Union Calendar No. 276

105TH CONGRESS

2D SESSION H. R. 6

[Report No. 105–481]

A BILL

To extend the authorization of programs under the

purposes.Higher Education Act of 1965, and for other

APRIL 17, 1998

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 276

105TH CONGRESS

2D SESSION H. R. 6

[Report No. 105–481]

To extend the authorization of programs under the Higher Education Act

of 1965, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 7, 1997

Mr. MCKEON (for himself, Mr. GOODLING, Mr. CLAY, and Mr. KILDEE) introduced the following bill; which was referred to the Committee on Education and the Workforce

APRIL 17, 1998

Additional sponsors: Mrs. ROUKEMA, Mr. RIGGS, Mr. BARRETT of Nebraska,

Mr. UPTON, Mr. GREENWOOD, Mr. CASTLE, Mr. FATTAH, Mr. ROEMER,

Mr. ANDREWS, and Mr. HINOJOSA

APRIL 17, 1998

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

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

A BILL

To extend the authorization of programs under the Higher

Education Act of 1965, and for other purposes.

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

2 This Act may be cited as the ‘‘Higher Education

3 Amendments of 1998’’.

4 SEC. 2. EXTENSION OF PROGRAMS.

5 (a) EXTENSION OF PROGRAMS.—The authorization

6 of appropriations for, and the duration of, each program

7 conducted under the Higher Education Act of 1965 (20

8 U.S.C. 1001 et seq.) shall be extended for each of the fis9 cal years ending before October 1, 2004.

10 (b) CONTINUATION OF AUTHORIZATION AMOUNTS.—

11 The amount authorized to be appropriated for a program

12 for each fiscal year during the period of extension under

13 subsection (a) shall be the amount authorized to be appro14 priated for such program for the terminal fiscal year of

15 the program.

16 (c) PERFORMANCE OF REQUIRED FUNCTIONS.—If

17 the Secretary of Education is required, in the terminal fis18 cal year of a program extended under subsection (a), to

19 carry out certain acts or make certain determinations that

20 are necessary for the continuation of such program, such

21 acts or determinations shall be required to be carried out

22 or made during the period of the extension under sub23 section (a).

24 (d) TERMINAL FISCAL YEAR.—For purposes of this

25 section, the term ‘‘terminal fiscal year’’, when used with

26 respect to a program conducted under the Higher Edu-
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1 cation Act of 1965, means the last fiscal year for which

2 funds are authorized to be appropriated, or during which

3 such program is authorized to be conducted, by such Act

4 as in effect on January 1, 1997.

5 SECTION 1. SHORT TITLE.

6 This Act may be cited as the ‘‘Higher Education

7 Amendments of 1998’’.

8 SEC. 2. TABLE OF CONTENTS.

9 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. References.

Sec. 4. General effective date.

TITLE I—GENERAL PROVISIONS

PART A—EXTENSION AND REVISION OF GENERAL PROVISIONS

Sec. 101. Redesignation and transfer of provisions.

Sec. 102. Definitions.

Sec. 103. Regulatory reform.

PART B—PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF

FEDERAL STUDENT FINANCIAL ASSISTANCE.

Sec. 111. Performance-based organization for the delivery of Federal student financial assistance.

TITLE II—POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

Sec. 201. Urban community service.

Sec. 202. Fund for the Improvement of Postsecondary Education.

Sec. 203. Grants to States for workplace and community transition training for

incarcerated youth offenders.

Sec. 204. Advanced placement fee payment program.

Sec. 205. Teacher quality enhancement grants.

Sec. 206. Additional repeal.

TITLE III—INSTITUTIONAL AID

Sec. 301. Strengthening institutions.

Sec. 302. Historically black colleges and universities.

Sec. 303. Minority science and engineering improvement program.

Sec. 304. General provisions.
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TITLE IV—STUDENT ASSISTANCE

PART A—GRANTS TO STUDENTS

Sec. 401. Pell grants.

Sec. 402. Federal TRIO programs.

Sec. 403. National early intervention and partnership program.

Sec. 404. Repeals.

Sec. 405. Establishment of new programs.

Sec. 406. Federal supplemental educational opportunity grants.

Sec. 407. Grants to States for State student incentives.

Sec. 408. Special programs for students whose families are engaged in migrant

and seasonal farmwork.

Sec. 409. Byrd scholarships.

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 411. Limitation repealed.

Sec. 412. Advances to reserve funds.

Sec. 413. Guaranty agency reforms.

Sec. 414. Scope and duration of program.

Sec. 415. Limitations on individual federally insured loans and Federal loan insurance.

Sec. 416. Applicable interest rates.

Sec. 417. Federally guaranteed student loans.

Sec. 418. Voluntary agreements with guaranty agencies.

Sec. 419. Federal consolidation loans.

Sec. 420. Disbursement.

Sec. 421. Unsubsidized Stafford loans.

Sec. 422. Repeal of loan forgiveness.

Sec. 423. Legal powers and responsibilities.

Sec. 424. Student loan information.

Sec. 425. Definitions.

Sec. 426. Discharge.

Sec. 427. Cancellation of loans for certain public service.

Sec. 428. Debt management options.

Sec. 429. Special allowances.

PART C—FEDERAL WORK-STUDY PROGRAMS

Sec. 435. Amendments to part C.

PART D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

Sec. 436. Selection of institutions.

Sec. 437. Terms and conditions.

Sec. 438. Contracts.

Sec. 439. Funds for administrative expenses.

Sec. 440. Authority to sell loans.

Sec. 441. Cancellation of loans for certain public service.

PART E—FEDERAL PERKINS LOANS

Sec. 445. Amendments to part E.

PART F—NEED ANALYSIS

Sec. 446. Cost of attendance.
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Sec. 447. Data elements.

Sec. 448. Family contribution for dependent students.

Sec. 449. Family contribution for independent students without dependents other

than a spouse.

Sec. 450. Family contribution for independent students with dependents other

than a spouse.

Sec. 451. Regulations; updated tables and amounts.

Sec. 452. Discretion of student financial aid administrators.

Sec. 453. Treatment of other financial assistance.

PART G—GENERAL PROVISIONS

Sec. 461. Definitions.

Sec. 462. Master calendar.

Sec. 463. Forms and regulations.

Sec. 464. Student eligibility.

Sec. 465. State court judgments.

Sec. 466. Information for students.

Sec. 467. National student loan data system.

Sec. 468. Program participation agreements.

Sec. 469. Quality assurance and regulatory simplification.

Sec. 470. Distance education demonstration programs.

Sec. 471. Garnishment requirements.

Sec. 472. Administrative subpoena authority.

Sec. 473. Advisory committee on student financial assistance.

Sec. 474. Meetings and negotiated rulemaking.

PART H—PROGRAM INTEGRITY

Sec. 476. State postsecondary review program.

Sec. 477. Accrediting agency recognition.

Sec. 478. Eligibility and certification procedures.

Sec. 479. Program review and data.

TITLE V—DEVELOPING INSTITUTIONS

Sec. 501. Establishment of new title V.

TITLE VI—INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

Sec. 601. International and foreign language studies.

Sec. 602. Business and international education programs.

Sec. 603. Institute for international public policy.

Sec. 604. General provisions.

Sec. 605. Transfer and reauthorization of graduate assistance in areas of national need program.

TITLE VII—CONSTRUCTION, RECONSTRUCTION, AND RENOVATION

OF ACADEMIC FACILITIES

Sec. 701. Extension of prior rights and obligations.

Sec. 702. Repeal of part A.

Sec. 703. Extension of authorization of part B.

Sec. 704. Extension of authorization of part C.

TITLE VIII—ADDITIONAL PROVISIONS

Sec. 801. Study of transfer of credits.
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Sec. 802. Study of market mechanisms in Federal student loan programs.

Sec. 803. Improvements in market information and public accountability in

higher education.

Sec. 804. Differential regulation.

Sec. 805. Annual report on cost of higher education.

Sec. 806. Repeals of previous higher education amendments provisions.

Sec. 807. Limitation.

TITLE IX—AMENDMENTS TO OTHER LAWS

PART A—EDUCATION OF THE DEAF ACT

SUBPART 1—GALLAUDET UNIVERSITY

Sec. 901. Board of Trustees membership.

Sec. 902. Elementary and secondary education programs.

Sec. 903. Agreement with Gallaudet University.

SUBPART 2—NATIONAL INSTITUTE FOR THE DEAF

Sec. 911. Agreement for the National Technical Institute for the Deaf.

SUBPART 3—GENERAL PROVISIONS

Sec. 921. Definitions.

Sec. 922. Audits.

Sec. 923. Reports.

Sec. 924. Monitoring, evaluation, and reporting.

Sec. 925. Responsibility of the liaison.

Sec. 926. Federal endowment programs.

Sec. 927. Scholarship program.

Sec. 928. Oversight and effect of agreements.

Sec. 929. International students.

Sec. 930. Authorization of appropriations.

PART B—EXTENSION AND REVISION OF INDIAN HIGHER EDUCATION

PROGRAMS

Sec. 951. Tribally controlled colleges and universities.

Sec. 952. Reauthorization of provisions from Higher Education Amendments of

1992.

Sec. 953. Reauthorization of Navajo Community College Act.

TITLE X—FACULTY RETIREMENT PROVISIONS

Sec. 1001. Voluntary retirement incentive plans.

1 SEC. 3. REFERENCES.

2 Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms of

4 an amendment to, or repeal of, a section or other provision,

5 the reference shall be considered to be made to a section or
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1 other provision of the Higher Education Act of 1965 (20

2 U.S.C. 1001 et seq.).

3 SEC. 4. GENERAL EFFECTIVE DATE.

4 Except as otherwise provided in this Act or the amend5 ments made by this Act, the amendments made by this Act

6 shall take effect on October 1, 1998.

7 TITLE I—GENERAL PROVISIONS

8 PART A—EXTENSION AND REVISION OF GENERAL

9 PROVISIONS

10 SEC. 101. REDESIGNATION AND TRANSFER OF PROVISIONS.

11 (a) IN GENERAL.—

12 (1) REPEAL OF TITLE I.—Title I (20 U.S.C.

13 1001 et seq.) is repealed.

14 (2) REPEAL OF TITLE XII PROVISIONS.—The fol15 lowing sections of title XII are repealed: sections

16 1206, 1211, and 1212 (20 U.S.C. 1145a, 1145e,

17 1145f).

18 (3) REDESIGNATIONS.—

19 (A) Title XII is redesignated as title I.

20 (B) Sections 1201, 1202, and 1203 (20

21 U.S.C. 1141, 1142, 1143) are redesignated as

22 sections 101, 102, and 103, respectively.

23 (C) Section 1204(b), as redesignated by sec24 tion 251 of the Higher Education Amendments
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1 of 1968 (20 U.S.C. 1144(b); 82 Stat. 1042), is

2 redesignated as section 104.

3 (D) Section 1204, as added by section 1201

4 of the Education Amendments of 1980 (20

5 U.S.C. 1144a; 94 Stat. 1495), is redesignated as

6 section 105.

7 (E) Sections 1205, 1207, 1208, 1209, 1210,

8 and 1213 (20 U.S.C. 1145, 1145b, 1145c, 1145d,

9 1145d-1, and 1145g) are redesignated as sections

10 106 through 111, respectively.

11 (4) TRANSFER.—Title I (including sections 101

12 through 111), as redesignated by paragraph (3), is

13 transferred to immediately follow the short title of the

14 Higher Education Act of 1965 (20 U.S.C. 1001 note).

15 (b) INTERNAL CROSS-REFERENCES.—The Higher

16 Education Act of 1965 is amended—

17 (1) in section 106 (as redesignated by subsection

18 (a)(3)), by striking ‘‘481(a)’’ and inserting ‘‘101(a)’’;

19 (2) in section 485(f)(1)(I), by striking ‘‘section

20 1213’’ and inserting ‘‘section 111’’;

21 (3) in section 498(j)(2), by striking ‘‘section

22 1201(a)(2)’’ and inserting ‘‘section 101(a)(2)’’;

23 (4) in section 591(d)(2), by striking ‘‘section

24 1201(a)’’ and inserting ‘‘section 101(a)(1)’’; and
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1 (5) in section 631(a)(8), by striking ‘‘section

2 1201(a)’’ each place it appears and inserting ‘‘section

3 101(a)(1)’’.

4 (c) CONFORMING AMENDMENTS.—

5 (1) TITLE 10, UNITED STATES CODE.—Sections

6 2193(c)(1) and 2199(2) of title 10, United States

7 Code, are each amended by striking ‘‘1201(a) of the

8 Higher Education Act of 1965 (20 U.S.C. 1141(a))’’

9 and inserting ‘‘101(a)(1) of the Higher Education Act

10 of 1965’’.

11 (2) TITLE 18, UNITED STATES CODE.—Section

12 207(j)(2)(B) of title 18, United States Code, is

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

14 ‘‘101(a)(1)’’.

15 (3) TITLE 39, UNITED STATES CODE.—Section

16 3626(b)(3) of title 39, United States Code, is amended

17 by striking ‘‘1201(a) of the Higher Education Act of

18 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1)

19 of the Higher Education Act of 1965’’.

20 (4) ANTI-DRUG ABUSE ACT OF 1988.—Section

21 3601(7) of the Anti-Drug Abuse Act of 1988 (42

22 U.S.C. 11851(7)) is amended by striking ‘‘1201(a) of

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

24 1141(a))’’ and inserting ‘‘101(a)(1) of the Higher

25 Education Act of 1965’’.
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1 (5) CRANSTON-GONZALEZ NATIONAL AFFORD2 ABLE HOUSING ACT.—Section 457(9) of the Cranston3 Gonzalez National Affordable Housing Act (42 U.S.C.

4 12899f(9)) is amended by striking ‘‘1201(a)’’ and in5 serting ‘‘101(a)(1)’’.

6 (6) DEPARTMENT OF STATE AUTHORIZATION

7 ACT, FISCAL YEARS 1984 AND 1985.—Section 803(1) of

8 the Department of State Authorization Act, Fiscal

9 Years 1984 and 1985 (22 U.S.C. 4502(1)) is amended

10 by striking ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’.

11 (7) EDUCATION FOR ECONOMIC SECURITY ACT.—

12 Section 3(6) of the Education for Economic Security

13 Act (20 U.S.C. 3902(6)) is amended by striking

14 ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’.

15 (8) ELEMENTARY AND SECONDARY EDUCATION

16 ACT OF 1965.—The Elementary and Secondary Edu17 cation Act of 1965 is amended—

18 (A) in section 7501(4) (20 U.S.C. 7601(4))

19 by striking ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’;

20 and

21 (B) in section 14101(17) (20 U.S.C.

22 8801(17)), by striking ‘‘1201(a)’’ and inserting

23 ‘‘101(a)(1)’’.

24 (9) FEDERAL AGRICULTURE IMPROVEMENT AND

25 REFORM ACT OF 1996.—Section 922 of the Federal Ag-
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1 riculture Improvement and Reform Act of 1996 (7

2 U.S.C. 2279c) is amended in subsections (a)(1)(B)

3 and (b)(1) by striking ‘‘1201 of the Higher Education

4 Act of 1965 (20 U.S.C. 1141)’’ and inserting

5 ‘‘101(a)(1) of the Higher Education Act of 1965’’.

6 (10) FOLLOW THROUGH ACT.—Section 670G(5)

7 of the Follow Through Act (42 U.S.C. 9877(5)) is

8 amended by striking ‘‘1201 of the Higher Education

9 Act of 1965’’ and inserting ‘‘101(a)(1) of the Higher

10 Education Act of 1965’’.

11 (11) FOOD AND AGRICULTURE ACT OF 1977.—

12 Section 1417(h)(1)(A) of the Food and Agriculture

13 Act of 1977 (7 U.S.C. 3152(h)(1)(A)) is amended by

14 striking ‘‘1201(a) of the Higher Education Act of

15 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1)

16 of the Higher Education Act of 1965’’.

17 (12) FOREIGN RELATIONS AUTHORIZATION ACT,

18 FISCAL YEARS 1986 AND 1987.—Section 603(d) of the

19 Foreign Relations Authorization Act, Fiscal Years

20 1986 and 1987 (20 U.S.C. 4703(d)) is amended by

21 striking ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’.

22 (13) GENERAL EDUCATION PROVISIONS ACT.—

23 Section 429(d)(2)(B)(ii) of the General Education

24 Provisions Act (20 U.S.C. 1228c(d)(2)(B)(ii)) is
12

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

2 ‘‘101(a)(1)’’.

3 (14) HARRY S TRUMAN MEMORIAL SCHOLARSHIP

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

5 Scholarship Act (20 U.S.C. 2002(4)) is amended by

6 striking ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’.

7 (15) HEAD START ACT.—Section 649(c)(3) of the

8 Head Start Act (42 U.S.C. 9844(c)(3)) is amended by

9 striking ‘‘1201(a) of the Higher Education Act of

10 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1)

11 of the Higher Education Act of 1965’’.

12 (16) HIGHER EDUCATION AMENDMENTS OF

13 1992.—Section 1371(a)(1)(B) of the Higher Education

14 Amendments of 1992 (25 U.S.C. 3371(a)(1)(B)) is

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

16 ‘‘101(a)(1)’’.

17 (17) INTELLIGENCE AUTHORIZATION ACT, FISCAL

18 YEAR 1992.—Section 808(3) of the Intelligence Author19 ization Act, Fiscal Year 1992 (20 U.S.C. 1908(3)) is

20 amended by striking ‘‘1201(a) of the Higher Edu21 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert22 ing ‘‘101(a)(1) of the Higher Education Act of 1965’’.

23 (18) JOB TRAINING PARTNERSHIP ACT.—The Job

24 Training Partnership Act is amended—
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1 (A) in section 4(12) (29 U.S.C. 1503(12)),

2 by striking ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’;

3 and

4 (B) in section 141(d)(3)(B) (29 U.S.C.

5 1551(d)(3)(B)), by striking ‘‘1201(a) of the

6 Higher Education Act of 1965 (20 U.S.C.

7 1141(a))’’ and inserting ‘‘101(a)(1) of the High8 er Education Act of 1965’’.

9 (19) JUSTICE SYSTEM IMPROVEMENT ACT OF

10 1979.—Section 901(a)(17) of the Justice System Im11 provement Act of 1979 (42 U.S.C. 3791(a)(17)) is

12 amended by striking ‘‘1201(a) of the Higher Edu13 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert14 ing ‘‘101(a)(1) of the Higher Education Act of 1965’’.

15 (20) MUTUAL EDUCATIONAL AND CULTURAL EX16 CHANGE ACT OF 1961.—Section 112(a)(8) of the Mu17 tual Educational and Cultural Exchange Act of 1961

18 (22 U.S.C. 2460(a)(8)) is amended by striking

19 ‘‘1201(a) of the Higher Education Act of 1965 (20

20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1) of the

21 Higher Education Act of 1965’’.

22 (21) NATIONAL AND COMMUNITY SERVICE ACT OF

23 1990.—Sections 101(13) and 166(6) of the National

24 and Community Service Act of 1990 (42 U.S.C.

25 12511(13); 12626(6)) are each amended by striking
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1 ‘‘1201(a) of the Higher Education Act of 1965 (20

2 U.S.C. 1141(a))’’ and inserting ‘‘101 of the Higher

3 Education Act of 1965’’.

4 (22) NATIONAL DEFENSE AUTHORIZATION ACT

5 FOR FISCAL YEAR 1987.—Section 1403(4) of the Na6 tional Defense Authorization Act for Fiscal Year 1987

7 (20 U.S.C. 4702(4)) is amended by striking ‘‘1201(a)

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

9 1141(a))’’ and inserting ‘‘101(a)(1) of the Higher

10 Education Act of 1965’’.

11 (23) NATIONAL DEFENSE AUTHORIZATION ACT

12 FOR FISCAL YEAR 1993.—The National Defense Au13 thorization Act for Fiscal Year 1993 is amended in

14 section 4451(b)(1) (10 U.S.C. 2701 note) by striking

15 ‘‘1201(a) of the Higher Education Act of 1965 (20

16 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1) of the

17 Higher Education Act of 1965’’.

18 (24) NATIONAL DEFENSE AUTHORIZATION ACT

19 FOR FISCAL YEARS 1992 AND 1993.—Section 3132(b)(1)

20 of the National Defense Authorization Act for Fiscal

21 Years 1992 and 1993 (42 U.S.C. 7274e(b)(1)) is

22 amended by striking ‘‘1201(a) of the Higher Edu23 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert24 ing ‘‘101(a)(1) of the Higher Education Act of 1965’’.
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1 (25) NATIONAL DEFENSE AUTHORIZATION ACT

2 FOR FISCAL YEAR 1994.—The National Defense Au3 thorization Act for Fiscal Year 1994 is amended—

4 (A) in section 841(c)(2) (10 U.S.C. 2324(2)

5 note), by striking ‘‘1201(a) of the Higher Edu6 cation Act of 1965 (20 U.S.C. 1141(a))’’ and in7 serting ‘‘101(a)(1) of the Higher Education Act

8 of 1965’’;

9 (B) in section 1333(i)(3) (10 U.S.C. 2701

10 note), by striking ‘‘1201(a) of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1141(a))’’ and in12 serting ‘‘101(a)(1) of the Higher Education Act

13 of 1965’’; and

14 (C) in section 1334(k)(3) (10 U.S.C. 2701

15 note), by striking ‘‘1201(a) of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1141(a))’’ and in17 serting ‘‘101(a)(1) of the Higher Education Act

18 of 1965’’.

19 (26) NATIONAL EDUCATION STATISTICS ACT OF

20 1994.—Section 402(c)(3) of the National Education

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

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

23 ‘‘101(a)(1)’’.

24 (27) OLDER AMERICANS ACT OF 1965.—Section

25 102(32) of the Older Americans Act of 1965 (42
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1 U.S.C. 3002(32)) is amended by striking ‘‘1201(a) of

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

3 1141(a))’’ and inserting ‘‘101(a)(1) of the Higher

4 Education Act of 1965’’.

5 (28) OMNIBUS PARKS AND PUBLIC LANDS MAN6 AGEMENT ACT OF 1996.—Section 1007(c)(5) of the

7 Omnibus Parks and Public Lands Management Act of

8 1996 (16 U.S.C. 698u–5) is amended by striking

9 ‘‘1201(a) of the Higher Education Act of 1965 (20

10 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1) of the

11 Higher Education Act of 1965’’.

12 (29) PUBLIC LAW 85 OF THE 67TH CONGRESS.—

13 Public Law 85 of the 67th Congress (42 Stat. 208; 25

14 U.S.C. 13), popularly referred to as the Snyder Act,

15 is amended by striking ‘‘1201’’ and inserting

16 ‘‘101(a)(1)’’.

17 (30) COMMUNICATION ACT OF 1934.—Section

18 223(h)(4) of the Communication Act of 1934 (47

19 U.S.C. 223(h)(4)) is amended by striking ‘‘1201 of the

20 Higher Education Act of 1965 (20 U.S.C. 1141)’’ and

21 inserting ‘‘101(a)(1) of the Higher Education Act of

22 1965’’.

23 (31) FEDERAL WATER POLLUTION CONTROL

24 ACT.—Section 112(a)(1) of the Federal Water Pollu-
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1 tion Control Act (33 U.S.C. 1262(a)(1)) is amended

2 by striking ‘‘1201’’ and inserting ‘‘101(a)(1)’’.

3 (32) CARL D. PERKINS VOCATIONAL AND APPLIED

4 TECHNOLOGY EDUCATION ACT.—Section 347(2)(A) of

5 the Carl D. Perkins Vocational and Applied Tech6 nology Education Act (20 U.S.C. 2394(2)(A)) is

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

8 ‘‘101(a)(1)’’.

9 (33) ENERGY POLICY AND CONSERVATION ACT.—

10 Section 362(f)(5)(A) of the Energy Policy and Con11 servation Act (42 U.S.C. 6322(f)(5)(A)) is amended

12 by striking ‘‘1201(a) of the Higher Education Act of

13 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1)

14 of the Higher Education Act of 1965’’.

15 (34) JAMES MADISON MEMORIAL FELLOWSHIP

16 ACT.—Section 815 of the James Madison Memorial

17 Fellowship Act (20 U.S.C. 4514) is amended—

18 (A) in paragraph (3), by striking ‘‘1201(a)’’

19 and inserting ‘‘101(a)(1)’’; and

20 (B) in paragraph (4), by striking

21 ‘‘1201(d)’’ and inserting ‘‘101(a)(1)’’.

22 (35) REHABILITATION ACT OF 1973.—Sections

23 7(32) and 101(a)(7)(A)(iv)(II) of the Rehabilitation

24 Act of 1973 (29 U.S.C. 706(32); 29 U.S.C.

25 721(a)(7)(A)(iv)(II)) are each amended by striking
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1 ‘‘1201(a) of the Higher Education Act of 1965 (20

2 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1) of the

3 Higher Education Act of 1965’’.

4 (36) TECHNOLOGY RELATED ASSISTANCE FOR IN5 DIVIDUALS WITH DISABILITIES ACT OF 1988.—Section

6 3(8) of the Technology Related Assistance for Individ7 uals with Disabilities Act of 1988 (29 U.S.C.

8 2202(8)) is amended by striking ‘‘1201(a) of the

9 Higher Education Act of 1965 (20 U.S.C. 1141(a))’’

10 and inserting ‘‘101(a)(1) of the Higher Education Act

11 of 1965’’.

12 (37) TRIBALLY CONTROLLED COMMUNITY COL13 LEGE ASSISTANCE ACT OF 1978.—The Tribally Con14 trolled Community College Assistance Act of 1978 is

15 amended—

16 (A) in section 2(a)(5) (25 U.S.C.

17 1801(a)(5)), by striking ‘‘1201(a)’’ and inserting

18 ‘‘101(a)(1)’’; and

19 (B) in section 113(b)(2) (25 U.S.C.

20 1813(b)(2)), by striking ‘‘1201(a) of the Higher

21 Education Act of 1965 (20 U.S.C. 1141(a))’’ and

22 inserting ‘‘101(a)(1) of the Higher Education

23 Act of 1965’’.
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1 (38) VIOLENT CRIME CONTROL AND LAW EN2 FORCEMENT ACT OF 1994.—The Violent Crime Control

3 and Law Enforcement Act of 1994 is amended—

4 (A) in sections 200103 and 200202 (42

5 U.S.C. 14092; 14111), by striking ‘‘1201(a) of

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

7 1141(a))’’ and inserting ‘‘101(a)(1) of the High8 er Education Act of 1965’’; and

9 (B) in section 30401(b) (42 U.S.C.

10 13791(b)), by striking ‘‘a public’’ through ‘‘that

11 Act’’ and inserting ‘‘an elementary school as de12 fined in section 14101(14) of the Elementary

13 and Secondary Education Act of 1965, and a

14 secondary school as defined by section 14101(25)

15 of such Act, which are public institutions’’.

16 (39) SCHOOL-TO-WORK OPPORTUNITIES ACT OF

17 1994.—Section 4 of the School-to-Work Opportunities

18 Act of 1994 (20 U.S.C. 6103) is amended—

19 (A) in paragraph (11)(B)(viii), by striking

20 ‘‘section 481(b)’’ and inserting ‘‘section

21 101(a)(3)’’; and

22 (B) in paragraph (12), by striking ‘‘section

23 481’’ and inserting ‘‘section 101(a)(2)’’.

24 (40) NATIONAL AND COMMUNITY SERVICE ACT OF

25 1990.—Section 148(g) of the National and Community
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1 Service Act of 1990 (42 U.S.C. 12604(g)) is amended

2 by striking ‘‘section 481(a) of the Higher Education

3 Act of 1965 (20 U.S.C. 1088(a))’’ and inserting ‘‘sec4 tion 101(a)(2) of the Higher Education Act of 1965’’.

5 SEC. 102. DEFINITIONS.

6 (a) INSTITUTION OF HIGHER EDUCATION.—Section

7 101 (as redesignated by section 101(a)(3) of this Act) is

8 amended by striking subsections (a) and (b) and inserting

9 the following:

10 ‘‘(a) INSTITUTION OF HIGHER EDUCATION.—

11 ‘‘(1) IN GENERAL.—Subject to paragraphs (2)

12 through (4) of this subsection:

13 ‘‘(A) PRINCIPAL CRITERIA.—The term ‘in14 stitution of higher education’ means an edu15 cational institution in any State that—

16 ‘‘(i) admits as regular students only

17 persons having a certificate of graduation

18 from a school providing secondary edu19 cation, or the recognized equivalent of such

20 a certificate;

21 ‘‘(ii) is legally authorized within such

22 State to provide a program of education be23 yond secondary education;

24 ‘‘(iii) provides an educational program

25 for which it awards a bachelor’s degree or
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1 provides not less than a two-year program

2 that is acceptable for full credit toward such

3 a degree;

4 ‘‘(iv) is a public or other nonprofit in5 stitution; and

6 ‘‘(v) is accredited by a nationally rec7 ognized accrediting agency or association,

8 or if not so accredited, is an institution that

9 has been granted preaccreditation status by

10 such an agency or association that has been

11 recognized by the Secretary for the granting

12 of preaccreditation status, and the Sec13 retary has determined that there is satisfac14 tory assurance that the institution will meet

15 the accreditation standards of such an agen16 cy or association within a reasonable time.

17 ‘‘(B) ADDITIONAL INSTITUTIONS IN18 CLUDED.—The term ‘institution of higher edu19 cation’ also includes—

20 ‘‘(i) any school that provides not less

21 than a one-year program of training to pre22 pare students for gainful employment in a

23 recognized occupation and that meets the

24 provision of clauses (i), (ii), (iv), and (v) of

25 subparagraph (A); and
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1 ‘‘(ii) a public or nonprofit private edu2 cational institution in any State that, in

3 lieu of the requirement in subparagraph

4 (A)(i), admits as regular students persons

5 who are beyond the age of compulsory school

6 attendance in the State in which the insti7 tution is located.

8 ‘‘(C) LIST OF ACCREDITING AGENCIES.—For

9 purposes of this subsection, the Secretary shall

10 publish a list of nationally recognized accredit11 ing agencies or associations that he determines,

12 pursuant to subpart 2 of part H of title IV of

13 this Act, to be reliable authority as to the quality

14 of the education or training offered.

15 ‘‘(2) DEFINITION FOR PURPOSES OF TITLE IV

16 PROGRAMS.—

17 ‘‘(A) INCLUSION OF ADDITIONAL INSTITU18 TIONS.—Subject to subparagraphs (B) through

19 (D) of this paragraph, the term ‘institution of

20 higher education’ for purposes of title IV of this

21 Act includes, in addition to the institutions cov22 ered by the definition in paragraph (1) of this

23 subsection—

24 ‘‘(i) a proprietary institution of higher

25 education;
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1 ‘‘(ii) a postsecondary vocational insti2 tution; and

3 ‘‘(iii) only for the purposes of part B

4 of title IV, an institution outside the United

5 States that is comparable to an institution

6 of higher education as defined in paragraph

7 (1) of this subsection and that has been ap8 proved by the Secretary for the purpose of

9 part B of title IV.

10 ‘‘(B) INSTITUTIONS OUTSIDE THE UNITED

11 STATES.—

12 ‘‘(i) For the purpose of qualifying as

13 an institution under subparagraph (A)(iii)

14 of this paragraph, the Secretary shall estab15 lish criteria by regulation for the approval

16 of institutions outside the United States

17 and for the determination that such institu18 tions are comparable to an institution of

19 higher education as defined in paragraph

20 (1) of this subsection. In the case of a grad21 uate medical school outside the United

22 States, such criteria shall include a require23 ment that a student attending a graduate

24 medical school outside the United States is
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1 ineligible for loans made, insured, or guar2 anteed under part B of this title unless—

3 ‘‘(I)(aa) at least 60 percent of

4 those enrolled and at least 60 percent

5 of the graduates of the graduate medi6 cal school outside the United States

7 were not persons described in section

8 484(a)(5) in the year preceding the

9 year for which a student is seeking a

10 loan under part B of title IV; and

11 ‘‘(bb) at least 60 percent of the in12 dividuals who were students or grad13 uates of the graduate medical school

14 outside the United States (both nation15 als of the United States and others)

16 taking the examinations administered

17 by the Educational Commission for

18 Foreign Medical Graduates received a

19 passing score in the year preceding the

20 year for which a student is seeking a

21 loan under part B of title IV; or

22 ‘‘(II) the institution’s clinical

23 training program was approved by a

24 State as of January 1, 1992.
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1 ‘‘(ii) For the purpose of qualifying as

2 an institution under subparagraph (A)(iii)

3 of this paragraph, the Secretary shall estab4 lish an advisory panel of medical experts

5 that shall—

6 ‘‘(I) evaluate the standards of ac7 creditation applied to applicant for8 eign medical schools; and

9 ‘‘(II) determine the comparability

10 of those standards to standards for ac11 creditation applied to United States

12 medical schools.

13 If such accreditation standards are deter14 mined not to be comparable, the foreign

15 medical school shall be required to meet the

16 requirements of paragraph (1) of this sub17 section.

18 ‘‘(iii) The failure of an institution out19 side the United States to provide, release, or

20 authorize release to the Secretary of such in21 formation as may be required by clause (i)

22 of this subparagraph shall render such in23 stitution ineligible for the purpose of part B

24 of title IV.
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1 ‘‘(iv) If, pursuant to this subpara2 graph, an institution loses eligibility to

3 participate in the programs under title IV,

4 then a student enrolled at such institution

5 may, notwithstanding such loss of eligi6 bility, continue to be eligible to receive a

7 loan under part B while attending such in8 stitution for the academic year succeeding

9 the academic year in which such loss of eli10 gibility occurred.

11 ‘‘(C) LIMITATIONS BASED ON COURSE OF

12 STUDY OR ENROLLMENT.—An institution shall

13 not be considered to meet the definition of an in14 stitution of higher education in subparagraph

15 (A) of this paragraph if such institution—

16 ‘‘(i) offers more than 50 percent of such

17 institution’s courses by correspondence, un18 less the institution is an institution that

19 meets the definition in section 521(4)(C) of

20 the Carl D. Perkins Vocational and Applied

21 Technology Education Act;

22 ‘‘(ii) enrolls 50 percent or more of its

23 students in correspondence courses, unless

24 the institution is an institution that meets

25 the definition in such section, except that
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1 the Secretary, at the request of such institu2 tion, may waive the applicability of this

3 clause to such institution for good cause, as

4 determined by the Secretary in the case of

5 an institution of higher education that pro6 vides a 2-year or 4-year program of instruc7 tion for which the institution awards an as8 sociate or baccalaureate degree;

9 ‘‘(iii) has a student enrollment in

10 which more than 25 percent of the students

11 are incarcerated, except that the Secretary

12 may waive the prohibition of this clause for

13 a nonprofit institution that provides a 4-

14 year or a 2-year program of instruction (or

15 both) for which it awards a bachelor’s or as16 sociate’s degree or diploma, respectively; or

17 ‘‘(iv) has a student enrollment in

18 which more than 50 percent of the students

19 do not have a high school diploma or its

20 recognized equivalent and does not provide

21 a 4-year or a 2-year program of instruction

22 (or both) for which it awards a bachelor’s or

23 associate’s degree, respectively, except that

24 the Secretary may waive the limitation con25 tained in this clause if a nonprofit institu-
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1 tion demonstrates to the satisfaction of the

2 Secretary that it exceeds such limitation be3 cause it serves, through contracts with Fed4 eral, State, or local government agencies,

5 significant numbers of students who do not

6 have a high school diploma or its recognized

7 equivalent.

8 ‘‘(D) LIMITATIONS BASED ON MANAGE9 MENT.—An institution shall not be considered to

10 meet the definition of an institution of higher

11 education in subparagraph (A) of this para12 graph if—

13 ‘‘(i) the institution, or an affiliate of

14 the institution that has the power, by con15 tract or ownership interest, to direct or

16 cause the direction of the management or

17 policies of the institution, has filed for

18 bankruptcy; or

19 ‘‘(ii) the institution, its owner, or its

20 chief executive officer has been convicted of,

21 or has pled nolo contendere or guilty to, a

22 crime involving the acquisition, use, or ex23 penditure of funds under title IV, or has

24 been judicially determined to have commit25 ted fraud involving funds under title IV.
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1 ‘‘(E) CERTIFICATION.—The Secretary shall

2 certify an institution’s qualification as an insti3 tution of higher education in accordance with the

4 requirements of subpart 2 of part H.

5 ‘‘(F) LOSS OF ELIGIBILITY.—An institution

6 of higher education shall not be considered to

7 meet the definition of an institution of higher

8 education in subparagraph (A) of this para9 graph if such institution is removed from eligi10 bility for funds under title IV as a result of an

11 action pursuant to part H of title IV.

12 ‘‘(3) PROPRIETARY INSTITUTION OF HIGHER

13 EDUCATION.—

14 ‘‘(A) PRINCIPAL CRITERIA.—For the pur15 pose of this subsection, the term ‘proprietary in16 stitution of higher education’ means a school

17 that—

18 ‘‘(i) provides an eligible program of

19 training to prepare students for gainful em20 ployment in a recognized occupation;

21 ‘‘(ii) meets the requirements of clauses

22 (i) and (ii) of paragraph (1)(A) of this sub23 section;
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1 ‘‘(iii) does not meet the requirement of

2 clause (iv) of paragraph (1)(A) of this sub3 section;

4 ‘‘(iv) is accredited by a nationally rec5 ognized accrediting agency or association

6 approved by the Secretary pursuant to part

7 H of title IV;

8 ‘‘(v) has been in existence for at least

9 2 years; and

10 ‘‘(vi) has at least 15 percent of its reve11 nues from sources that are not derived from

12 funds provided under title IV, as deter13 mined in accordance with regulations pre14 scribed by the Secretary.

15 In determining such 15 percent of revenues for

16 purposes of clause (vi), funds from programs of

17 education and training that do not meet the defi18 nition of an eligible program in section 481(b),

19 but are provided on a contractual basis under

20 Federal, State, or local training programs, or

21 under specialized business and industry training

22 requests, shall be counted.

23 ‘‘(B) ADDITIONAL INSTITUTIONS.—The term

24 ‘proprietary institution of higher education’ also

25 includes a proprietary educational institution in
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1 any State that, in lieu of the requirement in

2 clause (i) of paragraph (1)(A) of this subsection,

3 admits as regular students persons who are be4 yond the age of compulsory school attendance in

5 the State in which the institution is located.

6 ‘‘(4) POSTSECONDARY VOCATIONAL INSTITU7 TION.—

8 ‘‘(A) PRINCIPAL CRITERIA.—For the pur9 pose of this subsection, the term ‘postsecondary

10 vocational institution’ means a school that—

11 ‘‘(i) provides an eligible program of

12 training to prepare students for gainful em13 ployment in a recognized occupation;

14 ‘‘(ii) meets the requirements of clauses

15 (i), (ii), (iv), and (v) of paragraph (1)(A)

16 of this subsection; and

17 ‘‘(iii) has been in existence for at least

18 2 years.

19 ‘‘(B) ADDITIONAL INSTITUTIONS.—The term

20 ‘postsecondary vocational institution also in21 cludes an educational institution in any State

22 that, in lieu of the requirement in clause (i) of

23 paragraph (1)(A) of this subsection, admits as

24 regular students persons who are beyond the age
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1 of compulsory school attendance in the State in

2 which the institution is located.

3 ‘‘(b) STATE; FREELY ASSOCIATED STATES.—

4 ‘‘(1) STATE.—The term ‘State’ includes, in addi5 tion to the several States of the Union, the Common6 wealth of Puerto Rico, the District of Columbia,

7 Guam, American Samoa, the Virgin Islands, the

8 Commonwealth of the Northern Mariana Islands, and

9 the Freely Associated States.

10 ‘‘(2) FREELY ASSOCIATED STATES.—The term

11 ‘Freely Associated States’ means the Republic of the

12 Marshall Islands, the Republic of Palau, and the Fed13 erated States of Micronesia.’’.

14 (b) CONFORMING AMENDMENTS.—

15 (1) Section 481 (20 U.S.C. 1088) is amended—

16 (A) by striking subsections (a), (b), and (c);

17 and

18 (B) by redesignating subsections (d) through

19 (f) as subsections (a) through (c), respectively.

20 (2) Each of the following provisions are amended

21 by striking ‘‘section 481’’ and inserting ‘‘section

22 101(a)(2)’’: sections 435(a)(1), 487(d), and 496(j) and

23 (k).

24 (3) Section 498(i) (20 U.S.C. 1099c) is amended

25 by striking ‘‘section 481 (other than the requirements
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1 in subsections (b)(5) and (c)(3))’’ and inserting ‘‘sec2 tion 101(a) (other than the requirements in para3 graphs (3)(A)(v) and (4)(A)(iii))’’.

4 (4) Section 498(j) is amended by striking ‘‘sec5 tions 481(b)(5) and 481(c)(3)’’ and inserting ‘‘para6 graphs (3)(A)(v) and (4)(A)(iii) of section 101(a)’’.

7 (5) Section 105(b) (as redesignated by section

8 101(a)(3)(D)) is amended by adding at the end the

9 following new sentence: ‘‘This subsection shall cease to

10 be effective on October 1, 2001.’’.

11 SEC. 103. REGULATORY REFORM.

12 Title I is amended by adding at the end the following

13 new section:

14 ‘‘SEC. 112. REGULATORY REFORM.

15 ‘‘(a) BIENNIAL REVIEW OF REGULATIONS.—In every

16 even-numbered year (beginning with 1998), the Secretary—

17 ‘‘(1) shall review all regulations issued under

18 title IV of the Higher Education Act of 1965 in effect

19 at the time of the review that apply to the operations

20 or activities of any participant in those programs;

21 and

22 ‘‘(2) shall determine whether any such regulation

23 is no longer necessary in the public interest.

24 ‘‘(b) EFFECT OF DETERMINATION.—The Secretary

25 shall repeal, consolidate, simplify, or otherwise modify any
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1 regulation the Secretary determines to be no longer nec2 essary in the public interest.

3 ‘‘(c) REPORT TO CONGRESS.—The Secretary shall re4 port to the Congress any legislative changes necessary to

5 permit regulatory simplification under this section.’’.

6 PART B—PERFORMANCE-BASED ORGANIZATION

7 FOR THE DELIVERY OF FEDERAL STUDENT

8 FINANCIAL ASSISTANCE.

9 SEC. 111. PERFORMANCE-BASED ORGANIZATION FOR THE

10 DELIVERY OF FEDERAL STUDENT FINANCIAL

11 ASSISTANCE.

12 Title I (as amended by part A of this title) is amend13 ed—

14 (1) by striking the heading of such title and in15 serting the following:

16 ‘‘TITLE I—GENERAL AND

17 ADMINISTRATIVE PROVISIONS

18 ‘‘PART A—GENERAL PROVISIONS’’;

19 and

20 (2) by adding at the end the following new part:
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1 ‘‘PART B—ADMINISTRATIVE PROVISIONS FOR

2 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

3 ‘‘SEC. 131. PERFORMANCE-BASED ORGANIZATION FOR THE

4 DELIVERY OF FEDERAL STUDENT FINANCIAL

5 ASSISTANCE.

6 ‘‘(a) ESTABLISHMENT AND PURPOSE.—

7 ‘‘(1) ESTABLISHMENT.—There is established in

8 the Department a Performance-Based Organization

9 (hereafter referred to as the ‘PBO’) which shall be a

10 discrete management unit responsible for managing

11 the information systems supporting the programs au12 thorized under title IV of this Act, as specified in sub13 section (b).

14 ‘‘(2) PURPOSES.—The purposes of the PBO

15 are—

16 ‘‘(A) to improve the level of service to stu17 dents and participants in the programs;

18 ‘‘(B) to reduce the costs of administering the

19 Federal student financial assistance programs

20 authorized under title IV;

21 ‘‘(C) to increase the accountability of the of22 ficials responsible for administering the oper23 ational aspects of these programs;

24 ‘‘(D) to provide greater flexibility in the

25 management of the operational functions of the

26 Federal student financial assistance programs;
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1 ‘‘(E) to integrate the information systems

2 supporting the Federal student financial assist3 ance programs; and

4 ‘‘(F) to implement an open, common, inte5 grated system for the delivery of student finan6 cial assistance under title IV.

7 ‘‘(b) AUTHORITY.—

8 ‘‘(1) AUTHORITY OF SECRETARY.— Notwith9 standing any other provision of this Act, the Sec10 retary shall maintain responsibility for the develop11 ment and promulgation of policy relating to the pro12 grams of student financial assistance under title IV.

13 In the exercise of its functions, the PBO shall be sub14 ject to the direction of the Secretary. The Secretary

15 shall—

16 ‘‘(A) request the advice of, and work in co17 operation with, the Chief Operating Officer in

18 developing regulations, policies, administrative

19 guidance, or procedures affecting the information

20 systems administered by the PBO, and other

21 functions performed by the PBO;

22 ‘‘(B) request cost estimates from the Chief

23 Operating Officer for system changes required by

24 specific policies proposed by the Secretary;
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1 ‘‘(C) consider the Chief Operating Officer’s

2 comments and estimates prior to finalizing such

3 regulations, policies, administrative guidance, or

4 procedures;

5 ‘‘(D) assist the Chief Operating Officer in

6 identifying goals for the administration and

7 modernization of the delivery system for student

8 financial assistance under title IV; and

9 ‘‘(E) if necessary, arrange for additional

10 funding to ensure that the PBO can efficiently

11 perform its functions.

12 ‘‘(2) FUNCTIONS.—The PBO shall carry out the

13 following functions:

14 ‘‘(A) All aspects of contracting for the data

15 and information systems supporting student fi16 nancial assistance under title IV, including the

17 operational administration of the William D.

18 Ford Federal Direct Loan Program, but not in19 cluding the development of policy relating to

20 such programs.

21 ‘‘(B) The administrative, accounting, and

22 financial management functions of the delivery

23 system for Federal student assistance, includ24 ing—
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1 ‘‘(i) the collection, processing and

2 transmission of applicant data to students,

3 institutions and authorized third parties, as

4 provided for in section 483;

5 ‘‘(ii) technical specifications for soft6 ware development and systems supporting

7 the delivery of student financial assistance

8 under title IV;

9 ‘‘(iii) information technology and sys10 tems infrastructure related to the delivery

11 and management of student financial as12 sistance under title IV;

13 ‘‘(iv) all software and hardware acqui14 sitions and all information technology con15 tracts related to the delivery and manage16 ment of student financial assistance under

17 title IV; and

18 ‘‘(v) all customer service, training and

19 user support related to the functions de20 scribed in clauses (i) through (iv).

21 ‘‘(C) Annual development of a budget for

22 the operations and services of the PBO, in con23 sultation with the Secretary, and for consider24 ation and inclusion in the Department’s annual

25 budget submission.
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1 ‘‘(D) Annual development of goals, in con2 sultation with the Secretary, for the administra3 tion and modernization of the system for deliv4 ery of student financial assistance under title IV.

5 ‘‘(E) Other functions proposed by the Sec6 retary, and agreed to by the Chief Operating Of7 ficer as are not inconsistent with the functions of

8 the PBO.

9 ‘‘(3) INDEPENDENCE.—In carrying out its func10 tions, the PBO shall exercise independent control of

11 its budget allocations and expenditures, personnel de12 cisions and processes, procurements, and other admin13 istrative and management functions.

14 ‘‘(4) REVIEW OF PBO.—The PBO shall be subject

15 to the usual and customary Federal audit procedures,

16 and be subject to review by the Inspector General of

17 the Department.

18 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—For the

19 purpose of funding the administrative costs incurred by the

20 PBO in administering systems supporting programs under

21 this part, there are authorized to be appropriated such sums

22 as may be necessary for fiscal year 1999 and each of the

23 4 succeeding fiscal years, except that funds authorized

24 under section 458 shall be made available to the PBO by
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1 the Secretary for administrative costs authorized to be fund2 ed under that section.

3 ‘‘(d) ORGANIZATIONAL REPORTS.—

4 ‘‘(1) PERFORMANCE PLAN.—Within 6 months of

5 the hiring of the Chief Operating Officer, and every

6 12 months thereafter, the Secretary and the Chief Op7 erating Officer of the Department shall develop a per8 formance plan for the PBO that establishes measur9 able goals and objectives for the organization. In de10 veloping this performance plan, the Secretary and the

11 Chief Operating Officer shall consult with the Com12 mittee on Education and the Workforce of the House

13 of Representatives, the Committee on Labor and

14 Human Resources of the Senate, and the Advisory

15 Committee on Student Financial Assistance. The per16 formance plan shall include a concise statement of

17 goals for a modernized system for the delivery of stu18 dent financial assistance under title IV and identify

19 action steps necessary to achieve such goals. Such

20 goals shall be used in evaluating the performance of

21 the Chief Operating Officer and the PBO pursuant to

22 paragraph (2).

23 ‘‘(2) ANNUAL ACCOUNTABILITY REPORT.—The

24 Chief Operating Officer shall prepare and submit an

25 annual accountability report to the Secretary and the
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1 Committee on Education and the Workforce of the

2 House of Representatives and the Committee on Labor

3 and Human Resources of the Senate. The accountabil4 ity report shall include—

5 ‘‘(A) an independent financial audit of the

6 expenditures of both the PBO and programs ad7 ministered by it;

8 ‘‘(B) financial and performance require9 ments applicable to the PBO under the Chief Fi10 nancial Officer Act of 1990 and the Government

11 Performance and Results Act of 1993;

12 ‘‘(C) the results achieved by the PBO during

13 the year relative to the goals established in the

14 organization’s performance plan;

15 ‘‘(D) the results of the evaluations of per16 formance of the Chief Operating Officer and sen17 ior managers under subsections (e)(2) and (f)(2),

18 including the amounts of bonus compensation

19 awarded to these individuals;

20 ‘‘(E) a discussion of the effectiveness of co21 ordination between the PBO and the Secretary;

22 ‘‘(F) recommendations for legislative and

23 regulatory changes to improve service to students

24 and their families, and to improve program effi25 ciency and integrity; and
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1 ‘‘(G) other such information as the Director

2 of the Office of Management and Budget shall

3 prescribe for performance based organizations.

