II 

108TH CONGRESS 

2D SESSION S. 2477

To amend the Higher Education Act of 1965 to expand college access and 

increase college persistence, to simplify the process of applying for student assistance, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2004

Mr. REED (for himself, Ms. COLLINS, Mr. KENNEDY, and Mrs. MURRAY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL

To amend the Higher Education Act of 1965 to expand 

college access and increase college persistence, to simplify 

the process of applying for student assistance, and for 

other purposes.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Accessing College 

5 through Comprehensive Early Outreach, State Partner6 ships, and Simplification Act’’. 
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1 SEC. 2. GRANTS FOR ACCESS AND PERSISTENCE. 

2 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

3 415A(b) of the Higher Education Act of 1965 (20 U.S.C. 

4 1070c(b)) is amended by striking paragraphs (1) and (2) 

5 and inserting the following: 

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

7 appropriated to carry out this subpart $500,000,000 

8 for fiscal year 2005, and such sums as may be nec9 essary for each of the 5 succeeding fiscal years. 

10 ‘‘(2) RESERVATION.—For any fiscal year for 

11 which the amount appropriated under paragraph (1) 

12 exceeds $30,000,000, the excess amount shall be 

13 available to carry out section 415E.’’. 

14 (b) APPLICATIONS FOR LEVERAGING EDUCATIONAL

15 ASSISTANCE PARTNERSHIP PROGRAMS.—Section 415C(b) 

16 of the Higher Education Act of 1965 (20 U.S.C. 1070c–

17 2(b)) is amended—

18 (1) in paragraph (2), by striking ‘‘$5,000’’ and 

19 inserting ‘‘$12,500’’; 

20 (2) in paragraph (9), by striking ‘‘and’’ after 

21 the semicolon; 

22 (3) in paragraph (10), by striking the period at 

23 the end and inserting ‘‘; and’’; and 

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

25 ‘‘(11) provides notification to eligible students 

26 that such grants are—
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1 ‘‘(A) Leveraging Educational Assistance 

2 Partnership Grants; and 

3 ‘‘(B) funded by the Federal Government 

4 and the State.’’. 

5 (c) GRANTS FOR ACCESS AND PERSISTENCE.—Sec6 tion 415E of the Higher Education Act of 1965 (20 

7 U.S.C. 1070c–3a) is amended to read as follows: 

8 ‘‘SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE. 

9 ‘‘(a) PURPOSE.—It is the purpose of this section to 

10 expand college access and increase college persistence by 

11 making allotments to States to enable the States to—

12 ‘‘(1) expand and enhance partnerships with in13 stitutions of higher education, early information and 

14 intervention, mentoring, or outreach programs, pri15 vate corporations, philanthropic organizations, and 

16 other interested parties to carry out activities under 

17 this section and to provide coordination and cohesion 

18 among Federal, State, and local governmental and 

19 private efforts that provide financial assistance to 

20 help low-income students attend college; 

21 ‘‘(2) provide need-based access and persistence 

22 grants to eligible low-income students; 

23 ‘‘(3) provide early notification to low-income 

24 students of their eligibility for financial aid; and 
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1 ‘‘(4) encourage increased participation in early 

2 information and intervention, mentoring, or outreach 

3 programs. 

4 ‘‘(b) ALLOTMENTS TO STATES.—

5 ‘‘(1) IN GENERAL.—

6 ‘‘(A) AUTHORIZATION.—From sums re7 served under section 415A(b)(2) for each fiscal 

8 year, the Secretary shall make an allotment to 

9 each State that submits an application for an 

10 allotment in accordance with subsection (c) to 

11 enable the State to pay the Federal share of the 

12 cost of carrying out the activities under sub13 section (d). 

14 ‘‘(B) DETERMINATION OF ALLOTMENT.—

15 In making allotments under subparagraph (A), 

16 the Secretary shall consider the following: 

17 ‘‘(i) CONTINUATION OF AWARD.—If a 

18 State continues to meet the specifications 

19 established in its application under sub20 section (c), the Secretary shall make an al21 lotment to such State that is not less than 

22 the allotment made to such State for the 

23 previous fiscal year. 

24 ‘‘(ii) PRIORITY.—The Secretary shall 

25 give priority in making allotments to 
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1 States that meet the requirements under 

2 paragraph (2)(B)(iii). 

3 ‘‘(2) FEDERAL SHARE.—

4 ‘‘(A) IN GENERAL.—The Federal share of 

5 the cost of carrying out the activities under 

6 subsection (d) for any fiscal year may not ex7 ceed 66.66 percent. 

8 ‘‘(B) DIFFERENT PERCENTAGES.—The 

9 Federal share under this section shall be deter10 mined in accordance with the following: 

11 ‘‘(i) If a State applies for an allot12 ment under this section in partnership 

13 with any number of degree granting insti14 tutions of higher education in the State 

15 whose combined full-time enrollment rep16 resents less than a majority of all students 

17 attending institutions of higher education 

18 in the State, then the Federal share of the 

19 cost of carrying out the activities under 

20 subsection (d) shall be equal to 50 percent. 

21 ‘‘(ii) If a State applies for an allot22 ment under this section in partnership 

23 with any number of degree granting insti24 tutions of higher education in the State 

25 whose combined full-time enrollment rep-
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1 resents less than a majority of all students 

2 attending institutions of higher education 

3 in the State, and philanthropic organiza4 tions that are located in, or who provide 

5 funding in, the State or private corpora6 tions that are located in, or who do busi7 ness in, the State, then the Federal share 

8 of the cost of carrying out the activities 

9 under subsection (d) shall be equal to 57 

10 percent. 

11 ‘‘(iii) If a State applies for an allot12 ment under this section in partnership 

13 with any number of degree granting insti14 tutions of higher education in the State 

15 whose combined full-time enrollment rep16 resents a majority of all students attending 

17 institutions of higher education in the 

18 State, philanthropic organizations that are 

19 located in, or who provide funding in, the 

20 State, and private corporations that are lo21 cated in, or who do business in, the State, 

22 then the Federal share of the cost of car23 rying out the activities under subsection 

24 (d) shall be equal to 66.66 percent. 

25 ‘‘(c) APPLICATION FOR ALLOTMENT.—
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1 ‘‘(1) IN GENERAL.—

2 ‘‘(A) SUBMISSION.—A State that desires 

3 to receive an allotment under this section shall 

4 submit an application to the Secretary at such 

5 time, in such manner, and containing such in6 formation as the Secretary may require. 

7 ‘‘(B) CONTENT.—An application submitted 

8 under subparagraph (A) shall include the fol9 lowing: 

10 ‘‘(i) A description of the State’s plan 

11 for using the allotted funds. 

