II 

Calendar No. 266 

110TH CONGRESS 

1ST SESSION S. 1762 

To provide for reconciliation pursuant to section 602 of the concurrent 

resolution on the budget for fiscal year 2008 (S. Con. Res. 21). 

IN THE SENATE OF THE UNITED STATES 

JULY 10, 2007 

Mr. KENNEDY, from the Committee on Health, Education, Labor, and Pensions, reported the following original bill; which was read twice and 

placed on the calendar 

A BILL 

To provide for reconciliation pursuant to section 602 of 

the concurrent resolution on the budget for fiscal year 

2008 (S. Con. Res. 21). 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; REFERENCES. 

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

5 ‘‘Higher Education Access Act of 2007’’. 

6 (b) REFERENCES.—Except as otherwise expressly 

7 provided, whenever in this Act an amendment or repeal 

8 is expressed in terms of an amendment to, or repeal of, 


pwalker on PROD1PC71 with BILLS
2 

•S 1762 PCS

1 a section or other provision, the reference shall be consid2 ered to be made to a section or other provision of the 

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

4 TITLE I—GRANTS TO STUDENTS 

5 IN ATTENDANCE AT INSTITU6 TIONS OF HIGHER EDU7 CATION 

8 SEC. 101. TUITION SENSITIVITY. 

9 (a) AMENDMENT.—Section 401(b) (20 U.S.C. 

10 1070a(b)) is amended by striking paragraph (3). 

11 (b) AUTHORIZATION AND APPROPRIATION OF

12 FUNDS.—There is authorized to be appropriated, and 

13 there is appropriated, out of any money in the Treasury 

14 not otherwise appropriated, for the Department of Edu15 cation to carry out the amendment made by subsection 

16 (a), $5,000,000 for fiscal year 2008. 

17 SEC. 102. PROMISE GRANTS. 

18 (a) AMENDMENT.—Subpart 1 of part A of title IV 

19 (20 U.S.C. 1070a et seq.) is amended by adding at the 

20 end the following: 

21 ‘‘SEC. 401B. PROMISE GRANTS. 

22 ‘‘(a) GRANTS.— 

23 ‘‘(1) IN GENERAL.—From amounts appro24 priated under subsection (e) for a fiscal year and 

25 subject to subsection (b), the Secretary shall award 


pwalker on PROD1PC71 with BILLS
3 

•S 1762 PCS

1 grants to students in the same manner as the Sec2 retary awards Federal Pell Grants to students under 

3 section 401, except that— 

4 ‘‘(A) at the beginning of each award year, 

5 the Secretary shall establish a maximum and 

6 minimum award level based on amounts made 

7 available under subsection (e); 

8 ‘‘(B) the Secretary shall only award grants 

9 under this section to students eligible for a 

10 Federal Pell Grant for the award year; and 

11 ‘‘(C) when determining eligibility for the 

12 awards under this section, the Secretary shall 

13 consider only those students who submitted a 

14 Free Application for Federal Student Aid or 

15 other common reporting form under section 483 

16 as of July 1 of the award year for which the 

17 determination is made. 

18 ‘‘(2) STUDENTS WITH THE GREATEST NEED.— 

19 The Secretary shall ensure grants are awarded 

20 under this section to students with the greatest need 

21 as determined in accordance with section 471. 

22 ‘‘(b) COST OF ATTENDANCE LIMITATION.—A grant 

23 awarded under this section for an award year shall be 

24 awarded in an amount that does not exceed— 


pwalker on PROD1PC71 with BILLS
4 

•S 1762 PCS

1 ‘‘(1) the student’s cost of attendance for the 

2 award year; less 

3 ‘‘(2) an amount equal to the sum of— 

4 ‘‘(A) the expected family contribution for 

5 the student for the award year; and 

6 ‘‘(B) any Federal Pell Grant award re7 ceived by the student for the award year. 

8 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—Grants award9 ed from funds made available under subsection (e) shall 

10 be used to supplement, and not supplant, other Federal, 

11 State, or institutional grant funds. 

12 ‘‘(d) USE OF EXCESS FUNDS.— 

13 ‘‘(1) FIFTEEN PERCENT OR LESS.—If, at the 

14 end of a fiscal year, the funds available for making 

15 grant payments under this section exceed the 

16 amount necessary to make the grant payments re17 quired under this section to eligible students by 15 

18 percent or less, then all of the excess funds shall re19 main available for making grant payments under 

20 this section during the next succeeding fiscal year. 

21 ‘‘(2) MORE THAN FIFTEEN PERCENT.—If, at 

22 the end of a fiscal year, the funds available for mak23 ing grant payments under this section exceed the 

24 amount necessary to make the grant payments re25 quired under this section to eligible students by 


pwalker on PROD1PC71 with BILLS
5 

•S 1762 PCS

1 more than 15 percent, then all of such funds shall 

2 remain available for making such grant payments 

3 but grant payments may be made under this para4 graph only with respect to awards for that fiscal 

5 year. 

6 ‘‘(e) AUTHORIZATION AND APPROPRIATION OF

7 FUNDS.— 

8 ‘‘(1) IN GENERAL.—There are authorized to be 

9 appropriated, and there are appropriated, out of any 

10 money in the Treasury not otherwise appropriated, 

11 for the Department of Education to carry out this 

12 section— 

13 ‘‘(A) $2,620,000,000 for fiscal year 2008; 

14 ‘‘(B) $3,040,000,000 for fiscal year 2009; 

15 ‘‘(C) $3,460,000,000 for fiscal year 2010; 

16 ‘‘(D) $3,900,000,000 for fiscal year 2011; 

17 ‘‘(E) $4,020,000,000 for fiscal year 2012; 

18 ‘‘(F) $10,000,000 for fiscal year 2013; and 

19 ‘‘(G) $3,200,000,000 for each of the fiscal 

20 years 2014 through 2017. 

21 ‘‘(2) AVAILABILITY OF FUNDS.—Funds appro22 priated under paragraph (1) for a fiscal year shall 

23 remain available through the last day of the fiscal 

24 year immediately succeeding the fiscal year for 

25 which the funds are appropriated.’’. 


pwalker on PROD1PC71 with BILLS
6 

•S 1762 PCS

1 (b) EFFECTIVE DATE.—The amendment made by 

2 subsection (a) shall take effect on July 1, 2008. 

3 TITLE II—STUDENT LOAN BENE4 FITS, TERMS, AND CONDI5 TIONS 

6 SEC. 201. DEFERMENTS. 

7 (a) FISL.—Section 427(a)(2)(C)(iii) (20 U.S.C. 

8 1077(a)(2)(C)(iii)) is amended by striking ‘‘3 years’’ and 

9 inserting ‘‘6 years’’. 

10 (b) INTEREST SUBSIDIES.—Section 428(b)(1)(M)(iv) 

11 (20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking ‘‘3 

12 years’’ and inserting ‘‘6 years’’. 

13 (c) DIRECT LOANS.—Section 455(f)(2)(D) (20 

14 U.S.C. 1087e(f)(2)(D)) is amended by striking ‘‘3 years’’ 

15 and inserting ‘‘6 years’’. 

16 (d) PERKINS.—Section 464(c)(2)(A)(iv) (20 U.S.C. 

17 1087dd(c)(2)(A)(iv)) is amended by striking ‘‘3 years’’ 

18 and inserting ‘‘6 years’’. 

19 (e) EFFECTIVE DATE AND APPLICABILITY.—The 

20 amendments made by this section shall take effect on July 

21 1, 2008, and shall only apply with respect to the loans 

22 made to a borrower of a loan under title IV of the Higher 

23 Education Act of 1965 who obtained the borrower’s first 

24 loan under such title prior to October 1, 2012. 


pwalker on PROD1PC71 with BILLS
7 

•S 1762 PCS

1 SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEM2 BERS OF THE ARMED FORCES. 

3 (a) FEDERAL FAMILY EDUCATION LOANS.—Section 

4 428(b)(1)(M)(iii) (20 U.S.C. 1078(b)(1)(M)(iii)) is 

5 amended— 

6 (1) in the matter preceding subclause (I), by 

7 striking ‘‘not in excess of 3 years’’; 

8 (2) in subclause (II), by striking ‘‘; or’’ and in9 serting a comma; and 

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

11 ‘‘and for the 180-day period following the 

12 demobilization date for the service de13 scribed in subclause (I) or (II); or’’. 

14 (b) DIRECT LOANS.—Section 455(f)(2)(C) (20 

15 U.S.C. 1087e(f)(2)(C)) is amended— 

16 (1) in the matter preceding clause (i), by strik17 ing ‘‘not in excess of 3 years’’; 

18 (2) in clause (ii), by striking ‘‘; or’’ and insert19 ing a comma; and 

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

21 ‘‘and for the 180-day period following the de22 mobilization date for the service described in 

23 clause (i) or (ii); or’’. 

24 (c) PERKINS LOANS.—Section 464(c)(2)(A)(iii) (20 

25 U.S.C. 1087dd(c)(2)(A)(iii)) is amended— 


pwalker on PROD1PC71 with BILLS
8 

•S 1762 PCS

1 (1) in the matter preceding subclause (I), by 

2 striking ‘‘not in excess of 3 years’’; 

3 (2) in subclause (II), by striking the semicolon 

4 and inserting a comma; and 

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

6 ‘‘and for the 180-day period following the de7 mobilization date for the service described in 

8 subclause (I) or (II);’’. 

9 (d) APPLICABILITY.—Section 8007(f) of the Higher 

10 Education Reconciliation Act of 2005 (20 U.S.C. 1078 

11 note) is amended by striking ‘‘loans for which’’ and all 

12 that follows through the period at the end and inserting 

13 ‘‘all loans under title IV of the Higher Education Act of 

14 1965.’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall take effect on July 1, 2008. 