4 ‘‘(e) CHIEF OPERATING OFFICER.—

5 ‘‘(1) IN GENERAL.—The management of the PBO

6 shall be vested in a Chief Operating Officer who shall

7 be appointed by the Secretary to a 5-year term and

8 compensated without regard to chapters 33, 51, and

9 53 of title 5, United States Code. The Secretary shall

10 appoint the Chief Operating Officer within 6 months

11 of the date of enactment of this part. The Secretary

12 shall consult with the Chairmen of the Committee on

13 Education and the Workforce of the House of Rep14 resentatives and the Committee on Labor and Human

15 Resources of the Senate prior to making an appoint16 ment. The appointment shall be made on the basis

17 of demonstrated management ability and expertise in

18 information technology, including extensive experience

19 in the financial services industry, and without regard

20 to political affiliation or activity. The Secretary may

21 reappoint the Chief Operating Officer to subsequent

22 terms so long as the performance of the Chief Operat23 ing Officer, as set forth in the performance agreement,

24 is satisfactory or better. The Chief Operating Officer

25 may be removed by—
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1 ‘‘(A) the President; or

2 ‘‘(B) the Secretary, for misconduct or fail3 ure to meet performance goals set forth in the

4 performance agreement in paragraph (2).

5 The President or Secretary shall communicate the

6 reasons for any such removal to the appropriate com7 mittees of Congress.

8 ‘‘(2) PERFORMANCE AGREEMENT.—The Sec9 retary and the Chief Operating Officer shall enter

10 into an annual performance agreement which shall

11 set forth measurable organization and individual

12 goals for the Chief Operating Officer in key oper13 ational areas. The agreement shall be subject to re14 view and renegotiation at the end of each term. The

15 final agreement shall be transmitted to the Committee

16 on Education and the Workforce of the House of Rep17 resentatives and the Committee on Labor and Human

18 Resources of the Senate, and made publicly available.

19 ‘‘(3) COMPENSATION.—The Chief Operating Offi20 cer is authorized to be paid at an annual rate of

21 basic pay not to exceed the maximum rate of basic

22 pay for the Senior Executive Service under section

23 5382 of title 5, United States Code, including any ap24 plicable locality-based comparability payment that

25 may be authorized under section 5304(h)(2)(B) of
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1 such title 5. In addition, the Chief Operating Officer

2 may receive a bonus in an amount up to, but not in

3 excess of, 50 percent of such annual rate of basic pay,

4 based upon the Secretary’s evaluation of the Chief Op5 erating Officer’s performance in relation to the per6 formance goals set forth in the performance agreement

7 described in paragraph (2). Payment of a bonus

8 under this paragraph may be made to the Chief Oper9 ating Officer only to the extent that such payment

10 does not cause the Chief Operating Officer’s total ag11 gregate compensation in a calendar year to equal or

12 exceed the amount of the President’s salary under sec13 tion 102 of title 3, United States Code.

14 ‘‘(f) SENIOR MANAGEMENT.—

15 ‘‘(1) IN GENERAL.—The Chief Operating Officer

16 may appoint up to 5 senior managers as may be nec17 essary without regard to the provisions of title 5,

18 United States Code, governing appointments in the

19 competitive service, and who may be paid without re20 gard to the provisions of chapter 51 and subchapter

21 III of chapter 53 of such title relating to classification

22 and General Schedule pay rates.

23 ‘‘(2) PERFORMANCE AGREEMENT.—The Chief

24 Operating Officer shall enter into an annual perform25 ance agreement with each senior manager appointed
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1 under this subsection which shall set forth measurable

2 organization and individual goals in key operational

3 areas. The agreement shall be subject to review and

4 renegotiation at the end of each term.

5 ‘‘(3) COMPENSATION.—The Chief Operating Offi6 cer is authorized to pay senior managers at an an7 nual rate of basic pay not to exceed 75 percent of the

8 maximum rate of basic pay for the Senior Executive

9 Service under section 5382 of title 5, United States

10 Code, including any applicable locality-based com11 parability payment that may be authorized under

12 section 5304(h)(2)(C) of such title 5. In addition, a

13 senior manager may receive a bonus in an amount

14 up to, but not in excess of, 50 percent of such annual

15 rate of basic pay, based upon the Chief Operating Of16 ficer’s evaluation of the manager’s performance in re17 lation to the performance goals set forth in the per18 formance agreement described in paragraph (2).

19 ‘‘(g) PERSONNEL FLEXIBILITY.—

20 ‘‘(1) PERSONNEL CEILINGS.—The PBO shall not

21 be subject to any ceiling relating to the number or

22 grade of employees.

23 ‘‘(2) ADMINISTRATIVE FLEXIBILITY.—The Chief

24 Operating Officer shall work with the Office of Per25 sonnel Management to develop and implement person-
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1 nel flexibilities in staffing, classification, and pay

2 that meet the needs of the PBO, subject to compliance

3 with title 5, United States Code.

4 ‘‘(h) ESTABLISHMENT OF A FAIR AND EQUITABLE

5 SYSTEM FOR MEASURING STAFF PERFORMANCE.—The

6 PBO shall establish an annual performance management

7 system, subject to compliance with title 5, United States

8 Code and consistent with applicable provisions of law and

9 regulations, which strengthens the organizational effective10 ness of the PBO by providing for establishing goals or objec11 tives for individual, group, or organizational performance

12 (or any combination thereof), consistent with the perform13 ance plan of the PBO and its performance planning proce14 dures, including those established under the Government

15 Performance and Results Act of 1993, and communicating

16 such goals or objectives to employees.

17 ‘‘(i) PROCUREMENT FLEXIBILITY.—

18 ‘‘(1) IN GENERAL.—Except as provided in this

19 subsection, the PBO shall abide by all applicable Fed20 eral procurement laws and regulations when procur21 ing property and services. The PBO shall—

22 ‘‘(A) enter into contracts for information

23 systems supporting the programs authorized

24 under title IV to carry out the functions set forth

25 in subsection (b)(2); and
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1 ‘‘(B) obtain the services of experts and con2 sultants without regard to section 3109 of title 5,

3 United States Code and set pay in accordance

4 with such section.

5 ‘‘(2) PERFORMANCE BASED SERVICING CON6 TRACTS.—The Chief Operating Officer shall, to the ex7 tent practicable, maximize the use of performance

8 based servicing contracts, consistent with guidelines

9 for such contracts published by the Office of Federal

10 Procurement Policy, to achieve cost savings and im11 prove service.

12 ‘‘(3) FEE FOR SERVICE ARRANGEMENTS.—The

13 Chief Operating Officer shall, to the extent practicable

14 and consistent with the purpose of the PBO, utilize

15 services available outside of the Federal Government

16 in the delivery of Federal student financial assistance.

17 To achieve this purpose, the PBO is authorized to pay

18 fees to an organization that are equivalent to those

19 paid by other entities for such services, if the Chief

20 Operating Officer determines that such organization

21 currently provides an information system or service

22 that meets the requirements of the PBO.

23 ‘‘(j) FOCUS GROUPS.—To facilitate information shar24 ing and customer involvement, the Chief Operating Officer

25 may establish focus groups composed of students, institu-
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1 tions, and other participants in the programs authorized

2 by title IV to provide advice on student aid delivery mat3 ters.

4 ‘‘SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT

5 AID DELIVERY.

6 ‘‘(a) IN GENERAL.—The Secretary, and the Chief Op7 erating Officer shall improve the efficiency and effectiveness

8 of the student aid delivery system by encouraging and par9 ticipating in the establishment of voluntary consensus

10 standards and requirements for the electronic transmission

11 of information necessary for the administration of pro12 grams under title IV.

13 ‘‘(b) ADOPTION OF VOLUNTARY CONSENSUS STAND14 ARDS.—Except with respect to the common financial re15 porting form under section 483(a), the Secretary shall

16 adopt voluntary consensus standards for transactions re17 quired under title IV, and common data elements for such

18 transactions, to enable information to be exchanged elec19 tronically between systems administered by the Department

20 and among participants in the Federal student aid delivery

21 system.

22 ‘‘(c) REQUIREMENTS FOR ADOPTION OF VOLUNTARY

23 CONSENSUS STANDARDS.—Any voluntary consensus stand24 ard adopted under this section shall—
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1 ‘‘(1) be a standard that has been developed,

2 adopted, or modified by a standard setting organiza3 tion that is open to the participation of the various

4 entities engaged in the delivery of Federal student fi5 nancial assistance; and

6 ‘‘(2) be consistent with the objective of reducing

7 the administrative costs of delivering student finan8 cial assistance under title IV.

9 ‘‘(d) PARTICIPATION IN STANDARD SETTING ORGANI10 ZATIONS.—

11 ‘‘(1) The Chief Operating Officer shall partici12 pate in the activities of standard setting organiza13 tions in carrying out the provisions of this section.

14 ‘‘(2) The Chief Operating Officer shall encourage

15 higher education groups seeking to develop common

16 forms, standards, and procedures in support of the de17 livery of Federal student financial assistance to con18 duct these activities within a standard setting organi19 zation.

20 ‘‘(3) The Chief Operating Officer may pay nec21 essary dues and fees associated with participating in

22 standard setting organizations pursuant to this sub23 section from funds available under subsection (j).

24 ‘‘(e) PROCEDURES FOR ADOPTION AND IMPLEMENTA25 TION OF VOLUNTARY CONSENSUS STANDARDS.—In adopt-
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1 ing voluntary consensus standards and implementation

2 timetables under this section, including modifications of ex3 isting standards, the Secretary shall follow the procedures

4 for negotiated rulemaking in section 492.

5 ‘‘(f) INITIAL VOLUNTARY CONSENSUS STANDARDS TO

6 BE ADOPTED.—Through coordinated participation between

7 the Chief Operating Officer and standard setting organiza8 tions, the initial standards adopted by the Secretary shall

9 include the following:

10 ‘‘(1) ELECTRONIC PERSONAL IDENTIFIER NUM11 BER.—The Secretary shall adopt standards for a sin12 gle electronic personal identifier number for students

13 receiving assistance under title IV.

14 ‘‘(2) ELECTRONIC SIGNATURE.—The Secretary,

15 in coordination with the Secretary of Commerce, shall

16 adopt standards specifying procedures for the elec17 tronic transmission and authentication of signatures

18 with respect to transactions requiring a signature

19 under title IV.

20 ‘‘(3) SINGLE INSTITUTIONAL IDENTIFIER.—The

21 Secretary shall adopt standards for a single identifier

22 for eligible institutions under title IV.

23 ‘‘(g) USE OF CLEARINGHOUSES.—Nothing in this sec24 tion shall restrict the ability of participating institutions

25 and lenders from using a clearinghouse to comply with the
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1 standards for the exchange of information established under

2 this section.

3 ‘‘(h) APPLICABILITY TO CURRENT SYSTEMS.—

4 ‘‘(1) GENERAL RULE.—Except as provided in

5 paragraph (2) and (3), this section shall apply to all

6 Department of Education information systems sup7 porting the delivery of programs under title IV no

8 later than 12 months from the date of enactment of

9 this part.

10 ‘‘(2) NATIONAL STUDENT LOAN DATA SYSTEM.—

11 This section shall apply to sections 485B(e) and (f)

12 no later than 18 months after the date of enactment

13 of this part.

14 ‘‘(3) INTEGRATED POSTSECONDARY EDUCATION

15 DATA SYSTEM.—The Secretary shall coordinate the

16 adoption of voluntary consensus standards under this

17 section to ensure that standards are compatible with

18 the integrated postsecondary education data system

19 (IPEDS).

20 ‘‘(i) DATA SECURITY.—Any entity that maintains or

21 transmits information under a transaction covered by this

22 section shall maintain reasonable and appropriate admin23 istrative, technical, and physical safeguards—

24 ‘‘(1) to ensure the integrity and confidentiality

25 of the information; and
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1 ‘‘(2) to protect against any reasonably antici2 pated security threats, or unauthorized uses or disclo3 sures of the information.

4 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There are

5 authorized to be appropriated in any fiscal year or made

6 available from funds appropriated to carry out activities

7 in this section in any fiscal year such sums as may be nec8 essary to carry out the provisions of this section, except that

9 if no funds are appropriated pursuant to this subsection,

10 the Secretary shall make funds available to carry out this

11 section from amounts appropriated for the operations and

12 expenses of the Department of Education.

13 ‘‘(k) DEFINITIONS.—For purposes of this section:

14 ‘‘(1) The term ‘voluntary consensus standard’

15 means a standard developed or used by a standard

16 setting organization accredited by the American Na17 tional Standards Institute.

18 ‘‘(2) The term ‘standard setting organization’

19 means a standard setting organization accredited by

20 the American National Standards Institute that de21 velops standards for information transactions, data

22 elements, or any other standard that is necessary to,

23 or will facilitate, the implementation of this section.

24 ‘‘(3) For purposes of this section, the term ‘clear25 inghouse’ means a public or private entity that proc-
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1 esses or facilitates the processing of nonstandard data

2 elements into data elements conforming to standards

3 adopted under this section.’’.

4 TITLE II—POSTSECONDARY EDU5 CATION IMPROVEMENT PRO6 GRAMS

7 SEC. 201. URBAN COMMUNITY SERVICE.

8 (a) DESIGNATION OF TITLE.—The Higher Education

9 Act of 1965 is amended by inserting at the end of title I

10 (20 U.S.C. 1001 et seq.) the following:

11 ‘‘TITLE II—POSTSECONDARY

12 EDUCATION IMPROVEMENT

13 PROGRAMS’’.

14 (b) REDESIGNATION AND TRANSFER OF URBAN COM15 MUNITY SERVICE PROGRAM.—

16 (1) INTERNAL CROSS-REFERENCES.—Part A of

17 title XI is amended—

18 (A) in section 1102(b), by striking ‘‘section

19 1104’’ and inserting ‘‘section 204’’;

20 (B) in section 1104(12), by striking ‘‘section

21 1103(a)(2)(B)’’ and inserting ‘‘section

22 203(a)(2)(B)’’; and

23 (C) in section 1108(1), by striking ‘‘section

24 1103’’ and inserting ‘‘section 203’’.
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1 (2) REDESIGNATION.—Part A of title XI (20

2 U.S.C. 1136 et seq.) is redesignated as part A of title

3 II, and sections 1101 through 1109 are redesignated

4 as sections 201 through 209.

5 (3) TRANSFER.—Part A of title II (including

6 sections 201 through 209), as redesignated by para7 graph (2), is transferred to immediately follow the

8 heading inserted by subsection (a) of this section.

9 (4) REPEAL.—Part B of title XI (20 U.S.C.

10 1137 et seq.) and the heading of title XI are repealed.

11 (c) ALLOWABLE ACTIVITIES.—Section 204 (as redesig12 nated by subsection (b)(2)) is amended by adding at the

13 end the following new paragraph:

14 ‘‘(14) Improving access to technology in local

15 communities.’’.

16 (d) DESIGNATION OF URBAN GRANT INSTITUTIONS.—

17 Section 207 (as redesignated by subsection (b)(2)) is amend18 ed by adding at the end the following new sentence: ‘‘The

19 information developed as a result of this section shall be

20 made available to Urban Grant Institutions and to any

21 other interested institution of higher education by any ap22 propriate means, including the Internet.’’.

23 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

24 209 (as redesignated by subsection (b)(2)) is amended by

25 striking ‘‘1993’’ and inserting ‘‘1999’’.
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1 SEC. 202. FUND FOR THE IMPROVEMENT OF POSTSECOND2 ARY EDUCATION.

3 (a) REDESIGNATION AND TRANSFER OF PROGRAMS.—

4 (1) REDESIGNATION.—Part A of title X (20

5 U.S.C. 1135 et seq.) is redesignated as part B of title

6 II (as amended by section 201) and—

7 (A) sections 1001 through 1003 (20 U.S.C.

8 1135 et seq.) are redesignated as sections 221

9 through 223; and

10 (B) section 1011 (20 U.S.C. 1135a–11) is

11 redesignated as section 224.

12 (2) TRANSFER.—Part B of title II (including

13 sections 221 through 224), as redesignated by para14 graph (1), is transferred to follow part A of title II.

15 (3) REPEAL.—Section 1004 and parts B, C, and

16 D of title X (20 U.S.C. 1135a–3, 1135e et seq.) and

17 the heading of title X are repealed.

18 (b) ENDOWMENT GRANTS.—Section 221(a) (as redesig19 nated by subsection (a)(2)) is amended—

20 (1) by striking ‘‘and’’ at the end of paragraph

21 (7);

22 (2) by striking the period at the end of para23 graph (8) and inserting ‘‘; and’’; and

24 (3) by adding at the end the following new para25 graph:
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1 ‘‘(9) awarding an endowment grant, on a com2 petitive basis, to a national organization to enable

3 such organization to support the establishment or on4 going work of area program centers that foster the de5 velopment of local affiliated chapters in high-poverty

6 areas to improve graduation rates and postsecondary

7 attendance through the provision of academic support

8 services and scholarship assistance for the pursuit of

9 postsecondary education.’’.

10 (c) SPECIAL PROJECTS.—Section 224 (as redesignated

11 by subsection (a)(2)(B)) is amended—

12 (1) by striking paragraphs (1), (2), and (3) of

13 subsection (c) and inserting the following:

14 ‘‘(1) institutional restructuring to improve

15 learning and promote productivity, efficiency, quality

16 improvement, and cost and price control;

17 ‘‘(2) articulation agreements between two-year

18 and four-year institutions;

19 ‘‘(3) evaluation and dissemination of model pro20 grams; and

21 ‘‘(4) international cooperation and student ex22 change among postsecondary educational institu23 tions.’’; and

24 (2) by striking subsection (d).

25 (d) AUTHORIZATION OF APPROPRIATIONS.—
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1 (1) COMBINATION OF SUBPARTS.—Part B of title

2 II (as redesignated by subsection (a)) is amended by

3 striking the subpart designations and headings.

4 (2) AUTHORIZATION.—Part B of title II (as so

5 redesignated) is amended by adding at the end the

6 following:

7 ‘‘SEC. 225. AUTHORIZATION OF APPROPRIATIONS.

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

9 this part $30,000,000 for fiscal year 1999 and such sums

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

11 years.’’.

12 SEC. 203. GRANTS TO STATES FOR WORKPLACE AND COM13 MUNITY TRANSITION TRAINING FOR INCAR14 CERATED YOUTH OFFENDERS.

15 (a) REDESIGNATION AND TRANSFER OF PROGRAMS.—

16 (1) REDESIGNATION.—Part E of title X (20

17 U.S.C. 1135g) is redesignated as part C of title II

18 and section 1091 is redesignated as section 231.

19 (2) TRANSFER.—Part C of title II (including

20 section 231), as redesignated by paragraph (1), is

21 transferred to follow part B of title II (as amended

22 by section 202 of this Act).

23 (b) REAUTHORIZATION.—Section 231(j) (as so redesig24 nated) is amended to read as follows:
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1 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There are

2 authorized to be appropriated to carry out this section

3 $5,000,000 for fiscal year 1999 and such sums as may be

4 necessary for each of the four succeeding fiscal years.’’.

5 SEC. 204. ADVANCED PLACEMENT FEE PAYMENT PROGRAM.

6 (a) REDESIGNATION AND TRANSFER OF PROGRAMS.—

7 (1) REDESIGNATION.—Part G of title XV of the

8 Higher Education Amendments of 1992 (20 U.S.C.

9 1170) is redesignated as part D of title II and section

10 1545 of such Act is redesignated as section 241.

11 (2) TRANSFER.—Part D of title II (including

12 section 241), as redesignated by paragraph (1), is

13 transferred to follow part C of title II (as amended

14 by section 203 of this Act).

15 (b) REAUTHORIZATION.—Section 241(f) (as so redesig16 nated) is amended by striking ‘‘1993’’ and inserting

17 ‘‘1999’’.

18 SEC. 205. TEACHER QUALITY ENHANCEMENT GRANTS.

19 Title II is further amended by adding at the end the

20 following new part:

21 ‘‘PART E—TEACHER QUALITY ENHANCEMENT

22 GRANTS

23 ‘‘SEC. 271. PURPOSE.

24 ‘‘The purposes of this part are—
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1 ‘‘(1) to provide competitive grants to States for

2 assistance in strengthening the quality of the teaching

3 force by improving the academic knowledge of teach4 ers in the subject areas in which they teach;

5 ‘‘(2) to hold institutions of higher education with

6 teacher preparation programs accountable for prepar7 ing teachers who are highly competent in the aca8 demic content areas in which they plan to teach, in9 cluding training in the effective uses of technologies in

10 the classroom; and

11 ‘‘(3) to recruit high quality individuals, includ12 ing individuals from other occupation, into the teach13 ing force.

14 ‘‘SEC. 272. ELIGIBILITY.

15 ‘‘(a) APPLICATIONS.—To be eligible to receive a grant

16 under this part, a Governor shall, at the time of the initial

17 grant application, submit an application to the Secretary

18 that meets the requirements of this part.

19 ‘‘(b) CONTENTS OF APPLICATION.—Such application

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

21 funds provided under this part and such other information

22 and assurances as the Secretary may require.

23 ‘‘(c) STATE AUTHORITY.—Nothing under this part

24 shall be construed to negate or supersede the legal authority,

25 under State law of any State agency, State entity, or State
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1 public official over programs that are under the jurisdiction

2 of the agency, entity, or official.

3 ‘‘SEC. 273. USE OF FUNDS.

4 ‘‘The Governor of a State that receives a grant under

5 this subpart shall—

6 ‘‘(1) use a portion of such grant to carry out one

7 or more of the following activities:

8 ‘‘(A) reforming State teacher certification

9 requirements to ensure that current and future

10 teachers possess the necessary academic content

11 knowledge in the subject areas in which they are

12 certified and assigned to teach;

13 ‘‘(B) providing prospective teachers alter14 natives to schools of education through programs

15 at colleges of arts and sciences or at nonprofit

16 organizations;

17 ‘‘(C) funding programs which establish or

18 expand alternative routes to State certification

19 for highly qualified individuals from other occu20 pations;

21 ‘‘(D) developing and implementing effective

22 mechanisms to expeditiously remove incompetent

23 or unqualified teachers; and

24 ‘‘(E) implementing reforms which hold in25 stitutions of higher education with teacher prep-
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1 aration programs accountable for preparing

2 teachers who are highly competent in the aca3 demic content areas in which they plan to teach;

4 and

5 ‘‘(2) use a portion of such grant to establish a

6 lighthouse partnership consisting of the Governor, an

7 exemplary institution of higher education which pre8 pares teachers, and a local educational agency and

9 which may also consist of other institutions of higher

10 education, public charter schools, and public and pri11 vate nonprofit elementary and secondary schools, for

12 the purpose of carrying out one or more of the follow13 ing activities:

14 ‘‘(A) creating opportunities for enhance and

15 ongoing professional development which im16 proves the academic content knowledge of teach17 ers in the subject areas in which they are cer18 tified to teach or in which they are working to19 ward certification to teach;

20 ‘‘(B) providing programs designed to imple21 ment the successful integration of technology into

22 teaching and learning;

23 ‘‘(C) implementing reforms which hold in24 stitutions of higher education with teacher prep25 aration programs accountable for preparing
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1 teachers who are highly competent in the aca2 demic content areas in which they plan to teach;

3 ‘‘(D) reforming State certification require4 ments to ensure that current and future teachers

5 possess the necessary academic content knowledge

6 in the subject areas in which they are certified

7 to teach; and

8 ‘‘(E) recruiting minorities, and others, into

9 the teaching and counseling profession, including

10 education paraprofessionals, former military

11 personnel, and mid-career professionals, by pro12 viding financial and other assistance related to

13 instruction, induction, mentoring and support

14 services.

15 ‘‘SEC. 274. COMPETITIVE AWARDS.

16 ‘‘(a) COMPETITIVE BASIS FOR AWARDS.—The Sec17 retary shall make annual grants under this part on a com18 petitive basis.

19 ‘‘(b) PEER REVIEW PANEL.—The Secretary shall pro20 vide the applications submitted by Governors under section

21 272 to a peer review panel for evaluation. With respect to

22 each application, the peer review panel shall initially rec23 ommend the application for funding or for disapproval.

24 ‘‘(c) PRIORITY.—In recommending applications to the

25 Secretary, the panel shall give priority to applications from
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1 States with proposals which promise initiatives to reform

2 State teacher certification requirements which are designed

3 to ensure that current and future teachers possess the nec4 essary academic content knowledge in the subject areas in

5 which they are certified to teach or which include innova6 tive reforms to hold institutions of higher education with

7 teacher preparation programs accountable for preparing

8 teachers who are highly competent in the academic content

9 areas in which they plan to teach.

10 ‘‘(d) RANKING OF APPLICATIONS.—With respect to

11 each application recommended for funding, the panel shall

12 assign the application a rank, relative to other rec13 ommended applications, based on the priority described in

14 subsection (c), the extent to which the application furthers

15 the purposes of this part, and the overall quality of the ap16 plication, based on the quality and scope of State-supported

17 strategies to improve quality of teacher preparation and

18 their teaching force.

19 ‘‘(e) RECOMMENDATION OF AMOUNT.—With respect to

20 each application recommended for funding, the panel shall

21 make a recommendation to the Secretary with respect to

22 the amount of the grant that should be made.

23 ‘‘(f) SECRETARIAL SELECTION.—

24 ‘‘(1) IN GENERAL.—Subject to paragraph (2), the

25 Secretary shall determine, based on the peer review
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1 panel’s recommendations, which applications shall re2 ceive funding and the amounts of such grants. In de3 termining grant amounts, the Secretary shall take

4 into account the total amount of funds available for

5 all grants under this part and the types of activities

6 proposed to be carried out.

7 ‘‘(2) EFFECT OF RANKING BY PANEL.—In mak8 ing grants under this part, the Secretary shall select

9 applications according to the ranking of the applica10 tions by the peer review panel, except in cases where

11 the Secretary determines, for good cause, that a vari12 ation from that order is appropriate.

13 ‘‘(g) MATCHING REQUIREMENT.—Each State receiving

14 funds under this part shall provide, from non-Federal

15 sources, an amount equal to 1/2 of the amount of the grant

16 in cash or in kind to carry out the activities supported by

17 the grant.

18 ‘‘(h) LIMITATION ON ADMINISTRATIVE EXPENSES.—A

19 State that receives a grant under this part may use not

20 more than 2 percent of the grant funds for administrative

21 costs.

22 ‘‘(i) REPORTING.—

23 ‘‘(1) IN GENERAL.—A Governor that receives a

24 grant under this section shall submit an accountabil25 ity report to the Secretary and the Committee on
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1 Education and the Workforce of the House of Rep2 resentatives and the Committee on Labor and Human

3 Resources of the Senate. Such reports shall include a

4 description of the degree to which the State, in using

5 these funds, has made substantial progress in meeting

6 the following goals:

7 ‘‘(A) Raising the State academic standards

8 required to enter the teaching profession.

9 ‘‘(B) Increasing the percentage of classes

10 taught in core academic subject areas by teachers

11 fully certified by the State to teach in those sub12 ject areas.

13 ‘‘(C) Decreasing shortages of qualified

14 teachers in poor urban and rural areas.

15 ‘‘(D) Increasing opportunities for enhanced

16 and ongoing professional development which im17 proves the academic content knowledge of teach18 ers in the subject areas in which they are cer19 tified to teach or in which they are working to20 ward certification to teach.

21 ‘‘(2) ACCOUNTABILITY OF STATE INSTITUTION OF

22 HIGHER EDUCATION.—Prior to receiving funds under

23 this part, a State shall demonstrate that at least 80

24 percent of graduates of each of the exemplary institu25 tions of higher education in any partnership de-
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1 scribed in section 273(a)(2) who enter the field of

2 teaching pass all applicable State qualification assess3 ments of new teachers, which must include assess4 ments of each prospective teacher’s subject matter

5 knowledge in the content area or areas in which the

6 teacher provides instruction. Prior to each subsequent

7 receipt of funds under this part, such State shall dem8 onstrate that 70 percent of the graduates of each insti9 tution of higher education in the State have met such

10 goal and continue to progress to exceed such goal.

11 Such assessment shall be at least as rigorous as those

12 in place on the date of enactment of this Act and

13 shall have qualifying scores no lower than those in

14 place on date of enactment of this Act.

15 ‘‘(3) PROVISION TO PEER REVIEW PANEL.—The

16 Secretary shall provide the reports submitted under

17 paragraph (1) to the peer review panel convened

18 under subsection (b). The panel shall use such ac19 countability report in recommending applications for

20 subsequent funding under this section.

21 ‘‘(j) TEACHERS QUALIFICATIONS PROVIDED TO PAR22 ENT UPON REQUEST.—Any local educational agency that

23 participates as an eligible applicant or partner under this

24 part shall make available, upon request and in an under25 standable and uniform format, to any parent of a student
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1 attending any school in the local educational agency, infor2 mation regarding the qualifications of the students class3 room teacher, both generally and with regard to the subject

4 matter in which the teacher provides instruction.

5 ‘‘SEC. 275. LIMITATIONS.

6 ‘‘(a) FEDERAL CONTROL PROHIBITED.—Nothing in

7 this part shall be construed to permit, allow, encourage, or

8 authorize any Federal control over any aspect of any pri9 vate, religious, or home school, whether or not a home school

10 is treated as a private school or home school under State

11 law. This section shall not be construed to bar private, reli12 gious, or home schools from participation in programs or

13 services under this part.

14 ‘‘(b) NO CHANGE IN STATE CONTROL ENCOURAGED OR

15 REQUIRED.—Nothing in this part shall be construed to en16 courage or require any change in a State’s treatment of any

17 private, religious, or home school, whether or not a home

18 school is treated as a private school or home school under

19 State law.

20 ‘‘(c) NATIONAL SYSTEM OF TEACHER CERTIFICATION

21 PROHIBITED.—Nothing in this part shall be construed to

22 permit, allow, encourage, or authorize any national system

23 of teacher certification.
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1 ‘‘SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘(a) AUTHORIZATION.—There are authorized to be ap3 propriated to carry out this part, $18,500,000 for fiscal

4 years 1999 and such sums as may be necessary for each

5 of the 4 succeeding fiscal years.

6 ‘‘(b) TRANSITION.—Notwithstanding any other provi7 sion of law, the Secretary may use funds appropriated

8 under subsection (a) to complete awards under the original

9 grant period for projects that were funded under subpart

10 2 of part E of title V of this Act, as in effect prior to enact11 ment of the Higher Education Amendments of 1998.’’.

12 SEC. 206. ADDITIONAL REPEAL.

13 Title VIII (20 U.S.C. 1133 et seq.), relating to coopera14 tive education, is repealed.

15 TITLE III—INSTITUTIONAL AID

16 SEC. 301. STRENGTHENING INSTITUTIONS.

17 (a) PROGRAM PURPOSE; USE OF FUNDS.—Section 311

18 (20 U.S.C. 1057) is amended—

19 (1) in subsection (b)(2), by striking ‘‘or’’ at the

20 end of subparagraph (A) and inserting ‘‘and’’;

21 (2) by amending paragraph (3) of subsection (b)

22 to read as follows:

23 ‘‘(3) Special consideration shall be given to applica24 tions which propose, pursuant to the institution’s plan, the

25 use of funds for integrating computer technology into insti26 tutional facilities to create smart buildings.’’; and
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1 (3) by adding at the end the following new sub2 sections:

3 ‘‘(c) AUTHORIZED ACTIVITIES.—Grants awarded

4 under this section shall be used for one or more of the follow5 ing activities:

6 ‘‘(1) purchase, rental, or lease of scientific or lab7 oratory equipment for educational purposes, includ8 ing instructional and research purposes;

9 ‘‘(2) construction, maintenance, renovation, and

10 improvement in classrooms, libraries, laboratories,

11 and other instructional facilities;

12 ‘‘(3) support of faculty exchanges, faculty devel13 opment, and faculty fellowships to assist in attaining

14 advanced degrees in their field of instruction;

15 ‘‘(4) purchase of library books, periodicals, and

16 other educational materials, including telecommuni17 cations program material;

18 ‘‘(5) tutoring, counseling, and student service

19 programs designed to improve academic success;

20 ‘‘(6) funds management, administrative manage21 ment, and acquisition of equipment for use in

22 strengthening funds management;

23 ‘‘(7) joint use of facilities, such as laboratories

24 and libraries;
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1 ‘‘(8) establishing or improving a development of2 fice to strengthen or improve contributions from

3 alumni and the private sector;

4 ‘‘(9) establishing or improving an endowment

5 fund;

6 ‘‘(10) creating or improving facilities for Inter7 net or other distance learning academic instruction

8 capabilities, including purchase or rental of tele9 communications technology equipment or services;

10 and

11 ‘‘(11) other activities proposed in the application

12 submitted pursuant to subsection (c) that—

13 ‘‘(A) contribute to carrying out the purposes

14 of this section; and

15 ‘‘(B) are approved by the Secretary as part

16 of the review and acceptance of such application.

17 ‘‘(d) ENDOWMENT FUND LIMITATIONS.—

18 ‘‘(1) PORTION OF GRANT.—An institution may

19 not use more than 20 percent of its grant under this

20 part for any fiscal year for establishing or improving

21 an endowment fund.

22 ‘‘(2) MATCHING REQUIRED.—An institution that

23 uses any portion of its grant under this part for any

24 fiscal year for establishing or improving an endow-
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1 ment fund shall provide an equal or greater amount

2 for such purposes from non-Federal funds.

3 ‘‘(3) REGULATIONS.—The Secretary shall publish

4 rules and regulations specifically governing the use of

5 funds for establishing or improving an endowment

6 fund.’’.

7 (b) ENDOWMENT FUND DEFINITION.—Section 312 (20

8 U.S.C. 1058) is amended by adding at the end the following

9 new subsection:

10 ‘‘(g) ENDOWMENT FUND.—For the purpose of this

11 part, the term ‘endowment fund’ means a fund that—

12 ‘‘(1) is established by State law, by an institu13 tion of higher education, or by a foundation that is

14 exempt from Federal income taxation;

15 ‘‘(2) is maintained for the purpose of generating

16 income for the support of the institution; and

17 ‘‘(3) does not include real estate.’’.

18 (c) DURATION OF GRANT.—Section 313 (20 U.S.C.

19 1059) is amended—

20 (1) in subsection (a), by inserting before the pe21 riod at the end the following: ‘‘, except that no insti22 tution shall be eligible to secure a subsequent 5-year

23 grant award under this part until two calendar years

24 have elapsed since the expiration of its most recent 5-

25 year grant award’’; and
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1 (2) in subsection (b), by inserting ‘‘subsection (c)

2 and a grant under’’ before ‘‘section 354(a)(1)’’.

3 (d) APPLICATIONS.—Title III is amended by striking

4 section 314 (20 U.S.C. 1059a) and inserting the following:

5 ‘‘SEC. 314. APPLICATIONS.

6 ‘‘Each eligible institution desiring to receive assistance

7 under this part shall submit an application in accordance

8 with the requirements of section 351.’’.

9 (e) PROGRAM FOR TRIBALLY CONTROLLED COLLEGES

10 AND UNIVERSITIES.—Section 316 (20 U.S.C. 1059c) is

11 amended to read as follows:

12 ‘‘SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COL13 LEGES AND UNIVERSITIES.

14 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall

15 provide grants and related assistance to American Indian

16 Tribal Colleges and Universities to enable such institutions

17 to improve and expand their capacity to serve Indian stu18 dents.

19 ‘‘(b) DEFINITIONS.—For the purposes of this section:

20 ‘‘(1) The term ‘Indian’ has the same meaning as

21 in section 2 of the Tribally Controlled Community

22 Colleges Act of 1978.

23 ‘‘(2) The term ‘Indian tribe’ has the same mean24 ing as in section 2 of such Act.
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1 ‘‘(3) The term ‘Tribal College or University’ has

2 the meaning given the term ‘tribally controlled college

3 or university’ in section 2 of such Act, and includes

4 an institution listed in the Equity in Educational

5 Land Grant Status Act of 1994.

6 ‘‘(4) The term ‘institution of higher education’

7 means an institution of higher education as defined

8 by section 101(a)(1) of this Act, except that subpara9 graph (A)(ii) of such section shall not be applicable.

10 ‘‘(c) AUTHORIZED ACTIVITIES.—Grants awarded

11 under this section shall be used by Tribal Colleges or Uni12 versities to assist such institutions to plan, develop, under13 take, and carry out authorized activities. Such authorized

14 activities may include—

15 ‘‘(1) purchase, rental, or lease of scientific or lab16 oratory equipment for educational purposes, includ17 ing instructional and research purposes;

18 ‘‘(2) construction, maintenance, renovation, and

19 improvement in classrooms, libraries, laboratories,

20 and other instructional facilities, including purchase

21 or rental of telecommunications technology equipment

22 or services;

23 ‘‘(3) support of faculty exchanges, faculty devel24 opment, and faculty fellowships to assist in attaining

25 advanced degrees in their field of instruction;
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1 ‘‘(4) academic instruction in disciplines in

2 which American Indians are underrepresented;

3 ‘‘(5) purchase of library books, periodicals, and

4 other educational materials, including telecommuni5 cations program material;

6 ‘‘(6) tutoring, counseling, and student service

7 programs designed to improve academic success;

8 ‘‘(7) funds management, administrative manage9 ment, and acquisition of equipment for use in

10 strengthening funds management;

11 ‘‘(8) joint use of facilities, such as laboratories

12 and libraries;

13 ‘‘(9) establishing or improving a development of14 fice to strengthen or improve contributions from

15 alumni and the private sector;

16 ‘‘(10) establishing or enhancing a program of

17 teacher education designed to qualify students to teach

18 in elementary or secondary schools, with a particular

19 emphasis on teaching American Indian children and

20 youth, that shall include, as part of such program,

21 preparation for teacher certification;

22 ‘‘(11) establishing community outreach programs

23 which will encourage American Indian elementary

24 and secondary students to develop the academic skills

25 and the interest to pursue postsecondary education;
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1 ‘‘(12) establishing or improving an endowment

2 fund; and

3 ‘‘(13) other activities proposed in the application

4 submitted pursuant to this subsection that—

5 ‘‘(A) contribute to carrying out the purposes

6 of this section; and

7 ‘‘(B) are approved by the Secretary as part

8 of the review and acceptance of such application.

9 ‘‘(d) APPLICATION PROCESS.—

10 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligible

11 to receive assistance under this section, an institution

12 shall be an institution which—

13 ‘‘(A) is an eligible institution under section

14 312(b);

15 ‘‘(B) is eligible to receive assistance under

16 the Tribally Controlled Community College As17 sistance Act of 1978 (Public Law 95–471); or

18 ‘‘(C) is eligible to receive funds under the

19 Equity in Educational Land Grant Status Act

20 of 1994.

21 ‘‘(2) APPLICATION.—Any institution desiring to

22 receive assistance under this section shall submit an

23 application to the Secretary at such time, and in

24 such manner, as the Secretary may by regulation rea-
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1 sonably require. Each such application shall in2 clude—

3 ‘‘(A) a 5-year plan for improving the assist4 ance provided by the Tribal College or university

5 to Indian students, increasing the rates at which

6 Indian high school students enroll in higher edu7 cation, and increasing overall postsecondary re8 tention rates for Indian students; and

9 ‘‘(B) such enrollment data and other infor10 mation and assurances as the Secretary may re11 quire to demonstrate compliance with subpara12 graphs (A) and (B) of paragraph (1).

13 ‘‘(3) SPECIAL RULE.—For the purposes of this

14 part, no Tribal College or University which is eligible

15 for and receives funds under this section may concur16 rently receive other funds under this part or part B.’’.

17 SEC. 302. HISTORICALLY BLACK COLLEGES AND UNIVER18 SITIES.

19 (a) USES OF FUNDS.—Section 323(a) (20 U.S.C.

20 1062(a)) is amended—

21 (1) by redesignating paragraph (12) as para22 graph (13); and

23 (2) by inserting after paragraph (11) the follow24 ing new paragraph:
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1 ‘‘(12) Establishing or improving an endowment

2 fund.’’.

3 (b) LIMITATIONS.—Section 323(b) is amended by

4 striking paragraph (3) and inserting the following:

5 ‘‘(3)(A) An institution may not use more than 20 per6 cent of its grant under this part for any fiscal year for

7 establishing or improving an endowment fund.

8 ‘‘(B) An institution that uses any portion of its grant

9 under this part for any fiscal year for establishing or im10 proving an endowment fund shall provide an equal or

11 greater amount for such purposes from non-Federal funds.

12 ‘‘(C) The Secretary shall publish rules and regulations

13 specifically governing the use of funds for establishing or

14 improving an endowment fund.’’.

15 (c) PROFESSIONAL OR GRADUATE INSTITUTIONS.—

16 (1) GENERAL AUTHORIZATION.—Section 326(a)

17 (20 U.S.C. 1063b(a)) is amended—

18 (A) in paragraph (1), by inserting ‘‘in

19 mathematics or the physical or natural sciences’’

20 after ‘‘graduate education opportunities’’; and

21 (B) in paragraph (2), by striking ‘‘except

22 that’’ and all that follows and inserting the fol23 lowing: ‘‘, except that no institution shall be re24 quired to match any portion of the first

25 $500,000 of its award from the Secretary. After
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1 allocations are made to each eligible institution

2 under the funding rules provided in subsection

3 (f), the Secretary shall reallocate, on a pro rata

4 basis, any amounts which remain unallocated

5 (by reason of the failure of an institution to

6 comply with the matching requirements of this

7 paragraph) among the institutions that have

8 complied with such matching requirement.’’.

9 (2) USE OF FUNDS.—Section 326(c) (20 U.S.C.

10 1063b(c)) is amended by striking paragraphs (1)

11 through (3) and inserting the following:

12 ‘‘(1) purchase, rental or lease of scientific or lab13 oratory equipment for educational purposes, includ14 ing instructional and research purposes;

15 ‘‘(2) construction, maintenance, renovation, and

16 improvement in classroom, library, laboratory, and

17 other instructional facilities used exclusively for the

18 purposes of this section, including purchase or rental

19 of telecommunications technology equipment or serv20 ices;

21 ‘‘(3) purchase of library books, periodicals, tech22 nical and other scientific journals, microfilm, micro23 fiche, and other educational materials, including tele24 communications program materials;
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1 ‘‘(4) scholarships, fellowships, and other finan2 cial assistance for needy graduate and professional

3 students to permit their enrollment in and completion

4 of the doctoral degree in medicine, dentistry, phar5 macy, veterinary medicine, law, and the doctorate de6 gree in the physical or natural sciences, engineering,

7 mathematics, or other scientific disciplines in which

8 African Americans are underrepresented;

9 ‘‘(5) establish or improve a development office to

10 strengthen and increase contributions from alumni

11 and the private sector;

12 ‘‘(6) assist in the establishment or maintenance

13 of an institutional endowment to facilitate financial

14 independence pursuant to section 331 of this title;

15 and

16 ‘‘(7) funds and administrative management, and

17 the acquisition of equipment, including software, for

18 use in strengthening funds management and manage19 ment information systems.’’.

20 (3) ELIGIBILITY.—Section 326(e) (20 U.S.C.

21 1063b(e)) is amended—

22 (A) in paragraph (1)

23 (i) by striking ‘‘include—’’ and insert24 ing ‘‘are the following:’’;
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1 (ii) by inserting ‘‘and other qualified

2 graduate programs’’ before the semicolon at

3 the end of subparagraphs (F) through (J);

4 (iii) by striking ‘‘and’’ at the end of

5 subparagraph (O);

6 (iv) by inserting ‘‘University’’ after

7 ‘‘Jackson State’’ in subparagraph (P);

8 (v) by striking the period at the end of

9 such subparagraph and inserting a semi10 colon; and

11 (vi) by inserting after such subpara12 graph the following new subparagraphs:

13 ‘‘(Q) Norfolk State University qualified

14 graduate program; and

15 ‘‘(R) Tennessee State University qualified

16 graduate program.’’; and

17 (B) by striking paragraphs (2) and (3) and

18 inserting the following:

19 ‘‘(2) QUALIFIED GRADUATE PROGRAM.—For the

20 purposes of this section, the term ‘qualified graduate

21 program’ means a graduate or professional program

22 that provides an accredited program of instruction in

23 the physical or natural sciences, engineering, mathe24 matics, or other scientific discipline in which African

25 Americans are underrepresented and has students en-
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1 rolled in such program at the time of application for

2 a grant under this section.

3 ‘‘(3) SPECIAL RULE.—Institutions that were

4 awarded grants under this section prior to October 1,

5 1998, shall continue to receive such grants, subject to

6 the availability of appropriated funds, regardless of

7 the eligibility of the institutions described in subpara8 graphs (Q) and (R) of paragraph (1).’’; and

9 (C) in paragraph (4), by inserting before

10 the period at the end the following: ‘‘, except that

11 the president or chancellor of the institution may

12 decide which graduate or professional school or

13 qualified graduate program will receive funds

14 under the grant in any one fiscal year’’.

15 (4) FUNDING RULE.—Section 326(f) (20 U.S.C.

16 1063b(f)) is amended—

17 (A) by striking ‘‘Of the amount appro18 priated’’ and inserting ‘‘Subject to subsection

19 (g), of the amount appropriated’’;

20 (B) in paragraph (1)—

21 (i) by striking ‘‘$12,000,000’’ and in22 serting ‘‘$26,000,000’’; and

23 (ii) by striking ‘‘(A) through (E)’’ and

24 inserting ‘‘(A) through (P)’’.
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1 (C) by striking paragraph (2) and inserting

2 the following:

3 ‘‘(2) the next $1,000,000 in excess of $26,000,000

4 shall be available for the purpose of making grants to

5 institutions or programs identified in subparagraphs

6 (Q) and (R) of subsection (e)(1); and

7 ‘‘(3) if the amount appropriated exceeds

8 $27,000,000, the Secretary shall develop a formula for

9 making allotments of such excess to each of the insti10 tutions or programs identified in subparagraphs (A)

11 through (R) using the following elements:

12 ‘‘(A) the number of students enrolled in the

13 eligible institution’s professional or graduate

14 school, or qualified graduate program which re15 ceived funding under this section in the previous

16 year;

17 ‘‘(B) the average cost of education per stu18 dent for all full-time graduate or professional

19 students (or the equivalent) enrolled in the eligi20 ble professional school, graduate school or doc21 toral students in the qualified graduate program;

22 and

23 ‘‘(C) the number of students who received

24 their first professional or doctoral degree at the

25 professional or graduate school or the qualified
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1 graduate program in the preceding year for

2 which the institution received funding under this

3 section.’’.

4 (5) HOLD HARMLESS RULE.—Section 326 is fur5 ther amended by adding at the end the following new

6 subsection:

7 ‘‘(g) HOLD HARMLESS RULE.—Notwithstanding

8 paragraphs (2) and (3) of subsection (f), no institution or

9 qualified program identified in subsection (e)(1) that re10 ceived a grant for fiscal year 1998 and that is eligible to

11 receive a grant in a subsequent fiscal year shall receive a

12 grant amount in any such subsequent fiscal year that is

13 less than the grant amount received for fiscal year 1998,

14 unless the amount appropriated is not sufficient to provide

15 such grant amounts to all such institutions and programs.’’.

16 SEC. 303. MINORITY SCIENCE AND ENGINEERING IMPROVE17 MENT PROGRAM.

18 (a) AMENDMENT.—Title III (20 U.S.C. 1051) is

19 amended—

20 (1) by redesignating part D as part E; and

21 (2) by inserting after part C the following new

22 part:
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1 ‘‘PART D—MINORITY SCIENCE AND ENGINEERING

2 IMPROVEMENT PROGRAM

3 ‘‘SEC. 341. PROGRAM AUTHORIZED.

4 ‘‘The Secretary shall, in accordance with the provi5 sions of this part, carry out a program of making grants

6 to institutions of higher education that are designed to effect

7 long-range improvements in science and engineering edu8 cation, and improve support programs for minority stu9 dents enrolled in science and engineering programs at pre10 dominantly minority institutions.

11 ‘‘SEC. 342. USE OF FUNDS.

12 ‘‘Funds appropriated for the purpose of this subpart

13 may be made available for—

14 ‘‘(1) providing needed services to groups of mi15 nority institutions or providing training for scientists

16 and engineers from eligible minority institutions;

17 ‘‘(2) providing needed services to groups of insti18 tutions serving significant numbers of minority stu19 dents or providing training for scientists and engi20 neers from such institutions to improve their ability

21 to train minority students in science or engineering;

22 ‘‘(3) assisting minority institutions to improve

23 the quality of preparation of their students for grad24 uate work or careers in science, mathematics, and

25 technology;
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1 ‘‘(4) improving access of undergraduate students

2 at minority institutions to careers in the sciences,

3 mathematics, and engineering;

4 ‘‘(5) improving access of minority students, par5 ticularly minority women, to careers in the sciences,

6 mathematics, and engineering;

7 ‘‘(6) improving access for pre-college minority

8 students to careers in science, mathematics, and engi9 neering through community outreach programs con10 ducted through colleges and universities eligible for

11 support through the Minority Science and Engineer12 ing Improvement Programs;

13 ‘‘(7) disseminating activities, information, and

14 educational materials designed to address specific

15 barriers to the entry of minorities into science and

16 technology, and conducting activities and studies con17 cerning the flow of underrepresented ethnic minorities

18 into scientific careers;

19 ‘‘(8) supporting curriculum models to encourage

20 minority student participation in research careers in

21 science, mathematics, and technology; and

22 ‘‘(9) improving the capability of minority insti23 tutions for self-assessment, management, and evalua24 tion of their science, mathematics, and engineering

25 programs and dissemination of their results.
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1 ‘‘SEC. 343. ELIGIBILITY FOR GRANTS.

