110TH CONGRESS 

2D SESSION H. R. 5715 

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, 
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1 SECTION 1. SHORT TITLE. 

2 This title may be cited as the ‘‘Ensuring Continued 

3 Access to Student Loans Act of 2008’’. 

4 SEC. 2. INCREASING UNSUBSIDIZED STAFFORD LOAN LIM5 ITS FOR UNDERGRADUATE AND GRADUATE 

6 STUDENTS. 

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

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

9 8(d)) is amended to read as follows: 

10 ‘‘(d) LOAN LIMITS.— 

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graphs (2), (3), and (4), the annual and aggregate 

13 limits for loans under this section shall be the same 

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

15 any amount received by such student pursuant to 

16 the subsidized loan program established under sec17 tion 428. 

18 ‘‘(2) LIMITS FOR GRADUATE AND PROFES19 SIONAL STUDENTS.— 

20 ‘‘(A) ANNUAL LIMITS.—The maximum an21 nual amount of loans under this section a grad22 uate or professional student may borrow in any 

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

24 or its equivalent shall be the amount deter25 mined under paragraph (1), plus— 
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1 ‘‘(i) in the case of such a student who 

2 is a graduate or professional student at3 tending an eligible institution, $12,000; 

4 and 

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

6 enrolled in coursework specified in sections 

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

8 except in cases where the Secretary determines 

9 that a higher amount is warranted in order to 

10 carry out the purpose of this part with respect 

11 to students engaged in specialized training re12 quiring exceptionally high costs of education, 

13 but the annual insurable limit per student shall 

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

15 under which actual payments by the lender to 

16 the borrower will not be made in any years in 

17 excess of the annual limit. 

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

19 aggregate amount of loans under this section a 

20 student described in subparagraph (A) may 

21 borrow shall be the amount described in para22 graph (1), adjusted to reflect the increased an23 nual limits described in subparagraph (A), as 

24 prescribed by the Secretary by regulation. 
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1 ‘‘(3) LIMITS FOR UNDERGRADUATE DEPEND2 ENT STUDENTS.— 

3 ‘‘(A) ANNUAL LIMITS.—The maximum an4 nual amount of loans under this section an un5 dergraduate dependent student (except an un6 dergraduate dependent student whose parents 

7 are unable to borrow under section 428B or the 

8 Federal Direct PLUS Loan Program) may bor9 row in any academic year (as defined in section 

10 481(a)(2)) or its equivalent shall be the sum of 

11 the amount determined under paragraph (1), 

12 plus $2,000. 

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

14 aggregate amount of loans under this section a 

15 student described in subparagraph (A) may 

16 borrow shall be $31,000. 

17 ‘‘(4) LIMITS FOR UNDERGRADUATE INDE18 PENDENT STUDENTS.— 

19 ‘‘(A) ANNUAL LIMITS.—The maximum an20 nual amount of loans under this section an un21 dergraduate independent student, or an under22 graduate dependent student whose parents are 

23 unable to borrow under section 428B or the 

24 Federal Direct PLUS Loan Program, may bor25 row in any academic year (as defined in section 
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1 481(a)(2)) or its equivalent shall be the sum of 

2 the amount determined under paragraph (1), 

3 plus— 

4 ‘‘(i) in the case of such a student at5 tending an eligible institution who has not 

6 completed such student’s first 2 years of 

7 undergraduate study— 

8 ‘‘(I) $6,000, if such student is 

9 enrolled in a program whose length is 

10 at least one academic year in length; 

11 or 

12 ‘‘(II) if such student is enrolled 

13 in a program of undergraduate edu14 cation which is less than one academic 

15 year, the maximum annual loan 

16 amount that such student may receive 

17 may not exceed the amount that bears 

18 the same ratio to the amount specified 

19 in subclause (I) as the length of such 

20 program measured in semester, tri21 mester, quarter, or clock hours bears 

22 to one academic year; 

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

24 an eligible institution who has successfully 

25 completed such first and second years but 
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1 has not successfully completed the remain2 der of a program of undergraduate edu3 cation— 

4 ‘‘(I) $7,000; or 

5 ‘‘(II) if such student is enrolled 

6 in a program of undergraduate edu7 cation, the remainder of which is less 

8 than one academic year, the maximum 

9 annual loan amount that such student 

10 may receive may not exceed the 

11 amount that bears the same ratio to 

12 the amount specified in subclause (I) 

13 as such remainder measured in semes14 ter, trimester, quarter, or clock hours 

15 bears to one academic year; and 

16 ‘‘(iii) in the case of such a student en17 rolled in coursework specified in sections 

18 484(b)(3)(B) and 484(b)(4)(B), $6,000 for 

19 coursework necessary for enrollment in an 

20 undergraduate degree or certificate pro21 gram. 