17 SEC. 203. INCOME-BASED REPAYMENT PLANS. 

18 (a) FFEL.—Section 428 (as amended by sections 

19 201(b) and 202(a)) (20 U.S.C. 1078) is further amend20 ed— 

21 (1) in subsection (b)— 

22 (A) in paragraph (1)— 

23 (i) in subparagraph (D), by striking 

24 ‘‘income contingent’’ and inserting ‘‘in25 come-based’’; and 


pwalker on PROD1PC71 with BILLS
9 

•S 1762 PCS

1 (ii) in subparagraph (E)(i), by strik2 ing ‘‘income-sensitive’’ and inserting ‘‘in3 come-based’’; and 

4 (B) by striking clause (iii) of paragraph 

5 (9)(A) and inserting the following: 

6 ‘‘(iii) an income-based repayment 

7 plan, with parallel terms, conditions, and 

8 benefits as the income-based repayment 

9 plan described in subsections (e) and 

10 (d)(1)(D) of section 455, except that— 

11 ‘‘(I) the plan described in this 

12 clause shall not be available to a bor13 rower of an excepted PLUS loan (as 

14 defined in section 455(e)(10)) or of a 

15 loan made under 428C that includes 

16 an excepted PLUS loan; 

17 ‘‘(II) in lieu of the process of ob18 taining Federal income tax returns 

19 and information from the Internal 

20 Revenue Service, as described in sec21 tion 455(e)(1), the borrower shall pro22 vide the lender with a copy of the 

23 Federal income tax return and return 

24 information for the borrower (and, if 

25 applicable, the borrower’s spouse) for 


pwalker on PROD1PC71 with BILLS
10 

•S 1762 PCS

1 the purposes described in section 

2 455(e)(1), and the lender shall deter3 mine the repayment obligation on the 

4 loan, in accordance with the proce5 dures developed by the Secretary; 

6 ‘‘(III) in lieu of the requirements 

7 of section 455(e)(3), in the case of a 

8 borrower who chooses to repay a loan 

9 made, insured, or guaranteed under 

10 this part pursuant to income-based re11 payment and for whom the adjusted 

12 gross income is unavailable or does 

13 not reasonably reflect the borrower’s 

14 current income, the borrower shall 

15 provide the lender with other docu16 mentation of income that the Sec17 retary has determined is satisfactory 

18 for similar borrowers of loans made 

19 under part D; 

20 ‘‘(IV) the Secretary shall pay any 

21 interest due and not paid for under 

22 the repayment schedule described in 

23 section 455(e)(4) for a loan made, in24 sured, or guaranteed under this part 

25 in the same manner as the Secretary 


pwalker on PROD1PC71 with BILLS
11 

•S 1762 PCS

1 pays any such interest under section 

2 455(e)(6) for a Federal Direct Staf3 ford Loan; 

4 ‘‘(V) the Secretary shall assume 

5 the obligation to repay an outstanding 

6 balance of principal and interest due 

7 on all loans made, insured, or guaran8 teed under this part (other than an 

9 excepted PLUS Loan or a loan under 

10 section 428C that includes an ex11 cepted PLUS loan), for a borrower 

12 who satisfies the requirements of sub13 paragraphs (A) and (B) of section 

14 455(e)(7), in the same manner as the 

15 Secretary cancels such outstanding 

16 balance under section 455(e)(7); and 

17 ‘‘(VI) in lieu of the notification 

18 requirements under section 455(e)(8), 

19 the lender shall notify a borrower of a 

20 loan made, insured, or guaranteed 

21 under this part who chooses to repay 

22 such loan pursuant to income-based 

23 repayment of the terms and condi24 tions of such plan, in accordance with 


pwalker on PROD1PC71 with BILLS
12 

•S 1762 PCS

1 the procedures established by the Sec2 retary, including notification that— 

3 ‘‘(aa) the borrower shall be 

4 responsible for providing the 

5 lender with the information nec6 essary for documentation of the 

7 borrower’s income, including in8 come information for the bor9 rower’s spouse (as applicable); 

10 and 

11 ‘‘(bb) if the borrower con12 siders that special circumstances 

13 warrant an adjustment, as de14 scribed in section 455(e)(8)(B), 

15 the borrower may contact the 

16 lender, and the lender shall de17 termine whether such adjustment 

18 is appropriate, in accordance 

19 with the criteria established by 

20 the Secretary; and’’; 

21 (2) in subsection (e)— 

22 (A) in the subsection heading, by striking 

23 ‘‘INCOME-SENSITIVE’’ and inserting ‘‘INCOME24 BASED’’; 

25 (B) in paragraph (1)— 


pwalker on PROD1PC71 with BILLS
13 

•S 1762 PCS

1 (i) by striking ‘‘income-sensitive re2 payment’’ and inserting ‘‘income-based re3 payment’’; and 

4 (ii) by inserting ‘‘and for the public 

5 service loan forgiveness program under 

6 section 455(m), in accordance with section 

7 428C(b)(5)’’ before the semicolon; and 

8 (C) in paragraphs (2) and (3), by striking 

9 ‘‘income-sensitive’’ each place the term occurs 

10 and inserting ‘‘income-based’’; and 

11 (3) in subsection (m)— 

12 (A) in the subsection heading, by striking 

13 ‘‘INCOME CONTINGENT’’ and inserting ‘‘IN14 COME-BASED’’; 

15 (B) in paragraph (1), by striking ‘‘income 

16 contingent repayment plan’’ and all that follows 

17 through the period at the end and inserting ‘‘in18 come-based repayment plan as described in sub19 section (b)(9)(A)(iii) and section 

20 455(d)(1)(D).’’; and 

21 (C) in the paragraph heading of paragraph 

22 (2), by striking ‘‘INCOME CONTINGENT’’ and in23 serting ‘‘INCOME-BASED’’. 

24 (b) CONSOLIDATION LOANS.—Section 428C (20 

25 U.S.C. 1078–3) is amended— 


pwalker on PROD1PC71 with BILLS
14 

•S 1762 PCS

1 (1) in subsection (a)(3)(B)(i)(V), by striking 

2 ‘‘for the purposes of obtaining an income contingent 

3 repayment plan,’’ and inserting ‘‘for the purpose of 

4 using the public service loan forgiveness program 

5 under section 455(m),’’; 

6 (2) in subsection (b)(5)— 

7 (A) in the first sentence, by striking ‘‘, or 

8 is unable to obtain a consolidation loan with in9 come-sensitive repayment terms acceptable to 

10 the borrower from such a lender,’’ and inserting 

11 ‘‘, or chooses to obtain a consolidation loan for 

12 the purposes of using the public service loan 

13 forgiveness program offered under section 

14 455(m),’’; and 

15 (B) in the second sentence, by striking ‘‘in16 come contingent repayment under part D of 

17 this title’’ and inserting ‘‘income-based repay18 ment’’; and 

19 (3) in subsection (c)— 

20 (A) in paragraph (2)(A)— 

21 (i) in the first sentence, by striking 

22 ‘‘of graduated or income-sensitive repay23 ment schedules, established by the lender 

24 in accordance with the regulations of the 

25 Secretary.’’ and inserting ‘‘of graduated 


pwalker on PROD1PC71 with BILLS
15 

•S 1762 PCS

1 repayment schedules, established by the 

2 lender in accordance with the regulations 

3 of the Secretary, and income-based repay4 ment schedules, established pursuant to 

5 regulations by the Secretary.’’; and 

6 (ii) in the second sentence, by striking 

7 ‘‘Except as required’’ and all that follows 

8 through ‘‘subsection (b)(5),’’ and inserting 

9 ‘‘Except as required by such income-based 

10 repayment schedules,’’; and 

11 (B) in paragraph (3)(B), by striking ‘‘in12 come contingent repayment offered by the Sec13 retary under subsection (b)(5)’’ and inserting 

14 ‘‘income-based repayment’’. 

15 (c) DIRECT LOANS.—Section 455 (as amended by 

16 sections 201(c) and 202(b)) (20 U.S.C. 1087e) is further 

17 amended— 

18 (1) in subsection (d)— 

19 (A) in paragraph (1)(D)— 

20 (i) by striking ‘‘income contingent re21 payment plan’’ and inserting ‘‘income22 based repayment plan’’; and 

23 (ii) by striking ‘‘a Federal Direct 

24 PLUS loan’’ and inserting ‘‘an excepted 

25 PLUS loan or any Federal Direct ConsoliVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
16 

•S 1762 PCS

1 dation Loan that includes an excepted 

2 PLUS loan (as defined in subsection 

3 (e)(10))’’; and 

4 (B) in paragraph (5)(B), by striking ‘‘in5 come contingent’’ and inserting ‘‘income6 based’’; and 

7 (2) in subsection (e)— 

8 (A) in the subsection heading, by striking 

9 ‘‘INCOME CONTINGENT’’ and inserting ‘‘IN10 COME-BASED’’; 

11 (B) in paragraphs (1), (2), and (3), by 

12 striking ‘‘income contingent’’ each place the 

13 term appears and inserting ‘‘income-based’’; 

14 (C) in paragraph (4)— 

15 (i) by striking ‘‘Income contingent’’ 

16 and inserting ‘‘Income-based’’; and 

17 (ii) by striking ‘‘Secretary.’’ and in18 serting ‘‘Secretary, except that the month19 ly required payment under such schedule 

20 shall not exceed 15 percent of the result 

21 obtained by calculating the amount by 

22 which— 

23 ‘‘(A) the borrower’s adjusted gross income; 

24 exceeds 


pwalker on PROD1PC71 with BILLS
17 

•S 1762 PCS

1 ‘‘(B) 150 percent of the poverty line appli2 cable to the borrower’s family size, as deter3 mined under section 673(2) of the Community 

4 Service Block Grant Act, 

5 divided by 12.’’; 

6 (D) in paragraph (5), by striking ‘‘income 

7 contingent’’ and inserting ‘‘income-based’’; 

8 (E) by redesignating paragraph (6) as 

9 paragraph (8); 

10 (F) by inserting after paragraph (5) the 

11 following: 

12 ‘‘(6) TREATMENT OF INTEREST.—In the case 

13 of a Federal Direct Stafford Loan, any interest due 

14 and not paid for under paragraph (2) shall be paid 

15 by the Secretary. 

16 ‘‘(7) LOAN FORGIVENESS.—The Secretary shall 

17 cancel the obligation to repay an outstanding bal18 ance of principal and interest due on all loans made 

19 under this part, or assume the obligation to repay 

20 an outstanding balance of principal and interest due 

21 on all loans made, insured, or guaranteed under part 

22 B, (other than an excepted PLUS Loan, or any Fed23 eral Direct Consolidation Loan or loan under section 

24 428C that includes an excepted PLUS loan) to a 

25 borrower who— 


pwalker on PROD1PC71 with BILLS
18 

•S 1762 PCS

1 ‘‘(A) makes the election under this sub2 section or under section 428(b)(9)(A)(iii); and 

3 ‘‘(B) for a period of time prescribed by the 

4 Secretary not to exceed 25 years (including any 

5 period during which the borrower is in 

6 deferment due to an economic hardship de7 scribed in section 435(o)), meets 1 of the fol8 lowing requirements with respect to each pay9 ment made during such period: 

10 ‘‘(i) Has made the payment under this 

11 subsection or section 428(b)(9)(A)(iii). 

12 ‘‘(ii) Has made the payment under a 

13 standard repayment plan under section 

14 428(b)(9)(A)(i) or 455(d)(1)(A). 

15 ‘‘(iii) Has made a payment that 

16 counted toward the maximum repayment 

17 period under income-sensitive repayment 

18 under section 428(b)(9)(A)(iii) or income 

19 contingent repayment under section 

20 455(d)(1)(D), as each such section was in 

21 effect on June 30, 2008. 

22 ‘‘(iv) Has made a reduced payment of 

23 not less than the amount required under 

24 subsection (e), pursuant to a forbearance 

25 agreement under section 428(c)(3)(A)(i) 


pwalker on PROD1PC71 with BILLS
19 

•S 1762 PCS

1 for a borrower described in 

2 428(c)(3)(A)(i)(II).’’; 

3 (G) in the matter preceding subparagraph 

4 (A) of paragraph (8) (as redesignated by sub5 paragraph (E)), by striking ‘‘income contin6 gent’’ and inserting ‘‘income-based’’; and 

7 (H) by adding at the end the following: 

8 ‘‘(9) RETURN TO STANDARD REPAYMENT.—A 

9 borrower who is repaying a loan made under this 

10 part pursuant to income-based repayment may 

11 choose, at any time, to terminate repayment pursu12 ant to income-based repayment and repay such loan 

13 under the standard repayment plan. 