2 ‘‘The Secretary may make grants under this part to

3 minority institutions (as defined in section 347), organiza4 tions, and entities to enable them to carry out programs

5 and activities authorized by this part:

6 ‘‘(1)(A) institutions of higher education granting

7 baccalaureate degrees; and

8 ‘‘(B) institutions of higher education granting

9 associate degrees which—

10 ‘‘(i) have a curriculum including science or

11 engineering subjects;

12 ‘‘(ii) apply jointly with institutions de13 scribed in subparagraph (A); and

14 ‘‘(iii) have an articulation agreement with

15 institutions described in subparagraph (A) for

16 its science or engineering students; and

17 ‘‘(2) consortia of—

18 ‘‘(A) institutions which have a curriculum

19 in science or engineering;

20 ‘‘(B) graduate institutions which have a

21 curriculum in science or engineering;

22 ‘‘(C) Federal Education Research Centers;

23 ‘‘(D) research laboratories of, or under con24 tract with, the Department of Energy;

25 ‘‘(E) private organizations which have

26 science or engineering facilities; or
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1 ‘‘(F) quasi-governmental entities which have

2 a significant scientific or engineering mission;

3 to enable such institutions and consortia to carry pro4 grams and activities authorized by this part.

5 ‘‘SEC. 344. GRANT APPLICATION.

6 ‘‘(a) SUBMISSION AND CONTENTS OF APPLICATIONS.—

7 An eligible applicant (as determined under section 343)

8 that desires to receive a grant under this part shall submit

9 to the Secretary an application therefor at such time or

10 times, in such manner, and containing such information

11 as the Secretary may prescribe by regulation. Such applica12 tion shall set forth—

13 ‘‘(1) a program of activities for carrying out one

14 or more of the purposes described in section 342 in

15 such detail as will enable the Secretary to determine

16 the degree to which such program will accomplish

17 such purpose or purposes; and

18 ‘‘(2) such other policies, procedures, and assur19 ances as the Secretary may require by regulation.

20 ‘‘(b) APPROVAL BASED ON LIKELIHOOD OF

21 PROGRESS.—The Secretary shall approve an application

22 only if the Secretary determines that the application sets

23 forth a program of activities which are likely to make sub24 stantial progress toward achieving the purposes of this part.
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1 ‘‘SEC. 345. CROSS PROGRAM AND CROSS AGENCY COOPERA2 TION.

3 ‘‘The Minority Science and Engineering Improvement

4 Programs shall cooperate and consult with other programs

5 within the Department and within Federal, State, and pri6 vate agencies which carry out programs to improve the

7 quality of science, mathematics, and engineering education.

8 ‘‘SEC. 346. ADMINISTRATIVE PROVISIONS.

9 ‘‘(a) TECHNICAL STAFF.—The Secretary shall ap10 point, without regard to the provisions of title 5 of the

11 United States Code governing appointments in the competi12 tive service, not less than one technical employees with ap13 propriate scientific and educational background to admin14 ister the programs under this part who may be paid with15 out regard to the provisions of chapter 51 and subchapter

16 III of chapter 53 of such title relating to classification and

17 General Schedule pay rates.

18 ‘‘(b) PROCEDURES FOR GRANT REVIEW.—The Sec19 retary shall establish procedures for reviewing and evaluat20 ing grants and contracts made or entered into under such

21 programs. Procedures for reviewing grant applications,

22 based on the peer review system, or contracts for financial

23 assistance under this title may not be subject to any review

24 outside of officials responsible for the administration of the

25 Minority Science and Engineering Improvement Program.
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1 ‘‘SEC. 347. DEFINITIONS.

2 ‘‘For the purpose of this part—

3 ‘‘(1) The term ‘minority institution’ means an

4 institution of higher education whose enrollment of a

5 single minority or a combination of minorities (as

6 defined in paragraph (2)) exceeds 50 percent of the

7 total enrollment. The Secretary shall verify this infor8 mation from the data on enrollments in the higher

9 education general information surveys (HEGIS) fur10 nished by the institution to the Office for Civil

11 Rights, Department of Education.

12 ‘‘(2) The term ‘minority’ means American In13 dian, Alaskan Native, Black (not of Hispanic origin),

14 Hispanic (including persons of Mexican, Puerto

15 Rican, Cuban, and Central or South American ori16 gin), Pacific Islander or other ethnic group underrep17 resented in science and engineering.

18 ‘‘(3) The term ‘science’ means, for the purpose of

19 this program, the biological, engineering, mathemati20 cal, physical, behavioral, and social sciences, and his21 tory and philosophy of science; also included are

22 interdisciplinary fields which are comprised of over23 lapping areas among two or more sciences.’’.

24 SEC. 304. GENERAL PROVISIONS.

25 (a) APPLICATIONS FOR ASSISTANCE.—Section 351(a)

26 (20 U.S.C. 1066(a)) is amended to read as follows:
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1 ‘‘(a) APPLICATIONS.—

2 ‘‘(1) APPLICATIONS REQUIRED.—Any institution

3 which is eligible for assistance under this title shall

4 submit to the Secretary an application for assistance

5 at such time, in such form, and containing such in6 formation, as may be necessary to enable the Sec7 retary to evaluate its need for assistance. Subject to

8 the availability of appropriations to carry out this

9 title, the Secretary may approve an application for a

10 grant under this title only if the Secretary determines

11 that—

12 ‘‘(A) the application meets the requirements

13 of subsection (b);

14 ‘‘(B) the applicant is eligible for assistance

15 in accordance with the part of this title under

16 which the assistance is sought; and

17 ‘‘(C) the applicant’s performance goals are

18 sufficiently rigorous as to meet the purposes of

19 this title and the performance objectives and in20 dicators for this title established by the Secretary

21 pursuant to the Government Performance and

22 Results Act.

23 ‘‘(2) PRELIMINARY APPLICATIONS.—In carrying

24 out paragraph (1), the Secretary shall develop a pre25 liminary application for use by eligible institutions
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1 applying under part A prior to the submission of the

2 principal application.’’.

3 (b) CONTENTS OF APPLICATIONS.—Section 351(b) is

4 amended—

5 (1) in paragraph (5)(A), by inserting ‘‘and the

6 Government Performance and Results Act’’ after

7 ‘‘under this title’’; and

8 (2) in paragraph (6), by inserting before the

9 semicolon the following: ‘‘, except that for purposes of

10 section 316, paragraphs (2) and (3) shall not apply’’.

11 (c) WAIVERS.—Section 352(a) (20 U.S.C. 1067(a)) is

12 amended—

13 (1) by striking ‘‘or’’ at the end of paragraph (5);

14 (2) by redesignating paragraph (6) as para15 graph (7); and

16 (3) by inserting after paragraph (5) the follow17 ing new paragraph:

18 ‘‘(6) that is a tribally controlled community col19 lege as defined in the Tribally Controlled Community

20 College Act of 1978; or’’.

21 (d) APPLICATION REVIEW PROCESS.—Section 353(a)

22 (20 U.S.C. 1068(a)) is amended—

23 (1) in paragraph (2), by striking ‘‘Native Amer24 ican colleges and universities’’ and inserting ‘‘Tribal

25 Colleges and Universities’’; and
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1 (2) in paragraph (3)—

2 (A) by striking subparagraph (A); and

3 (B) by redesignating subparagraphs (B)

4 and (C) as subparagraphs (A) and (B), respec5 tively.

6 (e) CONTINUATION AWARDS.—Part D of title III is

7 amended by inserting after section 354 (20 U.S.C. 1069)

8 the following new section:

9 ‘‘SEC. 355. CONTINUATION AWARDS.

10 ‘‘The Secretary shall make continuation awards under

11 this title for the second and succeeding years of a grant

12 only after determining that the recipient is making satisfac13 tory progress in carrying out the grant.’’.

14 (f) AUTHORIZATION OF APPROPRIATIONS.—Section

15 360 (20 U.S.C. 1069f) is amended—

16 (1) by striking subsection (a) and inserting the

17 following:

18 ‘‘(a) AUTHORIZATIONS.—

19 ‘‘(1) PART A.—(A) There are authorized to be

20 appropriated to carry out part A (other that sections

21 316), $135,000,000 for fiscal year 1999, and such

22 sums as may be necessary for each of the 4 succeeding

23 fiscal years.

24 ‘‘(B) There are authorized to be appropriated to

25 carry out section 316, $10,000,000 for fiscal year
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1 1999, and such sums as may be necessary for each of

2 the 4 succeeding fiscal years.

3 ‘‘(2) PART B.—(A) There are authorized to be

4 appropriated to carry out part B (other than section

5 326), $135,000,000 for fiscal year 1999, and such

6 sums as may be necessary for each of the 4 succeeding

7 fiscal years.

8 ‘‘(B) There are authorized to be appropriated to

9 carry out section 326, $35,000,000 for fiscal year

10 1999, and such sums as may be necessary for each of

11 the 4 succeeding fiscal years.

12 ‘‘(3) PART C.—There are authorized to be appro13 priated to carry out part C, $10,000,000 for fiscal

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

15 each of the 4 succeeding fiscal years.

16 ‘‘(4) PART D.—There are authorized to be appro17 priated to carry out Part D, $10,000,000 for fiscal

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

19 each of the 4 succeeding fiscal years.’’; and

20 (2) by striking subsections (c), (d) and (e).

21 TITLE IV—STUDENT ASSISTANCE

22 PART A—GRANTS TO STUDENTS

23 SEC. 401. PELL GRANTS.

24 (a) EXTENSION OF AUTHORITY.—Section 401(a) (20

25 U.S.C. 1070a(a)) is amended—
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1 (1) in paragraph (1)—

2 (A) by striking ‘‘September 30, 1998’’ and

3 inserting ‘‘September 30, 2004’’; and

4 (B) by striking the second sentence; and

5 (2) in paragraph (2), by striking ‘‘the disburse6 ment system required by paragraph (1)’’ and insert7 ing ‘‘the disbursement of Federal Pell Grants’’.

8 (b) AMOUNT OF GRANT.—Section 401(b)(2)(A) is

9 amended to read as follows:

10 ‘‘(2)(A) The amount of the Federal Pell Grant for a

11 student eligible under this part shall be—

12 ‘‘(i) $4,500 for academic year 1999–2000,

13 ‘‘(ii) $4,700 for academic year 2000–2001,

14 ‘‘(iii) $4,900 for academic year 2001–2002,

15 ‘‘(iv) $5,100 for academic year 2002–2003, and

16 ‘‘(v) $5,300 for academic year 2003–2004,

17 less an amount equal to the amount determined to be the

18 expected family contribution with respect to that student

19 for that year.’’.

20 (c) RELATION OF MAXIMUM GRANT TO TUITION AND

21 EXPENSES.—Section 401(b)(3) is amended—

22 (1) by striking ‘‘$2,400’’ each place it appears

23 and inserting ‘‘$3,000’’; and

24 (2) by adding at the end the following new sub25 paragraph:
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1 ‘‘(C) An institution that charged only fees in lieu of

2 tuition as of January 31, 1997, may include in its deter3 mination of tuition charged, fees that would normally con4 stitute tuition.’’.

5 (d) DEPENDENT CARE AND DISABILITY RELATED EX6 PENSES.—Section 401(b)(3)(B) is amended by striking

7 ‘‘$750’’ and inserting ‘‘$1,500’’.

8 (e) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT

9 RATES.—Section 401 is amended by adding at the end the

10 following new subsection:

11 ‘‘(j) INSTITUTIONAL INELIGIBILITY BASED ON DE12 FAULT RATES.—

13 ‘‘(1) IN GENERAL.—No institution of higher edu14 cation shall be an eligible institution for purposes of

15 this section if such institution of higher education is

16 ineligible to participate in a loan program under this

17 title as a result of a final default rate determination

18 made by the Secretary under part B or D of this title,

19 or both, after the final publication of fiscal year 1996

20 cohort default rates.

21 ‘‘(2) SANCTIONS SUBJECT TO APPEAL OPPOR22 TUNITY.—No institution may be subject to the terms

23 of this subsection unless it has had the opportunity to

24 appeal its default rate determination under regula25 tions issued by the Secretary for the Federal Family
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1 Education Loan or Federal Direct Loan Program, as

2 applicable. This subsection shall not apply to an in3 stitution that was not participating in the loan pro4 grams authorized under part B or D of this title on

5 the date of enactment of the Higher Education

6 Amendments of 1998, unless the institution subse7 quently participates in the loan programs.’’.

8 (f) CONFORMING AMENDMENTS.—

9 (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is

10 amended by striking ‘‘basic educational opportunity

11 grants’’ and inserting ‘‘Federal Pell Grants’’.

12 (2) The heading of subpart 1 of part A of title

13 IV is amended to read as follows:

14 ‘‘Subpart 1—Federal Pell Grants’’.

15 (3) Section 401 is amended—

16 (A) in the heading of the section, by strik17 ing ‘‘BASIC EDUCATIONAL OPPORTUNITY’’

18 and inserting ‘‘FEDERAL PELL’’;

19 (B) in subsection (a)(3), by striking ‘‘Basic

20 grants’’ and inserting ‘‘Grants’’;

21 (C) by striking ‘‘basic grant’’ each place it

22 appears and inserting ‘‘Federal Pell Grant’’; and

23 (D) by striking ‘‘basic grants’’ each place it

24 appears and inserting ‘‘Federal Pell Grants’’.
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1 (4) Section 401(f)(3) is amended by striking

2 ‘‘Education and Labor’’ and inserting ‘‘Education

3 and the Workforce’’.

4 (5) Section 452(c) (20 U.S.C. 1087b(c)) is

5 amended by striking ‘‘basic grants’’ and inserting

6 ‘‘Federal Pell Grants’’.

7 (6) Subsections (j)(2) and (k)(3) of section 455

8 (20 U.S.C. 1087e) are each amended by striking

9 ‘‘basic grants’’ and inserting ‘‘Federal Pell Grants’’.

10 SEC. 402. FEDERAL TRIO PROGRAMS.

11 (a) PROGRAM AUTHORITY; AUTHORIZATION OF AP12 PROPRIATIONS.—

13 (1) DURATION OF GRANTS.—Section 402A(b)(2)

14 (20 U.S.C. 1070a–11(b)(2)) is amended—

15 (A) by striking subparagraph (A);

16 (B) by striking the period at the end of sub17 paragraph (B) and inserting ‘‘; and’’;

18 (C) by redesignating subparagraph (B) as

19 subparagraph (A); and

20 (D) by adding at the end the following new

21 subparagraph:

22 ‘‘(B) grants under section 402H shall be

23 awarded for a period determined by the Sec24 retary.’’.
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1 (2) MINIMUM GRANTS.—Section 402A(b)(3) is

2 amended to read as follows:

3 ‘‘(3) MINIMUM GRANTS.—Unless the institution

4 or agency requests a smaller amount, individual

5 grants under this chapter shall be no less than—

6 ‘‘(A) $170,000 for programs authorized by

7 sections 402D and 402G;

8 ‘‘(B) $180,000 for programs authorized by

9 sections 402B and 402F; and

10 ‘‘(C) $190,000 for programs authorized by

11 sections 402C and 402E.’’.

12 (3) PROCEDURES FOR AWARDING GRANTS AND

13 CONTRACTS.—Subsection (c) of section 402A is

14 amended to read as follows:

15 ‘‘(c) PROCEDURES FOR AWARDING GRANTS AND CON16 TRACTS.—

17 ‘‘(1) APPLICATION REQUIREMENTS.—An eligible

18 entity that desires to receive a grant or contract

19 under this chapter shall submit an application to the

20 Secretary in such manner and form, and containing

21 such information and assurances, as the Secretary

22 may reasonably require.

23 ‘‘(2) PRIOR EXPERIENCE.—In making grants

24 under this chapter, the Secretary shall consider each

25 applicant’s prior experience of service delivery under
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1 the particular program for which funds are sought.

2 The level of consideration given the factor of prior ex3 perience shall not vary from the level of consideration

4 given such factor during fiscal years 1994 through

5 1997, except that grants made under section 402H

6 shall not be given prior experience consideration.

7 ‘‘(3) ORDER OF AWARDS; PROGRAM FRAUD.—(A)

8 Except with respect to grants made under sections

9 402G and 402H and as provided in subparagraph

10 (B), the Secretary shall award grants and contracts

11 under this chapter in the order of the scores received

12 by the application for such grant or contract in the

13 peer review process required under section 110 and

14 adjusted for prior experience in accordance with

15 paragraph (2) of this subsection.

16 ‘‘(B) The Secretary is not required to provide as17 sistance to a program otherwise eligible for assistance

18 under this chapter, if the Secretary has determined

19 that such program has involved the fraudulent use of

20 funds under this chapter.

21 ‘‘(4) PEER REVIEW PROCESS.—(A) The Sec22 retary shall assure that, to the extent practicable,

23 members of groups underrepresented in higher edu24 cation, including African Americans, Hispanics, Na25 tive Americans, Alaska Natives, Asian Americans,
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1 Native American Pacific Islanders (including Native

2 Hawaiians), are represented as readers of applica3 tions submitted under this chapter. The Secretary

4 shall also assure that persons from urban and rural

5 backgrounds are represented as readers.

6 ‘‘(B) The Secretary shall ensure that each appli7 cation submitted under this chapter is read by at

8 least 3 readers who are not employees of the Federal

9 Government (other than as readers of applications).

10 ‘‘(5) NUMBER OF APPLICATIONS FOR GRANTS

11 AND CONTRACTS.—The Secretary shall not limit the

12 number of applications submitted by an entity under

13 any program authorized under this chapter if the ad14 ditional applications describe programs serving dif15 ferent populations or campuses.

16 ‘‘(6) COORDINATION WITH OTHER PROGRAMS

17 FOR DISADVANTAGED STUDENTS.—The Secretary

18 shall encourage coordination of programs assisted

19 under this chapter with other programs for disadvan20 taged students operated by the sponsoring institution

21 or agency, regardless of the funding source of such

22 programs. The Secretary shall not limit an entity’s

23 eligibility to receive funds under this chapter because

24 such entity sponsors a program similar to the pro25 gram to be assisted under this chapter, regardless of
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1 the funding source of such program. The Secretary

2 shall permit the Director of a program receiving

3 funds under this chapter to administer one or more

4 additional programs for disadvantaged students oper5 ated by the sponsoring institution or agency, regard6 less of the funding sources of such programs.

7 ‘‘(7) APPLICATION STATUS.—The Secretary shall

8 inform each entity operating programs under this

9 chapter regarding the status of their application for

10 continued funding at least 8 months prior to the expi11 ration of the grant or contract. The Secretary, in the

12 case of an entity that is continuing to operate a suc13 cessful program under this chapter, shall ensure that

14 the start-up date for a new grant or contract for such

15 program immediately follows the termination of pre16 ceding grant or contract so that no interruption of

17 funding occurs for such successful reapplicants. The

18 Secretary shall inform each entity requesting assist19 ance under this chapter for a new program regarding

20 the status of their application at least 8 months prior

21 to the proposed startup date of such program.’’.

22 (4) AUTHORIZATION OF APPROPRIATIONS.—Sec23 tion 402A(f) is amended—
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1 (A) by striking ‘‘$650,000,000 for fiscal

2 year 1993’’ and inserting ‘‘$800,000,000 for fis3 cal year 1999’’; and

4 (B) by striking everything after the first

5 sentence.

6 (b) TALENT SEARCH.—Section 402B(b) (20 U.S.C.

7 1070a–12(b)) is amended—

8 (1) by striking paragraph (4) and inserting the

9 following:

10 ‘‘(4) guidance on and assistance in secondary

11 school reentry, entry to general educational develop12 ment (GED) programs, other alternative education

13 programs for secondary school dropouts, or post14 secondary education;’’; and

15 (2) in paragraph (8), by striking ‘‘parents’’ and

16 inserting ‘‘families’’.

17 (c) UPWARD BOUND.—Section 402C (20 U.S.C.

18 1070a–13) is amended—

19 (1) in subsection (b)—

20 (A) in paragraph (2), by striking ‘‘personal

21 counseling’’ and inserting ‘‘counseling and work22 shops’’;

23 (B) in paragraph (6)—

24 (i) by inserting ‘‘work-study and

25 other’’ before ‘‘activities’’; and
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1 (ii) by inserting before the semicolon at

2 the end the following: ‘‘, including careers

3 requiring a postsecondary degree’’;

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

5 the end;

6 (D) in paragraph (10), by striking

7 ‘‘through (9)’’ and inserting ‘‘through (10)’’; and

8 (E) by redesignating paragraph (10) as

9 paragraph (11) and by inserting after para10 graph (9) the following new paragraph:

11 ‘‘(10) special services to enable veterans to make

12 the transition to postsecondary education; and’’; and

13 (2) in subsection (c), by inserting ‘‘, other than

14 a project a majority of the participants in which are

15 veterans,’’ after ‘‘this chapter’’.

16 (d) STUDENT SUPPORT SERVICES.—Section

17 402D(c)(6) (20 U.S.C. 1070a–14(c)(6)) is amended by in18 serting before the period at the end the following: ‘‘and min19 imize the student’s loan burden’’.

20 (e) POSTBACCALAUREATE ACHIEVEMENT PROGRAM.—

21 Section 402E (20 U.S.C. 1070a–15) is amended—

22 (1) in subsection (c)(3), by inserting ‘‘or accept23 ed in a graduate program’’ after ‘‘degree program’’;

24 and
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1 (2) in subsection (e)(1), by striking ‘‘$2,400’’

2 and inserting ‘‘$3,200’’.

3 (f) STAFF DEVELOPMENT ACTIVITIES.—Section

4 402G(b) (20 U.S.C. 1070a–17(b)) is amended by inserting

5 after paragraph (3) the following new paragraph:

6 ‘‘(4) The use of appropriate educational tech7 nology in the operation of projects assisted under this

8 chapter.’’.

9 (g) EVALUATION FOR PROJECT IMPROVEMENT.—Sec10 tion 402H(b) (20 U.S.C. 1070a–18(b)) is amended by add11 ing at the end the following new sentence: ‘‘Such evaluations

12 shall also investigate the effectiveness of alternative and in13 novative methods within Federal TRIO programs of in14 creasing access to, and retention of, students in postsecond15 ary education.’’.

16 SEC. 403. NATIONAL EARLY INTERVENTION AND PARTNER17 SHIP PROGRAM.

18 Section 404G (20 U.S.C. 1070a–27) is amended by

19 striking ‘‘1993’’ and inserting ‘‘1999’’.

20 SEC. 404. REPEALS.

21 (a) REPEALS OF SUBPART 2 PROVISIONS.—The follow22 ing provisions of subpart 2 of part A of title IV are re23 pealed:

24 (1) Chapter 3 (20 U.S.C. 1070a–31 et seq.).

25 (2) Chapter 4 (20 U.S.C. 1070a–41 et seq.).
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1 (3) Chapter 5 (20 U.S.C. 1070a–51 et seq.).

2 (4) Chapter 6 (20 U.S.C. 1070a–61 et seq.).

3 (5) Chapter 7 (20 U.S.C. 1070a–71 et seq.).

4 (6) Chapter 8 (20 U.S.C. 1070a–81 et seq.).

5 (b) SUBPART 8.—Subpart 8 of part A of title IV (20

6 U.S.C. 1070f) is repealed.

7 (c) CONFORMING AMENDMENT.—Section 400(b) (20

8 U.S.C. 1070(b)) is amended by striking ‘‘subparts 1 through

9 8’’ and inserting ‘‘subparts 1 through 6’’.

10 SEC. 405. ESTABLISHMENT OF NEW PROGRAMS.

11 Subpart 2 of part A of title IV is amended by inserting

12 after chapter 2 (20 U.S.C. 1070a–81) the following new

13 chapters:

14 ‘‘CHAPTER 3—HIGH HOPES FOR COLLEGE

15 ‘‘Subchapter A—21st Century Scholar Certificates

16 ‘‘SEC. 406A. 21ST CENTURY SCHOLAR CERTIFICATES.

17 ‘‘(a) FINDINGS.—The Congress makes the following

18 findings:

19 ‘‘(1) Among low-income students who, despite

20 high test scores, are not planning on attending college,

21 nearly 60 percent cite an inability to afford school as

22 the reason.

23 ‘‘(2) About 80 percent of our 12th graders who

24 are interested in continuing their education after high

25 school go on to college if their parents read materials
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1 about financial aid, compared to only 55 percent of

2 such students if their parents do not read this mate3 rial.

4 ‘‘(3) In 1996, the American Council on Edu5 cation found that the public overestimated the tuition

6 of public 2-year colleges by about 3 times the actual

7 average tuition, of public 4-year colleges by over twice

8 the actual average tuition, and of private 4-year uni9 versities by almost one-third more than the actual av10 erage tuition.

11 ‘‘(4) There is a need for, and a significant bene12 fit from, providing students, and through them their

13 parents, with information about the variety of Fed14 eral student financial assistance programs, such as

15 Pell grants, Federal work-study and loans, and the

16 AmeriCorps Education Awards that make college

17 more affordable than ever before.

18 ‘‘(b) AUTHORITY.—

19 ‘‘(1) The Secretary, using funds appropriated

20 under section 407H(a) of this Act—

21 ‘‘(A) shall ensure that certificates, to be

22 known as 21st Century Scholar Certificates, are

23 provided to all students participating in projects

24 under chapter 2; and
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1 ‘‘(B) may, as practicable, ensure that such

2 certificates are provided to all students in grades

3 6 through 12 who attend schools at which at

4 least 50 percent of the students enrolled are eligi5 ble for free or reduced-price lunch.

6 ‘‘(2) A 21st Century Scholar Certificate shall be

7 personalized for each student and indicate the amount

8 of Federal financial aid for college for which a stu9 dent may be eligible.

10 ‘‘Subchapter B—High Hopes Partnerships

11 ‘‘SEC. 407A. PURPOSE.

12 ‘‘It is the purpose of this chapter to encourage and pre13 pare students in low-income communities, beginning not

14 later than the 7th grade, to prepare for, enter, and success15 fully complete college by assisting college-school-community

16 partnerships to—

17 ‘‘(1) provide in-school and on-campus early col18 lege awareness activities to these students and their

19 parents;

20 ‘‘(2) ensure ongoing adult guidance and other

21 support to these students;

22 ‘‘(3) provide useful, early information to these

23 students and their parents on the need for, options re24 lated to, and financing (including the availability of

25 financial assistance) of a college education; and
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1 ‘‘(4) help ensure that these students have access

2 to rigorous core courses, such as algebra and geom3 etry, that prepare them for college.

4 ‘‘SEC. 407B. GRANTS.

5 ‘‘(a) GRANTS AUTHORIZED.—From funds appro6 priated under section 407H(a), the Secretary shall make

7 grants to college-school-community partnerships for activi8 ties under section 407D.

9 ‘‘(b) ELIGIBLE PARTNERSHIP.—For purposes of this

10 chapter, an eligible partnership shall include—

11 ‘‘(1) one or more local educational agencies act12 ing on behalf of—

13 ‘‘(A) one or more participating schools; and

14 ‘‘(B) the public secondary schools that stu15 dents from these schools would normally attend;

16 ‘‘(2) one or more degree granting institutions of

17 higher education; and

18 ‘‘(3) at least two community organizations or

19 entities, such as businesses, professional associations,

20 community-based organizations, or other public or

21 private agencies or organizations.

22 ‘‘(c) DEFINITIONS.—For the purpose of this chapter—

23 ‘‘(1) ‘participating school’ means a public school

24 in which—

25 ‘‘(A) there is a 7th grade;
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1 ‘‘(B) one or more cohorts of students receive

2 services under this chapter; and

3 ‘‘(C) at least 50 percent of the students en4 rolled are eligible for free or reduced-price lunch;

5 and

6 ‘‘(2) ‘cohort of students’ means—

7 ‘‘(A) an entire grade level of students in a

8 participating school; or

9 ‘‘(B) if the partnership determines that it

10 would promote the effectiveness of a project, an

11 entire grade level of students, beginning not later

12 than the 7th grade, who reside in public housing

13 as defined in section 3(b)(1) of the United States

14 Housing Act of 1937.

15 ‘‘(d) DURATION.—Each grant awarded under this

16 chapter shall be for a 6-year period.

17 ‘‘(e) COST SHARING.—

18 ‘‘(1) Federal funds shall provide no more than

19 80 percent of the cost of the project in the first year,

20 70 percent of the cost in the second year, 60 percent

21 of the cost in the third year, 50 percent of the cost

22 in the fourth year, 40 percent of the cost in the fifth

23 year, and 30 percent of the cost in the sixth year.

24 ‘‘(2) The non-Federal share of grants awarded

25 under this chapter may—
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1 ‘‘(A) be in cash or in kind, fairly evaluated,

2 including services, supplies, or equipment; and

3 ‘‘(B) include the non-Federal share of work4 study grants under part C of title IV of this Act

5 awarded to students who serve as tutors or men6 tors in projects under this chapter.

7 ‘‘(3) The Secretary may waive the cost sharing

8 requirement described in paragraph (1) for any eligi9 ble partnership that demonstrates to the satisfaction

10 of the Secretary an extraordinary hardship that pre11 vents compliance with that requirement.

12 ‘‘(f) EQUITABLE GEOGRAPHIC DISTRIBUTION.—To the

13 extent possible, the Secretary shall award grants under this

14 chapter in a manner that achieves an equitable geographic

15 distribution of those grants.

16 ‘‘(g) PRIORITY AWARDS UNDER CHAPTER 2.—Before

17 making grants under this chapter for fiscal year 1999, the

18 Secretary shall, as appropriate, make awards to recipients

19 eligible for continuation awards under chapter 2 of subpart

20 2 of this title as it was in effect prior to the enactment

21 of the Higher Education Amendments of 1998.

22 ‘‘SEC. 407C. GRANT APPLICATION; PREFERENCES.

23 ‘‘(a) APPLICATION REQUIRED.—An eligible partner24 ship desiring to receive a grant under this chapter shall
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1 submit an application to the Secretary, in such form and

2 containing such information, as the Secretary may require.

3 ‘‘(b) APPLICATION CONTENTS.—Each application

4 shall include—

5 ‘‘(1) the name of each partner and a description

6 of its responsibilities, including the designation of ei7 ther an institution of higher education or a local edu8 cational agency as the fiscal agent for the partner9 ship;

10 ‘‘(2) a description of the need for the project, in11 cluding a description of how the project will build on

12 existing services and activities, if any;

13 ‘‘(3) a listing of the human, financial (other

14 than funds under this chapter), and other resources

15 that each member of the partnership will contribute

16 to the partnership, and a description of the efforts

17 each member of the partnership will make in seeking

18 additional resources;

19 ‘‘(4) a description of how the project will oper20 ate, including how grant funds will be used to meet

21 the purpose of this chapter;

22 ‘‘(5) a description of how services will be coordi23 nated with, and will complement and enhance, serv24 ices received by participating schools and students

25 under other related Federal and non-Federal pro-
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1 grams, including programs under title I, part A of

2 title VII, and part 1 of title X of the Elementary and

3 Secondary Education Act of 1965, the School-to-Work

4 Opportunities Act of 1994, section 402 of this Act,

5 and the Individuals with Disabilities Education Act;

6 ‘‘(6) a description of how the partnership will

7 support and continue the services under this chapter

8 after the grant has expired;

9 ‘‘(7) an assurance from each local educational

10 agency using funds under this chapter that—

11 ‘‘(A) at least 50 percent of the students en12 rolled in each participating school are eligible

13 for free or reduced-price lunch;

14 ‘‘(B) its aggregate expenditures per student

15 for activities described in this chapter will not be

16 reduced from the level of such expenditures in the

17 year prior to the grant; and

18 ‘‘(C) someone at each participating school

19 will be designated as the primary point of con20 tact for the partnership;

21 ‘‘(8) an assurance that participating students

22 will have access to rigorous core academic courses that

23 reflect challenging State or local academic standards;

24 and
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1 ‘‘(9) an assurance that members will provide the

2 performance information required by the Secretary,

3 which would be used to base continuation of the

4 grant.

5 ‘‘(c) PREFERENCES.—In reviewing applications under

6 this chapter, the Secretary shall give preference to projects

7 that—

8 ‘‘(1) will serve participating schools in which at

9 least 75 percent of the students enrolled are eligible

10 for free or reduced-price lunch;

11 ‘‘(2) provide a commitment from non-Federal

12 sources to pay all or part of the cost of college,

13 through tuition assistance or guarantees (not already

14 available), such as ‘last-dollar grants’, for participat15 ing students; and

16 ‘‘(3) hold participating students responsible for

17 school or community service and high academic per18 formance.

19 ‘‘SEC. 407D. PROGRAM REQUIREMENTS; USES OF FUNDS.

20 ‘‘(a) PROGRAM REQUIREMENTS.—Projects under this

21 chapter shall—

22 ‘‘(1) have a program coordinator who is either

23 full-time or whose primary responsibility is the

24 project under this chapter;
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1 ‘‘(2) provide services to at least one cohort of stu2 dents, beginning not later than the 7th grade;

3 ‘‘(3) ensure that the services authorized under

4 this chapter are provided through the 12th grade to

5 students in the cohort, including students who attend

6 another participating school or a secondary school

7 identified under section 407B(b)(1)(B);

8 ‘‘(4) include activities and information that fos9 ter and improve parent involvement in promoting

10 postsecondary education for their children, including

11 the provision of useful early information on the ad12 vantages of a college education, academic admissions

13 requirements, and the need to take core courses, ad14 missions and achievement tests, application proce15 dures, college costs and options, and the availability

16 of student financial aid;

17 ‘‘(5) include academic counseling, career aware18 ness, and tutoring or mentoring from trained person19 nel, as well as other student support services that en20 able students to succeed academically and apply for,

21 enter, and complete college;

22 ‘‘(6) include training in promoting early college

23 awareness for classroom teachers, guidance counselors,

24 and staff of the schools involved in the project; faculty

25 and program personnel in participating institutions
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1 of higher education; and participating mentors and

2 tutors;

3 ‘‘(7) include activities on college campuses and

4 enrichment activities associated with postsecondary

5 education; and

6 ‘‘(8) include arrangements that ensure that all

7 participating students have access to rigorous core

8 courses that reflect challenging State or local aca9 demic standards and that prepare them for college.

10 ‘‘(b) USE OF FUNDS.—In addition to the activities de11 scribed in subsection (a), a recipient of funds under this

12 chapter may use them—

13 ‘‘(1) where necessary and appropriate to ensure

14 active participation, to pay stipends to participating

15 students and their mentors;

16 ‘‘(2) where necessary and appropriate to ensure

17 active participation, to pay transportation costs for

18 participants to attend project-sponsored activities;

19 ‘‘(3) to provide out-of-school and summer activi20 ties related to the project;

21 ‘‘(4) for project evaluation; and

22 ‘‘(5) to recognize the responsibility and achieve23 ment of participating students through ceremonies,

24 awards, and other means.
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1 ‘‘SEC. 407E. SERVICES FOR STUDENTS ATTENDING PRIVATE

2 SCHOOLS.

3 ‘‘A local educational agency that participates in an

4 eligible partnership shall provide services supported with

5 Federal funds under this chapter on an equitable basis, con6 sistent with section 14503 of Elementary and Secondary

7 Education Act of 1965, to students in private schools that—

8 ‘‘(1) have a 7th grade;

9 ‘‘(2) have students at least 50 percent of whom

10 are eligible for free or reduced-price lunch; and

11 ‘‘(3) are located in the normal attendance area

12 of a participating school.

13 ‘‘SEC. 407F. EVALUATION.

14 ‘‘In order to improve the operation of the program as15 sisted under this chapter, the Secretary shall, with funds

16 appropriated under section 407H(a), make grants to, and

17 enter into contracts and cooperative agreements with, insti18 tutions of higher education and other public and private

19 institutions and organizations to evaluate the effectiveness

20 of the program assisted under this chapter and, as appro21 priate, disseminate such results.

22 ‘‘SEC. 407G. PEER REVIEW.

23 ‘‘The Secretary shall use a peer review process to re24 view applications under this chapter and make rec25 ommendations for funding to the Secretary.
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1 ‘‘SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘(a) AUTHORIZATION OF APPROPRIATION.—There are

3 authorized to be appropriated $140,000,000 for fiscal year

4 1999 and such sums as may be necessary for each of the

5 5 succeeding fiscal years to carry out this chapter.

6 ‘‘(b) RESERVATION FOR TECHNICAL ASSISTANCE AND

7 PEER REVIEW.—From the amount appropriated under

8 subsection (a) for any fiscal year, the Secretary may reserve

9 up 0.5 percent of that amount to obtain additional qualified

10 readers and additional staff to review applications, to in11 crease the level of oversight monitoring, to support impact

12 studies, program assessments and reviews, and to provide

13 technical assistance to potential applicants and current

14 grantees.

15 ‘‘CHAPTER 4—FRANK TEJEDA SCHOLARSHIP

16 PROGRAM

17 ‘‘SEC. 408A. STATEMENT OF PURPOSE.

18 ‘‘It is the purpose of this chapter to establish a Frank

19 Tejeda Scholarship Program to recruit and train teachers

20 who are proficient in both Spanish and English and who

21 show promise of academic achievement.

22 ‘‘SEC. 408B. SCHOLARSHIPS AUTHORIZED.

23 ‘‘(a) PROGRAM AUTHORITY.—The Secretary is author24 ized, in accordance with the provisions of this chapter, to

25 award scholarships to individuals consistent with the pur26 poses of this chapter.
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1 ‘‘(b) TEJEDA SCHOLARS.—Individuals awarded schol2 arships under this chapter shall be known as ‘Tejeda Schol3 ars’.

4 ‘‘SEC. 408C. ALLOCATION AMONG STATES.

5 ‘‘(a) ALLOCATION FORMULA.—From the sums appro6 priated pursuant to the authority of section 408H for any

7 fiscal year, the Secretary shall allocate to each State an

8 amount equal to $5,000 multiplied by the number of schol9 arships determined by the Secretary to be available to such

10 State in accordance with subsection (b).

11 ‘‘(b) NUMBER OF SCHOLARSHIPS AVAILABLE.—The

12 number of scholarships to be made available in a State for

13 any fiscal year shall bear the same ratio to the number of

14 scholarships made available to all States as the State’s pop15 ulation ages 5 through 17 bears to the population ages 5

16 through 17 in all the States, except that not less than 10

17 scholarships shall be made available to any State.

18 ‘‘(c) USE OF CENSUS DATA.—For the purpose of this

19 section, the population ages 5 through 17 in a State and

20 in all the States shall be determined by the most recently

21 available data, satisfactory to the Secretary, from the Bu22 reau of the Census. The Bureau of the Census shall produce

23 and publish intercensal data for Puerto Rico and the other

24 territories.
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1 ‘‘SEC. 408D. ELIGIBILITY OF SCHOLARS.

2 ‘‘(a) HIGH SCHOOL GRADUATION OR EQUIVALENT AND

3 ADMISSION TO INSTITUTION REQUIRED.—Each student

4 awarded a scholarship under this chapter shall—

5 ‘‘(1) be—

6 ‘‘(A) a low-income individual, as that term

7 is defined in section 402A(g)(2) of this title; or

8 ‘‘(B) an individual who is eligible for a Pell

9 Grant under subpart 1 of this part;

10 ‘‘(2) be a citizen of the United States;

11 ‘‘(3) be a resident of the State in which he or she

12 applies;

13 ‘‘(4) be enrolled or accepted for enrollment on a

14 full- or part-time basis, at a graduate or undergradu15 ate level, in an institution of higher education that

16 has an accredited teacher preparation program;

17 ‘‘(5) have demonstrated proficiency in the

18 English and Spanish languages, as certified by the

19 applicant’s academic institution; and

20 ‘‘(6) have agreed, upon graduation from such

21 program—

22 ‘‘(A) to serve no less than one year for each

23 year of scholarship assistance, but no fewer than

24 two years of service in total, as a teacher in a

25 public elementary or secondary school in which

26 there is a demonstrated need for Spanish-speak-
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1 ing teachers and professionals, as determined by

2 the Secretary;

3 ‘‘(B) to complete such service within 6 years

4 of graduation; and

5 ‘‘(C) that if the student is unable to com6 plete such service, the student will, except as pro7 vided in subsection (c), repay the Secretary the

8 total amount, or a pro rata amount of the schol9 arship received under this chapter in proportion

10 to the amount of service completed, plus interest

11 and collection costs in the same manner as re12 payment of a student loan made under part D

13 of this title.

14 ‘‘(b) SELECTION BASED ON PROMISE OF ACADEMIC

15 ACHIEVEMENT.—Each student awarded a scholarship

16 under this chapter must demonstrate outstanding academic

17 achievement and show promise of continued academic

18 achievement, as certified by the student’s academic institu19 tion.

20 ‘‘(c) EXCEPTION TO REPAYMENT OBLIGATION.—

21 ‘‘(1) DEFERRAL DURING CERTAIN PERIODS.—A

22 recipient shall not be considered in violation of the

23 agreement entered into pursuant to subsection

24 (a)(4)(C) during any period in which the recipient—
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1 ‘‘(A) is pursuing a full-time course of study

2 related to the field of teaching at an eligible in3 stitution;

4 ‘‘(B) is serving, not in excess of 3 years, as

5 a member of the armed services of the United

6 States;

7 ‘‘(C) is temporarily totally disabled for a

8 period of time not to exceed 3 years as estab9 lished by sworn affidavit of a qualified physi10 cian;

11 ‘‘(D) is unable to secure employment for a

12 period not to exceed 12 months by reason of hav13 ing to care for a spouse, child, parent, or imme14 diate family member who is disabled;

15 ‘‘(E) is seeking and unable to find full-time

16 employment for a single period not to exceed 12

17 months;

18 ‘‘(F) is seeking and unable to find full-time

19 employment as a teacher in a public or private

20 nonprofit preschool, elementary or secondary

21 school, or education program for a single period

22 not to exceed 27 months; or

23 ‘‘(G) satisfies the provisions of additional

24 repayment exceptions that may be prescribed by
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1 the Secretary in regulations issued pursuant to

2 this subpart.

3 ‘‘(2) FORGIVENESS IF PERMANENTLY TOTALLY

4 DISABLED.—A recipient shall be excused from repay5 ment of any scholarship assistance received under this

6 chapter if the recipient becomes permanently totally

7 disabled as established by sworn affidavit of a quali8 fied physician.

9 ‘‘SEC. 408E. SELECTION OF SCHOLARS.

10 ‘‘(a) ESTABLISHMENT OF CRITERIA.—The Secretary

11 shall establish criteria for the selection of scholars under this

12 chapter that meet the requirements of section 408D.

13 ‘‘(b) TIMING OF SELECTION.—The selection process

14 shall be completed, and the awards made, no later than May

15 1 of the academic year preceding the academic year for

16 which the award will be used.

17 ‘‘SEC. 408F. STIPENDS AND SCHOLARSHIP CONDITIONS.

18 ‘‘(a) AMOUNT OF AWARD.—Each student awarded a

19 scholarship under this chapter shall receive a stipend of

20 $5,000 for the academic year of study for which the scholar21 ship is awarded, except that in no case shall the total

22 amount of financial aid awarded to such student exceed

23 such student’s total cost-of-attendance.

24 ‘‘(b) USE OF AWARD.—The State educational agency

25 shall establish procedures to assure that a scholar awarded
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1 a scholarship under this chapter pursues a course of study

2 at an institution of higher education.

3 ‘‘SEC. 408G. CONSTRUCTION OF NEEDS PROVISIONS.

4 ‘‘Notwithstanding section 471, nothing in this chapter,

5 or any other Act, shall be construed to permit the receipt

6 of a scholarship under this chapter to be counted for any

7 needs test in connection with the awarding of any grant

8 or the making of any loan under this Act or any other pro9 vision of Federal law relating to educational assistance.

10 ‘‘SEC. 408H. AUTHORIZATION OF APPROPRIATIONS.

11 ‘‘There are authorized to be appropriated for this chap12 ter $5,000,000 for fiscal year 1998 and such sums as may

13 be necessary for each of the 4 succeeding fiscal years.

14 ‘‘CHAPTER 5—CAMPUS-BASED CHILD CARE

15 ‘‘SEC. 410A. CAMPUS-BASED CHILD CARE.

16 ‘‘(a) PROGRAM AUTHORIZED.—

17 ‘‘(1) AUTHORITY.—The Secretary may award

18 grants to institutions of higher education to assist the

19 institutions in providing campus-based child care

20 services to low-income students.

21 ‘‘(2) AMOUNT OF GRANTS.—

22 ‘‘(A) IN GENERAL.—The amount of a grant

23 awarded to an institution of higher education

24 under this section for a fiscal year shall not ex25 ceed 1 percent of the total amount of all Federal
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1 Pell Grant funds awarded to students enrolled at

2 the institution of higher education for the preced3 ing fiscal year.

4 ‘‘(B) MINIMUM.—A grant under this section

5 shall be awarded in an amount that is not less

6 than $10,000.

7 ‘‘(3) DURATION AND PAYMENTS.—

8 ‘‘(A) DURATION.—The Secretary shall

9 award a grant under this section for a period of

10 3 years.

11 ‘‘(B) PAYMENTS.—Subject to paragraph (2),

12 the Secretary shall make annual grant payments

13 under this section.

14 ‘‘(4) ELIGIBLE INSTITUTIONS.—An institution of

15 higher education shall be eligible to receive a grant

16 under this section for a fiscal year if the total amount

17 of all Federal Pell Grant funds awarded to students

18 enrolled at the institution of higher education for the

19 preceding fiscal year equals or exceeds $350,000.

20 ‘‘(5) USE OF FUNDS.—Grant funds under this

21 section shall be used by an institution of higher edu22 cation to support or establish a campus-based child

23 care program serving the needs of low-income students

24 enrolled at the institution of higher education.
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1 ‘‘(6) DEFINITION OF LOW-INCOME STUDENT.—

2 For the purpose of this section, the term ‘low-income

3 student’ means a student who is eligible to receive a

4 Federal Pell Grant for the fiscal year for which the

5 determination is made.

6 ‘‘(b) APPLICATIONS.—An institution of higher edu7 cation desiring a grant under this section shall submit an

8 application to the Secretary at such time, in such manner,

9 and accompanied by such information as the Secretary

10 may require. Each application shall—

11 ‘‘(1) demonstrate that the institution is an eligi12 ble institution described in subsection (a)(4);

13 ‘‘(2) specify the amount of funds requested;

14 ‘‘(3) demonstrate the need of low-income students

15 at the institution for campus-based child care services

16 by including in the application student demographics

17 and other relevant data;

18 ‘‘(4) identify the resources the institution will

19 draw upon to support the child care program and the

20 participation of low-income students in the program,

21 such as accessing social services funding, using stu22 dent activity fees to help pay the costs of child care,

23 using resources obtained by meeting the needs of par24 ents who are not low-income students, accessing foun25 dation, corporate, or other institutional support, and
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1 demonstrating that the use of the resources will not

2 result in increases in student tuition;

3 ‘‘(5) contain an assurance that the institution

4 will meet the child care needs of low-income students

5 through the provision of services, or through a con6 tract for the provision of services;

7 ‘‘(6) provide a timeline, covering the period from

8 receipt of the grant through the provision of the child

9 care services, delineating the specific steps the institu10 tion will take to achieve the goal of providing low-in11 come students with child care services;

12 ‘‘(7) specify any measures the institution will

13 take to assist low-income students with child care

14 during the period before the institution provides child

15 care services;

16 ‘‘(8) include a plan for identifying resources

17 needed for the child care services, including space in

18 which to provide child care services, and technical as19 sistance if necessary;

20 ‘‘(9) contain an assurance that any child care

21 facility assisted under this section will meet the ap22 plicable State or local government licensing, certifi23 cation, approval, or registration requirements; and

24 ‘‘(10) contain a plan for any child care facility

25 assisted under this section to become accredited with-
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1 in 3 years of the date the institution first receives as2 sistance under this section.

3 ‘‘(c) REPORTING REQUIREMENTS; CONTINUING ELIGI4 BILITY.—

5 ‘‘(1) REPORTING REQUIREMENTS.—

6 ‘‘(A) REPORTS.—Each institution of higher

7 education receiving a grant under this section

8 shall report to the Secretary 18 months and 36

9 months after receiving the first grant payment

10 under this section.

11 ‘‘(B) CONTENTS.—The report shall in12 clude—

13 ‘‘(i) data on the population served

14 under this section;

15 ‘‘(ii) information on campus and com16 munity resources and funding used to help

17 low-income students access child care serv18 ices;

19 ‘‘(iii) information on progress made

20 toward accreditation of any child care facil21 ity; and

22 ‘‘(iv) information on the impact of the

23 grant on the quality, availability, and af24 fordability of campus-based child care serv25 ices.
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1 ‘‘(2) CONTINUING ELIGIBILITY.—The Secretary

2 shall make the third annual grant payment under

3 this section to an institution of higher education only

4 if the Secretary determines, on the basis of the 18-

5 month report submitted under paragraph (1), that the

6 institution is making a good faith effort to ensure

7 that low-income students at the institution have ac8 cess to affordable, quality child care services.

9 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

10 are authorized to be appropriated to carry out this section

11 $30,000,000 for fiscal year 1999 and such sums as may be

12 necessary for each of the 4 succeeding fiscal years.’’.

13 SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR14 TUNITY GRANTS.

15 (a) EXTENSION OF AUTHORITY.—Section 413A(b)(1)

16 (20 U.S.C. 1070b(b)(1)) is amended by striking ‘‘1993’’ and

17 inserting ‘‘1999’’.

18 (b) USE OF FUNDS FOR LESS-THAN-FULL-TIME STU19 DENTS.—Subsection (d) of section 413C (20 U.S.C. 1070b–

20 2(d)) is amended by striking ‘‘and if the total financial

21 need’’ and all that follows and inserting the following: ‘‘,

22 then grant funds shall be made available to such independ23 ent and less-than-full-time students.’’.

24 (c) ALLOCATION OF FUNDS.—Section 413D (20 U.S.C.

25 1070b-3) is amended—
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1 (1) by striking subsection (b); and

2 (2) in subsection (c)(1), by striking ‘‘three-quar3 ters of the remainder’’ and inserting ‘‘the remainder’’;

4 (3) in subsection (c)(2)(A)(i), by striking ‘‘sub5 section (d)’’ and inserting ‘‘subsection (c)’’;

6 (4) by redesignating subsections (c), (d), (e), and

7 (f) as subsections (b), (c), (d), and (e), respectively;

8 and

9 (5) by inserting after subsection (e) (as so redes10 ignated) the following new subsection:

11 ‘‘(f) CARRY-OVER/CARRY-BACK AUTHORITY.—

12 ‘‘(1) CARRY-OVER AUTHORITY.—

13 ‘‘(A) CARRY-OVER UP TO 10 PERCENT.—Of

14 the sums granted to an eligible institution under

15 this subpart for any fiscal year, 10 percent may,

16 at the discretion of the institution, remain avail17 able for expenditure during the succeeding fiscal

18 year to carry out the program under this sub19 part.

