IIA

105TH CONGRESS

2D SESSION H. R. 6

IN THE SENATE OF THE UNITED STATES

MAY 7, 1998

Received; read twice and referred to the Committee on Labor and Human

Resources

AN ACT

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. TABLE OF CONTENTS.

5 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. Campus safety.

Sec. 207. Accountability for institutions of higher education that prepare

teachers.

Sec. 208. 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.

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.
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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 Limitation repealed.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. 412A. Guaranty agency reforms.

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.

Sec. 430. Loan forgiveness for child care providers.

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.

Sec. 447. Data elements.

Sec. 448. Family contribution for dependent students.

Sec. 449. Family contribution for independent students without dependents

other than a spouse.
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Sec. 450. Family contribution for independent students with dependents other

than a spouse.

Sec. 451. Regulations; updated tables and amounts.

Sec. 452. Simplified needs test; zero expected family contribution.

Sec. 453. Discretion of student financial aid administrators.

Sec. 454. 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.

Sec. 802. Study of market mechanisms in Federal student loan programs.
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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. Study of consolidation options.

Sec. 807. Educational merchandise licensing codes of conduct.

Sec. 808. Repeals and extensions of previous higher education amendments

provisions.

Sec. 809. Limitation.

Sec. 810. Procedures for cancellations and deferments for eligible disabled

veterans.

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.

PART C—GENERAL EDUCATION PROVISIONS ACT

Sec. 961. Access to records concerning crimes of violence.

TITLE X—FACULTY RETIREMENT PROVISIONS

Sec. 1001. Voluntary retirement incentive plans.

TITLE XI—OFFESTS REQUIRED

Sec. 1101. Assurance of offsets.
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TITLE XII—ALCOHOL CONSUMPTION

Sec. 1201. Sense of the House of Representatives.

TITLE XIII—PROTECTION OF STUDENT SPEECH AND

ASSOCIATION RIGHTS

Sec. 1301. Protection of student speech and association rights.

TITLE XIV—DRUG AND ALCOHOL PREVENTION

Sec. 1401. Drug and alcohol abuse prevention.

TITLE XV—EQUAL OPPORTUNITY FOR INDIVIDUALS WITH

LEARNING DISABILITIES

Sec. 1501. Demonstration projects ensuring equal opportunity for individuals

with learning disabilities.

TITLE XVI—SENSE OF THE HOUSE OF REPRESENTATIVES

REGARDING DETECTION OF LEARNING DISABILITIES, PARTICULARLY DYSLEXIA, IN POSTSECONDARY EDUCATION

Sec. 1601. Sense of the House of Representatives.

TITLE XVII—SPECIAL PROVISION

Sec. 1701. Ternmination of effectiveness.

1 SEC. 3. REFERENCES.

2 Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of the Higher Education Act of

7 1965 (20 U.S.C. 1001 et seq.).

8 SEC. 4. GENERAL EFFECTIVE DATE.

9 Except as otherwise provided in this Act or the

10 amendments made by this Act, the amendments made by

11 this Act shall take effect on October 1, 1998.
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1 TITLE I—GENERAL PROVISIONS

2 PART A—EXTENSION AND REVISION OF

3 GENERAL PROVISIONS

4 SEC. 101. REDESIGNATION AND TRANSFER OF PROVISIONS.

5 (a) IN GENERAL.—

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

7 1001 et seq.) is repealed.

8 (2) REPEAL OF TITLE XII PROVISIONS.—The

9 following sections of title XII are repealed: sections

10 1206, 1211, and 1212 (20 U.S.C. 1145a, 1145e,

11 and 1145f ).

12 (3) REDESIGNATIONS.—

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

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

15 U.S.C. 1141, 1142, and 1143) are redesignated

16 as sections 101, 102, and 103, respectively.

17 (C) Section 1204(b), as redesignated by

18 section 251 of the Higher Education Amend19 ments of 1968 (20 U.S.C. 1144(b); 82 Stat.

20 1042), is redesignated as section 104.

21 (D) Section 1204, as added by section

22 1201 of the Education Amendments of 1980

23 (20 U.S.C. 1144a; 94 Stat. 1495), is amended

24 by striking subsection (a), and by redesignating

25 subsection (b) as section 105.
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1 (E) Sections 1205, 1207, 1208, 1209,

2 1210, and 1213 (20 U.S.C. 1145, 1145b,

3 1145c, 1145d, 1145d-1, and 1145g) are redes4 ignated as sections 106 through 111, respec5 tively.

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

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

8 transferred to immediately follow the short title of

9 the Higher Education Act of 1965 (20 U.S.C. 1001

10 note).

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

12 Education Act of 1965 is amended—

13 (1) in section 106 (as redesignated by sub14 section (a)(3)), by striking ‘‘481(a)’’ and inserting

15 ‘‘101(a)’’;

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

17 1213’’ and inserting ‘‘section 111’’;

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

19 1201(a)(2)’’ and inserting ‘‘section 101(a)(2)’’;

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

21 1201(a)’’ and inserting ‘‘section 101(a)(1)’’; and

22 (5) in section 631(a)(8), by striking ‘‘section

23 1201(a)’’ each place it appears and inserting ‘‘sec24 tion 101(a)(1)’’.

25 (c) CONFORMING AMENDMENTS.—
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1 (1) TITLE 10, UNITED STATES CODE.—Sections

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

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

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

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

6 Act of 1965’’.

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

8 207(j)(2)(B) of title 18, United States Code, is

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

10 ‘‘101(a)(1)’’.

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

12 3626(b)(3) of title 39, United States Code, is

13 amended by striking ‘‘1201(a) of the Higher Edu14 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert15 ing ‘‘101(a)(1) of the Higher Education Act of

16 1965’’.

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

18 3601(7) of the Anti-Drug Abuse Act of 1988 (42

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

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

21 1141(a))’’ and inserting ‘‘101(a)(1) of the Higher

22 Education Act of 1965’’.

23 (5) CRANSTON-GONZALEZ NATIONAL AFFORD24 ABLE HOUSING ACT.—Section 457(9) of the Cran25 ston-Gonzalez National Affordable Housing Act (42
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1 U.S.C. 12899f(9)) is amended by striking ‘‘1201(a)’’

2 and inserting ‘‘101(a)(1)’’.

3 (6) DEPARTMENT OF STATE AUTHORIZATION

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

5 of the Department of State Authorization Act, Fis6 cal Years 1984 and 1985 (22 U.S.C. 4502(1)) is

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

8 ‘‘101(a)(1)’’.

9 (7) EDUCATION FOR ECONOMIC SECURITY

10 ACT.—Section 3(6) of the Education for Economic

11 Security Act (20 U.S.C. 3902(6)) is amended by

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

13 (8) ELEMENTARY AND SECONDARY EDUCATION

14 ACT OF 1965.—The Elementary and Secondary Edu15 cation Act of 1965 is amended—

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

17 7601(4)) by striking ‘‘1201(a)’’ and inserting

18 ‘‘101(a)(1)’’; and

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

20 8801(17)), by striking ‘‘1201(a)’’ and inserting

21 ‘‘101(a)(1)’’.

22 (9) FEDERAL AGRICULTURE IMPROVEMENT

23 AND REFORM ACT OF 1996.—Section 922 of the Fed24 eral Agriculture Improvement and Reform Act of

25 1996 (7 U.S.C. 2279c) is amended in subsections
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1 (a)(1)(B) and (b)(1) by striking ‘‘1201 of the High2 er Education Act of 1965 (20 U.S.C. 1141)’’ and in3 serting ‘‘101(a)(1) of the Higher Education Act of

4 1965’’.

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

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

7 amended by striking ‘‘1201 of the Higher Education

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

9 Education Act of 1965’’.

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

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

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

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

14 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101(a)(1)

15 of the Higher Education Act of 1965’’.

16 (12) FOREIGN RELATIONS AUTHORIZATION

17 ACT, FISCAL YEARS 1986 AND 1987.—Section 603(d)

18 of the Foreign Relations Authorization Act, Fiscal

19 Years 1986 and 1987 (20 U.S.C. 4703(d)) is

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

21 ‘‘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
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1 amended by striking ‘‘1201(a)’’ and inserting

2 ‘‘101(a)(1)’’.

3 (14) HARRY S TRUMAN MEMORIAL SCHOLAR4 SHIP ACT.—Section 3(4) of the Harry S Truman

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

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

7 ‘‘101(a)(1)’’.

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

9 the Head Start Act (42 U.S.C. 9844(c)(3)) is

10 amended by striking ‘‘1201(a) of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert12 ing ‘‘101(a)(1) of the Higher Education Act of

13 1965’’.

14 (16) HIGHER EDUCATION AMENDMENTS OF

15 1992.—Section 1371(a)(1)(B) of the Higher Edu16 cation Amendments of 1992 (25 U.S.C.

17 3371(a)(1)(B)) is amended by striking ‘‘1201(a)’’

18 and inserting ‘‘101(a)(1)’’.

19 (17) INTELLIGENCE AUTHORIZATION ACT, FIS20 CAL YEAR 1992.—Section 808(3) of the Intelligence

21 Authorization Act, Fiscal Year 1992 (20 U.S.C.

22 1908(3)) is amended by striking ‘‘1201(a) of the

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

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

25 Act of 1965’’.
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1 (18) JOB TRAINING PARTNERSHIP ACT.—The

2 Job Training Partnership Act is amended—

3 (A) in section 4(12) (29 U.S.C. 1503(12)),

4 by striking ‘‘1201(a)’’ and inserting

5 ‘‘101(a)(1)’’; and

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

7 1551(d)(3)(B)), by striking ‘‘1201(a) of the

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

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

10 Higher Education Act of 1965’’.

11 (19) JUSTICE SYSTEM IMPROVEMENT ACT OF

12 1979.—Section 901(a)(17) of the Justice System Im13 provement Act of 1979 (42 U.S.C. 3791(a)(17)) is

14 amended by striking ‘‘1201(a) of the Higher Edu15 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert16 ing ‘‘101(a)(1) of the Higher Education Act of

17 1965’’.

18 (20) MUTUAL EDUCATIONAL AND CULTURAL

19 EXCHANGE ACT OF 1961.—Section 112(a)(8) of the

20 Mutual Educational and Cultural Exchange Act of

21 1961 (22 U.S.C. 2460(a)(8)) is amended by striking

22 ‘‘1201(a) of the Higher Education Act of 1965 (20

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

24 Higher Education Act of 1965’’.
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1 (21) NATIONAL AND COMMUNITY SERVICE ACT

2 OF 1990.—Sections 101(13) and 166(6) of the Na3 tional and Community Service Act of 1990 (42

4 U.S.C. 12511(13); 12626(6)) are each amended by

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

6 1965 (20 U.S.C. 1141(a))’’ and inserting ‘‘101 of

7 the Higher Education Act of 1965’’.

8 (22) NATIONAL DEFENSE AUTHORIZATION ACT

9 FOR FISCAL YEAR 1987.—Section 1403(4) of the Na10 tional Defense Authorization Act for Fiscal Year

11 1987 (20 U.S.C. 4702(4)) is amended by striking

12 ‘‘1201(a) of the Higher Education Act of 1965 (20

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

14 Higher Education Act of 1965’’.

15 (23) NATIONAL DEFENSE AUTHORIZATION ACT

16 FOR FISCAL YEAR 1993.—The National Defense Au17 thorization Act for Fiscal Year 1993 is amended in

18 section 4451(b)(1) (10 U.S.C. 2701 note) by strik19 ing ‘‘1201(a) of the Higher Education Act of 1965

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

21 the Higher Education Act of 1965’’.

22 (24) NATIONAL DEFENSE AUTHORIZATION ACT

23 FOR FISCAL YEARS 1992 AND 1993.—Section

24 3132(b)(1) of the National Defense Authorization

25 Act for Fiscal Years 1992 and 1993 (42 U.S.C.
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1 7274e(b)(1)) is amended by striking ‘‘1201(a) of the

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

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

4 Act of 1965’’.

5 (25) NATIONAL DEFENSE AUTHORIZATION ACT

6 FOR FISCAL YEAR 1994.—The National Defense Au7 thorization Act for Fiscal Year 1994 is amended—

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

9 2324(2) note), by striking ‘‘1201(a) of the

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

11 1141(a))’’ and inserting ‘‘101(a)(1) of the

12 Higher Education Act of 1965’’;

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

14 note), by striking ‘‘1201(a) of the Higher Edu15 cation Act of 1965 (20 U.S.C. 1141(a))’’ and

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

17 Act of 1965’’; and

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

19 note), by striking ‘‘1201(a) of the Higher Edu20 cation Act of 1965 (20 U.S.C. 1141(a))’’ and

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

22 Act of 1965’’.

23 (26) NATIONAL EDUCATION STATISTICS ACT OF

24 1994.—Section 402(c)(3) of the National Education

25 Statistics Act of 1994 (20 U.S.C. 9001(c)(3)) is
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1 amended by striking ‘‘1201(a)’’ and inserting

2 ‘‘101(a)(1)’’.

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

4 102(32) of the Older Americans Act of 1965 (42

5 U.S.C. 3002(32)) is amended by striking ‘‘1201(a)

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

7 1141(a))’’ and inserting ‘‘101(a)(1) of the Higher

8 Education Act of 1965’’.

9 (28) OMNIBUS PARKS AND PUBLIC LANDS MAN10 AGEMENT ACT OF 1996.—Section 1007(c)(5) of the

11 Omnibus Parks and Public Lands Management Act

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

13 ‘‘1201(a) of the Higher Education Act of 1965 (20

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

15 Higher Education Act of 1965’’.

16 (29) PUBLIC LAW 85 OF THE 67TH CON17 GRESS.—Public Law 85 of the 67th Congress (42

18 Stat. 208; 25 U.S.C. 13), popularly referred to as

19 the Snyder Act, is amended by striking ‘‘1201’’ and

20 inserting ‘‘101(a)(1)’’.

21 (30) COMMUNICATION ACT OF 1934.—Section

22 223(h)(4) of the Communication Act of 1934 (47

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

24 the Higher Education Act of 1965 (20 U.S.C.
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1 1141)’’ and inserting ‘‘101(a)(1) of the Higher Edu2 cation Act of 1965’’.

3 (31) FEDERAL WATER POLLUTION CONTROL

4 ACT.—Section 112(a)(1) of the Federal Water Pollu5 tion Control Act (33 U.S.C. 1262(a)(1)) is amended

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

7 (32) CARL D. PERKINS VOCATIONAL AND AP8 PLIED TECHNOLOGY EDUCATION ACT.—Section

9 347(2)(A) of the Carl D. Perkins Vocational and

10 Applied Technology Education Act (20 U.S.C.

11 2394(2)(A)) is amended by striking ‘‘1201(a)’’ and

12 inserting ‘‘101(a)(1)’’.

13 (33) ENERGY POLICY AND CONSERVATION

14 ACT.—Section 362(f )(5)(A) of the Energy Policy

15 and Conservation Act (42 U.S.C. 6322(f )(5)(A)) is

16 amended by striking ‘‘1201(a) of the Higher Edu17 cation Act of 1965 (20 U.S.C. 1141(a))’’ and insert18 ing ‘‘101(a)(1) of the Higher Education Act of

19 1965’’.

20 (34) JAMES MADISON MEMORIAL FELLOWSHIP

21 ACT.—Section 815 of the James Madison Memorial

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

23 (A) in paragraph (3), by striking

24 ‘‘1201(a)’’ and inserting ‘‘101(a)(1)’’; and
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1 (B) in paragraph (4), by striking

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

3 (35) REHABILITATION ACT OF 1973.—Sections

4 7(32) and 101(a)(7)(A)(iv)(II) of the Rehabilitation

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

6 721(a)(7)(A)(iv)(II)) are each amended by striking

7 ‘‘1201(a) of the Higher Education Act of 1965 (20

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

9 Higher Education Act of 1965’’.

10 (36) TECHNOLOGY RELATED ASSISTANCE FOR

11 INDIVIDUALS WITH DISABILITIES ACT OF 1988.—Sec12 tion 3(8) of the Technology Related Assistance for

13 Individuals with Disabilities Act of 1988 (29 U.S.C.

14 2202(8)) is amended by striking ‘‘1201(a) of the

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

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

17 Act of 1965’’.

18 (37) TRIBALLY CONTROLLED COMMUNITY COL19 LEGE ASSISTANCE ACT OF 1978.—The Tribally Con20 trolled Community College Assistance Act of 1978 is

21 amended—

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

23 1801(a)(5)), by striking ‘‘1201(a)’’ and insert24 ing ‘‘101(a)(1)’’; and
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1 (B) in section 113(b)(2) (25 U.S.C.

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

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

4 and inserting ‘‘101(a)(1) of the Higher Edu5 cation Act of 1965’’.

6 (38) VIOLENT CRIME CONTROL AND LAW EN7 FORCEMENT ACT OF 1994.—The Violent Crime Con8 trol and Law Enforcement Act of 1994 is amend9 ed—

10 (A) in sections 200103 and 200202 (42

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

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

13 1141(a))’’ and inserting ‘‘101(a)(1) of the

14 Higher Education Act of 1965’’; and

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

16 13791(b)), by striking ‘‘a public’’ through ‘‘that

17 Act’’ and inserting ‘‘an elementary school as de18 fined in section 14101(14) of the Elementary

19 and Secondary Education Act of 1965, and a

20 secondary school as defined by section

21 14101(25) of such Act, which are public insti22 tutions’’.

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

24 1994.—Section 4 of the School-to-Work Opportuni25 ties Act of 1994 (20 U.S.C. 6103) is amended—
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1 (A) in paragraph (11)(B)(viii), by striking

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

3 101(a)(3)’’; and

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

5 481’’ and inserting ‘‘section 101(a)(2)’’.

6 (40) NATIONAL AND COMMUNITY SERVICE ACT

7 OF 1990.—Section 148(g) of the National and Com8 munity Service Act of 1990 (42 U.S.C. 12604(g)) is

9 amended by striking ‘‘section 481(a) of the Higher

10 Education Act of 1965 (20 U.S.C. 1088(a))’’ and

11 inserting ‘‘section 101(a)(2) of the Higher Edu12 cation Act of 1965’’.

13 SEC. 102. DEFINITIONS.

14 (a) INSTITUTION OF HIGHER EDUCATION.—Section

15 101 (as redesignated by section 101(a)(3) of this Act) is

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

17 the following:

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

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

20 through (4) of this subsection:

21 ‘‘(A) PRINCIPAL CRITERIA.—The term ‘in22 stitution of higher education’ means an edu23 cational institution in any State that—

24 ‘‘(i) admits as regular students only

25 persons having a certificate of graduation
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1 from a school providing secondary edu2 cation, or the recognized equivalent of such

3 a certificate;

4 ‘‘(ii) is legally authorized within such

5 State to provide a program of education

6 beyond secondary education;

7 ‘‘(iii) provides an educational program

8 for which it awards a bachelor’s degree or

9 provides not less than a two-year program

10 that is acceptable for full credit toward

11 such a degree;

12 ‘‘(iv) is a public or other nonprofit in13 stitution; and

14 ‘‘(v) is accredited by a nationally rec15 ognized accrediting agency or association,

16 or if not so accredited, is an institution

17 that has been granted preaccreditation sta18 tus by such an agency or association that

19 has been recognized by the Secretary for

20 the granting of preaccreditation status,

21 and the Secretary has determined that

22 there is satisfactory assurance that the in23 stitution will meet the accreditation stand24 ards of such an agency or association with25 in a reasonable time.
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1 ‘‘(B) ADDITIONAL INSTITUTIONS IN2 CLUDED.—The term ‘institution of higher edu3 cation’ also includes—

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

5 than a one-year program of training to

6 prepare students for gainful employment in

7 a recognized occupation and that meets the

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

9 subparagraph (A); and

10 ‘‘(ii) a public or nonprofit private edu11 cational institution in any State that, in

12 lieu of the requirement in subparagraph

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

14 who are beyond the age of compulsory

15 school attendance in the State in which the

16 institution is located.

17 ‘‘(C) LIST OF ACCREDITING AGENCIES.—

18 For purposes of this subsection, the Secretary

19 shall publish a list of nationally recognized ac20 crediting agencies or associations that he deter21 mines, pursuant to subpart 2 of part H of title

22 IV of this Act, to be reliable authority as to the

23 quality of the education or training offered.

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

25 PROGRAMS.—
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1 ‘‘(A) INCLUSION OF ADDITIONAL INSTITU2 TIONS.—Subject to subparagraphs (B) through

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

4 higher education’ for purposes of title IV of this

5 Act includes, in addition to the institutions cov6 ered by the definition in paragraph (1) of this

7 subsection—

8 ‘‘(i) a proprietary institution of higher

9 education;

10 ‘‘(ii) a postsecondary vocational insti11 tution; and

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

13 of title IV, an institution outside the

14 United States that is comparable to an in15 stitution of higher education as defined in

16 paragraph (1) of this subsection and that

17 has been approved by the Secretary for the

18 purpose of part B of title IV.

19 ‘‘(B) INSTITUTIONS OUTSIDE THE UNITED

20 STATES.—

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

22 an institution under subparagraph (A)(iii)

23 of this paragraph, the Secretary shall es24 tablish criteria by regulation for the ap25 proval of institutions outside the United
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1 States and for the determination that such

2 institutions are comparable to an institu3 tion of higher education as defined in para4 graph (1) of this subsection. In the case of

5 a graduate medical or veterinary school

6 outside the United States, such criteria

7 shall include a requirement that a student

8 attending such school outside the United

9 States is ineligible for loans made, insured,

10 or guaranteed under part B of this title

11 unless—

12 ‘‘(I)(aa) at least 60 percent of

13 those enrolled and at least 60 percent

14 of the graduates of the graduate med15 ical school outside the United States

16 were not persons described in section

17 484(a)(5) in the year preceding the

18 year for which a student is seeking a

19 loan under part B of title IV; and

20 ‘‘(bb) at least 60 percent of the

21 individuals who were students or

22 graduates of the graduate medical

23 school outside the United States (both

24 nationals of the United States and

25 others) taking the examinations ad-
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1 ministered by the Educational Com2 mission for Foreign Medical Grad3 uates received a passing score in the

4 year preceding the year for which a

5 student is seeking a loan under part

6 B of title IV; or

7 ‘‘(II) the institution has a clinical

8 training program that was approved

9 by a State as of January 1, 1992, or

10 the institution’s students complete

11 their clinical training at an approved

12 veterinary school located in the United

13 States.

14 ‘‘(ii) For the purpose of qualifying as

15 an institution under subparagraph (A)(iii)

16 of this paragraph, the Secretary shall es17 tablish an advisory panel of medical ex18 perts that shall—

19 ‘‘(I) evaluate the standards of ac20 creditation applied to applicant for21 eign medical schools; and

22 ‘‘(II) determine the comparability

23 of those standards to standards for

24 accreditation applied to United States

25 medical schools.
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1 If such accreditation standards are deter2 mined not to be comparable, the foreign

3 medical school shall be required to meet

4 the requirements of paragraph (1) of this

5 subsection.

6 ‘‘(iii) The failure of an institution out7 side the United States to provide, release,

8 or authorize release to the Secretary of

9 such information as may be required by

10 clause (i) of this subparagraph shall render

11 such institution ineligible for the purpose

12 of part B of title IV.

13 ‘‘(iv) If, pursuant to this subpara14 graph, an institution loses eligibility to

15 participate in the programs under title IV,

16 then a student enrolled at such institution

17 may, notwithstanding such loss of eligi18 bility, continue to be eligible to receive a

19 loan under part B while attending such in20 stitution for the academic year succeeding

21 the academic year in which such loss of eli22 gibility occurred.

23 ‘‘(C) LIMITATIONS BASED ON COURSE OF

24 STUDY OR ENROLLMENT.—An institution shall

25 not be considered to meet the definition of an
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1 institution of higher education in subparagraph

2 (A) of this paragraph if such institution—

3 ‘‘(i) offers more than 50 percent of

4 such institution’s courses by correspond5 ence, unless the institution is an institution

6 that meets the definition in section

7 521(4)(C) of the Carl D. Perkins Voca8 tional and Applied Technology Education

9 Act;

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

11 students in correspondence courses, unless

12 the institution is an institution that meets

13 the definition in such section, except that

14 the Secretary, at the request of such insti15 tution, may waive the applicability of this

16 clause to such institution for good cause,

17 as determined by the Secretary in the case

18 of an institution of higher education that

19 provides a 2-year or 4-year program of in20 struction for which the institution awards

21 an associate or baccalaureate degree;

22 ‘‘(iii) has a student enrollment in

23 which more than 25 percent of the stu24 dents are incarcerated, except that the

25 Secretary may waive the prohibition of this
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1 clause for a nonprofit institution that pro2 vides a 4-year or a 2-year program of in3 struction (or both) for which it awards a

4 bachelor’s or associate’s degree or diploma,

5 respectively; or

6 ‘‘(iv) has a student enrollment in

7 which more than 50 percent of the stu8 dents do not have a high school diploma or

9 its recognized equivalent and does not pro10 vide a 4-year or a 2-year program of in11 struction (or both) for which it awards a

12 bachelor’s or associate’s degree, respec13 tively, except that the Secretary may waive

14 the limitation contained in this clause if a

15 nonprofit institution demonstrates to the

16 satisfaction of the Secretary that it exceeds

17 such limitation because it serves, through

18 contracts with Federal, State, or local gov19 ernment agencies, significant numbers of

20 students who do not have a high school di21 ploma or its recognized equivalent.

22 ‘‘(D) LIMITATIONS BASED ON MANAGE23 MENT.—An institution shall not be considered

24 to meet the definition of an institution of higher
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1 education in subparagraph (A) of this para2 graph if—

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

4 the institution that has the power, by con5 tract or ownership interest, to direct or

6 cause the direction of the management or

7 policies of the institution, has filed for

8 bankruptcy; or

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

10 chief executive officer has been convicted

11 of, or has pled nolo contendere or guilty to,

12 a crime involving the acquisition, use, or

13 expenditure of funds under title IV, or has

14 been judicially determined to have commit15 ted fraud involving funds under title IV.

16 ‘‘(E) CERTIFICATION.—The Secretary

17 shall certify an institution’s qualification as an

18 institution of higher education in accordance

19 with the requirements of subpart 2 of part H.

20 ‘‘(F) LOSS OF ELIGIBILITY.—An institu21 tion of higher education shall not be considered

22 to meet the definition of an institution of higher

23 education in subparagraph (A) of this para24 graph if such institution is removed from eligi-
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1 bility for funds under title IV as a result of an

2 action pursuant to part H of title IV.

3 ‘‘(3) PROPRIETARY INSTITUTION OF HIGHER

4 EDUCATION.—

5 ‘‘(A) PRINCIPAL CRITERIA.—For the pur6 pose of this subsection, the term ‘proprietary

7 institution of higher education’ means a school

8 that—

9 ‘‘(i) provides an eligible program of

10 training to prepare students for gainful

11 employment in a recognized occupation;

12 ‘‘(ii) meets the requirements of

13 clauses (i) and (ii) of paragraph (1)(A) of

14 this subsection;

15 ‘‘(iii) does not meet the requirement

16 of clause (iv) of paragraph (1)(A) of this

17 subsection;

18 ‘‘(iv) is accredited by a nationally rec19 ognized accrediting agency or association

20 approved by the Secretary pursuant to

21 part H of title IV;

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

23 2 years; and

24 ‘‘(vi) has at least 15 percent of its

25 revenues from sources that are not derived
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1 from funds provided under title IV, as de2 termined in accordance with regulations

3 prescribed by the Secretary.

4 In determining such 15 percent of revenues for

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

6 education and training that do not meet the

7 definition of an eligible program in section

8 481(b), but are provided on a contractual basis

9 under Federal, State, or local training pro10 grams, or under specialized business and indus11 try training requests, shall be counted.

12 ‘‘(B) ADDITIONAL INSTITUTIONS.—The

13 term ‘proprietary institution of higher edu14 cation’ also includes a proprietary educational

15 institution in any State that, in lieu of the re16 quirement in clause (i) of paragraph (1)(A) of

17 this subsection, admits as regular students per18 sons who are beyond the age of compulsory

19 school attendance in the State in which the in20 stitution is located.

21 ‘‘(4) POSTSECONDARY VOCATIONAL INSTITU22 TION.—

23 ‘‘(A) PRINCIPAL CRITERIA.—For the pur24 pose of this subsection, the term ‘postsecondary

25 vocational institution’ means a school that—
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1 ‘‘(i) provides an eligible program of

2 training to prepare students for gainful

3 employment in a recognized occupation;

4 ‘‘(ii) meets the requirements of

5 clauses (i), (ii), (iv), and (v) of paragraph

6 (1)(A) of this subsection; and

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

8 2 years.

9 ‘‘(B) ADDITIONAL INSTITUTIONS.—The

10 term ‘postsecondary vocational institution’ also

11 includes an educational institution in any State

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

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

14 regular students persons who are beyond the

15 age of compulsory school attendance in the

16 State in which the institution is located.

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

18 ‘‘(1) STATE.—The term ‘State’ includes, in ad19 dition to the several States of the Union, the Com20 monwealth of Puerto Rico, the District of Columbia,

21 Guam, American Samoa, the Virgin Islands, the

22 Commonwealth of the Northern Mariana Islands,

23 and the Freely Associated States.

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

25 ‘Freely Associated States’ means the Republic of the
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1 Marshall Islands, the Republic of Palau, and the

2 Federated States of Micronesia.’’.

3 (b) CONFORMING AMENDMENTS.—

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

5 (A) by striking subsections (a), (b), and

6 (c); and

7 (B) by redesignating subsections (d)

8 through (f ) as subsections (a) through (c), re9 spectively.

10 (2) Each of the following provisions are amend11 ed by striking ‘‘section 481’’ and inserting ‘‘section

12 101(a)(2)’’: sections 435(a)(1), 487(d), and 496(j)

13 and (k).

14 (3) Section 498(i) (20 U.S.C. 1099c) is amend15 ed by striking ‘‘section 481 (other than the require16 ments in subsections (b)(5) and (c)(3))’’ and insert17 ing ‘‘section 101(a) (other than the requirements in

18 paragraphs (3)(A)(v) and (4)(A)(iii))’’.

19 (4) Section 498(j) is amended by striking ‘‘sec20 tions 481(b)(5) and 481(c)(3)’’ and inserting ‘‘para21 graphs (3)(A)(v) and (4)(A)(iii) of section 101(a)’’.

22 (5) Section 105 (as redesignated by section

23 101(a)(3)(D)) is amended by adding at the end the

24 following new sentence: ‘‘This subsection shall cease

25 to be effective on October 1, 2001.’’.
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1 SEC. 103. REGULATORY REFORM.

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

3 new section:

4 ‘‘SEC. 112. REGULATORY REFORM.

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

6 even-numbered year (beginning with 1998), the Sec7 retary—

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

9 title IV of the Higher Education Act of 1965 in ef10 fect at the time of the review that apply to the oper11 ations or activities of any participant in those pro12 grams; and

13 ‘‘(2) shall determine whether any such regula14 tion is no longer necessary in the public interest.

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

16 shall repeal, consolidate, simplify, or otherwise modify any

17 regulation the Secretary determines to be no longer nec18 essary in the public interest.

19 ‘‘(c) REPORT TO CONGRESS.—The Secretary shall re20 port to the Congress any legislative changes necessary to

21 permit regulatory simplification under this section.’’.
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1 PART B—PERFORMANCE-BASED ORGANIZATION

2 FOR THE DELIVERY OF FEDERAL STUDENT

3 FINANCIAL ASSISTANCE.

4 SEC. 111. PERFORMANCE-BASED ORGANIZATION FOR THE

5 DELIVERY OF FEDERAL STUDENT FINANCIAL

6 ASSISTANCE.

7 Title I (as amended by part A of this title) is amend8 ed—

9 (1) by striking the heading of such title and in10 serting the following:

11 ‘‘TITLE I—GENERAL AND

12 ADMINISTRATIVE PROVISIONS

13 ‘‘PART A—GENERAL PROVISIONS’’;

14 and

15 (2) by adding at the end the following new part:

16 ‘‘PART B—ADMINISTRATIVE PROVISIONS FOR

17 DELIVERY OF STUDENT FINANCIAL ASSISTANCE

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

19 DELIVERY OF FEDERAL STUDENT FINANCIAL

20 ASSISTANCE.

21 ‘‘(a) ESTABLISHMENT AND PURPOSE.—

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

23 the Department a Performance-Based Organization

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

25 a discrete management unit responsible for manag26 ing the information systems supporting the pro-
36

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1 grams authorized under title IV of this Act, as speci2 fied in subsection (b).

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

4 are—

5 ‘‘(A) to improve the level of service to stu6 dents and participants in the programs;

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

8 the Federal student financial assistance pro9 grams authorized under title IV;

10 ‘‘(C) to increase the accountability of the

11 officials responsible for administering the oper12 ational aspects of these programs;

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

14 management of the operational functions of the

15 Federal student financial assistance programs;

16 ‘‘(E) to integrate the information systems

17 supporting the Federal student financial assist18 ance programs; and

19 ‘‘(F) to implement an open, common, inte20 grated system for the delivery of student finan21 cial assistance under title IV.

22 ‘‘(b) AUTHORITY.—

23 ‘‘(1) AUTHORITY OF SECRETARY.— Notwith24 standing any other provision of this Act, the Sec25 retary shall maintain responsibility for the develop-
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1 ment and promulgation of policy relating to the pro2 grams of student financial assistance under title IV.

3 In the exercise of its functions, the PBO shall be

4 subject to the direction of the Secretary. The Sec5 retary shall—

6 ‘‘(A) request the advice of, and work in co7 operation with, the Chief Operating Officer in

8 developing regulations, policies, administrative

9 guidance, or procedures affecting the informa10 tion systems administered by the PBO, and

11 other functions performed by the PBO;

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

13 Operating Officer for system changes required

14 by specific policies proposed by the Secretary;

15 ‘‘(C) consider the Chief Operating Officer’s

16 comments and estimates prior to finalizing such

17 regulations, policies, administrative guidance, or

18 procedures;

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

20 identifying goals for the administration and

21 modernization of the delivery system for stu22 dent financial assistance under title IV; and

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

24 funding to ensure that the PBO can efficiently

25 perform its functions.
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1 ‘‘(2) FUNCTIONS.—The PBO shall carry out

2 the following functions:

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

4 and information systems supporting student fi5 nancial assistance under title IV, including the

6 operational administration of the William D.

7 Ford Federal Direct Loan Program, but not in8 cluding the development of policy relating to

9 such programs.

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

11 financial management functions of the delivery

12 system for Federal student assistance, includ13 ing—

14 ‘‘(i) the collection, processing and

15 transmission of applicant data to students,

16 institutions and authorized third parties,

17 as provided for in section 483;

18 ‘‘(ii) technical specifications for soft19 ware development and systems supporting

20 the delivery of student financial assistance

21 under title IV;

22 ‘‘(iii) information technology and sys23 tems infrastructure related to the delivery

24 and management of student financial as25 sistance under title IV;
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1 ‘‘(iv) all software and hardware acqui2 sitions and all information technology con3 tracts related to the delivery and manage4 ment of student financial assistance under

5 title IV; and

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

7 user support related to the functions de8 scribed in clauses (i) through (iv).

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

10 the operations and services of the PBO, in con11 sultation with the Secretary, and for consider12 ation and inclusion in the Department’s annual

13 budget submission.

14 ‘‘(D) Annual development of goals, in con15 sultation with the Secretary, for the administra16 tion and modernization of the system for deliv17 ery of student financial assistance under title

18 IV.

19 ‘‘(E) Other functions proposed by the Sec20 retary, and agreed to by the Chief Operating

21 Officer as are not inconsistent with the func22 tions of the PBO.

23 ‘‘(3) INDEPENDENCE.—In carrying out its

24 functions, the PBO shall exercise independent con25 trol of its budget allocations and expenditures, per-
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1 sonnel decisions and processes, procurements, and

2 other administrative and management functions.

3 ‘‘(4) REVIEW OF PBO.—The PBO shall be sub4 ject to the usual and customary Federal audit proce5 dures, and be subject to review by the Inspector

6 General of the Department.

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

8 purpose of funding the administrative costs incurred by

9 the PBO in administering systems supporting programs

10 under this part, there are authorized to be appropriated

11 such sums as may be necessary for fiscal year 1999 and

12 each of the 4 succeeding fiscal years, except that funds

13 authorized under section 458 shall be made available to

14 the PBO by the Secretary for administrative costs author15 ized to be funded under that section.

16 ‘‘(d) ORGANIZATIONAL REPORTS.—

17 ‘‘(1) PERFORMANCE PLAN.—Within 6 months

18 of the hiring of the Chief Operating Officer, and

19 every 12 months thereafter, the Secretary and the

20 Chief Operating Officer of the Department shall de21 velop a performance plan for the PBO that estab22 lishes measurable goals and objectives for the orga23 nization. In developing this performance plan, the

24 Secretary and the Chief Operating Officer shall con25 sult with the Committee on Education and the
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1 Workforce of the House of Representatives, the

2 Committee on Labor and Human Resources of the

3 Senate, and the Advisory Committee on Student Fi4 nancial Assistance. The performance plan shall in5 clude a concise statement of goals for a modernized

6 system for the delivery of student financial assist7 ance under title IV and identify action steps nec8 essary to achieve such goals. Such goals shall be

9 used in evaluating the performance of the Chief Op10 erating Officer and the PBO pursuant to paragraph

11 (2).

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

13 Chief Operating Officer shall prepare and submit an

14 annual accountability report to the Secretary and

15 the Committee on Education and the Workforce of

16 the House of Representatives and the Committee on

17 Labor and Human Resources of the Senate. The ac18 countability report shall include—

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

20 expenditures of both the PBO and programs

21 administered by it;

22 ‘‘(B) financial and performance require23 ments applicable to the PBO under the Chief

24 Financial Officer Act of 1990 and the Govern25 ment Performance and Results Act of 1993;
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1 ‘‘(C) the results achieved by the PBO dur2 ing the year relative to the goals established in

3 the organization’s performance plan;

4 ‘‘(D) the results of the evaluations of per5 formance of the Chief Operating Officer and

6 senior managers under subsections (e)(2) and

7 (f )(2), including the amounts of bonus com8 pensation awarded to these individuals;

9 ‘‘(E) a discussion of the effectiveness of co10 ordination between the PBO and the Secretary;

11 ‘‘(F) recommendations for legislative and

12 regulatory changes to improve service to stu13 dents and their families, and to improve pro14 gram efficiency and integrity; and

15 ‘‘(G) other such information as the Direc16 tor of the Office of Management and Budget

17 shall prescribe for performance based organiza18 tions.

19 ‘‘(e) CHIEF OPERATING OFFICER.—

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

21 PBO shall be vested in a Chief Operating Officer

22 who shall be appointed by the Secretary to a 5-year

23 term and compensated without regard to chapters

24 33, 51, and 53 of title 5, United States Code. The

25 Secretary shall appoint the Chief Operating Officer
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1 within 6 months of the date of enactment of this

2 part. The Secretary shall consult with the Chairmen

3 of the Committee on Education and the Workforce

4 of the House of Representatives and the Committee

5 on Labor and Human Resources of the Senate prior

6 to making an appointment. The appointment shall

7 be made on the basis of demonstrated management

8 ability and expertise in information technology, in9 cluding extensive experience in the financial services

10 industry, and without regard to political affiliation

11 or activity. The Secretary may reappoint the Chief

12 Operating Officer to subsequent terms so long as the

13 performance of the Chief Operating Officer, as set

14 forth in the performance agreement, is satisfactory

15 or better. The Chief Operating Officer may be re16 moved by—

17 ‘‘(A) the President; or

18 ‘‘(B) the Secretary, for misconduct or fail19 ure to meet performance goals set forth in the

20 performance agreement in paragraph (2).

21 The President or Secretary shall communicate the

22 reasons for any such removal to the appropriate

23 committees of Congress.

24 ‘‘(2) PERFORMANCE AGREEMENT.—The Sec25 retary and the Chief Operating Officer shall enter
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1 into an annual performance agreement which shall

2 set forth measurable organization and individual

3 goals for the Chief Operating Officer in key oper4 ational areas. The agreement shall be subject to re5 view and renegotiation at the end of each term. The

6 final agreement shall be transmitted to the Commit7 tee on Education and the Workforce of the House

8 of Representatives and the Committee on Labor and

9 Human Resources of the Senate, and made publicly

10 available.

11 ‘‘(3) COMPENSATION.—The Chief Operating

12 Officer is authorized to be paid at an annual rate of

13 basic pay not to exceed the maximum rate of basic

14 pay for the Senior Executive Service under section

15 5382 of title 5, United States Code, including any

16 applicable locality-based comparability payment that

17 may be authorized under section 5304(h)(2)(B) of

18 such title 5. In addition, the Chief Operating Officer

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

20 excess of, 50 percent of such annual rate of basic

21 pay, based upon the Secretary’s evaluation of the

22 Chief Operating Officer’s performance in relation to

23 the performance goals set forth in the performance

24 agreement described in paragraph (2). Payment of a

25 bonus under this paragraph may be made to the
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1 Chief Operating Officer only to the extent that such

2 payment does not cause the Chief Operating Offi3 cer’s total aggregate compensation in a calendar

4 year to equal or exceed the amount of the Presi5 dent’s salary under section 102 of title 3, United

6 States Code.

7 ‘‘(f ) SENIOR MANAGEMENT.—

8 ‘‘(1) IN GENERAL.—The Chief Operating Offi9 cer may appoint up to 5 senior managers as may be

10 necessary without regard to the provisions of title 5,

11 United States Code, governing appointments in the

12 competitive service, and who may be paid without re13 gard to the provisions of chapter 51 and subchapter

14 III of chapter 53 of such title relating to classifica15 tion and General Schedule pay rates.

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

17 Operating Officer shall enter into an annual per18 formance agreement with each senior manager ap19 pointed under this subsection which shall set forth

20 measurable organization and individual goals in key

21 operational areas. The agreement shall be subject to

22 review and renegotiation at the end of each term.

23 ‘‘(3) COMPENSATION.—The Chief Operating

24 Officer is authorized to pay senior managers at an

25 annual rate of basic pay not to exceed 75 percent of
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1 the maximum rate of basic pay for the Senior Exec2 utive Service under section 5382 of title 5, United

3 States Code, including any applicable locality-based

4 comparability payment that may be authorized

5 under section 5304(h)(2)(C) of such title 5. In addi6 tion, a senior manager may receive a bonus in an

7 amount up to, but not in excess of, 50 percent of

8 such annual rate of basic pay, based upon the Chief

9 Operating Officer’s evaluation of the manager’s per10 formance in relation to the performance goals set

11 forth in the performance agreement described in

12 paragraph (2).

13 ‘‘(g) PERSONNEL FLEXIBILITY.—

14 ‘‘(1) PERSONNEL CEILINGS.—The PBO shall

15 not be subject to any ceiling relating to the number

16 or grade of employees.

17 ‘‘(2) ADMINISTRATIVE FLEXIBILITY.—The

18 Chief Operating Officer shall work with the Office of

19 Personnel Management to develop and implement

20 personnel flexibilities in staffing, classification, and

21 pay that meet the needs of the PBO, subject to com22 pliance with title 5, United States Code.

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

24 SYSTEM FOR MEASURING STAFF PERFORMANCE.—The

25 PBO shall establish an annual performance management
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1 system, subject to compliance with title 5, United States

2 Code and consistent with applicable provisions of law and

3 regulations, which strengthens the organizational effec4 tiveness of the PBO by providing for establishing goals

5 or objectives for individual, group, or organizational per6 formance (or any combination thereof), consistent with the

7 performance plan of the PBO and its performance plan8 ning procedures, including those established under the

9 Government Performance and Results Act of 1993, and

10 communicating such goals or objectives to employees.

11 ‘‘(i) PROCUREMENT FLEXIBILITY.—

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

13 subsection, the PBO shall abide by all applicable

14 Federal procurement laws and regulations when pro15 curing property and services. The PBO shall—

16 ‘‘(A) enter into contracts for information

17 systems supporting the programs authorized

18 under title IV to carry out the functions set

19 forth in subsection (b)(2); and

20 ‘‘(B) obtain the services of experts and

21 consultants without regard to section 3109 of

22 title 5, United States Code and set pay in ac23 cordance with such section.