12 ‘‘(ii) Assurances that the State will 

13 provide matching funds, from State, insti14 tutional, philanthropic, or private funds, of 

15 not less than 33.33 percent of the cost of 

16 carrying out the activities under subsection 

17 (d). The State shall specify the methods by 

18 which matching funds will be paid and in19 clude provisions designed to ensure that 

20 funds provided under this section will be 

21 used to supplement, and not supplant, 

22 Federal and non-Federal funds available 

23 for carrying out the activities under this 

24 title. A State that uses non-Federal funds 

25 to create or expand existing partnerships 
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1 with nonprofit organizations or commu2 nity-based organizations in which such or3 ganizations match State funds for student 

4 scholarships, may apply such matching 

5 funds from such organizations toward ful6 filling the State’s matching obligation 

7 under this clause. 

8 ‘‘(iii) Assurances that early informa9 tion and intervention, mentoring, or out10 reach programs exist within the State or 

11 that there is a plan to make such pro12 grams widely available. 

13 ‘‘(iv) A description of the organiza14 tional structure that the State has in place 

15 to administer the activities under sub16 section (d), including a description of the 

17 system the State will use to track the par18 ticipation of students who receive grants 

19 under this section to degree completion. 

20 ‘‘(v) Assurances that the State has a 

21 method in place, such as acceptance of the 

22 automatic zero expected family contribu23 tion determination described in section 

24 479, to identify eligible low-income stu-
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1 dents and award State grant aid to such 

2 students. 

3 ‘‘(vi) Assurances that the State will 

4 provide notification to eligible low-income 

5 students that grants under this section 

6 are—

7 ‘‘(I) Leveraging Educational As8 sistance Partnership Grants; and 

9 ‘‘(II) funded by the Federal Gov10 ernment and the State. 

11 ‘‘(2) STATE AGENCY.—The State agency that 

12 submits an application for a State under section 

13 415C(a) shall be the same State agency that sub14 mits an application under paragraph (1) for such 

15 State. 

16 ‘‘(3) PARTNERSHIP.—

17 ‘‘(A) MANDATORY PARTNERS.—In apply18 ing for an allotment under this section, the 

19 State agency shall apply for the allotment in 

20 partnership with—

21 ‘‘(i) not less than 1 public and 1 pri22 vate degree granting institution of higher 

23 education that are located in the State; 

24 and 
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1 ‘‘(ii) new or existing early information 

2 and intervention, mentoring, or outreach 

3 programs located in the State. 

4 ‘‘(B) PERMISSIVE PARTNERS.—In addition 

5 to applying for an allotment under this section

6 in partnership with degree granting institutions 

7 of higher education and early information and 

8 intervention, mentoring, or outreach programs, 

9 a State agency may also apply in partnership 

10 with philanthropic organizations that are lo11 cated in, or who provide funding in, the State 

12 and private corporations that are located in, or 

13 who do business in, the State. 

14 ‘‘(C) ROLES OF PARTNERS.—

15 ‘‘(i) STATE AGENCY.—A State agency 

16 that is in a partnership receiving an allot17 ment under this section—

18 ‘‘(I) shall—

19 ‘‘(aa) serve as the primary 

20 administrative unit for the part21 nership; 

22 ‘‘(bb) provide or coordinate 

23 matching funds, and coordinate 

24 activities among partners; 
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1 ‘‘(cc) encourage each institu2 tion of higher education in the 

3 State to participate in the part4 nership; 

5 ‘‘(dd) make determinations 

6 and early notifications of assist7 ance as described under sub8 section (d)(2); and 

9 ‘‘(ee) annually report to the 

10 Secretary on the partnership’s 

11 progress in meeting the purpose 

12 of this section; and 

13 ‘‘(II) may provide early informa14 tion and intervention, mentoring, or 

15 outreach programs. 

16 ‘‘(ii) DEGREE GRANTING INSTITU17 TIONS OF HIGHER EDUCATION.—A degree 

18 granting institution of higher education 

19 that is in a partnership receiving an allot20 ment under this section—

21 ‘‘(I) shall—

22 ‘‘(aa) recruit and admit par23 ticipating qualified students and 

24 provide such additional institu25 tional grant aid to participating 
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1 students as agreed to with the 

2 State agency; 

3 ‘‘(bb) provide support serv4 ices to students who receive an 

5 access and persistence grant 

6 under this section and are en7 rolled at such institution; and 

8 ‘‘(cc) assist the State in the 

9 identification of eligible students 

10 and the dissemination of early 

11 notifications of assistance as 

12 agreed to with the State agency; 

13 and 

14 ‘‘(II) may provide funding for 

15 early information and intervention, 

16 mentoring, or outreach programs or 

17 provide such services directly. 

18 ‘‘(iii) PROGRAMS.—An early informa19 tion and intervention, mentoring, or out20 reach program that is in a partnership re21 ceiving an allotment under this section 

22 shall provide direct services, support, and 

23 information to participating students. 

24 ‘‘(iv) PERMISSIVE PARTNERS.—A 

25 philanthropic organization or private cor-
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1 poration that is in a partnership receiving 

2 an allotment under this section shall pro3 vide funds for access and persistence 

4 grants for participating students, or pro5 vide funds or support for early information 

6 and intervention, mentoring, or outreach 

7 programs. 

8 ‘‘(d) AUTHORIZED ACTIVITIES.—

9 ‘‘(1) IN GENERAL.—

10 ‘‘(A) ESTABLISHMENT OF PARTNER11 SHIP.—Each State receiving an allotment under 

12 this section shall use the funds to establish a 

13 partnership to award access and persistence 

14 grants to eligible low-income students in order 

15 to increase the amount of financial assistance 

16 such students receive under this subpart for un17 dergraduate education expenses. 

18 ‘‘(B) AMOUNT.—

19 ‘‘(i) PARTNERSHIPS WITH INSTITU20 TIONS SERVING LESS THAN A MAJORITY

21 OF STUDENTS IN THE STATE.—

22 ‘‘(I) IN GENERAL.—In the case 

23 where a State receiving an allotment 

24 under this section is in a partnership 

25 described in clause (i) or (ii) of sub-
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1 section (b)(2)(B), the amount of an 

2 access and persistence grant awarded 

3 by such State shall be not less than 

4 the amount that is equal to the aver5 age undergraduate tuition and man6 datory fees at 4-year public institu7 tions of higher education in the State 

8 where the student resides (less any 

9 other Federal or State sponsored 

10 grant amount, college work study 

11 amount, and scholarship amount re12 ceived by the student) and such 

13 amount shall be used toward the cost 

14 of attendance at an institution of 

15 higher education, located in the State, 

16 that is a partner in the partnership. 

