) IN GENERAL.—Interest on loans 

8 made under this section— 

9 ‘‘(i) which accrues prior to the begin10 ning of repayment under paragraph 

11 (1)(A)(i), shall be added to the principal 

12 amount of the loan; and 

13 ‘‘(ii) which accrues prior to the begin14 ning of repayment under paragraph 

15 (1)(A)(ii) or during a period in which pay16 ments of principal are deferred pursuant to 

17 paragraph (1)(B) shall, if agreed upon by 

18 the borrower and the lender— 

19 ‘‘(I) be paid monthly or quar20 terly; or 

21 ‘‘(II) be added to the principal 

22 amount of the loan not more fre23 quently than quarterly by the lender. 

24 ‘‘(B) INSURABLE LIMITS.—Capitalization 

25 of interest under this paragraph shall not be 


jbell on PROD1PC66 with BILLS
9 

HR 5715 PCS 

1 deemed to exceed the annual insurable limit on 

2 account of the borrower.’’. 

3 (b) CONFORMING AMENDMENT.—Section 

4 428(b)(7)(C) of such Act (20 U.S.C. 1078(b)(7)(C)) is 

5 amended by striking ‘‘, 428B,’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall be effective for loans issued on or after 

8 July 1, 2008. 

9 SEC. 4. SPECIAL RULES FOR PLUS LOANS. 

10 Section 428B(a)(3) of the Higher Education Act of 

11 1965 (20 U.S.C. 1078–2(a)(3)) is amended to read as fol12 lows: 

13 ‘‘(3) SPECIAL RULES.— 

14 ‘‘(A) PARENT BORROWERS.—Whenever 

15 necessary to carry out the provisions of this 

16 section, the terms ‘student’ and ‘borrower’ as 

17 used in this part shall include a parent bor18 rower under this section. 

19 ‘‘(B)(i) EXTENUATING CIRCUMSTANCES.— 

20 For loans made on or after July 1, 2008, and 

21 before July 1, 2009, a lender may determine 

22 that extenuating circumstances exist under the 

23 regulations promulgated pursuant to paragraph 

24 (1)(A) if an applicant for a loan under this sec25 tion is delinquent for 180 days or less on their 


jbell on PROD1PC66 with BILLS
10 

HR 5715 PCS 

1 home mortgage payments and is not more than 

2 89 days delinquent on the repayment of any 

3 other debt. 

4 ‘‘(ii) MASTER CALENDAR INAPPLICABLE.— 

5 Section 482 shall not apply to determinations 

6 made under clause (i).’’. 

7 SEC. 5. LENDER-OF-LAST-RESORT. 

8 (a) IN GENERAL.—Section 428(j) of the Higher Edu9 cation Act of 1965 (20 U.S.C. 1078(j)) is amended— 

10 (1) in the first sentence of paragraph (1), by 

11 striking ‘‘students eligible to receive interest benefits 

12 paid on their behalf under subsection (a) of this sec13 tion who are otherwise unable to obtain loans under 

14 this part’’ and inserting ‘‘eligible students and par15 ents who are otherwise unable to obtain loans under 

16 this part (except for consolidation loans under sec17 tion 428C) or who attend an institution of higher 

18 education in the State that is designated under 

19 paragraph (4)’’; 

20 (2) in paragraph (2)(B), by inserting ‘‘, in the 

21 case of students and parents applying for loans 

22 under this subsection because of an inability to oth23 erwise obtain loans under this part (except for con24 solidation loans under section 428C),’’ after ‘‘lender, 

25 nor’’; 


jbell on PROD1PC66 with BILLS
11 

HR 5715 PCS 

1 (3) in paragraph (3)(C)— 

2 (A) in the first sentence, by inserting ‘‘or 

3 designates an institution of higher education for 

4 participation in the program under this sub5 section under paragraph (4)’’ after ‘‘under this 