24 ‘‘(2) PERFORMANCE BASED SERVICING CON25 TRACTS.—The Chief Operating Officer shall, to the
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1 extent practicable, maximize the use of performance

2 based servicing contracts, consistent with guidelines

3 for such contracts published by the Office of Federal

4 Procurement Policy, to achieve cost savings and im5 prove service.

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

7 Chief Operating Officer shall, to the extent prac8 ticable and consistent with the purpose of the PBO,

9 utilize services available outside of the Federal Gov10 ernment in the delivery of Federal student financial

11 assistance. To achieve this purpose, the PBO is au12 thorized to pay fees to an organization that are

13 equivalent to those paid by other entities for such

14 services, if the Chief Operating Officer determines

15 that such organization currently provides an infor16 mation system or service that meets the require17 ments of the PBO.

18 ‘‘(j) FOCUS GROUPS.—To facilitate information shar19 ing and customer involvement, the Chief Operating Officer

20 may establish focus groups composed of students, institu21 tions, and other participants in the programs authorized

22 by title IV to provide advice on student aid delivery mat23 ters.
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1 ‘‘SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT

2 AID DELIVERY.

3 ‘‘(a) IN GENERAL.—The Secretary, and the Chief

4 Operating Officer shall improve the efficiency and effec5 tiveness of the student aid delivery system by encouraging

6 and participating in the establishment of voluntary con7 sensus standards and requirements for the electronic

8 transmission of information necessary for the administra9 tion of programs under title IV.

10 ‘‘(b) ADOPTION OF VOLUNTARY CONSENSUS STAND11 ARDS.—Except with respect to the common financial re12 porting form under section 483(a), the Secretary shall

13 adopt voluntary consensus standards for transactions re14 quired under title IV, and common data elements for such

15 transactions, to enable information to be exchanged elec16 tronically between systems administered by the Depart17 ment and among participants in the Federal student aid

18 delivery system.

19 ‘‘(c) REQUIREMENTS FOR ADOPTION OF VOLUNTARY

20 CONSENSUS STANDARDS.—Any voluntary consensus

21 standard adopted under this section shall—

22 ‘‘(1) be a standard that has been developed,

23 adopted, or modified by a standard setting organiza24 tion that is open to the participation of the various

25 entities engaged in the delivery of Federal student

26 financial assistance; and
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1 ‘‘(2) be consistent with the objective of reducing

2 the administrative costs of delivering student finan3 cial assistance under title IV.

4 ‘‘(d) PARTICIPATION IN STANDARD SETTING ORGA5 NIZATIONS.—

6 ‘‘(1) The Chief Operating Officer shall partici7 pate in the activities of standard setting organiza8 tions in carrying out the provisions of this section.

9 ‘‘(2) The Chief Operating Officer shall encour10 age higher education groups seeking to develop com11 mon forms, standards, and procedures in support of

12 the delivery of Federal student financial assistance

13 to conduct these activities within a standard setting

14 organization.

15 ‘‘(3) The Chief Operating Officer may pay nec16 essary dues and fees associated with participating in

17 standard setting organizations pursuant to this sub18 section from funds available under subsection (j).

19 ‘‘(e) PROCEDURES FOR ADOPTION AND IMPLEMEN20 TATION OF VOLUNTARY CONSENSUS STANDARDS.—In

21 adopting voluntary consensus standards and implementa22 tion timetables under this section, including modifications

23 of existing standards, the Secretary shall follow the proce24 dures for negotiated rulemaking in section 492.
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1 ‘‘(f ) INITIAL VOLUNTARY CONSENSUS STANDARDS

2 TO BE ADOPTED.—Through coordinated participation be3 tween the Chief Operating Officer and standard setting

4 organizations, the initial standards adopted by the Sec5 retary shall include the following:

6 ‘‘(1) ELECTRONIC PERSONAL IDENTIFIER NUM7 BER.—The Secretary shall adopt standards for a

8 single electronic personal identifier number for stu9 dents receiving assistance under title IV.

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

11 in coordination with the Secretary of Commerce,

12 shall adopt standards specifying procedures for the

13 electronic transmission and authentication of signa14 tures with respect to transactions requiring a signa15 ture under title IV.

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

17 Secretary shall adopt standards for a single identi18 fier for eligible institutions under title IV.

19 ‘‘(g) USE OF CLEARINGHOUSES.—Nothing in this

20 section shall restrict the ability of participating institu21 tions and lenders from using a clearinghouse to comply

22 with the standards for the exchange of information estab23 lished under this section.

24 ‘‘(h) APPLICABILITY TO CURRENT SYSTEMS.—
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1 ‘‘(1) GENERAL RULE.—Except as provided in

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

3 Department of Education information systems sup4 porting the delivery of programs under title IV no

5 later than 12 months from the date of enactment of

6 this part.

7 ‘‘(2) NATIONAL STUDENT LOAN DATA SYS8 TEM.—This section shall apply to sections 485B(e)

9 and (f ) no later than 18 months after the date of

10 enactment of this part.

11 ‘‘(3) INTEGRATED POSTSECONDARY EDUCATION

12 DATA SYSTEM.—The Secretary shall coordinate the

13 adoption of voluntary consensus standards under

14 this section to ensure that standards are compatible

15 with the integrated postsecondary education data

16 system (IPEDS).

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

18 transmits information under a transaction covered by this

19 section shall maintain reasonable and appropriate admin20 istrative, technical, and physical safeguards—

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

22 of the information; and

23 ‘‘(2) to protect against any reasonably antici24 pated security threats, or unauthorized uses or dis25 closures of the information.
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1 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated in any fiscal year or

3 made available from funds appropriated to carry out ac4 tivities in this section in any fiscal year such sums as may

5 be necessary to carry out the provisions of this section,

6 except that if no funds are appropriated pursuant to this

7 subsection, the Secretary shall make funds available to

8 carry out this section from amounts appropriated for the

9 operations and expenses of the Department of Education.

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

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

12 means a standard developed or used by a standard

13 setting organization accredited by the American Na14 tional Standards Institute.

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

16 means a standard setting organization accredited by

17 the American National Standards Institute that de18 velops standards for information transactions, data

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

20 or will facilitate, the implementation of this section.

21 ‘‘(3) For purposes of this section, the term

22 ‘clearinghouse’ means a public or private entity that

23 processes or facilitates the processing of non24 standard data elements into data elements conform25 ing to standards adopted under this section.’’.
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1 TITLE II—POSTSECONDARY EDU2 CATION IMPROVEMENT PRO3 GRAMS

4 SEC. 201. URBAN COMMUNITY SERVICE.

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

6 Act of 1965 is amended by inserting at the end of title

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

8 ‘‘TITLE II—POSTSECONDARY

9 EDUCATION IMPROVEMENT

10 PROGRAMS’’.

11 (b) REDESIGNATION AND TRANSFER OF URBAN

12 COMMUNITY SERVICE PROGRAM.—

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

14 title XI is amended—

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

16 1104’’ and inserting ‘‘section 204’’;

17 (B) in section 1104(12), by striking ‘‘sec18 tion 1103(a)(2)(B)’’ and inserting ‘‘section

19 203(a)(2)(B)’’; and

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

21 1103’’ and inserting ‘‘section 203’’.

22 (2) REDESIGNATION.—Part A of title XI (20

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

24 title II, and sections 1101 through 1109 are redesig25 nated as sections 201 through 209.
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1 (3) TRANSFER.—Part A of title II (including

2 sections 201 through 209), as redesignated by para3 graph (2), is transferred to immediately follow the

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

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

6 1137 et seq.) and the heading of title XI are re7 pealed.

8 (c) ALLOWABLE ACTIVITIES.—Section 204 (as redes9 ignated by subsection (b)(2)) is amended by adding at the

10 end the following new paragraph:

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

12 communities.’’.

13 (d) DESIGNATION OF URBAN GRANT INSTITU14 TIONS.—Section 207 (as redesignated by subsection

15 (b)(2)) is amended by adding at the end the following new

16 sentence: ‘‘The information developed as a result of this

17 section shall be made available to Urban Grant Institu18 tions and to any other interested institution of higher edu19 cation by any appropriate means, including the Internet.’’.

20 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

21 209 (as redesignated by subsection (b)(2)) is amended by

22 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 PRO4 GRAMS.—

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

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

7 title II (as amended by section 201) and—

8 (A) sections 1001 through 1003 (20

9 U.S.C. 1135 et seq.) are redesignated as sec10 tions 221 through 223; and

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

12 redesignated as section 224.

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

14 sections 221 through 224), as redesignated by para15 graph (1), is transferred to follow part A of title II.

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

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

18 and the heading of title X are repealed.

19 (b) ENDOWMENT GRANTS.—Section 221(a) (as re20 designated by subsection (a)(2)) is amended—

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

22 (7);

23 (2) by striking the period at the end of para24 graph (8) and inserting ‘‘; and’’; and

25 (3) by adding at the end the following new

26 paragraph:
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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

4 ongoing work of area program centers that foster

5 the development of local affiliated chapters in high6 poverty areas to improve graduation rates and post7 secondary attendance through the provision of aca8 demic support services and scholarship assistance for

9 the pursuit of postsecondary education.’’.

10 (c) SPECIAL PROJECTS.—Section 224 (as redesig11 nated 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) cooperation between institutions to encour20 age cost saving initiatives through joint purchase of

21 goods and services, and shared use of facilities and

22 faculty resources.

23 ‘‘(4) evaluation and dissemination of model pro24 grams; and
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1 ‘‘(5) international cooperation and student ex2 change among postsecondary educational institu3 tions.’’; and

4 (2) by striking subsection (d).

5 (d) AUTHORIZATION OF APPROPRIATIONS.—

6 (1) COMBINATION OF SUBPARTS.—Part B of

7 title II (as redesignated by subsection (a)) is amend8 ed by striking the subpart designations and head9 ings.

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

11 redesignated) is amended by adding at the end the

12 following:

13 ‘‘SEC. 225. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

17 years.’’.

18 SEC. 203. GRANTS TO STATES FOR WORKPLACE AND COM19 MUNITY TRANSITION TRAINING FOR INCAR20 CERATED YOUTH OFFENDERS.

21 (a) REDESIGNATION AND TRANSFER OF PRO22 GRAMS.—

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

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

25 and section 1091 is redesignated as section 231.
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1 (2) TRANSFER.—Part C of title II (including

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

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

4 by section 202 of this Act).

5 (b) REAUTHORIZATION.—Section 231(j) (as so redes6 ignated) is amended to read as follows:

7 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There

8 are authorized to be appropriated to carry out this section

9 $5,000,000 for fiscal year 1999 and such sums as may

10 be necessary for each of the four succeeding fiscal years.’’.

11 SEC. 204. ADVANCED PLACEMENT FEE PAYMENT PRO12 GRAM.

13 (a) REDESIGNATION AND TRANSFER OF PRO14 GRAMS.—

15 (1) REDESIGNATION.—Part G of title XV of

16 the Higher Education Amendments of 1992 (20

17 U.S.C. 1170) is redesignated as part D of title II

18 and section 1545 of such Act is redesignated as sec19 tion 241.

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

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

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

23 by section 203 of this Act).
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1 (b) REAUTHORIZATION.—Section 241(f ) (as so re2 designated) is amended by striking ‘‘1993’’ and inserting

3 ‘‘1999’’.

4 SEC. 205. TEACHER QUALITY ENHANCEMENT GRANTS.

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

6 following new part:

7 ‘‘PART E—TEACHER QUALITY ENHANCEMENT

8 GRANTS

9 ‘‘SEC. 271. PURPOSE.

10 ‘‘The purposes of this part are—

11 ‘‘(1) to provide competitive grants to States for

12 assistance in strengthening the quality of the teach13 ing force by improving the academic knowledge of

14 teachers in the subject areas in which they teach,

15 such as math, science, English, foreign languages,

16 history, economics, art, civics, Government, and ge17 ography;

18 ‘‘(2) to hold institutions of higher education

19 with teacher preparation programs accountable for

20 preparing teachers who are highly competent in the

21 academic content areas in which they plan to teach,

22 including training in the effective uses of tech23 nologies in the classroom; and
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1 ‘‘(3) to recruit high quality individuals, includ2 ing individuals from other occupations, into the

3 teaching force.

4 ‘‘SEC. 272. ELIGIBILITY.

5 ‘‘(a) DEFINITIONS.—For purposes of this part:

6 ‘‘(1) ELIGIBLE GRANT RECIPIENT.—The term

7 ‘eligible grant recipient’ means—

8 ‘‘(A) other than for the purpose of section

9 273(b), a Governor of a State, except that if,

10 pursuant to the law or constitution of such

11 State, another individual, entity, or agency in a

12 State that is responsible for the teacher certifi13 cation and preparation activities contained in

14 the application, such term means that individ15 ual, entity, or agency; and

16 ‘‘(B) for the purpose of section 273(b), an

17 eligible partnership.

18 ‘‘(2) ELIGIBLE PARTNERSHIP.—The term ‘eligi19 ble partnership’ means an entity consisting of an ex20 emplary private independent or State-supported pub21 lic institution of higher education which prepares

22 teachers, and a local educational agency, and which

23 may also consist of the eligible grant recipient, other

24 institutions of higher education, public charter

25 schools, public and private nonprofit elementary and
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1 secondary schools, or other public and private non2 profit agencies or organizations.

3 ‘‘(b) APPLICATIONS.—To be eligible to receive a

4 grant under this part, an eligible grant recipient shall, at

5 the time of the initial grant application, submit an applica6 tion to the Secretary that meets the requirements of this

7 part.

8 ‘‘(c) CONTENTS OF APPLICATION.—Such application

9 shall include a description of how the eligible grant recipi10 ent intends to use funds provided under this part and such

11 other information and assurances as the Secretary may

12 require.

13 ‘‘SEC. 273. USE OF FUNDS.

14 ‘‘(a) GENERAL ACTIVITIES.—The eligible grant re15 cipient of a State that receives a grant under this subpart

16 shall use a portion of such grant to carry out 1 or more

17 of the following activities:

18 ‘‘(1) Reforming State teacher certification re19 quirements to ensure that current and future teach20 ers possess the necessary academic content knowl21 edge in the subject areas in which they are certified

22 and assigned to teach.

23 ‘‘(2) Providing prospective teachers alternatives

24 to schools of education through programs at colleges

25 of arts and sciences or at nonprofit organizations.
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1 ‘‘(3) Funding programs which establish or ex2 pand alternative routes to State certification for

3 highly qualified individuals, including mid-career

4 professionals from other occupations, paraprofes5 sionals, and former military personnel.

6 ‘‘(4) Implementing reforms which hold institu7 tions of higher education with teacher preparation

8 programs accountable for preparing teachers who

9 are highly competent in the academic content areas

10 in which they plan to teach.

11 ‘‘(5) Developing and implementing effective

12 mechanisms to expeditiously remove incompetent or

13 unqualified teachers.

14 ‘‘(6) Recruiting minorities, and others, into the

15 teaching and counseling professions, including edu16 cation paraprofessionals, former military personnel,

17 and mid-career professionals, by providing financial

18 and other assistance related to instruction, induc19 tion, mentoring, and support services that include

20 pre-service and in-service components, to serve with21 in schools which have—

22 ‘‘(A) a high percentage of children in pov23 erty;

24 ‘‘(B) low retention rates for teachers; or
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1 ‘‘(C) a high percentage of teachers teach2 ing subjects for which they are not qualified to

3 teach.

4 ‘‘(7) Developing and implementing effective

5 mechanisms to provide principals and superintend6 ents with advanced managerial skills.

7 ‘‘(8) Creating opportunities for school principals

8 and superintendents to further their professional de9 velopment by providing advanced managerial skills

10 training.

11 ‘‘(b) PARTNERSHIP ACTIVITIES.—An eligible part12 nership that receives a grant under this subpart shall use

13 such funds to carry out 1 or more of the following activi14 ties:

15 ‘‘(1) Implementing reforms which hold institu16 tions of higher education with teacher preparation

17 programs accountable for preparing teachers who

18 are highly competent in the academic content areas

19 in which they plan to teach.

20 ‘‘(2) Creating opportunities for enhanced and

21 ongoing professional development which improves

22 the academic content knowledge of teachers in the

23 subject areas in which they are certified to teach or

24 in which they are working toward certification to

25 teach.
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1 ‘‘(3) Providing programs designed to implement

2 the successful integration of technology into teaching

3 and learning.

4 ‘‘(4) Recruiting minorities, and others, into the

5 teaching and counseling professions, including edu6 cation paraprofessionals, former military personnel,

7 and mid-career professionals, by providing financial

8 and other assistance related to instruction, induc9 tion, mentoring, and support services that include

10 pre-service and in-service components, to serve with11 in schools which have—

12 ‘‘(A) a high percentage of children in pov13 erty;

14 ‘‘(B) low retention rates for teachers; or

15 ‘‘(C) a high percentage of teachers teach16 ing subjects for which they are not qualified to

17 teach.

18 ‘‘SEC. 274. COMPETITIVE AWARDS.

19 ‘‘(a) COMPETITIVE GRANTS.—

20 ‘‘(1) APPLICABILITY.—The Secretary shall

21 make grants in accordance with the requirements of

22 this subsection for any fiscal year for which the

23 amount appropriated under section 276 does not

24 equal or exceed $250,000,000.
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1 ‘‘(2) COMPETITIVE BASIS FOR AWARDS.—The

2 Secretary shall make annual grants under this sub3 section on a competitive basis.

4 ‘‘(3) PEER REVIEW PANEL.—The Secretary

5 shall provide the applications submitted by eligible

6 grant recipients under section 272 to a peer review

7 panel for evaluation. With respect to each applica8 tion, the peer review panel shall initially recommend

9 the application for funding or for disapproval.

10 ‘‘(4) PRIORITY.—In recommending applications

11 to the Secretary, the panel shall give priority to—

12 ‘‘(A) applications from States with propos13 als which promise initiatives to reform State

14 teacher certification requirements which are de15 signed to ensure that current and future teach16 ers possess the necessary academic content

17 knowledge in the subject areas in which they

18 are certified to teach or which include innova19 tive reforms to hold institutions of higher edu20 cation with teacher preparation programs ac21 countable for preparing teachers who are highly

22 competent in the academic content areas in

23 which they plan to teach; and

24 ‘‘(B) eligible partnership applications

25 which—
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1 ‘‘(i) include the eligible grant recipient

2 and demonstrate a high degree of collabo3 ration with the State agency responsible

4 for teacher certification and preparation;

5 and

6 ‘‘(ii) include a local educational agen7 cy which includes a school with—

8 ‘‘(I) a high percentage of children

9 in poverty;

10 ‘‘(II) low retention rates for

11 teachers; or

12 ‘‘(III) a high percentage of teach13 ers teaching subjects for which they

14 are not qualified to teach.

15 ‘‘(5) RANKING OF APPLICATIONS.—With re16 spect to each application recommended for funding,

17 the panel shall assign the application a rank, relative

18 to other recommended applications, based on the pri19 ority described in subsection (c), the extent to which

20 the application furthers the purposes of this part,

21 and the overall quality of the application, based on

22 the quality and scope of State-supported strategies

23 to improve quality of teacher preparation and their

24 teaching force.
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1 ‘‘(6) RECOMMENDATION OF AMOUNT.—With re2 spect to each application recommended for funding,

3 the panel shall make a recommendation to the Sec4 retary with respect to the amount of the grant that

should be made. The Secretary shall use 1 5 ⁄3 of the

6 funds made available under this part to fund appli7 cations submitted by eligible partnerships.

8 ‘‘(7) SECRETARIAL SELECTION.—

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (B), the Secretary shall determine, based

11 on the peer review panel’s recommendations,

12 which applications shall receive funding and the

13 amounts of such grants. In determining grant

14 amounts, the Secretary shall take into account

15 the total amount of funds available for all

16 grants under this part and the types of activi17 ties proposed to be carried out.

18 ‘‘(B) EFFECT OF RANKING BY PANEL.—In

19 making grants under this part, the Secretary

20 shall select applications according to the rank21 ing of the applications by the peer review panel,

22 except in cases where the Secretary determines,

23 for good cause, that a variation from that order

24 is appropriate.

25 ‘‘(b) FORMULA GRANTS.—
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1 ‘‘(1) ALLOTMENT.—For any fiscal year for

2 which the amount appropriated to carry out this

3 part exceeds $250,000,000, the Secretary shall make

4 allotments to the eligible grant recipient of each

5 State, pursuant to the formula described in para6 graph (2), to enable the eligible grant recipient to

7 carry out the activities under this part, including the

8 funding of eligible partnerships to carry out activi9 ties described in section 273(b).

10 ‘‘(2) ALLOTMENT FORMULA.—For any such fis11 cal year, an eligible grant recipient from each State

12 that submits an application under section 272(a)

13 shall receive an allotment under this part in an

14 amount that bears the same ratio to the amount ap15 propriated as the school age population ages 5

16 through 17 of the State bears to the school age pop17 ulation ages 5 through 17 of all the States, except

18 that no State shall receive less than an amount

equal to 1 19 ⁄4 of 1 percent of the total amount.

20 ‘‘(c) ADDITIONAL REQUIREMENTS.—

21 ‘‘(1) MATCHING REQUIREMENT.—Each State

22 receiving funds under this part shall provide, from

non-Federal sources, an amount equal to 1 23 ⁄2 of the

24 amount of the grant in cash or in kind to carry out

25 the activities supported by the grant.
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1 ‘‘(2) LIMITATION ON ADMINISTRATIVE EX2 PENSES.—An eligible recipient that receives a grant

3 under this part may use not more than 2 percent of

4 the grant funds for administrative costs.

5 ‘‘(3) REPORTING.—

6 ‘‘(A) IN GENERAL.—An eligible grant re7 cipient that receives a grant under this section

8 shall submit an accountability report to the

9 Secretary and the Committee on Education and

10 the Workforce of the House of Representatives

11 and the Committee on Labor and Human Re12 sources of the Senate. Such reports shall in13 clude a description of the degree to which sub14 stantial progress has been made in meeting the

15 following goals:

16 ‘‘(i) Raising the State academic stand17 ards required to enter the teaching profes18 sion.

19 ‘‘(ii) Increasing the percentage of

20 classes taught in core academic subject

21 areas by teachers fully certified by the

22 State to teach in those subject areas.

23 ‘‘(iii) Decreasing shortages of quali24 fied teachers in poor urban and rural

25 areas.
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1 ‘‘(iv) Increasing opportunities for en2 hanced and ongoing professional develop3 ment which improves the academic content

4 knowledge of teachers in the subject areas

5 in which they are certified to teach or in

6 which they are working toward certification

7 to teach.

8 ‘‘(B) ACCOUNTABILITY OF STATE INSTITU9 TION OF HIGHER EDUCATION.—Prior to receiv10 ing funds under this part, an eligible grant re11 cipient shall demonstrate that at least 80 per12 cent of graduates of each of the exemplary in13 stitutions of higher education in any eligible

14 partnership described in section 273(a)(2) who

15 enter the field of teaching pass all applicable

16 State qualification assessments of new teachers,

17 which must include assessments of each pro18 spective teacher’s subject matter knowledge in

19 the content area or areas in which the teacher

20 provides instruction. Prior to each subsequent

21 receipt of funds under this part, such State

22 shall demonstrate that 70 percent of the grad23 uates of each institution of higher education in

24 the State have met such goal and continue to

25 progress to exceed such goal. Such assessment
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1 shall be at least as rigorous as those in place

2 on the date of enactment of this Act and shall

3 have qualifying scores no lower than those in

4 place on the date of enactment of this Act.

5 ‘‘(C) PROVISION TO PEER REVIEW

6 PANEL.—The Secretary shall provide the re7 ports submitted under subparagraph (A) to the

8 peer review panel convened under subsection

9 (a)(3). The panel shall use such accountability

10 report in recommending applications for subse11 quent funding under this section.

12 ‘‘(4) TEACHERS QUALIFICATIONS PROVIDED TO

13 PARENT UPON REQUEST.—Any local educational

14 agency that participates as an eligible recipient or

15 partner under this part shall make available, upon

16 request and in an understandable and uniform for17 mat, to any parent of a student attending any school

18 in the local educational agency, information regard19 ing the qualifications of the student’s classroom

20 teacher, both generally and with regard to the sub21 ject matter in which the teacher provides instruction.

22 ‘‘SEC. 275. LIMITATIONS.

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

24 this part shall be construed to permit, allow, encourage,

25 or authorize any Federal control over any aspect of any
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1 private, religious, or home school, whether or not a home

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

3 State law. This section shall not be construed to bar pri4 vate, religious, or home schools from participation in pro5 grams or services under this part.

6 ‘‘(b) NO CHANGE IN STATE CONTROL ENCOURAGED

7 OR REQUIRED.—Nothing in this part shall be construed

8 to encourage or require any change in a State’s treatment

9 of any private, religious, or home school, whether or not

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

11 under State law.

12 ‘‘(c) NATIONAL SYSTEM OF TEACHER CERTIFI13 CATION PROHIBITED.—Nothing in this part shall be con14 strued to permit, allow, encourage, or authorize any na15 tional system of teacher certification.

16 ‘‘SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

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

18 this part such sums as may be necessary for each of the

19 fiscal years 1999 through 2003.’’.

20 SEC. 206. CAMPUS SAFETY.

21 (a) GRANTS TO COMBAT VIOLENT CRIMES AGAINST

22 WOMEN ON CAMPUSES.—Title II is further amended by

23 adding at the end the following new part:
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1 ‘‘Part F—Grants to Combat Violent Crimes Against

2 Women on Campuses

3 ‘‘SEC. 281. GRANTS TO COMBAT VIOLENT CRIMES AGAINST

4 WOMEN ON CAMPUSES.

5 ‘‘(a) GRANTS AUTHORIZED.—

6 ‘‘(1) IN GENERAL.—The Secretary is authorized

7 to make grants to institutions of higher education

8 for use to provide training to administrators, secu9 rity personnel, and campus personnel and student

10 organizations for the purpose of developing and

11 strengthening effective security and investigation

12 strategies to combat violent crimes against women

13 on campuses, and to develop and strengthen victim

14 services in cases involving violent crimes against

15 women on campuses, which may include partner16 ships with local criminal justice authorities and com17 munity-based victims services agencies.

18 ‘‘(2) AWARD BASIS.—The Secretary shall award

19 grants and contracts under this section on a com20 petitive basis.

21 ‘‘(3) EQUITABLE PARTICIPATION.—The Sec22 retary shall make every effort to ensure the equi23 table participation of private and public institutions

24 of higher education and to ensure the equitable geo25 graphic participation of such institutions in the ac26 tivities assisted under this part.
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1 ‘‘(4) PRIORITY.—In the award of grants and

2 contracts under this section, the Secretary shall give

3 priority to institutions of higher education or consor4 tia of such institutions that show the greatest need

5 for the sums requested.

6 ‘‘(b) USE OF GRANT FUNDS.—Funds provided under

7 this part may be used for the following purposes:

8 ‘‘(1) To provide training for campus security

9 and college personnel, including campus disciplinary

10 or judicial boards, that address the issues of sexual

11 assaults, stalking, and domestic violence.

12 ‘‘(2) To implement and operate education pro13 grams for the prevention of violent crimes against

14 women.

15 ‘‘(3) To develop, enlarge, or strengthen support

16 services programs including medical or psychological

17 counseling for victims of sexual offense crimes.

18 ‘‘(4) To create, disseminate, or otherwise pro19 vide assistance and information about victims’ op20 tions on and off campus to bring disciplinary or

21 other legal action.

22 ‘‘(5) To train campus administrators and cam23 pus security personnel to more effectively identify

24 and respond to violent crimes against women on
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1 campus, including the crimes of sexual assault,

2 stalking, and domestic violence.

3 ‘‘(6) To develop and implement more effective

4 campus policies, protocols, orders, and services spe5 cifically devoted to prevent, identify, and respond to

6 violent crimes against women on campus, including

7 the crimes of sexual assault, stalking, and domestic

8 violence.

9 ‘‘(7) To develop, enlarge, or strengthen victim

10 services programs for local campuses and to improve

11 delivery of victim services on campuses.

12 ‘‘(8) To provide capital improvements (includ13 ing improved lighting and communications facilities

14 but not including the construction of buildings) on

15 campuses to address violent crimes against women

16 on campus, including the crimes of sexual assault,

17 stalking, and domestic violence.

18 ‘‘(9) To support improved coordination between

19 campus administrators, campus security personnel,

20 and local law enforcement to reduce violent crimes

21 against women on campus.

22 ‘‘(c) APPLICATIONS.—

23 ‘‘(1) IN GENERAL.—In order to be eligible to be

24 awarded a grant under this section for any fiscal

25 year, an institution of higher education shall submit
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1 an application to the Secretary at such time and in

2 such manner as the Secretary shall prescribe.

3 ‘‘(2) CONTENTS.—Each application submitted

4 under paragraph (1) shall—

5 ‘‘(A) describe the need for grant funds and

6 the plan for implementation for any of the pur7 poses described in subsection (b);

8 ‘‘(B) describe how the campus authorities

9 shall consult and coordinate with nonprofit and

10 other victim services programs, including sexual

11 assault and domestic violence victim services

12 programs;

13 ‘‘(C) provide measurable goals and ex14 pected results from the use of the grants funds;

15 ‘‘(D) provide assurances that the Federal

16 funds made available under this section shall be

17 used to supplement and, to the extent practical,

18 increase the level of funds that would, in the

19 absence of Federal funds, be made available by

20 the applicant for the purpose described in this

21 part; and

22 ‘‘(E) include such other information and

23 assurances as the Secretary reasonably deter24 mines to be necessary.
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1 ‘‘(3) COMPLIANCE WITH CAMPUS CRIME RE2 PORTING REQUIRED.—No institution of higher edu3 cation shall be eligible for a grant under this section

4 unless such institution is in compliance with the re5 quirements of section 485(f ) of this Act.

6 ‘‘(d) REPORTING.—Not later than 180 days after the

7 end of the fiscal year for which grants are made under

8 this part, the Secretary shall submit to the committees of

9 the House of Representatives and the Senate responsible

10 for issues relating to higher education and crime, a report

11 that includes—

12 ‘‘(1) the number of grants and funds distrib13 uted under this part;

14 ‘‘(2) a summary of the purposes for which these

15 grants were provided and an evaluation of their

16 progress;

17 ‘‘(3) a statistical summary of the persons

18 served, detailing the nature of victimization, and

19 providing data on age, sex, race, ethnicity, disability,

20 relationship to offender, geographic distribution, and

21 type of campus; and

22 ‘‘(4) an evaluation of the effectiveness of pro23 grams funded under this part, including an evalua24 tion based on the reduction observed in crimes re25 ported pursuant to section 485(f ).
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1 ‘‘(f ) GRANTEE REPORTING.—Upon completion of the

2 grant or contract period under this section, the grantee

3 institution or consortium of such institutions shall file a

4 performance report with the Secretary explaining the ac5 tivities carried out together with an assessment of the ef6 fectiveness of those activities in achieving the purposes of

7 this section. The Secretary shall suspend funding for an

8 approved application if an applicant fails to submit an an9 nual performance report.

10 ‘‘(g) DEFINITIONS.—In this part—

11 ‘‘(1) the term ‘domestic violence’ includes acts

12 or threats of violence, not including acts of self-de13 fense, committed by a current or former spouse of

14 the victim, by a person with whom the victim shares

15 a child in common, by a person who is cohabitating

16 with or has cohabitated with the victim, by a person

17 similarly situated to a spouse of the victim under the

18 domestic or family violence laws of the jurisdiction,

19 or by any other person against a victim who is pro20 tected from that person’s acts under the domestic or

21 family violence laws of the jurisdiction;

22 ‘‘(2) the term ‘sexual assault’ means any con23 duct proscribed by chapter 109A of title 18, United

24 States Code, whether or not the conduct occurs in

25 the special maritime and territorial jurisdiction of
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1 the United States or in a Federal prison and in2 cludes both assaults committed by offenders who are

3 strangers to the victim and assaults committed by

4 offenders who are known or related by blood or mar5 riage to the victim; and

6 ‘‘(3) the term ‘victim services’ means a non7 profit, nongovernmental organization that assists do8 mestic violence or sexual assault victims, including

9 campus women’s centers, rape crisis centers, bat10 tered women’s shelters, and other sexual assault or

11 domestic violence programs including campus coun12 seling support and victim advocate organizations

13 with domestic violence, stalking, and sexual assault

14 programs, whether or not organized and staffed by

15 students.

16 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—For the

17 purpose of carrying out this part, there are authorized to

18 be appropriated $10,000,000 for fiscal year 1999 and

19 such sums as may be necessary for each of the 4 succeed20 ing fiscal years.’’.

21 SEC. 207. ACCOUNTABILITY FOR INSTITUTIONS OF HIGHER

22 EDUCATION THAT PREPARE TEACHERS.

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

24 following new part:
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1 ‘‘PART F—ACCOUNTABILITY FOR INSTITUTIONS

2 OF HIGHER EDUCATION THAT PREPARE

3 TEACHERS

4 ‘‘SEC. 281. DATA COLLECTION.

5 ‘‘(a) DATA REQUIRED.—Within one year after the

6 date of enactment of the Higher Education Amendments

7 of 1998, and annually thereafter, the Secretary shall col8 lect from each State receiving funds under this Act and

9 publish the following information:

10 ‘‘(1) A description of the teacher licensing and

11 credentialing assessments used by each State, in12 cluding any and all assessments required in the sub13 ject matter area or areas in which a teacher provides

14 instruction.

15 ‘‘(2) The standards and criteria established by

16 each State that teachers or prospective teachers

17 must meet in order to receive a passing score on

18 such assessments, including information on the ex19 tent to which passing such examinations is required

20 in order for an individual to be a classroom teacher.

21 ‘‘(3) Information on the extent to which teach22 ers or prospective teachers in each State are re23 quired to take examinations or other assessments of

24 their subject matter knowledge in the area or areas

25 in which they provide instruction, the standards es26 tablished for passing any such assessments, and the
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1 extent to which teachers or prospective teachers are

2 required to receive a passing score on such assess3 ments in order to teach in specific subject areas or

4 grade levels.

5 ‘‘(4) Information on the extent to which each

6 State waives teacher credentialing and licensing re7 quirements, including the proportion of all teachers

8 or prospective teachers in the State for whom such

9 licensing and credentialing requirements have been

10 waived and the distribution of such individuals

11 across high- and low-poverty schools and across

12 grade levels and subject areas.

13 ‘‘(5) The pass rate, for the preceding year, on

14 all teacher licensing and credentialing assessments

15 for all individuals in the State who took such assess16 ments, disaggregated by the institution of higher

17 education from which the teacher received his or her

18 most recent degree.

19 ‘‘(b) COORDINATION.—The Secretary, to the extent

20 practicable, shall coordinate the information collected and

21 published under this part among States for individuals

22 who took State teacher licensing or credentialing assess23 ments in a State other than the State in which the individ24 ual received his or her most recent degree.
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1 ‘‘(c) USE OF LOCAL AGENCIES.—For each State in

2 which there are no State licensing or credentialing assess3 ments, the Secretary shall, to the extent practicable, col4 lect data comparable to the data described in paragraphs

5 (1) through (5) of subsection (a) from local educational

6 agencies, colleges and universities, or other entities that

7 administer such assessments to teachers or prospective

8 teachers.

9 ‘‘SEC. 282. DATA DISSEMINATION.

10 ‘‘(a) EFFECTIVE DATE OF REQUIREMENTS.—The

11 data required to be distributed under this section shall be

12 distributed beginning within 3 years after the date of en13 actment of the Higher Education Amendments of 1998

14 and annually thereafter.

15 ‘‘(b) PASSING RATES.—Each institution of higher

16 education that has a course of study that prepares elemen17 tary and secondary school teachers and receives Federal

18 funds will report and distribute widely, including through

19 prominent publications such as catalogs and promotional

20 materials sent to potential applicants, high school guid21 ance counselors, and the employers of graduates of such

22 institutions, their pass rate for graduates of the institution

23 on each of the State’s initial teacher certification and li24 censing assessments for the most recent year for which
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1 data are available at the time of publication of such mate2 rials.

3 ‘‘(c) IDENTIFICATION OF INSTITUTIONS WITH PASS4 ING RATES BELOW 70 PERCENT.—Each State shall sub5 mit to the Secretary a list of institutions of higher edu6 cation that prepare teachers and receive Federal funds

7 under this Act for which, for the preceding year, less than

8 70 percent of graduates who took any of the State’s initial

9 teacher licensing and credentialing assessments failed to

10 receive a passing score on any such assessment. For each

11 assessment, data shall be disaggregated by the institution

12 of higher education from which the student received his

13 or her most recent degree, unless such degree was granted

14 more than 3 years prior to the date such assessment was

15 administered.

16 ‘‘SEC. 283. STATE FUNCTIONS.

17 ‘‘(a) STATE ASSESSMENT.—In order to receive funds

18 under this Act, a State shall, no later than one year after

19 the date of enactment of the Higher Education Amend20 ments of 1998, have in place a procedure to identify low

21 performing programs of teacher preparation within insti22 tutions of higher education. Such levels of performance

23 shall be determined solely by the State and may include

24 criteria based upon information collected pursuant to this
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1 part. Such assessment shall be described in the report

2 under section 281.

3 ‘‘(b) TERMINATION OF ELIGIBILITY.—Any institu4 tion of higher education that offers a program of teacher

5 preparation in which the State has withdrawn its approval

6 or terminated its financial support due to the low perform7 ance of its teacher preparation program based upon the

8 State assessment described in section (a)—

9 ‘‘(1) shall be ineligible for any funding for pro10 fessional development activities awarded by the De11 partment of Education; and

12 ‘‘(2) shall not be permitted to accept or enroll

13 any student that receives aid under title IV of this

14 Act in its teacher preparation program.

15 ‘‘SEC. 284. NEGOTIATED RULEMAKING.

16 ‘‘If the Secretary develops any regulations imple17 menting section 283(b)(2), the Secretary shall submit

18 such proposed regulations to a negotiated rulemaking

19 process which shall include representatives of States and

20 institutions of higher education for their review and com21 ment.

22 SEC. 208. ADDITIONAL REPEAL.

23 Title VIII (20 U.S.C. 1133 et seq.), relating to coop24 erative education, is repealed.
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1 TITLE III—INSTITUTIONAL AID

2 SEC. 301. STRENGTHENING INSTITUTIONS.

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

4 311 (20 U.S.C. 1057) is amended—

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

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

7 (2) by amending paragraph (3) of subsection

8 (b) to read as follows:

9 ‘‘(3) Special consideration shall be given to applica10 tions which propose, pursuant to the institution’s plan, the

11 use of funds for integrating computer technology into in12 stitutional facilities to create smart buildings.’’; and

13 (3) by adding at the end the following new sub14 sections:

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

16 under this section shall be used for one or more of the

17 following activities:

18 ‘‘(1) purchase, rental, or lease of scientific or

19 laboratory equipment for educational purposes, in20 cluding instructional and research purposes;

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

22 improvement in classrooms, libraries, laboratories,

23 and other instructional facilities;
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1 ‘‘(3) support of faculty exchanges, faculty devel2 opment, and faculty fellowships to assist in attaining

3 advanced degrees in their field of instruction;

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

5 other educational materials, including telecommuni6 cations program material;

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

8 programs designed to improve academic success;

9 ‘‘(6) funds management, administrative man10 agement, and acquisition of equipment for use in

11 strengthening funds management;

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

13 and libraries;

14 ‘‘(8) establishing or improving a development

15 office to strengthen or improve contributions from

16 alumni and the private sector;

17 ‘‘(9) establishing or improving an endowment

18 fund;

19 ‘‘(10) creating or improving facilities for Inter20 net or other distance learning academic instruction

21 capabilities, including purchase or rental of tele22 communications technology equipment or services;

23 and

24 ‘‘(11) other activities proposed in the applica25 tion submitted pursuant to subsection (c) that—
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1 ‘‘(A) contribute to carrying out the pur2 poses of this section; and

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

4 of the review and acceptance of such applica5 tion.

6 ‘‘(d) ENDOWMENT FUND LIMITATIONS.—

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

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

9 part for any fiscal year for establishing or improving

10 an endowment fund.

11 ‘‘(2) MATCHING REQUIRED.—An institution

12 that uses any portion of its grant under this part for

13 any fiscal year for establishing or improving an en14 dowment fund shall provide an equal or greater

15 amount for such purposes from non-Federal funds.

16 ‘‘(3) REGULATIONS.—The Secretary shall pub17 lish rules and regulations specifically governing the

18 use of funds for establishing or improving an endow19 ment fund.’’.

20 (b) ENDOWMENT FUND DEFINITION.—Section 312

21 (20 U.S.C. 1058) is amended by adding at the end the

22 following new subsection:

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

24 part, the term ‘endowment fund’ means a fund that—
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1 ‘‘(1) is established by State law, by an institu2 tion of higher education, or by a foundation that is

3 exempt from Federal income taxation;

4 ‘‘(2) is maintained for the purpose of generat5 ing income for the support of the institution; and

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

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

8 1059) is amended—

9 (1) in subsection (a), by inserting before the pe10 riod at the end the following: ‘‘, except that no insti11 tution shall be eligible to secure a subsequent 5-year

12 grant award under this part until two calendar years

13 have elapsed since the expiration of its most recent

14 5-year grant award’’; and

15 (2) in subsection (b), by inserting ‘‘subsection

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

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

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

19 ‘‘SEC. 314. APPLICATIONS.

20 ‘‘Each eligible institution desiring to receive assist21 ance under this part shall submit an application in accord22 ance with the requirements of section 351.’’.

23 (e) PROGRAM FOR TRIBALLY CONTROLLED COL24 LEGES AND UNIVERSITIES.—Section 316 (20 U.S.C.

25 1059c) is amended to read as follows:
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1 ‘‘SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COL2 LEGES AND UNIVERSITIES.

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

4 provide grants and related assistance to American Indian

5 Tribal Colleges and Universities to enable such institu6 tions to improve and expand their capacity to serve Indian

7 students.

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

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

10 as in section 2 of the Tribally Controlled Community

11 Colleges Act of 1978.

12 ‘‘(2) The term ‘Indian tribe’ has the same

13 meaning as in section 2 of such Act.

14 ‘‘(3) The term ‘Tribal College or University’

15 has the meaning given the term ‘tribally controlled

16 college or university’ in section 2 of such Act, and

17 includes an institution listed in the Equity in Edu18 cational Land Grant Status Act of 1994.

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

20 means an institution of higher education as defined

21 by section 101(a)(1) of this Act, except that sub22 paragraph (A)(ii) of such section shall not be appli23 cable.

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

25 under this section shall be used by Tribal Colleges or Uni26 versities to assist such institutions to plan, develop, under-
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1 take, and carry out authorized activities. Such authorized

2 activities may include—

3 ‘‘(1) purchase, rental, or lease of scientific or

4 laboratory equipment for educational purposes, in5 cluding instructional and research purposes;

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

7 improvement in classrooms, libraries, laboratories,

8 and other instructional facilities, including purchase

9 or rental of telecommunications technology equip10 ment or services;

11 ‘‘(3) support of faculty exchanges, faculty devel12 opment, and faculty fellowships to assist in attaining

13 advanced degrees in their field of instruction;

14 ‘‘(4) academic instruction in disciplines in

15 which American Indians are underrepresented;

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

17 other educational materials, including telecommuni18 cations program material;

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

20 programs designed to improve academic success;

21 ‘‘(7) funds management, administrative man22 agement, and acquisition of equipment for use in

23 strengthening funds management;

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

25 and libraries;
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1 ‘‘(9) establishing or improving a development

2 office to strengthen or improve contributions from

3 alumni and the private sector;

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

5 teacher education designed to qualify students to

6 teach in elementary or secondary schools, with a

7 particular emphasis on teaching American Indian

8 children and youth, that shall include, as part of

9 such program, preparation for teacher certification;

10 ‘‘(11) establishing community outreach pro11 grams which will encourage American Indian ele12 mentary and secondary students to develop the aca13 demic skills and the interest to pursue postsecondary

14 education;

15 ‘‘(12) establishing or improving an endowment

16 fund; and

17 ‘‘(13) other activities proposed in the applica18 tion submitted pursuant to this subsection that—

19 ‘‘(A) contribute to carrying out the pur20 poses of this section; and

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

22 of the review and acceptance of such applica23 tion.

24 ‘‘(d) APPLICATION PROCESS.—
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1 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligi2 ble to receive assistance under this section, an insti3 tution shall be an institution which—

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

5 312(b);

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

7 the Tribally Controlled Community College As8 sistance Act of 1978 (Public Law 95–471); or

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

10 Equity in Educational Land Grant Status Act

11 of 1994.