14 ‘‘(10) DEFINITION OF EXCEPTED PLUS

15 LOAN.—In this subsection, the term ‘excepted PLUS 

16 loan’ means a Federal Direct PLUS loan or a loan 

17 under section 428B that is made, insured, or guar18 anteed on behalf of a dependent student.’’. 

19 (d) CONFORMING AMENDMENTS AND TECHNICAL

20 CORRECTIONS.—The Act (20 U.S.C. 1001 et seq.) is fur21 ther amended— 

22 (1) in section 427(a)(2)(H) (20 U.S.C. 

23 1077(a)(2)(H))— 

24 (A) by striking ‘‘or income-sensitive’’; and 


pwalker on PROD1PC71 with BILLS
20 

•S 1762 PCS

1 (B) by inserting ‘‘or income-based repay2 ment schedule established pursuant to regula3 tions by the Secretary’’ before the semicolon at 

4 the end; and 

5 (2) in section 455(d)(1)(C) (20 U.S.C. 

6 1087e(d)(1)(C)), by striking ‘‘428(b)(9)(A)(v)’’ and 

7 inserting ‘‘428(b)(9)(A)(iv)’’. 

8 (e) TRANSITION PROVISION.—A student who, as of 

9 June 30, 2008, elects to repay a loan under part B or 

10 part D of the Higher Education Act of 1965 (20 U.S.C. 

11 1071 et seq., 1087a et seq.) through an income-sensitive 

12 repayment plan under section 428(b)(9)(A)(iii) of such 

13 Act (20 U.S.C. 1078(b)(9)(A)(iii)) or an income contin14 gent repayment plan under section 455(d)(1)(D) of such 

15 Act (20 U.S.C. 1087e(d)(1)(D)) (as each such section was 

16 in effect on the day before the date of enactment of this 

17 Act) shall have the option to continue repayment under 

18 such section (as such section was in effect on such day), 

19 or may elect, beginning on July 1, 2008, to use the in20 come-based repayment plan under section 

21 428(b)(9)(A)(iii) or 455(d)(1)(D) (as applicable) of the 

22 Higher Education Act of 1965, as amended by this sec23 tion. 

24 (f) EFFECTIVE DATE AND APPLICABILITY.—The 

25 amendments made by this section shall take effect on July 


pwalker on PROD1PC71 with BILLS
21 

•S 1762 PCS

1 1, 2008, and shall only apply with respect to a borrower 

2 of a loan under title IV of the Higher Education Act of 

3 1965 who obtained the borrower’s first loan under such 

4 title prior to October 1, 2012. 

5 TITLE III—FEDERAL FAMILY 

6 EDUCATION LOAN PROGRAM 

7 SEC. 301. REDUCTION OF LENDER INSURANCE PERCENT8 AGE. 

9 (a) AMENDMENT.—Section 428(b)(1)(G) (20 U.S.C. 

10 1078(b)(1)(G)) is amended— 

11 (1) in the matter preceding clause (i), by strik12 ing ‘‘insures 98 percent’’ and inserting ‘‘insures 97 

13 percent’’; 

14 (2) in clause (i), by inserting ‘‘and’’ after the 

15 semicolon; 

16 (3) by striking clause (ii); and 

17 (4) by redesignating clause (iii) as clause (ii). 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall take effect with respect to loans made 

20 on or after October 1, 2007. 

21 SEC. 302. GUARANTY AGENCY COLLECTION RETENTION. 

22 Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 

23 1078(c)(6)(A)(ii)) is amended to read as follows: 


pwalker on PROD1PC71 with BILLS
22 

•S 1762 PCS

1 ‘‘(ii) an amount equal to 24 percent of 

2 such payments for use in accordance with sec3 tion 422B, except that— 

4 ‘‘(I) beginning October 1, 2003 and 

5 ending September 30, 2007, this subpara6 graph shall be applied by substituting ‘23 

7 percent’ for ‘24 percent’; and 

8 ‘‘(II) beginning October 1, 2007, this 

9 subparagraph shall be applied by sub10 stituting ‘16 percent’ for ‘24 percent’.’’. 

11 SEC. 303. ELIMINATION OF EXCEPTIONAL PERFORMER 

12 STATUS FOR LENDERS. 

13 (a) ELIMINATION OF STATUS.—Part B of title IV (20 

14 U.S.C. 1071 et seq.) is amended by striking section 428I 

15 (20 U.S.C. 1078–9). 

16 (b) CONFORMING AMENDMENTS.—Part B of title IV 

17 is further amended— 

18 (1) in section 428(c)(1) (20 U.S.C. 

19 1078(c)(1))— 

20 (A) by striking subparagraph (D); and 

21 (B) by redesignating subparagraphs (E) 

22 through (H) as subparagraphs (D) through 

23 (G), respectively; and 


pwalker on PROD1PC71 with BILLS
23 

•S 1762 PCS

1 (2) in section 438(b)(5) (20 U.S.C. 1087– 

2 1(b)(5)), by striking the matter following subpara3 graph (B). 

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

5 subsections (a) and (b) shall take effect on October 1, 

6 2007, except that section 428I of the Higher Education 

7 Act of 1965 (as in effect on the day before the date of 

8 enactment of this Act) shall apply to eligible lenders that 

9 received a designation under subsection (a) of such section 

10 prior to October 1, 2007, for the remainder of the year 

11 for which the designation was made. 

12 SEC. 304. DEFINITIONS. 

13 (a) AMENDMENTS.—Section 435 (20 U.S.C. 1085) is 

14 amended— 

15 (1) in subsection (o)(1)— 

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

17 ‘‘100 percent of the poverty line for a family of 

18 2’’ and inserting ‘‘150 percent of the poverty 

19 line applicable to the borrower’s family size’’; 

20 and 

21 (B) in subparagraph (B)(ii), by striking 

22 ‘‘to a family of two’’ and inserting ‘‘to the bor23 rower’s family size’’; and 

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

25 ‘‘(p) ELIGIBLE NOT-FOR-PROFIT HOLDER.— 


pwalker on PROD1PC71 with BILLS
24 

•S 1762 PCS

1 ‘‘(1) DEFINITION OF ELIGIBLE NOT-FOR-PROF2 IT HOLDER.—The term ‘eligible not-for-profit hold3 er’ means an eligible lender under subsection (d) 

4 (except for an eligible lender described in subsection 

5 (d)(1)(E)) that requests a special allowance payment 

6 under section 438(b)(2)(I)(vi)(II) and that is— 

7 ‘‘(A) a State of the United States, or a po8 litical subdivision thereof, or an authority, agen9 cy, or other instrumentality thereof (including 

10 such entities that are eligible to issue bonds de11 scribed in section 1.103–1 of title 26, Code of 

12 Federal Regulations, or section 144(b) of the 

13 Internal Revenue Code of 1986); 

14 ‘‘(B) an entity described in section 

15 150(d)(2) of such Code that has not made the 

16 election described in section 150(d)(3) of such 

17 Code; 

18 ‘‘(C) an entity described in section 

19 501(c)(3) of such Code; or 

20 ‘‘(D) a trustee acting as an eligible lender 

21 on behalf of an entity described in subpara22 graph (A), (B), or (C), 

23 except that no entity described in subparagraph (A), 

24 (B), or (C) shall be owned or controlled in whole or 

25 in part by a for-profit entity. 


pwalker on PROD1PC71 with BILLS
25 

•S 1762 PCS

1 ‘‘(2) PROHIBITION.—In the case of a loan for 

2 which the special allowance payment is calculated 

3 under section 438(b)(2)(I)(vi)(II) and that is sold by 

4 the eligible not-for-profit holder holding the loan to 

5 a for-profit entity or to an entity that is not an eligi6 ble not-for-profit holder, the special allowance pay7 ment for such loan shall, beginning on the date of 

8 the sale, no longer be calculated under section 

9 438(b)(2)(I)(vi)(II) and shall be calculated under 

10 section 438(b)(2)(I)(vi)(I) instead. 

11 ‘‘(3) REGULATIONS.—Not later than 1 year 

12 after the date of enactment of the Higher Education 

13 Access Act of 2007, the Secretary shall promulgate 

14 regulations in accordance with the provisions of this 

15 subsection.’’. 

16 (b) APPLICABILITY.—The amendment made by sub17 section (a)(1) shall only apply with respect to any bor18 rower of a loan under title IV of the Higher Education 

19 Act of 1965 who obtained the borrower’s first loan under 

20 such title prior to October 1, 2012. 

21 SEC. 305. SPECIAL ALLOWANCES. 

22 (a) REDUCTION OF LENDER SPECIAL ALLOWANCE

23 PAYMENTS.—Section 438(b)(2)(I) (20 U.S.C. 1087– 

24 1(b)(2)(I)) is amended— 


pwalker on PROD1PC71 with BILLS
26 

•S 1762 PCS

1 (1) in clause (i), by striking ‘‘(iii), and (iv)’’ 

2 and inserting ‘‘(iii), (iv), and (vi)’’; and 

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

4 ‘‘(vi) REDUCTION FOR LOANS DIS5 BURSED ON OR AFTER OCTOBER 1, 2007.— 

6 With respect to a loan on which the appli7 cable interest rate is determined under sec8 tion 427A(l) and for which the first dis9 bursement of principal is made on or after 

10 October 1, 2007, the special allowance pay11 ment computed pursuant to this subpara12 graph shall be computed— 

13 ‘‘(I) for loans held by an eligible 

14 lender not described in subclause 

15 (II)— 

16 ‘‘(aa) by substituting ‘1.24 

17 percent’ for ‘1.74 percent’ in 

18 clause (ii); 

19 ‘‘(bb) by substituting ‘1.84 

20 percent’ for ‘2.34 percent’ each 

21 place the term appears in this 

22 subparagraph; 

23 ‘‘(cc) by substituting ‘1.84 

24 percent’ for ‘2.64 percent’ in 

25 clause (iii); and 


pwalker on PROD1PC71 with BILLS
27 

•S 1762 PCS

1 ‘‘(dd) by substituting ‘2.14 

2 percent’ for ‘2.64 percent’ in 

3 clause (iv); and 

4 ‘‘(II) for loans held by an eligible 

5 not-for-profit holder— 

6 ‘‘(aa) by substituting ‘1.99 

7 percent’ for ‘2.34 percent’ each 

8 place the term appears in this 

9 subparagraph; 

10 ‘‘(bb) by substituting ‘1.39 

11 percent’ for ‘1.74 percent’ in 

12 clause (ii); 

13 ‘‘(cc) by substituting ‘1.99 

14 percent’ for ‘2.64 percent’ in 

15 clause (iii); and 

16 ‘‘(dd) by substituting ‘2.29 

17 percent’ for ‘2.64 percent’ in 

18 clause (iv).’’. 

19 (b) INCREASED LOAN FEES FROM LENDERS.—Para20 graph (2) of section 438(d) (20 U.S.C. 1087–1(d)(2)) is 

21 amended to read as follows: 

22 ‘‘(2) AMOUNT OF LOAN FEES.—The amount of 

23 the loan fee which shall be deducted under para24 graph (1), but which may not be collected from the 

25 borrower, shall be equal to 1.0 percent of the prinVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
28 

•S 1762 PCS

1 cipal amount of the loan with respect to any loan 

2 under this part for which the first disbursement was 

3 made on or after October 1, 2007.’’. 