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

23 aggregate amount of loans under this section a 

24 student described in subparagraph (A) may 

25 borrow shall be $57,500. 
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1 ‘‘(5) CAPITALIZED INTEREST.—Interest capital2 ized shall not be deemed to exceed a maximum ag3 gregate amount determined under subparagraph (B) 

4 of paragraph (2), (3), or (4).’’. 

5 (b) STUDENT ELIGIBILITY.—Loan limit increases 

6 authorized by the amendments made by this section shall 

7 be available only to students who meet the requirements 

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

9 (20 U.S.C. 1091(a)). 

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

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

12 July 1, 2008. 

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

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

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

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

17 ‘‘(1) COMMENCEMENT OF REPAYMENT.—Re18 payment of principal on loans made under this sec19 tion shall— 

20 ‘‘(A) commence not later than— 

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

22 is disbursed by the lender, except as pro23 vided in clause (ii); and 

24 ‘‘(ii) if agreed upon by a parent bor25 rower, the day after 6 months after the 
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1 date the student for whom the loan is bor2 rowed ceases to carry at least one-half the 

3 normal full-time academic workload (as de4 termined by the institution); and 

5 ‘‘(B) be subject to deferral during any pe6 riod during which the graduate or professional 

7 student or the parent meets the conditions re8 quired for a deferral under section 427(a)(2)(C) 

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

10 ‘‘(2) CAPITALIZATION OF INTEREST.— 

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

12 made under this section— 

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

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

16 amount of the loan; and 

17 ‘‘(ii) which accrues prior to the begin18 ning of repayment under paragraph 

19 (1)(A)(ii) or during a period in which pay20 ments of principal are deferred pursuant to 

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

22 the borrower and the lender— 

23 ‘‘(I) be paid monthly or quar24 terly; or 
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1 ‘‘(II) be added to the principal 

2 amount of the loan not more fre3 quently than quarterly by the lender. 

4 ‘‘(B) INSURABLE LIMITS.—Capitalization 

5 of interest under this paragraph shall not be 

6 deemed to exceed the annual insurable limit on 

7 account of the borrower.’’. 

8 (b) CONFORMING AMENDMENT.—Section 

9 428(b)(7)(C) of such Act (20 U.S.C. 1078(b)(7)(C)) is 

10 amended by striking ‘‘, 428B,’’. 

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

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

13 July 1, 2008. 

14 SEC. 4. SPECIAL RULES FOR PLUS LOANS. 

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

16 1965 (20 U.S.C. 1078–2(a)(3)) is amended to read as fol17 lows: 

18 ‘‘(3) SPECIAL RULES.— 

19 ‘‘(A) PARENT BORROWERS.—Whenever 

20 necessary to carry out the provisions of this 

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

22 used in this part shall include a parent bor23 rower under this section. 

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

25 For loans made on or after July 1, 2008, and 
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1 before July 1, 2009, a lender may determine 

2 that extenuating circumstances exist under the 

3 regulations promulgated pursuant to paragraph 

4 (1)(A) if an applicant for a loan under this sec5 tion is delinquent for 180 days or less on their 

6 home mortgage payments and is not more than 

7 89 days delinquent on the repayment of any 

8 other debt. 

9 ‘‘(ii) MASTER CALENDAR INAPPLICABLE.— 

10 Section 482 shall not apply to determinations 

11 made under clause (i).’’. 

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

13 (a) IN GENERAL.—Section 428(j) of the Higher Edu14 cation Act of 1965 (20 U.S.C. 1078(j)) is amended— 

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

16 striking ‘‘students eligible to receive interest benefits 

17 paid on their behalf under subsection (a) of this sec18 tion who are otherwise unable to obtain loans under 

19 this part’’ and inserting ‘‘eligible students and par20 ents who are otherwise unable to obtain loans under 

21 this part (except for consolidation loans under sec22 tion 428C) or who attend an institution of higher 

23 education in the State that is designated under 

24 paragraph (4)’’; 
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1 (2) in paragraph (2)(B), by inserting ‘‘, in the 

2 case of students and parents applying for loans 

3 under this subsection because of an inability to oth4 erwise obtain loans under this part (except for con5 solidation loans under section 428C),’’ after ‘‘lender, 

6 nor’’; 