20 ‘‘(B) REALLOCATION OF EXCESS.—Any of

21 the sums so granted to an institution for a fiscal

22 year which are not needed by that institution to

23 operate programs under this subpart during that

24 fiscal year, and which it does not wish to use

25 during the next fiscal year as authorized in the
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1 preceding sentence, shall remain available to the

2 Secretary for making grants under section 413B

3 to other institutions in the same State until the

4 close of the second fiscal year next succeeding the

5 fiscal year for which such funds were appro6 priated.

7 ‘‘(2) CARRY-BACK AUTHORITY.—

8 ‘‘(A) CARRY-BACK UP TO 10 PERCENT.—Up

9 to 10 percent of the sums the Secretary deter10 mines an eligible institution may receive from

11 funds which have been appropriated for a fiscal

12 year may be used by the institution for expendi13 ture during the fiscal year preceding the fiscal

14 year for which the sums were appropriated.

15 ‘‘(B) USE OF CARRIED-BACK FUNDS.—An

16 eligible institution may make grants to students

17 after the end of the academic year, but prior to

18 the beginning of the succeeding fiscal year, from

19 such succeeding fiscal year’s appropriations.’’.

20 SEC. 407. GRANTS TO STATES FOR STATE STUDENT INCEN21 TIVES.

22 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

23 415A(b) of the Higher Education Act of 1965 (20 U.S.C.

24 1070c(b)) is amended—
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1 (1) in paragraph (1), by striking ‘‘1993’’ and in2 serting ‘‘1999’’;

3 (2) by redesignating paragraph (2) as para4 graph (3); and

5 (3) by inserting after paragraph (1) the follow6 ing:

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

8 which the amount appropriated under paragraph (1)

9 exceeds $25,000,000, the excess shall be available to

10 carry out section 415E.’’.

11 (b) SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE

12 PARTNERSHIP PROGRAM.—Subpart 4 of part A of title IV

13 of the Higher Education Act of 1965 (20 U.S.C. 1070c et

14 seq.) is amended—

15 (1) by redesignating section 415E as section

16 415F; and

17 (2) by inserting after section 415D the following:

18 ‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSIST19 ANCE PARTNERSHIP PROGRAM.

20 ‘‘(a) IN GENERAL.—From amounts reserved under sec21 tion 415A(b)(2) for each fiscal year, the Secretary shall—

22 ‘‘(1) make allotments among States in the same

23 manner as the Secretary makes allotments among

24 States under section 415B; and
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1 ‘‘(2) award grants to States, from allotments

2 under paragraph (1), to enable the States to pay the

3 Federal share of the cost of the authorized activities

4 described in subsection (c).

5 ‘‘(b) AUTHORIZED ACTIVITIES.—Each State receiving

6 a grant under this section may use the grant funds for—

7 ‘‘(1) increasing the dollar amount of grants

8 awarded under section 415B to eligible students who

9 demonstrate financial need;

10 ‘‘(2) carrying out transition programs from sec11 ondary school to postsecondary education for eligible

12 students who demonstrate financial need;

13 ‘‘(3) carrying out a financial aid program for el14 igible students who demonstrate financial need and

15 wish to enter teaching or computer-related careers, or

16 other fields of study determined by the State to be

17 critical to the State’s workforce needs;

18 ‘‘(4) carrying out early intervention programs,

19 mentoring programs, and career education programs

20 for eligible students who demonstrate financial need;

21 and

22 ‘‘(5) awarding merit or academic scholarships to

23 eligible students who demonstrate financial need.

24 ‘‘(c) MAINTENANCE OF EFFORT REQUIREMENT.—Each

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

2 amount expended per student or the aggregate expenditures

3 by the State, from funds derived from non-Federal sources,

4 for the authorized activities described in subsection (b) for

5 the preceding fiscal year were not less than the amount ex6 pended per student or the aggregate expenditures by the

7 State for the activities for the second preceding fiscal year.

8 The Secretary may waive this subsection for good cause,

9 as determined by the Secretary.

10 ‘‘(d) FEDERAL SHARE.—The Federal share of the cost

11 of the authorized activities described in subsection (b) for

12 any fiscal year shall be 25 percent.’’.

13 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

14 (1) PURPOSE.—Subsection (a) of section 415A of

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

16 1070c(a)) is amended to read as follows:

17 ‘‘(a) PURPOSE OF SUBPART.—It is the purpose of this

18 subpart to make incentive grants available to States to as19 sist States in—

20 ‘‘(1) providing grants to—

21 ‘‘(A) eligible students attending institutions

22 of higher education or participating in programs

23 of study abroad that are approved for credit by

24 institutions of higher education at which such

25 students are enrolled; and
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1 ‘‘(B) eligible students for campus-based

2 community service work-study; and

3 ‘‘(2) carrying out the activities described in sec4 tion 415F.’’.

5 (2) ALLOTMENT.—Section 415B(a)(1) of the

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

7 1(a)(1)) is amended by inserting ‘‘and not reserved

8 under section 415A(b)(2)’’ after ‘‘415A(b)(1)’’.

9 SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMI10 LIES ARE ENGAGED IN MIGRANT AND SEA11 SONAL FARMWORK.

12 (a) COORDINATION.—Section 418A(d) (20 U.S.C.

13 1070d–2(d)) is amended by inserting after ‘‘contains assur14 ances’’ the following: ‘‘that the grant recipient will coordi15 nate its project, to the extent feasible, with other local, State,

16 and Federal programs to maximize the resources available

17 for migrant students, and’’.

18 (b) EXTENSION OF AUTHORITY.—Section 418A(g) is

19 amended by striking ‘‘1993’’ each place it appears and in20 serting ‘‘1999’’.

21 (c) DATA COLLECTION.—Section 418A is amended by

22 adding at the end the following new subsection:

23 ‘‘(h) DATA COLLECTION.—The National Center for

24 Education Statistics shall collect postsecondary education

25 data on migrant students.’’.
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1 (d) TECHNICAL AMENDMENTS.—Section 418A(e) is

2 amended by striking ‘‘authorized by subpart 4 of this part

3 in accordance with section 417A(b)(2)’’ and inserting ‘‘in

4 accordance with section 402A(c)(1)’’.

5 SEC. 409. BYRD SCHOLARSHIPS.

6 (a) ELIGIBILITY.—Section 419G (20 U.S.C. 1070d–

7 37) is amended by adding at the end the following new sub8 section:

9 ‘‘(e) TERMINATION OF ELIGIBILITY.—The eligibility of

10 students from the Federated States of Micronesia, the Re11 public of the Marshall Islands, and Palau shall expire on

12 September 30, 2001.’’.

13 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

14 419K (20 U.S.C. 1070d–41) is amended by striking

15 ‘‘$10,000,000 for fiscal year 1993’’ and inserting

16 ‘‘$40,000,000 for fiscal year 1999’’.

17 PART B—FEDERAL FAMILY EDUCATION LOAN

18 PROGRAM

19 SEC. 411. LIMITATION REPEALED.

20 Section 421 (20 U.S.C. 1071) is amended by striking

21 subsection (d).

22 SEC. 412. ADVANCES TO RESERVE FUNDS.

23 Section 422 (20 U.S.C. 1072) is amended—

24 (1) in subsection (a)(2), by striking

25 ‘‘428(c)(10)(E)’’ and inserting ‘‘428(c)(9)(E)’’;
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1 (2) in subsection (c)(6)(B)(i), by striking ‘‘han2 dle written’’ and inserting ‘‘handle written, elec3 tronic,’’;

4 (3) in subsection (c)(7)

5 (A) by striking ‘‘to a guaranty agency—’’

6 and everything that follows through ‘‘(B) if the

7 Secretary’’ and inserting ‘‘to a guaranty agency,

8 if the Secretary’’;

9 (B) by striking ‘‘428(c)(10)(F)(v)’’ and in10 serting ‘‘428(c)(9)(F)(v)’’;

11 (C) by inserting ‘‘and’’ after ‘‘cash needs,’’;

12 and

13 (D) by striking ‘‘or ensure’’ and everything

14 that follows and inserting a period; and

15 (4) in the first and second sentences of subsection

16 (g)(1), by striking ‘‘or the program authorized by

17 part D of this title’’ each place it appears.

18 SEC. 413. GUARANTY AGENCY REFORMS.

19 (a) FEDERAL STUDENT LOAN RESERVE FUND.—Part

20 B of title IV is amended by inserting after section 422 (20

21 U.S.C. 1072) the following new section:

22 ‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

23 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

24 not later than 60 days after the date of enactment of this

25 section, deposit all funds, securities, and other liquid assets
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1 contained in the reserve fund established pursuant to sec2 tion 422 of this part into a Federal Student Loan Reserve

3 Fund (in this section and section 422B referred to as the

4 ‘Federal Fund’) which shall be an account of a type selected

5 by the agency, with the approval of the Secretary.

6 ‘‘(b) INVESTMENT OF FUNDS.—Funds maintained in

7 the Federal Fund shall be invested in obligations issued or

8 guaranteed by the United States or a State, or in other

9 similarly low-risk securities selected by the guaranty agen10 cy.

11 ‘‘(c) ADDITIONAL DEPOSITS.—After the establishment

12 of the Federal Fund, a guaranty agency shall deposit into

13 the Federal Fund—

14 ‘‘(1) all amounts received from the Secretary as

15 payment of reinsurance on loans pursuant to section

16 428(c)(1);

17 ‘‘(2) from amounts collected on behalf of the obli18 gation of a defaulted borrower, a percentage amount

19 equal to the complement of the reinsurance percentage

20 in effect when payment under the guaranty agreement

21 was made with respect to the defaulted loan pursuant

22 to sections 428(c)(6)(A) and 428F(a)(1)(B); and

23 ‘‘(3) insurance premiums collected from borrow24 ers pursuant to sections 428(b)(1)(H) and 428H(h).
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1 ‘‘(d) USES OF FUNDS.—Subject to subsection (f), the

2 Federal Fund may only be used by a guaranty agency—

3 ‘‘(1) to pay lender claims pursuant to section

4 428(b)(1)(G), section 428(j), section 437, and section

5 439(q); and

6 ‘‘(2) to pay into the Agency Operating Fund es7 tablished pursuant to section 422B a default preven8 tion fee in accordance with section 428(l).

9 ‘‘(e) OWNERSHIP OF FEDERAL FUND.—

10 ‘‘(1) IN GENERAL.—The Federal Fund of the

11 guaranty agency, and any assets purchased or devel12 oped with funds from the Federal Fund or any other

13 funds considered reserve funds on the date of enact14 ment of this section, regardless of who holds or con15 trols the reserves or assets, shall be considered to be

16 the property of the United States to be used in the op17 eration of the program authorized by this part, as

18 provided in subsection (d) of this section.

19 ‘‘(2) NONLIQUID RESERVE FUND AND OTHER AS20 SETS.—Notwithstanding any other provision of law,

21 nonliquid reserve fund assets, such as buildings and

22 equipment purchased or developed by the guaranty

23 agency with funds from the Federal Fund, or any

24 other funds considered reserve funds on the date of en25 actment of this section shall—
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1 ‘‘(A) remain the property of the United

2 States;

3 ‘‘(B) be used only for such purposes as the

4 Secretary determines are appropriate; and

5 ‘‘(C) be subject to such restrictions on the

6 disposition of such assets (which may include a

7 requirement that any sale of such assets be at not

8 less than fair market value) as the Secretary de9 termines are appropriate.

10 ‘‘(f) TRANSITION.—

11 ‘‘(1) IN GENERAL.—In order to establish the

12 Agency Operating Fund authorized by section 422B,

13 each guaranty agency may transfer up to 180 days

14 cash expenses for normal operating expenses, as a

15 working capital reserve as defined in Office of Man16 agement and budget circular A–87 (Cost Accounting

17 Standards) from the Federal Fund for deposit into

18 the Agency Operating Fund for use in the perform19 ance of its duties under this part. Such transfers may

20 occur during the first three years following the estab21 lishment of the Operating Fund. However, no agency

22 may transfer in excess of 50 percent of the Federal

23 Fund balance to its Operating Fund during any fis24 cal year. In determining the transfer amount, the

25 agency shall insure that sufficient funds remain in
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1 the Federal Fund to pay lender claims within the re2 quired time periods and to meet the reserve recall re3 quirements of the Balanced Budget Act of 1997.

4 ‘‘(2) REPAYMENT PROVISIONS.—Each guaranty

5 agency shall begin repayment of sums transferred

6 pursuant to this subsection no later than the start of

7 the fourth year after the establishment of the Agency

8 Operating Fund, and shall repay all amounts trans9 ferred no later than 5 years from the date of the es10 tablishment of the Agency Operating Fund. Each

11 guaranty agency shall provide to the Secretary, on an

12 annual basis, a financial analysis demonstrating its

13 ability to repay all outstanding amounts while any

14 transferred amounts are owned to the Federal Fund.

15 ‘‘(3) SPECIAL RULE.—In applying the minimum

16 reserve level required by section 428(c)(9)(A), the Sec17 retary shall include all amounts owed to the Federal

18 Fund by the agency due to transfers allowed under

19 paragraph (1) in the calculation.’’.

20 (b) AGENCY OPERATING FUND ESTABLISHED.—Part

21 B of title IV is further amended by inserting after section

22 422A (as added by subsection (a)) the following new section:

23 ‘‘SEC. 422B. AGENCY OPERATING FUND.

24 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

25 not later than 60 days after the date of enactment of this
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1 section, establish a fund designated as the Agency Operating

2 Fund (hereinafter referred to as the ‘Operating Fund’).

3 ‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into

4 the Operating Fund shall be invested at the discretion of

5 the guaranty agency in accordance with prudent investor

6 standards.

7 ‘‘(c) ADDITIONAL DEPOSITS.—After the establishment

8 of the Operating Fund, the guaranty agency shall deposit

9 into the Operating Fund—

10 ‘‘(1) the loan processing and issuance fee paid by

11 the Secretary pursuant to section 428(f);

12 ‘‘(2) the portfolio maintenance fee paid by the

13 Secretary pursuant to section 458;

14 ‘‘(3) the default prevention fee paid in accord15 ance with section 428(l);

16 ‘‘(4) amounts retained by the guaranty agency

17 pursuant to section 428(c)(6)(B) from collection on

18 defaulted loans held by the agency, after payment of

19 the Secretary’s equitable share, excluding amounts de20 posited in the Federal Fund pursuant to section

21 422A(c)(2); and

22 ‘‘(5) interest earned on the Federal Fund during

23 the first 3 years after the date of enactment of this

24 section, but only to the extent permitted by regula25 tions prescribed by the Secretary to permit a limited
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1 number of guaranty agencies (not to exceed 10) essen2 tial resources to maintain sufficient operating funds

3 and to restructure their operations in accordance with

4 the requirements of this section and section 422A.

5 ‘‘(d) USES OF FUNDS.—

6 ‘‘(1) IN GENERAL.—Funds in the Operating

7 Fund shall be used for activities related to student fi8 nancial aid, including application processing, loan

9 disbursement, enrollment and repayment status man10 agement, default prevention activities, default collec11 tion activities, school and lender training, financial

12 awareness and outreach activities, compliance mon13 itoring, other loan program related activities in sup14 port of postsecondary education and other student fi15 nancial aid related activities as determined by the

16 guaranty agency.

17 ‘‘(2) SPECIAL RULE.—The guaranty agency

18 may, in its discretion, transfer funds from the Oper19 ating Fund to the Federal Student Loan Reserve

20 Fund for use in accordance with section 422A. Such

21 transfer shall be irrevocable, and any funds so trans22 ferred shall become the property of the United States.

23 ‘‘(3) DEFINITIONS.—For purposes of this sub24 section:
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1 ‘‘(A) The term ‘default collection activities’

2 means activities of a guaranty agency which are

3 directly related to the collection of the loan on

4 which a default claim has been paid to the par5 ticipating lender, including the due diligence ac6 tivities required pursuant to regulations of the

7 Secretary.

8 ‘‘(B) The term ‘default prevention activities’

9 means activities of a guaranty agency which are

10 directly related to providing collection assistance

11 to the lender on a delinquent loan, prior to the

12 loan’s being legally in a default status, including

13 due diligence activities required pursuant to reg14 ulations of the Secretary.

15 ‘‘(C) The term ‘enrollment and repayment

16 status management’ means activities of a guar17 anty agency which are directly related to

18 ascertaining the student’s enrollment status, in19 cluding prompt notification to the lender of such

20 status, an audit of the note or written agreement

21 to determine if the provisions of that note or

22 agreement are consistent with the records of the

23 guaranty agency as to the principal amount of

24 the loan guaranteed, and an examination of the

25 note or agreement to assure that the repayment
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1 provisions are consistent with the provisions of

2 this part.

3 ‘‘(e) OWNERSHIP OF OPERATING FUND.—The Operat4 ing Fund of the guaranty agency shall be considered to be

5 the property of the guaranty agency. The Secretary may

6 regulate the uses or expenditure of moneys in the Operating

7 Fund with respect to activities required under guaranty

8 agency agreements under subsections (b) and (c) of section

9 428 until such time as a guaranty agency has repaid to

10 the Federal Fund all reserve funds transferred under section

11 422A(f). During any period in which funds are owed to

12 the Federal Fund as a result of a transfer under 422A(f),

13 moneys in the Operating Fund may only be used for ex14 penses related to the student loan programs authorized

15 under this part. The Secretary may require such necessary

16 reports and audits as provided in section 428(b)(2).’’.

17 (c) ADDITIONAL RECALL OF RESERVES.—Section 422

18 (as amended by section 412) is further amended by adding

19 at the end the following new subsection:

20 ‘‘(i) ADDITIONAL RECALL OF RESERVES.—

21 ‘‘(1) IN GENERAL.—Notwithstanding any other

22 provision of law, the Secretary shall recall

23 $30,000,000 for each of the fiscal years 1999, 2000,

24 2001, 2002, and 2003 from the reserve funds held by

25 guaranty agencies.
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1 ‘‘(2) DEPOSIT.—Funds recalled by the Secretary

2 under this subsection shall be deposited in the Treas3 ury.

4 ‘‘(3) REQUIRED SHARE.—The Secretary shall re5 quire each guaranty agency to return annually re6 serve funds under paragraph (1) based on one-fifth of

7 the agency’s required share. For purposes of this

8 paragraph, a guaranty agency’s required share shall

9 be determined as follows:

10 ‘‘(A) The Secretary shall impose on each

11 guaranty agency an equal percentage reduction

12 in the amount of the agency’s reserve funds held

13 as of September 30, 1996.

14 ‘‘(B) The equal percentage reduction shall

15 be the percentage obtained by dividing—

16 ‘‘(i) $150,000,000 by

17 ‘‘(ii) the total amount of all such agen18 cies’ reserve funds held as of September 30,

19 1996.

20 ‘‘(4) OFFSET OF REQUIRED SHARES.—If any

21 guaranty returns to the Secretary any reserves in ex22 cess of the amount required under this subsection or

23 subsection (h), the total amount required to be re24 turned under paragraph (1) shall be reduced by the

25 amount of such additional reserve return.
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1 ‘‘(5) DEFINITION OF RESERVE FUNDS.—The term

2 ‘reserve funds’ when used with respect to a guaranty

3 agency—

4 ‘‘(A) includes any reserve funds in cash or

5 liquid assets held by the guaranty agency, or

6 held by, or under the control of, any other entity;

7 and

8 ‘‘(B) does not include building, equipment,

9 or other nonliquid assets.’’.

10 (d) CONFORMING AMENDMENTS.—

11 (1) REINSURANCE PAYMENTS.—

12 (A) AMENDMENTS.—Section 428(c)(1) (20

13 U.S.C. 1078(c)(1)) is amended—

14 (i) in subparagraph (A), by striking

15 ‘‘98 percent’’ and inserting ‘‘95 percent’’;

16 (ii) in subparagraph (B)(i), by strik17 ing ‘‘88 percent’’ and inserting ‘‘85 per18 cent’’; and

19 (iii) in subparagraph (B)(ii), by strik20 ing ‘‘78 percent’’ and inserting ‘‘75 per21 cent’’;

22 (iv) in subparagraph (E)—

23 (I) by striking ‘‘for ‘98 percent’;’’

24 and inserting ‘‘for ‘95 percent’;’’;
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1 (II) by striking ‘‘for ‘88 percent’;’’

2 and inserting ‘‘for ‘85 percent’;’’; and

3 (III) by striking ‘‘for ‘78 per4 cent’.’’ and inserting ‘‘for ‘75 per5 cent’.’’;

6 (v) in subparagraph (F)—

7 (I) by striking ‘‘for ‘98 percent’;’’

8 and inserting ‘‘for ‘95 percent’;’’;

9 (II) by striking ‘‘for ‘88 percent’;’’

10 and inserting ‘‘for ‘85 percent’;’’; and

11 (III) by striking ‘‘for ‘78 per12 cent’.’’ and inserting ‘‘for ‘75 per13 cent’.’’;

14 (vi) by striking subparagraph (D) and

15 redesignating subparagraphs (E) and (F)

16 as subparagraphs (D) and (E), respectively.

17 (B) EFFECTIVE DATE.—The amendments

18 made by subparagraph (A) of this paragraph

19 apply to loans for which the first disbursement

20 is made on or after October 1, 1998.

21 (2) EQUITABLE SHARE.—Section 428(c)(6) is

22 amended—

23 (A) in subparagraph (A)—

24 (i) by striking ‘‘(A) For the purpose’’

25 and inserting ‘‘For the purpose’’; and
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1 (ii) by striking clause (ii) and insert2 ing the following:

3 ‘‘(ii) an amount equal to 24 percent of such

4 payments for use in accordance with section

5 422B.’’;

6 (B) by striking subparagraphs (B) and (C);

7 and

8 (C) by redesignating clauses (i) and (ii) as

9 subparagraphs (A) and (B).

10 (3) GUARANTY AGENCY RESERVE LEVEL.—Sec11 tion 428(c)(9)(C) is amended—

12 (A) by striking ‘‘80 percent pursuant to sec13 tion 428(c)(1)(B)(ii)’’ and inserting ‘‘85 percent

14 pursuant to paragraph (1)(B)(i) of this sub15 section’’; and

16 (B) by striking ‘‘30 working days’’ and in17 serting ‘‘45 working days’’.

18 (4) PAYMENT OF CERTAIN COSTS.—Section

19 428(f) is amended—

20 (A) by striking paragraph (1)(A) and in21 serting the following:

22 ‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—(A)

23 The Secretary shall, in accordance with the provisions

24 of this paragraph, pay to each guaranty agency for

25 each fiscal year a loan processing and issuance fee
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1 equal to 0.65 percent of the total principal amount of

2 the loans on which insurance was issued under this

3 part during such fiscal year by such agency.’’; and

4 (B) in paragraph (1)(B), by striking the

5 first sentence and inserting the following: ‘‘The

6 payment required by subparagraph (A) shall be

7 paid on a quarterly basis.’’.

8 (5) DEFAULT AVERSION ASSISTANCE.—Section

9 428(l) is amended to read as follows:

10 ‘‘(l) DEFAULT AVERSION ASSISTANCE.—

11 ‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of a

12 proper request from a lender received not earlier than

13 the 60th day of delinquency, a guaranty agency hav14 ing an agreement with the Secretary under subsection

15 (c) of this section shall engage in default aversion ac16 tivities designed to prevent the default by a borrower

17 on a loan covered by such agreement.

18 ‘‘(2) REIMBURSEMENT.—(A) A guaranty agency

19 may, in accordance with the provisions of this para20 graph, transfer from the Federal Student Loan Re21 serve Account to the Operating Account a default

22 aversion fee. Such fee shall be paid for any loan on

23 which a claim for default has not been presented that

24 the guaranty agency successfully brings into current
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1 repayment status on or before the 210th day after the

2 loan becomes 60 days delinquent.

3 ‘‘(B) The default aversion fee shall be equal to 1

4 percent of the total unpaid principal and accrued in5 terest on the loan at the time the request is submitted

6 by the lender. Such fee shall not be paid more than

7 once on any loan for which the guaranty agency

8 averts the default unless the borrower remained cur9 rent in payments for at least 12 months prior to the

10 subsequent delinquency. A guaranty agency may

11 transfer such fees earned under this subsection no

12 more frequently than monthly.

13 ‘‘(C) For the purpose of earning the default aver14 sion fee, the term ‘current repayment status’ means

15 that the borrower is not delinquent in the payment of

16 any principal or interest on the loan.’’.

17 SEC. 414. SCOPE AND DURATION OF PROGRAM.

18 Section 424(a) (20 U.S.C. 1074(a)) is amended—

19 (1) by striking ‘‘October 1, 2002’’ and inserting

20 ‘‘October 1, 2004’’; and

21 (2) by striking ‘‘September 30, 2006’’ and insert22 ing ‘‘September 30, 2008’’.
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1 SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY IN2 SURED LOANS AND FEDERAL LOAN INSUR3 ANCE.

4 Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is

5 amended—

6 (1) in clause (i)—

7 (A) by inserting ‘‘and’’ after the semicolon

8 at the end of subclause (I); and

9 (B) by striking subclauses (II) and (III)

10 and inserting the following:

11 ‘‘(II) if such student is enrolled in a

12 program of undergraduate education which

13 is less than one academic year, the maxi14 mum annual loan amount that such student

15 may receive may not exceed the amount

16 that bears the same ratio to the amount

17 specified in subclause (I) as the length of

18 such program measured in semester, tri19 mester, quarter, or clock hours bears to one

20 academic year;’’; and

21 (2) by inserting ‘‘and’’ after the semicolon at the

22 end of clause (iii).

23 SEC. 416. APPLICABLE INTEREST RATES.

24 (a) APPLICABLE INTEREST RATES.—

25 (1) AMENDMENT.—Section 427A (20 U.S.C.

26 1077a) is amended to read as follows:
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1 ‘‘SEC. 427A. APPLICABLE INTEREST RATES.

2 ‘‘(a) INTEREST RATES FOR NEW LOANS ON OR AFTER

3 JULY 1, 1998.—

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

5 with respect to any loan made, insured, or guaranteed

6 under this part (other than a loan made pursuant to

7 section 428B or 428C) for which the first disburse8 ment is made on or after July 1, 1998, the applicable

9 rate of interest shall, during any 12-month period be10 ginning on July 1 and ending on June 30, be deter11 mined on the preceding June 1 and be equal to—

12 ‘‘(A) the bond equivalent rate of 91-day

13 Treasury bills auctioned at the final auction held

14 prior to such June 1; plus

15 ‘‘(B) 2.3 percent,

16 except that such rate shall not exceed 8.25 percent.

17 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

18 With respect to any loan under this part (other than

19 a loan made pursuant to section 428B or 428C) for

20 which the first disbursement is made on or after July

21 1, 1998, the applicable rate of interest for interest

22 which accrues—

23 ‘‘(A) prior to the beginning of the repay24 ment period of the loan; or

25 ‘‘(B) during the period in which principal

26 need not be paid (whether or not such principal
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1 is in fact paid) by reason of a provision de2 scribed in section 428(b)(1)(M) or 427(a)(2)(C),

3 shall be determined under paragraph (1) by substitut4 ing ‘1.7 percent’ for ‘2.3 percent’.

5 ‘‘(3) PLUS LOANS.—With respect to any loan

6 under section 428B for which the first disbursement

7 is made on or after July 1, 1998, the applicable rate

8 of interest shall be determined under paragraph (1)—

9 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

10 percent’; and

11 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

12 percent’.

13 ‘‘(b) LESSER RATES PERMITTED.—Nothing in this

14 section or section 428C shall be construed to prohibit a lend15 er from charging a borrower interest at a rate less than

16 the rate which is applicable under this part.

17 ‘‘(c) CONSULTATION.—The Secretary shall determine

18 the applicable rate of interest under this section after con19 sultation with the Secretary of the Treasury and shall pub20 lish such rate in the Federal Register as soon as practicable

21 after the date of determination.’’.

22 (2) CONFORMING AMENDMENT.—Section

23 428B(d)(4) (20 U.S.C. 1078–2(d)(4)) is amended by

24 striking ‘‘section 427A(c)’’ and inserting ‘‘section

25 427A(a)(3)’’.
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1 (b) SPECIAL ALLOWANCES.—

2 (1) AMENDMENT.—Section 438(b)(2)(F) (20

3 U.S.C. 1087–1(b)(2)(F)) is amended to read as fol4 lows:

5 ‘‘(F) LOANS DISBURSED AFTER JULY 1, 1998.—

6 ‘‘(i) IN GENERAL.—Subject to paragraph

7 (4) and clauses (ii), (iii), and (iv) of this sub8 paragraph, the special allowance paid pursuant

9 to this subsection on loans for which the first dis10 bursement is made on or after July 1, 1998,

11 shall be computed—

12 ‘‘(I) by determining the average of the

13 bond equivalent rates of 91-day Treasury

14 bills auctioned for such 3-month period;

15 ‘‘(II) by subtracting the applicable in16 terest rates on such loans from such average

17 bond equivalent rate;

18 ‘‘(III) by adding 2.8 percent to the re19 sultant percent; and

20 ‘‘(IV) by dividing the resultant percent

21 by 4.

22 ‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In

23 the case of any loan for which the first disburse24 ment is made on or after July 1, 1998, and for

25 which the applicable rate of interest is described
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1 in section 427A(a)(2), clause (i)(III) of this sub2 paragraph shall be applied by substituting ‘2.2

3 percent’ for ‘2.8 percent’.

4 ‘‘(iii) PLUS LOANS.—In the case of any

5 loan for which the first disbursement is made on

6 or after July 1, 1998, and for which the applica7 ble rate of interest is described in section

8 427A(a)(3), clause (i)(III) of this subparagraph

9 shall be applied by substituting ‘3.1 percent’ for

10 ‘2.8 percent’, subject to clause (iv) of this sub11 paragraph.

12 ‘‘(iv) LIMITATION ON SPECIAL ALLOWANCES

13 FOR PLUS LOANS.—In the case of loans dis14 bursed on or after July 1, 1998, for which the in15 terest rate is determined under 427A(a)(3), a

16 special allowance shall not be paid for a loan

17 made under section 428B unless the rate deter18 mined for any 12-month period under section

19 427A(a)(3) exceeds 9 percent.’’.

20 (2) CONFORMING AMENDMENT.—Section

21 438(b)(2)(C)(ii) is amended by striking ‘‘In the case’’

22 and inserting ‘‘Subject to subparagraph (F), in the

23 case’’.

24 (c) EFFECTIVE DATE.—The amendments made by this

25 section shall apply with respect to any loan made, insured,
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1 or guaranteed under part B of title IV of the Higher Edu2 cation Act of 1965 for which the first disbursement is made

3 on or after July 1, 1998.

4 SEC. 417. FEDERALLY GUARANTEED STUDENT LOANS.

5 (a) REQUIREMENTS FOR FEDERAL INTEREST SUB6 SIDIES.—Section 428(a)(2) (20 U.S.C. 1078(a)(2)) is

7 amended by striking everything preceding subparagraph

8 (D) and inserting the following:

9 ‘‘(2) ADDITIONAL REQUIREMENTS TO RECEIVE

10 SUBSIDY.—(A) Each student qualifying for a portion

11 of an interest payment under paragraph (1) shall

12 provide to the lender a statement from the eligible in13 stitution, at which the student has been accepted for

14 enrollment, or at which the student is in attendance,

15 which certifies the eligibility of the student to receive

16 a loan under this part and the amount of the loan

17 for which such student is eligible.

18 ‘‘(B) A student shall qualify for a portion of an

19 interest payment under paragraph (1) if the eligible

20 institution has provided the lender with a statement

21 that—

22 ‘‘(i) at the lender’s request, sets forth such

23 student’s estimated cost of attendance (as deter24 mined under section 472);
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1 ‘‘(ii) sets forth such student’s estimated fi2 nancial assistance; and

3 ‘‘(iii) sets forth a schedule for disbursement

4 of the proceeds of the loan in installments, con5 sistent with the requirements of section 428G.

6 ‘‘(C) For the purpose of clause (ii) of subpara7 graph (B), a student shall qualify for a portion of an

8 interest payment under paragraph (1) if the eligible

9 institution has provided the lender with a statement

10 evidencing a determination of need for a loan (as de11 termined under part F of this title) and the amount

12 of such need, subject to the provisions of subpara13 graph (D).’’.

14 (b) DURATION OF AUTHORITY.—Section 428(a)(5) is

15 amended—

16 (1) by striking ‘‘September 30, 2002’’ and insert17 ing ‘‘September 30, 2004’’; and

18 (2) by striking ‘‘September 30, 2006’’ and insert19 ing ‘‘September 30, 2008’’.

20 (c) ANNUAL LOAN LIMITS.—Section 428(b)(1)(A) is

21 amended—

22 (1) in clause (i)—

23 (A) by inserting ‘‘and’’ after the semicolon

24 at the end of subclause (I); and
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1 (B) by striking subclauses (II) and (III)

2 and inserting the following:

3 ‘‘(II) if such student is enrolled in

4 a program of undergraduate education

5 which is less than one academic year,

6 the maximum annual loan amount

7 that such student may receive may not

8 exceed the amount that bears the same

9 ratio to the amount specified in sub10 clause (I) as the length of such pro11 gram measured in semester, trimester,

12 quarter, or clock hours bears to one

13 academic year;’’; and

14 (2) by inserting ‘‘and’’ after the semicolon at the

15 end of clause (iii).

16 (d) SELECTION OF REPAYMENT PLANS.—Section

17 428(b)(1)(D) is amended by striking ‘‘and (iii)’’ and insert18 ing the following: ‘‘(iii) the student borrower may annually

19 change the selection of a repayment plan under this part,

20 and (iv)’’.

21 (e) COINSURANCE.—Section 428(b)(1)(G) is amended

22 by striking ‘‘not less than’’.

23 (f) DEFERMENTS.—Section 428(b)(1)(M) is amend24 ed—
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1 (1) in clause (i)(I), by inserting before the semi2 colon the following: ‘‘, except that no borrower, not3 withstanding the provisions of the promissory note,

4 shall be required to borrow an additional loan under

5 this title in order to be eligible to receive a deferment

6 under this clause’’; and

7 (2) in clause (ii), by inserting before the semi8 colon the following: ‘‘, except that no borrower who

9 qualifies for unemployment benefits shall be required

10 to provide any additional paperwork for a deferment

11 under this clause’’.

12 (g) LIMITATION, SUSPENSION, AND TERMINATION.—

13 Section 428(b)(1)(U) is amended—

14 (1) by striking ‘‘emergency action,,’’ each place

15 it appears and inserting ‘‘emergency action,’’; and

16 (2) by striking ‘‘a compliance audit of each lend17 er’’ and inserting the following: ‘‘in the case of any

18 lender that originates or holds more than $5,000,000

19 in loans made under this title during an annual

20 audit period, a compliance audit of such lender’’.

21 (h) ADDITIONAL INSURANCE PROGRAM REQUIRE22 MENTS.—Section 428(b)(1) is further amended—

23 (1) by striking ‘‘and’’ at the end of subpara24 graph (W);

25 (2) in subparagraph (X)—
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1 (A) by striking ‘‘428(c)(10)’’ and inserting

2 ‘‘428(c)(9)’’; and

3 (B) by striking the period at the end and

4 inserting ‘‘; and’’; and

5 (3) by adding at the end the following new sub6 paragraph:

7 ‘‘(Y) provides that the lender shall deter8 mine the eligibility of a borrower for a deferment

9 described in subparagraph (M)(i) based on re10 ceipt of (i) a request for deferment from the bor11 rower, (ii) a newly completed loan application

12 that documents the borrower’s eligibility for a

13 deferment, or (iii) student status information re14 ceived by the lender that the borrower is enrolled

15 on at least a half-time basis.’’.

16 (i) RESTRICTIONS ON INDUCEMENTS.—Section

17 428(b)(3) is amended—

18 (1) by striking subparagraph (C) and inserting

19 the following:

20 ‘‘(C) conduct unsolicited mailings of student

21 loan application forms to students enrolled in

22 secondary school or a postsecondary institution,

23 or to parents of such students, except that appli24 cations may be mailed to students who have pre-
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1 viously received loans guaranteed under this

2 part by the guaranty agency; or’’; and

3 (2) by adding at the end the following new sen4 tence:

5 ‘‘It shall not be a violation of this paragraph for a

6 guaranty agency to provide assistance to institutions

7 of higher education comparable to the kinds of assist8 ance provided to institutions of higher education by

9 the Department of Education.’’.

10 (j) GUARANTY AGENCY INFORMATION TO ELIGIBLE IN11 STITUTIONS.—Section 428(c)(2)(H)(ii) is amended to read

12 as follows:

13 ‘‘(ii) the guaranty agency shall not re14 quire the payment from the institution of

15 any fee for such information; and’’.

16 (k) FORBEARANCE.—Section 428(c)(3) is amended—

17 (1) in subparagraph (A)(i), by striking ‘‘writ18 ten’’;

19 (2) in subparagraph (B), by inserting before the

20 semicolon the following: ‘‘, including forbearance

21 granted after consideration of a borrower’s total debt

22 burden’’; and

23 (3) in the last sentence—

24 (A) by striking ‘‘and (ii)’’ and inserting

25 ‘‘(ii)’’; and
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1 (B) by inserting before the period at the end

2 the following: ‘‘, and (iii) forbearance for periods

3 not to exceed 60 days if the lender reasonably de4 termines that such suspensions are necessary to

5 research or process information relative to such

6 loan or to collect appropriate documentation re7 lating to the borrower’s request for a deferment

8 or forbearance’’.

9 (l) ASSIGNMENT.—Section 428(c)(8) is amended—

10 (1) by striking ‘‘(A)’’; and

11 (2) by striking subparagraph (B).

12 (m) AGENCY TERMINATION.—Section 428(c)(9) is

13 amended—

14 (1) in subparagraph (E)—

15 (A) by inserting ‘‘or’’ at the end of clause

16 (iv);

17 (B) by striking ‘‘; or’’ at the end of clause

18 (v) and inserting a period; and

19 (C) by striking clause (vi);

20 (2) in subparagraph (F)(vii), by striking ‘‘to

21 avoid disruption’’ and everything that follows and in22 serting ‘‘and to avoid disruption of the student loan

23 program.’’;

24 (3) in subparagraph (I), by inserting ‘‘on the

25 record’’ after ‘‘for a hearing’’; and
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1 (4) in subparagraph (K)—

2 (A) by striking ‘‘and Labor’’ and inserting

3 ‘‘and the Workforce’’; and

4 (B) by striking everything after ‘‘guaranty

5 agency system’’ and inserting a period.

6 (n) LENDER REFERRAL.—Section 428(e) is amend7 ed—

8 (1) in paragraph (1)(B)(ii), by striking ‘‘during

9 the transition’’ and everything that follows through

10 ‘‘part D of this title’’; and

11 (2) in paragraph (3), by striking ‘‘for costs of

12 transition’’.

13 (o) ACTION ON AGREEMENTS.—Section 428(g) is

14 amended by striking ‘‘and Labor’’ and inserting ‘‘and the

15 Workforce’’.

16 (p) LENDERS-OF-LAST RESORT.—Section 428(j) is

17 amended by striking paragraph (3).

18 (q) INCOME CONTINGENT REPAYMENT.—Section

19 428(m) is amended by striking ‘‘shall require at least 10

20 percent of the borrowers’’ and inserting ‘‘may require bor21 rowers’’.

22 (r) STATE SHARE OF DEFAULT COSTS.—Subsection

23 (n) of section 428 is repealed.
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1 (s) BLANKET CERTIFICATE OF GUARANTY.—Section

2 428 of the Act is amended by adding at the end the follow3 ing new subsection:

4 ‘‘(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—

5 ‘‘(1) IN GENERAL.—Any guaranty agency that

6 has or enters into any insurance program agreement

7 with the Secretary under this part may—

8 ‘‘(A) offer eligible lenders participating in

9 the agency’s guaranty program blanket certifi10 cates of loan guaranty that permit the lender to

11 make loans without receiving prior approval

12 from the guaranty agency of individual loans for

13 eligible borrowers enrolled in eligible programs

14 at eligible institutions; and

15 ‘‘(B) provide eligible lenders with the abil16 ity to transmit electronically data to the agency

17 concerning loans the lender has elected to make

18 under the agency’s insurance program via stand19 ard reporting formats, such reporting to occur at

20 reasonable, mutually acceptable intervals.

21 ‘‘(2) LIMITATIONS ON BLANKET CERTIFICATE OF

22 GUARANTY.—A guaranty agency and eligible lender

23 may establish by mutual agreement limitations or re24 strictions on the number or volume of loans issued by

25 a lender under the blanket certificate of guaranty.’’.
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1 SEC. 418. VOLUNTARY AGREEMENTS WITH GUARANTY

2 AGENCIES.

3 Part B of title IV is amended by inserting after section

4 428 (20 U.S.C. 1078) the following new section:

5 ‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH

6 GUARANTY AGENCIES.

7 ‘‘(a) VOLUNTARY AGREEMENTS.—

8 ‘‘(1) AUTHORITY.—Notwithstanding any other

9 provision of law, the Secretary may enter into a vol10 untary, flexible agreement with not more than 6 guar11 anty agencies under this section, in lieu of agreements

12 with a guaranty agency under subsections (b) and (c)

13 of section 428, under which the Secretary may waive

14 or modify any requirement under this title applicable

15 to the responsibilities of the Secretary and a guaranty

16 agency.

17 ‘‘(2) ELIGIBILITY.—Any guaranty agency that

18 had one or more agreements with the Secretary under

19 subsections (b) and (c) of section 428 as of the day

20 before the date of enactment of this section may enter

21 into an agreement with the Secretary under this sub22 section.

23 ‘‘(b) TERMS OF AGREEMENT.—An agreement between

24 the Secretary and a guaranty agency under this section—

25 ‘‘(1) shall be developed by the Secretary, in con26 sultation with the guaranty agency;
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1 ‘‘(2) shall be for a period not to exceed five years,

2 and may be renewed upon the agreement of the par3 ties;

4 ‘‘(3) may include provisions—

5 ‘‘(A) specifying the responsibilities of the

6 guaranty agency under the agreement, such as—

7 ‘‘(i) administering the issuance of in8 surance on loans made under this part on

9 behalf of the Secretary;

10 ‘‘(ii) monitoring insurance commit11 ments made under this part;

12 ‘‘(iii) default prevention activities;

13 ‘‘(iv) review of default claims made by

14 lenders;

15 ‘‘(v) payment of default claims;

16 ‘‘(vi) collection of defaulted loans;

17 ‘‘(vii) adoption of internal systems of

18 accounting and auditing that are acceptable

19 to the Secretary, and reporting the result

20 thereof to the Secretary on a timely, accu21 rate, and auditable basis;

22 ‘‘(viii) timely and accurate collection

23 and reporting of such other data as the Sec24 retary may require to carry out the pur25 poses of the programs under this title;
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1 ‘‘(ix) monitoring of institutions and

2 lenders participating in the program under

3 this part; and

4 ‘‘(x) the performance of other program

5 functions by the guaranty agency.

6 ‘‘(B) regarding the fees the Secretary shall

7 pay, in lieu of revenues that the guaranty agen8 cy may otherwise receive under this part, to the

9 guaranty agency under the agreement, and other

10 funds that the guaranty agency may receive or

11 retain under the agreement, except that in no

12 case may the cost to the Secretary of the agree13 ment, as reasonably projected by the Secretary,

14 exceed the cost to the Secretary, as similarly pro15 jected, in the absence of the agreement;

16 ‘‘(C) regarding the use of net revenues, as

17 described in the agreement under this section, for

18 such other activities in support of postsecondary

19 education as may be agreed to by the Secretary

20 and the guaranty agency;

21 ‘‘(D) regarding the standards by which the

22 guaranty agency’s performance of its responsibil23 ities under the agreement will be assessed, and

24 the consequences for a guaranty agency’s failure
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1 to achieve a specified level of performance on 1

2 or more performance standards;

3 ‘‘(E) regarding the circumstances in which

4 a guaranty agency’s agreement under this sec5 tion may be ended in advance of its expiration

6 date;

7 ‘‘(F) regarding such other businesses, pre8 viously purchased or developed with reserve

9 funds, that relate to the program under this part

10 and in which the Secretary permits the guaranty

11 agency to engage; and

12 ‘‘(G) such other provisions as the Secretary

13 may determine to be necessary to protect the

14 United States from the risk of unreasonable loss

15 and to promote the purposes of this part; and

16 ‘‘(4) shall provide for uniform lender participa17 tion with the guaranty agency under the terms of the

18 agreement.

19 ‘‘(c) TERMINATION.—At the expiration or early termi20 nation of an agreement under this section, the Secretary

21 shall reinstate the guaranty agency’s prior agreements

22 under subsections (b) and (c) of section 428, subject only

23 to such additional requirements as the Secretary determines

24 to be necessary in order to ensure the efficient transfer of

25 responsibilities between the agreement under this section
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1 and the agreements under subsections (b) and (c) of section

2 428, including the guaranty agency’s compliance with re3 serve requirements under sections 422 and 428.’’.

4 SEC. 419. FEDERAL CONSOLIDATION LOANS.

5 (a) AGREEMENTS WITH LENDERS.—Section 428C(a)

6 (20 U.S.C. 1078–3(a)) is amended—

7 (1) by striking subclause (II) of paragraph

8 (3)(B)(i) and inserting the following:

9 ‘‘(II) that loans received during the 180-day

10 period following the making of the consolidation

11 loan may be added to the consolidation loan.’’;

12 and

13 (2) by striking subparagraph (C) of paragraph

14 (4) and inserting the following:

15 ‘‘(C) made under part D of this title;’’.

16 (b) CONTENTS OF AGREEMENTS.—Section 428C(b) is

17 amended—

18 (1) in paragraph (1)(A), by striking ‘‘under this

19 section and (i)’’ and everything that follows and in20 serting ‘‘under this section;’’;

21 (2) in paragraph (4)(C)(ii)—

22 (A) by redesignating subclause (III) as sub23 clause (IV);

24 (B) by inserting after subclause (II) the fol25 lowing new clause:
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1 ‘‘(III) by the Secretary, in the case of

2 a consolidation loan for which the applica3 tion is received by an eligible lender on or

4 after October 1, 1998, except that the Sec5 retary shall pay such interest only on that

6 portion of the loan that repays Federal

7 Stafford Loans for which the student bor8 rower received an interest subsidy under

9 section 428 or Federal Direct Stafford

10 Loans for which the borrower received an

11 interest subsidy under section 455; or’’; and

12 (C) in subclause (IV) (as redesignated), by

13 striking ‘‘subclause (I) or (II)’’ and inserting

14 ‘‘subclause (I), (II), or (III)’’; and

15 (3) in paragraph (6)(A), by inserting before the

16 semicolon at the end the following: ‘‘except that (i) a

17 lender is not required to consolidate loans described

18 in subparagraph (D) or (E) of subsection (a)(4); and

19 (ii) a lender is not prohibited from establishing a

20 minimum loan balance for which it will process a

21 consolidation loan application’’.

22 (c) EXTENSION OF AUTHORITY.—Section 428C(e) is

23 amended by striking ‘‘September 30, 2002’’ and inserting

24 ‘‘September 30, 2004’’.
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1 SEC. 420. DISBURSEMENT.

2 (a) REQUIREMENTS.—Section 428G(a)(1) (20 U.S.C.

3 1078–7(a)(1)) is amended by inserting ‘‘greater than one

4 semester, one trimester, one quarter, or four months’’ after

5 ‘‘period of enrollment’’.

6 (b) DISBURSEMENT.—Section 428G(b)(1) is amended

7 by adding at the end the following new sentence: ‘‘An insti8 tution whose cohort default rate (as determined under sec9 tion 435(a)) for each of the three most recent fiscal years

10 for which data are available is less than 10 percent shall

11 be exempt from the requirements of this paragraph.’’.

12 (c) WITHHOLDING OF SECOND DISBURSEMENT.—Sec13 tion 428G(d)(2) is amended by inserting ‘‘by more than

14 $300’’ after ‘‘under this title’’.

15 SEC. 421. UNSUBSIDIZED STAFFORD LOANS.

16 (a) ELIGIBLE BORROWERS.—Section 428H(b) (20

17 U.S.C. 1078–8(b)) is amended by striking ‘‘which—’’ and

18 everything that follows and inserting the following:

19 ‘‘which certifies the eligibility of the student to receive a

20 loan under this part and the amount of the loan for which

21 such student is eligible. A student shall qualify for a loan

22 if the eligible institution has provided the lender with a

23 statement that—

24 ‘‘(1) at the lender’s request, sets forth such stu25 dent’s estimated cost of attendance (as determined

26 under section 472);
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1 ‘‘(2) sets forth such student’s estimated financial

2 assistance, including a loan which qualifies for sub3 sidy payments under section 428; and

4 ‘‘(3) sets forth a schedule for disbursement of the

5 proceeds of the loan in installments, consistent with

6 the requirements of section 428G.’’.

7 (b) LOAN LIMITS.—Section 428H(d)(2)(A) is amend8 ed—

9 (1) by inserting ‘‘and’’ after the semicolon at the

10 end of clause (i); and

11 (2) by striking clauses (ii) and (iii) and insert12 ing the following:

13 ‘‘(ii) if such student is enrolled in a

14 program of undergraduate education which

15 is less than one academic year, the maxi16 mum annual loan amount that such student

17 may receive may not exceed the amount

18 that bears the same ratio to the amount

19 specified in clause (i) as the length of such

20 program measured in semester, trimester,

21 quarter, or clock hours bears to one aca22 demic year;’’.