17 ‘‘(II) COST OF ATTENDANCE.—A 

18 State that has a program, apart from 

19 the partnership under this section, of 

20 providing eligible low-income students 

21 with grants that are equal to the aver22 age undergraduate tuition and man23 datory fees at 4-year public institu24 tions of higher education in the State, 

25 may increase the amount of access 
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1 and persistence grants awarded by 

2 such State up to an amount that is 

3 equal to the average cost of attend4 ance at 4-year public institutions of 

5 higher education in the State (less

6 any other Federal or State sponsored 

7 grant amount, college work study 

8 amount, and scholarship amount re9 ceived by the student). 

10 ‘‘(ii) PARTNERSHIP WITH INSTITU11 TIONS SERVING THE MAJORITY OF STU12 DENTS IN THE STATE.—In the case where 

13 a State receiving an allotment under this 

14 section is in a partnership described in 

15 subsection (b)(2)(B)(iii), the amount of an 

16 access and persistence grant awarded by 

17 such State shall be up to an amount that 

18 is equal to the average cost of attendance 

19 at 4-year public institutions of higher edu20 cation in the State where the student re21 sides (less any other Federal or State 

22 sponsored grant amount, college work 

23 study amount, and scholarship amount re24 ceived by the student) and such amount 

25 shall be used by the student to attend an 
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1 institution of higher education, located in 

2 the State, that is a partner in the partner3 ship. 

4 ‘‘(2) EARLY NOTIFICATION.—

5 ‘‘(A) IN GENERAL.—Each State receiving 

6 an allotment under this section shall annually 

7 notify low-income students, such as students 

8 who are eligible to receive a free lunch under 

9 the school lunch program established under the 

10 Richard B. Russell National School Lunch Act, 

11 in grade 7 through grade 12 in the State of 

12 their potential eligibility for student financial 

13 assistance, including an access and persistence 

14 grant, to attend an institution of higher edu15 cation. 

16 ‘‘(B) CONTENT OF NOTICE.—The notifica17 tion under subparagraph (A)—

18 ‘‘(i) shall include—

19 ‘‘(I) information about early in20 formation and intervention, men21 toring, or outreach programs available 

22 to the student; 

23 ‘‘(II) information that a stu24 dent’s candidacy for an access and 

25 persistence grant is enhanced through 
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1 participation in an early information 

2 and intervention, mentoring, or out3 reach program; 

4 ‘‘(III) an explanation that stu5 dent and family eligibility and partici6 pation in other Federal means-tested 

7 programs may indicate eligibility for 

8 an access and persistence grant and 

9 other student aid programs; 

10 ‘‘(IV) a nonbinding estimation of 

11 the total amount of financial aid a 

12 low-income student with a similar in13 come level may expect to receive, in14 cluding an estimation of the amount 

15 of an access and persistence grant 

16 and an estimation of the amount of 

17 grants, loans, and all other available 

18 types of aid from the major Federal 

19 and State financial aid programs; 

20 ‘‘(V) an explanation that in order 

21 to be eligible for an access and per22 sistence grant, at a minimum, a stu23 dent shall meet the requirement under 

24 paragraph (3), graduate from sec25 ondary school, and enroll at an insti-
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1 tution of higher education that is a 

2 partner in the partnership; 

3 ‘‘(VI) information on any addi4 tional requirements (such as a student 

5 pledge detailing student responsibil6 ities) that the State may impose for 

7 receipt of an access and persistence 

8 grant under this section; and 

9 ‘‘(VII) instructions on how to 

10 apply for an access and persistence 

11 grant; and 

12 ‘‘(ii) may include a disclaimer that ac13 cess and persistence grant awards are con14 tingent upon—

15 ‘‘(I) a determination of the stu16 dent’s financial eligibility at the time 

17 of the student’s enrollment at an in18 stitution of higher education that is a 

19 partner in the partnership; 

20 ‘‘(II) annual Federal and State 

21 appropriations; and 

22 ‘‘(III) other aid received by the 

23 student at the time of the student’s 

24 enrollment at an institution of higher 
19

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1 education that is a partner in the 

2 partnership. 

3 ‘‘(3) ELIGIBILITY.—In determining which stu4 dents are eligible to receive access and persistence 

5 grants, the State shall ensure that each such student 

6 meets not less than 2 of the following criteria and 

7 give priority to students meeting all of the following 

8 criteria: 

9 ‘‘(A) Has an expected family contribution 

10 equal to zero (as described in section 479) or 

11 a comparable alternative based upon the State’s 

12 approved criteria in section 415C(b)(4). 

13 ‘‘(B) Is participating in, or has partici14 pated in, a Federal, State, institutional, or com15 munity early information and intervention, 

16 mentoring, or outreach program, as recognized 

17 by the State agency administering activities 

18 under this section. 

19 ‘‘(C) Has qualified for a free lunch, or at 

20 the State’s discretion a reduced price lunch, 

21 under the school lunch program established 

22 under the Richard B. Russell National School 

23 Lunch Act. 
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1 ‘‘(D) Qualifies for the State’s maximum 

2 undergraduate award, as authorized under sec3 tion 415C(b).

4 ‘‘(E) Receives, or has received, an access 

5 and persistence grant under this section. 

6 ‘‘(4) GRANT AWARD.—Once a student, includ7 ing those who have received early notification under 

8 paragraph (2) from the State, applies for admission 

9 to an institution that is a partner in the partnership, 

10 files a Free Application for Federal Student Aid and 

11 any related existing State form, and is determined 

12 eligible by the State under paragraph (3), the State 

13 shall—

14 ‘‘(A) issue the student a preliminary access 

15 and persistence grant award certificate with 

16 tentative award amounts; and 

17 ‘‘(B) inform the student that payment of 

18 the access and persistence grant award 

19 amounts is subject to certification of enrollment 

20 and award eligibility by the institution of higher 

21 education. 

22 ‘‘(5) DURATION OF AWARD.—An eligible stu23 dent that receives an access and persistence grant 

24 under this section shall receive such grant award for 

25 each year of such student’s undergraduate education 
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1 in which the student remains eligible for assistance 

2 under this title, including pursuant to section 

3 484(c), and remains financially eligible as deter4 mined by the State, except that the State may im5 pose reasonable time limits to baccalaureate degree 

6 completion. 

7 ‘‘(e) ADMINISTRATIVE COST ALLOWANCE.—A State 

8 that receives an allotment under this section may reserve 

9 not more than 3.5 percent of the funds made available 

10 annually through the allotment for State administrative 

11 functions required to carry out this section. 

12 ‘‘(f) STATUTORY AND REGULATORY RELIEF FOR IN13 STITUTIONS OF HIGHER EDUCATION.—The Secretary 

14 may grant, upon the request of an institution of higher 

15 education that is in a partnership described in subsection 

16 (b)(2)(B)(iii) and that receives an allotment under this 

17 section, a waiver for such institution from statutory or 

18 regulatory requirements that inhibit the ability of the in19 stitution to successfully and efficiently participate in the 

20 activities of the partnership. 