4 TITLE IV—WILLIAM D. FORD 

5 FEDERAL DIRECT LOAN PRO6 GRAM 

7 SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EM8 PLOYEES. 

9 Section 455 (as amended by sections 201(c), 202(b), 

10 and 203(c)) (20 U.S.C. 1087e) is further amended by add11 ing at the end the following: 

12 ‘‘(m) REPAYMENT PLAN FOR PUBLIC SERVICE EM13 PLOYEES.— 

14 ‘‘(1) IN GENERAL.—The Secretary shall cancel 

15 the balance of interest and principal due, in accord16 ance with paragraph (2), on any eligible Federal Di17 rect Loan not in default for an eligible borrower 

18 who— 

19 ‘‘(A) has made 120 monthly payments on 

20 the Federal Direct Loan after October 1, 2007, 

21 pursuant to any combination of— 

22 ‘‘(i) payments under an income-based 

23 repayment plan under section 

24 455(d)(1)(D); 


pwalker on PROD1PC71 with BILLS
29 

•S 1762 PCS

1 ‘‘(ii) payments under a standard re2 payment plan under section 455(d)(1)(A); 

3 or 

4 ‘‘(iii) monthly payments under a re5 payment plan under section 455(d)(1) of 

6 not less than the monthly amount cal7 culated under section 455(d)(1)(A); and 

8 ‘‘(B)(i) is employed in a public service job 

9 at the time of such forgiveness; and 

10 ‘‘(ii) has been employed in a public service 

11 job during the period in which the borrower 

12 makes each of the 120 payments described in 

13 subparagraph (A). 

14 ‘‘(2) LOAN CANCELLATION AMOUNT.—After the 

15 conclusion of the employment period described in 

16 paragraph (1), the Secretary shall cancel the obliga17 tion to repay, for each year during such period de18 scribed in paragraph (1)(B)(ii) for which the eligible 

19 borrower submits documentation to the Secretary 

20 that the borrower’s annual adjusted gross income or 

21 annual earnings were less than or equal to $65,000, 

1 22 ⁄10 of the amount of the balance of principal and in23 terest due as of the time of such cancellation, on the 

24 eligible Federal Direct Loans made to the borrower 

25 under this part. 


pwalker on PROD1PC71 with BILLS
30 

•S 1762 PCS

1 ‘‘(3) DEFINITIONS.—In this subsection: 

2 ‘‘(A) ELIGIBLE BORROWER.—The term ‘el3 igible borrower’ means a borrower who submits 

4 documentation to the Secretary that the bor5 rower’s annual adjusted gross income or annual 

6 earnings is less than or equal to $65,000. 

7 ‘‘(B) ELIGIBLE FEDERAL DIRECT LOAN.— 

8 The term ‘eligible Federal Direct Loan’ means 

9 a Federal Direct Stafford Loan, Federal Direct 

10 PLUS Loan, Federal Direct Unsubsidized 

11 Loan, or a Federal Direct Consolidation Loan 

12 if such consolidation loan was obtained by the 

13 borrower under section 428C(b)(5) or in ac14 cordance with section 428C(a)(3)(B)(i)(V). 

15 ‘‘(C) PUBLIC SERVICE JOB.—In this para16 graph, the term ‘public service job’ means— 

17 ‘‘(i) a full-time job in public emer18 gency management, government, public 

19 safety, public law enforcement, public 

20 health, public education, public early child21 hood education, public child care, social 

22 work in a public child or family service 

23 agency, public services for individuals with 

24 disabilities, public services for the elderly, 

25 public interest legal services (including 


pwalker on PROD1PC71 with BILLS
31 

•S 1762 PCS

1 prosecution or public defense), public li2 brary sciences, public school library 

3 sciences, or other public school-based serv4 ices; or 

5 ‘‘(ii) teaching as a full-time faculty 

6 member at a Tribal College or University 

7 as defined in section 316(b).’’. 

8 SEC. 402. UNIT COST CALCULATION FOR GUARANTY AGEN9 CY ACCOUNT MAINTENANCE FEES. 

10 Section 458(b) (20 U.S.C. 1087h(b)) is amended— 

11 (1) by striking ‘‘Account’’ and inserting the fol12 lowing: 

13 ‘‘(1) FOR FISCAL YEARS 2006 AND 2007.—For 

14 each of the fiscal years 2006 and 2007, account’’; 

15 and 

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

17 ‘‘(2) FOR FISCAL YEAR 2008 AND SUCCEEDING

18 FISCAL YEARS.— 

19 ‘‘(A) IN GENERAL.—For fiscal year 2008 

20 and each succeeding fiscal year, the Secretary 

21 shall calculate the account maintenance fees 

22 payable to guaranty agencies under subsection 

23 (a)(3), on a per-loan cost basis in accordance 

24 with subparagraph (B). 


pwalker on PROD1PC71 with BILLS
32 

•S 1762 PCS

1 ‘‘(B) AMOUNT DETERMINATION.—To de2 termine the amount that shall be paid under 

3 subsection (a)(3) per outstanding loan guaran4 teed by a guaranty agency for fiscal year 2008 

5 and succeeding fiscal years, the Secretary 

6 shall— 

7 ‘‘(i) establish the per-loan cost basis 

8 amount by dividing the total amount of ac9 count maintenance fees paid under sub10 section (a)(3) for fiscal year 2006 by the 

11 number of loans under part B that were 

12 outstanding for that fiscal year; and 

13 ‘‘(ii) for subsequent fiscal years, ad14 just the amount determined under clause 

15 (i) as the Secretary determines necessary 

16 to account for inflation.’’. 

17 TITLE V—FEDERAL PERKINS 

18 LOANS 

19 SEC. 501. DISTRIBUTION OF LATE COLLECTIONS. 

20 Section 466(b) (20 U.S.C. 1087ff(b)) is amended by 

21 striking ‘‘March 31, 2012’’ and inserting ‘‘September 30, 

22 2012’’. 


pwalker on PROD1PC71 with BILLS
33 

•S 1762 PCS

1 TITLE VI—NEED ANALYSIS 

2 SEC. 601. SUPPORT FOR WORKING STUDENTS. 

3 (a) DEPENDENT STUDENTS.—Subparagraph (D) of 

4 section 475(g)(2) (20 U.S.C. 1087oo(g)(2)(D)) is amend5 ed to read as follows: 

6 ‘‘(D) an income protection allowance of the 

7 following amount (or a successor amount pre8 scribed by the Secretary under section 478): 

9 ‘‘(i) for academic year 2009–2010, 

10 $3,750; 

11 ‘‘(ii) for academic year 2010–2011, 

12 $4,500; 

13 ‘‘(iii) for academic year 2011–2012, 

14 $5,250; and 

15 ‘‘(iv) for academic year 2012–2013, 

16 $6,000;’’. 

17 (b) INDEPENDENT STUDENTS WITHOUT DEPEND18 ENTS OTHER THAN A SPOUSE.—Clause (iv) of section 

19 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended 

20 to read as follows: 

21 ‘‘(iv) an income protection allowance 

22 of the following amount (or a successor 

23 amount prescribed by the Secretary under 

24 section 478): 


pwalker on PROD1PC71 with BILLS
34 

•S 1762 PCS

1 ‘‘(I) for single or separated stu2 dents, or married students where both 

3 are enrolled pursuant to subsection 

4 (a)(2)— 

5 ‘‘(aa) for academic year 

6 2009–2010, $7,000; 

7 ‘‘(bb) for academic year 

8 2010–2011, $7,780; 

9 ‘‘(cc) for academic year 

10 2011–2012, $8,550; and 

11 ‘‘(dd) for academic year 

12 2012–2013, $9,330; and 

13 ‘‘(II) for married students where 

14 1 is enrolled pursuant to subsection 

15 (a)(2)— 

16 ‘‘(aa) for academic year 

17 2009–2010, $11,220; 

18 ‘‘(bb) for academic year 

19 2010–2011, $12,460; 

20 ‘‘(cc) for academic year 

21 2011–2012, $13,710; and 

22 ‘‘(dd) for academic year 

23 2012–2013, $14,960;’’. 

24 (c) INDEPENDENT STUDENTS WITH DEPENDENTS

25 OTHER THAN A SPOUSE.—Paragraph (4) of section 


pwalker on PROD1PC71 with BILLS
35 

•S 1762 PCS

1 477(b) (20 U.S.C. 1087qq(b)(4)) is amended to read as 

2 follows: 

3 ‘‘(4) INCOME PROTECTION ALLOWANCE.—The 

4 income protection allowance is determined by the ta5 bles described in subparagraphs (A) through (D) (or 

6 a successor table prescribed by the Secretary under 

7 section 478). 

8 ‘‘(A) ACADEMIC YEAR 2009–2010.—For aca9 demic year 2009–2010, the income protection 

10 allowance is determined by the following table: 

‘‘Income Protection Allowance 

Family Size 

Number in College 

1 2 3 4 5 

2 $17,720 $14,690 

3 22,060 19,050 $16,020 

4 27,250 24,220 21,210 $18,170 

5 32,150 29,120 26,100 23,070 $20,060 

6 37,600 34,570 31,570 28,520 25,520 

NOTE: For each additional family member, add $4,240. 

For each additional college student, subtract $3,020. 

11 ‘‘(B) ACADEMIC YEAR 2010–2011.—For 

12 academic year 2010–2011, the income protec13 tion allowance is determined by the following 

14 table: 

‘‘Income Protection Allowance 

Family Size 

Number in College 

1 2 3 4 5 

2 $19,690 $16,330 

3 24,510 21,160 $17,800 

4 30,280 26,910 23,560 $20,190 

5 35,730 32,350 29,000 25,640 $22,290 


pwalker on PROD1PC71 with BILLS
36 

•S 1762 PCS

‘‘Income Protection Allowance—Continued 

Family Size 

Number in College 

1 2 3 4 5 

6 41,780 38,410 35,080 31,690 28,350 

NOTE: For each additional family member, add $4,710. 

For each additional college student, subtract $3,350. 

1 ‘‘(C) ACADEMIC YEAR 2011–2012.—For aca2 demic year 2011–2012, the income protection 

3 allowance is determined by the following table: 

‘‘Income Protection Allowance 

Family Size 

Number in College 

1 2 3 4 5 

2 $21,660 $17,960 

3 26,960 23,280 $19,580 

4 33,300 29,600 25,920 $22,210 

5 39,300 35,590 31,900 28,200 $24,520 

6 45,950 42,250 38,580 34,860 31,190 

NOTE: For each additional family member, add $5,180. 

For each additional college student, subtract $3,690. 

4 ‘‘(D) ACADEMIC YEAR 2012–2013.—For 

5 academic year 2012–2013, the income protec6 tion allowance is determined by the following 

7 table: 

‘‘Income Protection Allowance 

Family Size 

Number in College 

1 2 3 4 5 

2 $23,630 $19,590 

3 29,420 25,400 $21,360 

4 36,330 32,300 28,280 $24,230 

5 42,870 38,820 34,800 30,770 $26,750 

6 50,130 46,100 42,090 38,030 34,020 

NOTE: For each additional family member, add $5,660. 