23 (c) QUALIFICATION.—Section 428H(e) is amended by

24 adding at the end the following new paragraph:
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1 ‘‘(7) QUALIFICATION FOR FORBEARANCE,

2 DEFERMENT, AND INCOME-SENSITIVE REPAYMENT.—A

3 borrower of a loan made under this section may qual4 ify for a forbearance or deferment, or an income-sen5 sitive repayment plan for which the borrower is eligi6 ble, immediately upon receipt by the lender or holder

7 of a request from the borrower. Any necessary sup8 porting documentation shall be secured by the lender

9 or holder within 30 days of the request in order to

10 continue the forbearance, deferment, or income-sen11 sitive repayment plan.’’.

12 (d) REPEAL.—Section 428H(f) is repealed.

13 SEC. 422. REPEAL OF LOAN FORGIVENESS.

14 Section 428J (20 U.S.C. 1078–10) is repealed.

15 SEC. 423. LEGAL POWERS AND RESPONSIBILITIES.

16 (a) GENERAL POWERS.—Section 432(a)(2) (20 U.S.C.

17 1082(a)(2)) is amended by inserting ‘‘except that this sec18 tion shall not be deemed to limit court review under chapter

19 7 of title 5, United States Code’’ after ‘‘Secretary’s control’’.

20 (b) AUDIT OF FINANCIAL TRANSACTIONS.—Section

21 432(f)(1) is amended—

22 (1) in subparagraph (B), by striking ‘‘section

23 435(d)(1) (D), (F), or (H);’’ and inserting ‘‘section

24 435(d)(1); and’’;

25 (2) in subparagraph (C)—
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1 (A) by striking ‘‘and Labor’’ and inserting

2 ‘‘and the Workforce’’; and

3 (B) by striking ‘‘; and’’ and inserting a pe4 riod; and

5 (3) by striking subparagraph (D).

6 (c) PROGRAM OF ASSISTANCE.—Section 432(k)(3) is

7 amended by striking ‘‘Within 1 year’’ and everything that

8 follows through ‘‘1992, the’’ and inserting ‘‘The’’.

9 (d) COMMON FORMS AND FORMATS.—Section 432(m)

10 is amended—

11 (1) in paragraph (1)(A), by striking ‘‘The Sec12 retary’’ and inserting ‘‘Subject to paragraph (2), the

13 Secretary’’;

14 (2) by striking subparagraph (C) of paragraph

15 (1);

16 (3) in subparagraph (D), by striking ‘‘Nothing’’

17 and inserting ‘‘Subject to paragraph (2), nothing’’;

18 (4) by redesignating subparagraph (D) of such

19 paragraph as subparagraph (C);

20 (5) by redesignating paragraphs (2) and (3) as

21 paragraphs (3) and (4), respectively;

22 (6) by inserting after paragraph (1) the follow23 ing new paragraph:

24 ‘‘(2) FREE APPLICATION FOR FEDERAL STUDENT

25 AID.—For academic year 1999–2000 and thereafter,
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1 the Secretary shall prescribe the Free Application for

2 Federal Student Aid as the application form under

3 this part (other than sections 428B and 428C).’’; and

4 (7) by adding at the end the following new para5 graph:

6 ‘‘(5) MASTER PROMISSORY NOTE.—

7 ‘‘(A) DEVELOPMENT AND APPROVAL.—With8 in 180 days of enactment of this Act, the Sec9 retary, in cooperation with representatives of

10 guaranty agencies, eligible lenders, institutions,

11 students, and organizations involved in student

12 financial assistance, shall develop and approve a

13 master promissory note that will allow for a

14 multiyear line of credit. Such note shall address

15 the needs of participants in the programs under

16 this part. The Secretary shall also develop and

17 approve a corresponding master promissory note

18 for use under part D of this title that addresses

19 the needs of participants in the programs under

20 such part.

21 ‘‘(B) SALE AND ASSIGNMENT; ENFORCE22 MENT.—Notwithstanding the preceding provi23 sions of this section, each loan made under a

24 master promissory note providing for a line of

25 credit may be sold and assigned independently of
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1 any other loan made under the same promissory

2 note, and each such loan shall be separately en3 forceable in all State and Federal courts on the

4 basis of an original or copy of the master prom5 issory note with its terms.’’.

6 (e) DEFAULT REDUCTION MANAGEMENT.—Section

7 432(n) is amended—

8 (1) in paragraph (1), by striking ‘‘1993’’ and in9 serting ‘‘1999’’; and

10 (2) in paragraph (3), by striking ‘‘and Labor’’

11 and inserting ‘‘and the Workforce’’.

12 (f) REPORTING REQUIREMENT.—Section 432(p) is

13 amended by striking ‘‘State postsecondary reviewing enti14 ties designated under subpart 1 of part H,’’.

15 SEC. 424. STUDENT LOAN INFORMATION.

16 Section 433 (20 U.S.C. 1083) is amended—

17 (1) in the first sentence of subsection (a), by in18 serting ‘‘in simple and understandable terms’’ after

19 ‘‘to the borrower’’; and

20 (2) in the first sentence of subsection (b), by in21 serting ‘‘in simple and understandable terms’’ after

22 ‘‘under this subsection’’.

23 SEC. 425. DEFINITIONS.

24 (a) COHORT DEFAULT RATE.—Section 435(a) (20

25 U.S.C. 1085(a)) is amended—
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1 (1) in subparagraph (A) of paragraph (2)—

2 (A) by striking ‘‘or’’ at the end of clause (i);

3 and

4 (B) by striking clause (ii) and inserting the

5 following:

6 ‘‘(ii) there are exceptional mitigating cir7 cumstances within the meaning of paragraph

8 (4); or

9 ‘‘(iii) there are, in the judgment of the Sec10 retary, other exceptional mitigating cir11 cumstances that would make the application of

12 this paragraph inequitable.’’;

13 (2) in subparagraph (C) of paragraph (2), by

14 striking ‘‘July 1, 1998,’’ and inserting ‘‘July 1,

15 1999,’’;

16 (3) in paragraph (3), by inserting ‘‘or, at the re17 quest of the institution, a complete copy of the records

18 for loans made under this part or of the direct loan

19 servicer for loans made under part D’’ after ‘‘and

20 loan servicers’’; and

21 (4) by adding at the end the following new para22 graphs:

23 ‘‘(4) DEFINITION OF MITIGATING CIR24 CUMSTANCES.—For purposes of paragraph (2), an in25 stitution shall be treated as having exceptional miti-
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1 gating circumstances that make application of that

2 paragraph inequitable if such institution is certified

3 by a certified public accountant to meet each of the

4 following criteria:

5 ‘‘(A) at least two-thirds of the students en6 rolled on at least a half-time basis at the institu7 tion—

8 ‘‘(i) are eligible to receive a Federal

9 Pell Grant award that is at least equal to

10 one-half the maximum Federal Pell Grant

11 award for which the student would be eligi12 ble based on his or her enrollment status; or

13 ‘‘(ii) have an adjusted gross income of

14 the student, and his or her parents (unless

15 the student is an independent student), of

16 less than the poverty level, as determined

17 under criteria established by the Depart18 ment of Health and Human Services;

19 ‘‘(B) at least two-thirds of the students en20 rolled on a full-time basis at the institution in

21 any 12-month period ending not more than six

22 months prior to the date the institution submits

23 its appeal, and who remain enrolled beyond the

24 point at which the student would be entitled to

25 a tuition refund of 100 percent—
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1 ‘‘(i) complete the educational program

2 in which they are enrolled within the time

3 normally required to complete that pro4 gram, as specified in the institution’s en5 rollment contract, catalog, or other mate6 rials; or

7 ‘‘(ii) continue to be enrolled and are

8 making satisfactory academic progress to9 ward completion of their program; or

10 ‘‘(iii) have entered active duty in the

11 armed forces of the United States; and

12 ‘‘(C) at least two-thirds of the students en13 rolled on a full-time basis at the institution who

14 complete the educational program in which they

15 are enrolled within any 12-month period ending

16 not more than six months prior to the date the

17 institution submits its appeal are placed for at

18 least 13 weeks in an employment position for

19 which they have been trained, or are enrolled for

20 at least 13 weeks in higher level education pro21 gram for which the educational program of the

22 institution provided substantial preparation, or

23 have entered active duty in the armed forces of

24 the United States.
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1 ‘‘(5) REDUCTION OF DEFAULT RATES AT CER2 TAIN MINORITY INSTITUTIONS.—

3 ‘‘(A) BENEFICIARIES OF EXCEPTION RE4 QUIRED TO ESTABLISH MANAGEMENT PLAN.—

5 After July 1, 1998, any institution that has a

6 cohort default rate that equals or exceeds 25 per7 cent for each of the three most recent fiscal years

8 for which data are available and that relies on

9 the exception in paragraph (2)(C) of this sub10 section to continue to be an eligible institution

11 shall—

12 ‘‘(i) submit to the Secretary a default

13 management plan which the Secretary, in

14 his discretion, after consideration of the in15 stitution’s history, resources, dollars in de16 fault, and targets for default reduction, de17 termines is acceptable and provides reason18 able assurance that the institution will, by

19 July 1, 2001, have a cohort default rate that

20 is less than 25 percent;

21 ‘‘(ii) engage an independent third

22 party (which may be paid with funds re23 ceived under part B of title III) to provide

24 technical assistance in implementing such

25 default management plan; and
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1 ‘‘(iii) provide to the Secretary, on an

2 annual basis or at such other intervals as

3 the Secretary may require, evidence of co4 hort default rate improvement and success5 ful implementation of such default manage6 ment plan.

7 ‘‘(B) DISCRETIONARY ELIGIBILITY CONDI8 TIONED ON IMPROVEMENT.—Notwithstanding the

9 expiration of the exception in paragraph (2)(C),

10 the Secretary may, in his discretion, continue to

11 treat an institution described in subparagraph

12 (A) of this paragraph as an eligible institution

13 for each of the one-year periods beginning on

14 July 1, 1999, and July 1, 2000, only if the insti15 tution submits by the beginning of such period

16 evidence satisfactory to the Secretary that—

17 ‘‘(i) such institution has complied and

18 is continuing to comply with the require19 ments of subparagraph (A); and

20 ‘‘(ii) such institution has made sub21 stantial improvement, during each of the

22 preceding one-year periods, in its cohort de23 fault rate.

24 ‘‘(6) SPECIAL RULE BASED ON PARTICIPATION

25 RATE INDICES.—(A) An institution that demonstrates
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1 to the Secretary that its participation rate index (as

2 defined in regulations in effect on July 1, 1996) is

3 equal to or less than .0375 for any of the three most

4 recent fiscal years for which data are available shall

5 not be subject to paragraph (2).

6 ‘‘(B) An institution shall provide the Secretary

7 with sufficient data to determine its participation

8 rate index within 30 days after receiving an initial

9 notification of its draft cohort default rate.

10 ‘‘(C) Prior to publication of a final cohort de11 fault rate for an institution that provides the data

12 under subparagraph (B), the Secretary shall notify

13 the institution of its compliance or noncompliance

14 with subparagraph (A).’’.

15 (b) ELIGIBLE LENDER.—Section 435(d) is amended—

16 (1) in paragraph (1)(A)(ii)—

17 (A) by striking ‘‘or’’ at the end of subclause

18 (I); and

19 (B) by inserting before the semicolon at the

20 end of subclause (II) the following: ‘‘, or (III) it

21 is a bank that is a wholly owned subsidiary of

22 a nonprofit foundation, the foundation is de23 scribed in section 501(c)(3) of the Internal Reve24 nue Code of 1986 and exempt from taxation

25 under section 501(a) of such Code and has been
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1 participating in the program authorized by this

2 part for three years as of the date of enactment

3 of the Higher Education Amendments of 1998

4 and only makes loans to undergraduate students

5 who are 22 years of age or younger and has a

6 portfolio of not more than $10,000,000; and in

7 determining whether the making or holding of

8 loans to students and parents under this part is

9 the primary consumer credit function of the eli10 gible lender, all loans (including student loans

11 and other consumer loans) made or held as trust12 ee or in a trust capacity for the benefit of a third

13 party shall be considered’’;

14 (2) in paragraph (1)—

15 (A) by striking ‘‘and’’ at the end of sub16 paragraph (I);

17 (B) by striking the period at the end of sub18 paragraph (J) and inserting ‘‘; and’’; and

19 (C) by adding at the end the following new

20 subparagraph:

21 ‘‘(K) a wholly owned subsidiary of a pub22 licly held holding company which, for the three

23 years preceding the date of enactment of this

24 subparagraph, through one or more subsidiaries

25 (i) acts as a finance company, and (ii) partici-
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1 pates in the program authorized by this part

2 pursuant to subparagraph (C).’’; and

3 (3) in paragraph (5), by adding at the end the

4 following new sentence:

5 ‘‘It shall not be a violation of this paragraph for a

6 lender to provide assistance to institutions of higher

7 education comparable to the kinds of assistance pro8 vided to institutions of higher education by the De9 partment of Education.’’.

10 (c) LINE OF CREDIT.—Section 435(e) is amended to

11 read as follows:

12 ‘‘(e) LINE OF CREDIT.—The term ‘line of credit’ means

13 an agreement between the lender and the borrower pursuant

14 to a master promissory note under which the lender may

15 make and disburse, in addition to the initial loan, addi16 tional loans in subsequent years.’’.

17 SEC. 426. DISCHARGE.

18 (a) DOCUMENTATION.—Section 437(a) (20 U.S.C.

19 1087(a)) is amended by adding at the end the following:

20 ‘‘A certification of permanent and total disability from a

21 Veteran’s Hospital shall be acceptable documentation for

22 discharge under this subsection.’’.

23 (b) DISCHARGE.—Section 437(c)(1) is amended—

24 (1) by inserting after ‘‘falsely certified by the eli25 gible institution,’’ the following: ‘‘or if the institution
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1 failed to make a refund of loan proceeds which it

2 owed to such student’s lender,’’; and

3 (2) by adding at the end the following new sen4 tences: ‘‘In the case of a discharge based upon a fail5 ure to refund, the amount of the discharge shall not

6 exceed that portion of the loan which should have been

7 refunded. The Secretary shall report to the Committee

8 on Education and the Workforce of the House of Rep9 resentatives and the Committee on Labor and Human

10 Resources of the Senate annually as to the dollar

11 amount of loan discharges attributable to failures to

12 make refunds.’’.

13 SEC. 427. CANCELLATION OF LOANS FOR CERTAIN PUBLIC

14 SERVICE.

15 Section 437 is further amended—

16 (1) in the section heading, by striking out the pe17 riod at the end thereof and inserting in lieu thereof

18 a semicolon and ‘‘LOAN FORGIVENESS FOR

19 TEACHING.’’;

20 (2) by amending the heading for subsection (c)

21 to read as follows: ‘‘DISCHARGE RELATED TO SCHOOL

22 CLOSURE OR FALSE CERTIFICATION.—’’; and

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

24 new subsection:

25 ‘‘(e) CANCELLATION OF LOANS FOR TEACHING.—
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1 ‘‘(1) FUNCTIONS OF SECRETARY.—The Secretary

2 shall discharge the liability of a borrower of a quali3 fying loan by repaying the amount owed on the loan,

4 to the extent specified in paragraph (4), for service

5 described in paragraph (3).

6 ‘‘(2) QUALIFYING LOANS.—

7 ‘‘(A) IN GENERAL.—For purposes of this

8 subsection, a loan is a qualifying loan if—

9 ‘‘(i) the loan was made under section

10 428 on or after the date of enactment of the

11 Higher Education Amendments of 1998 to a

12 borrower who, on the date of entering into

13 the note or other written evidence of the

14 loan, had no outstanding balance of prin15 cipal or interest on any loan made before

16 such date; and

17 ‘‘(ii) the loan was obtained to cover the

18 cost of instruction for an academic year

19 after the first and second year of under20 graduate education.

21 ‘‘(B) LIMITATION.—The Secretary may not

22 repay loans described in subparagraph (A) to

23 cover the costs of instruction for more than two

24 academic years, or three academic years in the
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1 case of a program of instruction normally re2 quiring five years.

3 ‘‘(C) TREATMENT OF CONSOLIDATION

4 LOANS.—A loan made under section 428C may

5 be a qualifying loan for the purposes of this sub6 section only to the extent that such loan was

7 used to repay a loan or loans that meet the re8 quirements of subparagraphs (A) and (B), as de9 termined in accordance with regulations pre10 scribed by the Secretary.

11 ‘‘(3) QUALIFYING SERVICE.—A loan shall be dis12 charged under paragraph (1) for service by the bor13 rower as a full-time teacher for each complete aca14 demic year of service, after completion of the second

15 academic year of service, in a public or other non16 profit private elementary or secondary school—

17 ‘‘(A) which is in the school district of a

18 local educational agency which is eligible in such

19 year for assistance pursuant to title I of the Ele20 mentary and Secondary Education Act of 1965;

21 and

22 ‘‘(B) which for the purpose of this para23 graph and for that year has been determined by

24 the State educational agency of the State in

25 which the school is located to be a school in
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1 which the enrollment of children counted under

2 section 1124(c) of the Elementary and Secondary

3 Education Act of 1965 exceeds 30 percent of the

4 total enrollment of that school.

5 ‘‘(4) RATE OF DISCHARGE.—(A) Loans shall be

6 discharged under this subsection at the rate of—

7 ‘‘(i) 30 percent for the first or second com8 plete academic year of qualifying service as de9 scribed in paragraph (3) (after completion of two

10 years of service); and

11 ‘‘(ii) 40 percent for the third complete year

12 of such qualifying service.

13 ‘‘(B) The total amount that may be discharged

14 under this subsection for any borrower shall not ex15 ceed $17,750.

16 ‘‘(C) If a portion of a loan is discharged under

17 subparagraph (A) for any year, the entire amount of

18 interest on that loan that accrues for that year shall

19 also be discharged by the Secretary.

20 ‘‘(D) Nothing in this section shall be construed

21 to authorize refunding of any repayment of a loan.

22 ‘‘(5) LIMITATION ON TEACHER ELIGIBILITY.—

23 ‘‘(A) SECONDARY SCHOOL TEACHERS.—A

24 borrower may not receive assistance under this

25 subsection by virtue of teaching in a secondary
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1 school unless such borrower majored in the sub2 ject area in which they are teaching.

3 ‘‘(B) ELEMENTARY SCHOOL TEACHERS.—A

4 borrower may not receive assistance under this

5 subsection by virtue of teaching in a elementary

6 school unless such borrower demonstrates, in ac7 cordance with State teacher certification or li8 censing requirements, subject matter knowledge

9 and teaching skills in reading, writing, mathe10 matics, and other subjects taught in elementary

11 schools.

12 ‘‘(6) RULE OF CONSTRUCTION.—The amount of a

13 loan, and interest on a loan, that is canceled under

14 this subsection shall not be considered income for pur15 poses of the Internal Revenue Code of 1986.

16 ‘‘(7) PREVENTION OF DOUBLE BENEFITS.—No

17 borrower may, for the same service, receive a benefit

18 under both this subsection and subtitle D of title I of

19 the National and Community Service Act of 1990 (42

20 U.S.C. 12571 et seq.).

21 ‘‘(8) METHOD OF PAYMENT.—The Secretary shall

22 specify in regulations the manner in which lenders

23 shall be reimbursed for loans made under this part,

24 or portions thereof, that are discharged under this

25 subsection.
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1 ‘‘(9) LIST.—If the list of schools in which a

2 teacher may perform service pursuant to paragraph

3 (3) is not available before May 1 of any year, the Sec4 retary may use the list for the year preceding the year

5 for which the determination is made to make such

6 service determination.

7 ‘‘(10) CONTINUING ELIGIBILITY.—Any teacher

8 who performs service in a school which—

9 ‘‘(A) meets the requirements of paragraph

10 (3) in any year during such service; and

11 ‘‘(B) in a subsequent year fails to meet the

12 requirements of such subsection,

13 may continue to teach in such school and shall be eli14 gible for loan cancellation pursuant to this subsection

15 with respect to such subsequent years.’’.

16 SEC. 428. DEBT MANAGEMENT OPTIONS.

17 Section 437A (20 U.S.C. 1087–O) is repealed.

18 SEC. 429. SPECIAL ALLOWANCES.

19 (a) COMPUTATION.—Section 438(b)(2) (20 U.S.C.

20 1087–1(b)(2)) is amended—

21 (1) in subparagraph (A), by striking ‘‘(E), and

22 (F)’’ and inserting ‘‘and (E)’’; and

23 (2) in subparagraph (B)(iv), by striking ‘‘, (E),

24 or (F)’’ and inserting ‘‘or (E)’’.

25 (b) ORIGINATION FEES.—Section 438(c) is amended—
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1 (1) in paragraph (2)—

2 (A) by striking ‘‘(other than’’ and inserting

3 ‘‘(including loans made under section 428H, but

4 excluding’’; and

5 (B) by adding at the end the following new

6 sentence: ‘‘Except as provided in paragraph (8),

7 a lender is not authorized to assess an origina8 tion fee under this paragraph unless the lender

9 assesses the same fee to all student borrowers.’’;

10 and

11 (2) by adding at the end the following new para12 graph:

13 ‘‘(8) EXCEPTION.—Notwithstanding paragraph

14 (2), a lender may assess a lesser origination fee for

15 a borrower demonstrating greater financial need as

16 determined by such borrower’s adjusted gross family

17 income.’’.

18 (c) LENDING FROM PROCEEDS OF TAX EXEMPT OBLI19 GATIONS.—Section 438 is amended—

20 (1) by striking subsection (e); and

21 (2) by redesignating subsection (f) as subsection

22 (e).

23 (d) STUDY.—Section 438 is amended by adding at the

24 end the following new subsection:
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1 ‘‘(f) STUDY.—The Comptroller General shall conduct

2 a statistical analysis of the subsidized and unsubsidized

3 student loan programs under part B to gather data on lend4 ers’ policies on charging origination fees and to determine

5 if there are any anomalies that would indicate any institu6 tional, programmatic, or socioeconomic discrimination in

7 the assessing or waiving of such fees. The Comptroller Gen8 eral shall report to the appropriate committees of Congress

9 within two years after the date of enactment of the Higher

10 Education Amendments of 1998.’’.

11 PART C—FEDERAL WORK-STUDY PROGRAMS

12 SEC. 435. AMENDMENTS TO PART C.

13 (a) EXTENSION OF AUTHORITY; DEFINITION.—

14 (1) ELIGIBLE STUDENTS.—Section 441(a) (20

15 U.S.C. 2751(a)) is amended by inserting after ‘‘pro16 fessional students’’ the following: ‘‘, including students

17 participating in an internship or practicum, or as a

18 research assistant, as determined by the Secretary,’’.

19 (2) EXTENSION OF AUTHORITY.—Section 441(b)

20 is amended by striking ‘‘$800,000,000 for fiscal year

21 1993’’ and inserting ‘‘$1,000,000,000 for fiscal year

22 1999’’.

23 (3) DEFINITION OF COMMUNITY SERVICE.—Sec24 tion 441(c) is amended by striking ‘‘which are’’ and
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1 inserting ‘‘that are performed off-campus or on-cam2 pus and that are’’.

3 (b) ALLOCATION OF FUNDS.—Section 442 (42 U.S.C.

4 2752) is amended—

5 (1) by striking subsection (b);

6 (2) in subsection (c)(1), by striking ‘‘three-quar7 ters of the remainder’’ and inserting ‘‘the remainder’’;

8 (3) in subsection (c)(2)(A)(i), by striking ‘‘sub9 section (d)’’ and inserting ‘‘subsection (c)’’;

10 (4) in subsection (e)(1), by striking ‘‘subsection

11 (c)’’ and inserting ‘‘subsection (b)’’; and

12 (5) by redesignating subsections (c), (d), (e), and

13 (f) as subsections (b), (c), (d), and (e), respectively.

14 (c) TUTORING AND LITERACY ACTIVITIES.—

15 Section 443 of the Higher Education Act of 1965 (42

16 U.S.C. 2753) is amended—

17 (1) in subsection (b)(2)—

18 (A) by striking ‘‘and’’ at the end of sub19 paragraph (A);

20 (B) by redesignating subparagraph (B) as

21 subparagraph (C); and

22 (C) by inserting after subparagraph (A) the

23 following new subparagraph:

24 ‘‘(B) in academic year 1999 and succeeding

25 academic years, an institution shall use at least
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1 2 percent of the total amount of funds granted

2 to such institution under this section for such

3 academic year in accordance with subsection (d);

4 and’’; and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(d) TUTORING AND LITERACY ACTIVITIES.—

8 ‘‘(1) USE OF FUNDS.—In any academic year to

9 which subsection (b)(2)(B) applies, an institution

10 shall use the amount required to be used in accord11 ance with this subsection to compensate (including

12 compensation for time spent in directly related train13 ing and travel) students—

14 ‘‘(A) employed as a reading tutor for chil15 dren who are in preschool through elementary

16 school; or

17 ‘‘(B) employed in family literacy projects.

18 ‘‘(2) PRIORITY FOR SCHOOLS.—An institution

19 shall—

20 ‘‘(A) give priority, in using such funds, to

21 the employment of students in the provision of

22 tutoring services in schools that—

23 ‘‘(i) are identified for school improve24 ment under section 1116(c) of the Elemen-
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1 tary and Secondary Education Act of 1965;

2 or

3 ‘‘(ii) are selected by a local educational

4 agency under section 15104(a)(2) of such

5 Act; and

6 ‘‘(B) ensure that any student compensated

7 with such funds who is employed in a school se8 lected under section 15104(a)(2) of the Elemen9 tary and Secondary Education Act of 1965 is

10 trained in the instructional practices based on

11 reliable, replicable research on reading used by

12 the school pursuant to such section 15104.

13 ‘‘(3) FEDERAL SHARE.—The Federal share of the

14 compensation of work study students compensated

15 under this subsection may exceed 75 percent.

16 ‘‘(4) WAIVER.—The Secretary may waive the re17 quirements of this subsection if the Secretary deter18 mines that enforcing such requirements would cause

19 a hardship for students at the institution.

20 ‘‘(5) RETURN OF FUNDS.—Any institution that

21 does not use the amount required under this sub22 section, and that does not request and receive a waiv23 er from the Secretary under paragraph (4), shall re24 turn to the Secretary, at such time as the Secretary

25 may require for reallocation under paragraph (6),
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1 any balance of such amount that is not used as so re2 quired.

3 ‘‘(6) REALLOCATION.—The Secretary shall

4 reallot any amounts returned pursuant to paragraph

5 (5) among institutions that used at least 4 percent of

6 the total amount of funds granted to such institution

7 under this section to compensate students employed in

8 tutoring and literacy activities in the preceding aca9 demic year. Such funds shall be reallotted among such

10 institutions on the same basis as excess eligible

11 amounts are allocated to institutions pursuant to sec12 tion 442(c). Funds received by institutions pursuant

13 to this paragraph shall be used in the same manner

14 as amounts required to be used in accordance with

15 this subsection.’’.

16 (d) GRANT REQUIREMENTS.—

17 (1) COMMUNITY SERVICE.—Section 443(b)(2)(A)

18 (42 U.S.C. 2753(b)(2)(A)) is amended—

19 (A) by striking ‘‘in fiscal year 1994 and

20 succeeding fiscal years,’’; and

21 (B) by inserting ‘‘(including time spent in

22 travel or training, or both, directly related to

23 such community service)’’ after ‘‘community

24 service’’.
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1 (2) USE OF FUNDS FOR INDEPENDENT AND

2 LESS-THAN-FULL-TIME STUDENTS.—Section 443(b)(3)

3 (42 U.S.C. 2753(b)(3)) is amended to read as follows:

4 ‘‘(3) provide that in the selection of students for

5 employment under such work-study program, only

6 students, who demonstrate financial need in accord7 ance with part F of this title, and who meet the re8 quirements of section 484 will be assisted, except that

9 if the institution’s grant under this part is directly

10 or indirectly based in part on the financial need dem11 onstrated by students who are (A) attending the insti12 tution less than full time, or (B) independent stu13 dents, then grant funds shall be made available to

14 such less than full-time and independent students;’’.

15 (3) AVAILABILITY OF EMPLOYMENT.—Section

16 443(b)(6) is amended by striking everything after ‘‘in

17 need thereof’’ and inserting a semicolon.

18 (4) ACADEMIC RELEVANCE.—Section 443(c)(4) is

19 amended by inserting before the semicolon at the end

20 the following: ‘‘, to the maximum extent practicable’’.

21 (e) FLEXIBLE USE OF FUNDS.—Section 445(b) (42

22 U.S.C. 2755(b)) is amended by adding at the end the follow23 ing new paragraph:

24 ‘‘(3) An eligible institution may, with the permission

25 of a student, make payments to the student under this part
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1 by crediting the student’s account at the institution or by

2 making a direct deposit to the student’s account at a deposi3 tory institution. An eligible institution may only credit the

4 student’s account at the institution for (A) tuition and fees,

5 (B) in the case of institutionally owned housing, room and

6 board, and (C) other institutionally provided goods and

7 services.’’.

8 (f) JOB LOCATION AND DEVELOPMENT PROGRAMS.—

9 Section 446 (42 U.S.C. 2756) is amended—

10 (1) in subsection (a)(1)—

11 (A) by striking ‘‘$50,000’’ and inserting

12 ‘‘$60,000’’; and

13 (B) by striking ‘‘community service jobs, for

14 currently enrolled students’’ and inserting ‘‘com15 munity service jobs and cooperative education

16 jobs, for currently enrolled students, including

17 students participating in work-study programs

18 under this part’’; and

19 (2) in subsection (b)—

20 (A) by redesignating paragraphs (4)

21 through (6) as paragraphs (5) through (7); and

22 (B) by inserting after paragraph (3) the fol23 lowing new paragraph:

24 ‘‘(4) provide that the institution will notify the

25 Secretary if the institution will use funds under this
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1 section to develop cooperative education jobs and will

2 provide assurances that—

3 ‘‘(A) the funds provided under this para4 graph will supplement and not supplant any co5 operative education funds available to the insti6 tution;

7 ‘‘(B) in the case of 2-year programs, funds

8 will be used to develop and expand cooperative

9 education, jobs for associate degree or certificate

10 students only;

11 ‘‘(C) the work portion of a cooperative edu12 cation job developed or expanded under this

13 paragraph will be related to a student’s aca14 demic program; and

15 ‘‘(D) the institution will furnish the Sec16 retary a report on cooperative education jobs ex17 panded and developed under this paragraph, in18 cluding—

19 ‘‘(i) how the funds were used;

20 ‘‘(ii) a list of employers and whether

21 the employer is a for-profit or not-for-profit

22 entity; and

23 ‘‘(iii) the employers’ role in the cooper24 ative education job.’’.
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1 (g) WORK COLLEGES EXTENSION OF AUTHORITY.—

2 Section 448(f) (42 U.S.C. 2756b(f)) is amended by striking

3 ‘‘1993’’ and inserting ‘‘1999’’.

4 PART D—WILLIAM D. FORD FEDERAL DIRECT

5 LOAN PROGRAM

6 SEC. 436. SELECTION OF INSTITUTIONS.

7 (a) GENERAL AUTHORITY.—Section 453(a) (20 U.S.C.

8 1087c(a)) is amended—

9 (1) by striking ‘‘PHASE-IN’’ and everything that

10 follows through ‘‘GENERAL AUTHORITY.—’’ and in11 serting ‘‘GENERAL AUTHORITY.—’’; and

12 (2) by striking paragraphs (2), (3), and (4).

13 (b) SELECTION CRITERIA.—Section 453(b)(2) is

14 amended by striking ‘‘prescribe,’’ and everything that fol15 lows through the end of subparagraph (B) and inserting

16 ‘‘prescribe.’’.

17 (c) ORIGINATION.—Section 453(c) is amended—

18 (1) in paragraph (2)—

19 (A) in the heading, by striking ‘‘TRANSI20 TION SELECTION CRITERIA’’ and inserting ‘‘SE21 LECTION CRITERIA’’;

22 (B) by striking ‘‘For academic year 1994–

23 1995, the Secretary’’ and inserting ‘‘The Sec24 retary’’;

25 (C) by striking subparagraph (A); and
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1 (D) in subparagraph (E), by striking every2 thing after ‘‘deficiencies’’ and inserting a semi3 colon; and

4 (E) by redesignating subparagraphs (B)

5 through (H) as subparagraphs (A) through (G);

6 and

7 (2) in paragraph (3)—

8 (A) in the heading, by striking ‘‘AFTER

9 TRANSITION’’; and

10 (B) by striking ‘‘For academic year 1995–

11 1996 and subsequent academic years, the Sec12 retary’’ and inserting ‘‘The Secretary’’.

13 SEC. 437. TERMS AND CONDITIONS.

14 (a) INTEREST RATES.—

15 (1) AMENDMENT.—Section 455(b) (20 U.S.C.

16 1087e(b)) is amended to read as follows:

17 ‘‘(b) INTEREST RATE.—

18 ‘‘(1) RATES FOR FDSL AND FDUSL.—For Federal

19 Direct Stafford Loans and Federal Direct Unsub20 sidized Stafford Loans for which the first disburse21 ment is made on or after July 1, 1998, the applicable

22 rate of interest shall, during any 12-month period be23 ginning on July 1 and ending on June 30, be deter24 mined on the preceding June 1 and be equal to—
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1 ‘‘(A) the bond equivalent rate of 91-day

2 Treasury bills auctioned at the final auction held

3 prior to such June 1; plus

4 ‘‘(B) 2.3 percent,

5 except that such rate shall not exceed 8.25 percent.

6 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

7 With respect to any Federal Direct Stafford Loan or

8 Federal Direct Unsubsidized Stafford Loan for which

9 the first disbursement is made on or after July 1,

10 1995, the applicable rate of interest for interest which

11 accrues—

12 ‘‘(A) prior to the beginning of the repay13 ment period of the loan; or

14 ‘‘(B) during the period in which principal

15 need not be paid (whether or not such principal

16 is in fact paid) by reason of a provision de17 scribed in section 428(b)(1)(M) or 427(a)(2)(C),

18 shall be determined under paragraph (1) by substitut19 ing ‘1.7 percent’ for ‘2.3 percent’.

20 ‘‘(3) PLUS LOANS.—With respect to Federal Di21 rect PLUS Loan for which the first disbursement is

22 made on or after July 1, 1998, the applicable rate of

23 interest shall be determined under paragraph (1)—

24 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

25 percent’; and
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1 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

2 percent’.

3 ‘‘(4) REPAYMENT INCENTIVES.—Notwithstanding

4 any other provision of this part, the Secretary is au5 thorized to prescribe in regulation such reductions in

6 the interest rate paid by a borrower of a loan made

7 under this part as the Secretary determines appro8 priate to encourage on-time repayment. Such reduc9 tions may be offered only if the Secretary determines

10 they are both cost neutral and in the best financial

11 interest of the Federal Government. Any increase in

12 subsidy costs resulting from such reductions must be

13 completely offset by corresponding savings in funds

14 available for the Direct Loan Program in that fiscal

15 year from section 458 and other administrative ac16 counts.

17 ‘‘(5) PUBLICATION.—The Secretary shall deter18 mine the applicable rates of interest under this sub19 section after consultation with the Secretary of the

20 Treasury and shall publish such rate in the Federal

21 Register as soon as practicable after the date of deter22 mination.’’.

23 (2) EFFECTIVE DATE.—The amendments made

24 by this section shall apply with respect to any loan

25 made under part D of title IV of the Higher Edu-
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1 cation Act of 1965 for which the first disbursement is

2 made on or after July 1, 1998.

3 (b) CONSOLIDATION LOANS.—The first sentence of sec4 tion 455(g) is amended by striking everything after ‘‘section

5 428C(a)(4)’’ and inserting a period.

6 SEC. 438. CONTRACTS.

7 Section 456(b) (20 U.S.C. 1087f(b)) is amended—

8 (1) by inserting ‘‘and’’ after the semicolon at the

9 end of paragraph (3);

10 (2) by striking paragraph (4); and

11 (3) by redesignating paragraph (5) as para12 graph (4).

13 SEC. 439. FUNDS FOR ADMINISTRATIVE EXPENSES.

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

15 (1) in subsection (a)(1), by striking subpara16 graph (B) and everything that follows and inserting

17 the following:

18 ‘‘(B) account maintenance fees payable to

19 guaranty agencies under part B and calculated

20 in accordance with paragraph (2),

21 not to exceed (from such funds not otherwise appro22 priated) $626,000,000 in fiscal year 1999,

23 $726,000,000 in fiscal year 2000, $770,000,000 in fis24 cal year 2001, $780,000,000 in fiscal year 2002, and

25 $795,000,000 in fiscal year 2003. Account mainte-
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1 nance fees under subparagraph (B) of this paragraph

2 shall be paid quarterly and deposited in the Operat3 ing Fund established under 422B. The Secretary may

4 carry over funds available under this section to a sub5 sequent fiscal year.’’;

6 (2) by striking paragraph (2) of subsection (a)

7 and inserting the following:

8 ‘‘(2) CALCULATION BASIS.—Account mainte9 nance fees payable to guaranty agencies under para10 graph (1)(B) shall be calculated for fiscal year 1999

11 and fiscal year 2000, on the basis of 0.12 percent of

12 the original principal amount of outstanding loans

13 on which insurance was issued under part B, and for

14 fiscal years 2001 and succeeding fiscal years, shall be

15 calculated on the basis of 0.10 percent of the original

16 principal amount of outstanding loans on which in17 surance was issued under part B.’’; and

18 (3) by striking subsection (d).

19 SEC. 440. AUTHORITY TO SELL LOANS.

20 Part D of title IV (20 U.S.C. 1087a et seq.) is amended

21 by adding at the end the following new section:

22 ‘‘SEC. 459. AUTHORITY TO SELL LOANS.

23 ‘‘The Secretary, in consultation with the Secretary of

24 the Treasury, is authorized to sell loans made under this

25 part on such terms as the Secretary determines are in the
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1 best interest of the United States, except that any such sale

2 shall not result in any cost to the Federal Government. Not3 withstanding any other provision of law, the proceeds of

4 any such sale may be used by the Secretary to offer reduc5 tions in the interest rate paid by a borrower of a loan made

6 under this part as the Secretary determines appropriate to

7 encourage on-time repayment. Such reductions may be of8 fered only if the Secretary determines they are in the best

9 financial interests of the Federal Government.’’.

10 SEC. 441. CANCELLATION OF LOANS FOR CERTAIN PUBLIC

11 SERVICE.

12 Part D of title IV is amended by inserting after section

13 459, as added by section 440, the following new section:

14 ‘‘SEC. 459A. CANCELLATION OF LOANS FOR CERTAIN PUB15 LIC SERVICE.

16 ‘‘(a) CANCELLATION OF PERCENTAGE OF DEBT BASED

17 ON YEARS OF QUALIFYING SERVICE.—

18 ‘‘(1) FUNCTIONS OF SECRETARY.—The percent

19 specified in paragraph (4) of the total amount of any

20 qualifying loan shall be canceled for each complete

21 year of service by the borrower described in para22 graph (3).

23 ‘‘(2) QUALIFYING LOANS.—

24 ‘‘(A) IN GENERAL.—For purposes of this

25 subsection, a loan is a qualifying loan if—
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1 ‘‘(i) the loan was a Federal Direct

2 Stafford Loan made on or after the date of

3 enactment of the Higher Education Amend4 ments of 1998 to a borrower who, on the

5 date of entering into the note or other writ6 ten evidence of the loan, had no outstanding

7 balance of principal or interest on any loan

8 made before such date; and

9 ‘‘(ii) the loan was obtained to cover the

10 cost of instruction for an academic year

11 after the first and second year of under12 graduate education.

13 ‘‘(B) LIMITATION.—The Secretary may not

14 repay loans described in subparagraph (A) to

15 cover the costs of instruction for more than two

16 academic years, or three academic years in the

17 case of a program of instruction normally re18 quiring five years.

19 ‘‘(C) TREATMENT OF CONSOLIDATION

20 LOANS.—A Federal Direct Consolidation Loan

21 may be a qualifying loan for the purposes of this

22 subsection only to the extent that such loan was

23 used to repay a loan or loans that meet the re24 quirements of subparagraphs (A) and (B), as de-
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1 termined in accordance with regulations pre2 scribed by the Secretary.

3 ‘‘(3) QUALIFYING SERVICE.—A loan shall be can4 celled under paragraph (1) for service by the borrower

5 as a full-time teacher for each complete academic year

6 of service, after completion of the second academic

7 year of service, in a public or other nonprofit private

8 elementary or secondary school—

9 ‘‘(A) which is in the school district of a

10 local educational agency which is eligible in such

11 year for assistance pursuant to title I of the Ele12 mentary and Secondary Education Act of 1965;

13 and

14 ‘‘(B) which for the purpose of this para15 graph and for that year has been determined by

16 the State educational agency of the State in

17 which the school is located to be a school in

18 which the enrollment of children counted under

19 section 1124(c) of the Elementary and Secondary

20 Education Act of 1965 exceeds 30 percent of the

21 total enrollment of that school.

22 ‘‘(4) PERCENTAGE OF CANCELLATION.—(A) The

23 percent of a loan which shall be canceled under para24 graph (1) of this subsection is at the rate of—
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1 ‘‘(i) 30 percent for the first or second com2 plete academic year of qualifying service as de3 scribed in paragraph (3) (after completion of two

4 years of service); and

5 ‘‘(ii) 40 percent for the third complete year

6 of such qualifying service.

7 ‘‘(B) The total amount that may be canceled

8 under this subsection for any borrower shall not ex9 ceed $17,750.

10 ‘‘(C) If a portion of a loan is canceled under this

11 subsection for any year, the entire amount of interest

12 on such loan which accrues for such year shall be can13 celed.

14 ‘‘(D) Nothing in this section shall be construed

15 to authorize refunding of any repayment of a loan.

16 ‘‘(5) LIMITATION ON TEACHER ELIGIBILITY.—

17 ‘‘(A) SECONDARY SCHOOL TEACHERS.—A

18 borrower may not receive assistance under this

19 subsection by virtue of teaching in a secondary

20 school unless such borrower majored in the sub21 ject area in which they are teaching.

22 ‘‘(B) ELEMENTARY SCHOOL TEACHERS.—A

23 borrower may not receive assistance under this

24 subsection by virtue of teaching in a elementary

25 school unless such borrower demonstrates, in ac-
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1 cordance with State teacher certification or li2 censing requirements, subject matter knowledge

3 and teaching skills in reading, writing, mathe4 matics, and other subjects taught in elementary

5 schools.

6 ‘‘(6) DEFINITION.—For the purpose of this sec7 tion, the term ‘year’ where applied to service as a

8 teacher means an academic year as defined by the

9 Secretary.

10 ‘‘(7) TREATMENT OF CANCELED AMOUNTS.—The

11 amount of a loan, and interest on a loan, which is

12 canceled under this section shall not be considered in13 come for purposes of the Internal Revenue Code of

14 1986.

15 ‘‘(8) PREVENTION OF DOUBLE BENEFITS.—No

16 borrower may, for the same volunteer service, receive

17 a benefit under both this section and subtitle D of

18 title I of the National and Community Service Act of

19 1990 (42 U.S.C. 12571 et seq.).

20 ‘‘(b) SPECIAL RULES.—

21 ‘‘(1) LIST.—If the list of schools in which a

22 teacher may perform service pursuant to subsection

23 (a)(3) is not available before May 1 of any year, the

24 Secretary may use the list for the year preceding the
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1 year for which the determination is made to make

2 such service determination.

3 ‘‘(2) CONTINUING ELIGIBILITY.—Any teacher

4 who performs service in a school which—

5 ‘‘(A) meets the requirements of subsection

6 (a)(3) in any year during such service; and

7 ‘‘(B) in a subsequent year fails to meet the

8 requirements of such subsection,

9 may continue to teach in such school and shall be eli10 gible for loan cancellation pursuant to subsection

11 (a)(1) with respect to such subsequent years.’’.

12 PART E—FEDERAL PERKINS LOANS

13 SEC. 445. AMENDMENTS TO PART E.

14 (a) EXTENSION OF AUTHORITY.—Section 461(b) (20

15 U.S.C. 1087aa(b)) is amended—

16 (1) in paragraph (1), by striking ‘‘1993’’ and in17 serting ‘‘1999’’; and

18 (2) in paragraph (2), by striking ‘‘1997’’ each

19 place it appears and inserting ‘‘2003’’.

20 (b) ALLOCATION OF FUNDS.—Section 462 (20 U.S.C.

21 1087bb) is amended—

22 (1) by striking subsection (b);

23 (2) in subsection (c)(1), by striking ‘‘three-quar24 ters of the remainder’’ and inserting ‘‘the remainder’’;
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1 (3) in subsection (c)(2), by striking ‘‘subsection

2 (g)’’ and inserting ‘‘subsection (f)’’;

3 (4) in subsection (c)(3)—

4 (A) by striking ‘‘subsection (d)’’ and insert5 ing ‘‘subsection (c)’’;

6 (B) by striking ‘‘subsection (f)’’ and insert7 ing ‘‘subsection (e)’’; and

8 (C) by striking ‘‘subsection (g)’’ and insert9 ing ‘‘subsection (f)’’;

10 (5) in subsection (f)(1), by striking ‘‘subsection

11 (g)’’ and inserting ‘‘subsection (f)’’;

12 (6) in subsection (j)(2)—

13 (A) by striking ‘‘subsection (c)’’ and insert14 ing ‘‘subsection (b)’’; and

15 (B) by striking ‘‘subsection (c) of section

16 462’’ and inserting ‘‘subsection (b)’’; and

17 (7) by redesignating subsections (c) through (j)

18 as subsections (b) through (i), respectively.

19 (c) DEFAULT REDUCTION PENALTIES.—Section

20 462(e)(2)(A) (as redesignated by subsection (b)(7) of this

21 section) is amended by inserting before the semicolon at the

22 end the following: ‘‘, except that a plan shall not be required

23 with respect to any such institution that has a default rate

24 of less than 20 percent and has less than 100 students who

25 have loans under this part in any academic year’’.
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1 (d) DEFINITIONS FOR DEFAULT RATE CALCULA2 TIONS.—Section 462(g) (as redesignated by subsection

3 (b)(7) of this section) is amended by adding at the end the

4 following new paragraph:

5 ‘‘(5) For the purpose of this subsection, the term ‘satis6 factory arrangements to resume payment’ includes—

7 ‘‘(A) receipt of voluntary monthly payments for

8 three consecutive months after the time periods speci9 fied in paragraph (4);

10 ‘‘(B) receipt of voluntary payments sufficient to

11 bring the loan current prior to the calculation being

12 made for any award year under paragraph (3);

13 ‘‘(C) obtaining any deferment, postponement, re14 habilitation, forbearance, or cancellation of the loan

15 after the time periods specified in paragraph (4), but

16 prior to the calculation being made for any award

17 year under paragraph (3);

18 ‘‘(D) receipt of the full amount due on the loan

19 after the time periods specified in paragraph (4), but

20 prior to the calculation being made for any award

21 year under paragraph (3); or

22 ‘‘(E) any other arrangements to resume payment

23 which the Secretary determines to be satisfactory.’’.
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1 (e) REPORTS TO CREDIT BUREAUS OF PAYMENT RE2 SUMPTIONS.—Section 463(c) (20 U.S.C. 1087cc(c)) is

3 amended by adding at the end the following new paragraph:

4 ‘‘(5) Each institution of higher education shall notify

5 the appropriate credit bureau organizations whenever a

6 borrower of a loan that is made and held by the institution

7 and that is in default makes 12 consecutive monthly pay8 ments on such loan, for the purpose of encouraging such

9 organizations to update the status of information main10 tained with respect to that borrower.’’.

11 (f) INCENTIVE REPAYMENT PROGRAMS.—Section 463

12 is amended by adding at the end the following new sub13 section:

14 ‘‘(f) INCENTIVE REPAYMENT PROGRAMS.—

15 ‘‘(1) PROGRAM AUTHORIZED.—Any institution

16 of higher education participating in the program

17 under this part may establish, with the approval of

18 the Secretary, an incentive repayment program de19 signed to reduce defaults on loans under this part and

20 to assist in replenishing the student loan fund estab21 lished under this part.

22 ‘‘(2) CONTENTS OF PROGRAM.—An incentive re23 payment program under this part may contain pro24 visions that—
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1 ‘‘(A) offer a reduction in the interest rate on

2 a loan on which the borrower has made 48 con3 secutive monthly payments, but in no event may

4 the interest rate be reduced by more than one

5 percent;

6 ‘‘(B) provide for a discount on the balance

7 owed on a loan on which the borrower pays the

8 principal and interest in full prior to the end of

9 the applicable repayment period, but in no event

10 shall such discount exceed 5 percent of the un11 paid principal balance due on the loan at the

12 time the early repayment is made; and

13 ‘‘(C) include such other incentive repayment

14 options as the institution determines, with the

15 approval of the Secretary, will carry out the ob16 jectives of this subsection.

17 ‘‘(3) NO NET COST TO THE GOVERNMENT.—No

18 incentive option contained in a program authorized

19 by this subsection may be charged to the Federal Gov20 ernment.’’.

21 (g) TERMS OF LOANS.—

22 (1) AGGREGATE AMOUNT.—Section 464(a)(2)(B)

23 (20 U.S.C. 1087dd(a)(2)(B)) is amended by striking

24 ‘‘the aggregate of the loans for all years’’ and insert-
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1 ing ‘‘the aggregate unpaid principal amount for all

2 loans’’.

3 (2) ALLOCATION TO LESS-THAN-FULL-TIME STU4 DENTS.—Section 464(b) is amended—

5 (A) by striking ‘‘(1)’’; and

6 (B) by striking paragraph (2).

7 (3) QUALIFICATION FOR DEFERMENTS.—Section

8 464(c)(2) is amended by adding at the end the follow9 ing new subparagraph:

10 ‘‘(C) An individual with an outstanding loan balance

11 who meets the eligibility criteria for a deferment described

12 in subparagraph (A) as in effect on the date of enactment

13 of this subparagraph shall be eligible for deferment under

14 this paragraph notwithstanding any contrary provision of

15 the promissory note under which the loan or loans were

16 made, and notwithstanding any amendment (or effective

17 date provision relating to any amendment) to this section

18 made prior to the date of such deferment.’’.