21 ‘‘(g) APPLICABILITY RULE.—The provisions of this 

22 subpart which are not inconsistent with this section shall 

23 apply to the program authorized by this section. 

24 ‘‘(h) MAINTENANCE OF EFFORT REQUIREMENT.—

25 Each State receiving an allotment under this section for 
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1 a fiscal year shall provide the Secretary an assurance that 

2 the aggregate amount expended per student or the aggre3 gate expenditures by the State, from funds derived from 

4 non-Federal sources, for the authorized activities de5 scribed in subsection (d) for the preceding fiscal year were 

6 not less than the amount expended per student or the ag7 gregate expenditure by the State for the activities for the 

8 second preceding fiscal year. 

9 ‘‘(i) REPORTS.—Not later than 3 years after the date 

10 of enactment of the Accessing College through Com11 prehensive Early Outreach, State Partnerships, and Sim12 plification Act, and annually thereafter, the Secretary 

13 shall submit a report describing the activities and the im14 pact of the partnerships under this section to the Com15 mittee on Health, Education, Labor, and Pensions of the 

16 Senate and the Committee on Education and the Work17 force of the House of Representatives.’’. 

18 (d) CONTINUATION AND TRANSITION.—During the 

19 2-year period commencing on the date of enactment of this 

20 Act, the Secretary shall continue to award grants under 

21 section 415E of the Higher Education Act of 1965 (20 

22 U.S.C. 1070c–3a), as such section existed on the day be23 fore the date of enactment of this Act, to States that 

24 choose to apply for grants under such predecessor section. 
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1 (e) IMPLEMENTATION AND EVALUATION.—Section 

2 491(j) of the Higher Education Act of 1965 (20 U.S.C. 

3 1098(j)) is amended—

4 (1) in paragraph (4), by striking ‘‘and’’ after 

5 the semicolon; and 

6 (2) by striking paragraph (5) and inserting the 

7 following: 

8 ‘‘(5) not later than 6 months after the date of 

9 enactment of the Accessing College through Com10 prehensive Early Outreach, State Partnerships, and 

11 Simplification Act, advise the Secretary on means to 

12 implement the activities under section 415E, and the 

13 Advisory Committee shall continue to monitor, 

14 evaluate, and make recommendations on the 

15 progress of partnerships that receive allotments 

16 under such section; and’’. 

17 SEC. 3. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO IM18 PROVEMENTS. 

19 (a) SIMPLIFIED NEEDS TEST.—Section 479 of the 

20 Higher Education Act of 1965 (20 U.S.C. 1087ss) is 

21 amended—

22 (1) in subsection (b)—

23 (A) in paragraph (1)—

24 (i) by striking subparagraph (A)(i) 

25 and inserting the following: 
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1 ‘‘(i) the student’s parents—

2 ‘‘(I) file, or are eligible to file, a 

3 form described in paragraph (3); 

4 ‘‘(II) certify that they are not re5 quired to file an income tax return; 

6 ‘‘(III) 1 of whom is a dislocated 

7 worker; or 

8 ‘‘(IV) or the student received 

9 benefits at some time during the pre10 vious 24-month period under a means11 tested Federal benefit program as de12 fined under subsection (d); and’’; and 

13 (ii) by striking subparagraph (B)(i) 

14 and inserting the following: 

15 ‘‘(i) the student (and the student’s 

16 spouse, if any)—

17 ‘‘(I) files, or is eligible to file, a 

18 form described in paragraph (3); 

19 ‘‘(II) certifies that the student 

20 (and the student’s spouse, if any) is 

21 not required to file an income tax re22 turn; 

23 ‘‘(III) is a dislocated worker; or 

24 ‘‘(IV) received benefits at some 

25 time during the previous 24-month 
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1 period under a means-tested Federal 

2 benefit program as defined under sub3 section (d); and’’; and

4 (B) in paragraph (3), by striking ‘‘A stu5 dent or family files a form described in this 

6 subsection, or subsection (c), as the case may 

7 be, if the student or family, respectively, files’’ 

8 and inserting ‘‘In the case of an independent 

9 student, the student, or in the case of a depend10 ent student, the family, files a form described 

11 in this subsection, or subsection (c), as the case 

12 may be, if the student or family, as appropriate, 

13 files’’; 

14 (2) in subsection (c)—

15 (A) in paragraph (1)—

16 (i) by striking subparagraph (A) and 

17 inserting the following: 

18 ‘‘(A) the student’s parents—

19 ‘‘(i) file, or are eligible to file, a form 

20 described in subsection (b)(3); 

21 ‘‘(ii) certify that they are not required 

22 to file an income tax return; 

23 ‘‘(iii) 1 of whom is a dislocated work24 er; or 
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1 ‘‘(iv) or the student received benefits 

2 at some time during the previous 24-month 

3 period under a means-tested Federal ben4 efit program as defined under subsection 

5 (d); and’’; and 

6 (ii) by striking subparagraph (B) and 

7 inserting the following: 

8 ‘‘(B) the sum of the adjusted gross income 

9 of the parents is less than or equal to $25,000; 

10 or’’; 

11 (B) in paragraph (2)—

12 (i) by striking subparagraph (A) and 

13 inserting the following: 

14 ‘‘(A) the student (and the student’s 

15 spouse, if any)—

16 ‘‘(i) files, or is eligible to file, a form 

17 described in subsection (b)(3); 

18 ‘‘(ii) certifies that the student (and 

19 the student’s spouse, if any) is not re20 quired to file an income tax return; 

21 ‘‘(iii) is a dislocated worker; or 

22 ‘‘(iv) received benefits at some time 

23 during the previous 24-month period under 

24 a means-tested Federal benefit program as 

25 defined under subsection (d); and’’; and 
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1 (ii) by striking subparagraph (B) and 

2 inserting the following: 

3 ‘‘(B) the sum of the adjusted gross income 

4 of the student and spouse (if appropriate) is 

5 less than or equal to $25,000.’’; and 

6 (C) by striking the flush matter at the end 

7 and inserting the following: 

8 ‘‘The Secretary shall annually adjust the income level nec9 essary to qualify an applicant for the zero expected family 

10 contribution. The income level shall be adjusted according 

11 to increases in the Consumer Price Index, as defined in 

12 section 478(f).’’; and 

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

14 ‘‘(d) DEFINITIONS.—In this section: 

15 ‘‘(1) DISLOCATED WORKER.—The term ‘dis16 located worker’ has the same meaning given the 