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

13 receive assistance under this section shall submit an

14 application to the Secretary at such time, and in

15 such manner, as the Secretary may by regulation

16 reasonably require. Each such application shall in17 clude—

18 ‘‘(A) a 5-year plan for improving the as19 sistance provided by the Tribal College or uni20 versity to Indian students, increasing the rates

21 at which Indian high school students enroll in

22 higher education, and increasing overall post23 secondary retention rates for Indian students;

24 and
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1 ‘‘(B) such enrollment data and other infor2 mation and assurances as the Secretary may re3 quire to demonstrate compliance with subpara4 graphs (A) and (B) of paragraph (1).

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

6 part, no Tribal College or University which is eligible

7 for and receives funds under this section may con8 currently receive other funds under this part or part

9 B.’’.

10 SEC. 302. HISTORICALLY BLACK COLLEGES AND UNIVER11 SITIES.

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

13 1062(a)) is amended—

14 (1) by redesignating paragraph (12) as para15 graph (13); and

16 (2) by inserting after paragraph (11) the fol17 lowing new paragraph:

18 ‘‘(12) Establishing or improving an endowment

19 fund.’’.

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

21 striking paragraph (3) and inserting the following:

22 ‘‘(3)(A) An institution may not use more than 20 per23 cent of its grant under this part for any fiscal year for

24 establishing or improving an endowment fund.
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1 ‘‘(B) An institution that uses any portion of its grant

2 under this part for any fiscal year for establishing or im3 proving an endowment fund shall provide an equal or

4 greater amount for such purposes from non-Federal

5 funds.

6 ‘‘(C) The Secretary shall publish rules and regula7 tions specifically governing the use of funds for establish8 ing or improving an endowment fund.’’.

9 (c) PROFESSIONAL OR GRADUATE INSTITUTIONS.—

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

11 (20 U.S.C. 1063b(a)) is amended—

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

13 mathematics or the physical or natural

14 sciences’’ after ‘‘graduate education opportuni15 ties’’; and

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

17 that’’ and all that follows and inserting the fol18 lowing: ‘‘, except that no institution shall be re19 quired to match any portion of the first

20 $500,000 of its award from the Secretary. After

21 allocations are made to each eligible institution

22 under the funding rules provided in subsection

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

24 basis, any amounts which remain unallocated

25 (by reason of the failure of an institution to
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1 comply with the matching requirements of this

2 paragraph) among the institutions that have

3 complied with such matching requirement.’’.

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

5 1063b(c)) is amended by striking paragraphs (1)

6 through (3) and inserting the following:

7 ‘‘(1) purchase, rental or lease of scientific or

8 laboratory equipment for educational purposes, in9 cluding instructional and research purposes;

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

11 improvement in classroom, library, laboratory, and

12 other instructional facilities used exclusively for the

13 purposes of this section, including purchase or rental

14 of telecommunications technology equipment or serv15 ices;

16 ‘‘(3) purchase of library books, periodicals,

17 technical and other scientific journals, microfilm,

18 microfiche, and other educational materials, includ19 ing telecommunications program materials;

20 ‘‘(4) scholarships, fellowships, and other finan21 cial assistance for needy graduate and professional

22 students to permit their enrollment in and comple23 tion of the doctoral degree in medicine, dentistry,

24 pharmacy, veterinary medicine, law, and the doctor25 ate degree in the physical or natural sciences, engi-
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1 neering, mathematics, or other scientific disciplines

2 in which African Americans are underrepresented;

3 ‘‘(5) establish or improve a development office

4 to strengthen and increase contributions from alum5 ni and the private sector;

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

7 of an institutional endowment to facilitate financial

8 independence pursuant to section 331 of this title;

9 and

10 ‘‘(7) funds and administrative management,

11 and the acquisition of equipment, including software,

12 for use in strengthening funds management and

13 management information systems.’’.

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

15 1063b(e)) is amended—

16 (A) in paragraph (1)

17 (i) by striking ‘‘include—’’ and insert18 ing ‘‘are the following:’’;

19 (ii) by inserting ‘‘and other qualified

20 graduate programs’’ before the semicolon

21 at the end of subparagraphs (F) through

22 (J);

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

24 subparagraph (O);
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1 (iv) by inserting ‘‘University’’ after

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

3 (v) by striking the period at the end

4 of such subparagraph and inserting a

5 semicolon; and

6 (vi) by inserting after such subpara7 graph the following new subparagraphs:

8 ‘‘(Q) Norfolk State University qualified

9 graduate program; and

10 ‘‘(R) Tennessee State University qualified

11 graduate program.’’; and

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

13 inserting the following:

14 ‘‘(2) QUALIFIED GRADUATE PROGRAM.—For

15 the purposes of this section, the term ‘qualified

16 graduate program’ means a graduate or professional

17 program that provides an accredited program of in18 struction in the physical or natural sciences, engi19 neering, mathematics, or other scientific discipline in

20 which African Americans are underrepresented and

21 has students enrolled in such program at the time

22 of application for a grant under this section.

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

24 awarded grants under this section prior to October

25 1, 1998, shall continue to receive such grants, sub-
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1 ject to the availability of appropriated funds, regard2 less of the eligibility of the institutions described in

3 subparagraphs (Q) and (R) of paragraph (1).’’; and

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

5 the period at the end the following: ‘‘, except

6 that the president or chancellor of the institu7 tion may decide which graduate or professional

8 school or qualified graduate program will re9 ceive funds under the grant in any one fiscal

10 year’’.

11 (4) FUNDING RULE.—Section 326(f ) (20

12 U.S.C. 1063b(f )) is amended—

13 (A) by striking ‘‘Of the amount appro14 priated’’ and inserting ‘‘Subject to subsection

15 (g), of the amount appropriated’’;

16 (B) in paragraph (1)—

17 (i) by striking ‘‘$12,000,000’’ and in18 serting ‘‘$26,000,000’’; and

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

20 inserting ‘‘(A) through (P)’’.

21 (C) by striking paragraph (2) and insert22 ing the following:

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

24 $26,000,000 shall be available for the purpose of

25 making grants to institutions or programs identified
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1 in subparagraphs (Q) and (R) of subsection (e)(1);

2 and

3 ‘‘(3) if the amount appropriated exceeds

4 $27,000,000, the Secretary shall develop a formula

5 for making allotments of such excess to each of the

6 institutions or programs identified in subparagraphs

7 (A) through (R) using the following elements:

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

9 the eligible institution’s professional or grad10 uate school, or qualified graduate program

11 which received funding under this section in the

12 previous year;

13 ‘‘(B) the average cost of education per stu14 dent for all full-time graduate or professional

15 students (or the equivalent) enrolled in the eli16 gible professional school, graduate school or

17 doctoral students in the qualified graduate pro18 gram; and

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

20 their first professional or doctoral degree at the

21 professional or graduate school or the qualified

22 graduate program in the preceding year for

23 which the institution received funding under

24 this section.’’.
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1 (5) HOLD HARMLESS RULE.—Section 326 is

2 further amended by adding at the end the following

3 new subsection:

4 ‘‘(g) HOLD HARMLESS RULE.—Notwithstanding

5 paragraphs (2) and (3) of subsection (f ), no institution

6 or qualified program identified in subsection (e)(1) that

7 received a grant for fiscal year 1998 and that is eligible

8 to receive a grant in a subsequent fiscal year shall receive

9 a grant amount in any such subsequent fiscal year that

10 is less than the grant amount received for fiscal year 1998,

11 unless the amount appropriated is not sufficient to provide

12 such grant amounts to all such institutions and pro13 grams.’’.

14 SEC. 303. MINORITY SCIENCE AND ENGINEERING IMPROVE15 MENT PROGRAM.

16 (a) AMENDMENT.—Title III (20 U.S.C. 1051) is

17 amended—

18 (1) by redesignating part D as part E; and

19 (2) by inserting after part C the following new

20 part:

21 ‘‘PART D—MINORITY SCIENCE AND

22 ENGINEERING IMPROVEMENT PROGRAM

23 ‘‘SEC. 341. PROGRAM AUTHORIZED.

24 ‘‘The Secretary shall, in accordance with the provi25 sions of this part, carry out a program of making grants
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1 to institutions of higher education that are designed to

2 effect long-range improvements in science and engineering

3 education, and improve support programs for minority

4 students enrolled in science and engineering programs at

5 predominantly minority institutions.

6 ‘‘SEC. 342. USE OF FUNDS.

7 ‘‘Funds appropriated for the purpose of this subpart

8 may be made available for—

9 ‘‘(1) providing needed services to groups of mi10 nority institutions or providing training for scientists

11 and engineers from eligible minority institutions;

12 ‘‘(2) providing needed services to groups of in13 stitutions serving significant numbers of minority

14 students or providing training for scientists and en15 gineers from such institutions to improve their abil16 ity to train minority students in science or engineer17 ing;

18 ‘‘(3) assisting minority institutions to improve

19 the quality of preparation of their students for grad20 uate work or careers in science, mathematics, and

21 technology;

22 ‘‘(4) improving access of undergraduate stu23 dents at minority institutions to careers in the

24 sciences, mathematics, and engineering;
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1 ‘‘(5) improving access of minority students,

2 particularly minority women, to careers in the

3 sciences, mathematics, and engineering;

4 ‘‘(6) improving access for pre-college minority

5 students to careers in science, mathematics, and en6 gineering through community outreach programs

7 conducted through colleges and universities eligible

8 for support through the Minority Science and Engi9 neering Improvement Programs;

10 ‘‘(7) disseminating activities, information, and

11 educational materials designed to address specific

12 barriers to the entry of minorities into science and

13 technology, and conducting activities and studies

14 concerning the flow of underrepresented ethnic mi15 norities into scientific careers;

16 ‘‘(8) supporting curriculum models to encourage

17 minority student participation in research careers in

18 science, mathematics, and technology; and

19 ‘‘(9) improving the capability of minority insti20 tutions for self-assessment, management, and eval21 uation of their science, mathematics, and engineer22 ing programs and dissemination of their results.

23 ‘‘SEC. 343. ELIGIBILITY FOR GRANTS.

24 ‘‘The Secretary may make grants under this part to

25 minority institutions (as defined in section 347), organiza-
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1 tions, and entities to enable them to carry out programs

2 and activities authorized by this part:

3 ‘‘(1)(A) institutions of higher education grant4 ing baccalaureate degrees; and

5 ‘‘(B) institutions of higher education granting

6 associate degrees which—

7 ‘‘(i) have a curriculum including science or

8 engineering subjects;

9 ‘‘(ii) apply jointly with institutions de10 scribed in subparagraph (A); and

11 ‘‘(iii) have an articulation agreement with

12 institutions described in subparagraph (A) for

13 its science or engineering students; and

14 ‘‘(2) consortia of—

15 ‘‘(A) institutions which have a curriculum

16 in science or engineering;

17 ‘‘(B) graduate institutions which have a

18 curriculum in science or engineering;

19 ‘‘(C) Federal Education Research Centers;

20 ‘‘(D) research laboratories of, or under

21 contract with, the Department of Energy;

22 ‘‘(E) private organizations which have

23 science or engineering facilities; or
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1 ‘‘(F) quasi-governmental entities which

2 have a significant scientific or engineering mis3 sion;

4 to enable such institutions and consortia to carry

5 programs and activities authorized by this part.

6 ‘‘SEC. 344. GRANT APPLICATION.

7 ‘‘(a) SUBMISSION AND CONTENTS OF APPLICA8 TIONS.—An eligible applicant (as determined under sec9 tion 343) that desires to receive a grant under this part

10 shall submit to the Secretary an application therefore at

11 such time or times, in such manner, and containing such

12 information as the Secretary may prescribe by regulation.

13 Such application shall set forth—

14 ‘‘(1) a program of activities for carrying out

15 one or more of the purposes described in section 342

16 in such detail as will enable the Secretary to deter17 mine the degree to which such program will accom18 plish such purpose or purposes; and

19 ‘‘(2) such other policies, procedures, and assur20 ances as the Secretary may require by regulation.

21 ‘‘(b) APPROVAL BASED ON LIKELIHOOD OF

22 PROGRESS.—The Secretary shall approve an application

23 only if the Secretary determines that the application sets

24 forth a program of activities which are likely to make sub-
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1 stantial progress toward achieving the purposes of this

2 part.

3 ‘‘SEC. 345. CROSS PROGRAM AND CROSS AGENCY COOPERA4 TION.

5 ‘‘The Minority Science and Engineering Improvement

6 Programs shall cooperate and consult with other programs

7 within the Department and within Federal, State, and pri8 vate agencies which carry out programs to improve the

9 quality of science, mathematics, and engineering edu10 cation.

11 ‘‘SEC. 346. ADMINISTRATIVE PROVISIONS.

12 ‘‘(a) TECHNICAL STAFF.—The Secretary shall ap13 point, without regard to the provisions of title 5 of the

14 United States Code governing appointments in the com15 petitive service, not less than one technical employees with

16 appropriate scientific and educational background to ad17 minister the programs under this part who may be paid

18 without regard to the provisions of chapter 51 and sub19 chapter III of chapter 53 of such title relating to classi20 fication and General Schedule pay rates.

21 ‘‘(b) PROCEDURES FOR GRANT REVIEW.—The Sec22 retary shall establish procedures for reviewing and evalu23 ating grants and contracts made or entered into under

24 such programs. Procedures for reviewing grant applica25 tions, based on the peer review system, or contracts for
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1 financial assistance under this title may not be subject to

2 any review outside of officials responsible for the adminis3 tration of the Minority Science and Engineering Improve4 ment Program.

5 ‘‘SEC. 347. DEFINITIONS.

6 ‘‘For the purpose of this part—

7 ‘‘(1) The term ‘minority institution’ means an

8 institution of higher education whose enrollment of

9 a single minority or a combination of minorities (as

10 defined in paragraph (2)) exceeds 50 percent of the

11 total enrollment. The Secretary shall verify this in12 formation from the data on enrollments in the high13 er education general information surveys (HEGIS)

14 furnished by the institution to the Office for Civil

15 Rights, Department of Education.

16 ‘‘(2) The term ‘minority’ means American In17 dian, Alaskan Native, Black (not of Hispanic ori18 gin), Hispanic (including persons of Mexican, Puerto

19 Rican, Cuban, and Central or South American ori20 gin), Pacific Islander or other ethnic group under21 represented in science and engineering.

22 ‘‘(3) The term ‘science’ means, for the purpose

23 of this program, the biological, engineering, mathe24 matical, physical, behavioral, and social sciences, and

25 history and philosophy of science; also included are
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1 interdisciplinary fields which are comprised of over2 lapping areas among two or more sciences.’’.

3 SEC. 304. GENERAL PROVISIONS.

4 (a) APPLICATIONS FOR ASSISTANCE.—Section

5 351(a) (20 U.S.C. 1066(a)) is amended to read as follows:

6 ‘‘(a) APPLICATIONS.—

7 ‘‘(1) APPLICATIONS REQUIRED.—Any institu8 tion which is eligible for assistance under this title

9 shall submit to the Secretary an application for as10 sistance at such time, in such form, and containing

11 such information, as may be necessary to enable the

12 Secretary to evaluate its need for assistance. Subject

13 to the availability of appropriations to carry out this

14 title, the Secretary may approve an application for

15 a grant under this title only if the Secretary deter16 mines that—

17 ‘‘(A) the application meets the require18 ments of subsection (b);

19 ‘‘(B) the applicant is eligible for assistance

20 in accordance with the part of this title under

21 which the assistance is sought; and

22 ‘‘(C) the applicant’s performance goals are

23 sufficiently rigorous as to meet the purposes of

24 this title and the performance objectives and in25 dicators for this title established by the Sec-
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1 retary pursuant to the Government Perform2 ance and Results Act.

3 ‘‘(2) PRELIMINARY APPLICATIONS.—In carrying

4 out paragraph (1), the Secretary shall develop a pre5 liminary application for use by eligible institutions

6 applying under part A prior to the submission of the

7 principal application.’’.

8 (b) CONTENTS OF APPLICATIONS.—Section 351(b) is

9 amended—

10 (1) in paragraph (5)(A), by inserting ‘‘and the

11 Government Performance and Results Act’’ after

12 ‘‘under this title’’; and

13 (2) in paragraph (6), by inserting before the

14 semicolon the following: ‘‘, except that for purposes

15 of section 316, paragraphs (2) and (3) shall not

16 apply’’.

17 (c) WAIVERS.—Section 352(a) (20 U.S.C. 1067(a))

18 is amended—

19 (1) by striking ‘‘or’’ at the end of paragraph

20 (5);

21 (2) by redesignating paragraph (6) as para22 graph (7); and

23 (3) by inserting after paragraph (5) the follow24 ing new paragraph:
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1 ‘‘(6) that is a tribally controlled community col2 lege as defined in the Tribally Controlled Commu3 nity College Act of 1978; or’’.

4 (d) APPLICATION REVIEW PROCESS.—Section 353(a)

5 (20 U.S.C. 1068(a)) is amended—

6 (1) in paragraph (2), by striking ‘‘Native Amer7 ican colleges and universities’’ and inserting ‘‘Tribal

8 Colleges and Universities’’; and

9 (2) in paragraph (3)—

10 (A) by striking subparagraph (A); and

11 (B) by redesignating subparagraphs (B)

12 and (C) as subparagraphs (A) and (B), respec13 tively.

14 (e) CONTINUATION AWARDS.—Part D of title III is

15 amended by inserting after section 354 (20 U.S.C. 1069)

16 the following new section:

17 ‘‘SEC. 355. CONTINUATION AWARDS.

18 ‘‘The Secretary shall make continuation awards

19 under this title for the second and succeeding years of a

20 grant only after determining that the recipient is making

21 satisfactory progress in carrying out the grant.’’.

22 (f ) AUTHORIZATION OF APPROPRIATIONS.—Section

23 360 (20 U.S.C. 1069f) is amended—

24 (1) by striking subsection (a) and inserting the

25 following:
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1 ‘‘(a) AUTHORIZATIONS.—

2 ‘‘(1) PART A.—(A) There are authorized to be

3 appropriated to carry out part A (other that sections

4 316), $135,000,000 for fiscal year 1999, and such

5 sums as may be necessary for each of the 4 succeed6 ing fiscal years.

7 ‘‘(B) There are authorized to be appropriated

8 to carry out section 316, $10,000,000 for fiscal year

9 1999, and such sums as may be necessary for each

10 of the 4 succeeding fiscal years.

11 ‘‘(2) PART B.—(A) There are authorized to be

12 appropriated to carry out part B (other than section

13 326), $135,000,000 for fiscal year 1999, and such

14 sums as may be necessary for each of the 4 succeed15 ing fiscal years.

16 ‘‘(B) There are authorized to be appropriated

17 to carry out section 326, $35,000,000 for fiscal year

18 1999, and such sums as may be necessary for each

19 of the 4 succeeding fiscal years.

20 ‘‘(3) PART C.—There are authorized to be ap21 propriated to carry out part C, $10,000,000 for fis22 cal year 1999, and such sums as may be necessary

23 for each of the 4 succeeding fiscal years.

24 ‘‘(4) PART D.—There are authorized to be ap25 propriated to carry out Part D, $10,000,000 for fis-
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1 cal year 1999, and such sums as may be necessary

2 for each of the 4 succeeding fiscal years.’’; and

3 (2) by striking subsections (c), (d), and (e).

4 TITLE IV—STUDENT ASSISTANCE

5 PART A—GRANTS TO STUDENTS

6 SEC. 401. PELL GRANTS.

7 (a) EXTENSION OF AUTHORITY.—Section 401(a) (20

8 U.S.C. 1070a(a)) is amended—

9 (1) in paragraph (1)—

10 (A) by striking ‘‘September 30, 1998’’ and

11 inserting ‘‘September 30, 2004’’; and

12 (B) by striking the second sentence; and

13 (2) in paragraph (2), by striking ‘‘the disburse14 ment system required by paragraph (1)’’ and insert15 ing ‘‘the disbursement of Federal Pell Grants’’.

16 (b) AMOUNT OF GRANT.—Section 401(b)(2)(A) is

17 amended to read as follows:

18 ‘‘(2)(A) The amount of the Federal Pell Grant for

19 a student eligible under this part shall be—

20 ‘‘(i) $4,500 for academic year 1999–2000;

21 ‘‘(ii) $4,700 for academic year 2000–2001;

22 ‘‘(iii) $4,900 for academic year 2001–2002;

23 ‘‘(iv) $5,100 for academic year 2002–2003; and

24 ‘‘(v) $5,300 for academic year 2003–2004,
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1 less an amount equal to the amount determined to be the

2 expected family contribution with respect to that student

3 for that year.’’.

4 (c) RELATION OF MAXIMUM GRANT TO TUITION AND

5 EXPENSES.—Section 401(b)(3) is amended—

6 (1) by striking ‘‘$2,400’’ each place it appears

7 and inserting ‘‘$3,000’’; and

8 (2) by adding at the end the following new sub9 paragraph:

10 ‘‘(C) An institution that charged only fees in lieu of

11 tuition as of January 31, 1997, may include in its deter12 mination of tuition charged, fees that would normally con13 stitute tuition.’’.

14 (d) DEPENDENT CARE AND DISABILITY RELATED

15 EXPENSES.—Section 401(b)(3)(B) is amended by striking

16 ‘‘$750’’ and inserting ‘‘$1,500’’.

17 (e) INSTITUTIONAL INELIGIBILITY BASED ON DE18 FAULT RATES.—Section 401 is amended by adding at the

19 end the following new subsection:

20 ‘‘(j) INSTITUTIONAL INELIGIBILITY BASED ON DE21 FAULT RATES.—

22 ‘‘(1) IN GENERAL.—No institution of higher

23 education shall be an eligible institution for purposes

24 of this section if such institution of higher education

25 is ineligible to participate in a loan program under
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1 this title as a result of a final default rate deter2 mination made by the Secretary under part B or D

3 of this title, or both, after the final publication of

4 fiscal year 1996 cohort default rates.

5 ‘‘(2) SANCTIONS SUBJECT TO APPEAL OPPOR6 TUNITY.—No institution may be subject to the

7 terms of this subsection unless it has had the oppor8 tunity to appeal its default rate determination under

9 regulations issued by the Secretary for the Federal

10 Family Education Loan or Federal Direct Loan

11 Program, as applicable. This subsection shall not

12 apply to an institution that was not participating in

13 the loan programs authorized under part B or D of

14 this title on the date of enactment of the Higher

15 Education Amendments of 1998, unless the institu16 tion subsequently participates in the loan pro17 grams.’’.

18 (f ) PELL GRANT INCENTIVES.—Subpart 1 of part A

19 of title IV of the Higher Education Act of 1965 is amend20 ed by inserting after section 401 (20 U.S.C. 1070a) the

21 following new section:

22 ‘‘SEC. 401A. PELL GRANT INCENTIVES.

23 ‘‘(a) PROGRAM AUTHORITY.—From the amounts ap24 propriated pursuant to subsection (d), the Secretary shall

25 establish a program to increase the Pell grant awards
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1 under section 401 during their first two academic years

2 of undergraduate education to students who graduate

3 after May 1, 1998, in the top 10 percent of their high

4 school graduating class.

5 ‘‘(b) AMOUNT OF INCREASE.—The additional amount

6 of Pell grant that shall be awarded under this section to

7 any student who qualifies under this section shall be an

8 amount equal to the amount for which the student is eligi9 ble under section 401 (determined without regard to the

10 provisions of this section), except that if the amount ap11 propriated pursuant to subsection (d) is less than the

12 amount required to award such additional amounts to all

13 such students, the additional amount awarded to each

14 such student under this section shall be ratably reduced.

15 ‘‘(c) DETERMINATIONS OF ELIGIBILITY.—

16 ‘‘(1) PROCEDURES ESTABLISHED BY REGULA17 TION.—The Secretary shall establish by regulation

18 procedures for the determination of eligibility of stu19 dents for increased Pell grant awards under this sec20 tion. Such procedures shall include measures to pre21 vent any secondary school from certifying more than

22 10 percent of it’s students for eligibility under this

23 section.

24 ‘‘(2) COORDINATION WITH NEED ANALYSIS.—In

25 prescribing procedures under paragraph (1), the
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1 Secretary shall ensure that the determination of eli2 gibility and the amount of the increase in the Pell

3 grant award is determined in a timely manner con4 sistent with the requirements of section 482 and the

5 submission of the financial aid form required by sec6 tion 483. For such purposes, the Secretary may pro7 vide that, for the first of a student’s two academic

8 years of eligibility under this section, class rank may

9 be determined prior to graduation, at such time and

10 in such manner as the Secretary may specify in the

11 regulations prescribed under this subsection.

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated to award increased Pell

14 grants under this section $240,000,000 for fiscal year

15 1999 and such sums as may be necessary for each of the

16 4 succeeding fiscal years.’’.

17 (g) CONFORMING AMENDMENTS.—

18 (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is

19 amended by striking ‘‘basic educational opportunity

20 grants’’ and inserting ‘‘Federal Pell Grants’’.

21 (2) The heading of subpart 1 of part A of title

22 IV is amended to read as follows:

23 ‘‘Subpart 1—Federal Pell Grants’’.

24 (3) Section 401 is amended—
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1 (A) in the heading of the section, by strik2 ing ‘‘BASIC EDUCATIONAL OPPORTUNITY’’

3 and inserting ‘‘FEDERAL PELL’’;

4 (B) in subsection (a)(3), by striking

5 ‘‘Basic grants’’ and inserting ‘‘Grants’’;

6 (C) by striking ‘‘basic grant’’ each place it

7 appears and inserting ‘‘Federal Pell Grant’’;

8 and

9 (D) by striking ‘‘basic grants’’ each place

10 it appears and inserting ‘‘Federal Pell Grants’’.

11 (4) Section 401(f )(3) is amended by striking

12 ‘‘Education and Labor’’ and inserting ‘‘Education

13 and the Workforce’’.

14 (5) Section 452(c) (20 U.S.C. 1087b(c)) is

15 amended by striking ‘‘basic grants’’ and inserting

16 ‘‘Federal Pell Grants’’.

17 (6) Subsections (j)(2) and (k)(3) of section 455

18 (20 U.S.C. 1087e) are each amended by striking

19 ‘‘basic grants’’ and inserting ‘‘Federal Pell Grants’’.

20 SEC. 402. FEDERAL TRIO PROGRAMS.

21 (a) PROGRAM AUTHORITY; AUTHORIZATION OF AP22 PROPRIATIONS.—

23 (1) DURATION OF GRANTS.—Section

24 402A(b)(2) (20 U.S.C. 1070a–11(b)(2)) is amend25 ed—
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1 (A) by striking subparagraph (A);

2 (B) by striking the period at the end of

3 subparagraph (B) and inserting ‘‘; and’’;

4 (C) by redesignating subparagraph (B) as

5 subparagraph (A); and

6 (D) by adding at the end the following new

7 subparagraph:

8 ‘‘(B) grants under section 402H shall be

9 awarded for a period determined by the Sec10 retary.’’.

11 (2) MINIMUM GRANTS.—Section 402A(b)(3) is

12 amended to read as follows:

13 ‘‘(3) MINIMUM GRANTS.—Unless the institution

14 or agency requests a smaller amount, individual

15 grants under this chapter shall be no less than—

16 ‘‘(A) $170,000 for programs authorized by

17 sections 402D and 402G;

18 ‘‘(B) $180,000 for programs authorized by

19 sections 402B and 402F; and

20 ‘‘(C) $190,000 for programs authorized by

21 sections 402C and 402E.’’.

22 (3) PROCEDURES FOR AWARDING GRANTS AND

23 CONTRACTS.—Subsection (c) of section 402A is

24 amended to read as follows:
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1 ‘‘(c) PROCEDURES FOR AWARDING GRANTS AND

2 CONTRACTS.—

3 ‘‘(1) APPLICATION REQUIREMENTS.—An eligi4 ble entity that desires to receive a grant or contract

5 under this chapter shall submit an application to the

6 Secretary in such manner and form, and containing

7 such information and assurances, as the Secretary

8 may reasonably require.

9 ‘‘(2) PRIOR EXPERIENCE.—In making grants

10 under this chapter, the Secretary shall consider each

11 applicant’s prior experience of service delivery under

12 the particular program for which funds are sought.

13 The level of consideration given the factor of prior

14 experience shall not vary from the level of consider15 ation given such factor during fiscal years 1994

16 through 1997, except that grants made under sec17 tion 402H shall not be given prior experience consid18 eration.

19 ‘‘(3) ORDER OF AWARDS; PROGRAM FRAUD.—

20 (A) Except with respect to grants made under sec21 tions 402G and 402H and as provided in subpara22 graph (B), the Secretary shall award grants and

23 contracts under this chapter in the order of the

24 scores received by the application for such grant or

25 contract in the peer review process required under
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1 section 110 and adjusted for prior experience in ac2 cordance with paragraph (2) of this subsection.

3 ‘‘(B) The Secretary is not required to provide

4 assistance to a program otherwise eligible for assist5 ance under this chapter, if the Secretary has deter6 mined that such program has involved the fraudu7 lent use of funds under this chapter.

8 ‘‘(4) PEER REVIEW PROCESS.—(A) The Sec9 retary shall assure that, to the extent practicable,

10 members of groups underrepresented in higher edu11 cation, including African Americans, Hispanics, Na12 tive Americans, Alaska Natives, Asian Americans,

13 Native American Pacific Islanders (including Native

14 Hawaiians), are represented as readers of applica15 tions submitted under this chapter. The Secretary

16 shall also assure that persons from urban and rural

17 backgrounds are represented as readers.

18 ‘‘(B) The Secretary shall ensure that each ap19 plication submitted under this chapter is read by at

20 least 3 readers who are not employees of the Federal

21 Government (other than as readers of applications).

22 ‘‘(5) NUMBER OF APPLICATIONS FOR GRANTS

23 AND CONTRACTS.—The Secretary shall not limit the

24 number of applications submitted by an entity under

25 any program authorized under this chapter if the
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1 additional applications describe programs serving

2 different populations or campuses.

3 ‘‘(6) COORDINATION WITH OTHER PROGRAMS

4 FOR DISADVANTAGED STUDENTS.—The Secretary

5 shall encourage coordination of programs assisted

6 under this chapter with other programs for dis7 advantaged students operated by the sponsoring in8 stitution or agency, regardless of the funding source

9 of such programs. The Secretary shall not limit an

10 entity’s eligibility to receive funds under this chapter

11 because such entity sponsors a program similar to

12 the program to be assisted under this chapter, re13 gardless of the funding source of such program. The

14 Secretary shall permit the Director of a program re15 ceiving funds under this chapter to administer one

16 or more additional programs for disadvantaged stu17 dents operated by the sponsoring institution or agen18 cy, regardless of the funding sources of such pro19 grams.

20 ‘‘(7) APPLICATION STATUS.—The Secretary

21 shall inform each entity operating programs under

22 this chapter regarding the status of their application

23 for continued funding at least 8 months prior to the

24 expiration of the grant or contract. The Secretary,

25 in the case of an entity that is continuing to operate
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1 a successful program under this chapter, shall en2 sure that the start-up date for a new grant or con3 tract for such program immediately follows the ter4 mination of preceding grant or contract so that no

5 interruption of funding occurs for such successful re6 applicants. The Secretary shall inform each entity

7 requesting assistance under this chapter for a new

8 program regarding the status of their application at

9 least 8 months prior to the proposed startup date of

10 such program.’’.

11 (4) AUTHORIZATION OF APPROPRIATIONS.—

12 Section 402A(f ) is amended—

13 (A) by striking ‘‘$650,000,000 for fiscal

14 year 1993’’ and inserting ‘‘$800,000,000 for

15 fiscal year 1999’’; and

16 (B) by striking everything after the first

17 sentence.

18 (b) TALENT SEARCH.—Section 402B(b) (20 U.S.C.

19 1070a–12(b)) is amended—

20 (1) by striking paragraph (4) and inserting the

21 following:

22 ‘‘(4) guidance on and assistance in secondary

23 school reentry, entry to general educational develop24 ment (GED) programs, other alternative education
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1 programs for secondary school dropouts, or post2 secondary education;’’; and

3 (2) in paragraph (8), by striking ‘‘parents’’ and

4 inserting ‘‘families’’.

5 (c) UPWARD BOUND.—Section 402C (20 U.S.C.

6 1070a–13) is amended—

7 (1) in subsection (b)—

8 (A) in paragraph (2), by striking ‘‘personal

9 counseling’’ and inserting ‘‘counseling and

10 workshops’’;

11 (B) in paragraph (6)—

12 (i) by inserting ‘‘work-study and

13 other’’ before ‘‘activities’’; and

14 (ii) by inserting before the semicolon

15 at the end the following: ‘‘, including ca16 reers requiring a postsecondary degree’’;

17 (C) in paragraph (9), by striking ‘‘and’’ at

18 the end;

19 (D) in paragraph (10), by striking

20 ‘‘through (9)’’ and inserting ‘‘through (10)’’;

21 and

22 (E) by redesignating paragraph (10) as

23 paragraph (11) and by inserting after para24 graph (9) the following new paragraph:
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1 ‘‘(10) special services to enable veterans to

2 make the transition to postsecondary education;

3 and’’; and

4 (2) in subsection (c), by inserting ‘‘, other than

5 a project a majority of the participants in which are

6 veterans,’’ after ‘‘this chapter’’.

7 (d) STUDENT SUPPORT SERVICES.—Section

8 402D(c)(6) (20 U.S.C. 1070a–14(c)(6)) is amended by in9 serting before the period at the end the following: ‘‘and

10 minimize the student’s loan burden’’.

11 (e) POSTBACCALAUREATE ACHIEVEMENT PRO12 GRAM.—Section 402E (20 U.S.C. 1070a–15) is amend13 ed—

14 (1) in subsection (c)(3), by inserting ‘‘or accept15 ed in a graduate program’’ after ‘‘degree program’’;

16 and

17 (2) in subsection (e)(1), by striking ‘‘$2,400’’

18 and inserting ‘‘$3,200’’.

19 (f ) STAFF DEVELOPMENT ACTIVITIES.—Section

20 402G(b) (20 U.S.C. 1070a–17(b)) is amended by insert21 ing after paragraph (3) the following new paragraph:

22 ‘‘(4) The use of appropriate educational tech23 nology in the operation of projects assisted under

24 this chapter.’’.
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1 (g) EVALUATION FOR PROJECT IMPROVEMENT.—

2 Section 402H(b) (20 U.S.C. 1070a–18(b)) is amended by

3 adding at the end the following new sentence: ‘‘Such eval4 uations shall also investigate the effectiveness of alter5 native and innovative methods within Federal TRIO pro6 grams of increasing access to, and retention of, students

7 in postsecondary education.’’.

8 SEC. 403. NATIONAL EARLY INTERVENTION AND PARTNER9 SHIP PROGRAM.

10 Section 404G (20 U.S.C. 1070a–27) is amended by

11 striking ‘‘1993’’ and inserting ‘‘1999’’.

12 SEC. 404. REPEALS.

13 (a) REPEALS OF SUBPART 2 PROVISIONS.—The fol14 lowing provisions of subpart 2 of part A of title IV are

15 repealed:

16 (1) Chapter 3 (20 U.S.C. 1070a–31 et seq.).

17 (2) Chapter 4 (20 U.S.C. 1070a–41 et seq.).

18 (3) Chapter 5 (20 U.S.C. 1070a–51 et seq.).

19 (4) Chapter 6 (20 U.S.C. 1070a–61 et seq.).

20 (5) Chapter 7 (20 U.S.C. 1070a–71 et seq.).

21 (6) Chapter 8 (20 U.S.C. 1070a–81 et seq.).

22 (b) SUBPART 8.—Subpart 8 of part A of title IV (20

23 U.S.C. 1070f) is repealed.
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1 (c) CONFORMING AMENDMENT.—Section 400(b) (20

2 U.S.C. 1070(b)) is amended by striking ‘‘subparts 1

3 through 8’’ and inserting ‘‘subparts 1 through 6’’.

4 SEC. 405. ESTABLISHMENT OF NEW PROGRAMS.

5 Subpart 2 of part A of title IV is amended by insert6 ing after chapter 2 (20 U.S.C. 1070a–81) the following

7 new chapters:

8 ‘‘CHAPTER 3—HIGH HOPES FOR COLLEGE

9 ‘‘Subchapter A—21st Century Scholar Certificates

10 ‘‘SEC. 406A. 21ST CENTURY SCHOLAR CERTIFICATES.

11 ‘‘(a) FINDINGS.—The Congress makes the following

12 findings:

13 ‘‘(1) Among low-income students who, despite

14 high test scores, are not planning on attending col15 lege, nearly 60 percent cite an inability to afford

16 school as the reason.

17 ‘‘(2) About 80 percent of our 12th graders who

18 are interested in continuing their education after

19 high school go on to college if their parents read ma20 terials about financial aid, compared to only 55 per21 cent of such students if their parents do not read

22 this material.

23 ‘‘(3) In 1996, the American Council on Edu24 cation found that the public overestimated the tui25 tion of public 2-year colleges by about 3 times the
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1 actual average tuition, of public 4-year colleges by

2 over twice the actual average tuition, and of private

3 4-year universities by almost one-third more than

4 the actual average tuition.

5 ‘‘(4) There is a need for, and a significant ben6 efit from, providing students, and through them

7 their parents, with information about the variety of

8 Federal student financial assistance programs, such

9 as Pell grants, Federal work-study and loans, and

10 the AmeriCorps Education Awards that make college

11 more affordable than ever before.

12 ‘‘(b) AUTHORITY.—

13 ‘‘(1) The Secretary, using funds appropriated

14 under section 407H(a) of this Act—

15 ‘‘(A) shall ensure that certificates, to be

16 known as 21st Century Scholar Certificates, are

17 provided to all students participating in projects

18 under chapter 2; and

19 ‘‘(B) may, as practicable, ensure that such

20 certificates are provided to all students in

21 grades 6 through 12 who attend schools at

22 which at least 50 percent of the students en23 rolled are eligible for free or reduced-price

24 lunch.
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1 ‘‘(2) A 21st Century Scholar Certificate shall be

2 personalized for each student and indicate the

3 amount of Federal financial aid for college for which

4 a student may be eligible.

5 ‘‘Subchapter B—High Hopes Partnerships

6 ‘‘SEC. 407A. PURPOSE.

7 ‘‘It is the purpose of this chapter to encourage and

8 prepare students in low-income communities, beginning

9 not later than the 7th grade, to prepare for, enter, and

10 successfully complete college by assisting college-school11 community partnerships to—

12 ‘‘(1) provide in-school and on-campus early col13 lege awareness activities to these students and their

14 parents;

15 ‘‘(2) ensure ongoing adult guidance and other

16 support to these students;

17 ‘‘(3) provide useful, early information to these

18 students and their parents on the need for, options

19 related to, and financing (including the availability

20 of financial assistance) of a college education; and

21 ‘‘(4) help ensure that these students have ac22 cess to rigorous core courses, such as algebra and

23 geometry, that prepare them for college.
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1 ‘‘SEC. 407B. GRANTS.

2 ‘‘(a) GRANTS AUTHORIZED.—From funds appro3 priated under section 407H(a), the Secretary shall make

4 grants to college-school-community partnerships for activi5 ties under section 407D.

6 ‘‘(b) ELIGIBLE PARTNERSHIP.—For purposes of this

7 chapter, an eligible partnership shall include—

8 ‘‘(1) one or more local educational agencies act9 ing on behalf of—

10 ‘‘(A) one or more participating schools;

11 and

12 ‘‘(B) the public secondary schools that stu13 dents from these schools would normally attend;

14 ‘‘(2) one or more degree granting institutions of

15 higher education; and

16 ‘‘(3) at least two community organizations or

17 entities, such as State agencies, businesses, profes18 sional associations, community-based organizations,

19 or other public or private agencies or organizations.

20 ‘‘(c) DEFINITIONS.—For the purpose of this chap21 ter—

22 ‘‘(1) ‘participating school’ means a public

23 school in which—

24 ‘‘(A) there is a 7th grade;

25 ‘‘(B) one or more cohorts of students re26 ceive services under this chapter; and
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1 ‘‘(C) at least 50 percent of the students

2 enrolled are eligible for free or reduced-price

3 lunch; and

4 ‘‘(2) ‘cohort of students’ means—

5 ‘‘(A) an entire grade level of students in a

6 participating school; or

7 ‘‘(B) if the partnership determines that it

8 would promote the effectiveness of a project, an

9 entire grade level of students, beginning not

10 later than the 7th grade, who reside in public

11 housing as defined in section 3(b)(1) of the

12 United States Housing Act of 1937.

13 ‘‘(d) DURATION.—Each grant awarded under this

14 chapter shall be for a 6-year period.

15 ‘‘(e) COST SHARING.—

16 ‘‘(1) Federal funds shall provide no more than

17 80 percent of the cost of the project in the first

18 year, 70 percent of the cost in the second year, 60

19 percent of the cost in the third year, 50 percent of

20 the cost in the fourth year, 40 percent of the cost

21 in the fifth year, and 30 percent of the cost in the

22 sixth year.

23 ‘‘(2) The non-Federal share of grants awarded

24 under this chapter may—
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1 ‘‘(A) be in cash or in kind, fairly evalu2 ated, including services, supplies, or equipment;

3 and

4 ‘‘(B) include the non-Federal share of

5 work-study grants under part C of title IV of

6 this Act awarded to students who serve as tu7 tors or mentors in projects under this chapter.

8 ‘‘(3) The Secretary may waive the cost sharing

9 requirement described in paragraph (1) for any eligi10 ble partnership that demonstrates to the satisfaction

11 of the Secretary an extraordinary hardship that pre12 vents compliance with that requirement.

13 ‘‘(f ) EQUITABLE GEOGRAPHIC DISTRIBUTION.—To

14 the extent possible, the Secretary shall award grants under

15 this chapter in a manner that achieves an equitable geo16 graphic distribution of those grants.

17 ‘‘(g) PRIORITY AWARDS UNDER CHAPTER 2.—Be18 fore making grants under this chapter for fiscal year

19 1999, the Secretary shall, as appropriate, make awards

20 to recipients eligible for continuation awards under chap21 ter 2 of subpart 2 of this title as it was in effect prior

22 to the enactment of the Higher Education Amendments

23 of 1998.
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1 ‘‘SEC. 407C. GRANT APPLICATION; PREFERENCES.

2 ‘‘(a) APPLICATION REQUIRED.—An eligible partner3 ship desiring to receive a grant under this chapter shall

4 submit an application to the Secretary, in such form and

5 containing such information, as the Secretary may re6 quire.

7 ‘‘(b) APPLICATION CONTENTS.—Each application

8 shall include—

9 ‘‘(1) the name of each partner and a descrip10 tion of its responsibilities, including the designation

11 of either an institution of higher education or a local

12 educational agency as the fiscal agent for the part13 nership;

14 ‘‘(2) a description of the need for the project,

15 including a description of how the project will build

16 on existing services and activities, if any;

17 ‘‘(3) a listing of the human, financial (other

18 than funds under this chapter), and other resources

19 that each member of the partnership will contribute

20 to the partnership, and a description of the efforts

21 each member of the partnership will make in seeking

22 additional resources;

23 ‘‘(4) a description of how the project will oper24 ate, including how grant funds will be used to meet

25 the purpose of this chapter;
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1 ‘‘(5) a description of how services will be coordi2 nated with, and will complement and enhance, serv3 ices received by participating schools and students

4 under other related Federal and non-Federal pro5 grams, including programs under title I, part A of

6 title VII, and part 1 of title X of the Elementary

7 and Secondary Education Act of 1965, the School8 to-Work Opportunities Act of 1994, section 402 of

9 this Act, and the Individuals with Disabilities Edu10 cation Act;

11 ‘‘(6) a description of how the partnership will

12 support and continue the services under this chapter

13 after the grant has expired;

14 ‘‘(7) an assurance from each local educational

15 agency using funds under this chapter that—

16 ‘‘(A) at least 50 percent of the students

17 enrolled in each participating school are eligible

18 for free or reduced-price lunch;

19 ‘‘(B) its aggregate expenditures per stu20 dent for activities described in this chapter will

21 not be reduced from the level of such expendi22 tures in the year prior to the grant; and

23 ‘‘(C) someone at each participating school

24 will be designated as the primary point of con25 tact for the partnership;
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1 ‘‘(8) an assurance that participating students

2 will have access to rigorous core academic courses

3 that reflect challenging State or local academic

4 standards; and

5 ‘‘(9) an assurance that members will provide

6 the performance information required by the Sec7 retary, which would be used to base continuation of

8 the grant.