6 part’’; and 

7 (B) in the third sentence, by inserting ‘‘or 

8 to eligible borrowers who attend an institution 

9 in the State that is designated under paragraph 

10 (4)’’ after ‘‘problems’’; and 

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

12 ‘‘(4) INSTITUTION-WIDE STUDENT QUALIFICA13 TION.—Upon the request of an institution of higher 

14 education and pursuant to standards developed by 

15 the Secretary, the Secretary shall designate such in16 stitution for participation in the lender-of-last-resort 

17 program under this paragraph. If the Secretary des18 ignates an institution under this paragraph, the 

19 guaranty agency designated for the State in which 

20 the institution is located shall make loans, in the 

21 same manner as such loans are made under para22 graph (1), to students and parent borrowers of the 

23 designated institution, regardless of whether the stu24 dents or parent borrowers are otherwise unable to 


jbell on PROD1PC66 with BILLS
12 

HR 5715 PCS 

1 obtain loans under this part (other than a consolida2 tion loan under section 428C). 

3 ‘‘(5) STANDARDS DEVELOPED BY THE SEC4 RETARY.—In developing standards with respect to 

5 paragraph (4), the Secretary may require— 

6 ‘‘(A) an institution of higher education to 

7 demonstrate that, despite due diligence on the 

8 part of the institution, the institution has been 

9 unable to secure the commitment of lenders 

10 willing to make loans to a significant number of 

11 students attending the institution; 

12 ‘‘(B) that, prior to making a request under 

13 such paragraph for designation for participation 

14 in the lender-of-last-resort program, an institu15 tion of higher education shall demonstrate that 

16 the institution has met a minimum threshold, 

17 as determined by the Secretary, for the number 

18 or percentage of students at such institution 

19 who have received rejections from eligible lend20 ers for loans under this part; and 

21 ‘‘(C) any other standards and guidelines 

22 the Secretary determines to be appropriate.’’. 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 subsection (a) shall take effect on the date of enactment 

25 of this Act. 


jbell on PROD1PC66 with BILLS
13 

HR 5715 PCS 

1 (c) REVIEW OF INDUCEMENTS LIMITATIONS.—With2 in 90 days after the date of enactment of this Act, the 

3 Secretary of Education shall review, and as necessary re4 vise, the Department of Education’s regulations con5 cerning prohibited guaranty agency inducements to eligi6 ble lenders (34 CFR 682.401(e)) to ensure that such 

7 agency’s do not engage in improper inducements in the 

8 expansion of operations of the lender-of-last-resort pro9 gram as authorized by the amendments made by this sec10 tion. The Secretary shall submit a report on the review 

11 and revision required by this subsection to the Committee 

12 on Education and Labor of the House of Representatives 

13 and the Committee on Health, Education, Labor, and 

14 Pensions of the Senate within 180 days after such date 

15 of enactment. 

16 SEC. 6. MANDATORY ADVANCES. 

17 (a) IN GENERAL.—Section 421(b) of the Higher 

18 Education Act of 1965 (20 U.S.C. 1071(b)) is amended— 

19 (1) in paragraph (4), by striking ‘‘programs, 

20 and’’ and inserting ‘‘programs,’’; 

21 (2) in paragraph (5), by striking ‘‘agencies.’’ 

22 and inserting ‘‘agencies, and’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(6) there is authorized to be appropriated, and 

25 there are appropriated, out of any money in the 


jbell on PROD1PC66 with BILLS
14 

HR 5715 PCS 

1 Treasury not otherwise appropriated, such sums as 

2 may be necessary for the purpose of carrying out 

3 section 422(c)(7).’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 subsection (a) shall take effect on the date of enactment 

6 of this Act. 

7 SEC. 7. TEMPORARY AUTHORITY TO PURCHASE STUDENT 

8 LOANS. 

9 (a) SPENDING AUTHORITY.— 

10 (1) AUTHORITY GRANTED.—The first sentence 

11 of section 451(a) of the Higher Education Act of 

12 1965 (20 U.S.C. 1087a(a)) is amended— 

13 (A) by inserting ‘‘(1)’’ after ‘‘as may be 

14 necessary’’; and 

15 (B) by inserting before the period at the 

16 end of such sentence the following: ‘‘; and (2) 

17 for purchasing loans under section 459A’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 451(a) of such Act (20 U.S.C. 1087a(a)) is further 

20 amended by striking ‘‘Such loans shall’’ and insert21 ing ‘‘Loans made under this part shall’’. 