For each additional college student, subtract $4,020.’’. 


pwalker on PROD1PC71 with BILLS
37 

•S 1762 PCS

1 (d) UPDATED TABLES AND AMOUNTS.—Section 

2 478(b) (20 U.S.C. 1087rr(b)) is amended— 

3 (1) by striking paragraph (1) and inserting the 

4 following: 

5 ‘‘(1) REVISED TABLES.— 

6 ‘‘(A) IN GENERAL.—For each academic 

7 year after academic year 2008–2009, the Sec8 retary shall publish in the Federal Register a 

9 revised table of income protection allowances 

10 for the purpose of such sections, subject to sub11 paragraphs (B) and (C). 

12 ‘‘(B) TABLE FOR INDEPENDENT STU13 DENTS.— 

14 ‘‘(i) ACADEMIC YEARS 2009–2010

15 THROUGH 2012–2013.—For each of the aca16 demic years 2009–2010 through 2012– 

17 2013, the Secretary shall not develop a re18 vised table of income protection allowances 

19 under section 477(b)(4) and the table spec20 ified for such academic year under sub21 paragraphs (A) through (D) of such sec22 tion shall apply. 

23 ‘‘(ii) OTHER ACADEMIC YEARS.—For 

24 each academic year after academic year 

25 2012–2013, the Secretary shall develop the 


pwalker on PROD1PC71 with BILLS
38 

•S 1762 PCS

1 revised table of income protection allow2 ances by increasing each of the dollar 

3 amounts contained in the table of income 

4 protection allowances under section 

5 477(b)(4)(D) by a percentage equal to the 

6 estimated percentage increase in the Con7 sumer Price Index (as determined by the 

8 Secretary) between December 2011 and 

9 the December next preceding the beginning 

10 of such academic year, and rounding the 

11 result to the nearest $10. 

12 ‘‘(C) TABLE FOR PARENTS.—For each 

13 academic year after academic year 2008–2009, 

14 the Secretary shall develop the revised table of 

15 income protection allowances under section 

16 475(c)(4) by increasing each of the dollar 

17 amounts contained in the table by a percentage 

18 equal to the estimated percentage increase in 

19 the Consumer Price Index (as determined by 

20 the Secretary) between December 1992 and the 

21 December next preceding the beginning of such 

22 academic year, and rounding the result to the 

23 nearest $10.’’; and 

24 (2) in paragraph (2), by striking ‘‘shall be de25 veloped’’ and all that follows through the period at 


pwalker on PROD1PC71 with BILLS
39 

•S 1762 PCS

1 the end and inserting ‘‘shall be developed for each 

2 academic year after academic year 2012–2013, by 

3 increasing each of the dollar amounts contained in 

4 such section for academic year 2012–2013 by a per5 centage equal to the estimated percentage increase 

6 in the Consumer Price Index (as determined by the 

7 Secretary) between December 2011 and the Decem8 ber next preceding the beginning of such academic 

9 year, and rounding the result to the nearest $10.’’. 

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

11 this section shall take effect on July 1, 2009. 

12 SEC. 602. AUTOMATIC ZERO IMPROVEMENTS. 

13 (a) IN GENERAL.—Section 479(c) (20 U.S.C. 

14 1087ss(c)) is amended— 

15 (1) in paragraph (1)(B), by striking ‘‘20,000’’ 

16 and inserting ‘‘$30,000’’; and 

17 (2) in paragraph (2)(B), by striking ‘‘$20,000’’ 

18 and inserting ‘‘$30,000’’. 

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

20 this section shall take effect on July 1, 2009. 

21 SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMIN22 ISTRATORS. 

23 The third sentence of section 479A(a) (20 U.S.C. 

24 1087tt(a)) is amended— 


pwalker on PROD1PC71 with BILLS
40 

•S 1762 PCS

1 (1) by inserting ‘‘or an independent student’’ 

2 after ‘‘family member’’; and 

3 (2) by inserting ‘‘a change in housing status 

4 that results in homelessness (as defined in section 

5 103 of the McKinney-Vento Homeless Assistance 

6 Act),’’ after ‘‘under section 487,’’. 

7 SEC. 604. DEFINITIONS. 

8 (a) IN GENERAL.—Section 480 (20 U.S.C. 1087vv) 

9 is amended— 

10 (1) in subsection (a)(2)— 

11 (A) by striking ‘‘and no portion’’ and in12 serting ‘‘no portion’’; and 

13 (B) by inserting ‘‘and no distribution from 

14 any qualified education benefit described in sub15 section (f)(3) that is not subject to Federal in16 come tax,’’ after ‘‘1986,’’; 

17 (2) in subsection (d)— 

18 (A) by redesignating paragraphs (1), (2), 

19 (3) through (6), and (7) as subparagraphs (A), 

20 (B), (D) through (G), and (I), respectively, and 

21 indenting appropriately; 

22 (B) by striking ‘‘INDEPENDENT STU23 DENT.—The term’’ and inserting ‘‘INDE24 PENDENT STUDENT.— 

25 ‘‘(1) DEFINITION.—The term’’; 


pwalker on PROD1PC71 with BILLS
41 

•S 1762 PCS

1 (C) by striking subparagraph (B) (as re2 designated by subparagraph (A)) and inserting 

3 the following: 

4 ‘‘(B) is an orphan, in foster care, or a 

5 ward of the court, or was in foster care or a 

6 ward of the court until the individual reached 

7 the age of 18; 

8 ‘‘(C) is an emancipated minor or is in legal 

9 guardianship as determined by a court of com10 petent jurisdiction in the individual’s State of 

11 legal residence;’’; 

12 (D) in subparagraph (G) (as redesignated 

13 by subparagraph (A)), by striking ‘‘or’’ after 

14 the semicolon; 

15 (E) by inserting after subparagraph (G) 

16 (as redesignated by subparagraph (A)) the fol17 lowing: 

18 ‘‘(H) has been verified as an unaccom19 panied youth who is a homeless child or youth 

20 (as such terms are defined in section 725 of the 

21 McKinney-Vento Homeless Assistance Act) dur22 ing the school year in which the application is 

23 submitted, by— 

24 ‘‘(i) a local educational agency home25 less liaison, designated pursuant to section 


pwalker on PROD1PC71 with BILLS
42 

•S 1762 PCS

1 722(g)(1)(J)(ii) of the McKinney-Vento 

2 Homeless Assistance Act; 

3 ‘‘(ii) the director of a program funded 

4 under the Runaway and Homeless Youth 

5 Act or a designee of the director; or 

6 ‘‘(iii) the director of a program fund7 ed under subtitle B of title IV of the 

8 McKinney-Vento Homeless Assistance Act 

9 (relating to emergency shelter grants) or a 

10 designee of the director; or’’; and 

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

12 ‘‘(2) SIMPLIFYING THE DEPENDENCY OVER13 RIDE PROCESS.—A financial aid administrator may 

14 make a determination of independence under para15 graph (1)(I) based upon a documented determina16 tion of independence that was previously made by 

17 another financial aid administrator under such para18 graph in the same award year.’’; 

19 (3) in subsection (e)— 

20 (A) in paragraph (3), by striking ‘‘and’’ 

21 after the semicolon; 

22 (B) in paragraph (4), by striking the pe23 riod at the end and inserting ‘‘; and’’; and 

24 (C) by adding at the end the following: 

25 ‘‘(5) special combat pay.’’; 


pwalker on PROD1PC71 with BILLS
43 

•S 1762 PCS

1 (4) in subsection (f), by striking paragraph (3) 

2 and inserting the following: 

3 ‘‘(3) A qualified education benefit shall be con4 sidered an asset of— 

5 ‘‘(A) the student if the student is an inde6 pendent student; or 

7 ‘‘(B) the parent if the student is a depend8 ent student, regardless of whether the owner of 

9 the account is the student or the parent.’’; 

10 (5) in subsection (j)— 

11 (A) in paragraph (2), by inserting ‘‘, or a 

12 distribution that is not includable in gross in13 come under section 529 of such Code, under 

14 another prepaid tuition plan offered by a State, 

15 or under a Coverdell education savings account 

16 under section 530 of such Code,’’ after ‘‘1986’’; 

17 and 

18 (B) by adding at the end the following: 

19 ‘‘(4) Notwithstanding paragraph (1), special combat 

20 pay shall not be treated as estimated financial assistance 

21 for purposes of section 471(3).’’; and 

22 (6) by adding at the end the following: 

23 ‘‘(n) SPECIAL COMBAT PAY.—The term ‘special com24 bat pay’ means pay received by a member of the Armed 

25 Forces because of exposure to a hazardous situation.’’. 


pwalker on PROD1PC71 with BILLS
44 

•S 1762 PCS

1 SEC. 605. AUTHORIZATION AND APPROPRIATIONS. 

2 There are authorized to be appropriated, and there 

3 are appropriated, out of any money in the Treasury not 

4 otherwise appropriated, $10,000,000 for fiscal year 2008 

5 for the Department of Education to pay the estimated in6 crease in costs in the Federal Pell Grant program under 

7 section 401 of the Higher Education Act of 1965 (20 

8 U.S.C. 1070a) resulting from the amendments made by 

9 sections 603 and 604 for award year 2007–2008. 

10 TITLE VII—GENERAL PROVI11 SIONS RELATING TO STU12 DENT ASSISTANCE 

13 SEC. 701. STUDENT ELIGIBILITY. 

14 (a) AMENDMENTS.—Section 484(r) (20 U.S.C. 

15 1091(r)) is amended— 

16 (1) in the table in paragraph (1), by inserting 

17 ‘‘while such student is enrolled in an institution of 

18 higher education and receiving financial assistance 

19 under this title’’ after ‘‘of a controlled substance’’ 

20 each place the term appears; 

21 (2) by redesignating paragraph (3) as para22 graph (4); and 

23 (3) by inserting after paragraph (2) the fol24 lowing: 

25 ‘‘(4) INTERACTION WITH FAFSA.—The Sec26 retary shall not require a student to provide inforVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
45 

•S 1762 PCS

1 mation regarding the student’s possession or sale of 

2 a controlled substance on the Free Application for 

3 Federal Student Aid (FAFSA) or any other common 

4 financial reporting form described in section 

5 483(a).’’. 

6 (b) AUTHORIZATION AND APPROPRIATIONS.—There 

7 are authorized to be appropriated, and there are appro8 priated, out of any money in the Treasury not otherwise 

9 appropriated, $5,000,000 for fiscal year 2008 for the De10 partment of Education to pay the estimated increase in 

11 costs in the Federal Pell Grant program under section 401 

12 of the Higher Education Act of 1965 (20 U.S.C. 1070a) 

13 resulting from the amendments made by subsection (a) 

14 for award year 2007–2008. 

15 TITLE VIII—MISCELLANEOUS 

16 SEC. 801. COMPETITIVE LOAN AUCTION PILOT PROGRAM. 

17 Title IV (20 U.S.C. 1070 et seq.) is further amended 

18 by adding at the end the following: 

19 ‘‘PART I—COMPETITIVE LOAN AUCTION PILOT 

20 PROGRAM; STATE GRANT PROGRAM 

21 ‘‘SEC. 499. COMPETITIVE LOAN AUCTION PILOT PROGRAM. 