9 ‘‘(c) PREFERENCES.—In reviewing applications

10 under this chapter, the Secretary shall give preference to

11 projects that—

12 ‘‘(1) will serve participating schools in which at

13 least 75 percent of the students enrolled are eligible

14 for free or reduced-price lunch;

15 ‘‘(2) provide a commitment from non-Federal

16 sources to pay all or part of the cost of college,

17 through tuition assistance or guarantees (not al18 ready available), such as ‘last-dollar grants’, for par19 ticipating students; and

20 ‘‘(3) hold participating students responsible for

21 school or community service and high academic per22 formance.

23 ‘‘SEC. 407D. PROGRAM REQUIREMENTS; USES OF FUNDS.

24 ‘‘(a) PROGRAM REQUIREMENTS.—Projects under this

25 chapter shall—
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1 ‘‘(1) have a program coordinator who is either

2 full-time or whose primary responsibility is the

3 project under this chapter;

4 ‘‘(2) provide services to at least one cohort of

5 students, beginning not later than the 7th grade;

6 ‘‘(3) ensure that the services authorized under

7 this chapter are provided through the 12th grade to

8 students in the cohort, including students who at9 tend another participating school or a secondary

10 school identified under section 407B(b)(1)(B);

11 ‘‘(4) include activities and information that fos12 ter and improve parent involvement in promoting

13 postsecondary education for their children, including

14 the provision of useful early information on the ad15 vantages of a college education, academic admissions

16 requirements, and the need to take core courses, ad17 missions and achievement tests, application proce18 dures, college costs and options, and the availability

19 of student financial aid;

20 ‘‘(5) include academic counseling, career aware21 ness, and tutoring or mentoring from trained per22 sonnel, as well as other student support services that

23 enable students to succeed academically and apply

24 for, enter, and complete college;
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1 ‘‘(6) include training in promoting early college

2 awareness for classroom teachers, guidance coun3 selors, and staff of the schools involved in the

4 project; faculty and program personnel in participat5 ing institutions of higher education; and participat6 ing mentors and tutors;

7 ‘‘(7) include activities on college campuses and

8 enrichment activities associated with postsecondary

9 education; and

10 ‘‘(8) include arrangements that ensure that all

11 participating students have access to rigorous core

12 courses that reflect challenging State or local aca13 demic standards and that prepare them for college.

14 ‘‘(b) USE OF FUNDS.—In addition to the activities

15 described in subsection (a), recipient of funds under this

16 chapter may use them—

17 ‘‘(1) where necessary and appropriate to ensure

18 active participation, to pay stipends to participating

19 students and their mentors;

20 ‘‘(2) where necessary and appropriate to ensure

21 active participation, to pay transportation costs for

22 participants to attend project-sponsored activities;

23 ‘‘(3) to provide out-of-school and summer ac24 tivities related to the project;

25 ‘‘(4) for project evaluation; and
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1 ‘‘(5) to recognize the responsibility and achieve2 ment of participating students through ceremonies,

3 awards, and other means.

4 ‘‘SEC. 407E. SERVICES FOR STUDENTS ATTENDING PRIVATE

5 SCHOOLS.

6 ‘‘A local educational agency that participates in an

7 eligible partnership shall provide services supported with

8 Federal funds under this chapter on an equitable basis,

9 consistent with section 14503 of Elementary and Second10 ary Education Act of 1965, to students in private schools

11 that—

12 ‘‘(1) have a 7th grade;

13 ‘‘(2) have students at least 50 percent of whom

14 are eligible for free or reduced-price lunch; and

15 ‘‘(3) are located in the normal attendance area

16 of a participating school.

17 ‘‘SEC. 407F. EVALUATION.

18 ‘‘In order to improve the operation of the program

19 assisted under this chapter, the Secretary shall, with funds

20 appropriated under section 407H(a), make grants to, and

21 enter into contracts and cooperative agreements with, in22 stitutions of higher education and other public and private

23 institutions and organizations to evaluate the effectiveness

24 of the program assisted under this chapter and, as appro25 priate, disseminate such results.
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1 ‘‘SEC. 407G. PEER REVIEW.

2 ‘‘The Secretary shall use a peer review process to re3 view applications under this chapter and make rec4 ommendations for funding to the Secretary.

5 ‘‘SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

6 ‘‘(a) AUTHORIZATION OF APPROPRIATION.—There

7 are authorized to be appropriated $140,000,000 for fiscal

8 year 1999 and such sums as may be necessary for each

9 of the 5 succeeding fiscal years to carry out this chapter.

10 ‘‘(b) RESERVATION FOR TECHNICAL ASSISTANCE

11 AND PEER REVIEW.—From the amount appropriated

12 under subsection (a) for any fiscal year, the Secretary may

13 reserve up 0.5 percent of that amount to obtain additional

14 qualified readers and additional staff to review applica15 tions, to increase the level of oversight monitoring, to sup16 port impact studies, program assessments and reviews,

17 and to provide technical assistance to potential applicants

18 and current grantees.

19 ‘‘CHAPTER 4—FRANK TEJEDA SCHOLARSHIP

20 PROGRAM

21 ‘‘SEC. 408A. STATEMENT OF PURPOSE.

22 ‘‘It is the purpose of this chapter to establish a Frank

23 Tejeda Scholarship Program to recruit and train teachers

24 who are proficient in both Spanish and English and who

25 show promise of academic achievement.
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1 ‘‘SEC. 408B. SCHOLARSHIPS AUTHORIZED.

2 ‘‘(a) PROGRAM AUTHORITY.—The Secretary is au3 thorized, in accordance with the provisions of this chapter,

4 to award scholarships to individuals consistent with the

5 purposes of this chapter.

6 ‘‘(b) TEJEDA SCHOLARS.—Individuals awarded

7 scholarships under this chapter shall be known as ‘Tejeda

8 Scholars’.

9 ‘‘SEC. 408C. ALLOCATION AMONG STATES.

10 ‘‘(a) ALLOCATION FORMULA.—From the sums ap11 propriated pursuant to the authority of section 408H for

12 any fiscal year, the Secretary shall allocate to each State

13 an amount equal to $5,000 multiplied by the number of

14 scholarships determined by the Secretary to be available

15 to such State in accordance with subsection (b).

16 ‘‘(b) NUMBER OF SCHOLARSHIPS AVAILABLE.—The

17 number of scholarships to be made available in a State

18 for any fiscal year shall bear the same ratio to the number

19 of scholarships made available to all States as the State’s

20 population ages 5 through 17 bears to the population ages

21 5 through 17 in all the States, except that not less than

22 10 scholarships shall be made available to any State.

23 ‘‘(c) USE OF CENSUS DATA.—For the purpose of this

24 section, the population ages 5 through 17 in a State and

25 in all the States shall be determined by the most recently

26 available data, satisfactory to the Secretary, from the Bu-
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1 reau of the Census. The Bureau of the Census shall

2 produce and publish intercensal data for Puerto Rico and

3 the other territories.

4 ‘‘SEC. 408D. ELIGIBILITY OF SCHOLARS.

5 ‘‘(a) HIGH SCHOOL GRADUATION OR EQUIVALENT

6 AND ADMISSION TO INSTITUTION REQUIRED.—Each stu7 dent awarded a scholarship under this chapter shall—

8 ‘‘(1) be—

9 ‘‘(A) a low-income individual, as that term

10 is defined in section 402A(g)(2) of this title; or

11 ‘‘(B) an individual who is eligible for a Pell

12 Grant under subpart 1 of this part;

13 ‘‘(2) be a citizen of the United States;

14 ‘‘(3) be a resident of the State in which he or

15 she applies;

16 ‘‘(4) be enrolled or accepted for enrollment on

17 a full- or part-time basis, at a graduate or under18 graduate level, in an institution of higher education

19 that has an accredited teacher preparation program;

20 ‘‘(5) have demonstrated proficiency in the

21 English and Spanish languages, as certified by the

22 applicant’s academic institution; and

23 ‘‘(6) have agreed, upon graduation from such

24 program—
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1 ‘‘(A) to serve no less than one year for

2 each year of scholarship assistance, but no

3 fewer than two years of service in total, as a

4 teacher in a public elementary or secondary

5 school in which there is a demonstrated need

6 for Spanish-speaking teachers and profes7 sionals, as determined by the Secretary;

8 ‘‘(B) to complete such service within 6

9 years of graduation; and

10 ‘‘(C) that if the student is unable to com11 plete such service, the student will, except as

12 provided in subsection (c), repay the Secretary

13 the total amount, or a pro rata amount of the

14 scholarship received under this chapter in pro15 portion to the amount of service completed, plus

16 interest and collection costs in the same manner

17 as repayment of a student loan made under

18 part D of this title.

19 ‘‘(b) SELECTION BASED ON PROMISE OF ACADEMIC

20 ACHIEVEMENT.—Each student awarded a scholarship

21 under this chapter must demonstrate outstanding aca22 demic achievement and show promise of continued aca23 demic achievement, as certified by the student’s academic

24 institution.

25 ‘‘(c) EXCEPTION TO REPAYMENT OBLIGATION.—
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1 ‘‘(1) DEFERRAL DURING CERTAIN PERIODS.—A

2 recipient shall not be considered in violation of the

3 agreement entered into pursuant to subsection

4 (a)(4)(C) during any period in which the recipient—

5 ‘‘(A) is pursuing a full-time course of

6 study related to the field of teaching at an eligi7 ble institution;

8 ‘‘(B) is serving, not in excess of 3 years,

9 as a member of the armed services of the

10 United States;

11 ‘‘(C) is temporarily totally disabled for a

12 period of time not to exceed 3 years as estab13 lished by sworn affidavit of a qualified physi14 cian;

15 ‘‘(D) is unable to secure employment for a

16 period not to exceed 12 months by reason of

17 having to care for a spouse, child, parent, or

18 immediate family member who is disabled;

19 ‘‘(E) is seeking and unable to find full20 time employment for a single period not to ex21 ceed 12 months;

22 ‘‘(F) is seeking and unable to find full-time

23 employment as a teacher in a public or private

24 nonprofit preschool, elementary or secondary
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1 school, or education program for a single period

2 not to exceed 27 months; or

3 ‘‘(G) satisfies the provisions of additional

4 repayment exceptions that may be prescribed by

5 the Secretary in regulations issued pursuant to

6 this subpart.

7 ‘‘(2) FORGIVENESS IF PERMANENTLY TOTALLY

8 DISABLED.—A recipient shall be excused from re9 payment of any scholarship assistance received

10 under this chapter if the recipient becomes perma11 nently totally disabled as established by sworn affi12 davit of a qualified physician.

13 ‘‘SEC. 408E. SELECTION OF SCHOLARS.

14 ‘‘(a) ESTABLISHMENT OF CRITERIA.—The Secretary

15 shall establish criteria for the selection of scholars under

16 this chapter that meet the requirements of section 408D.

17 ‘‘(b) TIMING OF SELECTION.—The selection process

18 shall be completed, and the awards made, no later than

19 May 1 of the academic year preceding the academic year

20 for which the award will be used.

21 ‘‘SEC. 408F. STIPENDS AND SCHOLARSHIP CONDITIONS.

22 ‘‘(a) AMOUNT OF AWARD.—Each student awarded a

23 scholarship under this chapter shall receive a stipend of

24 $5,000 for the academic year of study for which the schol25 arship is awarded, except that in no case shall the total
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1 amount of financial aid awarded to such student exceed

2 such student’s total cost-of-attendance.

3 ‘‘(b) USE OF AWARD.—The State educational agency

4 shall establish procedures to assure that a scholar awarded

5 a scholarship under this chapter pursues a course of study

6 at an institution of higher education.

7 ‘‘SEC. 408G. CONSTRUCTION OF NEEDS PROVISIONS.

8 ‘‘Notwithstanding section 471, nothing in this chap9 ter, or any other Act, shall be construed to permit the

10 receipt of a scholarship under this chapter to be counted

11 for any needs test in connection with the awarding of any

12 grant or the making of any loan under this Act or any

13 other provision of Federal law relating to educational as14 sistance.

15 ‘‘SEC. 408H. AUTHORIZATION OF APPROPRIATIONS.

16 ‘‘There are authorized to be appropriated for this

17 chapter $5,000,000 for fiscal year 1998 and such sums

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

19 years.

20 ‘‘CHAPTER 5—CAMPUS-BASED CHILD CARE

21 ‘‘SEC. 410A. CAMPUS-BASED CHILD CARE.

22 ‘‘(a) PROGRAM AUTHORIZED.—

23 ‘‘(1) AUTHORITY.—The Secretary may award

24 grants to institutions of higher education to assist
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1 the institutions in providing campus-based child care

2 services to low-income students.

3 ‘‘(2) AMOUNT OF GRANTS.—

4 ‘‘(A) IN GENERAL.—The amount of a

5 grant awarded to an institution of higher edu6 cation under this section for a fiscal year shall

7 not exceed 1 percent of the total amount of all

8 Federal Pell Grant funds awarded to students

9 enrolled at the institution of higher education

10 for the preceding fiscal year.

11 ‘‘(B) MINIMUM.—A grant under this sec12 tion shall be awarded in an amount that is not

13 less than $10,000.

14 ‘‘(3) DURATION AND PAYMENTS.—

15 ‘‘(A) DURATION.—The Secretary shall

16 award a grant under this section for a period

17 of 3 years.

18 ‘‘(B) PAYMENTS.—Subject to paragraph

19 (2), the Secretary shall make annual grant pay20 ments under this section.

21 ‘‘(4) ELIGIBLE INSTITUTIONS.—An institution

22 of higher education shall be eligible to receive a

23 grant under this section for a fiscal year if the total

24 amount of all Federal Pell Grant funds awarded to

25 students enrolled at the institution of higher edu-
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1 cation for the preceding fiscal year equals or exceeds

2 $350,000.

3 ‘‘(5) USE OF FUNDS.—Grant funds under this

4 section shall be used by an institution of higher edu5 cation to support or establish a campus-based child

6 care program serving the needs of low-income stu7 dents enrolled at the institution of higher education.

8 ‘‘(6) DEFINITION OF LOW-INCOME STUDENT.—

9 For the purpose of this section, the term ‘low-income

10 student’ means a student who is eligible to receive

11 a Federal Pell Grant for the fiscal year for which

12 the determination is made.

13 ‘‘(b) APPLICATIONS.—An institution of higher edu14 cation desiring a grant under this section shall submit an

15 application to the Secretary at such time, in such manner,

16 and accompanied by such information as the Secretary

17 may require. Each application shall—

18 ‘‘(1) demonstrate that the institution is an eligi19 ble institution described in subsection (a)(4);

20 ‘‘(2) specify the amount of funds requested;

21 ‘‘(3) demonstrate the need of low-income stu22 dents at the institution for campus-based child care

23 services by including in the application student de24 mographics and other relevant data;
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1 ‘‘(4) identify the resources the institution will

2 draw upon to support the child care program and

3 the participation of low-income students in the pro4 gram, such as accessing social services funding,

5 using student activity fees to help pay the costs of

6 child care, using resources obtained by meeting the

7 needs of parents who are not low-income students,

8 accessing foundation, corporate, or other institu9 tional support, and demonstrating that the use of

10 the resources will not result in increases in student

11 tuition;

12 ‘‘(5) contain an assurance that the institution

13 will meet the child care needs of low-income students

14 through the provision of services, or through a con15 tract for the provision of services;

16 ‘‘(6) provide a timeline, covering the period

17 from receipt of the grant through the provision of

18 the child care services, delineating the specific steps

19 the institution will take to achieve the goal of provid20 ing low-income students with child care services;

21 ‘‘(7) specify any measures the institution will

22 take to assist low-income students with child care

23 during the period before the institution provides

24 child care services;
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1 ‘‘(8) include a plan for identifying resources

2 needed for the child care services, including space in

3 which to provide child care services, and technical

4 assistance if necessary;

5 ‘‘(9) contain an assurance that any child care

6 facility assisted under this section will meet the ap7 plicable State or local government licensing, certifi8 cation, approval, or registration requirements; and

9 ‘‘(10) contain a plan for any child care facility

10 assisted under this section to become accredited

11 within 3 years of the date the institution first re12 ceives assistance under this section.

13 ‘‘(c) REPORTING REQUIREMENTS; CONTINUING ELI14 GIBILITY.—

15 ‘‘(1) REPORTING REQUIREMENTS.—

16 ‘‘(A) REPORTS.—Each institution of high17 er education receiving a grant under this sec18 tion shall report to the Secretary 18 months

19 and 36 months after receiving the first grant

20 payment under this section.

21 ‘‘(B) CONTENTS.—The report shall in22 clude—

23 ‘‘(i) data on the population served

24 under this section;
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1 ‘‘(ii) information on campus and com2 munity resources and funding used to help

3 low-income students access child care serv4 ices;

5 ‘‘(iii) information on progress made

6 toward accreditation of any child care fa7 cility; and

8 ‘‘(iv) information on the impact of the

9 grant on the quality, availability, and af10 fordability of campus-based child care serv11 ices.

12 ‘‘(2) CONTINUING ELIGIBILITY.—The Secretary

13 shall make the third annual grant payment under

14 this section to an institution of higher education

15 only if the Secretary determines, on the basis of the

16 18-month report submitted under paragraph (1),

17 that the institution is making a good faith effort to

18 ensure that low-income students at the institution

19 have access to affordable, quality child care services.

20 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

21 are authorized to be appropriated to carry out this section

22 $30,000,000 for fiscal year 1999 and such sums as may

23 be necessary for each of the 4 succeeding fiscal years.
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1 ‘‘CHAPTER 6—PUBLIC SAFETY OFFICER

2 MEMORIAL SCHOLARSHIPS

3 ‘‘SEC. 411A. SCHOLARSHIPS AUTHORIZED.

4 ‘‘(a) IN GENERAL.—

5 ‘‘(1) SCHOLARSHIP AWARDS.—The Secretary is

6 authorized to award a scholarship to any eligible ap7 plicant who is enrolled, or has been accepted for en8 rollment, in an eligible institution as a full-time or

9 part-time postsecondary level student.

10 ‘‘(2) APPLICATION.—To receive a scholarship

11 award under this chapter, each eligible applicant

12 shall submit an application to the Secretary in such

13 time and manner as may be determined appropriate

14 by the Secretary—

15 ‘‘(A) accompanied by a certification from

16 the head of the agency that employed the public

17 safety officer to whom the applicant was mar18 ried (in the case of a surviving spouse), or with

19 whom the applicant was living or from whom

20 the applicant was receiving support contribu21 tions (in the case of a dependent child), stating

22 that such officer died as a result of the per23 formance of the officer’s official duties; and

24 ‘‘(B) demonstrating the applicant’s need

25 for financial aid under part F of this title, de-
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1 termined without regard to any assets derived

2 from death benefits for such officer, to pursue

3 a program of postsecondary education.

4 ‘‘(b) MAXIMUM AWARD.—For any academic year, the

5 maximum amount of a scholarship award under this sec6 tion for a postsecondary student may equal, but not ex7 ceed, the lesser of the following:

8 ‘‘(1) The average cost of attendance (as defined

9 in section 472), at a State university in the State in

10 which the student resides, for a State resident carry11 ing the same academic workload as the student, with

12 the same number of dependents as the student, and

13 residing in the same type of housing as the student.

14 ‘‘(2) The actual cost of attendance (as defined

15 in section 472) of such student.

16 ‘‘(c) AWARD PERIOD.—The duration of each award

17 under this chapter for a postsecondary student, shall be

18 the lesser of—

19 ‘‘(1) the time actually required by the student

20 to complete a course of study and obtain a diploma;

21 and

22 ‘‘(2) 6 years in the case of a student engaged

23 in undergraduate studies and 3 years in the case of

24 a student engaged in postgraduate studies.
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1 ‘‘(d) NOTIFICATION.—The Secretary shall notify the

2 recipient and the eligible institution of the applicant’s se3 lection for receipt of an award under this chapter, the con4 ditions pertaining to award eligibility and continuance.

5 ‘‘(e) FISCAL AGENT.—The Secretary shall, if prac6 ticable, use the eligible institution as fiscal agent for pay7 ment of an award.

8 ‘‘SEC. 411B. ADDITIONAL AWARD REQUIREMENTS.

9 ‘‘A student awarded a scholarship grant under this

10 chapter, as a condition for initial receipt of such award

11 and periodically thereafter as a condition for its continu12 ation, shall demonstrate to the satisfaction of the Sec13 retary that the student is—

14 ‘‘(1) maintaining satisfactory progress in the

15 course of study the student is pursuing consistent

16 with section 484(c);

17 ‘‘(2) committed to remaining drug-free; and

18 ‘‘(3) attending class on a regular basis as to not

19 interfere with normal course of studies except for ex20 cused absence for vacation, illness, military service

21 and such other periods deemed good cause by the el22 igible institution or the Secretary.

23 ‘‘SEC. 411C. AGREEMENTS WITH ELIGIBLE INSTITUTIONS.

24 ‘‘For the purposes of this chapter, the Secretary is

25 authorized to enter into agreements with eligible institu-
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1 tions in which any student receiving a scholarship award

2 under this chapter has enrolled or has been accepted for

3 enrollment. Each such agreement shall—

4 ‘‘(1) provide that an eligible institution will co5 operate with the Secretary in carrying out the provi6 sions of this chapter, including the provision of in7 formation necessary for a student to satisfy the re8 quirements in section 411B;

9 ‘‘(2) provide that the institution will conduct a

10 periodic review to determine whether students en11 rolled and receiving scholarship awards continue to

12 be entitled to payments under this chapter and will

13 notify the Secretary of the results of such reviews;

14 and

15 ‘‘(3) provide for control and accounting proce16 dures as may be necessary to assure proper dis17 bursements and accounting of funds paid under to

18 the institution under section 411A(e).

19 ‘‘SEC. 411D. DEFINITIONS.

20 ‘‘In this chapter:

21 ‘‘(1) DEPENDENT CHILD.—The term ‘depend22 ent child’ means a child who is either living with or

23 receiving regular support contributions from a public

24 safety officer at the time of the officer’s death, in25 cluding a stepchild or an adopted child.
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1 ‘‘(2) ELIGIBLE APPLICANT.—The term ‘eligible

2 applicant’ means a person residing in a State who

3 is—

4 ‘‘(A) a surviving spouse; or

5 ‘‘(B) a dependent child.

6 ‘‘(3) ELIGIBLE INSTITUTION.—The term ‘eligi7 ble institution’ means an eligible institution as de8 fined in section 435(a) that—

9 ‘‘(A) is located in a State; and

10 ‘‘(B) complies with the antidiscrimination

11 provisions of section 601 of the Civil Rights Act

12 of 1964 and does not discriminate on the basis

13 of race.

14 ‘‘(4) PUBLIC SAFETY OFFICER.—The term

15 ‘public safety officer’ means a person serving a pub16 lic agency of a State or of a unit of general local

17 government, with or without compensation, as—

18 ‘‘(A) a law enforcement officer, including a

19 corrections or a court officer engaged in—

20 ‘‘(i) apprehending or attempting to

21 apprehend of any person—

22 ‘‘(I) for the commission of a

23 criminal act; or
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1 ‘‘(II) who at the time was sought

2 as a material witness in a criminal

3 proceeding; or

4 ‘‘(ii) protecting or guarding a person

5 held for the commission of a criminal act,

6 or held as a material witness in connection

7 with a criminal act; or

8 ‘‘(iii) lawfully preventing of, or law9 fully attempting to prevent the commission

10 of, a criminal act or an apparent criminal

11 act in the performance of his official duty;

12 or

13 ‘‘(B) a firefighter.

14 ‘‘(5) SURVIVING SPOUSE.—The term ‘surviving

15 spouse’ means the legally married husband or wife

16 of a public safety officer at the time of the officer’s

17 death.

18 ‘‘(6) UNIT OF GENERAL LOCAL GOVERN19 MENT.—The term ‘unit of general local government’

20 means any city, county, township, town, borough,

21 parish, village, or any other general purpose subdivi22 sion of a State, or any Indian tribe which the Sec23 retary of the Interior determines performs law en24 forcement functions.’’.
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1 SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR2 TUNITY GRANTS.

3 (a) EXTENSION OF AUTHORITY.—Section

4 413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended by strik5 ing ‘‘1993’’ and inserting ‘‘1999’’.

6 (b) USE OF FUNDS FOR LESS-THAN-FULL-TIME

7 STUDENTS.—Subsection (d) of section 413C (20 U.S.C.

8 1070b–2(d)) is amended by striking ‘‘and if the total fi9 nancial need’’ and all that follows and inserting the follow10 ing: ‘‘, then grant funds shall be made available to such

11 independent and less-than-full-time students.’’.

12 (c) ALLOCATION OF FUNDS.—Section 413D (20

13 U.S.C. 1070b-3) is amended—

14 (1) by striking subsection (b);

15 (2) in subsection (c)(1), by striking ‘‘three16 quarters of the remainder’’ and inserting ‘‘the re17 mainder’’;

18 (3) in subsection (c)(2)(A)(i), by striking ‘‘sub19 section (d)’’ and inserting ‘‘subsection (c)’’;

20 (4) by redesignating subsections (c), (d), (e),

21 and (f ) as subsections (b), (c), (d), and (e), respec22 tively; and

23 (5) by inserting after subsection (e) (as so re24 designated) the following new subsection:

25 ‘‘(f ) CARRY-OVER /CARRY-BACK AUTHORITY.—

26 ‘‘(1) CARRY-OVER AUTHORITY.—
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1 ‘‘(A) CARRY-OVER UP TO 10 PERCENT.—

2 Of the sums granted to an eligible institution

3 under this subpart for any fiscal year, 10 per4 cent may, at the discretion of the institution,

5 remain available for expenditure during the suc6 ceeding fiscal year to carry out the program

7 under this subpart.

8 ‘‘(B) REALLOCATION OF EXCESS.—Any of

9 the sums so granted to an institution for a fis10 cal year which are not needed by that institu11 tion to operate programs under this subpart

12 during that fiscal year, and which it does not

13 wish to use during the next fiscal year as au14 thorized in the preceding sentence, shall remain

15 available to the Secretary for making grants

16 under section 413B to other institutions in the

17 same State until the close of the second fiscal

18 year next succeeding the fiscal year for which

19 such funds were appropriated.

20 ‘‘(2) CARRY-BACK AUTHORITY.—

21 ‘‘(A) CARRY-BACK UP TO 10 PERCENT.—

22 Up to 10 percent of the sums the Secretary de23 termines an eligible institution may receive

24 from funds which have been appropriated for a

25 fiscal year may be used by the institution for
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1 expenditure during the fiscal year preceding the

2 fiscal year for which the sums were appro3 priated.

4 ‘‘(B) USE OF CARRIED-BACK FUNDS.—An

5 eligible institution may make grants to students

6 after the end of the academic year, but prior to

7 the beginning of the succeeding fiscal year,

8 from such succeeding fiscal year’s appropria9 tions.’’.

10 SEC. 407. GRANTS TO STATES FOR STATE STUDENT INCEN11 TIVES.

12 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

13 415A(b) of the Higher Education Act of 1965 (20 U.S.C.

14 1070c(b)) is amended—

15 (1) in paragraph (1), by striking ‘‘1993’’ and

16 inserting ‘‘1999’’;

17 (2) by redesignating paragraph (2) as para18 graph (3); and

19 (3) by inserting after paragraph (1) the follow20 ing:

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

22 which the amount appropriated under paragraph (1)

23 exceeds $25,000,000, the excess shall be available to

24 carry out section 415E.’’.
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1 (b) SPECIAL LEVERAGING EDUCATIONAL ASSIST2 ANCE PARTNERSHIP PROGRAM.—Subpart 4 of part A of

3 title IV of the Higher Education Act of 1965 (20 U.S.C.

4 1070c et seq.) is amended—

5 (1) by redesignating section 415E as section

6 415F; and

7 (2) by inserting after section 415D the follow8 ing:

9 ‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSIST10 ANCE PARTNERSHIP PROGRAM.

11 ‘‘(a) IN GENERAL.—From amounts reserved under

12 section 415A(b)(2) for each fiscal year, the Secretary

13 shall—

14 ‘‘(1) make allotments among States in the same

15 manner as the Secretary makes allotments among

16 States under section 415B; and

17 ‘‘(2) award grants to States, from allotments

18 under paragraph (1), to enable the States to pay the

19 Federal share of the cost of the authorized activities

20 described in subsection (c).

21 ‘‘(b) AUTHORIZED ACTIVITIES.—Each State receiv22 ing a grant under this section may use the grant funds

23 for—
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1 ‘‘(1) increasing the dollar amount of grants

2 awarded under section 415B to eligible students who

3 demonstrate financial need;

4 ‘‘(2) carrying out transition programs from sec5 ondary school to postsecondary education for eligible

6 students who demonstrate financial need;

7 ‘‘(3) carrying out a financial aid program for

8 eligible students who demonstrate financial need and

9 wish to enter teaching or careers in information

10 technology, or other fields of study determined by

11 the State to be critical to the State’s workforce

12 needs;

13 ‘‘(4) carrying out early intervention programs,

14 mentoring programs, and career education programs

15 for eligible students who demonstrate financial need;

16 and

17 ‘‘(5) awarding merit or academic scholarships

18 to eligible students who demonstrate financial need.

19 ‘‘(c) MAINTENANCE OF EFFORT REQUIREMENT.—

20 Each State receiving a grant under this section for a fiscal

21 year shall provide the Secretary an assurance that the ag22 gregate amount expended per student or the aggregate ex23 penditures by the State, from funds derived from non-Fed24 eral sources, for the authorized activities described in sub25 section (b) for the preceding fiscal year were not less than
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1 the amount expended per student or the aggregate expend2 itures by the State for the activities for the second preced3 ing fiscal year. The Secretary may waive this subsection

4 for good cause, as determined by the Secretary.

5 ‘‘(d) FEDERAL SHARE.—The Federal share of the

6 cost of the authorized activities described in subsection (b)

7 for any fiscal year shall be 25 percent.’’.

8 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

9 (1) PURPOSE.—Subsection (a) of section 415A

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

11 1070c(a)) is amended to read as follows:

12 ‘‘(a) PURPOSE OF SUBPART.—It is the purpose of

13 this subpart to make incentive grants available to States

14 to assist States in—

15 ‘‘(1) providing grants to—

16 ‘‘(A) eligible students attending institu17 tions of higher education or participating in

18 programs of study abroad that are approved for

19 credit by institutions of higher education at

20 which such students are enrolled; and

21 ‘‘(B) eligible students for campus-based

22 community service work-study; and

23 ‘‘(2) carrying out the activities described in sec24 tion 415F.’’.
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1 (2) ALLOTMENT.—Section 415B(a)(1) of the

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

3 1(a)(1)) is amended by inserting ‘‘and not reserved

4 under section 415A(b)(2)’’ after ‘‘415A(b)(1)’’.

5 SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAM6 ILIES ARE ENGAGED IN MIGRANT AND SEA7 SONAL FARMWORK.

8 (a) COORDINATION.—Section 418A(d) (20 U.S.C.

9 1070d–2(d)) is amended by inserting after ‘‘contains as10 surances’’ the following: ‘‘that the grant recipient will co11 ordinate its project, to the extent feasible, with other local,

12 State, and Federal programs to maximize the resources

13 available for migrant students, and’’.

14 (b) EXTENSION OF AUTHORITY.—Section 418A(g) is

15 amended by striking ‘‘1993’’ each place it appears and

16 inserting ‘‘1999’’.

17 (c) DATA COLLECTION.—Section 418A is amended

18 by adding at the end the following new subsection:

19 ‘‘(h) DATA COLLECTION.—The National Center for

20 Education Statistics shall collect postsecondary education

21 data on migrant students.’’.

22 (d) TECHNICAL AMENDMENTS.—Section 418A(e) is

23 amended by striking ‘‘authorized by subpart 4 of this part

24 in accordance with section 417A(b)(2)’’ and inserting ‘‘in

25 accordance with section 402A(c)(1)’’.
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1 SEC. 409. BYRD SCHOLARSHIPS.

2 (a) ELIGIBILITY.—Section 419G (20 U.S.C. 1070d–

3 37) is amended by adding at the end the following new

4 subsection:

5 ‘‘(e) TERMINATION OF ELIGIBILITY.—The eligibility

6 of students from the Federated States of Micronesia, the

7 Republic of the Marshall Islands, and Palau shall expire

8 on the earlier of the date of enactment of the Higher Edu9 cation Amendments of 1998 or October 1, 1998.’’.

10 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

11 419K (20 U.S.C. 1070d–41) is amended by striking

12 ‘‘$10,000,000 for fiscal year 1993’’ and inserting

13 ‘‘$40,000,000 for fiscal year 1999’’.

14 PART B—FEDERAL FAMILY EDUCATION LOAN

15 PROGRAM

16 SEC. 411. LIMITATION REPEALED.

17 Section 421 (20 U.S.C. 1071) is amended by striking

18 subsection (d).

19 SEC. 412. ADVANCES TO RESERVE FUNDS.

20 Section 422 (20 U.S.C. 1072) is amended—

21 (1) in subsection (a)(2), by striking

22 ‘‘428(c)(10)(E)’’ and inserting ‘‘428(c)(9)(E)’’;

23 (2) in subsection (c)(6)(B)(i), by striking ‘‘han24 dle written’’ and inserting ‘‘handle written, elec25 tronic,’’;

26 (3) in subsection (c)(7)
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1 (A) by striking ‘‘to a guaranty agency—’’

2 and everything that follows through ‘‘(B) if the

3 Secretary’’ and inserting ‘‘to a guaranty agen4 cy, if the Secretary’’;

5 (B) by striking ‘‘428(c)(10)(F)(v)’’ and in6 serting ‘‘428(c)(9)(F)(v)’’;

7 (C) by inserting ‘‘and’’ after ‘‘cash

8 needs,’’; and

9 (D) by striking ‘‘or ensure’’ and everything

10 that follows and inserting a period; and

11 (4) in the first and second sentences of sub12 section (g)(1), by striking ‘‘or the program author13 ized by part D of this title’’ each place it appears.

14 SEC. 412A. GUARANTY AGENCY REFORMS.

15 The Secretary shall conduct a study to investigate to

16 what extent the actions of the lenders and the guarantors

17 impact upon the default rates of student borrowers as it

18 relates to the servicing of the loans or the due diligence

19 of the loan.

20 SEC. 413. GUARANTY AGENCY REFORMS.

21 (a) FEDERAL STUDENT LOAN RESERVE FUND.—

22 Part B of title IV is amended by inserting after section

23 422 (20 U.S.C. 1072) the following new section:
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1 ‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

2 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

3 not later than 60 days after the date of enactment of this

4 section, deposit all funds, securities, and other liquid as5 sets contained in the reserve fund established pursuant to

6 section 422 of this part into a Federal Student Loan Re7 serve Fund (in this section and section 422B referred to

8 as the ‘Federal Fund’) which shall be an account of a type

9 selected by the agency, with the approval of the Secretary.

10 ‘‘(b) INVESTMENT OF FUNDS.—Funds maintained in

11 the Federal Fund shall be invested in obligations issued

12 or guaranteed by the United States or a State, or in other

13 similarly low-risk securities selected by the guaranty agen14 cy.

15 ‘‘(c) ADDITIONAL DEPOSITS.—After the establish16 ment of the Federal Fund, a guaranty agency shall deposit

17 into the Federal Fund—

18 ‘‘(1) all amounts received from the Secretary as

19 payment of reinsurance on loans pursuant to section

20 428(c)(1);

21 ‘‘(2) from amounts collected on behalf of the

22 obligation of a defaulted borrower, a percentage

23 amount equal to the complement of the reinsurance

24 percentage in effect when payment under the guar25 anty agreement was made with respect to the de-
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1 faulted loan pursuant to sections 428(c)(6)(A) and

2 428F(a)(1)(B); and

3 ‘‘(3) insurance premiums collected from borrow4 ers pursuant to sections 428(b)(1)(H) and 428H(h).

5 ‘‘(d) USES OF FUNDS.—Subject to subsection (f ),

6 the Federal Fund may only be used by a guaranty agen7 cy—

8 ‘‘(1) to pay lender claims pursuant to section

9 428(b)(1)(G), section 428(j), section 437, and sec10 tion 439(q); and

11 ‘‘(2) to pay into the Agency Operating Fund es12 tablished pursuant to section 422B a default preven13 tion fee in accordance with section 428(l).

14 ‘‘(e) OWNERSHIP OF FEDERAL FUND.—

15 ‘‘(1) IN GENERAL.—The Federal Fund of the

16 guaranty agency, and any assets purchased or devel17 oped with funds from the Federal Fund or any other

18 funds considered reserve funds on the date of enact19 ment of this section, regardless of who holds or con20 trols the reserves or assets, shall be considered to be

21 the property of the United States to be used in the

22 operation of the program authorized by this part, as

23 provided in subsection (d) of this section.

24 ‘‘(2) NONLIQUID RESERVE FUND AND OTHER

25 ASSETS.—Notwithstanding any other provision of
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1 law, nonliquid reserve fund assets, such as buildings

2 and equipment purchased or developed by the guar3 anty agency with funds from the Federal Fund, or

4 any other funds considered reserve funds on the date

5 of enactment of this section shall—

6 ‘‘(A) remain the property of the United

7 States;

8 ‘‘(B) be used only for such purposes as the

9 Secretary determines are appropriate; and

10 ‘‘(C) be subject to such restrictions on the

11 disposition of such assets (which may include a

12 requirement that any sale of such assets be at

13 not less than fair market value) as the Sec14 retary determines are appropriate.

15 ‘‘(f ) TRANSITION.—

16 ‘‘(1) IN GENERAL.—In order to establish the

17 Agency Operating Fund authorized by section 422B,

18 each guaranty agency may transfer up to 180 days

19 cash expenses for normal operating expenses, as a

20 working capital reserve as defined in Office of Man21 agement and budget circular A–87 (Cost Accounting

22 Standards) from the Federal Fund for deposit into

23 the Agency Operating Fund for use in the perform24 ance of its duties under this part. Such transfers

25 may occur during the first three years following the
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1 establishment of the Operating Fund. However, no

2 agency may transfer in excess of 50 percent of the

3 Federal Fund balance to its Operating Fund during

4 any fiscal year. In determining the transfer amount,

5 the agency shall insure that sufficient funds remain

6 in the Federal Fund to pay lender claims within the

7 required time periods and to meet the reserve recall

8 requirements of the Balanced Budget Act of 1997.

9 ‘‘(2) REPAYMENT PROVISIONS.—Each guaranty

10 agency shall begin repayment of sums transferred

11 pursuant to this subsection no later than the start

12 of the fourth year after the establishment of the

13 Agency Operating Fund, and shall repay all

14 amounts transferred no later than 5 years from the

15 date of the establishment of the Agency Operating

16 Fund. Each guaranty agency shall provide to the

17 Secretary, on an annual basis, a financial analysis

18 demonstrating its ability to repay all outstanding

19 amounts while any transferred amounts are owned

20 to the Federal Fund.

21 ‘‘(3) SPECIAL RULE.—In applying the minimum

22 reserve level required by section 428(c)(9)(A), the

23 Secretary shall include all amounts owed to the Fed24 eral Fund by the agency due to transfers allowed

25 under paragraph (1) in the calculation.’’.
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1 (b) AGENCY OPERATING FUND ESTABLISHED.—Part

2 B of title IV is further amended by inserting after section

3 422A (as added by subsection (a)) the following new sec4 tion:

5 ‘‘SEC. 422B. AGENCY OPERATING FUND.

6 ‘‘(a) ESTABLISHMENT.—Each guaranty agency shall,

7 not later than 60 days after the date of enactment of this

8 section, establish a fund designated as the Agency Operat9 ing Fund (hereinafter referred to as the ‘Operating

10 Fund’).

11 ‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into

12 the Operating Fund shall be invested at the discretion of

13 the guaranty agency in accordance with prudent investor

14 standards.

15 ‘‘(c) ADDITIONAL DEPOSITS.—After the establish16 ment of the Operating Fund, the guaranty agency shall

17 deposit into the Operating Fund—

18 ‘‘(1) the loan processing and issuance fee paid

19 by the Secretary pursuant to section 428(f );

20 ‘‘(2) the portfolio maintenance fee paid by the

21 Secretary pursuant to section 458;

22 ‘‘(3) the default prevention fee paid in accord23 ance with section 428(l);

24 ‘‘(4) amounts retained by the guaranty agency

25 pursuant to section 428(c)(6)(B) from collection on
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1 defaulted loans held by the agency, after payment of

2 the Secretary’s equitable share, excluding amounts

3 deposited in the Federal Fund pursuant to section

4 422A(c)(2); and

5 ‘‘(5) interest earned on the Federal Fund dur6 ing the first 3 years after the date of enactment of

7 this section by a limited number of guaranty agen8 cies (not to exceed 10) that demonstrate to the Sec9 retary the potential for a negative cash flow in the

10 Operating Fund during the restructuring of their

11 operations in accordance with the requirements of

12 this section and section 422A.

13 ‘‘(d) USES OF FUNDS.—

14 ‘‘(1) IN GENERAL.—Funds in the Operating

15 Fund shall be used for activities related to student

16 financial aid, including application processing, loan

17 disbursement, enrollment and repayment status

18 management, default prevention activities, default

19 collection activities, school and lender training, fi20 nancial awareness and outreach activities, compli21 ance monitoring, other loan program related activi22 ties in support of postsecondary education and other

23 student financial aid related activities as determined

24 by the guaranty agency.
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1 ‘‘(2) SPECIAL RULE.—The guaranty agency

2 may, in its discretion, transfer funds from the Oper3 ating Fund to the Federal Student Loan Reserve

4 Fund for use in accordance with section 422A. Such

5 transfer shall be irrevocable, and any funds so trans6 ferred shall become the property of the United

7 States.

8 ‘‘(3) DEFINITIONS.—For purposes of this sub9 section:

10 ‘‘(A) The term ‘default collection activities’

11 means activities of a guaranty agency which are

12 directly related to the collection of the loan on

13 which a default claim has been paid to the par14 ticipating lender, including the due diligence ac15 tivities required pursuant to regulations of the

16 Secretary.

17 ‘‘(B) The term ‘default prevention activi18 ties’ means activities of a guaranty agency

19 which are directly related to providing collection

20 assistance to the lender on a delinquent loan,

21 prior to the loan’s being legally in a default sta22 tus, including due diligence activities required

23 pursuant to regulations of the Secretary.

24 ‘‘(C) The term ‘enrollment and repayment

25 status management’ means activities of a guar-
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1 anty agency which are directly related to

2 ascertaining the student’s enrollment status, in3 cluding prompt notification to the lender of

4 such status, an audit of the note or written

5 agreement to determine if the provisions of that

6 note or agreement are consistent with the

7 records of the guaranty agency as to the prin8 cipal amount of the loan guaranteed, and an ex9 amination of the note or agreement to assure

10 that the repayment provisions are consistent

11 with the provisions of this part.

12 ‘‘(e) OWNERSHIP OF OPERATING FUND.—The Oper13 ating Fund of the guaranty agency shall be considered to

14 be the property of the guaranty agency. The Secretary

15 may regulate the uses or expenditure of moneys in the

16 Operating Fund with respect to activities required under

17 guaranty agency agreements under subsections (b) and (c)

18 of section 428 until such time as a guaranty agency has

19 repaid to the Federal Fund all reserve funds transferred

20 under section 422A(f ). During any period in which funds

21 are owed to the Federal Fund as a result of a transfer

22 under 422A(f ), moneys in the Operating Fund may only

23 be used for expenses related to the student loan programs

24 authorized under this part. The Secretary may require
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1 such necessary reports and audits as provided in section

2 428(b)(2).’’.

3 (c) ADDITIONAL RECALL OF RESERVES.—Section

4 422 (as amended by section 412) is further amended by

5 adding at the end the following new subsection:

6 ‘‘(i) ADDITIONAL RECALL OF RESERVES.—

7 ‘‘(1) IN GENERAL.—Notwithstanding any other

8 provision of law, the Secretary shall recall

9 $43,000,000 for each of the fiscal years 1999, 2000,

10 2001, 2002, and 2003 from the reserve funds held

11 by guaranty agencies.

12 ‘‘(2) DEPOSIT.—Funds recalled by the Sec13 retary under this subsection shall be deposited in the

14 Treasury.

15 ‘‘(3) REQUIRED SHARE.—The Secretary shall

16 require each guaranty agency to return annually re17 serve funds under paragraph (1) based on one-fifth

18 of the agency’s required share. For purposes of this

19 paragraph, a guaranty agency’s required share shall

20 be determined as follows:

21 ‘‘(A) The Secretary shall impose on each

22 guaranty agency an equal percentage reduction

23 in the amount of the agency’s reserve funds

24 held as of September 30, 1996.
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1 ‘‘(B) The equal percentage reduction shall

2 be the percentage obtained by dividing—

3 ‘‘(i) $215,000,000 by

4 ‘‘(ii) the total amount of all such

5 agencies’ reserve funds held as of Septem6 ber 30, 1996.