22 (b) TEMPORARY AUTHORITY.—Part D of title IV of 

23 the Higher Education Act of 1965 (20 U.S.C. 1087a et 

24 seq.) is amended by inserting after section 459 the fol25 lowing new section: 


jbell on PROD1PC66 with BILLS
15 

HR 5715 PCS 

1 ‘‘SEC. 459A. TEMPORARY AUTHORITY TO PURCHASE STU2 DENT LOANS. 

3 ‘‘(a) AUTHORITY TO PURCHASE.— 

4 ‘‘(1) AUTHORITY; DETERMINATION RE5 QUIRED.—Upon a determination by the Secretary 

6 that there is an inadequate availability of loan cap7 ital to meet the demand for loans under sections 

8 428, 428B, or 428H, whether as a result of inad9 equate liquidity for such loans or for other reasons, 

10 the Secretary, in consultation with the Secretary of 

11 the Treasury, is authorized to purchase, or enter 

12 into forward commitments to purchase, from any eli13 gible lender, as defined by section 435(d)(1), loans 

14 originated under sections 428, 428B, or 428H on or 

15 after October 1, 2003, on such terms as the Sec16 retary, the Secretary of the Treasury, and the Direc17 tor of the Office of Management and Budget jointly 

18 determine are in the best interest of the United 

19 States, except that any purchase under this section 

20 shall not result in any net cost to the Federal Gov21 ernment, as determined jointly by the Secretary, the 

22 Secretary of the Treasury, and the Director of the 

23 Office of Management and Budget. 

24 ‘‘(2) REGULATIONS REQUIRED.—The Secretary, 

25 the Secretary of the Treasury, and the Director of 

26 the Office of Management and Budget shall jointly 


jbell on PROD1PC66 with BILLS
16 

HR 5715 PCS 

1 promulgate emergency regulations and publish such 

2 emergency regulations promptly in the Federal Reg3 ister concerning the purchases authorized by para4 graph (1). 

5 ‘‘(3) METHODOLOGY AND FACTORS; JUSTIFICA6 TION REQUIRED.—Such regulations shall outline the 

7 methodology and factors that the Secretary, the Sec8 retary of the Treasury, and the Director of the Of9 fice of Management and Budget shall consider in 

10 evaluating the price at which to purchase loans 

11 under sections 428, 428B, or 428H, and shall in12 clude a justification of how the use of such method13 ology and consideration of such factors used to de14 termine purchase price will ensure that loan pur15 chases do not result in any net cost to the Federal 

16 Government. 

17 ‘‘(b) PROCEEDS.—The Secretary shall require, as a 

18 condition of any purchase under subsection (a), that the 

19 funds paid by the Secretary to any eligible lender under 

20 this section shall be used: (1) to ensure continued partici21 pation of such lender in the Federal student loan pro22 grams authorized under part B of this title; and (2) to 

23 originate new Federal loans to students, as authorized 

24 under part B of this title. 


jbell on PROD1PC66 with BILLS
17 

HR 5715 PCS 

1 ‘‘(c) MAINTAINING SERVICING ARRANGEMENTS.— 

2 The Secretary may, if agreed upon by an eligible lender 

3 selling loans under this section, contract with such lender 

4 for the servicing of the loans purchased, provided that— 

5 ‘‘(1) the cost of such servicing arrangement 

6 does not exceed the cost the Federal Government 

7 would otherwise incur for the servicing of loans pur8 chased, as determined under subsection (a); and 

9 ‘‘(2) such servicing arrangement is in the best 

10 interest of the borrowers whose loans are purchased. 