17 term in section 101 of the Workforce Investment 

18 Act of 1998 (29 U.S.C. 2801). 

19 ‘‘(2) MEANS-TESTED FEDERAL BENEFIT PRO20 GRAM.—The term ‘means-tested Federal benefit pro21 gram’ means a mandatory spending program of the 

22 Federal Government in which eligibility for the pro23 gram’s benefits, or the amount of such benefits, or 

24 both, are determined on the basis of income or re25 sources of the individual or family seeking the ben-
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1 efit, and includes the supplemental security income 

2 program under title XVI of the Social Security Act, 

3 the food stamp program under the Food Stamp Act 

4 of 1977, and the free and reduced price school lunch 

5 program established under the Richard B. Russell 

6 National School Lunch Act.’’. 

7 (b) DISCRETION OF STUDENT FINANCIAL AID AD8 MINISTRATORS.—Section 479A(a) of the Higher Edu9 cation Act of 1965 (20 U.S.C. 1087tt(a)) is amended in 

10 the third sentence by inserting ‘‘a family member who is 

11 a dislocated worker (as defined in section 101 of the 

12 Workforce Investment Act of 1998 (29 U.S.C. 2801)),’’ 

13 after ‘‘recent unemployment of a family member,’’. 

14 SEC. 4. IMPROVING PAPER AND ELECTRONIC FORMS. 

15 (a) SIMPLIFIED NEEDS TEST.—Section 479(a) of the 

16 Higher Education Act of 1965 (20 U.S.C. 1087ss(a)) is 

17 amended by adding at the end the following: 

18 ‘‘(3) SIMPLIFIED FORMS.—The Secretary shall 

19 make special efforts to notify families meeting the 

20 requirements of subsection (c) that such families 

21 may use the FAFSA–EZ or the simplified electronic 

22 application form established under section 483(a).’’. 

23 (b) COMMON FINANCIAL AID FORM DEVELOPMENT

24 AND PROCESSING.—Section 483 of the Higher Education 

25 Act of 1965 (20 U.S.C. 1090) is amended—
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1 (1) in subsection (a)—

2 (A) by striking paragraphs (1), (2), and 

3 (5); 

4 (B) by redesignating paragraphs (3), (4), 

5 (6), and (7), as paragraphs (7), (8), (9), and 

6 (10), respectively; 

7 (C) by inserting before paragraph (7), as 

8 redesignated by subparagraph (B), the fol9 lowing: 

10 ‘‘(1) IN GENERAL.—The Secretary, in coopera11 tion with representatives of agencies and organiza12 tions involved in student financial assistance, shall 

13 produce, distribute, and process free of charge com14 mon financial reporting forms as described in this 

15 subsection to be used for application and reapplica16 tion to determine the need and eligibility of a stu17 dent for financial assistance under parts A through 

18 E (other than subpart 4 of part A). These forms 

19 shall be made available to applicants in both paper 

20 and electronic formats and shall be referred to as 

21 the ‘Free Application for Federal Student Aid’. 

22 ‘‘(2) PAPER FORMAT.—

23 ‘‘(A) IN GENERAL.—The Secretary shall 

24 produce, distribute, and process common forms 

25 in paper format to meet the requirements of 
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1 paragraph (1). The Secretary shall develop a

2 common paper form for applicants who do not 

3 meet the requirements of subparagraph (B). 

4 ‘‘(B) FAFSA–EZ.—

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall develop and use a simplified paper 

7 application form, to be known as the 

8 ‘FAFSA–EZ’, to be used for applicants 

9 meeting the requirements of section 

10 479(c). 

11 ‘‘(ii) REDUCED DATA REQUIRE12 MENTS.—The FAFSA–EZ shall permit an 

13 applicant to submit for financial assistance 

14 purposes, only the data elements required 

15 to make a determination of whether the 

16 applicant meets the requirements under 

17 section 479(c). 

18 ‘‘(iii) STATE DATA.—The Secretary 

19 shall include on the FAFSA–EZ space for 

20 information that needs to be submitted 

21 from the applicant to be eligible for State 

22 financial assistance, as provided under 

23 paragraph (5), except the Secretary shall 

24 not include a State’s data if that State 
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1 does not permit its applicants for State as2 sistance to use the FAFSA–EZ. 

3 ‘‘(iv) FREE AVAILABILITY AND PROC4 ESSING.—The provisions of paragraph (6) 

5 shall apply to the FAFSA–EZ, and the 

6 data collected by means of the FAFSA–EZ 

7 shall be available to institutions of higher 

8 education, guaranty agencies, and States 

9 in accordance with paragraph (7). 

10 ‘‘(v) TESTING.—The Secretary shall 

11 conduct appropriate field testing on the 

12 FAFSA–EZ. 

13 ‘‘(C) PHASING OUT THE PAPER FORM FOR

14 STUDENTS WHO DO NOT MEET THE REQUIRE15 MENTS OF THE AUTOMATIC ZERO EXPECTED

16 FAMILY CONTRIBUTION.—

17 ‘‘(i) IN GENERAL.—The Secretary 

18 shall make all efforts to encourage all ap19 plicants to utilize the electronic forms de20 scribed in paragraph (3). 

21 ‘‘(ii) PHASEOUT OF FULL FAFSA.—

22 Not later than award year 2009–2010, the 

23 Secretary shall phaseout the long paper 

24 form for applicants who do not qualify for 

25 the FAFSA–EZ. 
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1 ‘‘(iii) USE OF SAVINGS TO ADDRESS

2 THE DIGITAL DIVIDE.—The Secretary shall 

3 utilize savings accrued by moving more ap4 plicants to the electronic forms to improve 

5 access to the electronic forms for appli6 cants meeting the requirements of section 

7 479(c). 

8 ‘‘(3) ELECTRONIC FORMAT.—

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 produce, distribute, and process common forms 

11 in electronic format to meet the requirements of 

12 paragraph (1). The Secretary shall develop a 

13 common electronic form for applicants who do 

14 not meet the requirements of subparagraph 

15 (B). 

16 ‘‘(B) SIMPLIFIED APPLICATION: FAFSA ON

17 THE WEB.—

18 ‘‘(i) IN GENERAL.—The Secretary 

19 shall develop and use a simplified elec20 tronic application form to be used by appli21 cants meeting the requirements under sub22 section (b) or (c) of section 479. 

23 ‘‘(ii) REDUCED DATA REQUIRE24 MENTS.—The simplified electronic applica25 tion form shall permit an applicant to sub-
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1 mit for financial assistance purposes, only 

2 the data elements required to make a de3 termination of whether the applicant meets 

4 the requirements under subsection (b) or 

5 (c) of section 479. 