7 ‘‘(4) OFFSET OF REQUIRED SHARES.—If any

8 guaranty agency returns to the Secretary any re9 serves in excess of the amount required under this

10 subsection or subsection (h), the total amount re11 quired to be returned under paragraph (1) shall be

12 reduced by the amount of such additional reserve re13 turn.

14 ‘‘(5) DEFINITION OF RESERVE FUNDS.—The

15 term ‘reserve funds’ when used with respect to a

16 guaranty agency—

17 ‘‘(A) includes any reserve funds in cash or

18 liquid assets held by the guaranty agency, or

19 held by, or under the control of, any other en20 tity; and

21 ‘‘(B) does not include building, equipment,

22 or other nonliquid assets.’’.

23 (d) CONFORMING AMENDMENTS.—

24 (1) REINSURANCE PAYMENTS.—
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1 (A) AMENDMENTS.—Section 428(c)(1) (20

2 U.S.C. 1078(c)(1)) is amended—

3 (i) in subparagraph (A), by striking

4 ‘‘98 percent’’ and inserting ‘‘95 percent’’;

5 (ii) in subparagraph (B)(i), by strik6 ing ‘‘88 percent’’ and inserting ‘‘85 per7 cent’’; and

8 (iii) in subparagraph (B)(ii), by strik9 ing ‘‘78 percent’’ and inserting ‘‘75 per10 cent’’;

11 (iv) in subparagraph (E)—

12 (I) by striking ‘‘for ‘98 percent’;’’

13 and inserting ‘‘for ‘95 percent’;’’;

14 (II) by striking ‘‘for ‘88 per15 cent’;’’ and inserting ‘‘for ‘85 per16 cent’;’’; and

17 (III) by striking ‘‘for ‘78 per18 cent’.’’ and inserting ‘‘for ‘75 per19 cent’.’’;

20 (v) in subparagraph (F)—

21 (I) by striking ‘‘for ‘98 percent’;’’

22 and inserting ‘‘for ‘95 percent’;’’;

23 (II) by striking ‘‘for ‘88 per24 cent’;’’ and inserting ‘‘for ‘85 per25 cent’;’’; and
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1 (III) by striking ‘‘for ‘78 per2 cent’.’’ and inserting ‘‘for ‘75 per3 cent’.’’;

4 (vi) by striking subparagraph (D) and

5 redesignating subparagraphs (E) and (F)

6 as subparagraphs (D) and (E), respec7 tively.

8 (B) EFFECTIVE DATE.—The amendments

9 made by subparagraph (A) of this paragraph

10 apply to loans for which the first disbursement

11 is made on or after October 1, 1998.

12 (2) EQUITABLE SHARE.—Section 428(c)(6) is

13 amended—

14 (A) in subparagraph (A)—

15 (i) by striking ‘‘(A) For the purpose’’

16 and inserting ‘‘For the purpose’’; and

17 (ii) by striking clause (ii) and insert18 ing the following:

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

20 such payments for use in accordance with sec21 tion 422B.’’;

22 (B) by striking subparagraphs (B) and

23 (C); and

24 (C) by redesignating clauses (i) and (ii) as

25 subparagraphs (A) and (B).
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1 (3) GUARANTY AGENCY RESERVE LEVEL.—Sec2 tion 428(c)(9) is amended—

3 (A) in subparagraph (A), by striking ‘‘.5

4 percent’’ and inserting ‘‘0.25 percent’’; and

5 (B) in subparagraph (C)—

6 (i) by striking ‘‘80 percent pursuant

7 to section 428(c)(1)(B)(ii)’’ and inserting

8 ‘‘85 percent pursuant to paragraph

9 (1)(B)(i) of this subsection’’; and

10 (ii) by striking ‘‘30 working days’’

11 and inserting ‘‘45 working days’’.

12 (4) PAYMENT OF CERTAIN COSTS.—Section

13 428(f ) is amended—

14 (A) by striking paragraph (1)(A) and in15 serting the following:

16 ‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—(A)

17 The Secretary shall, in accordance with the provi18 sions of this paragraph, pay to each guaranty agen19 cy for each fiscal year a loan processing and

20 issuance fee equal to 0.65 percent of the total prin21 cipal amount of the loans on which insurance was

22 issued under this part during such fiscal year by

23 such agency.’’; and

24 (B) in paragraph (1)(B), by striking the

25 first sentence and inserting the following: ‘‘The
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1 payment required by subparagraph (A) shall be

2 paid on a quarterly basis.’’.

3 (5) DEFAULT AVERSION ASSISTANCE.—Section

4 428(l) is amended to read as follows:

5 ‘‘(l) DEFAULT AVERSION ASSISTANCE.—

6 ‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of

7 a proper request from a lender received not earlier

8 than the 60th day of delinquency, a guaranty agency

9 having an agreement with the Secretary under sub10 section (c) of this section shall engage in default

11 aversion activities designed to prevent the default by

12 a borrower on a loan covered by such agreement.

13 ‘‘(2) REIMBURSEMENT.—(A) guaranty agency

14 may, in accordance with the provisions of this para15 graph, transfer from the Federal Student Loan Re16 serve Account to the Operating Account a default

17 aversion fee. Such fee shall be paid for any loan on

18 which a claim for default has not been paid as a re19 sult of the loan being brought into current repay20 ment status on or before the 210th day after the

21 loan becomes 60 days delinquent.

22 ‘‘(B) The default aversion fee shall be equal to

23 1 percent of the total unpaid principal and accrued

24 interest on the loan at the time the request is sub25 mitted by the lender. Such fee shall not be paid
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1 more than once on any loan for which the guaranty

2 agency averts the default unless at least 12 months

3 has elapsed between the date the borrower became

4 current in his or her payments and the date the

5 lender filed a subsequent default aversion assistance

6 request. A guaranty agency may transfer such fees

7 earned under this subsection no more frequently

8 than monthly.

9 ‘‘(C) For the purpose of earning the default

10 aversion fee, the term ‘current repayment status’

11 means that the borrower is not delinquent in the

12 payment of any principal or interest on the loan.’’.

13 SEC. 414. SCOPE AND DURATION OF PROGRAM.

14 Section 424(a) (20 U.S.C. 1074(a)) is amended—

15 (1) by striking ‘‘October 1, 2002’’ and inserting

16 ‘‘October 1, 2004’’; and

17 (2) by striking ‘‘September 30, 2006’’ and in18 serting ‘‘September 30, 2008’’.

19 SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY IN20 SURED LOANS AND FEDERAL LOAN INSUR21 ANCE.

22 Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is

23 amended—

24 (1) in clause (i)—
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1 (A) by inserting ‘‘and’’ after the semicolon

2 at the end of subclause (I); and

3 (B) by striking subclauses (II) and (III)

4 and inserting the following:

5 ‘‘(II) if such student is enrolled in a

6 program of undergraduate education which

7 is less than one academic year, the maxi8 mum annual loan amount that such stu9 dent may receive may not exceed the

10 amount that bears the same ratio to the

11 amount specified in subclause (I) as the

12 length of such program measured in se13 mester, trimester, quarter, or clock hours

14 bears to one academic year;’’; and

15 (2) by inserting ‘‘and’’ after the semicolon at

16 the end of clause (iii).

17 SEC. 416. APPLICABLE INTEREST RATES.

18 (a) APPLICABLE INTEREST RATES.—

19 (1) AMENDMENT.—Section 427A (20 U.S.C.

20 1077a) is amended to read as follows:

21 ‘‘SEC. 427A. APPLICABLE INTEREST RATES.

22 ‘‘(a) INTEREST RATES FOR NEW LOANS ON OR

23 AFTER JULY 1, 1998.—

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

25 with respect to any loan made, insured, or guaran-
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1 teed under this part (other than a loan made pursu2 ant to section 428B or 428C) for which the first dis3 bursement is made on or after July 1, 1998, the ap4 plicable rate of interest shall, during any 12-month

5 period beginning on July 1 and ending on June 30,

6 be determined on the preceding June 1 and be equal

7 to—

8 ‘‘(A) the bond equivalent rate of 91-day

9 Treasury bills auctioned at the final auction

10 held prior to such June 1; plus

11 ‘‘(B) 2.3 percent,

12 except that such rate shall not exceed 8.25 percent.

13 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

14 With respect to any loan under this part (other than

15 a loan made pursuant to section 428B or 428C) for

16 which the first disbursement is made on or after

17 July 1, 1998, the applicable rate of interest for in18 terest which accrues—

19 ‘‘(A) prior to the beginning of the repay20 ment period of the loan; or

21 ‘‘(B) during the period in which principal

22 need not be paid (whether or not such principal

23 is in fact paid) by reason of a provision de24 scribed in section 428(b)(1)(M) or

25 427(a)(2)(C),
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1 shall be determined under paragraph (1) by sub2 stituting ‘1.7 percent’ for ‘2.3 percent’.

3 ‘‘(3) PLUS LOANS.—With respect to any loan

4 under section 428B for which the first disbursement

5 is made on or after July 1, 1998, the applicable rate

6 of interest shall, during any 12-month period begin7 ning on July 1 and ending on June 30, be deter8 mined on the preceding June 1 and be equal to the

9 lesser of—

10 ‘‘(A)(i) the bond equivalent rate of 91-day

11 Treasury bills auctioned at the final auction

12 held prior to such June 1; plus

13 ‘‘(ii) 3.1 percent; or

14 ‘‘(B) 9.0 percent.

15 ‘‘(4) CONSOLIDATION LOANS.—With respect to

16 any consolidation loan under section 428C for which

17 the application is received by an eligible lender on or

18 after October 1, 1998, the applicable rate of interest

19 shall be at an annual rate on the unpaid principal

20 balance of the loan that is equal to the lesser of—

21 ‘‘(A) the weighted average of the interest

22 rates on the loans consolidated, rounded to the

23 nearest higher one-eighth of one percent; or

24 ‘‘(B) 8.25 percent.
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1 ‘‘(b) LESSER RATES PERMITTED.—Nothing in this

2 section or section 428C shall be construed to prohibit a

3 lender from charging a borrower interest at a rate less

4 than the rate which is applicable under this part.

5 ‘‘(c) CONSULTATION.—The Secretary shall determine

6 the applicable rate of interest under this section after con7 sultation with the Secretary of the Treasury and shall

8 publish such rate in the Federal Register as soon as prac9 ticable after the date of determination.’’.

10 (2) CONFORMING AMENDMENT.—Section

11 428B(d)(4) (20 U.S.C. 1078–2(d)(4)) is amended by

12 striking ‘‘section 427A(c)’’ and inserting ‘‘section

13 427A(a)(3)’’.

14 (b) SPECIAL ALLOWANCES.—

15 (1) AMENDMENT.—Section 438(b)(2)(F) (20

16 U.S.C. 1087–1(b)(2)(F)) is amended to read as fol17 lows:

18 ‘‘(F) LOANS DISBURSED AFTER JULY 1,

19 1998.—

20 ‘‘(i) IN GENERAL.—Subject to paragraph

21 (4) and clauses (ii), (iii), and (iv) of this sub22 paragraph, and except as provided in subpara23 graph (B), the special allowance paid pursuant

24 to this subsection on loans for which the first
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1 disbursement is made on or after July 1, 1998,

2 shall be computed—

3 ‘‘(I) by determining the average of the

4 bond equivalent rates of 91-day Treasury

5 bills auctioned for such 3-month period;

6 ‘‘(II) by subtracting the applicable in7 terest rates on such loans from such aver8 age bond equivalent rate;

9 ‘‘(III) by adding 2.8 percent to the re10 sultant percent; and

11 ‘‘(IV) by dividing the resultant per12 cent by 4.

13 ‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In

14 the case of any loan for which the first dis15 bursement is made on or after July 1, 1998,

16 and for which the applicable rate of interest is

17 described in section 427A(a)(2), clause (i)(III)

18 of this subparagraph shall be applied by sub19 stituting ‘2.2 percent’ for ‘2.8 percent’.

20 ‘‘(iii) PLUS LOANS.—In the case of any

21 loan for which the first disbursement is made

22 on or after July 1, 1998, and for which the ap23 plicable rate of interest is described in section

24 427A(a)(3), clause (i)(III) of this subparagraph

25 shall be applied by substituting ‘3.1 percent’ for
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1 ‘2.8 percent’, subject to clause (v) of this sub2 paragraph.

3 ‘‘(iv) CONSOLIDATION LOANS.—In the case

4 of any consolidation loan for which the applica5 tion is received by an eligible lender on or after

6 October 1, 1998, and for which the applicable

7 interest rate is determined under section

8 427A(a)(4), clause (i)(III) of this subparagraph

9 shall be applied by substituting ‘3.1 percent’ for

10 ‘2.8 percent’, subject to clause (v) of this sub11 paragraph.

12 ‘‘(v) LIMITATION ON SPECIAL ALLOW13 ANCES FOR PLUS AND CONSOLIDATION

14 LOANS.—In the case of PLUS loans made

15 under section 428B and disbursed on or after

16 July 1, 1998, for which the interest rate is de17 termined under 427A(a)(3), a special allowance

18 shall not be paid for such loan unless the rate

19 determined under subparagraph (A) of such

20 section (without regard to subparagraph (B) of

21 such section) exceeds 9.0 percent. In the case of

22 consolidation loans made under section 428C

23 for which the application is received by an eligi24 ble lender on or after October 1, 1998, and for

25 which the applicable interest rate is determined
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1 under section 427A(a)(4), a special allowance

2 shall not be paid for such loan unless the rate

3 determined under subparagraph (A) of such

4 section (without regard to subparagraph (B) of

5 such section) exceeds 8.25 percent.’’.

6 (2) CONSOLIDATION LOANS.—Section

7 428C(c)(1) (20 U.S.C. 1078-3) is amended—

8 (A) by striking everything preceding sub9 paragraph (D) and inserting the following:

10 ‘‘(1) INTEREST RATE.—(A) Except as provided

11 in subparagraph (B), with respect to any loan made

12 under this section for which the application is re13 ceived by an eligible lender on or after October 1,

14 1998, the applicable interest rate shall be deter15 mined under section 427A(a)(4).’’; and

16 (B) by redesignating subparagraph (D) as

17 subparagraph (B).

18 (3) CONFORMING AMENDMENT.—Section

19 438(b)(2)(C)(ii) is amended by striking ‘‘In the

20 case’’ and inserting ‘‘Subject to subparagraph (F),

21 in the case’’.

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

23 this section shall apply with respect to any loan made, in24 sured, or guaranteed under part B of title IV of the High-
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1 er Education Act of 1965 for which the first disbursement

2 is made on or after July 1, 1998.

3 SEC. 417. FEDERALLY GUARANTEED STUDENT LOANS.

4 (a) REQUIREMENTS FOR FEDERAL INTEREST SUB5 SIDIES.—Section 428(a)(2) (20 U.S.C. 1078(a)(2)) is

6 amended by striking everything preceding subparagraph

7 (D) and inserting the following:

8 ‘‘(2) ADDITIONAL REQUIREMENTS TO RECEIVE

9 SUBSIDY.—(A) Each student qualifying for a portion

10 of an interest payment under paragraph (1) shall

11 provide to the lender a statement from the eligible

12 institution, at which the student has been accepted

13 for enrollment, or at which the student is in attend14 ance, which certifies the eligibility of the student to

15 receive a loan under this part and the amount of the

16 loan for which such student is eligible.

17 ‘‘(B) A student shall qualify for a portion of an

18 interest payment under paragraph (1) if the eligible

19 institution has provided the lender with a statement

20 that sets forth a schedule for disbursement of the

21 proceeds of the loan in installments, consistent with

22 the requirements of section 428G.

23 ‘‘(C) For the purpose of subparagraph (B), a

24 student shall qualify for a portion of an interest pay25 ment under paragraph (1) if the eligible institution
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1 has provided the lender with a statement evidencing

2 a determination of need for a loan (as determined

3 under part F of this title) and the amount of such

4 need, subject to the provisions of subparagraph

5 (D).’’.

6 (b) DURATION OF AUTHORITY.—Section 428(a)(5) is

7 amended—

8 (1) by striking ‘‘September 30, 2002’’ and in9 serting ‘‘September 30, 2004’’; and

10 (2) by striking ‘‘September 30, 2006’’ and in11 serting ‘‘September 30, 2008’’.

12 (c) ANNUAL LOAN LIMITS.—Section 428(b)(1)(A) is

13 amended—

14 (1) in clause (i)—

15 (A) by inserting ‘‘and’’ after the semicolon

16 at the end of subclause (I); and

17 (B) by striking subclauses (II) and (III)

18 and inserting the following:

19 ‘‘(II) if such student is enrolled

20 in a program of undergraduate edu21 cation which is less than one academic

22 year, the maximum annual loan

23 amount that such student may receive

24 may not exceed the amount that bears

25 the same ratio to the amount specified
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1 in subclause (I) as the length of such

2 program measured in semester, tri3 mester, quarter, or clock hours bears

4 to one academic year;’’; and

5 (2) by inserting ‘‘and’’ after the semicolon at

6 the end of clause (iii).

7 (d) SELECTION OF REPAYMENT PLANS.—Section

8 428(b)(1)(D) is amended by striking ‘‘and (iii)’’ and in9 serting the following: ‘‘(iii) the student borrower may an10 nually change the selection of a repayment plan under this

11 part, and (iv)’’.

12 (e) COINSURANCE.—Section 428(b)(1)(G) is amend13 ed by striking ‘‘not less than’’.

14 (f ) DEFERMENTS.—Section 428(b)(1)(M) is amend15 ed—

16 (1) in clause (i)(I), by inserting before the semi17 colon the following: ‘‘, except that no borrower, not18 withstanding the provisions of the promissory note,

19 shall be required to borrow an additional loan under

20 this title in order to be eligible to receive a

21 deferment under this clause’’; and

22 (2) in clause (ii), by inserting before the semi23 colon the following: ‘‘, except that no borrower who

24 qualifies for unemployment benefits shall be required
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1 to provide any additional paperwork for a deferment

2 under this clause’’.

3 (g) LIMITATION, SUSPENSION, AND TERMINATION.—

4 Section 428(b)(1)(U) is amended—

5 (1) by striking ‘‘emergency action,,’’ each place

6 it appears and inserting ‘‘emergency action,’’; and

7 (2) by striking ‘‘a compliance audit of each

8 lender’’ and inserting the following: ‘‘in the case of

9 any lender that originates or holds more than

10 $5,000,000 in loans made under this title during an

11 annual audit period, a compliance audit of such

12 lender’’.

13 (h) ADDITIONAL INSURANCE PROGRAM REQUIRE14 MENTS.—Section 428(b)(1) is further amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (W);

17 (2) in subparagraph (X)—

18 (A) by striking ‘‘428(c)(10)’’ and inserting

19 ‘‘428(c)(9)’’; and

20 (B) by striking the period at the end and

21 inserting ‘‘; and’’;

22 (3) by adding at the end the following new sub23 paragraph:

24 ‘‘(Y) provides that the lender shall deter25 mine the eligibility of a borrower for a
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1 deferment described in subparagraph (M)(i)

2 based on receipt of (i) a request for deferment

3 from the borrower, (ii) a newly completed loan

4 application that documents the borrower’s eligi5 bility for a deferment, or (iii) student status in6 formation received by the lender that the bor7 rower is enrolled on at least a half-time basis.’’.

8 (i) RESTRICTIONS ON INDUCEMENTS.—Section

9 428(b)(3) is amended—

10 (1) by striking subparagraph (C) and inserting

11 the following:

12 ‘‘(C) conduct unsolicited mailings of stu13 dent loan application forms to students enrolled

14 in secondary school or a postsecondary institu15 tion, or to parents of such students, except that

16 applications may be mailed to students who

17 have previously received loans guaranteed under

18 this part by the guaranty agency; or’’; and

19 (2) by adding at the end the following new sen20 tence:

21 ‘‘It shall not be a violation of this paragraph for a

22 guaranty agency to provide assistance to institutions

23 of higher education comparable to the kinds of as24 sistance provided to institutions of higher education

25 by the Department of Education.’’.
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1 (j) DELAY IN COMMENCEMENT OF REPAYMENT PE2 RIOD.—Section 428(b)(7) is amended by inserting after

3 subparagraph (C) the following new subparagraph:

4 ‘‘(D) There shall be excluded from the 6

5 months determined under subparagraph (A)(i) any

6 period during which the student was called or or7 dered to active duty in a reserve component of the

8 Armed Forces of the United States.’’.

9 (k) GUARANTY AGENCY INFORMATION TO ELIGIBLE

10 INSTITUTIONS.—Section 428(c)(2)(H)(ii) is amended to

11 read as follows:

12 ‘‘(ii) the guaranty agency shall not re13 quire the payment from the institution of

14 any fee for such information; and’’.

15 (l) FORBEARANCE.—Section 428(c)(3) is amended—

16 (1) in subparagraph (A)(i), by striking ‘‘writ17 ten’’;

18 (2) in subparagraph (B), by inserting before

19 the semicolon the following: ‘‘, including forbearance

20 granted after consideration of a borrower’s total

21 debt burden’’; and

22 (3) in the last sentence—

23 (A) by striking ‘‘and (ii)’’ and inserting

24 ‘‘(ii)’’; and
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1 (B) by inserting before the period at the

2 end the following: ‘‘, and (iii) forbearance for

3 periods not to exceed 60 days if the lender rea4 sonably determines that such suspensions are

5 necessary to research or process information

6 relative to such loan or to collect appropriate

7 documentation relating to the borrower’s re8 quest for a deferment or forbearance’’.

9 (m) ASSIGNMENT.—Section 428(c)(8) is amended—

10 (1) by striking ‘‘(A)’’; and

11 (2) by striking subparagraph (B).

12 (n) 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 (o) 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 (p) ACTION ON AGREEMENTS.—Section 428(g) is

14 amended by striking ‘‘and Labor’’ and inserting ‘‘and the

15 Workforce’’.

16 (q) LENDERS-OF-LAST-RESORT.—Section 428(j)(3)

17 is amended—

18 (1) in subparagraph (A)—

19 (A) in the heading thereof, by striking

20 ‘‘DURING TRANSITION TO DIRECT LEND21 ING’’;

22 (B) by striking out ‘‘during the transition

23 from the Federal Family Education Loan Pro24 gram under this part ot the Federal Direct Stu-
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1 dent Loan Program under part D of this title,’’

2 and inserting a comma;

3 (C) by inserting ‘‘designated for a State’’

4 immediately after ‘‘a guaranty agency’’; and

5 (D) by inserting ‘‘subparagraph (C) and’’

6 immediately before ‘‘section 422(c)(7),’’; and

7 (2) by adding at the end thereof the following

8 new subparagraph:

9 ‘‘(C) The Secretary shall exercise the authority

10 described in subparagraph (A) only if the Secretary

11 determines that eligible borrowers are seeking and

12 are unable to obtain loans under this part, and that

13 the guaranty agency designated for that State has

14 the capability to provide lender-of-last-resort loans in

15 a timely manner, in accordance with its obligations

16 under paragraph (1), but cannot do so without ad17 vances provided by the Secretary under this para18 graph. If the Secretary makes the determinations

19 described in the preceding sentence and determines

20 that it would be cost-effective to do so, the Secretary

21 may provide advances under this paragraph to that

22 guaranty agency. If the Secretary determines that

23 guaranty agency does not have such capability, or

24 will not provide such loans in a timely fashion, the

25 Secretary may provide such advances to enable an-
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1 other guaranty agency, that the Secretary deter2 mines to have such capability, to make lender-of3 last-resort loans to eligible borrowers in that State

4 who are experiencing loan access problems.’’.

5 (r) INCOME CONTINGENT REPAYMENT.—Section

6 428(m) is amended by striking ‘‘shall require at least 10

7 percent of the borrowers’’ and inserting ‘‘may require bor8 rowers’’.

9 (s) STATE SHARE OF DEFAULT COSTS.—Subsection

10 (n) of section 428 is repealed.

11 (t) BLANKET CERTIFICATE OF GUARANTY.—Section

12 428 of the Act is amended by adding at the end the follow13 ing new subsection:

14 ‘‘(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—

15 ‘‘(1) IN GENERAL.—Any guaranty agency that

16 has or enters into any insurance program agreement

17 with the Secretary under this part may—

18 ‘‘(A) offer eligible lenders participating in

19 the agency’s guaranty program blanket certifi20 cates of loan guaranty that permit the lender to

21 make loans without receiving prior approval

22 from the guaranty agency of individual loans

23 for eligible borrowers enrolled in eligible pro24 grams at eligible institutions; and
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1 ‘‘(B) provide eligible lenders with the abil2 ity to transmit electronically data to the agency

3 concerning loans the lender has elected to make

4 under the agency’s insurance program via

5 standard reporting formats, such reporting to

6 occur at reasonable, mutually acceptable inter7 vals.

8 ‘‘(2) LIMITATIONS ON BLANKET CERTIFICATE

9 OF GUARANTY.—(A) An eligible lender may not

10 make a loan to a borrower under this section after

11 such lender receives a notification from the guaranty

12 agency that the borrower is not an eligible borrower.

13 ‘‘(B) A guaranty agency and eligible lender may

14 establish by mutual agreement limitations or restric15 tions on the number or volume of loans issued by a

16 lender under the blanket certificate of guaranty.’’.

17 (u) NOTICE OF AVAILABILITY OF INCOME-SENSITIVE

18 REPAYMENT OPTION.—

19 (1) AMENDMENT.—Section 428 is further

20 amended by adding at the end the following new

21 subsection:

22 ‘‘(o) NOTICE OF AVAILABILITY OF INCOME-SEN23 SITIVE REPAYMENT OPTION.—At the time of offering a

24 borrower a loan under this part, and at the time of offer25 ing the borrower the option of repaying a loan in accord-
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1 ance with this subsection, the lender shall provided the

2 borrower with a notice that informs the borrower, in a

3 form prescribed by the Secretary by regulation—

4 ‘‘(1) that all borrowers are eligible for income5 sensitive repayment through loan consolidation

6 under section 428C;

7 ‘‘(2) the procedures by which the borrower may

8 elect income-sensitive repayment; and

9 ‘‘(3) where and how the borrower may obtain

10 additional information concerning income-sensitive

11 repayment.’’.

12 (2) CONFORMING AMENDMENTS.—

13 (A) Section 428(b)(1)(E)(i) is amended by

14 inserting before the semicolon the following: ‘‘or

15 of repaying the loan in accordance with an in16 come-sensitive repayment schedule offered pur17 suant to section 428C’’.

18 (B) Section 485(b)(1)(A) is amended—

19 (i) by striking ‘‘and’’ at the end of

20 clause (i);

21 (ii) by striking the period at the end

22 of clause (ii) and inserting ‘‘; and’’; and

23 (iii) by adding at the end the follow24 ing new clause:
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1 ‘‘(iii) the information required to be disclosed

2 by lenders pursuant to section 428(o).’’.

3 (v) NOTICE TO INSTITUTIONS OF DEFAULTS.—

4 (1) ADMINISTRATIVE AND FISCAL PROCE5 DURES.—Section 428(c)(2)(A) is amended by strik6 ing ‘‘proof that reasonable attempts were made’’ and

7 inserting ‘‘proof that the institution was contacted

8 and other reasonable attempts were made’’.

9 (2) REIMBURSEMENT.—Section 428(c)(2)(G)

10 (20 U.S.C. 1078(c)(2)(G)) is amended by striking

11 ‘‘certifies to the Secretary that diligent attempts

12 have been made’’ and inserting ‘‘demonstrates to the

13 Secretary that diligent attempts, including direct

14 contact with the institution, have been made.’’.

15 (3) NOTICE TO SECRETARY AND PAYMENT OF

16 LOSS.—The third sentence of section 430(a) (20

17 U.S.C. 1080(a)) is amended by inserting ‘‘the insti18 tution was contacted and other’’ after ‘‘submit proof

19 that’’.

20 SEC. 418. VOLUNTARY AGREEMENTS WITH GUARANTY

21 AGENCIES.

22 Part B of title IV is amended by inserting after sec23 tion 428 (20 U.S.C. 1078) the following new section:
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1 ‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH

2 GUARANTY AGENCIES.

3 ‘‘(a) VOLUNTARY AGREEMENTS.—

4 ‘‘(1) AUTHORITY.—Notwithstanding any other

5 provision of law, the Secretary may enter into a vol6 untary, flexible agreement with not more than 6

7 guaranty agencies under this section, in lieu of

8 agreements with a guaranty agency under sub9 sections (b) and (c) of section 428, under which the

10 Secretary may waive or modify any requirement

11 under this title applicable to the responsibilities of

12 the Secretary and a guaranty agency.

13 ‘‘(2) ELIGIBILITY.—Any guaranty agency that

14 had one or more agreements with the Secretary

15 under subsections (b) and (c) of section 428 as of

16 the day before the date of enactment of this section

17 may enter into an agreement with the Secretary

18 under this subsection.

19 ‘‘(b) TERMS OF AGREEMENT.—An agreement be20 tween the Secretary and a guaranty agency under this sec21 tion—

22 ‘‘(1) shall be developed by the Secretary, in con23 sultation with the guaranty agency;

24 ‘‘(2) shall be for a period not to exceed five

25 years, and may be renewed upon the agreement of

26 the parties;
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1 ‘‘(3) may include provisions—

2 ‘‘(A) specifying the responsibilities of the

3 guaranty agency under the agreement, such

4 as—

5 ‘‘(i) administering the issuance of in6 surance on loans made under this part on

7 behalf of the Secretary;

8 ‘‘(ii) monitoring insurance commit9 ments made under this part;

10 ‘‘(iii) default prevention activities;

11 ‘‘(iv) review of default claims made by

12 lenders;

13 ‘‘(v) payment of default claims;

14 ‘‘(vi) collection of defaulted loans;

15 ‘‘(vii) adoption of internal systems of

16 accounting and auditing that are accept17 able to the Secretary, and reporting the re18 sult thereof to the Secretary on a timely,

19 accurate, and auditable basis;

20 ‘‘(viii) timely and accurate collection

21 and reporting of such other data as the

22 Secretary may require to carry out the

23 purposes 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 pro5 gram 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

10 other funds that the guaranty agency may re11 ceive or retain under the agreement, except that

12 in no case may the cost to the Secretary of the

13 agreement, as reasonably projected by the Sec14 retary, exceed the cost to the Secretary, as

15 similarly projected, in the absence of the agree16 ment;

17 ‘‘(C) regarding the use of net revenues, as

18 described in the agreement under this section,

19 for such other activities in support of post20 secondary education as may be agreed to by the

21 Secretary and the guaranty agency;

22 ‘‘(D) regarding the standards by which the

23 guaranty agency’s performance of its respon24 sibilities under the agreement will be assessed,

25 and the consequences for a guaranty agency’s
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1 failure to achieve a specified level of perform2 ance on 1 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

10 part and in which the Secretary permits the

11 guaranty agency to engage; and

12 ‘‘(G) such other provisions as the Sec13 retary may determine to be necessary to protect

14 the United States from the risk of unreasonable

15 loss and to promote the purposes of this part;

16 and

17 ‘‘(4) shall provide for uniform lender participa18 tion with the guaranty agency under the terms of

19 the agreement.

20 ‘‘(c) TERMINATION.—At the expiration or early ter21 mination of an agreement under this section, the Sec22 retary shall reinstate the guaranty agency’s prior agree23 ments under subsections (b) and (c) of section 428, sub24 ject only to such additional requirements as the Secretary

25 determines to be necessary in order to ensure the efficient
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1 transfer of responsibilities between the agreement under

2 this section and the agreements under subsections (b) and

3 (c) of section 428, including the guaranty agency’s compli4 ance with reserve requirements under sections 422 and

5 428.’’.

6 SEC. 419. FEDERAL CONSOLIDATION LOANS.

7 (a) AGREEMENTS WITH LENDERS.—Section 428C(a)

8 (20 U.S.C. 1078–3(a)) is amended—

9 (1) by striking subclause (II) of paragraph

10 (3)(B)(i) and inserting the following:

11 ‘‘(II) that loans received during the 180-

12 day period following the making of the consoli13 dation loan may be added to the consolidation

14 loan.’’; and

15 (2) by striking subparagraph (C) of paragraph

16 (4) and inserting the following:

17 ‘‘(C) made under part D of this title;’’.

18 (b) CONTENTS OF AGREEMENTS.—Section 428C(b)

19 is amended—

20 (1) in paragraph (1)(A), by striking ‘‘under this

21 section and (i)’’ and everything that follows and in22 serting ‘‘under this section;’’;

23 (2) in paragraph (4)(C)(ii)—

24 (A) by redesignating subclause (III) as

25 subclause (IV);
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1 (B) by inserting after subclause (II) the

2 following new clause:

3 ‘‘(III) by the Secretary, in the case of

4 a consolidation loan for which the applica5 tion is received by an eligible lender on or

6 after October 1, 1998, except that the Sec7 retary shall pay such interest only on that

8 portion of the loan that repays Federal

9 Stafford Loans for which the student bor10 rower received an interest subsidy under

11 section 428 or Federal Direct Stafford

12 Loans for which the borrower received an

13 interest subsidy under section 455; or’’;

14 and

15 (C) in subclause (IV) (as redesignated), by

16 striking ‘‘subclause (I) or (II)’’ and inserting

17 ‘‘subclause (I), (II), or (III)’’; and

18 (3) in paragraph (6)(A), by inserting before the

19 semicolon at the end the following: ‘‘except that (i)

20 a lender is not required to consolidate loans de21 scribed in subparagraph (D) or (E) of subsection

22 (a)(4); and (ii) a lender is not prohibited from estab23 lishing a minimum loan balance for which it will

24 process a consolidation loan application’’.
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1 (c) EXTENSION OF AUTHORITY.—Section 428C(e) is

2 amended by striking ‘‘September 30, 2002’’ and inserting

3 ‘‘September 30, 2004’’.

4 SEC. 420. DISBURSEMENT.

5 (a) REQUIREMENTS.—Section 428G(a)(1) (20 U.S.C.

6 1078–7(a)(1)) is amended by inserting ‘‘greater than one

7 semester, one trimester, one quarter, or four months’’

8 after ‘‘period of enrollment’’.

9 (b) DISBURSEMENT.—Section 428G(b)(1) is amend10 ed by adding at the end the following new sentence: ‘‘An

11 institution whose cohort default rate (as determined under

12 section 435(a)) for each of the three most recent fiscal

13 years for which data are available is less than 10 percent

14 shall be exempt from the requirements of this para15 graph.’’.

16 (c) WITHHOLDING OF SECOND DISBURSEMENT.—

17 Section 428G(d)(2) is amended by inserting ‘‘by more

18 than $300’’ after ‘‘under this title’’.

19 SEC. 421. UNSUBSIDIZED STAFFORD LOANS.

20 (a) ELIGIBLE BORROWERS.—Section 428H(b) (20

21 U.S.C. 1078–8(b)) is amended by striking ‘‘which—’’ and

22 everything that follows and inserting the following:

23 ‘‘which certifies the eligibility of the student to receive a

24 loan under this part and the amount of the loan for which

25 such student is eligible. A student shall qualify for a loan
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1 if the eligible institution has provided the lender with a

2 statement that sets forth a schedule for disbursement of

3 the proceeds of the loan in installments, consistent with

4 the requirements of section 428G.’’.

5 (b) LOAN LIMITS.—Section 428H(d)(2)(A) is amend6 ed—

7 (1) by inserting ‘‘and’’ after the semicolon at

8 the end of clause (i); and

9 (2) by striking clauses (ii) and (iii) and insert10 ing 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 stu15 dent may receive may not exceed the

16 amount that bears the same ratio to the

17 amount specified in clause (i) as the length

18 of such program measured in semester, tri19 mester, quarter, or clock hours bears to

20 one academic year;’’.

21 (c) CAPITALIZATION OF INTEREST.—Section

22 428H(e)(2) is amended to read as follows:

23 ‘‘(2) CAPITALIZATION OF INTEREST.—Interest

24 on loans made under this section for which pay25 ments of principal are not required during the in-
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1 school and grace periods or for which payments are

2 deferred under sections 427(a)(2)(C) and

3 428(b)(1)(M) shall, if agreed upon by the borrower

4 and the lender—

5 ‘‘(A) be paid monthly or quarterly; or

6 ‘‘(B) be added to the principal amount of

7 the loan by the lender only—

8 ‘‘(i) when the loan enters repayment;

9 ‘‘(ii) at the expiration of a grace pe10 riod, in the case of a loan that qualifies for

11 a grace period;

12 ‘‘(iii) at the expiration of a period of

13 deferment; and

14 ‘‘(iv) when the borrower defaults.

15 Such capitalization of interest shall not be

16 deemed to exceed the annual insurable limit on

17 account of the student.’’.

18 (d) QUALIFICATION.—Section 428H(e) is amended

19 by adding at the end the following new paragraph:

20 ‘‘(7) QUALIFICATION FOR FORBEARANCE,

21 DEFERMENT, AND INCOME-SENSITIVE REPAY22 MENT.—A borrower of a loan made under this sec23 tion may qualify for a forbearance or deferment, or

24 an income-sensitive repayment plan for which the

25 borrower is eligible, immediately upon receipt by the
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1 lender or holder of a request from the borrower. Any

2 necessary supporting documentation shall be secured

3 by the lender or holder within 30 days of the request

4 in order to continue the forbearance, deferment, or

5 income-sensitive repayment plan.’’.

6 (e) REPEAL.—Section 428H(f ) is repealed.

7 SEC. 422. REPEAL OF LOAN FORGIVENESS.

8 Section 428J (20 U.S.C. 1078–10) is repealed.

9 SEC. 423. LEGAL POWERS AND RESPONSIBILITIES.

10 (a) GENERAL POWERS.—Section 432(a)(2) (20

11 U.S.C. 1082(a)(2)) is amended by inserting ‘‘except that

12 this section shall not be deemed to limit court review

13 under chapter 7 of title 5, United States Code’’ after ‘‘Sec14 retary’s control’’.

15 (b) AUDIT OF FINANCIAL TRANSACTIONS.—Section

16 432(f )(1) is amended—

17 (1) in subparagraph (B), by striking ‘‘section

18 435(d)(1) (D), (F), or (H);’’ and inserting ‘‘section

19 435(d)(1); and’’;

20 (2) in subparagraph (C)—

21 (A) by striking ‘‘and Labor’’ and inserting

22 ‘‘and the Workforce’’; and

23 (B) by striking ‘‘; and’’ inserting a period;

24 and

25 (3) by striking subparagraph (D).
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1 (c) PROGRAM OF ASSISTANCE.—Section 432(k)(3) is

2 amended by striking ‘‘Within 1 year’’ and everything that

3 follows through ‘‘1992, the’’ and inserting ‘‘The’’.

4 (d) COMMON FORMS AND FORMATS.—Section

5 432(m) is amended—

6 (1) in paragraph (1)(A), by striking ‘‘The Sec7 retary’’ and inserting ‘‘Subject to paragraph (2), the

8 Secretary’’;

9 (2) by striking subparagraph (C) of paragraph

10 (1);

11 (3) in subparagraph (D), by striking ‘‘Nothing’’

12 and inserting ‘‘Subject to paragraph (2), nothing’’;

13 (4) by redesignating subparagraph (D) of such

14 paragraph as subparagraph (C);

15 (5) by redesignating paragraphs (2) and (3) as

16 paragraphs (3) and (4), respectively;

17 (6) by inserting after paragraph (1) the follow18 ing new paragraph:

19 ‘‘(2) FREE APPLICATION FOR FEDERAL STU20 DENT AID.—For academic year 1999–2000 and

21 thereafter, the Secretary shall prescribe the Free

22 Application for Federal Student Aid as the applica23 tion form under this part (other than sections 428B

24 and 428C).’’; and
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1 (7) by adding at the end the following new

2 paragraph:

3 ‘‘(5) MASTER PROMISSORY NOTE.—

4 ‘‘(A) DEVELOPMENT AND APPROVAL.—

5 Within 180 days of enactment of this Act, the

6 Secretary, in cooperation with representatives of

7 guaranty agencies, eligible lenders, institutions,

8 students, and organizations involved in student

9 financial assistance, shall develop and approve a

10 master promissory note that will allow for a

11 multiyear line of credit. Such note shall address

12 the needs of participants in the programs under

13 this part. The Secretary shall also develop and

14 approve a corresponding master promissory

15 note for use under part D of this title that ad16 dresses the needs of participants in the pro17 grams under such part.

18 ‘‘(B) SALE AND ASSIGNMENT; ENFORCE19 MENT.—Notwithstanding the preceding provi20 sions of this section, each loan made under a

21 master promissory note providing for a line of

22 credit may be sold and assigned independently

23 of any other loan made under the same promis24 sory note, and each such loan shall be sepa25 rately enforceable in all State and Federal
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1 courts on the basis of an original or copy of the

2 master promissory note in accordance with its

3 terms.’’.

4 (e) DEFAULT REDUCTION MANAGEMENT.—Section

5 432(n) is amended—

6 (1) in paragraph (1), by striking ‘‘1993’’ and

7 inserting ‘‘1999’’; and

8 (2) in paragraph (3), by striking ‘‘and Labor’’

9 and inserting ‘‘and the Workforce’’.

10 (f ) REPORTING REQUIREMENT.—Section 432(p) is

11 amended by striking ‘‘State postsecondary reviewing enti12 ties designated under subpart 1 of part H,’’.

13 SEC. 424. STUDENT LOAN INFORMATION.

14 Section 433 (20 U.S.C. 1083) is amended—

15 (1) in the first sentence of subsection (a), by in16 serting ‘‘in simple and understandable terms’’ after

17 ‘‘to the borrower’’; and

18 (2) in the first sentence of subsection (b), by in19 serting ‘‘in simple and understandable terms’’ after

20 ‘‘under this subsection’’.

21 SEC. 425. DEFINITIONS.

22 (a) COHORT DEFAULT RATE.—Section 435(a) (20

23 U.S.C. 1085(a)) is amended—

24 (1) in subparagraph (A) of paragraph (2)—
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1 (A) by striking ‘‘or’’ at the end of clause

2 (i); and

3 (B) by striking clause (ii) and inserting the

4 following:

5 ‘‘(ii) there are exceptional mitigating cir6 cumstances within the meaning of paragraph

7 (4); or

8 ‘‘(iii) there are, in the judgment of the

9 Secretary, other exceptional mitigating cir10 cumstances that would make the application of

11 this paragraph inequitable.’’;

12 (2) in subparagraph (C) of paragraph (2), by

13 striking ‘‘July 1, 1998,’’ and inserting ‘‘July 1,

14 1999,’’;

15 (3) in paragraph (3), by inserting ‘‘or, at the

16 request of the institution, a complete copy of the

17 records for loans made under this part or of the di18 rect loan servicer for loans made under part D’’

19 after ‘‘and loan servicers’’; and

20 (4) by adding at the end the following new

21 paragraphs:

22 ‘‘(4) DEFINITION OF MITIGATING CIR23 CUMSTANCES.—For purposes of paragraph (2), an

24 institution shall be treated as having exceptional

25 mitigating circumstances that make application of
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1 that paragraph inequitable if such institution is cer2 tified by a certified public accountant to meet each

3 of the following criteria:

4 ‘‘(A) at least two-thirds of the students en5 rolled on at least a half-time basis at the insti6 tution—

7 ‘‘(i) are eligible to receive a Federal

8 Pell Grant award that is at least equal to

9 one-half the maximum Federal Pell Grant

10 award for which the student would be eligi11 ble based on his or her enrollment status;

12 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

20 for at least 13 weeks in higher level education

21 program for which the educational program of

22 the institution provided substantial preparation,

23 or have entered active duty in the armed forces

24 of 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

7 percent for each of the three most recent fiscal

8 years for which data are available and that re9 lies on the exception in paragraph (2)(C) of this

10 subsection to continue to be an eligible institu11 tion 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

20 that 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 man6 agement plan.