11 ‘‘(d) EXPIRATION OF AUTHORITY.—The Secretary’s 

12 authority to purchase loans under this section shall expire 

13 on July 1, 2009.’’. 

14 (c) CONTRACTING AUTHORITY.—Section 456(b) of 

15 the Higher Education Act of 1965 (20 U.S.C. 1087f(b)) 

16 is amended by inserting ‘‘or purchased’’ after ‘‘loans 

17 made’’ each place it appears in paragraphs (2) and (3). 

18 SEC. 8. SENSE OF CONGRESS. 

19 It is a sense of Congress that, at a time when our 

20 economy is fragile and higher education and retraining op21 portunities are more important than ever— 

22 (1) the Federal financial institutions, such as 

23 the Federal Financing Bank and Federal Reserve, 

24 and federally chartered private entities such as the 

25 Federal Home Loan Banks and others, should conVerDate Aug 31 2005 03:33 Apr 30, 2008 Jkt 069200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H5715.PCS H5715

jbell on PROD1PC66 with BILLS
18 

HR 5715 PCS 

1 sider, in consultation with the Secretary of Treasury 

2 and the Secretary of Education, using available au3 thorities in a timely manner, if needed, to assist in 

4 ensuring that students and families can access Fed5 eral student loans for academic year 2008–2009, 

6 and if needed in the subsequent academic year, in a 

7 manner that results in no increased costs to tax8 payers; and 

9 (2) any action taken as a result of such consid10 eration should in no way limit or delay the Secretary 

11 of Education’s authority to operate the lender-of12 last-resort provisions of section 428(j) of the Higher 

13 Education Act of 1965 (as amended by this Act), 

14 nor the authority to purchase Federal Family Edu15 cation Loan Program loans, as authorized by section 

16 459A of such Act (as added by this Act). 

17 SEC. 9. GAO STUDY ON IMPACT OF INCREASED LOAN LIM18 ITS. 

19 (a) STUDY REQUIRED.—The Comptroller General 

20 shall conduct a study to evaluate the impact of the in21 crease in Federal loan limits provided for in section 2 of 

22 this Act and section 8005 of the Deficit Reduction Act 

23 of 2005 with respect to the impact on— 

24 (1) tuition, fees, and room and board at institu25 tions of higher education; and 


jbell on PROD1PC66 with BILLS
19 

HR 5715 PCS 

1 (2) private loan borrowing by students and par2 ents for attendance at institutions of higher edu3 cation. 

4 (b) STUDY COMPONENTS.—The study required under 

5 subsection (a) shall be conducted for each major sector 

6 of institutions of higher education over a 5-year time pe7 riod. The report shall specifically analyze the following: 

8 (1) Whether, on average, tuition, fees, and 

9 room and board increase, decrease, or remain un10 changed in each such sector after the increases in 

11 Federal loan limits take effect. 

12 (2) Whether the amount of private educational 

13 loans taken out by students (and their parents) at 

14 institutions in each such sector to pay tuition, fees, 

15 and room and board increase, decrease, or remain 

16 unchanged. 

17 (c) REPORT.—Not later than one year after the date 

18 of enactment of this Act, the Comptroller General shall 

19 provide an interim report to the Committee on Education 

20 and Labor of the House of Representatives and the Com21 mittee on Health, Education, Labor, and Pensions of the 

22 Senate including the initial results of the study conducted 

23 under this section. The Comptroller General shall follow 


jbell on PROD1PC66 with BILLS
20 

HR 5715 PCS 

1 up with such Committees after the third year and the fifth 

2 year after such date of enactment. 

Passed the House of Representatives April 17, 2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


jbell on PROD1PC66 with BILLS

jbell on PROD1PC66 with BILLS
Calendar No. 722 

110TH CONGRESS 

2D SESSION H. R. 5715 

AN ACT 

To ensure continued availability of access to the 

families. Federal student loan program for students and 

APRIL 29, 2008 

Read the second time and placed on the calendar 


jbell on PROD1PC66 with BILLS