6 ‘‘(iii) STATE DATA.—The Secretary 

7 shall include on the simplified electronic 

8 application form space for information that 

9 needs to be submitted from the applicant 

10 to be eligible for State financial assistance, 

11 as provided under paragraph (5), except 

12 the Secretary shall not include a State’s 

13 data if that State does not permit its ap14 plicants for State assistance to use the 

15 simplified electronic application form. 

16 ‘‘(iv) FREE AVAILABILITY AND PROC17 ESSING.—The provisions of paragraph (6) 

18 shall apply to the simplified electronic ap19 plication form, and the data collected by 

20 means of the simplified electronic applica21 tion form shall be available to institutions 

22 of higher education, guaranty agencies, 

23 and States in accordance with paragraph 

24 (7). 
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1 ‘‘(v) TESTING.—The Secretary shall 

2 conduct appropriate field testing on the 

3 form developed under this subparagraph. 

4 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

5 in this subsection shall be construed to prohibit 

6 the use of the form developed by the Secretary 

7 pursuant to this paragraph by an eligible insti8 tution, eligible lender, guaranty agency, State 

9 grant agency, private computer software pro10 viders, a consortium thereof, or such other enti11 ties as the Secretary may designate. 

12 ‘‘(D) PRIVACY.—The Secretary shall en13 sure that data collection under this paragraph 

14 complies with section 552a of title 5, United 

15 States Code, and that any entity using the elec16 tronic version of the forms developed by the 

17 Secretary pursuant to this paragraph shall 

18 maintain reasonable and appropriate adminis19 trative, technical, and physical safeguards to 

20 ensure the integrity and confidentiality of the 

21 information, and to protect against security 

22 threats, or unauthorized uses or disclosures of 

23 the information provided on the electronic 

24 version of the form. Data collected by such elec25 tronic version of the form shall be used only for 
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1 the application, award, and administration of 

2 aid awarded under this title, State aid, or aid 

3 awarded by eligible institutions or such entities

4 as the Secretary may designate. No data col5 lected by such electronic version of the form 

6 shall be used for making final aid awards under 

7 this title until such data have been processed 

8 by the Secretary or a contractor or designee of 

9 the Secretary, except as may be permitted 

10 under this title. 

11 ‘‘(E) SIGNATURE.—Notwithstanding any 

12 other provision of this Act, the Secretary may 

13 permit an electronic form to be submitted with14 out a signature, if a signature is subsequently 

15 submitted by the applicant. 

16 ‘‘(F) PERSONAL IDENTIFICATION NUM17 BERS AUTHORIZED.—The Secretary is author18 ized to assign to applicants personal identifica19 tion numbers—

20 ‘‘(i) to enable the applicants to use 

21 such numbers in lieu of a signature for 

22 purposes of completing a form under this 

23 paragraph; and 
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1 ‘‘(ii) for any purpose determined by 

2 the Secretary to enable the Secretary to 

3 carry out this title. 

4 ‘‘(4) REAPPLICATION.—

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 develop streamlined reapplication forms and 

7 processes, including both paper and electronic 

8 reapplication processes, consistent with the re9 quirements of this subsection, for an applicant 

10 who applies for financial assistance under this 

11 title in the next succeeding academic year sub12 sequent to the year in which such applicant 

13 first applied for financial assistance under this 

14 title. 

15 ‘‘(B) UPDATED.—The Secretary shall de16 termine, in cooperation with States, institutions 

17 of higher education, agencies and organizations 

18 involved in student financial assistance, the 

19 data elements that can be updated from the 

20 previous academic year’s application. 

21 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

22 in this title shall be construed as limiting the 

23 authority of the Secretary to reduce the number 

24 of data elements required of reapplicants. 
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1 ‘‘(D) ZERO FAMILY CONTRIBUTION.—Ap2 plicants determined to have a zero family con3 tribution pursuant to section 479(c) shall not 

4 be required to provide any financial data in a 

5 reapplication form, except that which is nec6 essary to determine eligibility under such sec7 tion. 

8 ‘‘(5) STATE REQUIREMENTS.—

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 include on the forms developed under this sub11 section, such State-specific nonfinancial data 

12 items as the Secretary determines are necessary 

13 to meet State requirements for need-based 

14 State aid. Such items shall be selected in con15 sultation with States to assist in the awarding 

16 of State financial assistance in accordance with 

17 the terms of this subsection. The number of 

18 such data items shall not be less than the num19 ber included on the form on October 7, 1998, 

20 unless States notify the Secretary that they no 

21 longer require those data items for the distribu22 tion of State need-based aid. 

23 ‘‘(B) ANNUAL REVIEW.—The Secretary 

24 shall conduct an annual review process to deter25 mine which nonfinancial data items the States 
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1 require to award need-based State aid and 

2 other application requirements that the States 

3 may impose. 

4 ‘‘(C) FEDERAL REGISTER NOTICE.—The 

5 Secretary shall publish on an annual basis a no6 tice in the Federal Register requiring State 

7 agencies to inform the Secretary—

8 ‘‘(i) if they are unable to permit appli9 cants to utilize the FAFSA–EZ or the sim10 plified electronic application form; and 

11 ‘‘(ii) of the State-specific nonfinancial 

12 data that the State agency requires for de13 livery of State need-based financial aid. 

14 ‘‘(D) STATE NOTIFICATION TO THE SEC15 RETARY.—

16 ‘‘(i) IN GENERAL.—Each State shall 

17 notify the Secretary whether it permits an 

18 applicant to file a form described in para19 graph (2)(B) or (3)(B) for purposes of de20 termining eligibility for State need-based 

21 grant aid. 

22 ‘‘(ii) NO PERMISSION.—In the event 

23 that a State does not permit an applicant 

24 to file a form described in paragraph 

25 (2)(B) or (3)(B) for purposes of deter-
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1 mining eligibility for State need-based 

2 grant aid—

3 ‘‘(I) the State shall notify the 

4 Secretary if it is not permitted to do 

5 so because of either State law or be6 cause of agency policy; and 

7 ‘‘(II) the notification under sub8 clause (I) shall include an estimate of 

9 the program cost to permit applicants 

10 to complete FAFSA–EZs and sim11 plified electronic application forms. 

12 ‘‘(iii) LACK OF NOTIFICATION BY THE

13 STATE.—If a State does not notify the 

14 Secretary pursuant to clause (i), the Sec15 retary shall—

16 ‘‘(I) permit residents of that 

17 State to complete a FAFSA–EZ or a 

18 simplified electronic application form; 

19 and 

20 ‘‘(II) not require any resident of 

21 that State to complete any non22 financial data previously required by 

23 that State. 

24 ‘‘(E) RESTRICTION.—The Secretary shall 

25 not require applicants to complete any non-
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1 financial data or financial data that are not re2 quired by the applicant’s State agency, except 

3 as may be required for applicants who use the 

4 common paper form.