7 ‘‘(B) DISCRETIONARY ELIGIBILITY CONDI8 TIONED ON IMPROVEMENT.—Notwithstanding

9 the expiration of the exception in paragraph

10 (2)(C), the Secretary may, in his discretion,

11 continue to treat an institution described in

12 subparagraph (A) of this paragraph as an eligi13 ble institution for each of the one-year periods

14 beginning on July 1, 1999, and July 1, 2000,

15 only if the institution submits by the beginning

16 of such period evidence satisfactory to the Sec17 retary that—

18 ‘‘(i) such institution has complied and

19 is continuing to comply with the require20 ments of subparagraph (A); and

21 ‘‘(ii) such institution has made sub22 stantial improvement, during each of the

23 preceding one-year periods, in its cohort

24 default rate.
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1 ‘‘(6) SPECIAL RULE BASED ON PARTICIPATION

2 RATE INDICES.—(A) An institution that dem3 onstrates to the Secretary that its participation rate

4 index (as defined in regulations in effect on July 1,

5 1996) is equal to or less than .0375 for any of the

6 three most recent fiscal years for which data are

7 available shall not be subject to paragraph (2).

8 ‘‘(B) An institution shall provide the Secretary

9 with sufficient data to determine its participation

10 rate index within 30 days after receiving an initial

11 notification of its draft cohort default rate.

12 ‘‘(C) Prior to publication of a final cohort de13 fault rate for an institution that provides the data

14 under subparagraph (B), the Secretary shall notify

15 the institution of its compliance or noncompliance

16 with subparagraph (A).

17 ‘‘(7) AUTHORITY OF THE SECRETARY TO AS18 SIST DISTRESSED INSTITUTIONS.—The Secretary is

19 authorized pursuant to section 326(c)(7) to provide

20 administrative, fiscal, management, strategic plan21 ning, and technical assistance through a qualified

22 third-party consultant identified by the institution or

23 an organization representing such institutions. Insti24 tutions eligible for such assistance include those in25 stitutions which qualify for the exemption in para-
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1 graph (2)(C)(i), (ii), and (iii) of this subsection, or

2 which have submitted a default management plan

3 under paragraph (5) which has been accepted by the

4 Secretary.’’.

5 (b) ELIGIBLE LENDER.—Section 435(d) is amend6 ed—

7 (1) in paragraph (1)(A)(ii)—

8 (A) by striking ‘‘or’’ at the end of sub9 clause (I); and

10 (B) by inserting before the semicolon at

11 the end of subclause (II) the following: ‘‘, or

12 (III) it is a bank that is a wholly owned sub13 sidiary of a nonprofit foundation, the founda14 tion is described in section 501(c)(3) of the In15 ternal Revenue Code of 1986 and exempt from

16 taxation under section 501(a) of such Code and

17 has been participating in the program author18 ized by this part for three years as of the date

19 of enactment of the Higher Education Amend20 ments of 1998 and only makes loans to under21 graduate students who are 22 years of age or

22 younger and has a portfolio of not more than

23 $10,000,000; and in determining whether the

24 making or holding of loans to students and par25 ents under this part is the primary consumer
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1 credit function of the eligible lender, all loans

2 (including student loans and other consumer

3 loans) made or held as trustee or in a trust ca4 pacity for the benefit of a third party shall be

5 considered’’;

6 (2) in paragraph (1)—

7 (A) by striking ‘‘and’’ at the end of sub8 paragraph (I);

9 (B) by striking the period at the end of

10 subparagraph (J) and inserting ‘‘; and’’; and

11 (C) by adding at the end the following new

12 subparagraph:

13 ‘‘(K) a wholly owned subsidiary of a pub14 licly held holding company which, for the three

15 years preceding the date of enactment of this

16 subparagraph, through one or more subsidiaries

17 (i) acts as a finance company, and (ii) partici18 pates in the program authorized by this part

19 pursuant to subparagraph (C).’’; and

20 (3) in paragraph (5), by adding at the end the

21 following new sentence:

22 ‘‘It shall not be a violation of this paragraph for a

23 lender to provide assistance to institutions of higher

24 education comparable to the kinds of assistance pro-
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1 vided to institutions of higher education by the De2 partment of Education.’’.

3 (c) LINE OF CREDIT.—Section 435(e) is amended to

4 read as follows:

5 ‘‘(e) LINE OF CREDIT.—The term ‘line of credit’

6 means an agreement between the lender and the borrower

7 pursuant to a master promissory note under which the

8 lender may make and disburse, in addition to the initial

9 loan, additional loans in subsequent years.’’.

10 (d) DEFINITION OF DEFAULT.—

11 (1) AMENDMENT.—Section 435(l) is amend12 ed—

13 (A) by striking ‘‘180 days’’ and inserting

14 ‘‘270 days’’; and

15 (B) by striking ‘‘240 days’’ and inserting

16 ‘‘330 days’’.

17 (2) EFFECTIVE DATE.—The amendment made

18 by paragraph (1) shall apply with respect to loans

19 for which the first day of delinquency occurs on or

20 after the date of enactment of this Act.

21 (e) COHORT DEFAULT RATE: REHABILITATION.—

22 Section 435(m)(2)(C) is amended by adding at the end

23 the following new sentences: ‘‘Within 2 years after the

24 date of enactment of the Higher Education Amendments

25 of 1998, the Secretary shall, by regulation, require guar-
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1 anty agencies to collect data with respect to defaulted

2 loans in a manner that will permit the identification of

3 any defaulted loan for which (i) the borrower is currently

4 making payments and has made not less than 6 consecu5 tive on-time payments by the end of such following fiscal

6 year, and (ii) a guaranty agency has renewed the borrow7 er’s title IV eligibility as provided in section 428F(b).

8 Upon a determination by the Secretary that such data is

9 available, the Secretary shall, by regulation, prescribe the

10 extent to which any such defaulted loan may be excluded

11 from the calculation of the cohort default rate under this

12 subsection.’’.

13 SEC. 426. DISCHARGE.

14 Section 437(c)(1) is amended—

15 (1) by inserting after ‘‘falsely certified by the

16 eligible institution,’’ the following: ‘‘or if the institu17 tion failed to make a refund of loan proceeds which

18 it owed to such student’s lender,’’; and

19 (2) by adding at the end the following new sen20 tences: ‘‘In the case of a discharge based upon a

21 failure to refund, the amount of the discharge shall

22 not exceed that portion of the loan which should

23 have been refunded. The Secretary shall report to

24 the Committee on Education and the Workforce of

25 the House of Representatives and the Committee on
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1 Labor and Human Resources of the Senate annually

2 as to the dollar amount of loan discharges attrib3 utable to failures to make refunds.’’.

4 SEC. 427. CANCELLATION OF LOANS FOR CERTAIN PUBLIC

5 SERVICE.

6 Section 437 is further amended—

7 (1) in the section heading, by striking out the

8 period at the end thereof and inserting in lieu there9 of a semicolon and ‘‘LOAN FORGIVENESS FOR

10 TEACHING.’’;

11 (2) by amending the heading for subsection (c)

12 to read as follows: ‘‘DISCHARGE RELATED TO

13 SCHOOL CLOSURE OR FALSE CERTIFICATION.—’’;

14 and

15 (3) by adding at the end thereof the following

16 new subsection:

17 ‘‘(e) CANCELLATION OF LOANS FOR TEACHING.—

18 ‘‘(1) FUNCTIONS OF SECRETARY.—The Sec19 retary shall discharge the liability of a borrower of

20 a qualifying loan by repaying the amount owed on

21 the loan, to the extent specified in paragraph (4),

22 for service described in paragraph (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 made under section

2 428 on or after the date of enactment of

3 the Higher Education Amendments of

4 1998 to a borrower who, on the date of en5 tering into the note or other written evi6 dence of the loan, had no outstanding bal7 ance of principal or interest on any loan

8 made before such date; and

9 ‘‘(ii) the loan was obtained to cover

10 the cost of instruction for an academic

11 year after the first and second year of un12 dergraduate education.

13 ‘‘(B) LIMITATION.—The Secretary may

14 not repay loans described in subparagraph (A)

15 to cover the costs of instruction for more than

16 two academic years, or three academic years in

17 the case of a program of instruction normally

18 requiring five years.

19 ‘‘(C) TREATMENT OF CONSOLIDATION

20 LOANS.—A loan made under section 428C may

21 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
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1 determined in accordance with regulations pre2 scribed by the Secretary.

3 ‘‘(3) QUALIFYING SERVICE.—A loan shall be

4 discharged under paragraph (1) for service by the

5 borrower as a full-time teacher for each complete

6 academic year of service, after completion of the sec7 ond academic year of service, in a public or other

8 nonprofit private elementary or secondary school—

9 ‘‘(A) which is in the school district of a

10 local educational agency which is eligible in

11 such year for assistance pursuant to title I of

12 the Elementary and Secondary Education Act

13 of 1965; 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 Second20 ary Education Act of 1965 exceeds 30 percent

21 of the total enrollment of that school.

22 ‘‘(4) RATE OF DISCHARGE.—(A) Loans shall be

23 discharged under this subsection at the rate of—

24 ‘‘(i) 30 percent for the first or second com25 plete academic year of qualifying service as de-
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1 scribed in paragraph (3) (after completion of

2 two years of service); and

3 ‘‘(ii) 40 percent for the third complete year

4 of such qualifying service.

5 ‘‘(B) The total amount that may be discharged

6 under this subsection for any borrower shall not ex7 ceed $17,750.

8 ‘‘(C) If a portion of a loan is discharged under

9 subparagraph (A) for any year, the entire amount of

10 interest on that loan that accrues for that year shall

11 also be discharged by the Secretary.

12 ‘‘(D) Nothing in this section shall be construed

13 to authorize refunding of any repayment of a loan.

14 ‘‘(5) LIMITATION ON TEACHER ELIGIBILITY.—

15 ‘‘(A) SECONDARY SCHOOL TEACHERS.—A

16 borrower may not receive assistance under this

17 subsection by virtue of teaching in a secondary

18 school unless such borrower majored in the sub19 ject area in which they are teaching.

20 ‘‘(B) ELEMENTARY SCHOOL TEACHERS.—

21 A borrower may not receive assistance under

22 this subsection by virtue of teaching in a ele23 mentary school unless such borrower dem24 onstrates, in accordance with State teacher cer25 tification or licensing requirements, subject
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1 matter knowledge and teaching skills in read2 ing, writing, mathematics, and other subjects

3 taught in elementary schools.

4 ‘‘(6) PREVENTION OF DOUBLE BENEFITS.—No

5 borrower may, for the same service, receive a benefit

6 under both this subsection and subtitle D of title I

7 of the National and Community Service Act of 1990

8 (42 U.S.C. 12571 et seq.).

9 ‘‘(7) METHOD OF PAYMENT.—The Secretary

10 shall specify in regulations the manner in which

11 lenders shall be reimbursed for loans made under

12 this part, or portions thereof, that are discharged

13 under this subsection.

14 ‘‘(8) LIST.—If the list of schools in which a

15 teacher may perform service pursuant to paragraph

16 (3) is not available before May 1 of any year, the

17 Secretary may use the list for the year preceding the

18 year for which the determination is made to make

19 such service determination.

20 ‘‘(9) CONTINUING ELIGIBILITY.—Any teacher

21 who performs service in a school which—

22 ‘‘(A) meets the requirements of paragraph

23 (3) in any year during such service; and

24 ‘‘(B) in a subsequent year fails to meet the

25 requirements of such subsection,
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1 may continue to teach in such school and shall be

2 eligible for loan cancellation pursuant to this sub3 section with respect to such subsequent years.’’.

4 SEC. 428. DEBT MANAGEMENT OPTIONS.

5 Section 437A (20 U.S.C. 1087–O) is repealed.

6 SEC. 429. SPECIAL ALLOWANCES.

7 (a) COMPUTATION.—Section 438(b)(2) (20 U.S.C.

8 1087–1(b)(2)) is amended—

9 (1) in subparagraph (A), by striking ‘‘(E), and

10 (F)’’ and inserting ‘‘and (E)’’; and

11 (2) in subparagraph (B)(iv), by striking ‘‘, (E),

12 or (F)’’ and inserting ‘‘or (E)’’.

13 (b) ORIGINATION FEES.—Section 438(c) is amend14 ed—

15 (1) in paragraph (2)—

16 (A) by striking ‘‘(other than’’ and inserting

17 ‘‘(including loans made under section 428H,

18 but excluding’’; and

19 (B) by adding at the end the following new

20 sentence: ‘‘Except as provided in paragraph (8),

21 a lender is not authorized to assess an origina22 tion fee under this paragraph unless the lender

23 assesses the same fee to all student borrow24 ers.’’; and
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1 (2) by adding at the end the following new

2 paragraph:

3 ‘‘(8) EXCEPTION.—Notwithstanding paragraph

4 (2), a lender may assess a lesser origination fee for

5 a borrower demonstrating greater financial need as

6 determined by such borrower’s adjusted gross family

7 income.’’.

8 (c) LENDING FROM PROCEEDS OF TAX EXEMPT OB9 LIGATIONS.—Section 438 is amended—

10 (1) by striking subsection (e); and

11 (2) by redesignating subsection (f ) as sub12 section (e).

13 (d) STUDY.—Section 438 is amended by adding at

14 the end the following new subsection:

15 ‘‘(f ) STUDY.—The Comptroller General shall conduct

16 a statistical analysis of the subsidized and unsubsidized

17 student loan programs under part B to gather data on

18 lenders’ policies on charging origination fees and to deter19 mine if there are any anomalies that would indicate any

20 institutional, programmatic, or socioeconomic discrimina21 tion in the assessing or waiving of such fees. The Comp22 troller General shall report to the appropriate committees

23 of Congress within two years after the date of enactment

24 of the Higher Education Amendments of 1998.’’.
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1 SEC. 430. LOAN FORGIVENESS FOR CHILD CARE PROVID2 ERS.

3 (a) PURPOSE.—It is the purpose of this section—

4 (1) to bring more highly trained individuals into

5 the early child care profession; and

6 (2) to keep more highly trained child care pro7 viders in the early child care field for longer periods

8 of time.

9 (b) LOAN FORGIVENESS FOR CHILD CARE PROVID10 ERS.—Part B (20 U.S.C. 1071 et seq.) is amended by in11 serting after section 428J (as added by section 432) (20

12 U.S.C. 1078–10) the following:

13 ‘‘SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVID14 ERS.

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

16 ‘‘(1) CHILD CARE FACILITY.—The term ‘child

17 care facility’ means a facility, including a home,

18 that—

19 ‘‘(A) provides child care services; and

20 ‘‘(B) meets applicable State or local gov21 ernment licensing, certification, approval, or

22 registration requirements, if any.

23 ‘‘(2) CHILD CARE SERVICES.—The term ‘child

24 care services’ means activities and services provided

25 for the education and care of children from birth
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1 through age 5 by an individual who has a degree in

2 early childhood education.

3 ‘‘(3) DEGREE.—The term ‘degree’ means an as4 sociate’s or bachelor’s degree awarded by an institu5 tion of higher education.

6 ‘‘(4) EARLY CHILDHOOD EDUCATION.—The

7 term ‘early childhood education’ means education in

8 the areas of early child education, child care, or any

9 other educational area related to child care that the

10 Secretary determines appropriate.

11 ‘‘(b) DEMONSTRATION PROGRAM.—

12 ‘‘(1) IN GENERAL.—The Secretary may carry

13 out a demonstration program of assuming the obli14 gation to repay, pursuant to subsection (c), a loan

15 made, insured or guaranteed under this part or part

16 D (excluding loans made under sections 428B and

17 428C) for any new borrower after the date of enact18 ment of the Higher Education Amendments of 1998,

19 who—

20 ‘‘(A) completes a degree in early childhood

21 education; and

22 ‘‘(B) obtains employment in a child care

23 facility.

24 ‘‘(2) AWARD BASIS; PRIORITY.—
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1 ‘‘(A) AWARD BASIS.—Subject to subpara2 graph (B), loan repayment under this section

3 shall be on a first-come, first-served basis and

4 subject to the availability of appropriations.

5 ‘‘(B) PRIORITY.—The Secretary shall give

6 priority in providing loan repayment under this

7 section for a fiscal year to student borrowers

8 who received loan repayment under this section

9 for the preceding fiscal year.

10 ‘‘(3) REGULATIONS.—The Secretary is author11 ized to prescribe such regulations as may be nec12 essary to carry out the provisions of this section.

13 ‘‘(c) LOAN REPAYMENT.—

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

15 the obligation to repay—

16 ‘‘(A) after the second year of employment

17 described in subparagraphs (B) and (C) of sub18 section (b)(1), 20 percent of the total amount

19 of all loans made after date of enactment of the

20 Higher Education Amendments of 1998, to a

21 student under this part or part D;

22 ‘‘(B) after the third year of such employ23 ment, 20 percent of the total amount of all such

24 loans; and
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1 ‘‘(C) after each of the fourth and fifth

2 years of such employment, 30 percent of the

3 total amount of all such loans.

4 ‘‘(2) CONSTRUCTION.—Nothing in this section

5 shall be construed to authorize the refunding of any

6 repayment of a loan made under this part or part

7 D.

8 ‘‘(3) INTEREST.—If a portion of a loan is re9 paid by the Secretary under this section for any

10 year, the proportionate amount of interest on such

11 loan which accrues for such year shall be repaid by

12 the Secretary.

13 ‘‘(4) SPECIAL RULE.—In the case where a stu14 dent borrower who is not participating in loan repay15 ment pursuant to this section returns to an institu16 tion of higher education after graduation from an in17 stitution of higher education for the purpose of ob18 taining a degree in early childhood education, the

19 Secretary is authorized to assume the obligation to

20 repay the total amount of loans made under this

21 part or part D incurred for a maximum of two aca22 demic years in returning to an institution of higher

23 education for the purpose of obtaining a degree in

24 early childhood education. Such loans shall only be

25 repaid for borrowers who qualify for loan repayment
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1 pursuant to the provisions of this section, and shall

2 be repaid in accordance with the provisions of para3 graph (1).

4 ‘‘(5) INELIGIBILITY OF NATIONAL SERVICE

5 AWARD RECIPIENTS.—No student borrower may, for

6 the same volunteer service, receive a benefit under

7 both this section and subtitle D of title I of the Na8 tional and Community Service Act of 1990 (42

9 U.S.C. 12601 et seq.).

10 ‘‘(d) REPAYMENT TO ELIGIBLE LENDERS.—The Sec11 retary shall pay to each eligible lender or holder for each

12 fiscal year an amount equal to the aggregate amount of

13 loans which are subject to repayment pursuant to this sec14 tion for such year.

15 ‘‘(e) APPLICATION FOR REPAYMENT.—

16 ‘‘(1) IN GENERAL.—Each eligible individual de17 siring loan repayment under this section shall sub18 mit a complete and accurate application to the Sec19 retary at such time, in such manner, and containing

20 such information as the Secretary may require.

21 ‘‘(2) CONDITIONS.—An eligible individual may

22 apply for loan repayment under this section after

23 completing each year of qualifying employment. The

24 borrower shall receive forbearance while engaged in
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1 qualifying employment unless the borrower is in

2 deferment while so engaged.

3 ‘‘(f ) EVALUATION.—

4 ‘‘(1) IN GENERAL.—The Secretary shall con5 duct, by grant or contract, an independent national

6 evaluation of the impact of the demonstration pro7 gram assisted under this section on the field of early

8 childhood education.

9 ‘‘(2) COMPETITIVE BASIS.—The grant or con10 tract described in subsection (a) shall be awarded on

11 a competitive basis.

12 ‘‘(3) CONTENTS.—The evaluation described in

13 this subsection shall—

14 ‘‘(A) determine the number of individuals

15 who were encouraged by the demonstration pro16 gram assisted under this section to pursue early

17 childhood education;

18 ‘‘(B) determine the number of individuals

19 who remain employed in a child care facility as

20 a result of participation in the program;

21 ‘‘(C) identify the barriers to the effective22 ness of the program;

23 ‘‘(D) assess the cost-effectiveness of the

24 program in improving the quality of—

25 ‘‘(i) early childhood education; and
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1 ‘‘(ii) child care services;

2 ‘‘(E) identify the reasons why participants

3 in the program have chosen to take part in the

4 program;

5 ‘‘(F) identify the number of individuals

6 participating in the program who received an

7 associate’s degree and the number of such indi8 viduals who received a bachelor’s degree; and

9 ‘‘(G) identify the number of years each in10 dividual participates in the program.

11 ‘‘(4) INTERIM AND FINAL EVALUATION RE12 PORTS.—The Secretary shall prepare and submit to

13 the President and the Congress such interim reports

14 regarding the evaluation described in this subsection

15 as the Secretary deems appropriate, and shall pre16 pare and so submit a final report regarding the eval17 uation by January 1, 2002.

18 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There

19 are authorized to be appropriated to carry out this section

20 $10,000,000 for fiscal year 1999, and such sums as may

21 be necessary for each of the 4 succeeding fiscal years.’’.

22 PART C—FEDERAL WORK-STUDY PROGRAMS

23 SEC. 435. AMENDMENTS TO PART C.

24 (a) EXTENSION OF AUTHORITY; DEFINITION.—
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1 (1) ELIGIBLE STUDENTS.—Section 441(a) (20

2 U.S.C. 2751(a)) is amended by inserting after ‘‘pro3 fessional students’’ the following: ‘‘, including stu4 dents participating in an internship or practicum, or

5 as a research assistant, as determined by the Sec6 retary,’’.

7 (2) EXTENSION OF AUTHORITY.—Section

8 441(b) is amended by striking ‘‘$800,000,000 for

9 fiscal year 1993’’ and inserting ‘‘$1,000,000,000 for

10 fiscal year 1999’’.

11 (3) DEFINITION OF COMMUNITY SERVICE.—

12 Section 441(c) is amended by striking ‘‘which are’’

13 and inserting ‘‘that are performed off-campus or on14 campus and that are’’.

15 (b) ALLOCATION OF FUNDS.—Section 442 (42

16 U.S.C. 2752) is amended—

17 (1) by striking subsection (b);

18 (2) in subsection (c)(1), by striking ‘‘three19 quarters of the remainder’’ and inserting ‘‘the re20 mainder’’;

21 (3) in subsection (c)(2)(A)(i), by striking ‘‘sub22 section (d)’’ and inserting ‘‘subsection (c)’’;

23 (4) in subsection (e)(1), by striking ‘‘subsection

24 (c)’’ and inserting ‘‘subsection (b)’’; and
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1 (5) by redesignating subsections (c), (d), (e),

2 and (f ) as subsections (b), (c), (d), and (e), respec3 tively.

4 (c) TUTORING AND LITERACY ACTIVITIES.—

5 Section 443 of the Higher Education Act of 1965 (42

6 U.S.C. 2753) is amended—

7 (1) in subsection (b)(2)—

8 (A) by striking ‘‘and’’ at the end of sub9 paragraph (A);

10 (B) by redesignating subparagraph (B) as

11 subparagraph (C); and

12 (C) by inserting after subparagraph (A)

13 the following new subparagraph:

14 ‘‘(B) in academic year 1999 and succeed15 ing academic years, an institution shall use at

16 least 2 percent of the total amount of funds

17 granted to such institution under this section

18 for such academic year in accordance with sub19 section (d); and’’;

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(d) TUTORING AND LITERACY ACTIVITIES.—

23 ‘‘(1) USE OF FUNDS.—In any academic year to

24 which subsection (b)(2)(B) applies, an institution

25 shall use the amount required to be used in accord-
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1 ance with this subsection to compensate (including

2 compensation for time spent in directly related train3 ing and travel) students—

4 ‘‘(A) employed as a reading tutor for chil5 dren who are in preschool through elementary

6 school; or

7 ‘‘(B) employed in family literacy projects.

8 ‘‘(2) PRIORITY FOR SCHOOLS.—An institution

9 shall—

10 ‘‘(A) give priority, in using such funds, to

11 the employment of students in the provision of

12 tutoring services in schools that—

13 ‘‘(i) are identified for school improve14 ment under section 1116(c) of the Elemen15 tary and Secondary Education Act of

16 1965; or

17 ‘‘(ii) are selected by a local edu18 cational agency under section 15104(a)(2)

19 of such Act; and

20 ‘‘(B) ensure that any student compensated

21 with such funds who is employed in a school se22 lected under section 15104(a)(2) of the Ele23 mentary and Secondary Education Act of 1965

24 is trained in the instructional practices based
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1 on reliable, replicable research on reading used

2 by the school pursuant to such section 15104.

3 ‘‘(3) FEDERAL SHARE.—The Federal share of

4 the compensation of work study students com5 pensated under this subsection may exceed 75 per6 cent.

7 ‘‘(4) WAIVER.—The Secretary may waive the

8 requirements of this subsection if the Secretary de9 termines that enforcing such requirements would

10 cause a hardship for students at the institution.

11 ‘‘(5) RETURN OF FUNDS.—Any institution that

12 does not use the amount required under this sub13 section, and that does not request and receive a

14 waiver from the Secretary under paragraph (4),

15 shall return to the Secretary, at such time as the

16 Secretary may require for reallocation under para17 graph (6), any balance of such amount that is not

18 used as so required.

19 ‘‘(6) REALLOCATION.—The Secretary shall

20 reallot any amounts returned pursuant to paragraph

21 (5) among institutions that used at least 4 percent

22 of the total amount of funds granted to such institu23 tion under this section to compensate students em24 ployed in tutoring and literacy activities in the pre25 ceding academic year. Such funds shall be reallotted
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1 among such institutions on the same basis as excess

2 eligible amounts are allocated to institutions pursu3 ant to section 442(c). Funds received by institutions

4 pursuant to this paragraph shall be used in the

5 same manner as amounts required to be used in ac6 cordance with this subsection.’’.

7 (d) GRANT REQUIREMENTS.—

8 (1) COMMUNITY SERVICE.—Section

9 443(b)(2)(A) (42 U.S.C. 2753(b)(2)(A)) is amend10 ed—

11 (A) by striking ‘‘in fiscal year 1994 and

12 succeeding fiscal years,’’; and

13 (B) by inserting ‘‘(including time spent in

14 travel or training, or both, directly related to

15 such community service)’’ after ‘‘community

16 service’’.

17 (2) USE OF FUNDS FOR INDEPENDENT

18 AND LESS-THAN-FULL-TIME STUDENTS.—Section

19 443(b)(3) (42 U.S.C. 2753(b)(3)) is amended to

20 read as follows:

21 ‘‘(3) provide that in the selection of students

22 for employment under such work-study program,

23 only students, who demonstrate financial need in ac24 cordance with part F of this title, and who meet the

25 requirements of section 484 will be assisted, except
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1 that if the institution’s grant under this part is di2 rectly or indirectly based in part on the financial

3 need demonstrated by students who are (A) attend4 ing the institution less than full time, or (B) inde5 pendent students, then grant funds shall be made

6 available to such less than full-time and independent

7 students;’’.

8 (3) AVAILABILITY OF EMPLOYMENT.—Section

9 443(b)(6) is amended by striking everything after

10 ‘‘in need thereof’’ and inserting a semicolon.

11 (4) ACADEMIC RELEVANCE.—Section 443(c)(4)

12 is amended by inserting before the semicolon at the

13 end the following: ‘‘, to the maximum extent prac14 ticable’’.

15 (e) FLEXIBLE USE OF FUNDS.—Section 445(b) (42

16 U.S.C. 2755(b)) is amended by adding at the end the fol17 lowing new paragraph:

18 ‘‘(3) An eligible institution may, with the permission

19 of a student, make payments to the student under this

20 part by crediting the student’s account at the institution

21 or by making a direct deposit to the student’s account at

22 a depository institution. An eligible institution may only

23 credit the student’s account at the institution for (A) tui24 tion and fees, (B) in the case of institutionally owned
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1 housing, room and board, and (C) other institutionally

2 provided goods and services.’’.

3 (f ) JOB LOCATION AND DEVELOPMENT PRO4 GRAMS.—Section 446 (42 U.S.C. 2756) is amended—

5 (1) in subsection (a)(1)—

6 (A) by striking ‘‘$50,000’’ and inserting

7 ‘‘$60,000’’; and

8 (B) by striking ‘‘community service jobs,

9 for currently enrolled students’’ and inserting

10 ‘‘community service jobs and cooperative edu11 cation jobs, for currently enrolled students, in12 cluding students participating in work-study

13 programs under this part’’; and

14 (2) in subsection (b)—

15 (A) by redesignating paragraphs (4)

16 through (6) as paragraphs (5) through (7); and

17 (B) by inserting after paragraph (3) the

18 following new paragraph:

19 ‘‘(4) provide that the institution will notify the

20 Secretary if the institution will use funds under this

21 section to develop cooperative education jobs and will

22 provide assurances that—

23 ‘‘(A) the funds provided under this para24 graph will supplement and not supplant any co-
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1 operative education funds available to the insti2 tution;

3 ‘‘(B) in the case of 2-year programs, funds

4 will be used to develop and expand cooperative

5 education, jobs for associate degree or certifi6 cate students only;

7 ‘‘(C) the work portion of a cooperative edu8 cation job developed or expanded under this

9 paragraph will be related to a student’s aca10 demic program; and

11 ‘‘(D) the institution will furnish the Sec12 retary a report on cooperative education jobs

13 expanded and developed under this paragraph,

14 including—

15 ‘‘(i) how the funds were used;

16 ‘‘(ii) a list of employers and whether

17 the employer is a for-profit or not-for-prof18 it entity; and

19 ‘‘(iii) the employers’ role in the coop20 erative education job.’’.

21 (g) WORK COLLEGES EXTENSION OF AUTHORITY.—

22 Section 448(f ) (42 U.S.C. 2756b(f )) is amended by strik23 ing ‘‘1993’’ and inserting ‘‘1999’’.
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1 PART D—WILLIAM D. FORD FEDERAL DIRECT

2 LOAN PROGRAM

3 SEC. 436. SELECTION OF INSTITUTIONS.

4 (a) GENERAL AUTHORITY.—Section 453(a) (20

5 U.S.C. 1087c(a)) is amended—

6 (1) by striking ‘‘PHASE-IN’’ and everything that

7 follows through ‘‘GENERAL AUTHORITY.—’’ and in8 serting ‘‘GENERAL AUTHORITY.—’’; and

9 (2) by striking paragraphs (2), (3), and (4).

10 (b) SELECTION CRITERIA.—Section 453(b)(2) is

11 amended by striking ‘‘prescribe,’’ and everything that fol12 lows through the end of subparagraph (B) and inserting

13 ‘‘prescribe.’’.

14 (c) ORIGINATION.—Section 453(c) is amended—

15 (1) in paragraph (2)—

16 (A) in the heading, by striking ‘‘TRANSI17 TION SELECTION CRITERIA’’ and inserting ‘‘SE18 LECTION CRITERIA’’±±;

19 (B) by striking ‘‘For academic year 1994–

20 1995, the Secretary’’ and inserting ‘‘The Sec21 retary’’;

22 (C) by striking subparagraph (A); and

23 (D) in subparagraph (E), by striking ev24 erything after ‘‘deficiencies’’ and inserting a

25 semicolon; and
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1 (E) by redesignating subparagraphs (B)

2 through (H) as subparagraphs (A) through (G);

3 and

4 (2) in paragraph (3)—

5 (A) in the heading, by striking ‘‘AFTER

6 TRANSITION’’; and

7 (B) by striking ‘‘For academic year 1995–

8 1996 and subsequent academic years, the Sec9 retary’’ and inserting ‘‘The Secretary’’.

10 SEC. 437. TERMS AND CONDITIONS.

11 (a) INTEREST RATES.—

12 (1) AMENDMENT.—Section 455(b) (20 U.S.C.

13 1087e(b)) is amended to read as follows:

14 ‘‘(b) INTEREST RATE.—

15 ‘‘(1) RATES FOR FDSL AND FDUSL.—For Fed16 eral Direct Stafford Loans and Federal Direct Un17 subsidized Stafford Loans for which the first dis18 bursement is made on or after July 1, 1998, the ap19 plicable rate of interest shall, during any 12-month

20 period beginning on July 1 and ending on June 30,

21 be determined on the preceding June 1 and be equal

22 to—

23 ‘‘(A) the bond equivalent rate of 91-day

24 Treasury bills auctioned at the final auction

25 held prior to such June 1; plus
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1 ‘‘(B) 2.3 percent,

2 except that such rate shall not exceed 8.25 percent.

3 ‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—

4 With respect to any Federal Direct Stafford Loan or

5 Federal Direct Unsubsidized Stafford Loan for

6 which the first disbursement is made on or after

7 July 1, 1995, the applicable rate of interest for in8 terest which accrues—

9 ‘‘(A) prior to the beginning of the repay10 ment period of the loan; or

11 ‘‘(B) during the period in which principal

12 need not be paid (whether or not such principal

13 is in fact paid) by reason of a provision de14 scribed in section 428(b)(1)(M) or

15 427(a)(2)(C),

16 shall be determined under paragraph (1) by sub17 stituting ‘1.7 percent’ for ‘2.3 percent’.

18 ‘‘(3) PLUS LOANS.—With respect to Federal

19 Direct PLUS Loan for which the first disbursement

20 is made on or after July 1, 1998, the applicable rate

21 of interest shall be determined under paragraph

22 (1)—

23 ‘‘(A) by substituting ‘3.1 percent’ for ‘2.3

24 percent’; and
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1 ‘‘(B) by substituting ‘9.0 percent’ for ‘8.25

2 percent’.

3 ‘‘(4) CONSOLIDATION LOANS.—Any Federal Di4 rect Consolidation loan for which the application is

5 received on or after October 1, 1998, shall bear in6 terest at an annual rate on the unpaid principal bal7 ance of the loan that is equal to the lesser of—

8 ‘‘(i) the weighted average of the interest

9 rates on the loans consolidated, rounded to the

10 nearest higher one-eighth of one percent; or

11 ‘‘(ii) 8.25 percent.

12 ‘‘(5) REPAYMENT INCENTIVES.—Notwithstand13 ing any other provision of this part, the Secretary is

14 authorized to prescribe in regulation such reductions

15 in the interest rate paid by a borrower of a loan

16 made under this part as the Secretary determines

17 appropriate to encourage on-time repayment. Such

18 reductions may be offered only if the Secretary de19 termines they are both cost neutral and in the best

20 financial interest of the Federal Government. Any

21 increase in subsidy costs resulting from such reduc22 tions must be completely offset by corresponding

23 savings in funds available for the Direct Loan Pro24 gram in that fiscal year from section 458 and other

25 administrative accounts.
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1 ‘‘(6) PUBLICATION.—The Secretary shall deter2 mine the applicable rates of interest under this sub3 section after consultation with the Secretary of the

4 Treasury and shall publish such rate in the Federal

5 Register as soon as practicable after the date of de6 termination.’’.

7 (2) EFFECTIVE DATE.—Except as otherwise

8 provided therein, the amendments made by this sec9 tion shall apply with respect to any loan made under

10 part D of title IV of the Higher Education Act of

11 1965 for which the first disbursement is made on or

12 after July 1, 1998.

13 (b) CONSOLIDATION LOANS.—The first sentence of

14 section 455(g) is amended by striking everything after

15 ‘‘section 428C(a)(4)’’ and inserting a period.

16 SEC. 438. CONTRACTS.

17 Section 456(b) (20 U.S.C. 1087f(b)) is amended—

18 (1) by inserting ‘‘and’’ after the semicolon at

19 the end of paragraph (3);

20 (2) by striking paragraph (4); and

21 (3) by redesignating paragraph (5) as para22 graph (4).

23 SEC. 439. FUNDS FOR ADMINISTRATIVE EXPENSES.

24 Section 458 (20 U.S.C. 1087h) is amended—
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1 (1) in subsection (a)(1), by striking subpara2 graph (B) and everything that follows and inserting

3 the following:

4 ‘‘(B) account maintenance fees payable to

5 guaranty agencies under part B and calculated

6 in accordance with paragraph (2),

7 not to exceed (from such funds not otherwise appro8 priated) $626,000,000 in fiscal year 1999,

9 $726,000,000 in fiscal year 2000, $770,000,000 in

10 fiscal year 2001, $780,000,000 in fiscal year 2002,

11 and $795,000,000 in fiscal year 2003. Account

12 maintenance fees under subparagraph (B) of this

13 paragraph shall be paid quarterly and deposited in

14 the Operating Fund established under 422B. The

15 Secretary may carry over funds available under this

16 section to a subsequent fiscal year.’’;

17 (2) by striking paragraph (2) of subsection (a)

18 and inserting the following:

19 ‘‘(2) CALCULATION BASIS.—Account mainte20 nance fees payable to guaranty agencies under para21 graph (1)(B) shall be calculated for fiscal year 1999

22 and fiscal year 2000, on the basis of 0.12 percent

23 of the original principal amount of outstanding loans

24 on which insurance was issued under part B, and for

25 fiscal years 2001 and succeeding fiscal years, shall
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1 be calculated on the basis of 0.10 percent of the

2 original principal amount of outstanding loans on

3 which insurance was issued under part B.’’; and

4 (3) by striking subsection (d).

5 SEC. 440. AUTHORITY TO SELL LOANS.

6 Part D of title IV (20 U.S.C. 1087a et seq.) is

7 amended by adding at the end the following new section:

8 ‘‘SEC. 459. AUTHORITY TO SELL LOANS.

9 ‘‘The Secretary, in consultation with the Secretary of

10 the Treasury, is authorized to sell loans made under this

11 part on such terms as the Secretary determines are in the

12 best interest of the United States, except that any such

13 sale shall not result in any cost to the Federal Govern14 ment. Notwithstanding any other provision of law, the pro15 ceeds of any such sale may be used by the Secretary to

16 offer reductions in the interest rate paid by a borrower

17 of a loan made under this part as the Secretary deter18 mines appropriate to encourage on-time repayment. Such

19 reductions may be offered only if the Secretary determines

20 they are in the best financial interests of the Federal Gov21 ernment.’’.
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1 SEC. 441. CANCELLATION OF LOANS FOR CERTAIN PUBLIC

2 SERVICE.

3 Part D of title IV is amended by inserting after sec4 tion 459, as added by section 440, the following new sec5 tion:

6 ‘‘SEC. 459A. CANCELLATION OF LOANS FOR CERTAIN PUB7 LIC SERVICE.

8 ‘‘(a) CANCELLATION OF PERCENTAGE OF DEBT

9 BASED ON YEARS OF QUALIFYING SERVICE.—

10 ‘‘(1) FUNCTIONS OF SECRETARY.—The percent

11 specified in paragraph (4) of the total amount of

12 any qualifying loan shall be canceled for each com13 plete year of service by the borrower described in

14 paragraph (3).

15 ‘‘(2) QUALIFYING LOANS.—

16 ‘‘(A) IN GENERAL.—For purposes of this

17 subsection, a loan is a qualifying loan if—

18 ‘‘(i) the loan was a Federal Direct

19 Stafford Loan made on or after the date of

20 enactment of the Higher Education

21 Amendments of 1998 to a borrower who,

22 on the date of entering into the note or

23 other written evidence of the loan, had no

24 outstanding balance of principal or interest

25 on any loan made before such date; and
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1 ‘‘(ii) the loan was obtained to cover

2 the cost of instruction for an academic

3 year after the first and second year of un4 dergraduate education.

5 ‘‘(B) LIMITATION.—The Secretary may

6 not repay loans described in subparagraph (A)

7 to cover the costs of instruction for more than

8 two academic years, or three academic years in

9 the case of a program of instruction normally

10 requiring five years.

11 ‘‘(C) TREATMENT OF CONSOLIDATION

12 LOANS.—A Federal Direct Consolidation Loan

13 may be a qualifying loan for the purposes of

14 this subsection only to the extent that such loan

15 was used to repay a loan or loans that meet the

16 requirements of subparagraphs (A) and (B), as

17 determined in accordance with regulations pre18 scribed by the Secretary.

19 ‘‘(3) QUALIFYING SERVICE.—A loan shall be

20 cancelled under paragraph (1) for service by the bor21 rower as a full-time teacher for each complete aca22 demic year of service, after completion of the second

23 academic year of service, in a public or other non24 profit private elementary or secondary school—
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1 ‘‘(A) which is in the school district of a

2 local educational agency which is eligible in

3 such year for assistance pursuant to title I of

4 the Elementary and Secondary Education Act

5 of 1965; and

6 ‘‘(B) which for the purpose of this para7 graph and for that year has been determined by

8 the State educational agency of the State in

9 which the school is located to be a school in

10 which the enrollment of children counted under

11 section 1124(c) of the Elementary and Second12 ary Education Act of 1965 exceeds 30 percent

13 of the total enrollment of that school.

14 ‘‘(4) PERCENTAGE OF CANCELLATION.—(A)

15 The percent of a loan which shall be canceled under

16 paragraph (1) of this subsection is at the rate of—

17 ‘‘(i) 30 percent for the first or second com18 plete academic year of qualifying service as de19 scribed in paragraph (3) (after completion of

20 two years of service); and

21 ‘‘(ii) 40 percent for the third complete year

22 of such qualifying service.

23 ‘‘(B) The total amount that may be canceled

24 under this subsection for any borrower shall not ex25 ceed $17,750.
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1 ‘‘(C) If a portion of a loan is canceled under

2 this subsection for any year, the entire amount of in3 terest on such loan which accrues for such year shall

4 be canceled.

5 ‘‘(D) Nothing in this section shall be construed

6 to authorize refunding of any repayment of a loan.

7 ‘‘(5) LIMITATION ON TEACHER ELIGIBILITY.—

8 ‘‘(A) SECONDARY SCHOOL TEACHERS.—A

9 borrower may not receive assistance under this

10 subsection by virtue of teaching in a secondary

11 school unless such borrower majored in the sub12 ject area in which they are teaching.

13 ‘‘(B) ELEMENTARY SCHOOL TEACHERS.—

14 A borrower may not receive assistance under

15 this subsection by virtue of teaching in a ele16 mentary school unless such borrower dem17 onstrates, in accordance with State teacher cer18 tification or licensing requirements, subject

19 matter knowledge and teaching skills in read20 ing, writing, mathematics, and other subjects

21 taught in elementary schools.

22 ‘‘(6) DEFINITION.—For the purpose of this sec23 tion, the term ‘year’ where applied to service as a

24 teacher means an academic year as defined by the

25 Secretary.
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1 ‘‘(7) PREVENTION OF DOUBLE BENEFITS.—No

2 borrower may, for the same volunteer service, receive

3 a benefit under both this section and subtitle D of

4 title I of the National and Community Service Act

5 of 1990 (42 U.S.C. 12571 et seq.).

6 ‘‘(b) SPECIAL RULES.—

7 ‘‘(1) LIST.—If the list of schools in which a

8 teacher may perform service pursuant to subsection

9 (a)(3) is not available before May 1 of any year, the

10 Secretary may use the list for the year preceding the

11 year for which the determination is made to make

12 such service determination.

13 ‘‘(2) CONTINUING ELIGIBILITY.—Any teacher

14 who performs service in a school which—

15 ‘‘(A) meets the requirements of subsection

16 (a)(3) in any year during such service; and

17 ‘‘(B) in a subsequent year fails to meet the

18 requirements of such subsection,

19 may continue to teach in such school and shall be

20 eligible for loan cancellation pursuant to subsection

21 (a)(1) with respect to such subsequent years.’’.

22 PART E—FEDERAL PERKINS LOANS

23 SEC. 445. AMENDMENTS TO PART E.

24 (a) EXTENSION OF AUTHORITY.—Section 461(b) (20

25 U.S.C. 1087aa(b)) is amended—
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1 (1) in paragraph (1), by striking ‘‘1993’’ and

2 inserting ‘‘1999’’; and

3 (2) in paragraph (2), by striking ‘‘1997’’ each

4 place it appears and inserting ‘‘2003’’.

5 (b) ALLOCATION OF FUNDS.—Section 462 (20

6 U.S.C. 1087bb) is amended—

7 (1) by striking subsection (b);

8 (2) in subsection (c)(1), by striking ‘‘three9 quarters of the remainder’’ and inserting ‘‘the re10 mainder’’;

11 (3) in subsection (c)(2), by striking ‘‘subsection

12 (g)’’ and inserting ‘‘subsection (f )’’;

13 (4) in subsection (c)(3)—

14 (A) by striking ‘‘subsection (d)’’ and in15 serting ‘‘subsection (c)’’;

16 (B) by striking ‘‘subsection (f )’’ and in17 serting ‘‘subsection (e)’’; and

18 (C) by striking ‘‘subsection (g)’’ and in19 serting ‘‘subsection (f )’’;

20 (5) in subsection (f )(1), by striking ‘‘subsection

21 (g)’’ and inserting ‘‘subsection (f )’’;

22 (6) in subsection (j)(2)—

23 (A) by striking ‘‘subsection (c)’’ and in24 serting ‘‘subsection (b)’’; and
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1 (B) by striking ‘‘subsection (c) of section

2 462’’ and inserting ‘‘subsection (b)’’; and

3 (7) by redesignating subsections (c) through (j)

4 as subsections (b) through (i), respectively.