22 ‘‘(a) DEFINITIONS.—In this section: 

23 ‘‘(1) ELIGIBLE FEDERAL PLUS LOAN.—The 

24 term ‘eligible Federal PLUS Loan’ means a loan deVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
46 

•S 1762 PCS

1 scribed in section 428B made to a parent of a de2 pendent student. 

3 ‘‘(2) ELIGIBLE LENDER.—The term ‘eligible 

4 lender’ has the meaning given the term in section 

5 435. 

6 ‘‘(b) PILOT PROGRAM.—The Secretary shall carry 

7 out a pilot program under which the Secretary establishes 

8 a mechanism for an auction of eligible Federal PLUS 

9 Loans in accordance with this subsection. The pilot pro10 gram shall meet the following requirements: 

11 ‘‘(1) PLANNING AND IMPLEMENTATION.—Dur12 ing the period beginning on the date of enactment 

13 of this section and ending on June 30, 2009, the 

14 Secretary shall plan and implement the pilot pro15 gram under this subsection. 

16 ‘‘(2) ORIGINATION AND DISBURSEMENT; APPLI17 CABILITY OF SECTION 428B.—Beginning on July 1, 

18 2009, the Secretary shall arrange for the origination 

19 and disbursement of all eligible Federal PLUS 

20 Loans in accordance with the provisions of this sub21 section and the provisions of section 428B that are 

22 not inconsistent with this subsection. 

23 ‘‘(3) LOAN ORIGINATION MECHANISM.—The 

24 Secretary shall establish a loan origination auction 

25 mechanism that meets the following requirements: 


pwalker on PROD1PC71 with BILLS
47 

•S 1762 PCS

1 ‘‘(A) AUCTION.—The Secretary admin2 isters an auction under this paragraph for each 

3 State under which eligible lenders compete to 

4 originate eligible Federal PLUS Loans under 

5 this paragraph at all institutions of higher edu6 cation within the State. 

7 ‘‘(B) PREQUALIFICATION PROCESS.—The 

8 Secretary establishes a prequalification process 

9 for eligible lenders desiring to participate in an 

10 auction under this paragraph that contains, at 

11 a minimum— 

12 ‘‘(i) a set of borrower benefits and 

13 servicing requirements each eligible lender 

14 shall meet in order to participate in such 

15 an auction; and 

16 ‘‘(ii) an assessment of each such eligi17 ble lender’s capacity, including capital ca18 pacity, to participate effectively. 

19 ‘‘(C) TIMING AND ORIGINATION.—Each 

20 State auction takes place every 2 years, and the 

21 eligible lenders with the winning bids for the 

22 State are the only eligible lenders permitted to 

23 originate eligible Federal PLUS Loans made 

24 under this paragraph for the cohort of students 

25 at the institutions of higher education within 


pwalker on PROD1PC71 with BILLS
48 

•S 1762 PCS

1 the State until the students graduate from or 

2 leave the institutions of higher education. 

3 ‘‘(D) BIDS.—Each eligible lender’s bid 

4 consists of the amount of the special allowance 

5 payment (including the recapture of excess in6 terest) the eligible lender proposes to accept 

7 from the Secretary with respect to the eligible 

8 Federal PLUS Loans made under this para9 graph in lieu of the amount determined under 

10 section 438(b)(2)(I). 

11 ‘‘(E) MAXIMUM BID.—The maximum bid 

12 allowable under this paragraph shall not exceed 

13 the amount of the special allowance payable on 

14 eligible Federal PLUS Loans made under this 

15 paragraph computed under section 438(b)(2)(I) 

16 (other than clauses (ii), (iii), (iv), and (vi) of 

17 such section), except that for purposes of the 

18 computation under this subparagraph, section 

19 438(b)(2)(I)(i)(III) shall be applied by sub20 stituting ‘1.74 percent’ for ‘2.34 percent’. 

21 ‘‘(F) WINNING BIDS.—The winning bids 

22 for each State auction shall be the 2 bids con23 taining the lowest and the second lowest pro24 posed special allowance payments, subject to 

25 subparagraph (E). 


pwalker on PROD1PC71 with BILLS
49 

•S 1762 PCS

1 ‘‘(G) AGREEMENT WITH SECRETARY.— 

2 Each eligible lender having a winning bid under 

3 subparagraph (F) enters into an agreement 

4 with the Secretary under which the eligible 

5 lender— 

6 ‘‘(i) agrees to originate eligible Fed7 eral PLUS Loans under this paragraph to 

8 each borrower who— 

9 ‘‘(I) seeks an eligible Federal 

10 PLUS Loan under this paragraph to 

11 enable a dependent student to attend 

12 an institution of higher education 

13 within the State; 

14 ‘‘(II) is eligible for an eligible 

15 Federal PLUS Loan; and 

16 ‘‘(III) elects to borrow from the 

17 eligible lender; and 

18 ‘‘(ii) agrees to accept a special allow19 ance payment (including the recapture of 

20 excess interest) from the Secretary with re21 spect to the eligible Federal PLUS Loans 

22 originated under clause (i) in the amount 

23 proposed in the second lowest winning bid 

24 described in subparagraph (F) for the ap25 plicable State auction. 


pwalker on PROD1PC71 with BILLS
50 

•S 1762 PCS

1 ‘‘(H) SEALED BIDS; CONFIDENTIALITY.— 

2 All bids are sealed and the Secretary keeps the 

3 bids confidential, including following the an4 nouncement of the winning bids. 

5 ‘‘(I) ELIGIBLE LENDER OF LAST RE6 SORT.— 

7 ‘‘(i) IN GENERAL.—In the event that 

8 there is no winning bid under subpara9 graph (F), the students at the institutions 

10 of higher education within the State that 

11 was the subject of the auction shall be 

12 served by an eligible lender of last resort, 

13 as determined by the Secretary. 

14 ‘‘(ii) DETERMINATION OF ELIGIBLE

15 LENDER OF LAST RESORT.—Prior to the 

16 start of any auction under this paragraph, 

17 eligible lenders that desire to serve as an 

18 eligible lender of last resort shall submit 

19 an application to the Secretary at such 

20 time and in such manner as the Secretary 

21 may determine. Such application shall in22 clude an assurance that the eligible lender 

23 will meet the prequalification requirements 

24 described in subparagraph (B). 


pwalker on PROD1PC71 with BILLS
51 

•S 1762 PCS

1 ‘‘(iii) GEOGRAPHIC LOCATION.—The 

2 Secretary shall identify an eligible lender 

3 of last resort for each State. 

4 ‘‘(iv) NOTIFICATION TIMING.—The 

5 Secretary shall not identify any eligible 

6 lender of last resort until after the an7 nouncement of all the winning bids for a 

8 State auction for any year. 

9 ‘‘(J) GUARANTEE AGAINST LOSSES.—The 

10 Secretary guarantees the eligible Federal PLUS 

11 Loans made under this paragraph against 

12 losses resulting from the default of a parent 

13 borrower in an amount equal to 99 percent of 

14 the unpaid principal and interest due on the 

15 loan. 

16 ‘‘(K) LOAN FEES.—The Secretary shall 

17 not collect a loan fee under section 438(d) with 

18 respect to an eligible Federal Plus Loan origi19 nated under this paragraph. 

20 ‘‘(L) CONSOLIDATION.— 

21 ‘‘(i) IN GENERAL.—An eligible lender 

22 who is permitted to originate eligible Fed23 eral PLUS Loans for a borrower under 

24 this paragraph shall have the option to 

25 consolidate such loans into 1 loan. 


pwalker on PROD1PC71 with BILLS
52 

•S 1762 PCS

1 ‘‘(ii) NOTIFICATION.—In the event a 

2 borrower with eligible Federal PLUS 

3 Loans made under this paragraph wishes 

4 to consolidate the loans, the borrower shall 

5 notify the eligible lender who originated 

6 the loans under this paragraph. 

7 ‘‘(iii) LIMITATION ON ELIGIBLE LEND8 ER OPTION TO CONSOLIDATE.—The option 

9 described in clause (i) shall not apply if— 

10 ‘‘(I) the borrower includes in the 

11 notification in clause (ii) verification 

12 of consolidation terms and conditions 

13 offered by an eligible lender other 

14 than the eligible lender described in 

15 clause (i); and 

16 ‘‘(II) not later than 10 days after 

17 receiving such notification from the 

18 borrower, the eligible lender described 

19 in clause (i) does not agree to match 

20 such terms and conditions, or provide 

21 more favorable terms and conditions 

22 to such borrower than the offered 

23 terms and conditions described in sub24 clause (I). 


pwalker on PROD1PC71 with BILLS
53 

•S 1762 PCS

1 ‘‘(iv) CONSOLIDATION OF ADDITIONAL

2 LOANS.—If a borrower has a Federal Di3 rect PLUS Loan or a loan made on behalf 

4 of a dependent student under section 428B 

5 and seeks to consolidate such loan with an 

6 eligible Federal PLUS Loan made under 

7 this paragraph, then the eligible lender 

8 that originated the borrower’s loan under 

9 this paragraph may include in the consoli10 dation under this subparagraph a Federal 

11 Direct PLUS Loan or a loan made on be12 half of a dependent student under section 

13 428B, but only if— 

14 ‘‘(I) in the case of a Federal Di15 rect PLUS Loan, the eligible lender 

16 agrees, not later than 10 days after 

17 the borrower requests such consolida18 tion from the lender, to match the 

19 consolidation terms and conditions 

20 that would otherwise be available to 

21 the borrower if the borrower consoli22 dated such loans in the loan program 

23 under part D; or 

24 ‘‘(II) in the case of a loan made 

25 on behalf of a dependent student 


pwalker on PROD1PC71 with BILLS
54 

•S 1762 PCS

1 under section 428B, the eligible lender 

2 agrees, not later than 10 days after 

3 the borrower requests such consolida4 tion from the lender, to match the 

5 consolidation terms and conditions of6 fered by an eligible lender other than 

7 the eligible lender that originated the 

8 borrower’s loans under this para9 graph. 

10 ‘‘(v) SPECIAL ALLOWANCE ON CON11 SOLIDATION LOANS THAT INCLUDE LOANS

12 MADE UNDER THIS PARAGRAPH.—The ap13 plicable special allowance payment for 

14 loans consolidated under this paragraph 

15 shall be equal to the lesser of— 

16 ‘‘(I) the weighted average of the 

17 special allowance payment on such 

18 loans, except that such weighted aver19 age shall exclude the special allowance 

20 payment for any Federal Direct 

21 PLUS Loan included in the consolida22 tion; or 

23 ‘‘(II) the result of— 

24 ‘‘(aa) the average of the 

25 bond equivalent rates of the 


pwalker on PROD1PC71 with BILLS
55 

•S 1762 PCS

1 quotes of the 3-month commer2 cial paper (financial) rates in ef3 fect for each of the days in such 

4 quarter as reported by the Fed5 eral Reserve in Publication H–15 

6 (or its successor) for such 3- 

7 month period; plus 

8 ‘‘(bb) 1.59 percent. 

9 ‘‘(vi) INTEREST PAYMENT REBATE

10 FEE.—Any loan under section 428C con11 solidated under this paragraph shall not be 

12 subject to the interest payment rebate fee 

13 under section 428C(f). 