19 (4) CLERICAL AMENDMENT.—The matter follow20 ing clause (iv) of section 464(c)(2)(A) is amended by

21 striking ‘‘subparagraph (B)’’ and inserting ‘‘subpara22 graph (A) of paragraph (1)’’.

23 (h) REHABILITATION AND DISCHARGE OF LOANS.—

24 Section 464 is further amended by adding at the end the

25 following new subsections:
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1 ‘‘(g) REHABILITATION OF LOANS.—(1)(A) If the bor2 rower of a loan made under this part who has defaulted

3 on the loan makes 12 on-time, consecutive, monthly pay4 ments of amounts owed on the loan, the loan shall be consid5 ered rehabilitated, and the institution that made the loan

6 (or the Secretary, in the case of a loan held by the Sec7 retary) shall instruct any credit reporting organization to

8 which the default was reported to remove the default from

9 the borrower’s credit history.

10 ‘‘(B) As long as the borrower continues to make sched11 uled repayments on a loan rehabilitated under this para12 graph, the rehabilitated loan shall be subject to the same

13 terms and conditions, and qualify for the same benefits and

14 privileges, as other loans made under this part.

15 ‘‘(C) The borrower of a rehabilitated loan shall not be

16 precluded by section 484 from receiving additional grant,

17 loan, or work assistance under this title (for which he or

18 she is otherwise eligible) on the basis of defaulting on the

19 loan prior to such rehabilitation.

20 ‘‘(D) A borrower may obtain the benefit of this para21 graph with respect to rehabilitating the loan only once.

22 ‘‘(2) If the borrower of loan made under this part who

23 has defaulted on that loan makes 6 on-time, consecutive,

24 monthly payments of amounts owed on such loan, the bor25 rower’s eligibility for grant, loan, or work assistance under
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1 this title shall be restored. A borrower may obtain the bene2 fit of this paragraph with respect to restored eligibility only

3 once.

4 ‘‘(h) DISCHARGE.—

5 ‘‘(1) IN GENERAL.—If a student borrower who

6 received a loan made under this part on or after Jan7 uary 1, 1986, is unable to complete the program in

8 which such student is enrolled due to the closure of the

9 institution, then the Secretary shall discharge the bor10 rower’s liability on the loan (including interest and

11 collection fees) by repaying the amount owed on the

12 loan and shall subsequently pursue any claim avail13 able to such borrower against the institution and its

14 affiliates and principals, or settle the loan obligation.

15 ‘‘(2) ASSIGNMENT.—A borrower whose loan has

16 been discharged pursuant to this subsection shall be

17 deemed to have assigned to the United States the right

18 to a loan refund up to the amount discharged against

19 the institution and its affiliates and principals.

20 ‘‘(3) ELIGIBILITY FOR ADDITIONAL ASSIST21 ANCE.—The period of a student’s assistance at an in22 stitution at which the student was unable to complete

23 a course of study due to the closing of the institution

24 shall not be considered for purposes of calculating the
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1 student’s period of eligibility for additional assistance

2 under this title.

3 ‘‘(4) SPECIAL RULE.—A borrower whose loan has

4 been discharged pursuant to this subsection shall not

5 be precluded, because of that discharge, from receiving

6 additional grant, loan, or work assistance under this

7 title for which the borrower would be otherwise eligi8 ble (but for the default on the discharged loan). The

9 amount discharged under this subsection shall be

10 treated the same as loans under section 465(a)(5).

11 ‘‘(5) REPORTING.—The Secretary or institution,

12 as the case may be, shall report to credit bureaus with

13 respect to loans that have been discharged pursuant to

14 this subsection.’’.

15 (i) CANCELLATION.—Section 465 (20 U.S.C. 1087ee)

16 is amended—

17 (1) in subsection (a)—

18 (A) in paragraph (2)(C), by striking ‘‘sec19 tion 676(b)(9)’’ and inserting ‘‘section

20 635(a)(10)’’;

21 (B) by striking subparagraph (H) of para22 graph (2) and inserting the following:

23 ‘‘(H) as a full-time nurse or medical technician

24 providing health care services;’’;
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1 (C) by striking the period at the end of sub2 paragraph (I) of such paragraph and inserting

3 a semicolon;

4 (D) by adding at the end of such paragraph

5 the following new subparagraphs:

6 ‘‘(J) as a member of the Commissioned Corps of

7 the Public Health Service of the United States; or

8 ‘‘(K) as a non-physician mental health profes9 sional providing health care services in a health pro10 fessional shortage area designated under section 332

11 of the Public Health Service Act.’’;

12 (E) in the last sentence of paragraph (2),

13 by striking ‘‘section 602(a)(1)’’ and inserting

14 ‘‘section 602(3)’’; and

15 (F) by adding at the end the following new

16 paragraph:

17 ‘‘(7) An individual with an outstanding loan obliga18 tion who performs service of any type that is described in

19 paragraph (2) as in effect on the date of enactment of this

20 paragraph shall be eligible for cancellation under this sec21 tion for such service notwithstanding any contrary provi22 sion of the promissory note under which the loan or loans

23 were made, and notwithstanding any amendment (or effec24 tive date provision relating to any amendment) to this sec25 tion made prior to the date of such service.’’; and
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1 (2) in subsection (b), by adding at the end the

2 following new sentence: ‘‘To the extent feasible, the

3 Secretary shall pay the amounts for which any insti4 tution qualifies under this subsection no later than

5 three months after the institution files an institu6 tional application for campus-based funds.’’.

7 (j) DISTRIBUTION OF ASSETS.—Section 466 (20

8 U.S.C. 1087ff) is amended—

9 (1) by striking ‘‘1996’’ each place it appears and

10 inserting ‘‘2003’’; and

11 (2) by striking ‘‘1997’’ each place it appears and

12 inserting ‘‘2004’’.

13 (k) COLLECTION OF DEFAULTED LOANS.—

14 (1) REPEAL.—Subsection (c) of section 467 (20

15 U.S.C. 1087gg(c)) is repealed.

16 (2) DEPOSIT.—Any funds in the Perkins Revolv17 ing Loan Fund on the date of enactment of this Act

18 shall be deposited in the general fund of the Treasury.

19 (l) STATUS CONFIRMATION REPORTS.—Section 468

20 (20 U.S.C. 1087hh) is amended—

21 (1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘In

22 carrying out’’; and

23 (2) by adding at the end the following new sub24 section:
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1 ‘‘(b) STUDENT STATUS CONFIRMATION REPORTS.—

2 The Secretary shall ensure that borrowers under this part

3 are included in the student status confirmation report re4 quired by the Secretary in the same manner as borrowers

5 under parts B and D of this title.’’.

6 PART F—NEED ANALYSIS

7 SEC. 446. COST OF ATTENDANCE.

8 Section 472 (20 U.S.C. 1087ll) is amended—

9 (1) in paragraph (2), by inserting after ‘‘per10 sonal expenses’’ the following: ‘‘, including a reason11 able allowance for the rental or purchase of a per12 sonal computer,’’; and

13 (2) in paragraph (10), by striking everything

14 after ‘‘determining costs’’ and inserting a semicolon.

15 SEC. 447. DATA ELEMENTS.

16 Section 474(b)(3) (20 U.S.C. 1087nn(b)(3)) is amend17 ed by inserting ‘‘, excluding the student’s parents,’’ after

18 ‘‘family of the student’’.

19 SEC. 448. FAMILY CONTRIBUTION FOR DEPENDENT STU20 DENTS.

21 (a) PARENTS’ CONTRIBUTION FROM ADJUSTED AVAIL22 ABLE INCOME.—Section 475(b)(3) (20 U.S.C. 1087oo(b)(3))

23 is amended by inserting ‘‘, excluding the student’s parents,’’

24 after ‘‘number of the family members’’.
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1 (b) FAMILY CONTRIBUTION FROM ASSETS.—Section

2 475 is amended—

3 (1) in subsection (b)(1)(B), by striking ‘‘parents’

4 contribution’’ and inserting ‘‘family contribution’’;

5 (2) in the heading of subsection (d), by striking

6 ‘‘PARENTS’ CONTRIBUTION’’ and inserting ‘‘FAMILY

7 CONTRIBUTION’’;

8 (3) in subsection (d)(1)—

9 (A) by striking ‘‘parents’ contribution’’ and

10 inserting ‘‘family contribution’’; and

11 (B) by striking ‘‘parental net worth’’ in

12 subparagraph (A) and inserting ‘‘family net

13 worth’’;

14 (4) in subsection (d)(2)—

15 (A) by striking ‘‘PARENTAL’’ in the heading

16 and inserting ‘‘FAMILY’’;

17 (B) by striking ‘‘parental net worth’’ and

18 inserting ‘‘family net worth’’; and

19 (C) by inserting ‘‘, for both the parents and

20 the dependent student’’ after ‘‘by adding’’;

21 (5) by striking subsection (h); and

22 (6) by redesignating subsection (i) as subsection

23 (h).

24 (c) STUDENT CONTRIBUTION FROM AVAILABLE IN25 COME.—Section 475(g) is amended—
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1 (1) in paragraph (2)—

2 (A) in subparagraph (D), by striking

3 ‘‘$1,750; and’’ and inserting ‘‘$3,000, or a suc4 cessor amount prescribed by the Secretary under

5 section 478;’’;

6 (B) by striking the period at the end of sub7 paragraph (E) and inserting ‘‘; and’’; and

8 (C) by inserting after subparagraph (E) the

9 following new subparagraph:

10 ‘‘(F) an allowance for parents’ negative

11 available income, determined in accordance with

12 paragraph (6).’’; and

13 (2) by adding at the end the following new para14 graph:

15 ‘‘(6) ALLOWANCE FOR PARENTS’ NEGATIVE

16 AVAILABLE INCOME.—The allowance for parents’ neg17 ative available income is the amount, if any, by

18 which the sum of the amounts deducted under sub19 paragraphs (A) through (F) of paragraph (2) exceeds

20 the parents’ total income (as defined in section

21 480).’’.

22 (e) ADJUSTMENTS TO STUDENTS CONTRIBUTION FOR

23 ENROLLMENT PERIODS OTHER THAN NINE MONTHS.—

24 Section 475 is amended by adding at the end the following

25 new subsection:
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1 ‘‘(i) ADJUSTMENTS TO STUDENTS CONTRIBUTION FOR

2 ENROLLMENT PERIODS OF LESS THAN NINE MONTHS.—

3 For periods of enrollment of less than nine months, the stu4 dent’s contribution from adjusted available income (as de5 termined under subsection (g)) is determined, for purposes

6 other than subpart 2 of part A, by dividing amount deter7 mined under such subsection by nine, and multiplying the

8 result by the number of months in the period of enroll9 ment.’’.

10 SEC. 449. FAMILY CONTRIBUTION FOR INDEPENDENT STU11 DENTS WITHOUT DEPENDENTS OTHER THAN

12 A SPOUSE.

13 (a) ADJUSTMENTS FOR ENROLLMENT PERIODS OTHER

14 THAN NINE MONTHS.—Section 476(a) (20 U.S.C.

15 1087pp(a)) is amended—

16 (1) by striking ‘‘and’’ at the end of paragraph

17 (1)(B);

18 (2) by inserting ‘‘and’’ after the semicolon at the

19 end of paragraph (2); and

20 (3) by inserting after paragraph (2) the follow21 ing new paragraph:

22 ‘‘(3) for periods of enrollment of other than 9

23 months, for purposes other than subpart 2 of part

24 A—
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1 ‘‘(A) dividing the quotient resulting under

2 paragraph (2) by nine; and

3 ‘‘(B) multiplying the result by the number

4 of months in the period of enrollment;’’.

5 (b) CONTRIBUTION FROM AVAILABLE INCOME.—Sec6 tion 476(b)(1)(A)(iv) is amended—

7 (1) by striking ‘‘allowance of—’’ and inserting

8 ‘‘allowance of the following amount (or a successor

9 amount prescribed by the Secretary under section

10 478)—’’;

11 (2) by striking ‘‘$3,000’’ each place it appears in

12 subclauses (I) and (II) and inserting ‘‘$5,500’’; and

13 (3) by striking ‘‘$6,000’’ in subclause (III) and

14 inserting ‘‘$8,500’’.

15 SEC. 450. FAMILY CONTRIBUTION FOR INDEPENDENT STU16 DENTS WITH DEPENDENTS OTHER THAN A

17 SPOUSE.

18 Section 477(a) (20 U.S.C. 1087qq(a)) is amended—

19 (1) by striking ‘‘and’’ at the end of paragraph

20 (2);

21 (2) by inserting ‘‘and’’ after the semicolon at the

22 end of paragraph (3); and

23 (3) by inserting after paragraph (3) the follow24 ing new paragraph:
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1 ‘‘(4) for periods of enrollment of other than 9

2 months, for purposes other than subpart 2 of part

3 A—

4 ‘‘(A) dividing the quotient resulting under

5 paragraph (3) by nine; and

6 ‘‘(B) multiplying the result by the number

7 of months in the period of enrollment;’’.

8 SEC. 451. REGULATIONS; UPDATED TABLES AND AMOUNTS.

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

10 (1) by striking ‘‘For each academic year’’ and

11 inserting the following:

12 ‘‘(1) REVISED TABLES.—For each academic

13 year’’; and

14 (2) by adding at the end the following new para15 graph:

16 ‘‘(2) REVISED AMOUNTS.—For each academic

17 year after academic year 1997–1998, the Secretary

18 shall publish in the Federal Register revised income

19 protection allowances for the purpose of sections

20 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised al21 lowances shall be developed by increasing each of the

22 dollar amounts contained in such section by a per23 centage equal to the estimated percentage increase in

24 the Consumer Price Index (as determined by the Sec25 retary) between December 1996 and the December
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1 next preceding the beginning of such academic year,

2 and rounding the result to the nearest $10.’’.

3 SEC. 452. DISCRETION OF STUDENT FINANCIAL AID ADMIN4 ISTRATORS.

5 (a) SPECIAL CIRCUMSTANCES.—Section 479A(a) (20

6 U.S.C. 1087tt(a)) is amended—

7 (1) in the first sentence, by inserting after ‘‘(or

8 both)’’ the following: ‘‘or, in extraordinary cir9 cumstances, the amount of the expected family con10 tribution,’’; and

11 (2) by inserting after the second sentence the fol12 lowing new sentence: ‘‘Special circumstances may in13 clude tuition expenses at an elementary or secondary

14 school, medical or dental expenses not covered by in15 surance, unusually high child care costs, recent unem16 ployment of a family member, or other changes in a

17 family’s income or assets or a student’s status. Ex18 traordinary circumstances shall be defined by the Sec19 retary by regulation.’’.

20 (b) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI21 CATIONS.—Section 479A is amended by striking subsection

22 (c) and inserting the following:

23 ‘‘(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI24 CATIONS.—On a case-by-case basis, an eligible institution

25 may refuse to certify a statement which permits a student
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1 to receive a loan under part B, or refuse to make a loan

2 under part D, or may certify a loan amount or make a

3 loan that is less than the student’s determination of need

4 (as determined under this part), if the reason for the action

5 is documented and provided in written form to the student

6 and the student is afforded an opportunity to appeal the

7 action in a timely fashion. No eligible institution shall dis8 criminate against any borrower or applicant in obtaining

9 a loan on the basis of race, national origin, religion, sex,

10 marital status, age, or handicapped status.’’.

11 SEC. 453. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

12 Section 480(j)(3) (20 U.S.C. 1087vv(j)(3)) is amended

13 by inserting after ‘‘paragraph (1),’’ the following: ‘‘a post14 service benefit under chapter 30 of title 38, United States

15 Code, or’’.

16 PART G—GENERAL PROVISIONS

17 SEC. 461. DEFINITIONS.

18 Section 481 (20 U.S.C. 1088), as amended by section

19 102(b), is further amended by adding at the end the follow20 ing new subsection:

21 ‘‘(d) DISTANCE LEARNING.—For the purpose of any

22 program under this title, the term ‘distance learning’ means

23 an educational process that is characterized by the separa24 tion, in time or place, between instructor and student. Dis-
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1 tance learning may include courses offered principally

2 through the use of—

3 ‘‘(1) television, audio, or computer transmission,

4 such as open broadcast, closed circuit, cable, micro5 wave, or satellite transmission;

6 ‘‘(2) audio or computer conferencing;

7 ‘‘(3) video cassettes or discs; or

8 ‘‘(4) correspondence.’’.

9 SEC. 462. MASTER CALENDAR.

10 (a) REQUIRED SCHEDULE.—Section 482(a) (20

11 U.S.C. 1089(a)) is amended by adding at the end the follow12 ing new paragraphs:

13 ‘‘(3) The Secretary shall, to the extent prac14 ticable, notify eligible institutions, guaranty agencies,

15 lenders, interested software providers, and, upon re16 quest, other interested parties, by December 1 prior to

17 the start of an award year of minimal hardware and

18 software requirements necessary to administer pro19 grams under this title.

20 ‘‘(4) The Secretary shall attempt to conduct

21 training activities for financial aid administrators

22 and others in an expeditious and timely manner

23 prior to the start of such award year in order to en24 sure that all participants are informed of all admin25 istrative requirements.’’.
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1 (b) DELAY OF EFFECTIVE DATE.—Section 482(c) is

2 amended by striking the second sentence and inserting the

3 following: ‘‘The Secretary shall provide a period for public

4 comment of not less than 60 days after publication of any

5 notice of proposed rulemaking affecting programs under

6 this title.’’.

7 SEC. 463. FORMS AND REGULATIONS.

8 (a) COMMON FINANCIAL AID FORM.—Section 483(a)

9 (20 U.S.C. 1090(a)) is amended—

10 (1) in paragraph (1)—

11 (A) by striking ‘‘A, C, D, and E’’ and in12 serting ‘‘A through E’’;

13 (B) by striking ‘‘and to determine the need

14 of a student for the purpose of part B of this

15 title’’; and

16 (C) by striking the last sentence and insert17 ing the following: ‘‘The Secretary shall include,

18 on the first page of the form, a prominently dis19 played notice to students and parents advising

20 them to check with the college financial aid office

21 in the event that they have unusual cir22 cumstances which may affect their eligibility for

23 financial aid.’’;

24 (2) in paragraph (2)—
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1 (A) by striking ‘‘A, C, D, and E’’ each place

2 it appears and inserting ‘‘A through E’’;

3 (B) by striking ‘‘and the need of a student

4 for the purpose of part B of this title,’’; and

5 (C) by striking ‘‘or have the student’s need

6 established for the purpose of part B of this

7 title’’;

8 (3) in the first sentence of paragraph (3), by in9 serting ‘‘processing loan applications and’’ after ‘‘for

10 the purposes of’’; and

11 (4) by adding at the end the following new para12 graph:

13 ‘‘(5) ELECTRONIC FORMS.—(A) The Secretary,

14 in cooperation with representatives of agencies and

15 organizations involved in student financial assist16 ance, including private computer software providers,

17 shall develop an electronic version of the form de18 scribed in paragraph (1). Such an electronic version

19 shall not require a signature to be collected at the

20 time such version is submitted, as permitted by the

21 Secretary. The Secretary shall prescribe such version

22 no later than 120 days after the date of enactment of

23 the Higher Education Amendments of 1998.

24 ‘‘(B) Nothing in this section shall prohibit the

25 use of the version of the form developed by the Sec-
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1 retary pursuant to subparagraph (A) by an eligible

2 institution, eligible lender, guaranty agency, State

3 grant agency, private computer software providers, a

4 consortium thereof, or such other entities as the Sec5 retary may designate.

6 ‘‘(C) The Secretary shall provide to such organi7 zation or consortium necessary specifications that

8 software developed, produced, distributed (including

9 any diskette, modem or network communications, or

10 otherwise) must meet. Included in the specifications

11 shall be test cases that such organization or consortia

12 must use to prove accuracy of its cases to the Sec13 retary. If the results of the test cases are inconsistent

14 with the provisions of this part, the Secretary shall

15 notify the submitting organizations or consortium of

16 his objection within 30 days of such submission. In

17 the absence of such an objection the organization or

18 consortium may use the electronic form as submitted.

19 No fee shall be charged to students in connection with

20 the use of the electronic form, or of any other elec21 tronic forms used in conjunction with such form in

22 applying for Federal or State student financial assist23 ance.

24 ‘‘(D) The Secretary shall ensure that data collec25 tion complies with section 552a of title 5, United
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1 States Code, and that any entity using the version

2 of the form developed by the Secretary pursuant to

3 subparagraph (A) shall maintain reasonable and ap4 propriate administrative, technical, and physical

5 safeguards to ensure the integrity and confidentiality

6 of the information, and to protect against security

7 threats, or unauthorized uses or disclosures of the in8 formation provided on the version of the form. Data

9 collected by such version of the form shall be used only

10 for the application, award, and administration of aid

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

12 by eligible institutions or such entities as the Sec13 retary may designate. No data collected by such ver14 sion of the form shall be used for making final aid

15 awards under this title until such data have been

16 processed by the Secretary or a contractor or designee

17 of the Secretary.’’.

18 (b) STREAMLINED REAPPLICATION PROCESS.—Section

19 483(b)(1) is amended by striking ‘‘, within 240 days’’ and

20 everything that follows through ‘‘of 1992,’’.

21 (c) INFORMATION TO COMMITTEES.—Section 483(c) is

22 amended by striking ‘‘and Labor’’ and inserting ‘‘and the

23 Workforce’’.
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1 (d) TOLL-FREE INFORMATION.—Section 483(d) is

2 amended by striking ‘‘section 633(c)’’ and inserting ‘‘sec3 tion 685(d)(2)(C)’’.

4 (e) REPEAL.—Subsection (f) of section 483 is repealed.

5 SEC. 464. STUDENT ELIGIBILITY.

6 (a) IN GENERAL.—Section 484(a) (20 U.S.C.

7 1091(a))—

8 (1) in paragraph (4), by striking ‘‘the institu9 tion’’ and everything that follows through ‘‘lender), a

10 document’’ and inserting ‘‘the Federal Government, as

11 part of the original financial aid application process,

12 a certification’’; and

13 (2) in paragraph (4)(B), by inserting after ‘‘so14 cial security number,’’ the following: ‘‘and if a de15 pendent student, the social security number of any

16 parent of such student whose income information is

17 required to be included on the form,’’.

18 (b) TERMINATION OF ELIGIBILITY.—Section 484(j) is

19 amended by inserting ‘‘until September 30, 2001’’ after ‘‘a

20 student shall be eligible’’.

21 (c) VERIFICATION OF INCOME DATA.—Section 484 is

22 amended by adding at the end the following new subsection:

23 ‘‘(q) VERIFICATION OF INCOME DATA.—

24 ‘‘(1) CONFIRMATION WITH IRS.—The Secretary

25 of Education, in cooperation with the Secretary of the
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1 Treasury, is authorized to confirm with the Internal

2 Revenue Service the adjusted gross income, filing sta3 tus, and exemptions reported by applicants (includ4 ing parents) under this title on their Federal income

5 tax returns for the purpose of verifying the informa6 tion reported by applicants on student financial aid

7 applications.

8 ‘‘(2) NOTIFICATION.—The Secretary shall estab9 lish procedures under which an applicant is notified

10 that the Internal Revenue Service will disclose to the

11 Secretary tax return information as authorized under

12 section 6103(l)(13) of the Internal Revenue Code of

13 1986.’’.

14 (d) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED

15 OFFENSES.—

16 (1) AMENDMENT.—Section 484 is further amend17 ed by adding at the end thereof the following new sub18 section:

19 ‘‘(r) SUSPENSION OF ELIGIBILITY FOR DRUG20 RELATED OFFENSES.—

21 ‘‘(1) IN GENERAL.—An individual student who

22 has been convicted of any offense under any Federal

23 or State law involving the possession or sale of a con24 trolled substance shall not be eligible to receive any

25 grant, loan, or work assistance under this title during
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1 the period beginning on the date of such conviction

2 and ending after the interval specified in the follow3 ing table:

‘‘If convicted of an offense involving:

The possession of a controlled substance: Ineligibility period is:

First offense .................................................. 1 year

Second offense ............................................... 2 years

Third offense ................................................. indefinite

The sale of a controlled substance:

First offense .................................................. 2 years

Second offense ............................................... indefinite

4 ‘‘(2) REHABILITATION.—A student whose eligi5 bility has been suspended under paragraph (1) may

6 resume eligibility before the end of the period deter7 mined under such paragraph if the student satisfac8 torily completes a drug rehabilitation program that

9 complies with such criteria as the Secretary shall pre10 scribe for purposes of this paragraph.

11 ‘‘(3) DEFINITIONS.—As used in this subsection,

12 the term ‘controlled substance’ has the meaning given

13 in section 102(6) of the Controlled Substances Act (21

14 U.S.C. 802(6)).’’.

15 (2) EFFECTIVE DATE.—The amendment made by

16 paragraph (1) shall apply with respect to financial

17 assistance to cover the costs of attendance for periods

18 of enrollment beginning after the date of enactment of

19 this Act.
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1 SEC. 465. STATE COURT JUDGMENTS.

2 Section 484A (20 U.S.C. 1091a) is amended by adding

3 at the end the following new subsection:

4 ‘‘(c) STATE COURT JUDGMENTS.—A judgment of a

5 State court for the recovery of money provided as grant,

6 loan, or work assistance under this title that has been as7 signed or transferred to the Secretary under this title may

8 be registered in any district court by filing a certified copy

9 of the judgment and the assignment or other transfer to the

10 Secretary. A judgment so registered shall have the same

11 force and effect, and may be enforced in the same manner,

12 as a judgment of the district court of the district in which

13 the judgment is registered.’’.

14 SEC. 466. INFORMATION FOR STUDENTS.

15 (a) INFORMATION DISSEMINATION.—Section 485(a)

16 (20 U.S.C. 1092(a)) is amended—

17 (1) in paragraph (1), by striking the second sen18 tence and inserting the following: ‘‘The information

19 required by this section shall be produced and be

20 made readily available upon request, through appro21 priate publications, mailings, and electronic media to

22 all current students and to any prospective student.

23 Each eligible institution shall, on an annual basis,

24 provide to all enrolled students a list of the informa25 tion that is required to be provided by institutions to

26 students by this Act and section 444 of the General
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1 Education Provisions Act (also referred to as the

2 Family Educational Rights and Privacy Act of

3 1974), together with a statement of the procedures re4 quired to obtain such information.’’;

5 (2) in paragraph (3)—

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

7 enrolled in any program of an eligible institu8 tion for which the prior program provides sub9 stantial preparation’’; and

10 (B) by striking subparagraph (A) and in11 serting the following:

12 ‘‘(A) shall be made available by July 1 each year

13 to current and prospective students prior to enrolling

14 or entering into any financial obligation; and’’; and

15 (3) by adding at the end the following new para16 graph:

17 ‘‘(6) Each institution may, but is not required to, pro18 vide supplemental information to enrolled and prospective

19 students showing the completion or graduation rate for stu20 dents transferring into the institution or information show21 ing the rate at which students transfer out of the institu22 tion.’’.

23 (b) DEPARTMENTAL PUBLICATIONS.—Section 485(d)

24 is amended—
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1 (1) by striking ‘‘(1) assist’’ and inserting ‘‘(A)

2 assist’’;

3 (2) by striking ‘‘(2) assist’’ and inserting ‘‘(B)

4 assist’’;

5 (3) by inserting ‘‘(1)’’ before ‘‘The Secretary’’ the

6 first place it appears; and

7 (4) by adding at the end the following new para8 graphs:

9 ‘‘(2) The Secretary shall, to the extent such informa10 tion is available, compile information describing State pre11 paid tuition programs and disseminate such information

12 to States, eligible institutions, students, and parents in de13 partmental publications.

14 ‘‘(3) The Secretary shall, to the extent practicable, up15 date the Department’s Internet site to include direct links

16 to databases which contain information on public and pri17 vate financial assistance programs. The Secretary shall

18 only provide direct links to databases which can be accessed

19 without charge and shall verify with appropriate parties

20 that the databases included in the direct link are not in

21 any way providing fraudulent information. The Secretary

22 shall prominently display adjacent to the direct link a dis23 claimer indicating that a direct link to a database does not

24 constitute an endorsement or recommendation of the data25 base or its provider or any services or products of such pro-
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1 vider. The Secretary shall provide additional direct links

2 to information resources from which students may obtain

3 information about fraudulent and deceptive practices in the

4 provision of services related to student financial aid.’’.

5 (c) DISCLOSURES.—Section 485(e) is amended—

6 (1) in paragraph (2)—

7 (A) by striking ‘‘his parents, his guidance’’

8 and inserting ‘‘the student’s parents, guidance’’;

9 and

10 (B) by adding at the end the following new

11 sentence: ‘‘If the institution is a member of a na12 tional collegiate athletic association that com13 piles graduation rate data on behalf of its mem14 ber institutions that the Secretary determines is

15 substantially comparable to the information de16 scribed in paragraph (1), the distribution of the

17 compilation of such data to all secondary schools

18 in the United States shall fulfill the responsibil19 ity of the institution to provide information to

20 a prospective student athlete’s guidance counselor

21 and coach.’’;

22 (2) in paragraph (4), by striking ‘‘when such

23 completion or graduation rate includes students

24 transferring into and out of such institution’’ and in25 serting ‘‘for students transferring into the institution
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1 or information showing the rate at which students

2 transfer out of the institution’’; and

3 (3) by striking paragraph (9) and inserting the

4 following:

5 ‘‘(9) The reports required by this subsection shall be

6 due on each July 1 and shall cover the 1-year period ending

7 August 31 of the preceding year.’’.

8 (d) CAMPUS CRIME REPORTING AND DISCLOSURE.—

9 Section 485(f) is amended—

10 (1) in paragraph (1)—

11 (A) by striking subparagraph (F) and in12 serting the following:

13 ‘‘(F) Statistics concerning the occurrence on

14 campus, during the most recent calendar year, and

15 during the 2 preceding calendar years, of the follow16 ing criminal offenses or arrests reported to campus se17 curity authorities, campus officials who have direct

18 administrative responsibility for student or campus

19 activities, disciplinary officers and other officials re20 sponsible for resolving student disciplinary matters,

21 athletic department officials, or local police agencies

22 (including offenses handled through the campus dis23 ciplinary system):

24 ‘‘(i) murder;

25 ‘‘(ii) sex offenses, forcible or nonforcible;
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1 ‘‘(iii) robbery;

2 ‘‘(iv) aggravated assault;

3 ‘‘(v) burglary;

4 ‘‘(vi) motor vehicle theft;

5 ‘‘(vii) manslaughter;

6 ‘‘(viii) larceny;

7 ‘‘(ix) arson; and

8 ‘‘(x) arrests or persons referred for campus

9 disciplinary action for liquor law violations,

10 drug-related violations, and weapons posses11 sion.’’;

12 (B) by striking subparagraph (H); and

13 (C) by redesignating subparagraph (I) as

14 subparagraph (H);

15 (2) in paragraph (4)—

16 (A) by striking ‘‘Upon request of the Sec17 retary, each’’ and inserting ‘‘On an annual

18 basis, each’’;

19 (B) by striking ‘‘paragraphs (1)(F) and

20 (1)(H)’’ and inserting ‘‘paragraph (1)(F)’’;

21 (C) by striking ‘‘and Labor’’ and inserting

22 ‘‘and the Workforce’’;

23 (D) by striking ‘‘1995’’ and inserting

24 ‘‘2000’’;
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1 (E) by striking ‘‘and’’ at the end of sub2 paragraph (A);

3 (F) by redesignating subparagraph (B) as

4 subparagraph (C); and

5 (G) by inserting after subparagraph (A) the

6 following new subparagraph:

7 ‘‘(B) make copies of the statistics submitted to

8 the Secretary available to the public; and’’;

9 (3) in paragraph (6)—

10 (A) by striking ‘‘paragraphs (1)(F) and

11 (1)(H)’’ and inserting ‘‘paragraph (1)(F)’’; and

12 (B) by adding at the end the following new

13 sentence: ‘‘Such statistics shall not identify vic14 tims of crimes or persons accused of crimes.’’;

15 and

16 (4) by adding at the end the following new para17 graphs:

18 ‘‘(8)(A) Each institution participating in any pro19 gram under this title that maintains either a police or secu20 rity department of any kind shall make, keep, and main21 tain a daily log, written in a form that can be easily under22 stood, recording in chronological order all crimes reported

23 to such police or security department, including the nature,

24 date, time, and general location of each crime and the dis25 position of the complaint, if known.
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1 ‘‘(B) All entries that are required by this paragraph

2 shall be open to public inspection during normal business

3 hours within two business days of the initial report being

4 made to the department, unless—

5 ‘‘(i) disclosure of such information is prohibited

6 by law; or

7 ‘‘(ii) the release of such information is likely to

8 jeopardize an ongoing criminal investigation or the

9 safety of an individual, cause a suspect to flee or

10 evade detection, or result in the destruction of evi11 dence.

12 Any information withheld under clause (ii) shall be open

13 to public inspection as soon as the damage that is the basis

14 for such withholding is no longer likely to occur.

15 ‘‘(9) The Secretary shall provide technical assistance

16 in complying with the provisions of this section to an insti17 tution of higher education who requests such assistance.’’.

18 (e) DATA REQUIRED.—Section 485(g) is amended—

19 (1) in paragraph (1), by adding at the end the

20 following new subparagraphs:

21 ‘‘(I)(i) The total revenues, and the revenues

22 from football, men’s basketball, women’s basket23 ball, all other men’s sports combined and all

24 other women’s sports combined, derived by the
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1 institution from its intercollegiate athletics ac2 tivities.

3 ‘‘(ii) For the purpose of clause (i), revenues

4 from intercollegiate athletics activities allocable

5 to a sport shall include (without limitation) gate

6 receipts, broadcast revenues, appearance guaran7 tees and options, concessions, and advertising,

8 but revenues such as student activities fees or

9 alumni contributions not so allocable shall be in10 cluded in the calculation of total revenues only.

11 ‘‘(J)(i) The total expenses, and the expenses

12 attributable to football, men’s basketball, wom13 en’s basketball, all other men’s sports combined,

14 and all other women’s sports combined, made by

15 the institution for its intercollegiate athletics ac16 tivities.

17 ‘‘(ii) For the purpose of clause (i) expenses

18 for intercollegiate athletics activities allocable to

19 a sport shall include (without limitation) grants20 in-aid, salaries, travel, equipment, and supplies,

21 but expenses such as general and administrative

22 overhead not so allocable shall be included in the

23 calculation of total expenses only.

24 ‘‘(K) A statement of any reduction that

25 may or is likely to occur during the ensuing 4
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1 academic years in the number of athletes that

2 will be permitted to participate in any collegiate

3 sport, or in the financial resources that the insti4 tution will make available to any such sport,

5 and the reasons for any such reduction.’’; and

6 (2) by striking paragraph (5).

7 SEC. 467. NATIONAL STUDENT LOAN DATA SYSTEM.

8 Section 485B(a) (20 U.S.C. 1092b(a)) is amended by

9 inserting before the period at the end of the third sentence

10 the following: ‘‘no later than one year after the date of en11 actment of the Higher Education Amendments of 1997’’.

12 SEC. 468. PROGRAM PARTICIPATION AGREEMENTS.

13 (a) REQUIRED CONTENT.—Section 487(a) (20 U.S.C.

14 1094(a)) is amended—

15 (1) in the first sentence, by striking ‘‘, except

16 with respect to a program under subpart 4 of part

17 A,’’;

18 (2) in paragraph (3), by striking subparagraph

19 (B) and inserting the following:

20 ‘‘(B) the appropriate State agency;’’;

21 (3) in paragraph (4), by striking ‘‘subsection

22 (b)’’ and inserting ‘‘subsection (c)’’;

23 (4) in paragraph (15), by striking ‘‘State review

24 entities under subpart 1 of part H’’ and inserting

25 ‘‘appropriate State agencies’’;
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1 (5) by striking paragraph (18) and inserting the

2 following:

3 ‘‘(18) The institution will meet the requirements

4 established pursuant to section 485(g).’’; and

5 (6) by striking paragraph (21) and inserting the

6 following:

7 ‘‘(21) The institution will meet the requirements

8 established by the Secretary, appropriate State agen9 cies, and accrediting agencies, pursuant to part H of

10 this title.’’.

11 (b) AUDITS; FINANCIAL RESPONSIBILITY.—Section

12 487(c) is amended—

13 (1) in paragraph (1)(A)(i), by striking ‘‘State

14 agencies’’ and everything that follows through the

15 semicolon and inserting ‘‘and appropriate State agen16 cies;’’;

17 (2) in paragraph (2), by striking ‘‘subpart 3’’

18 and inserting ‘‘subpart 2’’;

19 (3) in paragraph (4), by striking ‘‘, after con20 sultation’’ and everything that follows through ‘‘part

21 H,’’; and

22 (4) in paragraph (5), by striking ‘‘State review’’

23 and everything that follows through ‘‘part H’’ and in24 serting ‘‘appropriate State agencies’’.
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1 SEC. 469. QUALITY ASSURANCE AND REGULATORY SIM2 PLIFICATION.

3 Section 487A (20 U.S.C. 1094a) is amended to read

4 as follows:

5 ‘‘SEC. 487A. QUALITY ASSURANCE AND REGULATORY SIM6 PLIFICATION PROGRAM.

7 ‘‘(a) IN GENERAL.—The Secretary is authorized to se8 lect institutions for voluntary participation in a Regu9 latory Simplification Program that provides participating

10 institutions with the opportunity to develop and implement

11 an alternative management program that—

12 ‘‘(1) shall allow alternative methods of comply13 ing with regulations issued with respect to parts A

14 through E and G of this title;

15 ‘‘(2) shall not modify or waive the application of

16 any requirement or other provision of this Act; and

17 ‘‘(3) may include a Quality Assurance Program

18 through which individual schools develop and imple19 ment their own comprehensive systems to verify stu20 dent financial aid application data, thereby enhanc21 ing program integrity within the student aid delivery

22 system.

23 ‘‘(b) SELECTION CRITERIA.—The criteria for selecting

24 institutions for participation in the Regulatory Simplifica25 tion Program shall be based on criteria that include dem26 onstrated institutional performance, as determined by the
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1 Secretary, and shall take into consideration regulatory sim2 plification goals, as determined by the Secretary. The selec3 tion criteria shall ensure the participation of representa4 tives of institutions of higher education according to size,

5 mission, and geographical distribution.

6 ‘‘(c) REMOVAL FROM THE PROGRAM.—The Secretary

7 is authorized to determine—

8 ‘‘(1) when an institution that is unable to ad9 minister the Regulatory Simplification Program

10 must be removed from such program, and

11 ‘‘(2) when institutions desiring to cease partici12 pation in such Program will be required to complete

13 the current award year under the requirements of the

14 Program.

15 ‘‘(d) EXPERIMENTAL SITES.—The Secretary is author16 ized to designate institutions selected for participation in

17 the Regulatory Simplification Program as Experimental

18 Sites.

19 ‘‘(e) DEFINITIONS.—For purposes of this section, the

20 term ‘current award year’ means the award year during

21 which the participating institution indicates its intention

22 to cease participation.’’.

23 SEC. 470. DISTANCE EDUCATION DEMONSTRATION PRO24 GRAMS.

25 Part G of title IV is amended—
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1 (1) by redesignating section 487B (20 U.S.C.

2 1094b) as section 487C; and

3 (2) by inserting after section 487A (as amended

4 by section 469) the following new section:

5 ‘‘SEC. 487B. DISTANCE EDUCATION DEMONSTRATION PRO6 GRAMS.

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

8 ‘‘(1) to allow demonstration programs that are

9 strictly monitored by the Department of Education to

10 test the quality and viability of expanded distance

11 education programs currently restricted under this

12 Act;

13 ‘‘(2) to provide for increased student access to

14 higher education through distance education pro15 grams;

16 ‘‘(3) to help determine the most effective means

17 of delivering quality education via distance education

18 course offerings; and

19 ‘‘(4) to help determine the appropriate level of

20 Federal assistance for students enrolled in distance

21 education programs.

22 ‘‘(b) DEMONSTRATION PROGRAMS AUTHORIZED.—

23 ‘‘(1) IN GENERAL.—The Secretary is authorized

24 to select institutions or a consortia of institutions for

25 voluntary participation in a Distance Education
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1 Demonstration Program that provides participating

2 institutions with the ability to offer distance edu3 cation programs without regard to the current restric4 tions in part F or G of this title or part A of title

5 I.

6 ‘‘(2) EXEMPTIONS.—The Secretary is authorized

7 to exempt any institution or consortia participating

8 in a Distance Education Demonstration Program

9 from any of the requirements of parts F or G of this

10 title, or part A of title I, or the regulations prescribed

11 under such parts.

12 ‘‘(c) APPLICATION.—Each institution or consortia of

13 institutions desiring to participate in a demonstration pro14 gram under this section shall submit an application to the

15 Secretary at such time, in such manner, and accompanied

16 by such information as the Secretary may require.

17 ‘‘(d) SELECTION.—To the extent feasible, the Secretary

18 shall select a representative sample institutions for partici19 pation in the demonstration program authorized under this

20 section. In selecting institutions for participation, the Sec21 retary shall take into consideration the institution’s finan22 cial and administrative capability and the type of program

23 or programs being offered via distance education course of24 ferings. The Secretary shall, in the exercise of his discretion,

25 determine the number of demonstration programs to be al-
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1 lowed based on the number and quality of applications re2 ceived and the Department’s capacity to oversee and mon3 itor each demonstration program.

4 ‘‘(e) EVALUATION AND REPORT.—

5 ‘‘(1) EVALUATION.—The Secretary shall, on an

6 annual basis, evaluate the demonstration programs

7 authorized under this section. Such evaluations shall

8 specifically review—

9 ‘‘(A) the quality of the programs being of10 fered;

11 ‘‘(B) issues related to student financial as12 sistance for distance education; and

13 ‘‘(C) effective technologies for delivering dis14 tance education course offerings.

15 ‘‘(2) POLICY ANALYSIS.—In addition, the Sec16 retary shall review current policies and identify those

17 policies which present impediments to the develop18 ment and use of distance learning and other non19 traditional methods of expanding access to education.

20 ‘‘(3) REPORT.—The Secretary shall report to the

21 appropriate committees of Congress with respect to—

22 ‘‘(A) the evaluations of the demonstration

23 programs authorized under this section; and

24 ‘‘(B) any proposed legislative changes de25 signed to enhance the use of distance education.’’.
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1 SEC. 471. GARNISHMENT REQUIREMENTS.

2 (a) MAXIMUM PERCENTAGE.—Section 488A(a)(1) (20

3 U.S.C. 1095a(a)(1)) is amended by striking ‘‘10 percent’’

4 and inserting ‘‘15 percent’’.

5 (b) NO ATTACHMENT OF STUDENT ASSISTANCE.—Sec6 tion 488A is further amended—

7 (1) by redesignating subsection (d) as subsection

8 (e); and

9 (2) by inserting after subsection (c) the following

10 new subsection:

11 ‘‘(d) NO ATTACHMENT OF STUDENT ASSISTANCE.—

12 Except as authorized in this section, notwithstanding any

13 other provision of Federal or State law, no grant, loan, or

14 work assistance awarded under this title, or property trace15 able to such assistance, shall be subject to garnishment or

16 attachment in order to satisfy any debt owed by the student

17 awarded such assistance, other than a debt owed to the Sec18 retary and arising under this title.’’.

19 SEC. 472. ADMINISTRATIVE SUBPOENA AUTHORITY.

20 Part G of title IV of the Act is further amended by

21 inserting immediately after section 490 (20 U.S.C. 1097)

22 the following new section:

23 ‘‘SEC. 490A. ADMINISTRATIVE SUBPOENAS.

24 ‘‘(a) AUTHORITY.—To assist the Secretary in the con25 duct of investigations of possible violations of the provisions

26 of this title, the Secretary is authorized to require by sub-
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1 poena the production of information, documents, reports,

2 answers, records, accounts, papers, and other documentary

3 evidence pertaining to participation in any program under

4 this title. The production of any such records may be re5 quired from any place in a State.

6 ‘‘(b) ENFORCEMENT.—In case of contumacy by, or re7 fusal to obey a subpoena issued to, any person, the Sec8 retary may request the Attorney General to invoke the aid

9 of any court of the United States where such person resides

10 or transacts business for a court order for the enforcement

11 of this section.’’.

12 SEC. 473. ADVISORY COMMITTEE ON STUDENT FINANCIAL

13 ASSISTANCE.

14 Section 491 (20 U.S.C. 1098) is amended—

15 (1) in subsection (b)—

16 (A) by inserting ‘‘staffing levels,’’ after ‘‘al17 locations and expenditures,’’ the first place it ap18 pears; and

19 (B) by striking the fourth and fifth sen20 tences and inserting the following: ‘‘Reports,

21 publications, and other documents, including

22 documents in electronic form, shall not be subject

23 to review by the Secretary.’’;

24 (2) in subsection (c)(1)—
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1 (A) by striking ‘‘11 members’’ and inserting

2 ‘‘15 members’’; and

3 (B) by striking ‘‘3 members’’ each place it

4 appears in subparagraphs (A) and (B) and in5 serting ‘‘5 members’’;

6 (3) in subsection (c)(2), by striking ‘‘7 members’’

7 and inserting ‘‘11 members’’;

8 (4) in subsection (e)—

9 (A) by striking everything after ‘‘except

10 that,’’ in paragraph (1) and inserting the follow11 ing:

12 ‘‘within 90 days after the date of enactment of the Higher

13 Education Amendments of 1998, 2 additional members

14 shall be appointed by the President pro tempore of the Sen15 ate (one upon the recommendation of the Majority Leader

16 and one upon the recommendation of the Minority Leader)

17 and 2 additional members shall be appointed by the Speak18 er of the House (one upon the recommendation of the Major19 ity Leader and one upon the recommendation of the Minor20 ity Leader). Of the additional members—

21 ‘‘(A) 2 shall be appointed for a term of 1 year;

22 ‘‘(B) 1 shall be appointed for a term of 2 years;

23 and

24 ‘‘(C) 1 shall be appointed for a term of 3 years.’’;
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1 (B) by striking ‘‘Six members’’ in para2 graph (4) and inserting ‘‘Eight members’’; and

3 (C) by adding at the end the following new

4 paragraph:

5 ‘‘(6) No officer or full-time employee of the United

6 States shall serve as members of the Advisory Committee.’’;

7 (5) by striking subsection (g) and inserting the

8 following:

9 ‘‘(g) COMPENSATION AND EXPENSES.—Members of the

10 Advisory Committee may each receive reimbursement for

11 travel expenses incident to attending Advisory Committee

12 meetings, including per diem in lieu of subsistence, as au13 thorized by section 5703 of title 5, United States Code, for

14 persons in the Government service employed intermit15 tently.’’;

16 (6) in subsection (h)(1), by striking ‘‘may be

17 necessary by the Chairman without regard to’’ and

18 inserting ‘‘may be deemed necessary by the Chairman

19 without regard to personnel ceilings or’’;

20 (7) in subsection (i), by striking ‘‘$750,000’’ and

21 inserting ‘‘$850,000’’;

22 (8) by striking subsection (j) and inserting the

23 following:

24 ‘‘(j) SPECIAL ANALYSES AND ACTIVITIES.—The com25 mittee shall—
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1 ‘‘(1) monitor and evaluate the modernization of

2 student financial aid systems and delivery processes;

3 ‘‘(2) monitor and evaluate the implementation of

4 a performance-based organization within the Depart5 ment of Education and report to Congress, on not less

6 than an annual basis, including recommendations for

7 improvements; and

8 ‘‘(3) assess the adequacy of current methods for

9 disseminating information about programs under this

10 title and recommend improvements, as appropriate,

11 regarding early needs assessment and information for

12 first-year high school students.’’;

13 (9) in subsection (k), by striking ‘‘1998’’ and in14 serting ‘‘2004’’; and

15 (10) by striking subsection (l).

16 SEC. 474. MEETINGS AND NEGOTIATED RULEMAKING.

17 Section 492 (20 U.S.C. 1098a) is amended to read as

18 follows:

19 ‘‘SEC. 492. NEGOTIATED RULEMAKING.

20 ‘‘(a) IN GENERAL.—

21 ‘‘(1) REGULATION DEVELOPMENT.—In develop22 ing regulations and revisions thereof under this title,

23 the Secretary shall obtain the advice and rec24 ommendations of individuals and representatives of

25 the groups involved in student financial assistance
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1 programs under this title, such as students, legal as2 sistance organizations that represent students, institu3 tions of higher education, guaranty agencies, lenders,

4 secondary markets, loan servicers, guaranty agency

5 servicers, and collection agencies.

6 ‘‘(2) INPUT.—Such advice and recommendations

7 may be obtained through such mechanisms as na8 tional meetings and electronic exchanges of informa9 tion.

10 ‘‘(b) PROPOSED REGULATIONS.—After obtaining such

11 advice and recommendations, and prior to publishing any

12 proposed regulations and revisions thereof under this title

13 in the Federal Register, the Secretary shall prepare draft

14 regulations and submit such regulations to a negotiated

15 rulemaking process. In establishing the negotiated rule16 making process under this section, the Secretary shall—

17 ‘‘(1) follow the procedural requirements used in

18 implementing section 1601(b) of the Elementary and

19 Secondary Education Act of 1965;

20 ‘‘(2) select participants in the negotiations proc21 ess from individuals and groups participating in the

22 exchanges described in subsection (a)(1), including

23 both representatives of such groups from the District

24 of Columbia, and industry participants, and to the

25 extent possible, the Secretary shall select individuals
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1 reflecting the diversity in the industry, representing

2 both large and small participants, as well as individ3 uals serving local areas and national markets;

4 ‘‘(3) conduct the negotiations process in a timely

5 manner in order that final regulations may be issued

6 by the Secretary within the 240-day period described

7 in section 431(g) of the General Education Provisions

8 Act, and any subsequent revisions to regulations

9 under this title may be issued in accordance with the

10 master calendar provisions of section 482 of this title;

11 and

12 ‘‘(4) prepare a transcript of the negotiated rule13 making proceedings that shall be available to the pub14 lic prior to the issuance of any final regulations.