5 ‘‘(6) CHARGES TO STUDENTS AND PARENTS

6 FOR USE OF FORMS PROHIBITED.—The common fi7 nancial reporting forms prescribed by the Secretary 

8 under this subsection shall be produced, distributed, 

9 and processed by the Secretary and no parent or 

10 student shall be charged a fee by the Secretary, a 

11 contractor, a third party servicer or private software 

12 provider, or any other public or private entity for the 

13 collection, processing, or delivery of financial aid 

14 through the use of such forms. The need and eligi15 bility of a student for financial assistance under 

16 parts A through E (other than under subpart 4 of 

17 part A) may only be determined by using a form de18 veloped by the Secretary pursuant to this subsection. 

19 No student may receive assistance under parts A 

20 through E (other than under subpart 4 of part A), 

21 except by use of a form developed by the Secretary 

22 pursuant to this subsection. No data collected on a 

23 paper or electronic form, worksheet, or other docu24 ment for which a fee is charged shall be used to 

25 complete the form prescribed under this subsection. 
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1 No person, commercial entity, or other entity shall 

2 request, obtain, or utilize an applicant’s Personal 

3 Identification Number for purposes of submitting an 

4 application on an applicant’s behalf except State 

5 agencies that have entered into an agreement with 

6 the Secretary to streamline applications, eligible in7 stitutions, or programs under this title as permitted 

8 by the Secretary.’’; 

9 (2) by striking subsection (b) and inserting the 

10 following: 

11 ‘‘(b) EARLY NOTIFICATION OF AID ELIGIBILITY.—

12 ‘‘(1) IN GENERAL.—The Secretary shall make 

13 every effort to provide students with early informa14 tion about potential financial aid eligibility. 

15 ‘‘(2) AVAILABILITY OF MEANS TO DETERMINE

16 ELIGIBILITY.—

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 provide, in cooperation with States, institutions 

19 of higher education, agencies, and organizations 

20 involved in student financial assistance, both 

21 through a widely disseminated printed form and 

22 the Internet or other electronic means, a system 

23 for individuals to determine easily, by entering 

24 relevant data, approximately the amount of 

25 grant, work-study, and loan assistance for 
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1 which an individual would be eligible under this 

2 title upon completion and verification of form 

3 under subsection (a). 

4 ‘‘(B) DETERMINATION OF WHETHER TO

5 USE SIMPLIFIED APPLICATION.—The system es6 tablished under this paragraph shall also permit 

7 users to determine whether or not they may 

8 apply for aid using a FAFSA–EZ or a sim9 plified electronic application form under sub10 section (a). 

11 ‘‘(3) AVAILABILITY OF MEANS TO COMMU12 NICATE ELIGIBILITY.—

13 ‘‘(A) LOWER-INCOME STUDENTS.—The 

14 Secretary shall—

15 ‘‘(i) make special efforts to notify stu16 dents who qualify for a free or reduced 

17 price lunch under the school lunch pro18 gram established under the Richard B. 

19 Russell National School Lunch Act, bene20 fits under the food stamp program under 

21 the Food Stamp Act of 1977, or benefits 

22 under such programs as the Secretary 

23 shall determine, of such students’ potential 

24 eligibility for a maximum Federal Pell 

25 Grant under subpart 1 of part A; and 
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1 ‘‘(ii) disseminate informational mate2 rials regarding the linkage between eligi3 bility for means-tested Federal benefit pro4 grams and eligibility for a Federal Pell 

5 Grant, as determined necessary by the Sec6 retary. 

7 ‘‘(B) MIDDLE SCHOOL STUDENTS.—The 

8 Secretary shall, in cooperation with States, mid9 dle schools, programs under this title that serve 

10 middle school students, and other cooperating 

11 independent outreach programs, make special 

12 efforts to notify middle school students of the 

13 availability of financial assistance under this 

14 title and of the approximate amounts of grant, 

15 work-study, and loan assistance an individual 

16 would be eligible for under this title. 

17 ‘‘(C) SECONDARY SCHOOL STUDENTS.—

18 The Secretary shall, in cooperation with States, 

19 secondary schools, programs under this title 

20 that serve secondary school students, and co21 operating independent outreach programs, 

22 make special efforts to notify students in their 

23 junior year of secondary school the approximate 

24 amounts of grant, work-study, and loan assist25 ance an individual would be eligible for under 
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1 this title upon completion and verification of an 

2 application form under subsection (a).’’;

3 (3) in subsection (c), by striking ‘‘Labor and 

4 Human Resources’’ and inserting ‘‘Health, Edu5 cation, Labor, and Pensions’’; 

6 (4) by striking subsection (d); and 

7 (5) by redesignating subsection (e) as sub8 section (d). 

9 (c) TOLL-FREE APPLICATION AND INFORMATION.—

10 Section 479 of the Higher Education Act of 1965 (20 

11 U.S.C. 1087ss), as amended by section 3, is further 

12 amended by adding at the end the following: 

13 ‘‘(e) TOLL-FREE APPLICATION AND INFORMA14 TION.—The Secretary shall contract for, or establish, and 

15 publicize a toll-free telephone service to provide an applica16 tion mechanism and timely and accurate information to 

17 the general public. The information provided shall include 

18 specific instructions on completing the application form 

19 for assistance under this title. Such service shall also in20 clude a service accessible by telecommunications devices 

21 for the deaf (TDD’s) and shall, in addition to the services 

22 provided for in the previous sentence, refer such students 

23 to the national clearinghouse on postsecondary education 

24 that is authorized under section 685(d)(2)(C) of the Indi25 viduals with Disabilities Education Act. Not later than 2 
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1 years after the date of enactment of the Accessing College 

2 through Comprehensive Early Outreach, State Partner3 ships, and Simplification Act, the Secretary shall test and 

4 implement a toll-free telephone-based application system 

5 to permit applicants to utilize the FAFSA–EZ or sim6 plified electronic application form under section 483(a) 

7 over such system.’’. 

8 (d) MASTER CALENDAR.—Section 482(a)(1)(B) of 

9 the Higher Education Act of 1965 (20 U.S.C. 1089) is 

10 amended to read as follows: 

11 ‘‘(B) by March 1: proposed modifications 

12 and updates pursuant to sections 478 and 

13 483(a)(5) published in the Federal Register;’’. 

14 SEC. 5. ALLOWANCE FOR STATE AND OTHER TAXES. 

15 Section 478(g) of the Higher Education Act of 1965 

16 (20 U.S.C. 1087rr(g)) is amended to read as follows: 

17 ‘‘(g) STATE AND OTHER TAX ALLOWANCE.—For 

18 each award year after award year 2004–2005, the Sec19 retary shall publish in the Federal Register a revised table 

20 of State and other tax allowances for the purpose of sec21 tions 475(c)(2), 475(g)(3), 476(b)(2), and 477(b)(2). The 

22 Secretary shall develop such revised table after review of 

23 the Department of the Treasury’s Statistics of Income file 

24 and determination of the percentage of income that each 

25 State’s taxes represent. Updates shall be phased in pro-
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1 portionately over a period of time equal to the number 

2 of years since the last update.’’. 