14 ‘‘(c) COLLEGE ACCESS PARTNERSHIP GRANT PRO15 GRAM.— 

16 ‘‘(1) PURPOSE.—It is the purpose of this sub17 section to make payments to States to assist the 

18 States in carrying out the activities and services de19 scribed in paragraph (7) in order to increase access 

20 to higher education for students in the State. 

21 ‘‘(2) AUTHORIZATION AND APPROPRIATIONS.— 

22 There are authorized to be appropriated, and there 

23 are appropriated, $25,000,000 for each of the fiscal 

24 years 2008 and 2009 to carry out this subsection. 

25 ‘‘(3) PROGRAM AUTHORIZED.— 


pwalker on PROD1PC71 with BILLS
56 

•S 1762 PCS

1 ‘‘(A) GRANTS AUTHORIZED.—From 

2 amounts appropriated under paragraph (2), the 

3 Secretary shall award grants, from allotments 

4 under paragraph (4), to States having applica5 tions approved under paragraph (5), to enable 

6 the State to pay the Federal share of the costs 

7 of carrying out the activities and services de8 scribed in paragraph (7). 

9 ‘‘(B) FEDERAL SHARE; NON-FEDERAL

10 SHARE.— 

11 ‘‘(i) FEDERAL SHARE.—The amount 

12 of the Federal share under this subsection 

for a fiscal year shall be equal to 2 13 ⁄3 of the 

14 costs of the activities and services de15 scribed in paragraph (7). 

16 ‘‘(ii) NON-FEDERAL SHARE.—The 

17 amount of the non-Federal share under 

this subsection shall be equal to 1 18 ⁄3 of the 

19 costs of the activities and services de20 scribed in paragraph (7). The non-Federal 

21 share may be in cash or in-kind, and may 

22 be provided from a combination of State 

23 resources and contributions from private 

24 organizations in the State. 


pwalker on PROD1PC71 with BILLS
57 

•S 1762 PCS

1 ‘‘(C) REDUCTION FOR FAILURE TO PAY

2 NON-FEDERAL SHARE.—If a State fails to pro3 vide the full non-Federal share required under 

4 this paragraph, the Secretary shall reduce the 

5 amount of the grant payment under this sub6 section proportionately. 

7 ‘‘(D) TEMPORARY INELIGIBILITY FOR SUB8 SEQUENT PAYMENTS.— 

9 ‘‘(i) IN GENERAL.—The Secretary 

10 shall determine a State to be temporarily 

11 ineligible to receive a grant payment under 

12 this subsection for a fiscal year if— 

13 ‘‘(I) the State fails to submit an 

14 annual report pursuant to paragraph 

15 (9) for the preceding fiscal year; or 

16 ‘‘(II) the Secretary determines, 

17 based on information in such annual 

18 report, that the State is not effectively 

19 meeting the conditions described 

20 under paragraph (8) and the goals of 

21 the application under paragraph (5). 

22 ‘‘(ii) REINSTATEMENT.—If the Sec23 retary determines a State is ineligible 

24 under clause (i), the Secretary may enter 

25 into an agreement with the State setting 


pwalker on PROD1PC71 with BILLS
58 

•S 1762 PCS

1 forth the terms and conditions under which 

2 the State may regain eligibility to receive 

3 payments under this subsection. 

4 ‘‘(4) DETERMINATION OF ALLOTMENT.— 

5 ‘‘(A) AMOUNT OF ALLOTMENT.—Subject 

6 to subparagraph (B), in making grant pay7 ments to States under this subsection, the allot8 ment to each State for a fiscal year shall be 

9 equal to the sum of— 

10 ‘‘(i) the amount that bears the same 

11 relation to 50 percent of the amount ap12 propriated under paragraph (2) for such 

13 fiscal year as the number of residents in 

14 the State aged 5 through 17 who are living 

15 below the poverty line applicable to the 

16 resident’s family size (as determined under 

17 section 673(2) of the Community Service 

18 Block Grant Act) bears to the total num19 ber of such residents in all States; and 

20 ‘‘(ii) the amount that bears the same 

21 relation to 50 percent of the amount ap22 propriated under paragraph (2) for such 

23 fiscal year as the number of residents in 

24 the State aged 15 through 44 who are liv25 ing below the poverty line applicable to the 


pwalker on PROD1PC71 with BILLS
59 

•S 1762 PCS

1 individual’s family size (as determined 

2 under section 673(2) of the Community 

3 Service Block Grant Act) bears to the total 

4 number of such residents in all States. 

5 ‘‘(B) MINIMUM AMOUNT.—No State shall 

6 receive an allotment under this subsection for a 

fiscal year in an amount that is less than 1 7 ⁄2 of 

8 1 percent of the total amount appropriated 

9 under paragraph (2) for such fiscal year. 

10 ‘‘(5) SUBMISSION AND CONTENTS OF APPLICA11 TION.— 

12 ‘‘(A) IN GENERAL.—For each fiscal year 

13 for which a State desires a grant payment 

14 under paragraph (3), the State agency with ju15 risdiction over higher education, or another 

16 agency designated by the Governor of the State 

17 to administer the program under this sub18 section, shall submit an application to the Sec19 retary at such time, in such manner, and con20 taining the information described in subpara21 graph (B). 

22 ‘‘(B) APPLICATION.—An application sub23 mitted under subparagraph (A) shall include 

24 the following: 


pwalker on PROD1PC71 with BILLS
60 

•S 1762 PCS

1 ‘‘(i) A description of the State’s ca2 pacity to administer the grant under this 

3 subsection and report annually to the Sec4 retary on the activities and services de5 scribed in paragraph (7). 

6 ‘‘(ii) A description of the State’s plan 

7 for using the grant funds to meet the re8 quirements of paragraphs (7) and (8), in9 cluding plans for how the State will make 

10 special efforts to provide such benefits to 

11 students in the State that are underrep12 resented in postsecondary education. 

13 ‘‘(iii) A description of how the State 

14 will provide or coordinate the non-Federal 

15 share from State and private funds, if ap16 plicable. 

17 ‘‘(iv) A description of the existing 

18 structure that the State has in place to ad19 minister the activities and services under 

20 paragraph (7) or the plan to develop such 

21 administrative capacity. 

22 ‘‘(6) PAYMENT TO ELIGIBLE NONPROFIT ORGA23 NIZATIONS.—A State receiving a payment under this 

24 subsection may elect to make a payment to 1 or 

25 more eligible nonprofit organizations, including an 


pwalker on PROD1PC71 with BILLS
61 

•S 1762 PCS

1 eligible not-for-profit holder (as defined in section 

2 438(p)), or a partnership of such organizations, in 

3 the State in order to carry out activities or services 

4 described in paragraph (7), if the eligible nonprofit 

5 organization or partnership— 

6 ‘‘(A) was in existence on the day before the 

7 date of enactment of the Higher Education Ac8 cess Act of 2007; and 

9 ‘‘(B) as of the day of such payment, is 

10 participating in activities and services related to 

11 increasing access to higher education, such as 

12 those activities and services described in para13 graph (7). 

14 ‘‘(7) ALLOWABLE USES.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (C), a State may use a grant payment 

17 under this subsection only for the following ac18 tivities and services, pursuant to the conditions 

19 under paragraph (8): 

20 ‘‘(i) Information for students and 

21 families regarding— 

22 ‘‘(I) the benefits of a postsec23 ondary education; 

24 ‘‘(II) postsecondary education op25 portunities; 


pwalker on PROD1PC71 with BILLS
62 

•S 1762 PCS

1 ‘‘(III) planning for postsecondary 

2 education; and 

3 ‘‘(IV) career preparation. 

4 ‘‘(ii) Information on financing options 

5 for postsecondary education and activities 

6 that promote financial literacy and debt 

7 management among students and families. 

8 ‘‘(iii) Outreach activities for students 

9 who may be at risk of not enrolling in or 

10 completing postsecondary education. 

11 ‘‘(iv) Assistance in completion of the 

12 Free Application for Federal Student Aid 

13 or other common financial reporting form 

14 under section 483(a). 

15 ‘‘(v) Need-based grant aid for stu16 dents. 

17 ‘‘(vi) Professional development for 

18 guidance counselors at middle schools and 

19 secondary schools, and financial aid admin20 istrators and college admissions counselors 

21 at institutions of higher education, to im22 prove such individuals’ capacity to assist 

23 students and parents with— 

24 ‘‘(I) understanding— 


pwalker on PROD1PC71 with BILLS
63 

•S 1762 PCS

1 ‘‘(aa) entrance requirements 

2 for admission to institutions of 

3 higher education; and 

4 ‘‘(bb) State eligibility re5 quirements for Academic Com6 petitiveness Grants or National 

7 SMART Grants under section 

8 401A, and other financial assist9 ance that is dependent upon a 

10 student’s coursework; 

11 ‘‘(II) applying to institutions of 

12 higher education; 

13 ‘‘(III) applying for Federal stu14 dent financial assistance and other 

15 State, local, and private student fi16 nancial assistance and scholarships; 

17 ‘‘(IV) activities that increase stu18 dents’ ability to successfully complete 

19 the coursework required for a postsec20 ondary degree, including activities 

21 such as tutoring or mentoring; and 

22 ‘‘(V) activities to improve sec23 ondary school students’ preparedness 

24 for postsecondary entrance examina25 tions. 


pwalker on PROD1PC71 with BILLS
64 

•S 1762 PCS

1 ‘‘(vii) Student loan cancellation or re2 payment (as applicable), or interest rate 

3 reductions, for borrowers who are em4 ployed in a high-need geographical area or 

5 a high-need profession in the State, as de6 termined by the State. 

7 ‘‘(B) PROHIBITED USES.—Funds made 

8 available under this subsection shall not be used 

9 to promote any lender’s loans. 

10 ‘‘(C) USE OF FUNDS FOR ADMINISTRATIVE

11 PURPOSES.—A State may use not more than 2 

12 percent of the total amount of the Federal 

13 share and non-Federal share provided under 

14 this subsection for administrative purposes re15 lating to the grant under this subsection. 

16 ‘‘(8) SPECIAL CONDITIONS.— 

17 ‘‘(A) AVAILABILITY TO STUDENTS AND

18 FAMILIES.—A State receiving a grant payment 

19 under this subsection shall— 

20 ‘‘(i) make the activities and services 

21 described in clauses (i) through (vi) of 

22 paragraph (7)(A) that are funded under 

23 the payment available to all qualifying stu24 dents and families in the State; 


pwalker on PROD1PC71 with BILLS
65 

•S 1762 PCS

1 ‘‘(ii) allow students and families to 

2 participate in the activities and services 

3 without regard to— 

4 ‘‘(I) the postsecondary institution 

5 in which the student enrolls; 

6 ‘‘(II) the type of student loan the 

7 student receives; 

8 ‘‘(III) the servicer of such loan; 

9 or 

10 ‘‘(IV) the student’s academic per11 formance; 

12 ‘‘(iii) not charge any student or par13 ent a fee or additional charge to partici14 pate in the activities or services; and 

15 ‘‘(iv) in the case of an activity pro16 viding grant aid, not require a student to 

17 meet any condition other than eligibility 

18 for Federal financial assistance under this 

19 title, except as provided for in the loan 

20 cancellation or repayment or interest rate 

21 reductions described in paragraph 

22 (7)(A)(vii). 