15 ‘‘(c) FEDERAL ADVISORY COMMITTEE ACT.—The Fed16 eral Advisory Committee Act shall not apply to activities

17 carried out under this section.’’.

18 PART H—PROGRAM INTEGRITY

19 SEC. 476. STATE POSTSECONDARY REVIEW PROGRAM.

20 (a) AMENDMENTS.—Part H of title IV is amended—

21 (1) in the heading of the part, by striking

22 ‘‘TRIAD’’;

23 (2) by striking subpart 1 (20 U.S.C. 1099a

24 through 1099a–3); and
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1 (3) by redesignating subparts 2 and 3 as sub2 parts 1 and 2, respectively.

3 (b) CONFORMING AMENDMENTS.—Section 496 (20

4 U.S.C. 1099b) is amended by striking ‘‘subpart 3’’ each

5 place it appears in subsections (j) and (k) and inserting

6 ‘‘subpart 2’’.

7 SEC. 477. ACCREDITING AGENCY RECOGNITION.

8 (a) RECOGNITION.—

9 (1) The heading of subpart 1 of part H (as re10 designated by section 476(a)(3)) is amended by strik11 ing ‘‘Approval’’ and inserting ‘‘Recognition’’.

12 (2) The heading of section 496 is amended by

13 striking ‘‘APPROVAL’’ and inserting ‘‘RECOGNI14 TION’’.

15 (b) STANDARDS.—Section 496(a) is amended—

16 (1) by striking ‘‘STANDARDS’’ and inserting

17 ‘‘CRITERIA’’;

18 (2) by striking ‘‘standards’’ each place it ap19 pears and inserting ‘‘criteria’’;

20 (3) in paragraph (5)—

21 (A) by striking ‘‘of accreditation’’ and in22 serting ‘‘for accreditation’’;

23 (B) by inserting ‘‘the quality (including the

24 quality of distance learning programs or courses)

25 of’’ before ‘‘the institution’s’’;
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1 (C) in subparagraph (G), by striking ‘‘pro2 gram length and tuition and fees in relation to

3 the subject matters taught’’ and inserting ‘‘meas4 ures of program length’’;

5 (D) by striking subparagraph (J);

6 (E) in subparagraph (L), by inserting ‘‘the

7 most recent student loan default rate data pro8 vided by the Secretary and’’ after ‘‘including’’;

9 (F) by striking ‘‘and’’ at the end of sub10 paragraph (K);

11 (G) by inserting ‘‘and’’ after the semicolon

12 at the end of subparagraph (L);

13 (H) by redesignating subparagraphs (K)

14 and (L) as subparagraphs (J) and (K), respec15 tively;

16 (I) by inserting after subparagraph (K) (as

17 so redesignated) the following new subparagraph:

18 ‘‘(L) refund policy;’’; and

19 (J) by striking ‘‘(J), and (L)’’ and inserting

20 ‘‘(K) and (L)’’;

21 (4) in paragraph (7), by striking ‘‘State post22 secondary review entity’’ and inserting ‘‘State licens23 ing or authorizing agency’’; and

24 (5) in paragraph (8), by striking ‘‘State post25 secondary’’ and everything that follows through ‘‘is lo-
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1 cated’’ and inserting ‘‘State licensing or authorizing

2 agency’’.

3 (c) OPERATING PROCEDURES.—Section 496(c) is

4 amended—

5 (1) by striking ‘‘approved by the Secretary’’ and

6 inserting ‘‘recognized by the Secretary’’;

7 (2) in paragraph (1), by striking ‘‘(at least’’ and

8 everything that follows through ‘‘unannounced),’’ and

9 inserting ‘‘(which may include unannounced site vis10 its)’’; and

11 (3) in paragraph (3), by inserting before the

12 semicolon at the end the following: ‘‘, except that new

13 sites offered through telecommunications for programs

14 previously included in the scope of accreditation ap15 proval need not be subject to such on-site visits’’.

16 (d) CONFORMING AMENDMENTS.—Section 496 is fur17 ther amended—

18 (1) in subsection (d)—

19 (A) by striking ‘‘APPROVAL’’ in the heading

20 of such subsection and inserting ‘‘RECOGNITION’’;

21 and

22 (B) by striking ‘‘approved’’ and inserting

23 ‘‘recognized’’;

24 (2) in subsection (f), by striking ‘‘approved’’ and

25 inserting ‘‘recognized’’;
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1 (3) in subsection (g)—

2 (A) by striking ‘‘STANDARDS’’ and inserting

3 ‘‘CRITERIA’’; and

4 (B) by striking ‘‘standards’’ and inserting

5 ‘‘criteria’’;

6 (4) in subsection (k)(2), by striking ‘‘standards’’

7 and inserting ‘‘criteria’’;

8 (5) in subsection (l)—

9 (A) by striking ‘‘APPROVAL’’ in the heading

10 of such subsection and inserting ‘‘RECOGNITION’’;

11 (B) by striking ‘‘the standards’’ each place

12 it appears and inserting ‘‘its standards’’; and

13 (C) by striking ‘‘approval’’ and inserting

14 ‘‘recognition’’; and

15 (6) in subsection (n)—

16 (A) by striking ‘‘standards’’ each place it

17 appears and inserting ‘‘criteria’’;

18 (B) in paragraph (3)—

19 (i) by striking ‘‘approval or dis20 approval’’ and inserting ‘‘recognition or de21 nial of recognition’’; and

22 (ii) by striking ‘‘approval process’’ and

23 inserting ‘‘recognition process’’; and

24 (C) by striking paragraph (4) and inserting

25 the following:
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1 ‘‘(4) The Secretary shall maintain sufficient docu2 mentation to support the conclusions reached in the recogni3 tion process, and, if the Secretary does not recognize any

4 accreditation agency or association, shall make publicly

5 available the reason for denying recognition, including ref6 erence to the specific criteria under this section which have

7 not been fulfilled.’’.

8 SEC. 478. ELIGIBILITY AND CERTIFICATION PROCEDURES.

9 (a) SINGLE APPLICATION FORM.—Section 498(b)(1)

10 (20 U.S.C. 1099c(b)(1)) is amended by striking ‘‘accredita11 tion, and capability’’ and inserting ‘‘accreditation, finan12 cial responsibility, and administrative capacity’’.

13 (b) FINANCIAL RESPONSIBILITY STANDARDS.—Section

14 498(c) is amended—

15 (1) in paragraph (1), in the matter preceding

16 subparagraph (A), by striking ‘‘is able’’ and inserting

17 ‘‘has sufficient resources to ensure against the precipi18 tous closure of the institution and is able’’;

19 (2) in paragraph (2)—

20 (A) in the first sentence, by striking ‘‘oper21 ating losses, net worth, asset-to-liabilities ratios,

22 or operating fund deficits’’ and inserting ‘‘to ra23 tios that demonstrate financial responsibility,’’;

24 (B) in the second sentence, by inserting ‘‘,

25 public,’’ after ‘‘for profit’’; and
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1 (C) by inserting before the period at the end

2 the following: ‘‘, and develop an appropriate and

3 cost effective process under this subpart that does

4 not duplicate other reporting requirements for

5 assessing and reviewing financial responsibil6 ity’’; and

7 (3) in paragraph (4)—

8 (A) in the first sentence, by striking ‘‘ratio

9 of current assets to current liabilities’’ and in10 serting ‘‘criteria’’; and

11 (B) in subparagraph (C), by striking ‘‘cur12 rent operating ratio requirement’’ and inserting

13 ‘‘criteria imposed by the Secretary pursuant to

14 paragraph (2)’’.

15 (c) ADMINISTRATIVE CAPACITY.—Section 498(d)(1) is

16 amended—

17 (1) in subparagraph (A), by striking ‘‘student

18 aid programs; and’’ and inserting ‘‘student financial

19 assistance under this title;’’;

20 (2) by redesignating subparagraph (B) as sub21 paragraph (D); and

22 (3) by inserting after subparagraph (A) the fol23 lowing new subparagraphs:

24 ‘‘(B) written procedures for, or written in25 formation relating to, each office with respect to,
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1 the approval, disbursement, and delivery of stu2 dent financial assistance under this title;

3 ‘‘(C)(i) a division of functions for authoriz4 ing payments of student financial assistance

5 under this title and the disbursement or delivery

6 of such assistance, so that no office at the institu7 tion has responsibility for both functions; and

8 ‘‘(ii) an adequate system of checks and bal9 ances for internal control at the institution with

10 respect to student financial assistance under this

11 title; and’’.

12 (d) ACTIONS ON APPLICATIONS.—Section 498(f) is

13 amended—

14 (1) by striking ‘‘shall conduct’’ and inserting

15 ‘‘may conduct’’;

16 (2) by striking ‘‘may establish’’ and inserting

17 ‘‘shall establish’’;

18 (3) by striking ‘‘may coordinate’’ and inserting

19 ‘‘shall, to the extent practicable, coordinate’’; and

20 (4) by adding at the end the following new sen21 tence: ‘‘The Secretary may exempt from the site visit

22 requirement any institution that is participating in

23 the Quality Assurance Program established under sec24 tion 487A at the time such site visit would be re25 quired under this subsection.’’.
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1 (e) TIME LIMITATIONS.—Section 498(g) is amended to

2 read as follows:

3 ‘‘(g) TIME LIMITATIONS.—(1) After the expiration of

4 the certification of any institution or upon request for ini5 tial certification from an institution not previously cer6 tified, the Secretary may certify the eligibility for the pur7 poses of any program authorized under this title of each

8 such institution for a period not to exceed 6 years.

9 ‘‘(2) The Secretary shall notify each institution of the

10 expiration of its eligibility no later than six months prior

11 to such expiration.’’.

12 (f) CONFORMING AMENDMENT.—Section 498(h)(2) is

13 amended by striking ‘‘approval’’ and inserting ‘‘recogni14 tion’’.

15 (g) PROVISIONAL CERTIFICATION.—Section 498(i) is

16 amended by adding at the end the following new paragraph:

17 ‘‘(4)(A) The Secretary may provisionally certify an in18 stitution seeking approval of a change in ownership based

19 on the preliminary review by the Secretary of a materially

20 complete application that is received by the Secretary with21 in 10 business days of the transaction for which the ap22 proval is sought.

23 ‘‘(B) A provisional certification under this paragraph

24 shall expire no later than the end of the month following

25 the month in which the transaction occurred, except that
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1 if the Secretary has not issued a decision on the application

2 for the change of ownership within that period, the Sec3 retary may continue such provisional certification on a

4 month-to-month basis until such decision has been issued.’’.

5 SEC. 479. PROGRAM REVIEW AND DATA.

6 (a) GENERAL AUTHORITY.—Section 498A(a) (20

7 U.S.C. 1099c–1(a)) is amended—

8 (1) in paragraph (2)—

9 (A) by striking ‘‘may give’’ and inserting

10 ‘‘shall give’’;

11 (B) by inserting before the semicolon at the

12 end of subparagraph (C) the following: ‘‘, that

13 are not accounted for by changes in those pro14 grams’’;

15 (C) in subparagraph (D), by striking ‘‘the

16 appropriate’’ and everything that follows through

17 ‘‘of this part’’ and inserting ‘‘the State licensing

18 or authorizing agency’’;

19 (D) by striking subparagraph (F); and

20 (E) by redesignating subparagraph (G) as

21 subparagraph (F); and

22 (2) in paragraph (3)(A), by inserting ‘‘relevant’’

23 after ‘‘all’’.

24 (b) SPECIAL ADMINISTRATIVE RULES.—Section

25 498A(b) is amended to read as follows:
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1 ‘‘(b) SPECIAL ADMINISTRATIVE RULES.—(1) In carry2 ing out paragraphs (1) and (2) of subsection (a), the Sec3 retary shall—

4 ‘‘(A) establish guidelines designed to ensure uni5 formity of practice in the conduct of program reviews

6 of institutions; and

7 ‘‘(B) inform the appropriate State agency and

8 accrediting agency or association whenever taking ac9 tion against an institution under this section, section

10 498, or section 432.

11 ‘‘(2) The Secretary shall review the regulations of the

12 Department and the application of such regulations to en13 sure the uniformity of interpretation and application of the

14 regulations. In conducting such review, the Secretary shall

15 consult with relevant representatives of institutions partici16 pating in the programs authorized by this title.’’.

17 TITLE V—DEVELOPING

18 INSTITUTIONS

19 SEC. 501. ESTABLISHMENT OF NEW TITLE V.

20 Title V is amended to read as follows:
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1 ‘‘TITLE V—DEVELOPING

2 INSTITUTIONS

3 ‘‘PART A—HISPANIC-SERVING INSTITUTIONS

4 ‘‘SEC. 501. PROGRAM AUTHORIZED.

5 ‘‘The Secretary shall provide grants and related assist6 ance to Hispanic-serving institutions to enable such institu7 tions to improve and expand their capacity to serve His8 panic and other low-income students.

9 ‘‘SEC. 502. ELIGIBILITY; DEFINITIONS.

10 ‘‘(a) DEFINITIONS.—For the purpose of this part:

11 ‘‘(1) HISPANIC-SERVING INSTITUTION.—The term

12 ‘Hispanic-serving institution’ means an institution of

13 higher education which—

14 ‘‘(A) is an eligible institution;

15 ‘‘(B) at the time of application, has an en16 rollment of undergraduate full-time equivalent

17 students that is at least 25 percent Hispanic stu18 dents; and

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

20 50 percent of its Hispanic students are low-in21 come individuals.

22 ‘‘(2) ELIGIBLE INSTITUTION.—The term ‘eligible

23 institution’ means—

24 ‘‘(A) an institution of higher education—
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1 ‘‘(i) which has an enrollment of needy

2 students as required by subsection (b) of this

3 section;

4 ‘‘(ii) except as provided in section

5 522(b), the average educational and general

6 expenditures of which are low, per full-time

7 equivalent undergraduate student, in com8 parison with the average educational and

9 general expenditures per full-time equiva10 lent undergraduate student of institutions

11 that offer similar instruction;

12 ‘‘(iii) which is—

13 ‘‘(I) legally authorized to provide,

14 and provides within the State, an edu15 cational program for which such insti16 tution awards a bachelor’s degree; or

17 ‘‘(II) a junior or community col18 lege;

19 ‘‘(iv) which is accredited by a nation20 ally recognized accrediting agency or asso21 ciation determined by the Secretary to be

22 reliable authority as to the quality of train23 ing offered or which is, according to such an

24 agency or association, making reasonable

25 progress toward accreditation;
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1 ‘‘(v) which meets such other require2 ments as the Secretary may prescribe; and

3 ‘‘(vi) which is located in a State; and

4 ‘‘(B) any branch of any institution of high5 er education described under subparagraph (A)

6 which by itself satisfies the requirements con7 tained in clauses (i) and (ii) of such subpara8 graph.

9 For purposes of the determination of whether an in10 stitution is an eligible institution under this para11 graph, the factor described under subparagraph (A)(i)

12 shall be given twice the weight of the factor described

13 under subparagraph (A)(ii).

14 ‘‘(3) LOW-INCOME INDIVIDUAL.—The term ‘low15 income individual’ means an individual from a fam16 ily whose taxable income for the preceding year did

17 not exceed 150 percent of an amount equal to the pov18 erty level determined by using criteria of poverty es19 tablished by the Bureau of the Census.

20 ‘‘(4) FULL-TIME EQUIVALENT STUDENTS.—The

21 term ‘full-time equivalent students’ means the sum of

22 the number of students enrolled full time at an insti23 tution, plus the full-time equivalent of the number of

24 students enrolled part time (determined on the basis
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1 of the quotient of the sum of the credit hours of all

2 part-time students divided by 12) at such institution.

3 ‘‘(5) JUNIOR OR COMMUNITY COLLEGE.—The

4 term ‘junior or community college’ means an institu5 tion of higher education—

6 ‘‘(A) that admits as regular students per7 sons who are beyond the age of compulsory school

8 attendance in the State in which the institution

9 is located and who have the ability to benefit

10 from the training offered by the institution;

11 ‘‘(B) that does not provide an educational

12 program for which it awards a bachelor’s degree

13 (or an equivalent degree); and

14 ‘‘(C) that—

15 ‘‘(i) provides an educational program

16 of not less than 2 years that is acceptable

17 for full credit toward such a degree, or

18 ‘‘(ii) offers a 2-year program in engi19 neering, mathematics, or the physical or bi20 ological sciences, designed to prepare a stu21 dent to work as a technician or at the

22 semiprofessional level in engineering, sci23 entific, or other technological fields requir24 ing the understanding and application of
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1 basic engineering, scientific, or mathemati2 cal principles of knowledge.

3 ‘‘(6) EDUCATIONAL AND GENERAL EXPENDI4 TURES.—For the purpose of this part, the term ‘edu5 cational and general expenditures’ means the total

6 amount expended by an institution of higher edu7 cation for instruction, research, public service, aca8 demic support (including library expenditures), stu9 dent services, institutional support, scholarships and

10 fellowships, operation and maintenance expenditures

11 for the physical plant, and any mandatory transfers

12 which the institution is required to pay by law.

13 ‘‘(7) ENDOWMENT FUND.—For the purpose of

14 this part, the term ‘endowment fund’ means a fund

15 that—

16 ‘‘(A) is established by State law, by an in17 stitution of higher education, or by a foundation

18 that is exempt from Federal income taxation;

19 ‘‘(B) is maintained for the purpose of gener20 ating income for the support of the institution;

21 and

22 ‘‘(C) does not include real estate.

23 ‘‘(b) ENROLLMENT OF NEEDY STUDENTS.—For the

24 purpose of this part, the term ‘enrollment of needy students’
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1 means an enrollment at an institution of higher education

2 or a junior or community college which includes—

3 ‘‘(1) at least 50 percent of the degree students so

4 enrolled who are receiving need-based assistance

5 under title IV of this Act in the second fiscal year

6 preceding the fiscal year for which the determination

7 is being made (other than loans for which an interest

8 subsidy is paid pursuant to section 428), or

9 ‘‘(2) a substantial percentage of students receiv10 ing Pell Grants in the second fiscal year preceding

11 the fiscal year for which determination is being made,

12 in comparison with the percentage of students receiv13 ing Pell Grants at all such institutions in the second

14 fiscal year preceding the fiscal year for which the de15 termination is made, unless the requirement of this

16 subdivision is waived under section 522(a).

17 ‘‘SEC. 503. AUTHORIZED ACTIVITIES.

18 ‘‘(a) TYPES OF ACTIVITIES AUTHORIZED.—Grants

19 awarded under this part shall be used by Hispanic-serving

20 institutions of higher education to assist such institutions

21 to plan, develop, undertake, and carry out programs.

22 ‘‘(b) AUTHORIZED ACTIVITIES.—Grants awarded

23 under this section shall be used for one or more of the follow24 ing activities:
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1 ‘‘(1) purchase, rental, or lease of scientific or lab2 oratory equipment for educational purposes, includ3 ing instructional and research purposes;

4 ‘‘(2) construction, maintenance, renovation, and

5 improvement in classrooms, libraries, laboratories,

6 and other instructional facilities;

7 ‘‘(3) support of faculty exchanges, faculty devel8 opment, curriculum development, academic instruc9 tion, and faculty fellowships to assist in attaining ad10 vanced degrees in their field of instruction;

11 ‘‘(4) purchase of library books, periodicals, and

12 other educational materials, including telecommuni13 cations program material;

14 ‘‘(5) tutoring, counseling, and student service

15 programs designed to improve academic success;

16 ‘‘(6) funds management, administrative manage17 ment, and acquisition of equipment for use in

18 strengthening funds management;

19 ‘‘(7) joint use of facilities, such as laboratories

20 and libraries;

21 ‘‘(8) establishing or improving a development of22 fice to strengthen or improve contributions from

23 alumni and the private sector;

24 ‘‘(9) establishing or improving an endowment

25 fund;
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1 ‘‘(10) creating or improving facilities for Inter2 net or other distance learning academic instruction

3 capabilities, including purchase or rental of tele4 communications technology equipment or services;

5 ‘‘(11) establishing or enhancing a program of

6 teacher education designed to qualify students to teach

7 in public elementary and secondary schools;

8 ‘‘(12) establishing community outreach programs

9 which will encourage elementary and secondary school

10 students to develop academic skills and the interest to

11 pursue postsecondary education;

12 ‘‘(13) improving and expanding graduate and

13 professional opportunities for Hispanic students; and

14 ‘‘(14) other activities proposed in the application

15 submitted pursuant to section 504 that—

16 ‘‘(A) contribute to carrying out the purposes

17 of this section; and

18 ‘‘(B) are approved by the Secretary as part

19 of the review and acceptance of such application.

20 ‘‘(c) ENDOWMENT FUND LIMITATIONS.—

21 ‘‘(1) PORTION OF GRANT.—An institution may

22 not use more than 20 percent of its grant under this

23 part for any fiscal year for establishing or improving

24 an endowment fund.
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1 ‘‘(2) MATCHING REQUIRED.—An institution that

2 uses any portion of its grant under this part for any

3 fiscal year for establishing or improving an endow4 ment fund shall provide an equal or greater amount

5 for such purposes from non-Federal funds.

6 ‘‘(3) REGULATIONS.—The Secretary shall publish

7 rules and regulations specifically governing the use of

8 funds for establishing or improving an endowment

9 fund.

10 ‘‘SEC. 504. APPLICATION PROCESS.

11 ‘‘(a) INSTITUTIONAL ELIGIBILITY.—Each Hispanic12 serving institution desiring to receive assistance under this

13 part shall submit to the Secretary such enrollment data as

14 may be necessary to demonstrate that it is a Hispanic-serv15 ing institution, along with such other information and data

16 as the Secretary may by regulation require.

17 ‘‘(b) APPLICATIONS.—Any institution which is deter18 mined by the Secretary to be a Hispanic-serving institution

19 (on the basis of the information and data submitted under

20 subsection (a)) may submit an application for assistance

21 under this section to the Secretary. Such application shall

22 include—

23 ‘‘(1) a 5-year plan for improving the assistance

24 provided by the Hispanic-serving institution to His25 panic and other low-income students; and
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1 ‘‘(2) such other information and assurance as the

2 Secretary may require.

3 ‘‘(c) PRIORITY.—The Secretary shall give priority to

4 applications that contain satisfactory evidence that such in5 stitution has entered into or will enter into a collaborative

6 arrangement with at least one local educational agency or

7 community-based organization having demonstrated effec8 tiveness to provide such agency with assistance (from funds

9 other than funds provided under this part) in reducing His10 panic dropout rates, improving Hispanic rates of academic

11 achievement, and increasing the rates at which Hispanic

12 high school graduates enroll in higher education.

13 ‘‘(d) SPECIAL RULE.—For the purposes of this part,

14 no Hispanic-serving college or university which is eligible

15 for and receives funds under this part may concurrently

16 receive other funds under title III.

17 ‘‘SEC. 505. DURATION OF GRANT.

18 ‘‘(a) AWARD PERIOD.—The Secretary may award a

19 grant to an eligible institution under this part for 5 years,

20 except that no institution shall be eligible to secure a subse21 quent 5-year grant award under this part until two years

22 have elapsed since the expiration of its most recent 5-year

23 grant award.

24 ‘‘(b) LIMITATIONS.—In awarding grants under this

25 part the Secretary shall give priority to applicants who are
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1 not already receiving a grant under this part, except that

2 for the purpose of this subsection a grant under section

3 524(a)(1) shall not be considered a grant under this part.

4 ‘‘(c) PLANNING GRANTS.—Notwithstanding subsection

5 (a), the Secretary may award a grant to an eligible institu6 tion under this part for a period of one year for the purpose

7 of preparation of plans and applications for a grant under

8 this part.

9 ‘‘PART B—GENERAL PROVISIONS

10 ‘‘SEC. 521. APPLICATIONS FOR ASSISTANCE.

11 ‘‘(a) APPLICATIONS.—

12 ‘‘(1) APPLICATIONS REQUIRED.—Any institution

13 which is eligible for assistance under this title shall

14 submit to the Secretary an application for assistance

15 at such time, in such form, and containing such in16 formation, as may be necessary to enable the Sec17 retary to evaluate its need for assistance. Subject to

18 the availability of appropriations to carry out this

19 title, the Secretary may approve an application for a

20 grant under this title only if the Secretary determines

21 that—

22 ‘‘(A) the application meets the requirements

23 of subsection (b);
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1 ‘‘(B) the applicant is eligible for assistance

2 in accordance with the part of this title under

3 which the assistance is sought; and

4 ‘‘(C) the applicant’s performance goals are

5 sufficiently rigorous as to meet the purposes of

6 this title and the performance objectives and in7 dicators for this title established by the Secretary

8 pursuant to the Government Performance and

9 Results Act.

10 ‘‘(2) PRELIMINARY APPLICATIONS.—In carrying

11 out paragraph (1), the Secretary shall develop a pre12 liminary application for use by eligible institutions

13 applying under part A prior to the submission of the

14 principal application.

15 ‘‘(b) CONTENTS.—An institution, in its application for

16 a grant, shall—

17 ‘‘(1) set forth, or describe how the institution will

18 develop, a comprehensive development plan to

19 strengthen the institution’s academic quality and in20 stitutional management, and otherwise provide for in21 stitutional self-sufficiency and growth (including

22 measurable objectives for the institution and the Sec23 retary to use in monitoring the effectiveness of activi24 ties under this title);
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1 ‘‘(2) set forth policies and procedures to ensure

2 that Federal funds made available under this title for

3 any fiscal year will be used to supplement and, to the

4 extent practical, increase the funds that would other5 wise be made available for the purposes of section

6 503, and in no case supplant those funds;

7 ‘‘(3) set forth policies and procedures for evaluat8 ing the effectiveness in accomplishing the purpose of

9 the activities for which a grant is sought under this

10 title;

11 ‘‘(4) provide for such fiscal control and fund ac12 counting procedures as may be necessary to ensure

13 proper disbursement of and accounting for funds

14 made available to the applicant under this title;

15 ‘‘(5) provide (A) for making such reports, in

16 such form and containing such information, as the

17 Secretary may require to carry out the functions

18 under this title and the Government Performance and

19 Results Act, including not less than one report annu20 ally setting forth the institution’s progress toward

21 achieving the objectives for which the funds were

22 awarded, and (B) for keeping such records and af23 fording such access thereto, as the Secretary may find

24 necessary to assure the correctness and verification of

25 such reports;
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1 ‘‘(6) provide that the institution will comply

2 with the limitations set forth in section 526;

3 ‘‘(7) describe in a comprehensive manner any

4 proposed project for which funds are sought under the

5 application and include—

6 ‘‘(A) a description of the various compo7 nents of the proposed project, including the esti8 mated time required to complete each such com9 ponent;

10 ‘‘(B) in the case of any development project

11 which consists of several components (as de12 scribed by the applicant pursuant to subpara13 graph (A)), a statement identifying those compo14 nents which, if separately funded, would be

15 sound investments of Federal funds and those

16 components which would be sound investments of

17 Federal funds only if funded under this title in

18 conjunction with other parts of the development

19 project (as specified by the applicant);

20 ‘‘(C) an evaluation by the applicant of the

21 priority given any proposed project for which

22 funds are sought in relation to any other projects

23 for which funds are sought by the applicant

24 under this title, and a similar evaluation re25 garding priorities among the components of any
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1 single proposed project (as described by the ap2 plicant pursuant to subparagraph (A));

3 ‘‘(D) a detailed budget showing the manner

4 in which funds for any proposed project would

5 be spent by the applicant; and

6 ‘‘(E) a detailed description of any activity

7 which involves the expenditure of more than

8 $25,000, as identified in the budget referred to in

9 subparagraph (D); and

10 ‘‘(8) include such other information as the Sec11 retary may prescribe.

12 ‘‘(c) PRIORITY CRITERIA PUBLICATION REQUIRED.—

13 The Secretary shall publish in the Federal Register, pursu14 ant to chapter 5 of title 5, United States Code, all policies

15 and procedures required to exercise the authority set forth

16 in subsection (a). No other criteria, policies, or procedures

17 shall apply.

18 ‘‘(d) ELIGIBILITY DATA.—The Secretary shall use the

19 most recent and relevant data concerning the number and

20 percentage of students receiving need-based assistance under

21 title IV of this Act in making eligibility determinations and

22 shall advance the base-year forward following each annual

23 grant cycle.
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1 ‘‘SEC. 522. WAIVER AUTHORITY AND REPORTING REQUIRE2 MENT.

3 ‘‘(a) WAIVER REQUIREMENTS; NEED-BASED ASSIST4 ANCE STUDENTS.—The Secretary may waive the require5 ments set forth in section 502(a)(2)(A)(i) in the case of an

6 institution—

7 ‘‘(1) which is extensively subsidized by the State

8 in which it is located and charges low or no tuition;

9 ‘‘(2) which serves a substantial number of low10 income students as a percentage of its total student

11 population;

12 ‘‘(3) which is contributing substantially to in13 creasing higher education opportunities for education14 ally disadvantaged, underrepresented, or minority

15 students, who are low-income individuals;

16 ‘‘(4) which is substantially increasing higher

17 educational opportunities for individuals in rural or

18 other isolated areas which are unserved by postsecond19 ary institutions; or

20 ‘‘(5) wherever located, if the Secretary determines

21 that the waiver will substantially increase higher edu22 cation opportunities appropriate to the needs of His23 panic Americans.

24 ‘‘(b) WAIVER DETERMINATIONS; EXPENDITURES.—(1)

25 The Secretary may waive the requirements set forth in sec26 tion 502(a)(2)(A)(ii) if the Secretary determines, based on
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1 persuasive evidence submitted by the institution, that the

2 institution’s failure to meet that criterion is due to factors

3 which, when used in the determination of compliance with

4 such criterion, distort such determination, and that the in5 stitution’s designation as an eligible institution under part

6 A is otherwise consistent with the purposes of such part.

7 ‘‘(2) The Secretary shall submit to the Congress every

8 other year a report concerning the institutions which, al9 though not satisfying the criterion contained in section

10 502(a)(2)(A)(ii), have been determined to be eligible institu11 tions under part A institutions which enroll significant

12 numbers of Black American, Hispanic, Native American,

13 Asian American, or Native Hawaiian students under part

14 A, as the case may be. Such report shall—

15 ‘‘(A) identify the factors referred to in paragraph

16 (1) which were considered by the Secretary as factors

17 that distorted the determination of compliance with

18 section 502(a)(2)(A)(ii); and

19 ‘‘(B) contain a list of each institution deter20 mined to be an eligible institution under part A in21 cluding a statement of the reasons for each such deter22 mination.

23 ‘‘SEC. 523. APPLICATION REVIEW PROCESS.

24 ‘‘(a) REVIEW PANEL.—All applications submitted

25 under this title by institutions of higher education shall be
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1 read by a panel of readers composed of individuals selected

2 by the Secretary. The Secretary shall assure that no indi3 vidual assigned under this section to review any applica4 tion has any conflict of interest with regard to the applica5 tion which might impair the impartiality with which the

6 individual conducts the review under this section.

7 ‘‘(2) All readers selected by the Secretary shall receive

8 thorough instruction from the Secretary regarding the eval9 uation process for applications submitted under this title

10 and consistent with the provisions of this title, including—

11 ‘‘(A) an enumeration of the factors to be used to

12 determine the quality of applications submitted under

13 this title; and

14 ‘‘(B) an enumeration of the factors to be used to

15 determine whether a grant should be awarded for a

16 project under this title, the amount of any such grant,

17 and the duration of any such grant.

18 ‘‘(b) RECOMMENDATIONS OF PANEL.—In awarding

19 grants under this title, the Secretary shall take into consid20 eration the recommendations of the panel made under sub21 section (a).

22 ‘‘(c) NOTIFICATION.—Not later than June 30 of each

23 year, the Secretary shall notify each institution of higher

24 education making an application under this title of—
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1 ‘‘(1) the scores given the applicant by the panel

2 pursuant to this section;

3 ‘‘(2) the recommendations of the panel with re4 spect to such application; and

5 ‘‘(3) the reasons for the decision of the Secretary

6 in awarding or refusing to award a grant under this

7 title, and any modifications, if any, in the rec8 ommendations of the panel made by the Secretary.

9 ‘‘SEC. 524. COOPERATIVE ARRANGEMENTS.

10 ‘‘(a) GENERAL AUTHORITY.—The Secretary may make

11 grants to encourage cooperative arrangements with funds

12 available to carry out part A, between institutions eligible

13 for assistance under part A and between such institutions

14 and institutions not receiving assistance under this title for

15 the activities described in section 503 so that the resources

16 of the cooperating institutions might be combined and

17 shared to achieve the purposes of such part and avoid costly

18 duplicative efforts and to enhance the development of part

19 A eligible institutions.

20 ‘‘(b) PRIORITY.—The Secretary shall give priority to

21 grants for the purposes described under subsection (a) when22 ever the Secretary determines that the cooperative arrange23 ment is geographically and economically sound or will ben24 efit the applicant institution.
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1 ‘‘(c) DURATION.—Grants to institutions having a co2 operative arrangement may be made under this section for

3 a period as determined under section 505.

4 ‘‘SEC. 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER

5 PROGRAMS.

6 ‘‘(a) ASSISTANCE ELIGIBILITY.—Each institution

7 which the Secretary determines to be an institution eligible

8 under part A may be eligible for waivers in accordance with

9 subsection (b).

10 ‘‘(b) WAIVER APPLICABILITY.—(1) Subject to, and in

11 accordance with, regulations promulgated for the purpose

12 of this section, in the case of any application by an institu13 tion referred to in subsection (a) for assistance under any

14 programs specified in paragraph (2), the Secretary is au15 thorized, if such application is otherwise approvable, to

16 waive any requirement for a non-Federal share of the cost

17 of the program or project, or, to the extent not inconsistent

18 with other law, to give, or require to be given, priority con19 sideration of the application in relation to applications

20 from other institutions.

21 ‘‘(2) The provisions of this section shall apply to any

22 program authorized by title IV or VII of this Act.

23 ‘‘(c) LIMITATION.—The Secretary shall not waive,

24 under subsection (b), the non-Federal share requirement for

25 any program for applications which, if approved, would re-
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1 quire the expenditure of more than 10 percent of the appro2 priations for the program for any fiscal year.

3 ‘‘SEC. 526. LIMITATIONS.

4 The funds appropriated under section 528 may not be

5 used—

6 ‘‘(1) for a school or department of divinity or

7 any religious worship or sectarian activity;

8 ‘‘(2) for an activity that is inconsistent with a

9 State plan for desegregation of higher education ap10 plicable to such institution;

11 ‘‘(3) for an activity that is inconsistent with a

12 State plan of higher education applicable to such in13 stitution; or

14 ‘‘(4) for purposes other than the purposes set

15 forth in the approved application under which the

16 funds were made available to the institution.

17 ‘‘SEC. 527. PENALTIES.

18 Whoever, being an officer, director, agent, or employee

19 of, or connected in any capacity with, any recipient of Fed20 eral financial assistance or grant pursuant to this title em21 bezzles, willfully misapplies, steals, or obtains by fraud any

22 of the funds which are the subject of such grant or assist23 ance, shall be fined not more than $10,000 or imprisoned

24 for not more than 2 years, or both.
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1 ‘‘SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

2 ‘‘(a) AUTHORIZATIONS.—There are authorized to be

3 appropriated to carry out part A, $80,000,000 for fiscal

4 year 1999, and such sums as may be necessary for each

5 of the 4 succeeding fiscal years.

6 ‘‘(b) USE OF MULTIPLE YEAR AWARDS.—In the event

7 of a multiple year award to any institution under this title,

8 the Secretary shall make funds available for such award

9 from funds appropriated for this title for the fiscal year

10 in which such funds are to be used by the recipient.’’.

11 TITLE VI—INTERNATIONAL AND

12 GRADUATE EDUCATION PRO13 GRAMS

14 SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE

15 STUDIES.

16 (a) STATUTORY STRUCTURE.—Title VI is amended—

17 (1) by striking

18 ‘‘PART A—INTERNATIONAL AND FOREIGN

19 LANGUAGE STUDIES’’

20 and inserting the following:

21 ‘‘PART A—INTERNATIONAL EDUCATION

22 ‘‘Subpart 1—International and Foreign Language

23 Studies’’;

24 (2) by striking
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1 ‘‘PART B—BUSINESS AND INTERNATIONAL

2 EDUCATION PROGRAMS’’

3 and inserting the following:

4 ‘‘Subpart 2—Business and International Education

5 Programs’’;

6 (3) by striking

7 ‘‘PART C—INSTITUTE FOR INTERNATIONAL

8 PUBLIC POLICY’’

9 and inserting the following:

10 ‘‘Subpart 3—Institute for International Public

11 Policy’’; and

12 (4) by striking

13 ‘‘PART D—GENERAL PROVISIONS’’

14 and inserting the following:

15 ‘‘Subpart 4—General Provisions’’.

16 (b) FINDINGS AND PURPOSES.—Section 601 (20

17 U.S.C. 1121) is amended to read as follows:

18 ‘‘SEC. 601. FINDINGS AND PURPOSES.

19 ‘‘(a) FINDINGS.—The Congress finds as follows:

20 ‘‘(1) The security, stability, and economic vital21 ity of the United States in a complex global era de22 pend upon American experts in and citizens knowl23 edgeable about world regions, foreign languages and

24 international affairs, as well as on a strong research

25 base in these areas.
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1 ‘‘(2) Advances in communications technology

2 and the growth of regional and global problems make

3 knowledge of other countries and the ability to com4 municate in other languages more essential to the

5 promotion of mutual understanding and cooperation

6 among nations and their peoples.

7 ‘‘(3) Dramatic post-Cold War changes in the

8 world’s geopolitical and economic landscapes are cre9 ating needs for American expertise and knowledge

10 about a greater diversity of less commonly taught for11 eign languages and nations of the world.

12 ‘‘(4) Systematic efforts are necessary to enhance

13 the capacity of institutions of higher education in the

14 United States and to encourage a broader cross-sec15 tion of institutions of higher education to develop and

16 expand programs for producing graduates with inter17 national and foreign language expertise and knowl18 edge, and research on such areas, in a variety of dis19 ciplines and at all levels of graduate and undergradu20 ate education.

21 ‘‘(5) Cooperative efforts among the Federal Gov22 ernment, institutions of higher education, and the

23 private sector are necessary to promote the generation

24 and dissemination of information about world re25 gions, foreign languages, and international affairs
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1 throughout education, government, business, civic,

2 and nonprofit sectors in the United States.

3 ‘‘(b) PURPOSES.—The purposes of this part are—

4 ‘‘(1)(A) to support centers, programs and fellow5 ships in institutions of higher education in the

6 United States for producing increased numbers of

7 trained personnel and research in foreign languages,

8 area and other international studies;

9 ‘‘(B) to develop a pool of international experts to

10 meet national needs;

11 ‘‘(C) to develop and validate specialized mate12 rials and techniques for foreign language acquisition

13 and fluency, emphasizing (but not limited to) the less

14 commonly taught languages;

15 ‘‘(D) to promote access to research and training

16 overseas; and

17 ‘‘(E) to advance the internationalization of a va18 riety of disciplines throughout undergraduate and

19 graduate education;

20 ‘‘(2) to support cooperative efforts promoting ac21 cess to and the dissemination of international and

22 foreign language knowledge, teaching materials and

23 research throughout education, government, business,

24 civic and nonprofit sectors in the United States

25 through the use of advanced technologies; and
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1 ‘‘(3) to coordinate the programs of the Federal

2 Government in the areas of foreign language, area

3 and other international studies, including profes4 sional international affairs education and research.’’.

5 (c) GRADUATE AND UNDERGRADUATE NATIONAL RE6 SOURCE CENTERS.—

7 (1) NATIONAL RESOURCE CENTERS.—Section

8 602(a) (20 U.S.C. 1122(a)) is amended—

9 (A) in the heading, by striking ‘‘NATIONAL

10 LANGUAGE AND AREA CENTERS AUTHORIZED’’

11 and inserting ‘‘NATIONAL RESOURCE CENTERS

12 FOR FOREIGN LANGUAGE AND AREA OR INTER13 NATIONAL STUDIES AUTHORIZED’’;

14 (B) in paragraph (1)(A), by striking ‘‘com15 prehensive language and area centers’’ and in16 serting ‘‘comprehensive foreign language and

17 area or international studies centers’’;

18 (C) in paragraph (1)(B), by striking ‘‘lan19 guage and area centers’’ and inserting ‘‘foreign

20 language and area or international studies cen21 ters’’; and

22 (D) by striking paragraph (2) and insert23 ing the following:

24 ‘‘(2) AUTHORIZED ACTIVITIES.—
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1 ‘‘(A) IN GENERAL.—Any grant made under

2 paragraph (1) may be used to pay all or part

3 of the cost of establishing or operating a center

4 or program, in accordance with this subsection.

5 ‘‘(B) MANDATORY ACTIVITIES.—Activities to

6 be conducted by centers assisted under this sub7 section shall include—

8 ‘‘(i) support for the instruction of for9 eign languages and the offering of courses in

10 a variety of nonlanguage disciplines that

11 cover the center’s subject area or topic, and

12 the incorporation of such instruction in

13 baccalaureate and graduate programs of

14 study in a variety of disciplinary, inter15 disciplinary, or professional fields;

16 ‘‘(ii) support for teaching and research

17 materials, including library acquisitions, in

18 the center’s subject area or topic;

19 ‘‘(iii) programs of outreach or linkage

20 with State and local educational agencies,

21 postsecondary education institutions at all

22 levels, professional schools, government,

23 business, media, or the general public; and
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1 ‘‘(iv) program coordination and devel2 opment, curriculum planning and develop3 ment, and student advisement.

4 ‘‘(C) PERMISSIBLE ACTIVITIES.—Activities

5 to be conducted by centers assisted under this

6 subsection may include—

7 ‘‘(i) support for the creation of faculty

8 positions in disciplines that are underrep9 resented in the center’s instructional pro10 gram;

11 ‘‘(ii) establishment and maintenance of

12 linkages with overseas institutions of higher

13 education for the purpose of contributing to

14 the teaching and research of the center;

15 ‘‘(iii) support for bringing visiting

16 scholars and faculty to the center to teach or

17 conduct research;

18 ‘‘(iv) professional development of the

19 center’s faculty and staff;

20 ‘‘(v) projects conducted in cooperation

21 with other National Resource Centers ad22 dressing themes of world regional, cross-re23 gional, international, or global importance;

24 ‘‘(vi) summer institutes in the United

25 States or abroad designed to provide lan-
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1 guage and area training in the center’s field

2 or topic; and

3 ‘‘(vii) support for faculty, staff, and

4 student travel in foreign areas, regions, or

5 countries, and for the development and sup6 port of educational programs abroad for

7 students.’’.

8 (2) GRADUATE FELLOWSHIPS; EXPENSE LIMITA9 TIONS.—Section 602 is further amended by striking

10 subsections (b) and (c) and inserting the following:

11 ‘‘(b) GRADUATE FELLOWSHIPS FOR FOREIGN LAN12 GUAGE AND AREA OR INTERNATIONAL STUDIES.—

13 ‘‘(1) AUTHORITY.—The Secretary is authorized

14 to make grants to institutions of higher education or

15 combinations of such institutions for the purpose of

16 paying fellowships to individuals undergoing ad17 vanced training in any center or program approved

18 by the Secretary under this part.

19 ‘‘(2) ELIGIBLE STUDENTS.—Students receiving

20 fellowships described in paragraph (1) shall be indi21 viduals who are engaged in an instructional program

22 with stated performance goals for functional foreign

23 language use or in a program developing such per24 formance goals, in combination with area studies,

25 international studies, or the international aspects of
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1 a professional studies program, including

2 predissertation level studies, preparation for disserta3 tion research, dissertation research abroad, and dis4 sertation writing.

5 ‘‘(c) RULES WITH RESPECT TO EXPENSES.—

6 ‘‘(1) UNDERGRADUATE TRAVEL.—No funds may

7 be expended under this part for undergraduate travel

8 except in accordance with rules prescribed by the Sec9 retary setting forth policies and procedures to assure

10 that Federal funds made available for such travel are

11 expended as part of a formal program of supervised

12 study.

13 ‘‘(2) GRADUATE DEPENDENT AND TRAVEL EX14 PENSES.—Fellowships awarded to graduate level re15 cipients may include allowances for dependents and

16 for travel for research and study in the United States

17 and abroad.’’.

18 (d) LANGUAGE RESOURCE CENTERS.—Section 603(a)

19 (20 U.S.C. 1123(a)) is amended—

20 (1) by striking paragraph (5) and inserting the

21 following:

22 ‘‘(5) a significant focus on the teaching and

23 learning needs of the less commonly taught languages,

24 including an assessment of the strategic needs, the de25 termination of ways to meet those needs nationally,
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1 and the publication and dissemination of instruc2 tional materials in the less commonly taught lan3 guages;’’;

4 (2) by striking the period at the end of para5 graph (6) and inserting ‘‘; and’’; and

6 (3) by inserting after paragraph (6) the follow7 ing new paragraph:

8 ‘‘(7) the operation of intensive summer language

9 institutes to train advanced foreign language stu10 dents, provide professional development, and improve

11 language instruction through preservice and inservice

12 language training for teachers.’’.

13 (e) UNDERGRADUATE INTERNATIONAL STUDIES AND

14 FOREIGN LANGUAGE PROGRAMS.—Section 604 (20 U.S.C.

15 1124) is amended—

16 (1) in the heading of subsection (a), by striking

17 ‘‘INCENTIVES’’ and all that follows through ‘‘PRO18 GRAMS’’ and inserting ‘‘PROGRAM INCENTIVES’’;

19 (2) in subsection (a)(1)—

20 (A) by striking ‘‘or combinations of such in21 stitutions’’ in the first sentence and inserting ‘‘,

22 combinations of such institutions, or partner23 ships between nonprofit educational organiza24 tions and such institutions,’’;
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1 (B) by striking ‘‘a program’’ and inserting

2 ‘‘programs’’; and

3 (C) by striking the second sentence and in4 serting the following: ‘‘Such grants shall be

5 awarded for the purpose of seeking to create new

6 programs or to strengthen existing programs in

7 undergraduate area studies, foreign languages,

8 and other international fields.’’;

9 (3) by striking paragraphs (2) and (3) and in10 serting the following:

11 ‘‘(2) USE OF FUNDS.—Grants made under this

12 section may be used for Federal share of the cost of

13 projects and activities which are an integral part of

14 such a program, such as—

15 ‘‘(A) planning for the development and ex16 pansion of programs in undergraduate inter17 national studies, and foreign languages and the

18 internationalization of undergraduate education;

19 ‘‘(B) teaching, research, curriculum develop20 ment, and other related activities;

21 ‘‘(C) training of faculty members in foreign

22 countries;

23 ‘‘(D) expansion of existing and development

24 of new opportunities for learning foreign lan-
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1 guages, including the less commonly taught lan2 guages;

3 ‘‘(E) programs under which foreign teachers

4 and scholars may visit institutions as visiting

5 faculty;

6 ‘‘(F) international education programs de7 signed to develop or enhance linkages between

8 two- and four-year institutions of higher edu9 cation, or baccalaureate and postbaccalaureate

10 programs or institutions;

11 ‘‘(G) the development of an international

12 dimension in preservice and inservice teacher

13 training;

14 ‘‘(H) the development of undergraduate edu15 cational programs in locations abroad where

16 such opportunities are not otherwise available or

17 which serve students for whom such opportuni18 ties are not otherwise available and which pro19 vide courses that are closely related to on-campus

20 foreign language and international curricula;

21 ‘‘(I) the integration of new and continuing

22 education abroad opportunities for undergradu23 ate students into curricula of specific degree pro24 grams;
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1 ‘‘(J) the development of model programs to

2 enrich or enhance the effectiveness of educational

3 programs abroad, including predeparture and

4 postreturn programs, and the integration of edu5 cational programs abroad into the curriculum of

6 the home institution;

7 ‘‘(K) the expansion of library and teaching

8 resources;

9 ‘‘(L) the development of programs designed

10 to integrate professional and technical education

11 with area studies, foreign languages, and other

12 international fields;

13 ‘‘(M) the establishment of linkages overseas

14 with institutions of higher education and organi15 zations that contribute to the educational objec16 tives of this subsection;

17 ‘‘(N) the conduct of summer institutes in

18 foreign area and other international fields to

19 provide faculty and curriculum development, in20 cluding the integration of professional and tech21 nical education with foreign area and other

22 international studies, and to provide foreign

23 area and other international knowledge or skills

24 to government personnel or private sector profes25 sionals in international activities;
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1 ‘‘(O) the development of partnerships be2 tween institutions of higher education and the

3 private sector, government, and elementary and

4 secondary education institutions to enhance

5 international knowledge and skills; and

6 ‘‘(P) the use of innovative technology to in7 crease access to international education pro8 grams.

9 ‘‘(3) NON-FEDERAL SHARE.—The non-Federal

10 share of the cost of the programs assisted under this

11 subsection may be provided in cash from the private

12 sector corporations or foundations in an amount

13 equal to one-third of the total requested grant amount,

14 or may be provided as in-cash or in-kind contribution

15 from institutional and noninstitutional funds, includ16 ing State and private sector corporation or founda17 tion contributions, equal to one-half of the total re18 quested grant amount.’’;

19 (4) by adding at the end of subsection (a) the fol20 lowing new paragraphs:

21 ‘‘(5) SPECIAL RULE.—The Secretary may waive

22 or reduce the required non-Federal share for title III23 eligible institutions which have submitted a grant ap24 plication under this section.
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1 ‘‘(6) EVALUATION CRITERIA AND REPORT.—As a

2 condition for the award of any grant under this sub3 section, the Secretary may establish criteria for evalu4 ating programs and require an annual report which

5 evaluates the progress and performance of students in

6 such programs.’’.

7 (5) by striking subsection (b);

8 (6) by redesignating subsection (c) as subsection

9 (b); and

10 (7) by adding at the end the following new sub11 section:

12 ‘‘(c) FUNDING SUPPORT.—The Secretary may use no

13 more than 10 percent of the total amount appropriated for

14 this title, other than amounts appropriated for part D, for

15 carrying out the purposes of this section.’’.