7 (3) in paragraph (3)(C)— 

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

9 designates an institution of higher education for 

10 participation in the program under this sub11 section under paragraph (4)’’ after ‘‘under this 

12 part’’; and 

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

14 to eligible borrowers who attend an institution 

15 in the State that is designated under paragraph 

16 (4)’’ after ‘‘problems’’; and 

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

18 ‘‘(4) INSTITUTION-WIDE STUDENT QUALIFICA19 TION.—Upon the request of an institution of higher 

20 education and pursuant to standards developed by 

21 the Secretary, the Secretary shall designate such in22 stitution for participation in the lender-of-last-resort 

23 program under this paragraph. If the Secretary des24 ignates an institution under this paragraph, the 

25 guaranty agency designated for the State in which 
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1 the institution is located shall make loans, in the 

2 same manner as such loans are made under para3 graph (1), to students and parent borrowers of the 

4 designated institution, regardless of whether the stu5 dents or parent borrowers are otherwise unable to 

6 obtain loans under this part (other than a consolida7 tion loan under section 428C). 

8 ‘‘(5) STANDARDS DEVELOPED BY THE SEC9 RETARY.—In developing standards with respect to 

10 paragraph (4), the Secretary may require— 

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

12 demonstrate that, despite due diligence on the 

13 part of the institution, the institution has been 

14 unable to secure the commitment of lenders 

15 willing to make loans to a significant number of 

16 students attending the institution; 

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

18 such paragraph for designation for participation 

19 in the lender-of-last-resort program, an institu20 tion of higher education shall demonstrate that 

21 the institution has met a minimum threshold, 

22 as determined by the Secretary, for the number 

23 or percentage of students at such institution 

24 who have received rejections from eligible lend25 ers for loans under this part; and 
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1 ‘‘(C) any other standards and guidelines 

2 the Secretary determines to be appropriate.’’. 

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

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

5 of this Act. 

6 (c) REVIEW OF INDUCEMENTS LIMITATIONS.—With7 in 90 days after the date of enactment of this Act, the 

8 Secretary of Education shall review, and as necessary re9 vise, the Department of Education’s regulations con10 cerning prohibited guaranty agency inducements to eligi11 ble lenders (34 CFR 682.401(e)) to ensure that such 

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

13 expansion of operations of the lender-of-last-resort pro14 gram as authorized by the amendments made by this sec15 tion. The Secretary shall submit a report on the review 

16 and revision required by this subsection to the Committee 

17 on Education and Labor of the House of Representatives 

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

19 Pensions of the Senate within 180 days after such date 

20 of enactment. 

21 SEC. 6. MANDATORY ADVANCES. 

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

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

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

25 and’’ and inserting ‘‘programs,’’; 
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1 (2) in paragraph (5), by striking ‘‘agencies.’’ 

2 and inserting ‘‘agencies, and’’; and 

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

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

5 there are appropriated, out of any money in the 

6 Treasury not otherwise appropriated, such sums as 

7 may be necessary for the purpose of carrying out 

8 section 422(c)(7).’’. 

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

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

11 of this Act. 

12 SEC. 7. TEMPORARY AUTHORITY TO PURCHASE STUDENT 

13 LOANS. 

14 (a) SPENDING AUTHORITY.— 

15 (1) AUTHORITY GRANTED.—The first sentence 

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

17 1965 (20 U.S.C. 1087a(a)) is amended— 

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

19 necessary’’; and 

20 (B) by inserting before the period at the 

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

22 for purchasing loans under section 459A’’. 

23 (2) CONFORMING AMENDMENT.—Section 

24 451(a) of such Act (20 U.S.C. 1087a(a)) is further 
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1 amended by striking ‘‘Such loans shall’’ and insert2 ing ‘‘Loans made under this part shall’’. 

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

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

5 seq.) is amended by inserting after section 459 the fol6 lowing new section: 

7 ‘‘SEC. 459A. TEMPORARY AUTHORITY TO PURCHASE STU8 DENT LOANS. 