23 ‘‘(B) PRIORITY.—A State receiving a grant 

24 payment under this subsection shall, in carrying 

25 out any activity or service described in paraVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
66 

•S 1762 PCS

1 graph (7)(A) with the grant funds, prioritize 

2 students and families who are living below the 

3 poverty line applicable to the individual’s family 

4 size (as determined under section 673(2) of the 

5 Community Service Block Grant Act). 

6 ‘‘(C) DISCLOSURES.— 

7 ‘‘(i) ORGANIZATIONAL DISCLO8 SURES.—In the case of a State that has 

9 chosen to make a payment to an eligible 

10 not-for-profit holder in the State in accord11 ance with paragraph (6), the holder shall 

12 clearly and prominently indicate the name 

13 of the holder and the nature of its work in 

14 connection with any of the activities car15 ried out, or any information or services 

16 provided, with such funds. 

17 ‘‘(ii) INFORMATIONAL DISCLO18 SURES.—Any information about financing 

19 options for higher education provided 

20 through an activity or service funded under 

21 this subsection shall— 

22 ‘‘(I) include information to stu23 dents and the students’ parents of the 

24 availability of Federal, State, local, inVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
67 

•S 1762 PCS

1 stitutional, and other grants and loans 

2 for postsecondary education; and 

3 ‘‘(II) present information on fi4 nancial assistance for postsecondary 

5 education that is not provided under 

6 this title in a manner that is clearly 

7 distinct from information on student 

8 financial assistance under this title. 

9 ‘‘(D) COORDINATION.—A State receiving a 

10 grant payment under this subsection shall at11 tempt to coordinate the activities carried out 

12 with the payment with any existing activities 

13 that are similar to such activities, and with any 

14 other entities that support the existing activities 

15 in the State. 

16 ‘‘(9) REPORT.—A State receiving a payment 

17 under this subsection shall prepare and submit an 

18 annual report to the Secretary on the program 

19 under this subsection and on the implementation of 

20 the activities and services described in paragraph 

21 (7). The report shall include— 

22 ‘‘(A) each activity or service that was pro23 vided to students and families over the course 

24 of the year; 


pwalker on PROD1PC71 with BILLS
68 

•S 1762 PCS

1 ‘‘(B) the cost of providing each activity or 

2 service; 

3 ‘‘(C) the number, and percentage, if fea4 sible and applicable, of students who received 

5 each activity or service; and 

6 ‘‘(D) the total contributions from private 

7 organizations included in the State’s non-Fed8 eral share for the fiscal year. 

9 ‘‘(10) SUNSET.—The authority provided to 

10 carry out this subsection shall expire on September 

11 30, 2009. 

12 ‘‘(d) FINANCIAL LITERACY PROGRAM ESTAB13 LISHED.— 

14 ‘‘(1) DEFINITION OF ELIGIBLE ENTITY.—In 

15 this subsection, the term ‘eligible entity’ means a 

16 nonprofit or for-profit organization, or a consortium 

17 of such organizations, with a demonstrated record of 

18 effectiveness in providing financial literacy services 

19 to students at the secondary and postsecondary 

20 level. 

21 ‘‘(2) PROGRAM ESTABLISHED.—From amounts 

22 appropriated under paragraph (6), the Secretary 

23 shall award grants to eligible entities to enable the 

24 eligible entities to increase the financial literacy of 

25 students who are enrolled or will enroll in an instituVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
69 

•S 1762 PCS

1 tion of higher education, including providing instruc2 tion to students on topics such as the understanding 

3 of loan terms and conditions, the calculation of in4 terest rates, refinancing of debt, debt management, 

5 and future savings for education, health care and 

6 long-term care, and retirement. 

7 ‘‘(3) GRANT PERIOD; RENEWABILITY.—Each 

8 grant under this subsection shall be awarded for one 

9 5-year period, and may not be renewed. 

10 ‘‘(4) MATCHING REQUIREMENTS.—Each eligible 

11 entity that receives a grant under this subsection 

12 shall provide, from non-Federal sources, an amount 

13 (which may be provided in cash or in kind) to carry 

14 out the activities supported by the grant equal to 

15 100 percent of the amount received under the grant. 

16 ‘‘(5) APPLICATIONS.—An eligible entity desiring 

17 a grant under this subsection shall submit an appli18 cation to the Secretary at such time, in such man19 ner, and containing such information as the Sec20 retary may reasonably require. Such application 

21 shall include the following: 

22 ‘‘(A) A detailed description of the eligible 

23 entity’s plans for providing financial literacy ac24 tivities and the students and schools the grant 

25 will target. 


pwalker on PROD1PC71 with BILLS
70 

•S 1762 PCS

1 ‘‘(B) The eligible entity’s plan for using 

2 the matching grant funds, including how the 

3 funds will be used to provide financial literacy 

4 programs to students. 

5 ‘‘(C) A plan to ensure the viability of the 

6 work of the eligible entity beyond the grant pe7 riod. 

8 ‘‘(D) A detailed description of the activities 

9 that carry out this subsection and that are con10 ducted by the eligible entity at the time of the 

11 application, and how the matching grant funds 

12 will assist the eligible entity with expanding and 

13 enhancing such activities. 

14 ‘‘(E) A description of the strategies that 

15 will be used to target activities under the grant 

16 to students in secondary school and enrolled in 

17 institutions of higher education who are histori18 cally underrepresented in institutions of higher 

19 education and who may benefit from the activi20 ties of the eligible entity. 

21 ‘‘(6) AUTHORIZATION AND APPROPRIATIONS.— 

22 There are authorized to be appropriated, and there 

23 are appropriated, $10,000,000 for each of the fiscal 

24 years 2008 and 2009 to carry out this subsection. 


pwalker on PROD1PC71 with BILLS
71 

•S 1762 PCS

1 ‘‘(e) SECONDARY SCHOOL GRADUATION AND COL2 LEGE ENROLLMENT PROGRAM.— 

3 ‘‘(1) DEFINITIONS.—In this subsection: 

4 ‘‘(A) ELIGIBLE LOCAL EDUCATIONAL

5 AGENCY.— 

6 ‘‘(i) IN GENERAL.—The term ‘eligible 

7 local educational agency’ means a local 

8 educational agency with a secondary school 

9 graduation rate of 70 percent or less— 

10 ‘‘(I) in the aggregate; or 

11 ‘‘(II) applicable to 2 or more sub12 groups of secondary school students 

13 served by the local educational agency 

14 that are described in clause (ii). 

15 ‘‘(ii) SUBGROUPS.—A subgroup re16 ferred to in clause (i)(II) is— 

17 ‘‘(I) a subgroup of economically 

18 disadvantaged students; or 

19 ‘‘(II) a subgroup of students 

20 from a major racial or ethnic group. 

21 ‘‘(B) ELIGIBLE ENTITY.—The term ‘eligi22 ble entity’ means a consortium of a nonprofit 

23 organization and an institution of higher edu24 cation with a demonstrated record of effectiveVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
72 

•S 1762 PCS

1 ness in raising secondary school graduation 

2 rates and postsecondary enrollment rates. 

3 ‘‘(2) PROGRAM ESTABLISHED.—From amounts 

4 appropriated under paragraph (7), the Secretary 

5 shall award grants to eligible entities to enable the 

6 eligible entities to carry out activities that— 

7 ‘‘(A) create models of excellence for aca8 demically rigorous secondary schools, including 

9 early college secondary schools; 

10 ‘‘(B) increase secondary school graduation 

11 rates; 

12 ‘‘(C) raise the rate of students who enroll 

13 in an institution of higher education; 

14 ‘‘(D) improve instruction and access to 

15 supports for struggling secondary school stu16 dents; 

17 ‘‘(E) create, implement, and utilize early 

18 warning systems to help identify students at 

19 risk of dropping out of secondary school; and 

20 ‘‘(F) improve communication between par21 ents, students, and schools concerning require22 ments for secondary school graduation, postsec23 ondary education enrollment, and financial as24 sistance available for attending postsecondary 

25 education. 


pwalker on PROD1PC71 with BILLS
73 

•S 1762 PCS

1 ‘‘(3) USE OF FUNDS.—An eligible entity that 

2 receives a grant under this subsection shall use the 

3 funds— 

4 ‘‘(A) to implement a college-preparatory 

5 curriculum for all students in a secondary 

6 school served by the eligible local educational 

7 agency that is, at a minimum, aligned with a 

8 rigorous secondary school program of study; 

9 ‘‘(B) to implement accelerated academic 

10 catch-up programs, for students who enter sec11 ondary school not meeting the proficient levels 

12 of student academic achievement on the State 

13 academic assessments for mathematics, reading 

14 or language arts, or science under section 

15 1111(b)(3) of the Elementary and Secondary 

16 Education Act of 1965, that enable such stu17 dents to meet the proficient levels of achieve18 ment and remain on track to graduate from 

19 secondary school on time with a regular sec20 ondary school diploma; 

21 ‘‘(C) to implement an early warning sys22 tem to quickly identify students at risk of drop23 ping out of secondary school, including systems 

24 that track student absenteeism; and 


pwalker on PROD1PC71 with BILLS
74 

•S 1762 PCS

1 ‘‘(D) to implement a comprehensive post2 secondary education guidance program that— 

3 ‘‘(i) will ensure that all students are 

4 regularly notified throughout the students’ 

5 time in secondary school of secondary 

6 school graduation requirements and post7 secondary education entrance require8 ments; and 

9 ‘‘(ii) provides guidance and assistance 

10 to students in applying to an institution of 

11 higher education and in applying for Fed12 eral financial assistance and other State, 

13 local, and private financial assistance and 

14 scholarships. 

15 ‘‘(4) GRANT PERIOD; RENEWABILITY.—Each 

16 grant under this subsection shall be awarded for one 

17 5-year period, and may not be renewed. 

18 ‘‘(5) MATCHING REQUIREMENTS.—Each eligible 

19 entity that receives a grant under this subsection 

20 shall provide, from non-Federal sources, an amount 

21 (which may be provided in cash or in-kind) to carry 

22 out the activities supported by the grant equal to 

23 100 percent of the amount received under the grant. 

24 ‘‘(6) APPLICATIONS.—An eligible entity desiring 

25 a grant under this subsection shall submit an appliVerDate Aug 31 2005 23:21 Jul 10, 2007 Jkt 059200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S1762.PCS S1762

pwalker on PROD1PC71 with BILLS
75 

•S 1762 PCS

1 cation to the Secretary at such time, in such man2 ner, and containing such information as the Sec3 retary may reasonably require. 

4 ‘‘(7) AUTHORIZATION AND APPROPRIATIONS.— 

5 There are authorized to be appropriated, and there 

6 are appropriated, $25,000,000 for each of the fiscal 

7 years 2008 and 2009 to carry out this subsection.’’. 


pwalker on PROD1PC71 with BILLS
Calendar No. 266 

110TH CONGRESS 

1ST SESSION S. 1762 

A BILL 

To provide for reconciliation pursuant to section 

for fiscal year 2008 (S. Con. Res. 21). 602 of the concurrent resolution on the budget 

JULY 10, 2007 

Read twice and placed on the calendar 


pwalker on PROD1PC71 with BILLS