16 (f) INTENSIVE SUMMER LANGUAGE INSTITUTES.—Sec17 tion 605 (20 U.S.C. 1124a) is repealed.

18 (g) RESEARCH; STUDIES; ANNUAL REPORT.—Section

19 606(a) (20 U.S.C. 1125(a)) is amended—

20 (1) in paragraph (4), by inserting before the

21 semicolon at the end the following: ‘‘, area studies, or

22 other international fields’’;

23 (2) by striking ‘‘and’’ at the end of paragraph

24 (5);
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1 (3) by striking the period at the end of para2 graph (6) and inserting ‘‘; and’’; and

3 (4) by inserting after paragraph (6) the follow4 ing new paragraph:

5 ‘‘(7) studies and surveys of the uses of technology

6 in foreign language, area and international studies

7 programs.’’.

8 (h) PERIODICALS.—Section 607 (20 U.S.C. 1125a) is

9 amended to read as follows:

10 ‘‘SEC. 607. TECHNOLOGICAL INNOVATION AND COOPERA11 TION FOR FOREIGN INFORMATION ACCESS.

12 ‘‘(a) AUTHORITY.—The Secretary is authorized to

13 make grants to institutions of higher education, public or

14 nonprofit private library institutions, or consortia of such

15 institutions, to develop innovative techniques or programs

16 using new electronic technologies to collect, organize, pre17 serve and widely disseminate information on world regions

18 and countries other than the United States that address the

19 nation’s teaching and research needs in international edu20 cation and foreign languages.

21 ‘‘(b) AUTHORIZED ACTIVITIES.—Grants under this

22 section may be used—

23 ‘‘(1) to facilitate access to or preserve foreign in24 formation resources in print or electronic forms;
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1 ‘‘(2) to develop new means of immediate, full-text

2 document delivery for information and scholarship

3 from abroad;

4 ‘‘(3) to develop new means of shared electronic

5 access to international data;

6 ‘‘(4) to support collaborative projects of indexing,

7 cataloging, and other means of bibliographic access

8 for scholars to important research materials published

9 or distributed outside the United States;

10 ‘‘(5) to develop methods for the wide dissemina11 tion of resources written in non-Roman language

12 alphabets;

13 ‘‘(6) to assist teachers of less commonly taught

14 languages in acquiring, via electronic and other

15 means, materials suitable for classroom use; and

16 ‘‘(7) to promote collaborative technology based

17 projects in foreign languages, area and international

18 studies among grant recipients under this title.

19 ‘‘(c) APPLICATION.—Each institution or consortium

20 desiring a grant under this section shall submit an applica21 tion to the Secretary at such time, in such manner, and

22 accompanied by such information and assurances as the

23 Secretary may reasonably require.

24 ‘‘(d) MATCH REQUIRED.—The Federal share of the

25 total cost of carrying out a program supported by a grant
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under this section shall not be more than 662 1 ⁄3 percent. The

2 non-Federal share of such cost may be provided either in3 kind or in cash, and may include contributions from pri4 vate sector corporations or foundations.’’.

5 (i) DEVELOPMENT GRANTS.—Section 610 (20 U.S.C.

6 1127) is amended by adding at the end the following new

7 subsection:

8 ‘‘(d) DEVELOPMENT GRANTS AUTHORIZED.—The Sec9 retary is encouraged to consider the establishment of new

10 centers, and may use at least 10 percent of the funds avail11 able for this section to make grants for the establishment

12 of such new centers.’’.

13 (j) AUTHORIZATION OF APPROPRIATIONS.—Section

14 610A (20 U.S.C. 1128) is amended by striking ‘‘1993’’ and

15 inserting ‘‘1999’’.

16 (k) CONFORMING AMENDMENT.—Title VI is further

17 amended by redesignating sections 606, 607, 608, 609, 610,

18 and 610A as sections 605 through 610, respectively.

19 SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PRO20 GRAMS.

21 (a) CENTERS FOR INTERNATIONAL BUSINESS EDU22 CATION.—Section 612 (20 U.S.C. 1130–1) is amended—

23 (1) in subsection (c)(1)(B), by striking ‘‘ad24 vanced’’;
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1 (2) in subsection (c)(1)(C), by striking ‘‘evening

2 or summer programs,’’ and inserting ‘‘programs’’;

3 and

4 (3) in subsection (d)(2)(G), by inserting before

5 the period at the end the following: ‘‘, such as a rep6 resentative of a community college in the region

7 served by the center’’.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

9 614 (20 U.S.C. 1130b) is amended by striking ‘‘1993’’ each

10 place it appears and inserting ‘‘1999’’.

11 (c) TECHNICAL AMENDMENT.—The heading of section

12 611 (20 U.S.C. 1130) is amended to read as follows:

13 ‘‘SEC. 611. FINDINGS AND PURPOSES.’’.

14 SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

15 (a) MINORITY FOREIGN SERVICE PROFESSIONAL DE16 VELOPMENT PROGRAM.—Section 621(e) (20 U.S.C.

17 1131(e)) is amended by striking ‘‘one-fourth’’ and inserting

18 ‘‘one-half’’.

19 (b) JUNIOR YEAR AND SUMMER ABROAD PROGRAM.—

20 Section 622 (20 U.S.C. 1131a) is amended—

21 (1) in the heading of such section, by inserting

22 ‘‘AND SUMMER’’ after ‘‘YEAR’’;

23 (2) in subsection (a)—

24 (A) by striking ‘‘shall conduct’’ and insert25 ing ‘‘is authorized to conduct’’;
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1 (B) by inserting ‘‘and summer’’ after ‘‘jun2 ior year’’ each place it appears in the first and

3 second sentences;

4 (C) by inserting ‘‘in a junior year abroad

5 program’’ after ‘‘Each student’’ in the last sen6 tence;

7 (3) in subsection (b)(2), by inserting ‘‘or sum8 mer’’ after ‘‘junior year’’; and

9 (4) in subsection (c)—

10 (A) by inserting ‘‘or summer abroad pro11 gram’’ after ‘‘junior year abroad program’’ each

12 place it appears; and

13 (B) by striking ‘‘abroad or internship’’ and

14 inserting ‘‘abroad, summer abroad, or intern15 ship’’.

16 (c) INTERNSHIPS.—Section 624 (20 U.S.C. 1132c) is

17 amended—

18 (1) by striking ‘‘The Institute’’ and inserting

19 ‘‘(a) IN GENERAL.—The Institute’’; and

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(b) POSTBACCALAUREATE INTERNSHIPS.—The Insti23 tute shall enter into agreements with institutions of higher

24 education described in the first sentence of subsection (a)

25 to conduct internships in Washington, DC, for students who
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1 have completed study for the baccalaureate degree. The In2 ternship program authorized by this subsection shall—

3 ‘‘(1) be designated to assist the students to pre4 pare for a master’s degree program;

5 ‘‘(2) be carried out with the assistance of the

6 Woodrow Wilson Fellowship program;

7 ‘‘(3) contain work experience for the students

8 designated to contribute to the objectives set forth in

9 paragraph (1); and

10 ‘‘(4) contain such other elements as the Institute

11 determines will carry out the objectives of this sub12 section.’’.

13 (d) NEW PROGRAMS.—Title VI is further amended—

14 (1) by redesignating sections 625 through 627

15 (20 U.S.C. 1131d–1131f) as sections 627 through 629;

16 and

17 (2) by inserting after section 624 the following

18 new sections:

19 ‘‘SEC. 625. INSTITUTIONAL DEVELOPMENT.

20 ‘‘(a) IN GENERAL.—The Institute shall make grants,

21 from amounts available to it in each fiscal year, to Histori22 cally Black Colleges and Universities, Hispanic-serving In23 stitutions, Tribally Controlled Indian Community Colleges,

24 and minority institutions, to enable such colleges, univer-
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1 sities, and institutions to strengthen international affairs

2 programs.

3 ‘‘(b) APPLICATION.—No grant may be made by the In4 stitute under this section unless an application is made by

5 the college, university, or institution at such time, in such

6 manner, and accompanied by such information as the In7 stitute may require.

8 ‘‘(c) DEFINITIONS.—As used in this section—

9 ‘‘(1) the term ‘Historically Black College and

10 University’ has the same meaning given the term by

11 section 322(2) of this Act;

12 ‘‘(2) the term ‘Hispanic-serving Institution’ has

13 the same meaning given the term by section 316(b)(1)

14 of this Act;

15 ‘‘(3) the term ‘Tribally controlled Indian com16 munity college’ has the same meaning given that term

17 by the Tribally Controlled Community College Assist18 ance Act of 1978; and

19 ‘‘(4) the term ‘minority institution’ has the same

20 meaning given that term in section 347 of this Act.

21 ‘‘SEC. 626. INTERAGENCY COMMITTEE ON MINORITY CA22 REERS IN INTERNATIONAL AFFAIRS.

23 ‘‘(a) ESTABLISHMENT.—There is established in the ex24 ecutive branch of the Federal Government an Interagency

25 Committee on Minority Careers in International Affairs
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1 composed of 7 members. The members of the Committee

2 shall be—

3 ‘‘(1) the Undersecretary for International Affairs

4 and Commodity Programs of the Department of Agri5 culture, appointed by the Secretary of Agriculture;

6 ‘‘(2) the Assistant Secretary and Director Gen7 eral, the Commercial Service of the Department of

8 Commerce, appointed by the Secretary of Commerce;

9 ‘‘(3) the Undersecretary of Defense for Personnel

10 and Readiness of the Department of Defense, ap11 pointed by the Secretary of Defense;

12 ‘‘(4) the Assistant Secretary for Postsecondary

13 Education in the Department of Education, ap14 pointed by the Secretary of Education;

15 ‘‘(5) the Director General of the Foreign Service

16 of the Department of State, appointed by the Sec17 retary of State;

18 ‘‘(6) the General Counsel of the Agency for Inter19 national Development, appointed by the Adminis20 trator; and

21 ‘‘(7) the Associate Director for Educational and

22 Cultural Affairs of the United States Information

23 Agency, appointed by the Director.

24 ‘‘(b) FUNCTIONS.—The Interagency Committee estab25 lished by this section shall—
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1 ‘‘(1) advise the Secretary and the Institute with

2 respect to programs authorized by this part; and

3 ‘‘(2) promote policies in each department and

4 agency participating on the Committee that are de5 signed to carry out the objectives of this part.’’.

6 (e) AUTHORIZATION.—Section 629 (20 U.S.C. 1131f)

7 (as redesignated by subsection (d)) is amended by striking

8 ‘‘1993’’ and inserting ‘‘1999’’.

9 SEC. 604. GENERAL PROVISIONS.

10 (a) DEFINITIONS.—Section 631(a) (20 U.S.C.

11 1132(a)) is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (7);

14 (2) by striking the period at the end of para15 graph (8) and inserting ‘‘; and’’; and

16 (3) by inserting after paragraph (8) the follow17 ing new paragraphs:

18 ‘‘(9) the term ‘internationalization of under19 graduate education’ means the incorporation of for20 eign languages and area and international studies

21 perspectives in any undergraduate course or curricu22 lum in order to provide international content for that

23 course of study; and

24 ‘‘(10) the term ‘educational programs abroad’

25 means programs of study, internships, or service
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1 learning outside the United States which are part of

2 a foreign language or other international curriculum

3 at the undergraduate or graduate education levels.’’.

4 (b) REPEAL.—Section 632 (20 U.S.C. 1132–1) is re5 pealed.

6 SEC. 605. TRANSFER AND REAUTHORIZATION OF GRAD7 UATE ASSISTANCE IN AREAS OF NATIONAL

8 NEED PROGRAM.

9 (a) AMENDMENT.—Title VI is amended by adding at

10 the end the following new part:

11 ‘‘PART B—GRADUATE ASSISTANCE IN AREAS OF

12 NATIONAL NEED

13 ‘‘SEC. 651. PURPOSE.

14 ‘‘In order to sustain and enhance the capacity for

15 graduate education in areas of national need, it is the pur16 pose of this part to provide, through academic departments

17 and programs of institutions of higher education, a fellow18 ship program to assist graduate students of superior ability

19 who demonstrate financial need.

20 ‘‘SEC. 652. GRANTS TO ACADEMIC DEPARTMENTS AND PRO21 GRAMS OF INSTITUTIONS.

22 ‘‘(a) GRANT AUTHORITY.—

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

24 grants to academic departments and programs and

25 other academic units of institutions of higher edu-
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1 cation that provide courses of study leading to a

2 graduate degree in order to enable such institutions to

3 provide assistance to graduate students in accordance

4 with this part. The Secretary shall coordinate the ad5 ministration and regulation of programs under this

6 part with other Federal programs providing graduate

7 assistance to minimize duplication and improve effi8 ciency.

9 ‘‘(2) ADDITIONAL GRANTS.—The Secretary may

10 also make grants to such departments and programs

11 and to other units of institutions of higher education

12 granting graduate degrees which submit joint propos13 als involving nondegree granting institutions which

14 have formal arrangements for the support of doctoral

15 dissertation research with degree-granting institu16 tions. Nondegree granting institutions eligible for

17 awards as part of such joint proposals include any

18 organization which—

19 ‘‘(A) is described in section 501(c)(3) of the

20 Internal Revenue Code of 1986, and is exempt

21 from tax under section 501(a) of such Code;

22 ‘‘(B) is organized and operated substan23 tially to conduct scientific and cultural research

24 and graduate training programs;

25 ‘‘(C) is not a private foundation;
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1 ‘‘(D) has academic personnel for instruction

2 and counseling who meet the standards of the in3 stitution of higher education in which the stu4 dents are enrolled; and

5 ‘‘(E) has necessary research resources not

6 otherwise readily available in such institutions

7 to such students.

8 ‘‘(b) AWARD AND DURATION OF GRANTS.—

9 ‘‘(1) AWARDS.—The principal criterion for the

10 allocation of awards shall be the relative quality of

11 the graduate programs presented in competing appli12 cations. Consistent with an allocation of awards

13 based on quality of competing applications, the Sec14 retary shall, in making such grants, promote an equi15 table geographic distribution among eligible public

16 and private institutions of higher education.

17 ‘‘(2) DURATION.—The Secretary shall approve a

18 grant recipient under this part for a 3-year period.

19 From the sums appropriated under this part for any

20 fiscal year, the Secretary shall not make a grant to

21 any academic department or program of an institu22 tion of higher education of less than $125,000 or

23 greater than $750,000 per fiscal year.

24 ‘‘(3) REALLOTMENT.—Whenever the Secretary

25 determines that an academic department or program
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1 of an institution of higher education is unable to use

2 all of the amounts available to it under this part, the

3 Secretary shall, on such dates during each fiscal year

4 as the Secretary may fix, reallot the amounts not

5 needed to academic departments and programs of in6 stitutions which can use the grants authorized by this

7 part.

8 ‘‘SEC. 653. INSTITUTIONAL ELIGIBILITY.

9 ‘‘(a) ELIGIBILITY CRITERIA.—Any academic depart10 ment or program of an institution of higher education that

11 offers a program of postbaccalaureate study leading to a

12 graduate degree in an area of national need (as designated

13 under subsection (b)) may apply for a grant under this

14 part. No department or program shall be eligible for a grant

15 unless the program of postbaccalaureate study has been in

16 existence for at least 4 years at the time of application for

17 assistance under this part.

18 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL NEED.—

19 After consultation with appropriate Federal and nonprofit

20 agencies and organizations, the Secretary shall designate

21 areas of national need. In making such designations, the

22 Secretary shall take into account the extent to which the

23 interest is compelling, the extent to which other Federal pro24 grams support postbaccalaureate study in the area con-
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1 cerned, and an assessment of how the program could achieve

2 the most significant impact with available resources.

3 ‘‘SEC. 654. CRITERIA FOR APPLICATIONS.

4 ‘‘(a) SELECTION OF APPLICATIONS.—The Secretary

5 shall make grants to academic departments and programs

6 of institutions of higher education on the basis of applica7 tions submitted in accordance with subsection (b). Applica8 tions shall be ranked on program quality by review panels

9 of nationally recognized scholars and evaluated on the qual10 ity and effectiveness of the academic program and the

11 achievement and promise of the students to be served. To

12 the extent possible (consistent with other provisions of this

13 section), the Secretary shall make awards that are consist14 ent with recommendations of the review panels.

15 ‘‘(b) CONTENTS OF APPLICATIONS.—An academic de16 partment or program of an institution of higher education,

17 in its application for a grant, shall—

18 ‘‘(1) describe the current academic program of

19 the applicant for which the grant is sought;

20 ‘‘(2) provide assurances that the applicant will

21 provide, from other non-Federal funds, for the pur22 poses of the fellowship program under this part an

23 amount equal to at least 25 percent of the amount of

24 the grant received under this part, which contribution

25 may be in cash or in kind fairly valued;
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1 ‘‘(3) describe the number, types, and amounts of

2 the fellowships that the applicant intends to offer

3 under the grant;

4 ‘‘(4) set forth policies and procedures to assure

5 that, in making fellowship awards under this part,

6 the institution will make awards to individuals

7 who—

8 ‘‘(A) have financial need, as determined

9 under part F of title IV;

10 ‘‘(B) have excellent academic records in

11 their previous programs of study; and

12 ‘‘(C) plan to pursue the highest possible de13 gree available in their course of study;

14 ‘‘(5) set forth policies and procedures to ensure

15 that Federal funds made available under this part for

16 any fiscal year will be used to supplement and, to the

17 extent practical, increase the funds that would other18 wise be made available for the purpose of this part

19 and in no case to supplant those funds;

20 ‘‘(6) provide assurances that, in the event that

21 funds made available to the academic department or

22 program under this part are insufficient to provide

23 the assistance due a student under the commitment

24 entered into between the academic department or pro25 gram and the student, the academic department or
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1 program will, from any funds available to it, fulfill

2 the commitment to the student;

3 ‘‘(7) provide that the applicant will comply with

4 the limitations set forth in section 655;

5 ‘‘(8) provide assurances that the academic de6 partment will provide at least 1 year of supervised

7 training in instruction for students; and

8 ‘‘(9) include such other information as the Sec9 retary may prescribe.

10 ‘‘SEC. 655. AWARDS TO GRADUATE STUDENTS.

11 ‘‘(a) COMMITMENTS TO GRADUATE STUDENTS.—

12 ‘‘(1) IN GENERAL.—An academic department or

13 program of an institution of higher education shall

14 make commitments to eligible graduate students as

15 defined in section 484 (including students pursuing a

16 doctoral degree after having completed a master’s de17 gree program at an institution of higher education)

18 at any point in their graduate study to provide sti19 pends for the length of time necessary for a student

20 to complete the course of graduate study, but in no

21 case longer than 3 years.

22 ‘‘(2) SPECIAL RULE.—No such commitments

23 shall be made to students under this part unless the

24 academic department or program has determined ade25 quate funds are available to fulfill the commitment ei-
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1 ther from funds received or anticipated under this

2 part, or from institutional funds.

3 ‘‘(b) AMOUNT OF STIPENDS.—The Secretary shall

4 make payments to institutions of higher education for the

5 purpose of paying stipends to individuals who are awarded

6 fellowships under this part. The stipends the Secretary es7 tablishes shall reflect the purpose of this program to encour8 age highly talented students to undertake graduate study

9 as described in this part. In the case of an individual who

10 receives such individual’s first stipend under this part in

11 academic year 1999–2000 or any succeeding academic year,

12 such stipend shall be set at a level of support equal to that

13 provided by the National Science Foundation graduate fel14 lowships, except such amount shall be adjusted as necessary

15 so as not to exceed the fellow’s demonstrated level of need

16 as determined under part F of title IV.

17 ‘‘(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—An

18 institution of higher education that makes institutional

19 payments for tuition and fees on behalf of individuals sup20 ported by fellowships under this part in amounts that ex21 ceed the institutional payments made by the Secretary pur22 suant to section 656(a) may count the excess of such pay23 ments toward the amounts the institution is required to

24 provide pursuant to section 654(b)(2).
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1 ‘‘(d) ACADEMIC PROGRESS REQUIRED.—Notwith2 standing the provisions of subsection (a), no student shall

3 receive an award—

4 ‘‘(1) except during periods in which such student

5 is maintaining satisfactory progress in, and devoting

6 essentially full time to, study or research in the field

7 in which such fellowship was awarded, or

8 ‘‘(2) if the student is engaging in gainful em9 ployment other than part-time employment involved

10 in teaching, research, or similar activities determined

11 by the institution to be in support of the student’s

12 progress towards a degree.

13 ‘‘SEC. 656. ADDITIONAL ASSISTANCE FOR COST OF EDU14 CATION.

15 ‘‘(a) INSTITUTIONAL PAYMENTS.—(1) The Secretary

16 shall (in addition to stipends paid to individuals under this

17 part) pay to the institution of higher education, for each

18 individual awarded a fellowship under this part at such

19 institution, an institutional allowance. Except as provided

20 in paragraph (2), such allowance shall be—

21 ‘‘(A) $10,000 annually with respect to individ22 uals who first received fellowships under this part

23 prior to academic year 1999–2000; and
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1 ‘‘(B) with respect to individuals who first receive

2 fellowships during or after academic year 1999–

3 2000—

4 ‘‘(i) $10,000 for the academic year 1999–

5 2000; and

6 ‘‘(ii) for succeeding academic years, $10,000

7 adjusted annually thereafter in accordance with

8 inflation as determined by the Department of

9 Labor’s Consumer Price Index for the previous

10 calendar year.

11 ‘‘(2) The institutional allowance paid under para12 graph (1) shall be reduced by the amount the institution

13 charges and collects from a fellowship recipient for tuition

14 and other expenses as part of the recipient’s instructional

15 program.

16 ‘‘(b) USE FOR OVERHEAD PROHIBITED.—Funds made

17 available pursuant to this part may not be used for the

18 general operational overhead of the academic department

19 or program.

20 ‘‘SEC. 657. CONTINUATION AWARDS.

21 ‘‘Before making new awards under this part for any

22 fiscal year, the Secretary shall, as appropriate, making con23 tinuation awards to recipients of awards under parts B,

24 C, and D of title IX as in effect prior to the enactment

25 of the Higher Education Amendments of 1998.
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1 ‘‘SEC. 658. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘There are authorized to be appropriated $40,000,000

3 for fiscal year 1999 and such sums as may be necessary

4 for each of the 4 succeeding fiscal years to carry out this

5 part.’’.

6 (b) REPEAL.—Title IX (20 U.S.C. 1134 et seq.) is re7 pealed.

8 TITLE VII—CONSTRUCTION, RE9 CONSTRUCTION, AND REN10 OVATION OF ACADEMIC FA11 CILITIES

12 SEC. 701. EXTENSION OF PRIOR RIGHTS AND OBLIGATIONS.

13 Section 702(a) (20 U.S.C. 1132a–1(a)) is amended by

14 striking ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year

15 1999’’.

16 SEC. 702. REPEAL OF PART A.

17 (a) REPEAL.—Part A of title VII (20 U.S.C. 1132b

18 et seq.) is repealed.

19 (b) CONFORMING AMENDMENTS.—

20 (1) Section 701(b) (20 U.S.C. 1132a(b)) is

21 amended by striking ‘‘part A or B’’ and inserting

22 ‘‘part B’’.

23 (2) Part B of title VII is amended by striking

24 section 726 (20 U.S.C. 1132c–5).
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1 (3) Section 781 (20 U.S.C. 1132i) is amended by

2 striking ‘‘part A of this title, or’’ each place it ap3 pears.

4 SEC. 703. EXTENSION OF AUTHORIZATION OF PART B.

5 Section 727(c) (20 U.S.C. 1132c–6(c)) is amended by

6 striking ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year

7 1999’’.

8 SEC. 704. EXTENSION OF AUTHORIZATION OF PART C.

9 Section 735 (20 U.S.C. 1132d–4) is amended by strik10 ing ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year 1999’’.

11 TITLE VIII—ADDITIONAL

12 PROVISIONS

13 SEC. 801. STUDY OF TRANSFER OF CREDITS.

14 (a) STUDY REQUIRED.—The Secretary of Education

15 shall conduct a study to evaluate policies or practices insti16 tuted by recognized accrediting agencies or associations re17 garding the treatment of the transfer of credits from one

18 institution of higher education to another, giving particular

19 attention to—

20 (1) adopted policies regarding the transfer of

21 credits between institutions of higher education which

22 are accredited by different agencies or associations

23 and the reasons for such policies;

24 (2) adopted policies regarding the transfer of

25 credits between institutions of higher education which
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1 are accredited by national agencies or associations

2 and institutions of higher education which are accred3 ited by regional agencies and associations and the

4 reasons for such policies;

5 (3) the effect of the adoption of such policies on

6 students transferring between such institutions of

7 higher education, including time required to matricu8 late, increases to the student of tuition and fees paid,

9 and increases to the student with regard to student

10 loan burden;

11 (4) the extent to which Federal financial aid is

12 awarded to such students for the duplication of

13 coursework already completed at another institution;

14 and

15 (5) the aggregate cost to the Federal Government

16 of the adoption of such policies.

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

18 of enactment of this Act, the Secretary shall submit a report

19 to the Chairman and Ranking Minority Member of the

20 Committee on Education and the Workforce of the House

21 of Representatives and the Committee on Labor and

22 Human Resources of the Senate detailing his findings re23 garding the study conducted under subsection (a). The Sec24 retary’s report shall include such recommendation with re-
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1 spect to the recognition of accrediting agencies or associa2 tions as the Secretary deems advisable.

3 SEC. 802. STUDY OF MARKET MECHANISMS IN FEDERAL

4 STUDENT LOAN PROGRAMS.

5 (a) STUDY REQUIRED.—The Comptroller General, in

6 consultation with interested parties, shall conduct a study

7 of the potential to use auctions or other market mechanisms

8 in the delivery of Federal student loans in order to reduce

9 costs both to the Federal Government and to borrowers.

10 Such study shall include an examination of—

11 (1) the feasibility of using an auction of lending

12 authority for Federal student loans, and the appro13 priate Federal role in the operation of such an auc14 tion or other alternative market mechanisms;

15 (2) methods for operating such a system to en16 sure loan access for all eligible borrowers, while maxi17 mizing the cost-effectiveness (for the Government and

18 borrowers) in the delivery of such loans;

19 (3) the impact of such mechanisms on student

20 loan availability;

21 (4) any necessary transition procedures for im22 plementing such mechanisms;

23 (5) the costs or savings likely to be attained for

24 the Government and borrowers;
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1 (6) the feasibility of incorporating income-con2 tingent repayment options into the student loan sys3 tem and requiring borrowers to repay through income

4 tax withholding, and the impact of such an option on

5 the willingness of lenders to participate in auctions or

6 other market mechanisms and on the efficiency of

7 Federal management of student loan programs;

8 (7) the ability of the Department of the Treasury

9 to effectively auction the right to make student loans;

10 and

11 (8) other relevant issues.

12 (b) RECOMMENDATIONS.—Within 2 years after the

13 date of enactment of this Act, the Comptroller General shall

14 submit to the Congress a report on the study required by

15 subsection (a) and shall include with such report any legis16 lative recommendations the Comptroller General considers

17 appropriate.

18 SEC. 803. IMPROVEMENTS IN MARKET INFORMATION AND

19 PUBLIC ACCOUNTABILITY IN HIGHER EDU20 CATION.

21 (a) IMPROVED DATA COLLECTION.—

22 (1) DEVELOPMENT OF UNIFORM METHODOL23 OGY.—The Secretary shall direct the Commissioner of

24 Education Statistics to convene a series of forums to

25 develop nationally consistent methodologies for report-
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1 ing costs incurred by postsecondary institutions in

2 providing postsecondary education.

3 (2) SEPARATION OF UNDERGRADUATE AND

4 GRADUATE COSTS.—Such consistent methodologies

5 shall permit the Secretary to collect and disseminate

6 separate data with respect to the costs incurred in

7 providing undergraduate and graduate postsecondary

8 education.

9 (3) REDESIGN OF DATA SYSTEMS.—On the basis

10 of the methodologies developed pursuant to paragraph

11 (1), the Secretary shall redesign relevant parts of the

12 postsecondary education data systems to improve the

13 usefulness and timeliness of the data collected by such

14 systems.

15 (b) DATA DISSEMINATION.—The Secretary shall pub16 lish, in both printed and electronic form, of the data col17 lected pursuant to subsection (a). Such data shall be avail18 able in a form that permits the review and comparison of

19 the data submissions of individual institutions of higher

20 education. Such data shall be presented in a form that is

21 easily understandable and allows parents and students to

22 make informed decisions based on the following costs for

23 typical full-time undergraduate or graduate students—

24 (1) tuition charges published by the institution;
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1 (2) the institution’s cost of educating students on

2 a full-time equivalent basis;

3 (3) the general subsidy on a full-time equivalent

4 basis;

5 (4) instructional cost by level of instruction;

6 (5) the total price of attendance; and

7 (6) the average amount of per student financial

8 aid received, including and excluding assistance in

9 the form of loans.

10 SEC. 804. DIFFERENTIAL REGULATION.

11 (a) GAO STUDY.—The Comptroller General shall con12 duct a study of the extent to which unnecessary costs are

13 imposed on postsecondary education as a consequence of the

14 applicability to postsecondary facilities and equipment of

15 regulations prescribed for purposes of regulating industrial

16 and commercial enterprises.

17 (b) REPORT REQUIRED.—Within one year after the

18 date of enactment of this Act, the Comptroller General shall

19 submit a report to the Congress on the results of the study

20 required by subsection (a).

21 SEC. 805. ANNUAL REPORT ON COST OF HIGHER EDU22 CATION.

23 (a) GAO REPORT REQUIRED.—The Comptroller Gen24 eral shall conduct an on-going analysis of the following:
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1 (1) The increase in tuition compared with other

2 commodities and services.

3 (2) Trends in college and university administra4 tive costs, including administrative staffing, ratio of

5 administrative staff to instructors, ratio of adminis6 trative staff to students, remuneration of administra7 tive staff, and remuneration of college and university

8 presidents or chancellors.

9 (3) Trends in (A) faculty workload and remu10 neration (including the use of adjunct faculty), (B)

11 faculty-to-student ratios, (C) number of hours spent

12 in the classroom by faculty, and (D) tenure practices,

13 and the impact of such trends on tuition.

14 (4) Trends in (A) the construction and renova15 tion of academic and other collegiate facilities, and

16 (B) the modernization of facilities to access and uti17 lize new technologies, and the impact of such trends

18 on tuition.

19 (5) The extent to which increases in institutional

20 financial aid and tuition discounting have affected

21 tuition increases, including the demographics of stu22 dents receiving such aid, the extent to which such aid

23 is provided to students with limited need in order to

24 attract such students to particular institutions or

25 major fields of study, and the extent to which Federal
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1 financial aid, including loan aid, has been used to

2 offset such increases.

3 (6) The extent to which Federal, State, and local

4 laws, regulations, or other mandates contribute to in5 creasing tuition, and recommendations on reducing

6 those mandates.

7 (7) The establishment of a mechanism for a more

8 timely and widespread distribution of data on tuition

9 trends and other costs of operating colleges and uni10 versities.

11 (8) The extent to which student financial aid

12 programs have contributed to changes in tuition.

13 (9) Trends in State fiscal policies that have af14 fected college costs.

15 (10) Other related topics determined to be appro16 priate by the Comptroller General.

17 (b) ANNUAL REPORT TO CONGRESS.—The Comptroller

18 General shall submit to the Congress an annual report on

19 the results of the analysis required by subsection (a).

20 SEC. 806. REPEALS OF PREVIOUS HIGHER EDUCATION

21 AMENDMENTS PROVISIONS.

22 (a) HIGHER EDUCATION AMENDMENTS OF 1986.—

23 Title XIII of the Higher Education Amendments of 1986

24 (20 U.S.C. 1091 note, 1121 note, 1221e–1 note, 1011 note,

25 1070a note, 1071 note, 1221–1 note, 1091 note) is repealed.
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1 (b) HIGHER EDUCATION AMENDMENTS OF 1992.—

2 (1) TITLE XIV.—Title XIV of the Higher Edu3 cation Amendments of 1992 (20 U.S.C. 1071 note,

4 1080 note, 1221e note, 1070 note, 1221e–1 note,

5 1070a–21 note, 1134 note, 1132a note, 1221–1 note,

6 1101 note) is repealed.

7 (2) TITLE XV.—Parts A, B, C, D, and E of title

8 XV of the Higher Education Amendments of 1992 (29

9 U.S.C. 2401 et seq., 20 U.S.C. 1452 note, 1101 note,

10 1145h, 1070 note) are repealed.

11 SEC. 807. LIMITATION.

12 None of the funds appropriated under the Higher Edu13 cation Act of 1965 or any other Act shall be made available

14 by any Federal agency to the National Board for Profes15 sional Teaching Standards.

16 TITLE IX—AMENDMENTS TO

17 OTHER LAWS

18 PART A—EDUCATION OF THE DEAF ACT

19 Subpart 1—Gallaudet University

20 SEC. 901. BOARD OF TRUSTEES MEMBERSHIP.

21 Section 103(a)(1) of the Education of the Deaf Act of

22 1986 (20 U.S.C. 4303(a)(1)) is amended—

23 (1) in the matter preceding subparagraph (A),

24 by striking ‘‘twenty-one’’ and inserting ‘‘twenty-two’’;
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1 (2) in subparagraph (A), by striking ‘‘and’’ at

2 the end;

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

4 at the end and inserting ‘‘; and’’; and

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

6 ‘‘(C) the liaison designated under section 206,

7 who shall serve as an ex-officio, nonvoting member.’’.

8 SEC. 902. ELEMENTARY AND SECONDARY EDUCATION PRO9 GRAMS.

10 (a) COMPLIANCE WITH CERTAIN REQUIREMENTS

11 UNDER THE INDIVIDUALS WITH DISABILITIES EDUCATION

12 ACT.—Section 104(b)(3) of the Education of the Deaf Act

13 of 1986 (20 U.S.C. 4304(b)(3)) is amended by striking ‘‘in14 termediate educational unit’’ and inserting ‘‘educational

15 service agency’’.

16 (b) ADDITIONAL REQUIREMENTS.—Section

17 104(b)(4)(C) of such Act (20 U.S.C. 4304(b)(4)(C)) is

18 amended by striking clauses (i) through (iv) and inserting

19 the following:

20 ‘‘(i) Paragraph (1) and paragraphs (3)

21 through (6) of subsection (b).

22 ‘‘(ii) Subsections (e) through (g).

23 ‘‘(iii) Subsection (h), except the provision

24 contained in such subsection that requires that
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1 findings of fact and decisions be transmitted to

2 the State advisory panel.

3 ‘‘(iv) Paragraphs (1) and (2) of subsection

4 (i).

5 ‘‘(v) Subsection (j), except that such sub6 section shall not be applicable to a decision by

7 the University to refuse to admit or to dismiss

8 a child, except that, before dismissing any child,

9 the University shall give at least 60 days notice

10 to the child’s parents and to the local educational

11 agency in which the child resides.

12 ‘‘(vi) Subsections (k) through (m).’’.

13 SEC. 903. AGREEMENT WITH GALLAUDET UNIVERSITY.

14 Section 105(a) of the Education of the Deaf Act of

15 1986 (20 U.S.C. 4305(a)) is amended—

16 (1) in the first sentence, by striking ‘‘within 1

17 year after enactment of the Education of the Deaf Act

18 Amendments of 1992, a new’’ and inserting ‘‘and pe19 riodically update, an’’; and

20 (2) by amending the second sentence to read as

21 follows: ‘‘The necessity of the periodic update referred

22 to in the preceding sentence shall be determined by

23 the Secretary or the University.’’.
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1 Subpart 2—National Institute For The Deaf

2 SEC. 911. AGREEMENT FOR THE NATIONAL TECHNICAL IN3 STITUTE FOR THE DEAF.

4 Section 112 of the Education of the Deaf Act of 1986

5 (20 U.S.C. 4332) is amended—

6 (1) in subsection (a)(2), by striking ‘‘under this

7 section’’ and all that follows and inserting the follow8 ing: ‘‘under this section—

9 ‘‘(A) shall periodically assess the need for modi10 fication of the agreement; and

11 ‘‘(B) shall also periodically update the agreement

12 as determined to be necessary by the Secretary or the

13 institution.’’; and

14 (2) in subsection (b)(3), by striking ‘‘Committee

15 on Education and Labor’’ and inserting ‘‘Committee

16 on Education and the Workforce’’.

17 Subpart 3—General Provisions

18 SEC. 921. DEFINITIONS.

19 Section 201 of the Education of the Deaf Act of 1986

20 (20 U.S.C. 4351) is amended—

21 (1) in paragraph (1)(C), by striking ‘‘Palau (but

22 only until the Compact of Free Association with

23 Palau takes effect),’’; and

24 (2) in paragraph (5)—
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1 (A) by inserting ‘‘and’’ before ‘‘the Com2 monwealth of the Northern Mariana Islands’’;

3 and

4 (B) by striking ‘‘, and Palau’’ and all that

5 follows and inserting a period.

6 SEC. 922. AUDITS.

7 Section 203(b) of the Education of the Deaf Act of 1986

8 (20 U.S.C. 4353(b)) is amended in the first sentence by in9 serting before the period at the end the following: ‘‘, includ10 ing the national mission and school operations of the ele11 mentary and secondary programs’’.

12 SEC. 923. REPORTS.

13 Section 204 of the Education of the Deaf Act of 1986

14 (20 U.S.C. 4354) is amended in the matter preceding para15 graph (1) by striking ‘‘Committee on Education and

16 Labor’’ and inserting ‘‘Committee on Education and the

17 Workforce’’.

18 SEC. 924. MONITORING, EVALUATION, AND REPORTING.

19 Section 205(c) of the Education of the Deaf Act of 1986

20 (20 U.S.C. 4355(c)) is amended by striking ‘‘1993, 1994,

21 1995, 1996, and 1997’’ and inserting ‘‘1999 through 2003’’.

22 SEC. 925. RESPONSIBILITY OF THE LIAISON.

23 Section 206 of the Education of the Deaf Act (20

24 U.S.C. 4356) is amended—
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1 (1) in subsection (a), by striking ‘‘Not later than

2 30 days after the date of enactment of this Act, the’’

3 and inserting ‘‘The’’; and

4 (2) in subsection (b)—

5 (A) in paragraph (2), by striking ‘‘and’’ at

6 the end;

7 (B) by redesignating paragraph (3) as

8 paragraph (4); and

9 (C) by inserting after paragraph (2) the fol10 lowing:

11 ‘‘(3) serve as an ex-officio, nonvoting member of

12 the Board of Trustees under section 103; and’’.

13 SEC. 926. FEDERAL ENDOWMENT PROGRAMS.

14 (a) FEDERAL PAYMENTS.—Section 207(b) of the Edu15 cation of the Deaf Act of 1986 (20 U.S.C. 4357(b)) is

16 amended—

17 (1) in paragraph (2) to read as follows:

18 ‘‘(2) Subject to the availability of appropria19 tions, the Secretary shall make payments to each Fed20 eral endowment fund in amounts equal to sums con21 tributed to the fund from non-Federal sources during

22 the fiscal year in which the appropriations are made

23 available (excluding transfers from other endowment

24 funds of the institution involved).’’; and

25 (2) by striking paragraph (3).
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1 (b) WITHDRAWALS AND EXPENDITURES.—Section

2 207(d)(2)(C) of such Act (20 U.S.C. 4357(d)(2)(C)) is

3 amended by striking ‘‘Beginning on October 1, 1992, the’’

4 and inserting ‘‘The’’.

5 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

6 207(h) of such Act (20 U.S.C. 4357(h)) is amended by strik7 ing ‘‘fiscal years 1993 through 1997’’ each place it appears

8 and inserting ‘‘fiscal years 1999 through 2003’’.

9 SEC. 927. SCHOLARSHIP PROGRAM.

10 Section 208 of the Education of the Deaf Act of 1986

11 (20 U.S.C. 4358) is hereby repealed.

12 SEC. 928. OVERSIGHT AND EFFECT OF AGREEMENTS.

13 Section 209 of the Education of the Deaf Act of 1986

14 (20 U.S.C. 4359) is amended—

15 (1) in subsection (a), by striking ‘‘Committee on

16 Education and Labor’’ and inserting ‘‘Committee on

17 Education and the Workforce’’; and

18 (2) by redesignating such section as section 208.

19 SEC. 929. INTERNATIONAL STUDENTS.

20 (a) ENROLLMENT.—Section 210(a) of the Education

21 of the Deaf Act of 1986 (20 U.S.C. 4359a(a)) is amended

22 to read as follows:

23 ‘‘(a) ENROLLMENT.—A qualified United States citizen

24 seeking admission to the University or NTID shall not be
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1 denied admission in a given year due to the enrollment of

2 international students.’’.

3 (b) CONFORMING AMENDMENT.—Section 210 of such

4 Act (20 U.S.C. 4359a) is amended by redesignating such

5 section as section 209.

6 SEC. 930. AUTHORIZATION OF APPROPRIATIONS.

7 Section 211 of the Education of the Deaf Act of 1986

8 (20 U.S.C. 4360) is amended—

9 (1) in subsection (a), by striking ‘‘such sums as

10 may be necessary for each of the fiscal years 1993

11 through 1997’’ and inserting ‘‘$83,480,000 for fiscal

12 year 1999, $84,732,000 for fiscal year 2000,

13 $86,003,000 for fiscal year 2001, $87,293,000 for fis14 cal year 2002, and $88,603,000 for fiscal year 2003’’;

15 (2) in subsection (b), by striking ‘‘such sums as

16 may be necessary for each of the fiscal years 1993

17 through 1997’’ and inserting ‘‘$44,791,000 for fiscal

18 year 1999, $46,303,000 for fiscal year 2000,

19 $50,136,000 for fiscal year 2001, $50,818,000 for fis20 cal year 2002, and $46,850,000 for fiscal year 2003’’;

21 and

22 (3) by redesignating such section as section 210.
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1 PART B—EXTENSION AND REVISION OF INDIAN

2 HIGHER EDUCATION PROGRAMS

3 SEC. 951. TRIBALLY CONTROLLED COLLEGES AND UNIVER4 SITIES.

5 (a) EXTENSION TO COLLEGES AND UNIVERSITIES.—

6 The Tribally Controlled Community College Assistance Act

7 of 1978 (25 U.S.C. 1801 et seq.) is amended—

8 (1) by striking ‘‘community college’’ each place

9 it appears and inserting ‘‘college or university’’;

10 (2) by striking ‘‘community colleges’’ each place

11 it appears and inserting ‘‘colleges and universities’’;

12 (3) by striking ‘‘COMMUNITY COLLEGES’’ in

13 the heading of title I and inserting ‘‘COLLEGES

14 AND UNIVERSITIES’’;

15 (4) by striking ‘‘community college’s’’ in section

16 2(b)(5) and inserting ‘‘college’s or university’s’’;

17 (5) by striking ‘‘the college’’ in sections 102(b),

18 113(c)(2), and 305(a) and inserting ‘‘the college or

19 university’’;

20 (6) by striking ‘‘such colleges’’ in sections

21 104(a)(2) and 111(a)(2) and inserting ‘‘such colleges

22 and universities’’;

23 (7) by striking ‘‘COMMUNITY COLLEGES’’ in the

24 heading of section 107 and inserting ‘‘COLLEGES AND

25 UNIVERSITIES’’;
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1 (8) by striking ‘‘such college’’ each place it ap2 pears in sections 108(a), 113(b)(2), 113(c)(2), 302,

3 303, 304, and 305 and inserting ‘‘such college or uni4 versity’’;

5 (9) by striking ‘‘such colleges’’ in section 109(b)

6 and inserting ‘‘such college or university’’;

7 (10) in section 110(a)(4), by striking ‘‘Tribally

8 Controlled Community Colleges’’ and inserting ‘‘trib9 ally controlled colleges and universities’’;

10 (11) by striking ‘‘COMMUNITY COLLEGE’’ in

11 the heading of title III and inserting ‘‘COLLEGE

12 AND UNIVERSITY’’;

13 (11) by striking ‘‘that college’’ in sections

14 302(b)(4) and 305(a) and inserting ‘‘such college or

15 university’’; and

16 (12) by striking ‘‘other colleges’’ in section

17 302(b)(4) and insert ‘‘other colleges and universities’’.

18 (b) TITLE I ELIGIBLE GRANT RECIPIENTS.—Section

19 103 of the Tribally Controlled Community College Assist20 ance Act of 1978 (25 U.S.C. 1804) is amended—

21 (1) by striking ‘‘and’’ at the end of paragraph

22 (2);

23 (2) by striking the period at the end of para24 graph (3) and inserting ‘‘; and’’; and
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1 (3) by adding at the end the following new para2 graph:

3 ‘‘(4) has been accredited by a nationally recog4 nized accrediting agency or association determined by

5 the Secretary of Education to be a reliable authority

6 as to the quality of training offered, or is, according

7 to such an agency or association, making reasonable

8 progress toward such accreditation.’’.

9 (c) ELIGIBILITY AND ACCREDITATION.—Section 106 of

10 such Act (25 U.S.C. 1806) is amended—

11 (1) in the section heading, by inserting ‘‘AND AC12 CREDITATION PROGRAM’’ after ‘‘STUDIES’’;

13 (2) by redesignating subsection (c) as subsection

14 (d); and

15 (3) by inserting after subsection (b) the following

16 new subsection:

17 ‘‘(c) The Secretary of Education shall assist tribally

18 controlled colleges and universities in the development of a

19 national accrediting agency or association for such colleges

20 and universities.’’.

21 (d) AMOUNT OF TITLE I GRANTS.—Section 108(a)(2)

22 of such Act (25 U.S.C. 1808(a)(2)) is amended by striking

23 ‘‘$5,820’’ and inserting ‘‘$6,000’’.
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1 (e) CLERICAL AMENDMENT.—Section 109 of such Act

2 (25 U.S.C. 1809) is amended by redesignating subsection

3 (d) as subsection (c).

4 (f) AUTHORIZATION OF APPROPRIATIONS FOR TITLE

5 I.—Section 110 of such Act (25 U.S.C. 1810) is amended—

6 (1) by striking ‘‘1993’’ each place it appears and

7 inserting ‘‘1999’’; and

8 (2) in subsection (a)(2), by striking

9 ‘‘$30,000,000’’ and inserting ‘‘$40,000,000’’.

10 (g) AUTHORIZATION OF APPROPRIATIONS FOR TITLES

11 III AND IV.—Sections 306 and 403 of such Act (25 U.S.C.

12 1836, 1852) are each amended by striking ‘‘1993’’ and in13 serting ‘‘1999’’.

14 SEC. 952. REAUTHORIZATION OF PROVISIONS FROM HIGH15 ER EDUCATION AMENDMENTS OF 1992.

16 Title XIII of the Higher Education Amendments of

17 1992 (25 U.S.C. 3301 et seq.) is amended by striking

18 ‘‘1993’’ each place it appears in sections 1348, 1365, and

19 1371(e), and inserting ‘‘1999’’.

20 SEC. 953. REAUTHORIZATION OF NAVAJO COMMUNITY COL21 LEGE ACT.

22 Section 5(a)(1) of the Navajo Community College Act

23 (25 U.S.C. 640c–1) is amended by striking ‘‘1993’’ and in24 serting ‘‘1999’’.
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1 TITLE X—FACULTY RETIREMENT

2 PROVISIONS

3 SEC. 1001. VOLUNTARY RETIREMENT INCENTIVE PLANS.

4 (a) IN GENERAL.—Section 4 of the Age Discrimina5 tion in Employment Act of 1967 (29 U.S.C. 623) is amend6 ed by adding at the end the following:

7 ‘‘(m) Notwithstanding subsection (f)(2)(B), it shall not

8 be a violation of subsection (a), (b), (c), (e), or (i) solely

9 because a plan of an institution of higher education (as de10 fined in section 1201(a) of the Higher Education Act of

11 1965 (20 U.S.C. 1141(a))) offers employees who are serving

12 under a contract of unlimited tenure (or similar arrange13 ment providing for unlimited tenure) additional benefits

14 upon voluntary retirement that are reduced or eliminated

15 on the basis of age, if—

16 ‘‘(1) such institution does not implement with

17 respect to such employees any age-based reduction or

18 elimination of benefits that are not such additional

19 benefits, except as permitted by other provisions of

20 this Act; and

21 ‘‘(2) with respect to each of such employees who

22 have, as of the time the plan is adopted, attained the

23 minimum age and satisfied all non-age-based condi24 tions for receiving a benefit under the plan, such em25 ployee is not precluded on the basis of age from hav-
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1 ing 1 opportunity lasting not less than 180-days to

2 elect to retire and to receive the maximum benefit

3 that would be available to a younger employee if such

4 younger employee were otherwise similarly situated to

5 such employee.’’.

6 (b) CONSTRUCTION.—

7 (1) APPLICATION.—Nothing in the amendment

8 made by subsection (a) shall be construed to affect the

9 application of section 4 of the Age Discrimination in

10 Employment Act of 1967 (29 U.S.C. 623) with respect

11 to—

12 (A) any employer other than an institution

13 of higher education (as defined in section

14 1201(a) of the Higher Education Act of 1965); or

15 (B) any plan not described in subsection

16 (m) of section 4 of such Act (as added by sub17 section (a)).

18 (2) RELATIONSHIP TO PROVISIONS RELATING TO

19 VOLUNTARY EARLY RETIREMENT INCENTIVE PLANS.—

20 Nothing in the amendment made by subsection (a)

21 shall be construed to imply that a plan described in

22 subsection (m) of section 4 of such Act (as added by

23 subsection (a)) may not be considered to be a plan de24 scribed in section 4(f)(2)(B)(ii) of such Act (29 U.S.C.

25 623(f)(2)(B)(ii)).
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1 (c) EFFECTIVE DATE.—

2 (1) IN GENERAL.—This section shall take effect

3 on the date of enactment of this Act.

4 (2) EFFECT ON CAUSES OF ACTION EXISTING BE5 FORE DATE OF ENACTMENT.—The amendment made

6 by subsection (a) shall not apply with respect to any

7 cause of action arising under the Age Discrimination

8 in Employment Act of 1967 prior to the date of en9 actment of this Act.