9 ‘‘(a) AUTHORITY TO PURCHASE.— 

10 ‘‘(1) AUTHORITY; DETERMINATION RE11 QUIRED.—Upon a determination by the Secretary 

12 that there is an inadequate availability of loan cap13 ital to meet the demand for loans under sections 

14 428, 428B, or 428H, whether as a result of inad15 equate liquidity for such loans or for other reasons, 

16 the Secretary, in consultation with the Secretary of 

17 the Treasury, is authorized to purchase, or enter 

18 into forward commitments to purchase, from any eli19 gible lender, as defined by section 435(d)(1), loans 

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

21 after October 1, 2003, on such terms as the Sec22 retary, the Secretary of the Treasury, and the Direc23 tor of the Office of Management and Budget jointly 

24 determine are in the best interest of the United 

25 States, except that any purchase under this section 
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1 shall not result in any net cost to the Federal Gov2 ernment, as determined jointly by the Secretary, the 

3 Secretary of the Treasury, and the Director of the 

4 Office of Management and Budget. 

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

6 the Secretary of the Treasury, and the Director of 

7 the Office of Management and Budget shall jointly 

8 promulgate emergency regulations and publish such 

9 emergency regulations promptly in the Federal Reg10 ister concerning the purchases authorized by para11 graph (1). 

12 ‘‘(3) METHODOLOGY AND FACTORS; JUSTIFICA13 TION REQUIRED.—Such regulations shall outline the 

14 methodology and factors that the Secretary, the Sec15 retary of the Treasury, and the Director of the Of16 fice of Management and Budget shall consider in 

17 evaluating the price at which to purchase loans 

18 under sections 428, 428B, or 428H, and shall in19 clude a justification of how the use of such method20 ology and consideration of such factors used to de21 termine purchase price will ensure that loan pur22 chases do not result in any net cost to the Federal 

23 Government. 

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

25 condition of any purchase under subsection (a), that the 
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1 funds paid by the Secretary to any eligible lender under 

2 this section shall be used: (1) to ensure continued partici3 pation of such lender in the Federal student loan pro4 grams authorized under part B of this title; and (2) to 

5 originate new Federal loans to students, as authorized 

6 under part B of this title. 

7 ‘‘(c) MAINTAINING SERVICING ARRANGEMENTS.— 

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

9 selling loans under this section, contract with such lender 

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

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

12 does not exceed the cost the Federal Government 

13 would otherwise incur for the servicing of loans pur14 chased, as determined under subsection (a); and 

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

16 interest of the borrowers whose loans are purchased. 

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

18 authority to purchase loans under this section shall expire 

19 on July 1, 2009.’’. 

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

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

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

23 made’’ each place it appears in paragraphs (2) and (3). 
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1 SEC. 8. SENSE OF CONGRESS. 

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

3 economy is fragile and higher education and retraining op4 portunities are more important than ever— 

5 (1) the Federal financial institutions, such as 

6 the Federal Financing Bank and Federal Reserve, 

7 and federally chartered private entities such as the 

8 Federal Home Loan Banks and others, should con9 sider, in consultation with the Secretary of Treasury 

10 and the Secretary of Education, using available au11 thorities in a timely manner, if needed, to assist in 

12 ensuring that students and families can access Fed13 eral student loans for academic year 2008–2009, 

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

15 manner that results in no increased costs to tax16 payers; and 

17 (2) any action taken as a result of such consid18 eration should in no way limit or delay the Secretary 

19 of Education’s authority to operate the lender-of20 last-resort provisions of section 428(j) of the Higher 

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

22 nor the authority to purchase Federal Family Edu23 cation Loan Program loans, as authorized by section 

24 459A of such Act (as added by this Act). 
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1 SEC. 9. GAO STUDY ON IMPACT OF INCREASED LOAN LIM2 ITS. 

3 (a) STUDY REQUIRED.—The Comptroller General 

4 shall conduct a study to evaluate the impact of the in5 crease in Federal loan limits provided for in section 2 of 

6 this Act and section 8005 of the Deficit Reduction Act 

7 of 2005 with respect to the impact on— 

8 (1) tuition, fees, and room and board at institu9 tions of higher education; and 

10 (2) private loan borrowing by students and par11 ents for attendance at institutions of higher edu12 cation. 

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

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

15 of institutions of higher education over a 5-year time pe16 riod. The report shall specifically analyze the following: 

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

18 room and board increase, decrease, or remain un19 changed in each such sector after the increases in 

20 Federal loan limits take effect. 

21 (2) Whether the amount of private educational 

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

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

24 and room and board increase, decrease, or remain 

25 unchanged. 
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1 (c) REPORT.—Not later than one year after the date 

2 of enactment of this Act, the Comptroller General shall 

3 provide an interim report to the Committee on Education 

4 and Labor of the House of Representatives and the Com5 mittee on Health, Education, Labor, and Pensions of the 

6 Senate including the initial results of the study conducted 

7 under this section. The Comptroller General shall follow 

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

9 year after such date of enactment. 

Passed the House of Representatives April 17, 2008. 

Attest: 

Clerk. 

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