5 (c) DEFAULT REDUCTION PENALTIES.—Section

6 462(e)(2)(A) (as redesignated by subsection (b)(7) of this

7 section) is amended by inserting before the semicolon at

8 the end the following: ‘‘, except that a plan shall not be

9 required with respect to any such institution that has a

10 default rate of less than 20 percent and has less than 100

11 students who have loans under this part in any academic

12 year’’.

13 (d) DEFINITIONS FOR DEFAULT RATE CALCULA14 TIONS.—Section 462(g) (as redesignated by subsection

15 (b)(7) of this section) is amended by adding at the end

16 the following new paragraph:

17 ‘‘(5) For the purpose of this subsection, the term

18 ‘satisfactory arrangements to resume payment’ includes—

19 ‘‘(A) receipt of voluntary monthly payments for

20 three consecutive months after the time periods

21 specified in paragraph (4);

22 ‘‘(B) receipt of voluntary payments sufficient to

23 bring the loan current prior to the calculation being

24 made for any award year under paragraph (3);
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1 ‘‘(C) obtaining any deferment, postponement,

2 rehabilitation, forbearance, or cancellation of the

3 loan after the time periods specified in paragraph

4 (4), but prior to the calculation being made for any

5 award year under paragraph (3);

6 ‘‘(D) receipt of the full amount due on the loan

7 after the time periods specified in paragraph (4),

8 but prior to the calculation being made for any

9 award year under paragraph (3); or

10 ‘‘(E) any other arrangements to resume pay11 ment which the Secretary determines to be satisfac12 tory.’’.

13 (e) REPORTS TO CREDIT BUREAUS OF PAYMENT RE14 SUMPTIONS.—Section 463(c) (20 U.S.C. 1087cc(c)) is

15 amended by adding at the end the following new para16 graph:

17 ‘‘(5) Each institution of higher education shall notify

18 the appropriate credit bureau organizations whenever a

19 borrower of a loan that is made and held by the institution

20 and that is in default makes 12 consecutive monthly pay21 ments on such loan, for the purpose of encouraging such

22 organizations to update the status of information main23 tained with respect to that borrower.’’.
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1 (f ) INCENTIVE REPAYMENT PROGRAMS.—Section

2 463 is amended by adding at the end the following new

3 subsection:

4 ‘‘(f ) INCENTIVE REPAYMENT PROGRAMS.—

5 ‘‘(1) PROGRAM AUTHORIZED.—Any institution

6 of higher education participating in the program

7 under this part may establish, with the approval of

8 the Secretary, an incentive repayment program de9 signed to reduce defaults on loans under this part

10 and to assist in replenishing the student loan fund

11 established under this part.

12 ‘‘(2) CONTENTS OF PROGRAM.—An incentive

13 repayment program under this part may contain

14 provisions that—

15 ‘‘(A) offer a reduction in the interest rate

16 on a loan on which the borrower has made 48

17 consecutive monthly payments, but in no event

18 may the interest rate be reduced by more than

19 one percent;

20 ‘‘(B) provide for a discount on the balance

21 owed on a loan on which the borrower pays the

22 principal and interest in full prior to the end of

23 the applicable repayment period, but in no

24 event shall such discount exceed 5 percent of
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1 the unpaid principal balance due on the loan at

2 the time the early repayment is made; and

3 ‘‘(C) include such other incentive repay4 ment options as the institution determines, with

5 the approval of the Secretary, will carry out the

6 objectives of this subsection.

7 ‘‘(3) NO NET COST TO THE GOVERNMENT.—No

8 incentive option contained in a program authorized

9 by this subsection may be charged to the Federal

10 Government.’’.

11 (g) TERMS OF LOANS.—

12 (1) AGGREGATE AMOUNT.—Section

13 464(a)(2)(B) (20 U.S.C. 1087dd(a)(2)(B)) is

14 amended by striking ‘‘the aggregate of the loans for

15 all years’’ and inserting ‘‘the aggregate unpaid prin16 cipal amount for all loans’’.

17 (2) ALLOCATION TO LESS-THAN-FULL-TIME

18 STUDENTS.—Section 464(b) is amended—

19 (A) by striking ‘‘(1)’’; and

20 (B) by striking paragraph (2).

21 (3) QUALIFICATION FOR DEFERMENTS.—Sec22 tion 464(c)(2) is amended by adding at the end the

23 following new subparagraph:

24 ‘‘(C) An individual with an outstanding loan balance

25 who meets the eligibility criteria for a deferment described
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1 in subparagraph (A) as in effect on the date of enactment

2 of this subparagraph shall be eligible for deferment under

3 this paragraph notwithstanding any contrary provision of

4 the promissory note under which the loan or loans were

5 made, and notwithstanding any amendment (or effective

6 date provision relating to any amendment) to this section

7 made prior to the date of such deferment.’’.

8 (4) CLERICAL AMENDMENT.—The matter fol9 lowing clause (iv) of section 464(c)(2)(A) is amend10 ed by striking ‘‘subparagraph (B)’’ and inserting

11 ‘‘subparagraph (A) of paragraph (1)’’.

12 (h) REHABILITATION AND DISCHARGE OF LOANS.—

13 Section 464 is further amended by adding at the end the

14 following new subsections:

15 ‘‘(g) REHABILITATION OF LOANS.—(1)(A) If the bor16 rower of a loan made under this part who has defaulted

17 on the loan makes 12 on-time, consecutive, monthly pay18 ments of amounts owed on the loan, the loan shall be con19 sidered rehabilitated, and the institution that made the

20 loan (or the Secretary, in the case of a loan held by the

21 Secretary) shall instruct any credit reporting organization

22 to which the default was reported to remove the default

23 from the borrower’s credit history.

24 ‘‘(B) As long as the borrower continues to make

25 scheduled repayments on a loan rehabilitated under this
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1 paragraph, the rehabilitated loan shall be subject to the

2 same terms and conditions, and qualify for the same bene3 fits and privileges, as other loans made under this part.

4 ‘‘(C) The borrower of a rehabilitated loan shall not

5 be precluded by section 484 from receiving additional

6 grant, loan, or work assistance under this title (for which

7 he or she is otherwise eligible) on the basis of defaulting

8 on the loan prior to such rehabilitation.

9 ‘‘(D) A borrower may obtain the benefit of this para10 graph with respect to rehabilitating the loan only once.

11 ‘‘(2) If the borrower of loan made under this part

12 who has defaulted on that loan makes 6 on-time, consecu13 tive, monthly payments of amounts owed on such loan, the

14 borrower’s eligibility for grant, loan, or work assistance

15 under this title shall be restored. A borrower may obtain

16 the benefit of this paragraph with respect to restored eligi17 bility only once.

18 ‘‘(h) DISCHARGE.—

19 ‘‘(1) IN GENERAL.—If a student borrower who

20 received a loan made under this part on or after

21 January 1, 1986, is unable to complete the program

22 in which such student is enrolled due to the closure

23 of the institution, then the Secretary shall discharge

24 the borrower’s liability on the loan (including inter25 est and collection fees) by repaying the amount owed
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1 on the loan and shall subsequently pursue any claim

2 available to such borrower against the institution

3 and its affiliates and principals, or settle the loan

4 obligation.

5 ‘‘(2) ASSIGNMENT.—A borrower whose loan has

6 been discharged pursuant to this subsection shall be

7 deemed to have assigned to the United States the

8 right to a loan refund up to the amount discharged

9 against the institution and its affiliates and prin10 cipals.

11 ‘‘(3) ELIGIBILITY FOR ADDITIONAL ASSIST12 ANCE.—The period of a student’s assistance at an

13 institution at which the student was unable to com14 plete a course of study due to the closing of the in15 stitution shall not be considered for purposes of cal16 culating the student’s period of eligibility for addi17 tional assistance under this title.

18 ‘‘(4) SPECIAL RULE.—A borrower whose loan

19 has been discharged pursuant to this subsection

20 shall not be precluded, because of that discharge,

21 from receiving additional grant, loan, or work assist22 ance under this title for which the borrower would

23 be otherwise eligible (but for the default on the dis24 charged loan). The amount discharged under this
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1 subsection shall be treated the same as loans under

2 section 465(a)(5).

3 ‘‘(5) REPORTING.—The Secretary or institu4 tion, as the case may be, shall report to credit bu5 reaus with respect to loans that have been dis6 charged pursuant to this subsection.’’.

7 (i) CANCELLATION.—Section 465 (20 U.S.C. 1087ee)

8 is amended—

9 (1) in subsection (a)—

10 (A) in paragraph (2)(C), by striking ‘‘sec11 tion 676(b)(9)’’ and inserting ‘‘section

12 635(a)(10)’’;

13 (B) by striking subparagraph (H) of para14 graph (2) and inserting the following:

15 ‘‘(H) as a full-time nurse or medical technician

16 providing health care services;’’;

17 (C) by striking the period at the end of

18 subparagraph (I) of such paragraph and insert19 ing a semicolon;

20 (D) by adding at the end of such para21 graph the following new subparagraphs:

22 ‘‘(J) as a member of the Commissioned Corps

23 of the Public Health Service of the United States;

24 or
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1 ‘‘(K) as a non-physician mental health profes2 sional providing health care services in a health pro3 fessional shortage area designated under section 332

4 of the Public Health Service Act.’’;

5 (E) in the last sentence of paragraph (2),

6 by striking ‘‘section 602(a)(1)’’ and inserting

7 ‘‘section 602(3)’’;

8 (F) in paragraph (3)(A)(i), by striking

9 ‘‘(H), or (I)’’ and inserting ‘‘(H), (I), (J), or

10 (K)’’; and

11 (G) by adding at the end the following new

12 paragraph:

13 ‘‘(7) An individual with an outstanding loan obliga14 tion who performs service of any type that is described

15 in paragraph (2) as in effect on the date of enactment

16 of this paragraph shall be eligible for cancellation under

17 this section for such service notwithstanding any contrary

18 provision of the promissory note under which the loan or

19 loans were made, and notwithstanding any amendment (or

20 effective date provision relating to any amendment) to this

21 section made prior to the date of such service.’’; and

22 (2) in subsection (b), by adding at the end the

23 following new sentence: ‘‘To the extent feasible, the

24 Secretary shall pay the amounts for which any insti25 tution qualifies under this subsection no later than
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1 three months after the institution files an institu2 tional application for campus-based funds.’’.

3 (j) DISTRIBUTION OF ASSETS.—Section 466 (20

4 U.S.C. 1087ff) is amended—

5 (1) by striking ‘‘1996’’ each place it appears

6 and inserting ‘‘2003’’; and

7 (2) by striking ‘‘1997’’ each place it appears

8 and inserting ‘‘2004’’.

9 (k) COLLECTION OF DEFAULTED LOANS.—

10 (1) REPEAL.—Subsection (c) of section 467 (20

11 U.S.C. 1087gg(c)) is repealed.

12 (2) DEPOSIT.—Any funds in the Perkins Re13 volving Loan Fund on the date of enactment of this

14 Act shall be deposited in the general fund of the

15 Treasury.

16 (l) STATUS CONFIRMATION REPORTS.—Section 468

17 (20 U.S.C. 1087hh) is amended—

18 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

19 ‘‘In carrying out’’; and

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(b) STUDENT STATUS CONFIRMATION REPORTS.—

23 The Secretary shall ensure that borrowers under this part

24 are included in the student status confirmation report re-
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1 quired by the Secretary in the same manner as borrowers

2 under parts B and D of this title.’’.

3 PART F—NEED ANALYSIS

4 SEC. 446. COST OF ATTENDANCE.

5 Section 472 (20 U.S.C. 1087ll) is amended—

6 (1) in paragraph (2), by inserting after ‘‘per7 sonal expenses’’ the following: ‘‘, including a reason8 able allowance for the rental or purchase of a per9 sonal computer,’’; and

10 (2) in paragraph (10), by striking everything

11 after ‘‘determining costs’’ and inserting a semicolon.

12 SEC. 447. DATA ELEMENTS.

13 Section 474(b)(3) (20 U.S.C. 1087nn(b)(3)) is

14 amended by inserting ‘‘, excluding the student’s parents,’’

15 after ‘‘family of the student’’.

16 SEC. 448. FAMILY CONTRIBUTION FOR DEPENDENT STU17 DENTS.

18 (a) PARENTS’ CONTRIBUTION FROM ADJUSTED

19 AVAILABLE INCOME.—Section 475(b)(3) (20 U.S.C.

20 1087oo(b)(3)) is amended by inserting ‘‘, excluding the

21 student’s parents,’’ after ‘‘number of the family mem22 bers’’.

23 (b) FAMILY CONTRIBUTION FROM ASSETS.—Section

24 475 is amended—
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1 (1) in subsection (b)(1)(B), by striking ‘‘par2 ents’ contribution’’ and inserting ‘‘family contribu3 tion’’;

4 (2) in the heading of subsection (d), by striking

5 ‘‘PARENTS’ CONTRIBUTION’’ and inserting ‘‘FAMILY

6 CONTRIBUTION’’;

7 (3) in subsection (d)(1)—

8 (A) by striking ‘‘parents’ contribution’’

9 and inserting ‘‘family contribution’’; and

10 (B) by striking ‘‘parental net worth’’ in

11 subparagraph (A) and inserting ‘‘family net

12 worth’’;

13 (4) in subsection (d)(2)—

14 (A) by striking ‘‘PARENTAL’’ in the head15 ing and inserting ‘‘FAMILY’’;

16 (B) by striking ‘‘parental net worth’’ and

17 inserting ‘‘family net worth’’; and

18 (C) by inserting ‘‘, for both the parents

19 and the dependent student’’ after ‘‘by adding’’;

20 (5) by striking subsection (h); and

21 (6) by redesignating subsection (i) as subsection

22 (h).

23 (c) STUDENT CONTRIBUTION FROM AVAILABLE IN24 COME.—Section 475(g) is amended—

25 (1) in paragraph (2)—
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1 (A) in subparagraph (D), by striking

2 ‘‘$1,750; and’’ and inserting ‘‘$3,000, or a suc3 cessor amount prescribed by the Secretary

4 under section 478;’’;

5 (B) by striking the period at the end of

6 subparagraph (E) and inserting ‘‘; and’’; and

7 (C) by inserting after subparagraph (E)

8 the following new subparagraph:

9 ‘‘(F) an allowance for parents’ negative

10 available income, determined in accordance with

11 paragraph (6).’’; and

12 (2) by adding at the end the following new

13 paragraph:

14 ‘‘(6) ALLOWANCE FOR PARENTS’ NEGATIVE AD15 JUSTED AVAILABLE INCOME.—The allowance for

16 parents’ negative adjusted available income is the

17 amount, if any, by which the sum of the amounts

18 deducted under subparagraphs (A) through (F) of

19 paragraph (2) exceeds the sum of the parents’ total

20 income (as defined in section 480) and the family

21 contribution from assets (as determined in accord22 ance with subsection (c).’’.

23 (e) ADJUSTMENTS TO STUDENTS CONTRIBUTION

24 FOR ENROLLMENT PERIODS OTHER THAN NINE
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1 MONTHS.—Section 475 is amended by adding at the end

2 the following new subsection:

3 ‘‘(i) ADJUSTMENTS TO STUDENTS CONTRIBUTION

4 FOR ENROLLMENT PERIODS OF LESS THAN NINE

5 MONTHS.—For periods of enrollment of less than nine

6 months, the student’s contribution from adjusted available

7 income (as determined under subsection (g)) is deter8 mined, for purposes other than subpart 2 of part A, by

9 dividing amount determined under such subsection by

10 nine, and multiplying the result by the number of months

11 in the period of enrollment.’’.

12 SEC. 449. FAMILY CONTRIBUTION FOR INDEPENDENT STU13 DENTS WITHOUT DEPENDENTS OTHER THAN

14 A SPOUSE.

15 (a) ADJUSTMENTS FOR ENROLLMENT PERIODS

16 OTHER THAN NINE MONTHS.—Section 476(a) (20

17 U.S.C. 1087pp(a)) is amended—

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

19 (1)(B);

20 (2) by inserting ‘‘and’’ after the semicolon at

21 the end of paragraph (2); and

22 (3) by inserting after paragraph (2) the follow23 ing new paragraph:
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1 ‘‘(3) 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 (2) by nine; and

6 ‘‘(B) multiplying the result by the number

7 of months in the period of enrollment;’’.

8 (b) CONTRIBUTION FROM AVAILABLE INCOME.—Sec9 tion 476(b)(1)(A)(iv) is amended—

10 (1) by striking ‘‘allowance of—’’ and inserting

11 ‘‘allowance of the following amount (or a successor

12 amount prescribed by the Secretary under section

13 478)—’’;

14 (2) by striking ‘‘$3,000’’ each place it appears

15 in subclauses (I) and (II) and inserting ‘‘$5,500’’;

16 and

17 (3) by striking ‘‘$6,000’’ in subclause (III) and

18 inserting ‘‘$8,500’’.

19 SEC. 450. FAMILY CONTRIBUTION FOR INDEPENDENT STU20 DENTS WITH DEPENDENTS OTHER THAN A

21 SPOUSE.

22 Section 477(a) (20 U.S.C. 1087qq(a)) is amended—

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

24 (2);
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1 (2) by inserting ‘‘and’’ after the semicolon at

2 the end of paragraph (3); and

3 (3) by inserting after paragraph (3) the follow4 ing new paragraph:

5 ‘‘(4) for periods of enrollment of other than 9

6 months, for purposes other than subpart 2 of part

7 A—

8 ‘‘(A) dividing the quotient resulting under

9 paragraph (3) by nine; and

10 ‘‘(B) multiplying the result by the number

11 of months in the period of enrollment;’’.

12 SEC. 451. REGULATIONS; UPDATED TABLES AND AMOUNTS.

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

14 (1) by striking ‘‘For each academic year’’ and

15 inserting the following:

16 ‘‘(1) REVISED TABLES.—For each academic

17 year’’; and

18 (2) by adding at the end the following new

19 paragraph:

20 ‘‘(2) REVISED AMOUNTS.—For each academic

21 year after academic year 1999–2000, the Secretary

22 shall publish in the Federal Register revised income

23 protection allowances for the purpose of sections

24 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised al25 lowances shall be developed by increasing each of the
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1 dollar amounts contained in such section by a per2 centage equal to the estimated percentage increase

3 in the Consumer Price Index (as determined by the

4 Secretary) between December 1998 and the Decem5 ber next preceding the beginning of such academic

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

7 SEC. 452. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAM8 ILY CONTRIBUTION.

9 Section 479 is amended—

10 (1) in subsection (b)(3)—

11 (A) in the matter preceding subparagraph

12 (A), by striking ‘‘this paragraph’’ and inserting

13 ‘‘this subsection, or subsection (c), as the case

14 may be,’’;

15 (B) in subparagraph (A), by striking ‘‘or’’

16 at the end thereof;

17 (C) by redesignating subparagraph (B) as

18 subparagraph (C); and

19 (D) by inserting after subparagraph (A)

20 the following new subparagraph:

21 ‘‘(B) a form 1040 (including any prepared

22 or electronic version of such form) required

23 pursuant to the Internal Revenue Code of 1986,

24 except that such form shall be considered a

25 qualifying form only if the student or family
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1 files such form in order to take a tax credit

2 under section 25A of the Internal Revenue

3 Code of 1986, and would otherwise be eligible

4 to file a form described in subparagraph(A);

5 or’’;

6 (2) in subsection (c)—

7 (A) by amending paragraph (1)(A) to read

8 as follows:

9 ‘‘(A) the student’s parents file, or are eligi10 ble to file, a form described in subsection

11 (b)(3), or certify that they are not required to

12 file an income tax return and the student files,

13 or is eligible to file, such a form, or certifies

14 that the student is not required to file an in15 come tax return; and’’; and

16 (B) by amending paragraph (2)(A) to read

17 as follows:

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

19 spouse, if any) files, or is eligible to file, a form

20 described in subsection (b)(3), or certifies that

21 the student (and the student’s spouse, if any)

22 is not required to file an income tax return;

23 and’’.
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1 SEC. 453. DISCRETION OF STUDENT FINANCIAL AID ADMIN2 ISTRATORS.

3 (a) SPECIAL CIRCUMSTANCES.—Section 479A(a) (20

4 U.S.C. 1087tt(a)) is amended—

5 (1) in the first sentence, by inserting after ‘‘(or

6 both)’’ the following: ‘‘or, in extraordinary cir7 cumstances, the amount of the expected family con8 tribution,’’; and

9 (2) by inserting after the second sentence the

10 following new sentence: ‘‘Special circumstances may

11 include tuition expenses at an elementary or second12 ary school, medical or dental expenses not covered

13 by insurance, unusually high child care costs, recent

14 unemployment of a family member, or other changes

15 in a family’s income or assets or a student’s status.

16 Extraordinary circumstances shall be defined by the

17 Secretary by regulation.’’.

18 (b) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI19 CATIONS.—Section 479A is amended by striking sub20 section (c) and inserting the following:

21 ‘‘(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFI22 CATIONS.—On a case-by-case basis, an eligible institution

23 may refuse to certify a statement which permits a student

24 to receive a loan under part B, or refuse to make a loan

25 under part D, or may certify a loan amount or make a

26 loan that is less than the student’s determination of need
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1 (as determined under this part), if the reason for the ac2 tion is documented and provided in written form to the

3 student and the student is afforded an opportunity to ap4 peal the action in a timely fashion. No eligible institution

5 shall discriminate against any borrower or applicant in ob6 taining a loan on the basis of race, national origin, reli7 gion, sex, marital status, age, or handicapped status.’’.

8 SEC. 454. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

9 Section 480(j)(3) (20 U.S.C. 1087vv(j)(3)) is amend10 ed by inserting after ‘‘paragraph (1),’’ the following: ‘‘a

11 post-service benefit under chapter 30 of title 38, United

12 States Code, or’’.

13 PART G—GENERAL PROVISIONS

14 SEC. 461. DEFINITIONS.

15 Section 481 (20 U.S.C. 1088), as amended by section

16 102(b), is further amended by adding at the end the fol17 lowing new subsection:

18 ‘‘(d) DISTANCE LEARNING.—For the purpose of any

19 program under this title, the term ‘distance learning’

20 means an educational process that is characterized by the

21 separation, in time or place, between instructor and stu22 dent. Distance learning may include courses offered prin23 cipally through the use of—
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1 ‘‘(1) television, audio, or computer trans2 mission, such as open broadcast, closed circuit,

3 cable, microwave, or satellite transmission;

4 ‘‘(2) audio or computer conferencing;

5 ‘‘(3) video cassettes or discs; or

6 ‘‘(4) correspondence.’’.

7 SEC. 462. MASTER CALENDAR.

8 (a) REQUIRED SCHEDULE.—Section 482(a) (20

9 U.S.C. 1089(a)) is amended by adding at the end the fol10 lowing new paragraphs:

11 ‘‘(3) The Secretary shall, to the extent prac12 ticable, notify eligible institutions, guaranty agen13 cies, lenders, interested software providers, and,

14 upon request, other interested parties, by December

15 1 prior to the start of an award year of minimal

16 hardware and software requirements necessary to

17 administer programs under this title.

18 ‘‘(4) The Secretary shall attempt to conduct

19 training activities for financial aid administrators

20 and others in an expeditious and timely manner

21 prior to the start of such award year in order to en22 sure that all participants are informed of all admin23 istrative requirements.’’.

24 (b) DELAY OF EFFECTIVE DATE.—Section 482(c) is

25 amended by striking the second sentence and inserting the
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1 following: ‘‘The Secretary shall provide a period for public

2 comment of not less than 60 days after publication of any

3 notice of proposed rulemaking affecting programs under

4 this title.’’.

5 SEC. 463. FORMS AND REGULATIONS.

6 (a) COMMON FINANCIAL AID FORM.—Section 483(a)

7 (20 U.S.C. 1090(a)) is amended—

8 (1) in paragraph (1)—

9 (A) by striking ‘‘A, C, D, and E’’ and in10 serting ‘‘A through E’’;

11 (B) by striking ‘‘and to determine the need

12 of a student for the purpose of part B of this

13 title’’;

14 (C) by striking the second sentence and in15 serting the following: ‘‘The Secretary shall in16 clude on the form developed under this sub17 section such data items as the Secretary deter18 mines are appropriate for inclusion, selected in

19 consultation with States to assist in the award20 ing of State financial assistance, except that in

21 no case shall the number of such data items be

22 less than the number included on the form on

23 the date of enactment of the Higher Education

24 Amendments of 1998.’’; and
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1 (D) by striking the last sentence and in2 serting the following: ‘‘The Secretary shall in3 clude, on the first page of the form, a promi4 nently displayed notice to students and parents

5 advising them to check with the college finan6 cial aid office in the event that they have un7 usual circumstances which may affect their eli8 gibility for financial aid.’’;

9 (2) in paragraph (2)—

10 (A) by striking ‘‘A, C, D, and E’’ each

11 place it appears and inserting ‘‘A through E’’;

12 (B) by striking ‘‘and the need of a student

13 for the purpose of part B of this title,’’; and

14 (C) by striking ‘‘or have the student’s need

15 established for the purpose of part B of this

16 title’’;

17 (3) in the first sentence of paragraph (3), by

18 inserting ‘‘processing loan applications and’’ after

19 ‘‘for the purposes of’’; and

20 (4) by adding at the end the following new

21 paragraphs:

22 ‘‘(5) ELECTRONIC FORMS.—(A) The Secretary,

23 in cooperation with representatives of agencies and

24 organizations involved in student financial assist25 ance, including private computer software providers,
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1 shall develop an electronic version of the form de2 scribed in paragraph (1). Such an electronic version

3 shall not require a signature to be collected at the

4 time such version is submitted, as permitted by the

5 Secretary. The Secretary shall prescribe such version

6 no later than 120 days after the date of enactment

7 of the Higher Education Amendments of 1998.

8 ‘‘(B) Nothing in this section shall prohibit the

9 use of the version of the form developed by the Sec10 retary pursuant to subparagraph (A) by an eligible

11 institution, eligible lender, guaranty agency, State

12 grant agency, private computer software providers, a

13 consortium thereof, or such other entities as the Sec14 retary may designate.

15 ‘‘(C) No fee shall be charged to students in con16 nection with the use of the electronic form, or of any

17 other electronic forms used in conjunction with such

18 form in applying for Federal or State student finan19 cial assistance.

20 ‘‘(D) The Secretary shall ensure that data col21 lection complies with section 552a of title 5, United

22 States Code, and that any entity using the version

23 of the form developed by the Secretary pursuant to

24 subparagraph (A) shall maintain reasonable and ap25 propriate administrative, technical, and physical
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1 safeguards to ensure the integrity and confidentiality

2 of the information, and to protect against security

3 threats, or unauthorized uses or disclosures of the

4 information provided on the version of the form.

5 Data collected by such version of the form shall be

6 used only for the application, award, and adminis7 tration of aid awarded under this title, State aid, or

8 aid awarded by eligible institutions or such entities

9 as the Secretary may designate. No data collected by

10 such version of the form shall be used for making

11 final aid awards under this title until such data have

12 been processed by the Secretary or a contractor or

13 designee of the Secretary.

14 ‘‘(6) SUPPORT TO THIRD PARTY SERVICERS

15 AND PRIVATE SOFTWARE PROVIDERS.—The Sec16 retary shall support private organizations and con17 sortia thereof in the development of software used by

18 eligible institutions for the administration of funds

19 under this title. The Secretary shall provide in a

20 timely manner to such organizations and consortia

21 all necessary specifications that data and software

22 developed, produced, and distributed (including any

23 diskette, modem, or network communications) must

24 meet. These specifications shall contain record lay25 outs for required data and test cases that such orga-
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1 nizations or consortia may use to test the accuracy

2 of its software. The Secretary shall develop in ad3 vance of each processing cycle an annual schedule

4 for providing such specifications. The Secretary

5 shall, to the extent practicable, use means of provid6 ing such support, including conferences and other

7 meetings, outreach, and technical support mecha8 nisms (including telephone support, training and

9 printed reference materials). The Secretary shall,

10 from time to time, solicit from such organizations

11 and consortia means of improving the support pro12 vided by the Secretary.’’.

13 (b) STREAMLINED REAPPLICATION PROCESS.—Sec14 tion 483(b)(1) is amended by striking ‘‘, within 240 days’’

15 and everything that follows through ‘‘of 1992,’’.

16 (c) INFORMATION TO COMMITTEES.—Section 483(c)

17 is amended by striking ‘‘and Labor’’ and inserting ‘‘and

18 the Workforce’’.

19 (d) TOLL-FREE INFORMATION.—Section 483(d) is

20 amended by striking ‘‘section 633(c)’’ and inserting ‘‘sec21 tion 685(d)(2)(C)’’.

22 (e) REPEAL.—Subsection (f ) of section 483 is re23 pealed.
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1 SEC. 464. STUDENT ELIGIBILITY.

2 (a) IN GENERAL.—Section 484(a) (20 U.S.C.

3 1091(a))—

4 (1) in paragraph (4), by striking ‘‘the institu5 tion’’ and everything that follows through ‘‘lender),

6 a document’’ and inserting ‘‘the Federal Govern7 ment, as part of the original financial aid application

8 process, a certification’’;

9 (2) in paragraph (4)(B), by inserting after ‘‘so10 cial security number,’’ the following: ‘‘and if a de11 pendent student, the social security number of any

12 parent of such student whose income information is

13 required to be included on the form,’’; and

14 (3) in paragraph (5), by striking ‘‘Trust Terri15 tory of the Pacific Islands’’ and inserting ‘‘the Fed16 erated States of Micronesia, the Republic of the

17 Marshall Islands, or the Republic of Palau’’.

18 (b) TERMINATION OF ELIGIBILITY.—Section 484(j)

19 is amended to read as follows:

20 ‘‘(j) ASSISTANCE UNDER SUBPARTS 1 AND 3, OF

21 PART A, AND PART C.—Notwithstanding any other provi22 sion of law, a student shall be eligible until September 30,

23 2001, if otherwise qualified, for assistance under subparts

24 1 and 3 of part A, and part C, of this title, if the student

25 is otherwise qualified and—
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1 ‘‘(1) is a citizen of the Federated States of Mi2 cronesia, the Republic of the Marshall Islands, or

3 the Republic of Palau, and attends an institution of

4 higher education in Guam or a public or nonprofit

5 private institution of higher education in the Fed6 erated States of Micronesia, the Republic of the

7 Marshall Islands, or the Republic of Palau; or

8 ‘‘(2) meets the requirements of subsection

9 (a)(5) and attends a public or nonprofit private in10 stitution of higher education in the Federated States

11 of Micronesia, the Republic of the Marshall Islands,

12 or the Republic of Palau.’’.

13 (c) VERIFICATION OF INCOME DATA.—Section 484

14 is amended by adding at the end the following new sub15 section:

16 ‘‘(q) VERIFICATION OF INCOME DATA.—

17 ‘‘(1) CONFIRMATION WITH IRS.—The Secretary

18 of Education, in cooperation with the Secretary of

19 the Treasury, is authorized to confirm with the In20 ternal Revenue Service the adjusted gross income,

21 Federal income taxes paid, filing status, and exemp22 tions reported by applicants (including parents)

23 under this title on their Federal income tax returns

24 for the purpose of verifying the information reported

25 by applicants on student financial aid applications.
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1 ‘‘(2) NOTIFICATION.—The Secretary shall es2 tablish procedures under which an applicant is noti3 fied that the Internal Revenue Service will disclose

4 to the Secretary tax return information as author5 ized under section 6103(l)(13) of the Internal Reve6 nue Code of 1986.’’.

7 (d) SUSPENSION OF ELIGIBILITY FOR DRUG-RELAT8 ED OFFENSES.—

9 (1) AMENDMENT.—Section 484 is further

10 amended by adding at the end thereof the following

11 new subsection:

12 ‘‘(r) SUSPENSION OF ELIGIBILITY FOR DRUG-RE13 LATED OFFENSES.—

14 ‘‘(1) IN GENERAL.—An individual student who

15 has been convicted of any offense under any Federal

16 or State law involving the possession or sale of a

17 controlled substance shall not be eligible to receive

18 any grant, loan, or work assistance under this title

19 during the period beginning on the date of such con20 viction and ending after the interval specified in the

21 following 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
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1 ‘‘(2) REHABILITATION.—A student whose eligi2 bility has been suspended under paragraph (1) may

3 resume eligibility before the end of the period deter4 mined under such paragraph if the student satisfac5 torily completes a drug rehabilitation program that

6 complies with such criteria as the Secretary shall

7 prescribe for purposes of this paragraph and that in8 cludes two unannounced drug tests.

9 ‘‘(3) DEFINITIONS.—As used in this subsection,

10 the term ‘controlled substance’ has the meaning

11 given in section 102(6) of the Controlled Substances

12 Act (21 U.S.C. 802(6)).’’.

13 (2) EFFECTIVE DATE.—The amendment made

14 by paragraph (1) shall apply with respect to finan15 cial assistance to cover the costs of attendance for

16 periods of enrollment beginning after the date of en17 actment of this Act.

18 SEC. 465. STATE COURT JUDGMENTS.

19 Section 484A (20 U.S.C. 1091a) is amended by add20 ing at the end the following new subsection:

21 ‘‘(c) STATE COURT JUDGMENTS.—A judgment of a

22 State court for the recovery of money provided as grant,

23 loan, or work assistance under this title that has been as24 signed or transferred to the Secretary under this title may

25 be registered in any district court by filing a certified copy
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1 of the judgment and the assignment or other transfer to

2 the Secretary. A judgment so registered shall have the

3 same force and effect, and may be enforced in the same

4 manner, as a judgment of the district court of the district

5 in which the judgment is registered.’’.

6 SEC. 466. INFORMATION FOR STUDENTS.

7 (a) INFORMATION DISSEMINATION.—Section 485(a)

8 (20 U.S.C. 1092(a)) is amended—

9 (1) in paragraph (1), by striking the second

10 sentence and inserting the following: ‘‘The informa11 tion required by this section shall be produced and

12 be made readily available upon request, through ap13 propriate publications, mailings, and electronic

14 media to all current students and to any prospective

15 student. Each eligible institution shall, on an annual

16 basis, provide to all enrolled students a list of the in17 formation that is required to be provided by institu18 tions to students by this Act and section 444 of the

19 General Education Provisions Act (also referred to

20 as the Family Educational Rights and Privacy Act

21 of 1974), together with a statement of the proce22 dures required to obtain such information.’’;

23 (2) in paragraph (3)—

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

25 enrolled in any program of an eligible institu-
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1 tion for which the prior program provides sub2 stantial preparation’’; and

3 (B) by striking subparagraph (A) and in4 serting the following:

5 ‘‘(A) shall be made available by July 1 each

6 year to current and prospective students prior to en7 rolling or entering into any financial obligation;

8 and’’; and

9 (3) by adding at the end the following new

10 paragraph:

11 ‘‘(6) Each institution may, but is not required to,

12 provide supplemental information to enrolled and prospec13 tive students showing the completion or graduation rate

14 for students transferring into the institution or informa15 tion showing the rate at which students transfer out of

16 the institution.’’.

17 (b) DEPARTMENTAL PUBLICATIONS.—Section

18 485(d) is amended—

19 (1) by striking ‘‘(1) assist’’ and inserting ‘‘(A)

20 assist’’;

21 (2) by striking ‘‘(2) assist’’ and inserting ‘‘(B)

22 assist’’;

23 (3) by inserting ‘‘(1)’’ before ‘‘The Secretary’’

24 the first place it appears; and
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1 (4) by adding at the end the following new

2 paragraphs:

3 ‘‘(2) The Secretary shall, to the extent such informa4 tion is available, compile information describing State pre5 paid tuition programs and disseminate such information

6 to States, eligible institutions, students, and parents in de7 partmental publications.

8 ‘‘(3) The Secretary shall, to the extent practicable,

9 update the Department’s Internet site to include direct

10 links to databases which contain information on public

11 and private financial assistance programs. The Secretary

12 shall only provide direct links to databases which can be

13 accessed without charge and shall verify with appropriate

14 parties that the databases included in the direct link are

15 not in any way providing fraudulent information. The Sec16 retary shall prominently display adjacent to the direct link

17 a disclaimer indicating that a direct link to a database

18 does not constitute an endorsement or recommendation of

19 the database or its provider or any services or products

20 of such provider. The Secretary shall provide additional

21 direct links to information resources from which students

22 may obtain information about fraudulent and deceptive

23 practices in the provision of services related to student fi24 nancial aid.’’.

25 (c) DISCLOSURES.—Section 485(e) is amended—
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1 (1) in paragraph (2)—

2 (A) by striking ‘‘his parents, his guidance’’

3 and inserting ‘‘the student’s parents, guid4 ance’’; and

5 (B) by adding at the end the following new

6 sentence: ‘‘If the institution is a member of a

7 national collegiate athletic association that com8 piles graduation rate data on behalf of its mem9 ber institutions that the Secretary determines is

10 substantially comparable to the information de11 scribed in paragraph (1), the distribution of the

12 compilation of such data to all secondary

13 schools in the United States shall fulfill the re14 sponsibility of the institution to provide infor15 mation to a prospective student athlete’s guid16 ance counselor and coach.’’;

17 (2) in paragraph (4), by striking ‘‘when such

18 completion or graduation rate includes students

19 transferring into and out of such institution’’ and

20 inserting ‘‘for students transferring into the institu21 tion or information showing the rate at which stu22 dents transfer out of the institution’’; and

23 (3) by striking paragraph (9) and inserting the

24 following:
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1 ‘‘(9) The reports required by this subsection shall be

2 due on each July 1 and shall cover the 1-year period end3 ing August 31 of the preceding year.’’.

4 (d) CAMPUS CRIME REPORTING AND DISCLOSURE.—

5 Section 485(f ) is amended—

6 (1) in paragraph (1)—

7 (A) by striking subparagraph (F) and in8 serting the following:

9 ‘‘(F) Statistics concerning the occurrence on

10 campus, during the most recent calendar year, and

11 during the 2 preceding calendar years, of the follow12 ing criminal offenses or arrests reported to campus

13 security authorities, campus officials who have direct

14 administrative responsibility for student or campus

15 activities, disciplinary officers and other officials re16 sponsible for resolving student disciplinary matters,

17 athletic department officials, or local police agencies

18 (including offenses handled through the campus dis19 ciplinary system):

20 ‘‘(i) murder;

21 ‘‘(ii) sex offenses, forcible or nonforcible;

22 ‘‘(iii) robbery;

23 ‘‘(iv) aggravated assault;

24 ‘‘(v) burglary;

25 ‘‘(vi) motor vehicle theft;
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1 ‘‘(vii) manslaughter;

2 ‘‘(viii) larceny;

3 ‘‘(ix) arson; and

4 ‘‘(x) arrests or persons referred for campus

5 disciplinary action for liquor law violations,

6 drug-related violations, and weapons posses7 sion.’’;

8 (B) by striking subparagraph (H); and

9 (C) by redesignating subparagraph (I) as

10 subparagraph (H);

11 (2) in paragraph (4)—

12 (A) by striking ‘‘Upon request of the Sec13 retary, each’’ and inserting ‘‘On an annual

14 basis, each’’;

15 (B) by striking ‘‘paragraphs (1)(F) and

16 (1)(H)’’ and inserting ‘‘paragraph (1)(F)’’;

17 (C) by striking ‘‘and Labor’’ and inserting

18 ‘‘and the Workforce’’;

19 (D) by striking ‘‘1995’’ and inserting

20 ‘‘2000’’;

21 (E) by striking ‘‘and’’ at the end of sub22 paragraph (A);

23 (F) by redesignating subparagraph (B) as

24 subparagraph (C); and
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1 (G) by inserting after subparagraph (A)

2 the following new subparagraph:

3 ‘‘(B) make copies of the statistics submitted to

4 the Secretary available to the public; and’’;

5 (3) in paragraph (6)—

6 (A) by striking ‘‘paragraphs (1)(F) and

7 (1)(H)’’ and inserting ‘‘paragraph (1)(F)’’; and

8 (B) by adding at the end the following new

9 sentence: ‘‘Such statistics shall not identify vic10 tims of crimes or persons accused of crimes.’’;

11 and

12 (4) by adding at the end the following new

13 paragraphs:

14 ‘‘(8)(A) Each institution participating in any pro15 gram under this title that maintains either a police or se16 curity department of any kind shall make, keep, and main17 tain a daily log, written in a form that can be easily under18 stood, recording in chronological order all crimes reported

19 to such police or security department, including the na20 ture, date, time, and general location of each crime and

21 the disposition of the complaint, if known.

22 ‘‘(B) All entries that are required by this paragraph

23 shall be open to public inspection during normal business

24 hours within two business days of the initial report being

25 made to the department, unless—
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1 ‘‘(i) disclosure of such information is prohibited

2 by law; or

3 ‘‘(ii) the release of such information is likely to

4 jeopardize an ongoing criminal investigation or the

5 safety of an individual, cause a suspect to flee or

6 evade detection, or result in the destruction of evi7 dence.

8 Any information withheld under clause (ii) shall be open

9 to public inspection as soon as the damage that is the

10 basis for such withholding is no longer likely to occur.

11 ‘‘(9) The Secretary shall provide technical assistance

12 in complying with the provisions of this section to an insti13 tution of higher education who requests such assistance.

14 ‘‘(10) Nothing in this section shall require the report15 ing or disclosure of privileged information.’’.

16 (e) DATA REQUIRED.—Section 485(g) is amended—

17 (1) in paragraph (1), by adding at the end the

18 following new subparagraphs:

19 ‘‘(I)(i) The total revenues, and the reve20 nues from football, men’s basketball, women’s

21 basketball, all other men’s sports combined and

22 all other women’s sports combined, derived by

23 the institution from its intercollegiate athletics

24 activities.
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1 ‘‘(ii) For the purpose of clause (i), reve2 nues from intercollegiate athletics activities allo3 cable to a sport shall include (without limita4 tion) gate receipts, broadcast revenues, appear5 ance guarantees and options, concessions, and

6 advertising, but revenues such as student activi7 ties fees or alumni contributions not so alloca8 ble shall be included in the calculation of total

9 revenues only.

10 ‘‘(J)(i) The total expenses, and the ex11 penses attributable to football, men’s basketball,

12 women’s basketball, all other men’s sports com13 bined, and all other women’s sports combined,

14 made by the institution for its intercollegiate

15 athletics activities.

16 ‘‘(ii) For the purpose of clause (i) expenses

17 for intercollegiate athletics activities allocable to

18 a sport shall include (without limitation)

19 grants-in-aid, salaries, travel, equipment, and

20 supplies, but expenses such as general and ad21 ministrative overhead not so allocable shall be

22 included in the calculation of total expenses

23 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 in4 stitution 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

11 enactment of the Higher Education Amendments of

12 1997’’.

13 SEC. 468. PROGRAM PARTICIPATION AGREEMENTS.

14 (a) REQUIRED CONTENT.—Section 487(a) (20

15 U.S.C. 1094(a)) is amended—

16 (1) in the first sentence, by striking ‘‘, except

17 with respect to a program under subpart 4 of part

18 A,’’;

19 (2) in paragraph (3), by striking subparagraph

20 (B) and inserting the following:

21 ‘‘(B) the appropriate State agency;’’;

22 (3) in paragraph (4), by striking ‘‘subsection

23 (b)’’ and inserting ‘‘subsection (c)’’;
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1 (4) in paragraph (15), by striking ‘‘State review

2 entities under subpart 1 of part H’’ and inserting

3 ‘‘appropriate State agencies’’;

4 (5) by striking paragraph (18) and inserting

5 the following:

6 ‘‘(18) The institution will meet the require7 ments established pursuant to section 485(g).’’;

8 (6) by striking paragraph (21) and inserting

9 the following:

10 ‘‘(21) The institution will meet the require11 ments established by the Secretary, appropriate

12 State agencies, and accrediting agencies, pursuant to

13 part H of this title.’’; and

14 (7) by adding at the end the following new

15 paragraph:

16 ‘‘(23) The institution will distribute to each stu17 dent, during registration for enrollment in its in18 structional program, the mail voter registration ap19 plication form described in section 9(a)(2) of the

20 National Voter Registration Act of 1993, unless the

21 student, in writing, declines to receive such form.’’.