3 SEC. 6. SUPPORT FOR WORKING STUDENTS. 

4 (a) DEPENDENT STUDENTS.—Section 475(g)(2)(D) 

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

6 1087oo(g)(2)(D)) is amended to read as follows: 

7 ‘‘(D) $9,000;’’. 

8 (b) INDEPENDENT STUDENTS WITHOUT DEPEND9 ENTS OTHER THAN A SPOUSE.—Section 476(b)(1)(A)(iv) 

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

11 1087pp(b)(1)(A)(iv)) is amended to read as follows: 

12 ‘‘(iv) an income protection allowance 

13 of the following amount (or a successor 

14 amount prescribed by the Secretary under 

15 section 478)—

16 ‘‘(I) $10,000 for single students; 

17 ‘‘(II) $10,000 for married stu18 dents where both are enrolled pursu19 ant to subsection (a)(2); and 

20 ‘‘(III) $13,000 for married stu21 dents where 1 is enrolled pursuant to 

22 subsection (a)(2);’’. 

23 (c) INDEPENDENT STUDENTS WITH DEPENDENTS

24 OTHER THAN A SPOUSE.—Section 477(b)(4) of the High-
47

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1 er Education Act of 1965 (20 U.S.C. 1087qq(b)(4)) is 

2 amended to read as follows: 

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

4 income protection allowance is determined by the fol5 lowing table (or a successor table prescribed by the 

6 Secretary under section 478): 

‘‘Income Protection Allowance 

Family Size 

Number in College 

12345

2 $17,580 $15,230

3 20,940 17,610 $16,260

4 24,950 22,600 20,270 $17,930

5 28,740 26,390 24,060 21,720 $19,390

6 32,950 30,610 28,280 25,940 23,610

NOTE: For each additional family member, add $3,280. 

For each additional college student, subtract $2,330.’’. 

7 SEC. 7. TREATMENT OF PREPAYMENT AND SAVINGS PLANS 

8 UNDER STUDENT FINANCIAL AID NEEDS 

9 ANALYSIS. 

10 (a) DEFINITION OF ASSETS.—Section 480(f) of the 

11 Higher Education Act of 1965 (20 U.S.C. 1087vv(f)) is 

12 amended—

13 (1) in paragraph (1), by inserting ‘‘qualified 

14 education benefits (except as provided in paragraph 

15 (3)),’’ after ‘‘tax shelters,’’; and 

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

17 ‘‘(3) A qualified education benefit shall not be 

18 considered an asset of a student for purposes of sec19 tion 475. 
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1 ‘‘(4) In this subsection, the term ‘qualified edu2 cation benefit’ means—

3 ‘‘(A) a program that is described in clause 

4 (i) of section 529(b)(1)(A) of the Internal Rev5 enue Code of 1986 and that meets the require6 ments of section 529(b)(1)(B) of such Code;

7 ‘‘(B) a State tuition program described in 

8 clause (ii) of section 529(b)(1)(A) of the Inter9 nal Revenue Code of 1986 that meets the re10 quirements of section 529(b)(1)(B) of such 

11 Code; and 

12 ‘‘(C) a Coverdell education savings account 

13 (as defined in section 530(b)(1) of the Internal 

14 Revenue Code of 1986).’’. 

15 (b) DEFINITION OF OTHER FINANCIAL ASSIST16 ANCE.—Section 480(j) of the Higher Education Act of 

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

18 (1) in the heading, by striking ‘‘; TUITION PRE19 PAYMENT PLANS’’; 

20 (2) by striking paragraph (2); and 

21 (3) by redesignating paragraph (3) as para22 graph (2). 

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

24 this section shall apply with respect to determinations of 

25 need under part F of title IV of the Higher Education 
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1 Act of 1965 (20 U.S.C. 1087kk et seq.) for academic years 

2 beginning on or after July 1, 2005. 

3 SEC. 8. ADVISORY COMMITTEE ON STUDENT FINANCIAL AS4 SISTANCE. 

5 Section 491 of the Higher Education Act of 1965 (20 

6 U.S.C. 1098), as amended by section 2, is further amend7 ed—

8 (1) in subsection (a)(2)—

9 (A) in subparagraph (B), by striking 

10 ‘‘and’’ after the semicolon; 

11 (B) in subparagraph (C), by striking the 

12 period at the end and inserting a semicolon; 

13 and 

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

15 ‘‘(D) to provide knowledge and under16 standing of early intervention programs and 

17 make recommendations that will result in early 

18 awareness by low- and moderate-income stu19 dents and families of their eligibility for assist20 ance under this title, and, to the extent prac21 ticable, their eligibility for other forms of State 

22 and institutional need-based student assistance; 

23 and 

24 ‘‘(E) to make recommendations that will 

25 expand and improve partnerships among the 
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1 Federal Government, States, institutions, and 

2 private entities to increase the awareness and 

3 total amount of need-based student assistance 

4 available to low- and moderate-income stu5 dents.’’; 

6 (2) in subsection (d)—

7 (A) in paragraph (6), by striking ‘‘, but 

8 nothing in this section shall authorize the com9 mittee to perform such studies, surveys, or 

10 analyses’’; 

11 (B) in paragraph (8), by striking ‘‘and’’ 

12 after the semicolon; 

13 (C) by redesignating paragraph (9) as 

14 paragraph (10); and 

15 (D) by inserting after paragraph (8) the 

16 following: 

17 ‘‘(9) monitor the adequacy of total need-based 

18 aid available to low- and moderate-income students 

19 from all sources, assess the implications for access 

20 and persistence, and report those implications annu21 ally to Congress and the Secretary; and’’; 

22 (3) in subsection (j), by adding at the end the 

23 following: 

24 ‘‘(6) monitor and assess implementation of im25 provements called for under this title, make rec-
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•S 2477 IS 

1 ommendations to the Secretary that ensure the time2 ly design, testing, and implementation of the im3 provements, and report annually to Congress and 

4 the Secretary on progress made toward simplifying 

5 overall delivery, reducing data elements and ques6 tions, incorporating the latest technology, aligning 

7 Federal, State, and institutional eligibility, enhanc8 ing partnerships, and improving early awareness of 

9 total student aid eligibility for low- and moderate-in10 come students and families.’’; and 

11 (4) in subsection (k), by striking ‘‘2004’’ and 

12 inserting ‘‘2010’’.

Æ