22 (b) AUDITS; FINANCIAL RESPONSIBILITY.—Section

23 487(c) is amended—

24 (1) in paragraph (1)(A)(i), by striking ‘‘State

25 agencies’’ and everything that follows through the
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1 semicolon and inserting ‘‘and appropriate State

2 agencies;’’;

3 (2) in paragraph (2), by striking ‘‘subpart 3’’

4 and inserting ‘‘subpart 2’’;

5 (3) in paragraph (4), by striking ‘‘, after con6 sultation’’ and everything that follows through ‘‘part

7 H,’’; and

8 (4) in paragraph (5), by striking ‘‘State review’’

9 and everything that follows through ‘‘part H’’ and

10 inserting ‘‘appropriate State agencies’’.

11 SEC. 469. QUALITY ASSURANCE AND REGULATORY SIM12 PLIFICATION.

13 Section 487A (20 U.S.C. 1094a) is amended to read

14 as follows:

15 ‘‘SEC. 487A. QUALITY ASSURANCE AND REGULATORY SIM16 PLIFICATION PROGRAM.

17 ‘‘(a) IN GENERAL.—The Secretary is authorized to

18 select institutions for voluntary participation in a Regu19 latory Simplification Program that provides participating

20 institutions with the opportunity to develop and implement

21 an alternative management program that—

22 ‘‘(1) shall allow alternative methods of comply23 ing with regulations issued with respect to parts A

24 through E and G of this title;
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1 ‘‘(2) shall not modify or waive the application

2 of any requirement or other provision of this Act;

3 and

4 ‘‘(3) may include a Quality Assurance Program

5 through which individual schools develop and imple6 ment their own comprehensive systems to verify stu7 dent financial aid application data, thereby enhanc8 ing program integrity within the student aid delivery

9 system.

10 ‘‘(b) SELECTION CRITERIA.—The criteria for select11 ing institutions for participation in the Regulatory Sim12 plification Program shall be based on criteria that include

13 demonstrated institutional performance, as determined by

14 the Secretary, and shall take into consideration regulatory

15 simplification goals, as determined by the Secretary. The

16 selection criteria shall ensure the participation of rep17 resentatives of institutions of higher education according

18 to size, mission, and geographical distribution.

19 ‘‘(c) REMOVAL FROM THE PROGRAM.—The Sec20 retary is authorized to determine—

21 ‘‘(1) when an institution that is unable to ad22 minister the Regulatory Simplification Program

23 must be removed from such program; and

24 ‘‘(2) when institutions desiring to cease partici25 pation in such Program will be required to complete
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1 the current award year under the requirements of

2 the Program.

3 ‘‘(d) EXPERIMENTAL SITES.—The Secretary is au4 thorized to designate institutions selected for participation

5 in the Regulatory Simplification Program as Experimental

6 Sites.

7 ‘‘(e) DEFINITIONS.—For purposes of this section, the

8 term ‘current award year’ means the award year during

9 which the participating institution indicates its intention

10 to cease participation.’’.

11 SEC. 470. DISTANCE EDUCATION DEMONSTRATION PRO12 GRAMS.

13 Part G of title IV is amended—

14 (1) by redesignating section 487B (20 U.S.C.

15 1094b) as section 487C; and

16 (2) by inserting after section 487A (as amended

17 by section 469) the following new section:

18 ‘‘SEC. 487B. DISTANCE EDUCATION DEMONSTRATION PRO19 GRAMS.

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

21 ‘‘(1) to allow demonstration programs that are

22 strictly monitored by the Department of Education

23 to test the quality and viability of expanded distance

24 education programs currently restricted under this

25 Act;
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1 ‘‘(2) to provide for increased student access to

2 higher education through distance education pro3 grams;

4 ‘‘(3) to help determine the most effective means

5 of delivering quality education via distance education

6 course offerings; and

7 ‘‘(4) to help determine the appropriate level of

8 Federal assistance for students enrolled in distance

9 education programs.

10 ‘‘(b) DEMONSTRATION PROGRAMS AUTHORIZED.—

11 ‘‘(1) IN GENERAL.—The Secretary is authorized

12 to select institutions or a consortia of institutions for

13 voluntary participation in a Distance Education

14 Demonstration Program that provides participating

15 institutions with the ability to offer distance edu16 cation programs without regard to the current re17 strictions in part F or G of this title or part A of

18 title I.

19 ‘‘(2) EXEMPTIONS.—The Secretary is author20 ized to exempt any institution or consortia partici21 pating in a Distance Education Demonstration Pro22 gram from any of the requirements of parts F or G

23 of this title, or part A of title I, or the regulations

24 prescribed under such parts.
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1 ‘‘(c) APPLICATION.—Each institution or consortia of

2 institutions desiring to participate in a demonstration pro3 gram under this section shall submit an application to the

4 Secretary at such time, in such manner, and accompanied

5 by such information as the Secretary may require. Each

6 application shall include—

7 ‘‘(1) a description of the institution or consor8 tium’s consultation with a recognized accrediting

9 agency or association with respect to quality assur10 ances for the distance education programs to be of11 fered;

12 ‘‘(2) a description of the statutory and regu13 latory requirements described in subsection (b)(2)

14 for which a waiver is sought and the reasons for

15 which the waiver is sought;

16 ‘‘(3) a description of the distance education

17 programs to be offered;

18 ‘‘(4) a description of the students to whom dis19 tance education programs will be offered;

20 ‘‘(5) an assurance that the institution or con21 sortium will offer full cooperation with the ongoing

22 evaluations of the demonstration program provided

23 for in this section; and

24 ‘‘(6) such other information as the Secretary

25 may require.
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1 ‘‘(d) SELECTION.—To the extent feasible, the Sec2 retary shall select a representative sample of institutions

3 for participation in the demonstration program authorized

4 under this section. In selecting institutions for participa5 tion, the Secretary shall take into consideration the insti6 tution’s financial and administrative capability and the

7 type of program or programs being offered via distance

8 education course offerings. The Secretary shall, in the ex9 ercise of his discretion, determine the number of dem10 onstration programs to be allowed based on the number

11 and quality of applications received and the Department’s

12 capacity to oversee and monitor each demonstration pro13 gram.

14 ‘‘(e) EVALUATION AND REPORT.—

15 ‘‘(1) EVALUATION.—The Secretary shall, on an

16 annual basis, evaluate the demonstration programs

17 authorized under this section. Such evaluations shall

18 specifically review—

19 ‘‘(A) the extent to which the institution or

20 consortia of institutions has met the goals set

21 forth in its application to the Secretary, includ22 ing the measures of program quality assurance;

23 ‘‘(B) issues related to student financial as24 sistance for distance education; and
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1 ‘‘(C) effective technologies for delivering

2 distance education course offerings.

3 ‘‘(2) POLICY ANALYSIS.—In addition, the Sec4 retary shall review current policies and identify those

5 policies which present impediments to the develop6 ment and use of distance learning and other non7 traditional methods of expanding access to edu8 cation.

9 ‘‘(3) REPORT.—The Secretary shall report to

10 the appropriate committees of Congress with respect

11 to—

12 ‘‘(A) the evaluations of the demonstration

13 programs authorized under this section; and

14 ‘‘(B) any proposed legislative changes de15 signed to enhance the use of distance edu16 cation.’’.

17 SEC. 471. GARNISHMENT REQUIREMENTS.

18 (a) MAXIMUM PERCENTAGE.—Section 488A(a)(1)

19 (20 U.S.C. 1095a(a)(1)) is amended by striking ‘‘10 per20 cent’’ and inserting ‘‘15 percent’’.

21 (b) NO ATTACHMENT OF STUDENT ASSISTANCE.—

22 Section 488A is further amended—

23 (1) by redesignating subsection (d) as sub24 section (e); and
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1 (2) by inserting after subsection (c) the follow2 ing new subsection:

3 ‘‘(d) NO ATTACHMENT OF STUDENT ASSISTANCE.—

4 Except as authorized in this section, notwithstanding any

5 other provision of Federal or State law, no grant, loan,

6 or work assistance awarded under this title, or property

7 traceable to such assistance, shall be subject to garnish8 ment or attachment in order to satisfy any debt owed by

9 the student awarded such assistance, other than a debt

10 owed to the Secretary and arising under this title.’’.

11 SEC. 472. ADMINISTRATIVE SUBPOENA AUTHORITY.

12 Part G of title IV of the Act is further amended by

13 inserting immediately after section 490 (20 U.S.C. 1097)

14 the following new section:

15 ‘‘SEC. 490A. ADMINISTRATIVE SUBPOENAS.

16 ‘‘(a) AUTHORITY.—To assist the Secretary in the

17 conduct of investigations of possible violations of the provi18 sions of this title, the Secretary is authorized to require

19 by subpoena the production of information, documents, re20 ports, answers, records, accounts, papers, and other docu21 mentary evidence pertaining to participation in any pro22 gram under this title. The production of any such records

23 may be required from any place in a State.

24 ‘‘(b) ENFORCEMENT.—In case of contumacy by, or

25 refusal to obey a subpoena issued to, any person, the Sec-
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1 retary may request the Attorney General to invoke the aid

2 of any court of the United States where such person re3 sides or transacts business for a court order for the en4 forcement of this section.’’.

5 SEC. 473. ADVISORY COMMITTEE ON STUDENT FINANCIAL

6 ASSISTANCE.

7 Section 491 (20 U.S.C. 1098) is amended—

8 (1) in subsection (b)—

9 (A) by inserting ‘‘staffing levels,’’ after

10 ‘‘allocations and expenditures,’’ the first place it

11 appears; and

12 (B) by striking the fourth and fifth sen13 tences and inserting the following: ‘‘Reports,

14 publications, and other documents, including

15 documents in electronic form, shall not be sub16 ject to review by the Secretary.’’;

17 (2) in subsection (c)(1)—

18 (A) by striking ‘‘11 members’’ and insert19 ing ‘‘15 members’’; and

20 (B) by striking ‘‘3 members’’ each place it

21 appears in subparagraphs (A) and (B) and in22 serting ‘‘5 members’’;

23 (3) in subsection (c)(2), by striking ‘‘7 mem24 bers’’ and inserting ‘‘11 members’’;

25 (4) in subsection (e)—
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1 (A) by striking everything after ‘‘except

2 that,’’ in paragraph (1) and inserting the fol3 lowing:

4 ‘‘within 90 days after the date of enactment of the Higher

5 Education Amendments of 1998, 2 additional members

6 shall be appointed by the President pro tempore of the

7 Senate (one upon the recommendation of the Majority

8 Leader and one upon the recommendation of the Minority

9 Leader) and 2 additional members shall be appointed by

10 the Speaker of the House (one upon the recommendation

11 of the Majority Leader and one upon the recommendation

12 of the Minority Leader). Of the additional members—

13 ‘‘(A) 2 shall be appointed for a term of 1 year;

14 ‘‘(B) 1 shall be appointed for a term of 2 years;

15 and

16 ‘‘(C) 1 shall be appointed for a term of 3

17 years.’’;

18 (B) by striking ‘‘Six members’’ in para19 graph (4) and inserting ‘‘Eight members’’; and

20 (C) by adding at the end the following new

21 paragraph:

22 ‘‘(6) No officer or full-time employee of the United

23 States shall serve as members of the Advisory Commit24 tee.’’;
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1 (5) by striking subsection (g) and inserting the

2 following:

3 ‘‘(g) COMPENSATION AND EXPENSES.—Members of

4 the Advisory Committee may each receive reimbursement

5 for travel expenses incident to attending Advisory Com6 mittee meetings, including per diem in lieu of subsistence,

7 as authorized by section 5703 of title 5, United States

8 Code, for persons in the Government service employed

9 intermittently.’’;

10 (6) in subsection (h)(1), by striking ‘‘may be

11 necessary by the Chairman without regard to’’ and

12 inserting ‘‘may be deemed necessary by the Chair13 man without regard to personnel ceilings or’’;

14 (7) in subsection (i), by striking ‘‘$750,000’’

15 and inserting ‘‘$850,000’’;

16 (8) by striking subsection (j) and inserting the

17 following:

18 ‘‘(j) SPECIAL ANALYSES AND ACTIVITIES.—The com19 mittee shall—

20 ‘‘(1) monitor and evaluate the modernization of

21 student financial aid systems and delivery processes;

22 ‘‘(2) monitor and evaluate the implementation

23 of a performance-based organization within the De24 partment of Education and report to Congress, on
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1 not less than an annual basis, including rec2 ommendations for improvements; and

3 ‘‘(3) assess the adequacy of current methods for

4 disseminating information about programs under

5 this title and recommend improvements, as appro6 priate, regarding early needs assessment and infor7 mation for first-year high school students.’’;

8 (9) in subsection (k), by striking ‘‘1998’’ and

9 inserting ‘‘2004’’; and

10 (10) by striking subsection (l).

11 SEC. 474. MEETINGS AND NEGOTIATED RULEMAKING.

12 Section 492 (20 U.S.C. 1098a) is amended to read

13 as follows:

14 ‘‘SEC. 492. NEGOTIATED RULEMAKING.

15 ‘‘(a) IN GENERAL.—

16 ‘‘(1) REGULATION DEVELOPMENT.—In develop17 ing regulations and revisions thereof under this title,

18 the Secretary shall obtain the advice and rec19 ommendations of individuals and representatives of

20 the groups involved in student financial assistance

21 programs under this title, such as students, legal as22 sistance organizations that represent students, insti23 tutions of higher education, guaranty agencies, lend24 ers, secondary markets, loan servicers, guaranty

25 agency servicers, and collection agencies.
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1 ‘‘(2) INPUT.—Such advice and recommenda2 tions may be obtained through such mechanisms as

3 national meetings and electronic exchanges of infor4 mation.

5 ‘‘(b) PROPOSED REGULATIONS.—After obtaining

6 such advice and recommendations, and prior to publishing

7 any proposed regulations and revisions thereof under this

8 title in the Federal Register, the Secretary shall prepare

9 draft regulations and submit such regulations to a nego10 tiated rulemaking process. In establishing the negotiated

11 rulemaking process under this section, the Secretary

12 shall—

13 ‘‘(1) follow the procedural requirements used in

14 implementing section 1601(b) of the Elementary and

15 Secondary Education Act of 1965;

16 ‘‘(2) select participants in the negotiations proc17 ess from individuals and groups participating in the

18 exchanges described in subsection (a)(1), including

19 both representatives of such groups from the Dis20 trict of Columbia, and industry participants, and to

21 the extent possible, the Secretary shall select individ22 uals reflecting the diversity in the industry, rep23 resenting both large and small participants, as well

24 as individuals serving local areas and national mar25 kets;
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1 ‘‘(3) conduct the negotiations process in a time2 ly manner in order that final regulations may be

3 issued by the Secretary within the 240-day period

4 described in section 431(g) of the General Education

5 Provisions Act, and any subsequent revisions to reg6 ulations under this title may be issued in accordance

7 with the master calendar provisions of section 482

8 of this title; and

9 ‘‘(4) prepare a transcript of the negotiated rule10 making proceedings that shall be available to the

11 public prior to the issuance of any final regulations.

12 ‘‘(c) FEDERAL ADVISORY COMMITTEE ACT.—The

13 Federal Advisory Committee Act shall not apply to activi14 ties carried out under this section.’’.

15 PART H—PROGRAM INTEGRITY

16 SEC. 476. STATE POSTSECONDARY REVIEW PROGRAM.

17 (a) AMENDMENTS.—Part H of title IV is amended—

18 (1) in the heading of the part, by striking

19 ‘‘TRIAD’’;

20 (2) by striking subpart 1 (20 U.S.C. 1099a

21 through 1099a–3); and

22 (3) by redesignating subparts 2 and 3 as sub23 parts 1 and 2, respectively.

24 (b) CONFORMING AMENDMENTS.—Section 496 (20

25 U.S.C. 1099b) is amended by striking ‘‘subpart 3’’ each
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1 place it appears in subsections (j) and (k) and inserting

2 ‘‘subpart 2’’.

3 SEC. 477. ACCREDITING AGENCY RECOGNITION.

4 (a) RECOGNITION.—

5 (1) The heading of subpart 1 of part H (as re6 designated by section 476(a)(3)) is amended by

7 striking ‘‘Approval’’ and inserting ‘‘Recogni8 tion’’.

9 (2) The heading of section 496 is amended by

10 striking ‘‘APPROVAL’’ and inserting ‘‘RECOGNI11 TION’’.

12 (b) STANDARDS.—Section 496(a) is amended—

13 (1) by striking ‘‘STANDARDS’’ and inserting

14 ‘‘CRITERIA’’;

15 (2) by striking ‘‘standards’’ each place it ap16 pears and inserting ‘‘criteria’’;

17 (3) in paragraph (5)—

18 (A) by striking ‘‘of accreditation’’ and in19 serting ‘‘for accreditation’’;

20 (B) by inserting ‘‘the quality (including the

21 quality of distance learning programs or

22 courses) of’’ before ‘‘the institution’s’’;

23 (C) in subparagraph (G), by striking ‘‘pro24 gram length and tuition and fees in relation to
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1 the subject matters taught’’ and inserting

2 ‘‘measures of program length’’;

3 (D) by striking subparagraph (J);

4 (E) in subparagraph (L), by inserting ‘‘the

5 most recent student loan default rate data pro6 vided by the Secretary and’’ after ‘‘including’’;

7 (F) by striking ‘‘and’’ at the end of sub8 paragraph (K);

9 (G) by inserting ‘‘and’’ after the semicolon

10 at the end of subparagraph (L);

11 (H) by redesignating subparagraphs (K)

12 and (L) as subparagraphs (J) and (K), respec13 tively; and

14 (I) by striking ‘‘(J), and (L)’’ and insert15 ing ‘‘and (K)’’;

16 (4) in paragraph (7), by striking ‘‘State post17 secondary review entity’’ and inserting ‘‘State licens18 ing or authorizing agency’’; and

19 (5) in paragraph (8), by striking ‘‘State post20 secondary’’ and everything that follows through ‘‘is

21 located’’ and inserting ‘‘State licensing or authoriz22 ing agency’’.

23 (c) OPERATING PROCEDURES.—Section 496(c) is

24 amended—
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1 (1) by striking ‘‘approved by the Secretary’’

2 and inserting ‘‘recognized by the Secretary’’;

3 (2) in paragraph (1), by striking ‘‘(at least’’

4 and everything that follows through ‘‘unan5 nounced),’’ and inserting ‘‘(which may include unan6 nounced site visits)’’; and

7 (3) in paragraph (3), by inserting before the

8 semicolon at the end the following: ‘‘, except that

9 new sites offered through telecommunications for

10 programs previously included in the scope of accredi11 tation approval need not be subject to such on-site

12 visits’’.

13 (d) CONFORMING AMENDMENTS.—Section 496 is

14 further amended—

15 (1) in subsection (d)—

16 (A) by striking ‘‘APPROVAL’’ in the head17 ing of such subsection and inserting ‘‘RECOGNI18 TION’’; and

19 (B) by striking ‘‘approved’’ and inserting

20 ‘‘recognized’’;

21 (2) in subsection (f ), by striking ‘‘approved’’

22 and inserting ‘‘recognized’’;

23 (3) in subsection (g)—

24 (A) by striking ‘‘STANDARDS’’ and insert25 ing ‘‘CRITERIA’’; and
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1 (B) by striking ‘‘standards’’ and inserting

2 ‘‘criteria’’;

3 (4) in subsection (k)(2), by striking ‘‘stand4 ards’’ and inserting ‘‘criteria’’;

5 (5) in subsection (l)—

6 (A) by striking ‘‘APPROVAL’’ in the head7 ing of such subsection and inserting ‘‘RECOGNI8 TION’’;

9 (B) by striking ‘‘the standards’’ each place

10 it appears and inserting ‘‘its standards’’; and

11 (C) by striking ‘‘approval’’ and inserting

12 ‘‘recognition’’; and

13 (6) in subsection (n)—

14 (A) by striking ‘‘standards’’ each place it

15 appears and inserting ‘‘criteria’’;

16 (B) in paragraph (3)—

17 (i) by striking ‘‘approval or dis18 approval’’ and inserting ‘‘recognition or de19 nial of recognition’’; and

20 (ii) by striking ‘‘approval process’’

21 and inserting ‘‘recognition process’’; and

22 (C) by striking paragraph (4) and insert23 ing the following:

24 ‘‘(4) The Secretary shall maintain sufficient docu25 mentation to support the conclusions reached in the rec-
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1 ognition process, and, if the Secretary does not recognize

2 any accreditation agency or association, shall make pub3 licly available the reason for denying recognition, including

4 reference to the specific criteria under this section which

5 have not been fulfilled.’’.

6 SEC. 478. ELIGIBILITY AND CERTIFICATION PROCEDURES.

7 (a) SINGLE APPLICATION FORM.—Section 498(b)(1)

8 (20 U.S.C. 1099c(b)(1)) is amended by striking ‘‘accredi9 tation, and capability’’ and inserting ‘‘accreditation, finan10 cial responsibility, and administrative capacity’’.

11 (b) FINANCIAL RESPONSIBILITY STANDARDS.—Sec12 tion 498(c) is amended—

13 (1) in paragraph (1), in the matter preceding

14 subparagraph (A), by striking ‘‘is able’’ and insert15 ing ‘‘has sufficient resources to ensure against the

16 precipitous closure of the institution and is able’’;

17 (2) in paragraph (2)—

18 (A) in the first sentence, by striking ‘‘oper19 ating losses, net worth, asset-to-liabilities ratios,

20 or operating fund deficits’’ and inserting ‘‘to ra21 tios that demonstrate financial responsibility,’’;

22 (B) in the second sentence, by inserting ‘‘,

23 public,’’ after ‘‘for profit’’; and

24 (C) by inserting before the period at the

25 end the following: ‘‘, and develop an appropriate
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1 and cost effective process under this subpart

2 that does not duplicate other reporting require3 ments for assessing and reviewing financial re4 sponsibility’’; and

5 (3) in paragraph (4)—

6 (A) in the first sentence, by striking ‘‘ratio

7 of current assets to current liabilities’’ and in8 serting ‘‘criteria’’; and

9 (B) in subparagraph (C), by striking ‘‘cur10 rent operating ratio requirement’’ and inserting

11 ‘‘criteria imposed by the Secretary pursuant to

12 paragraph (2)’’.

13 (c) ADMINISTRATIVE CAPACITY.—Section 498(d)(1)

14 is amended—

15 (1) in subparagraph (A), by striking ‘‘student

16 aid programs; and’’ and inserting ‘‘student financial

17 assistance under this title;’’;

18 (2) by redesignating subparagraph (B) as sub19 paragraph (D); and

20 (3) by inserting after subparagraph (A) the fol21 lowing new subparagraphs:

22 ‘‘(B) written procedures for, or written in23 formation relating to, each office with respect

24 to, the approval, disbursement, and delivery of

25 student financial assistance under this title;
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1 ‘‘(C)(i) a division of functions for authoriz2 ing payments of student financial assistance

3 under this title and the disbursement or deliv4 ery of such assistance, so that no office at the

5 institution has responsibility for both functions;

6 and

7 ‘‘(ii) an adequate system of checks and

8 balances for internal control at the institution

9 with respect to student financial assistance

10 under this title; and’’.

11 (d) FINANCIAL RESPONSIBILITY FOR REFUNDS DUR12 ING PROVISIONAL CERTIFICATION.—

13 (1) AMENDMENT.—Section 498(e) is amended

14 by adding at the end the following new paragraph:

15 ‘‘(6) Notwithstanding any other provision of

16 law, any person required to pay, on behalf of a stu17 dent or borrower, a refund of unearned institutional

18 charges to a lender, or the Secretary, who willfully

19 fails to pay such refund or willfully attempts in any

20 manner to evade payment of such refund, shall, in

21 addition to other penalties provided by law, be liable

22 to the Secretary for the amount of the refund not

23 paid, to the same extent with respect to such refund

24 that such an individual would be liable as a respon25 sible person for a penalty under section 6672(a) of
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1 title 26, United States Code, with respect to the

2 nonpayment of taxes.’’.

3 (2) EFFECTIVE DATE.—The amendments made

4 by paragraph (1) shall be effective with respect to

5 any unpaid refunds that were first required to be

6 paid to a lender or to the Secretary on or after 90

7 days after the date of enactment of this Act.

8 (e) ACTIONS ON APPLICATIONS.—Section 498(f ) is

9 amended—

10 (1) by striking ‘‘shall conduct’’ and inserting

11 ‘‘may conduct’’;

12 (2) by striking ‘‘may establish’’ and inserting

13 ‘‘shall establish’’;

14 (3) by striking ‘‘may coordinate’’ and inserting

15 ‘‘shall, to the extent practicable, coordinate’’; and

16 (4) by adding at the end the following new sen17 tence: ‘‘The Secretary may exempt from the site

18 visit requirement any institution that is participating

19 in the Quality Assurance Program established under

20 section 487A at the time such site visit would be re21 quired under this subsection.’’.

22 (f) TIME LIMITATIONS.—Section 498(g) is amended

23 to read as follows:

24 ‘‘(g) TIME LIMITATIONS.—(1) After the expiration of

25 the certification of any institution or upon request for ini-
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1 tial certification from an institution not previously cer2 tified, the Secretary may certify the eligibility for the pur3 poses of any program authorized under this title of each

4 such institution for a period not to exceed 6 years.

5 ‘‘(2) The Secretary shall notify each institution of the

6 expiration of its eligibility no later than six months prior

7 to such expiration.’’.

8 (g) CONFORMING AMENDMENT.—Section 498(h)(2)

9 is amended by striking ‘‘approval’’ and inserting ‘‘recogni10 tion’’.

11 (h) PROVISIONAL CERTIFICATION.—Section 498(i) is

12 amended by adding at the end the following new para13 graph:

14 ‘‘(4)(A) The Secretary may provisionally certify an

15 institution seeking approval of a change in ownership

16 based on the preliminary review by the Secretary of a ma17 terially complete application that is received by the Sec18 retary within 10 business days of the transaction for which

19 the approval is sought.

20 ‘‘(B) A provisional certification under this paragraph

21 shall expire no later than the end of the month following

22 the month in which the transaction occurred, except that

23 if the Secretary has not issued a decision on the applica24 tion for the change of ownership within that period, the

25 Secretary may continue such provisional certification on
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1 a month-to-month basis until such decision has been

2 issued.’’.

3 SEC. 479. PROGRAM REVIEW AND DATA.

4 (a) GENERAL AUTHORITY.—Section 498A(a) (20

5 U.S.C. 1099c–1(a)) is amended—

6 (1) in paragraph (2)—

7 (A) by striking ‘‘may give’’ and inserting

8 ‘‘shall give’’;

9 (B) by inserting before the semicolon at

10 the end of subparagraph (C) the following: ‘‘,

11 that are not accounted for by changes in those

12 programs’’;

13 (C) in subparagraph (D), by striking ‘‘the

14 appropriate’’ and everything that follows

15 through ‘‘of this part’’ and inserting ‘‘the State

16 licensing or authorizing agency’’;

17 (D) by striking subparagraph (F); and

18 (E) by redesignating subparagraph (G) as

19 subparagraph (F); and

20 (2) in paragraph (3)(A), by inserting ‘‘relevant’’

21 after ‘‘all’’.

22 (b) SPECIAL ADMINISTRATIVE RULES.—Section

23 498A(b) is amended to read as follows:
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1 ‘‘(b) SPECIAL ADMINISTRATIVE RULES.—(1) In car2 rying out paragraphs (1) and (2) of subsection (a), the

3 Secretary shall—

4 ‘‘(A) establish guidelines designed to ensure

5 uniformity of practice in the conduct of program re6 views of institutions; and

7 ‘‘(B) inform the appropriate State agency and

8 accrediting agency or association whenever taking

9 action against an institution under this section, sec10 tion 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

14 the regulations. In conducting such review, the Secretary

15 shall consult with relevant representatives of institutions

16 participating 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 as6 sistance to Hispanic-serving institutions to enable such in7 stitutions to improve and expand their capacity to serve

8 Hispanic 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

12 term ‘Hispanic-serving institution’ means an institu13 tion of higher education which—

14 ‘‘(A)(i) is an eligible institution; or

15 ‘‘(ii) is an institution of higher education

16 (as such term is defined in section 101(a)(2))

17 that provides a 4-year baccalaureate program,

18 is regionally accredited, and serves at least

19 1,500 Hispanic students;

20 ‘‘(B) at the time of application, has an en21 rollment of undergraduate full-time equivalent

22 students that is at least 25 percent Hispanic

23 students; and
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1 ‘‘(C) provides assurances that not less than

2 50 percent of its Hispanic students are low-in3 come individuals.

4 ‘‘(2) ELIGIBLE INSTITUTION.—The term ‘eligi5 ble institution’ means—

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

7 ‘‘(i) which has an enrollment of needy

8 students as required by subsection (b) of

9 this section;

10 ‘‘(ii) except as provided in section

11 522(b), the average educational and gen12 eral expenditures of which are low, per

13 full-time equivalent undergraduate student,

14 in comparison with the average educational

15 and general expenditures per full-time

16 equivalent undergraduate student of insti17 tutions that offer similar instruction;

18 ‘‘(iii) which is—

19 ‘‘(I) legally authorized to provide,

20 and provides within the State, an edu21 cational program for which such insti22 tution awards a bachelor’s degree; or

23 ‘‘(II) a junior or community col24 lege;
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1 ‘‘(iv) which is accredited by a nation2 ally recognized accrediting agency or asso3 ciation determined by the Secretary to be

4 reliable authority as to the quality of train5 ing offered or which is, according to such

6 an agency or association, making reason7 able progress toward accreditation;

8 ‘‘(v) which meets such other require9 ments as the Secretary may prescribe; and

10 ‘‘(vi) which is located in a State; and

11 ‘‘(B) any branch of any institution of high12 er education described under subparagraph (A)

13 which by itself satisfies the requirements con14 tained in clauses (i) and (ii) of such subpara15 graph.

16 For purposes of the determination of whether an in17 stitution is an eligible institution under this para18 graph, the factor described under subparagraph

19 (A)(i) shall be given twice the weight of the factor

20 described under subparagraph (A)(ii).

21 ‘‘(3) LOW-INCOME INDIVIDUAL.—The term

22 ‘low-income individual’ means an individual from a

23 family whose taxable income for the preceding year

24 did not exceed 150 percent of an amount equal to
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1 the poverty level determined by using criteria of pov2 erty established by the Bureau of the Census.

3 ‘‘(4) FULL-TIME EQUIVALENT STUDENTS.—The

4 term ‘full-time equivalent students’ means the sum

5 of the number of students enrolled full time at an

6 institution, plus the full-time equivalent of the num7 ber of students enrolled part time (determined on

8 the basis of the quotient of the sum of the credit

9 hours of all part-time students divided by 12) at

10 such institution.

11 ‘‘(5) JUNIOR OR COMMUNITY COLLEGE.—The

12 term ‘junior or community college’ means an institu13 tion of higher education—

14 ‘‘(A) that admits as regular students per15 sons who are beyond the age of compulsory

16 school attendance in the State in which the in17 stitution is located and who have the ability to

18 benefit from the training offered by the institu19 tion;

20 ‘‘(B) that does not provide an educational

21 program for which it awards a bachelor’s degree

22 (or an equivalent degree); and

23 ‘‘(C) that—
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1 ‘‘(i) provides an educational program

2 of not less than 2 years that is acceptable

3 for full credit toward such a degree; or

4 ‘‘(ii) offers a 2-year program in engi5 neering, mathematics, or the physical or

6 biological sciences, designed to prepare a

7 student to work as a technician or at the

8 semiprofessional level in engineering, sci9 entific, or other technological fields requir10 ing the understanding and application of

11 basic engineering, scientific, or mathemati12 cal principles of knowledge.

13 ‘‘(6) EDUCATIONAL AND GENERAL EXPENDI14 TURES.—For the purpose of this part, the term

15 ‘educational and general expenditures’ means the

16 total amount expended by an institution of higher

17 education for instruction, research, public service,

18 academic support (including library expenditures),

19 student services, institutional support, scholarships

20 and fellowships, operation and maintenance expendi21 tures for the physical plant, and any mandatory

22 transfers which the institution is required to pay by

23 law.
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1 ‘‘(7) ENDOWMENT FUND.—For the purpose of

2 this part, the term ‘endowment fund’ means a fund

3 that—

4 ‘‘(A) is established by State law, by an in5 stitution of higher education, or by a founda6 tion that is exempt from Federal income tax7 ation;

8 ‘‘(B) is maintained for the purpose of gen9 erating income for the support of the institu10 tion; and

11 ‘‘(C) does not include real estate.

12 ‘‘(b) ENROLLMENT OF NEEDY STUDENTS.—For the

13 purpose of this part, the term ‘enrollment of needy stu14 dents’ means an enrollment at an institution of higher

15 education or a junior or community college which in16 cludes—

17 ‘‘(1) at least 50 percent of the degree students

18 so enrolled who are receiving need-based assistance

19 under title IV of this Act in the second fiscal year

20 preceding the fiscal year for which the determination

21 is being made (other than loans for which an inter22 est subsidy is paid pursuant to section 428); or

23 ‘‘(2) a substantial percentage of students re24 ceiving Pell Grants in the second fiscal year preced25 ing the fiscal year for which determination is being
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1 made, in comparison with the percentage of students

2 receiving Pell Grants at all such institutions in the

3 second fiscal year preceding the fiscal year for which

4 the determination is made, unless the requirement of

5 this subdivision is waived under section 522(a).

6 ‘‘SEC. 503. AUTHORIZED ACTIVITIES.

7 ‘‘(a) TYPES OF ACTIVITIES AUTHORIZED.—Grants

8 awarded under this part shall be used by Hispanic-serving

9 institutions of higher education to assist such institutions

10 to plan, develop, undertake, and carry out programs.

11 ‘‘(b) AUTHORIZED ACTIVITIES.—Grants awarded

12 under this section shall be used for one or more of the

13 following activities:

14 ‘‘(1) purchase, rental, or lease of scientific or

15 laboratory equipment for educational purposes, in16 cluding instructional and research purposes;

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

18 improvement in classrooms, libraries, laboratories,

19 and other instructional facilities;

20 ‘‘(3) support of faculty exchanges, faculty devel21 opment, curriculum development, academic instruc22 tion, and faculty fellowships to assist in attaining

23 advanced degrees in their field of instruction;
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1 ‘‘(4) purchase of library books, periodicals, and

2 other educational materials, including telecommuni3 cations program material;

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

5 programs designed to improve academic success;

6 ‘‘(6) funds management, administrative man7 agement, and acquisition of equipment for use in

8 strengthening funds management;

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

10 and libraries;

11 ‘‘(8) establishing or improving a development

12 office to strengthen or improve contributions from

13 alumni and the private sector;

14 ‘‘(9) establishing or improving an endowment

15 fund;

16 ‘‘(10) creating or improving facilities for Inter17 net or other distance learning academic instruction

18 capabilities, including purchase or rental of tele19 communications technology equipment or services;

20 ‘‘(11) establishing or enhancing a program of

21 teacher education designed to qualify students to

22 teach in public elementary and secondary schools;

23 ‘‘(12) establishing community outreach pro24 grams which will encourage elementary and second-
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1 ary school students to develop academic skills and

2 the interest to pursue postsecondary education;

3 ‘‘(13) improving and expanding graduate and

4 professional opportunities for Hispanic students; and

5 ‘‘(14) other activities proposed in the applica6 tion submitted pursuant to section 504 that—

7 ‘‘(A) contribute to carrying out the pur8 poses of this section; and

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

10 of the review and acceptance of such applica11 tion.

12 ‘‘(c) ENDOWMENT FUND LIMITATIONS.—

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

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

15 part for any fiscal year for establishing or improving

16 an endowment fund.

17 ‘‘(2) MATCHING REQUIRED.—An institution

18 that uses any portion of its grant under this part for

19 any fiscal year for establishing or improving an en20 dowment fund shall provide an equal or greater

21 amount for such purposes from non-Federal funds.

22 ‘‘(3) REGULATIONS.—The Secretary shall pub23 lish rules and regulations specifically governing the

24 use of funds for establishing or improving an endow25 ment fund.
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1 ‘‘SEC. 504. APPLICATION PROCESS.

2 ‘‘(a) INSTITUTIONAL ELIGIBILITY.—Each Hispanic3 serving institution desiring to receive assistance under this

4 part shall submit to the Secretary such enrollment data

5 as may be necessary to demonstrate that it is a Hispanic6 serving institution, along with such other information and

7 data as the Secretary may by regulation require.

8 ‘‘(b) APPLICATIONS.—Any institution which is deter9 mined by the Secretary to be a Hispanic-serving institu10 tion (on the basis of the information and data submitted

11 under subsection (a)) may submit an application for as12 sistance under this section to the Secretary. Such applica13 tion shall include—

14 ‘‘(1) a 5-year plan for improving the assistance

15 provided by the Hispanic-serving institution to His16 panic and other low-income students; and

17 ‘‘(2) such other information and assurance as

18 the Secretary may require.

19 ‘‘(c) PRIORITY.—The Secretary shall give priority to

20 applications that contain satisfactory evidence that such

21 institution has entered into or will enter into a collabo22 rative arrangement with at least one local educational

23 agency or community-based organization having dem24 onstrated effectiveness to provide such agency with assist25 ance (from funds other than funds provided under this

26 part) in reducing Hispanic dropout rates, improving His-
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1 panic rates of academic achievement, and increasing the

2 rates at which Hispanic high school graduates enroll in

3 higher education.

4 ‘‘(d) SPECIAL RULE.—For the purposes of this part,

5 no Hispanic-serving college or university which is eligible

6 for and receives funds under this part may concurrently

7 receive other funds under title III.

8 ‘‘SEC. 505. DURATION OF GRANT.

9 ‘‘(a) AWARD PERIOD.—The Secretary may award a

10 grant to an eligible institution under this part for 5 years,

11 except that no institution shall be eligible to secure a sub12 sequent 5-year grant award under this part until two years

13 have elapsed since the expiration of its most recent 5-year

14 grant award.

15 ‘‘(b) LIMITATIONS.—In awarding grants under this

16 part the Secretary shall give priority to applicants who are

17 not already receiving a grant under this part, except that

18 for the purpose of this subsection a grant under section

19 524(a)(1) shall not be considered a grant under this part.

20 ‘‘(c) PLANNING GRANTS.—Notwithstanding sub21 section (a), the Secretary may award a grant to an eligible

22 institution under this part for a period of one year for

23 the purpose of preparation of plans and applications for

24 a grant under this part.
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1 ‘‘PART B—GENERAL PROVISIONS

2 ‘‘SEC. 521. APPLICATIONS FOR ASSISTANCE.

3 ‘‘(a) APPLICATIONS.—

4 ‘‘(1) APPLICATIONS REQUIRED.—Any institu5 tion which is eligible for assistance under this title

6 shall submit to the Secretary an application for as7 sistance at such time, in such form, and containing

8 such information, as may be necessary to enable the

9 Secretary to evaluate its need for assistance. Subject

10 to the availability of appropriations to carry out this

11 title, the Secretary may approve an application for

12 a grant under this title only if the Secretary deter13 mines that—

14 ‘‘(A) the application meets the require15 ments of subsection (b);

16 ‘‘(B) the applicant is eligible for assistance

17 in accordance with the part of this title under

18 which the assistance is sought; and

19 ‘‘(C) the applicant’s performance goals are

20 sufficiently rigorous as to meet the purposes of

21 this title and the performance objectives and in22 dicators for this title established by the Sec23 retary pursuant to the Government Perform24 ance and Results Act.

25 ‘‘(2) PRELIMINARY APPLICATIONS.—In carrying

26 out paragraph (1), the Secretary shall develop a pre-
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1 liminary application for use by eligible institutions

2 applying under part A prior to the submission of the

3 principal application.

4 ‘‘(b) CONTENTS.—An institution, in its application

5 for a grant, shall—

6 ‘‘(1) set forth, or describe how the institution

7 will develop, a comprehensive development plan to

8 strengthen the institution’s academic quality and in9 stitutional management, and otherwise provide for

10 institutional self-sufficiency and growth (including

11 measurable objectives for the institution and the

12 Secretary to use in monitoring the effectiveness of

13 activities under this title);

14 ‘‘(2) set forth policies and procedures to ensure

15 that Federal funds made available under this title

16 for any fiscal year will be used to supplement and,

17 to the extent practical, increase the funds that would

18 otherwise be made available for the purposes of sec19 tion 503, and in no case supplant those funds;

20 ‘‘(3) set forth policies and procedures for evalu21 ating the effectiveness in accomplishing the purpose

22 of the activities for which a grant is sought under

23 this title;

24 ‘‘(4) provide for such fiscal control and fund ac25 counting procedures as may be necessary to ensure
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1 proper disbursement of and accounting for funds

2 made available to the applicant under this title;

3 ‘‘(5) provide (A) for making such reports, in

4 such form and containing such information, as the

5 Secretary may require to carry out the functions

6 under this title and the Government Performance

7 and Results Act, including not less than one report

8 annually setting forth the institution’s progress to9 ward achieving the objectives for which the funds

10 were awarded, and (B) for keeping such records and

11 affording such access thereto, as the Secretary may

12 find necessary to assure the correctness and verifica13 tion of such reports;

14 ‘‘(6) provide that the institution will comply

15 with the limitations set forth in section 526;

16 ‘‘(7) describe in a comprehensive manner any

17 proposed project for which funds are sought under

18 the application and include—

19 ‘‘(A) a description of the various compo20 nents of the proposed project, including the es21 timated time required to complete each such

22 component;

23 ‘‘(B) in the case of any development

24 project which consists of several components (as

25 described by the applicant pursuant to subpara-
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1 graph (A)), a statement identifying those com2 ponents which, if separately funded, would be

3 sound investments of Federal funds and those

4 components which would be sound investments

5 of Federal funds only if funded under this title

6 in conjunction with other parts of the develop7 ment project (as specified by the applicant);

8 ‘‘(C) an evaluation by the applicant of the

9 priority given any proposed project for which

10 funds are sought in relation to any other

11 projects for which funds are sought by the ap12 plicant under this title, and a similar evaluation

13 regarding priorities among the components of

14 any single proposed project (as described by the

15 applicant pursuant to subparagraph (A));

16 ‘‘(D) a detailed budget showing the man17 ner in which funds for any proposed project

18 would be spent by the applicant; and

19 ‘‘(E) a detailed description of any activity

20 which involves the expenditure of more than

21 $25,000, as identified in the budget referred to

22 in subparagraph (D); and

23 ‘‘(8) include such other information as the Sec24 retary may prescribe.
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1 ‘‘(c) PRIORITY CRITERIA PUBLICATION RE2 QUIRED.—The Secretary shall publish in the Federal Reg3 ister, pursuant to chapter 5 of title 5, United States Code,

4 all policies and procedures required to exercise the author5 ity set forth in subsection (a). No other criteria, policies,

6 or procedures shall apply.

7 ‘‘(d) ELIGIBILITY DATA.—The Secretary shall use

8 the most recent and relevant data concerning the number

9 and percentage of students receiving need-based assist10 ance under title IV of this Act in making eligibility deter11 minations and shall advance the base-year forward follow12 ing each annual grant cycle.

13 ‘‘SEC. 522. WAIVER AUTHORITY AND REPORTING REQUIRE14 MENT.

15 ‘‘(a) WAIVER REQUIREMENTS; NEED-BASED ASSIST16 ANCE STUDENTS.—The Secretary may waive the require17 ments set forth in section 502(a)(2)(A)(i) in the case of

18 an institution—

19 ‘‘(1) which is extensively subsidized by the

20 State in which it is located and charges low or no

21 tuition;

22 ‘‘(2) which serves a substantial number of low23 income students as a percentage of its total student

24 population;
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1 ‘‘(3) which is contributing substantially to in2 creasing higher education opportunities for educa3 tionally disadvantaged, underrepresented, or minor4 ity students, who are low-income individuals;

5 ‘‘(4) which is substantially increasing higher

6 educational opportunities for individuals in rural or

7 other isolated areas which are unserved by post8 secondary institutions; or

9 ‘‘(5) wherever located, if the Secretary deter10 mines that the waiver will substantially increase

11 higher education opportunities appropriate to the

12 needs of Hispanic Americans.

13 ‘‘(b) WAIVER DETERMINATIONS; EXPENDITURES.—

14 (1) The Secretary may waive the requirements set forth

15 in section 502(a)(2)(A)(ii) if the Secretary determines,

16 based on persuasive evidence submitted by the institution,

17 that the institution’s failure to meet that criterion is due

18 to factors which, when used in the determination of com19 pliance with such criterion, distort such determination,

20 and that the institution’s designation as an eligible institu21 tion under part A is otherwise consistent with the pur22 poses of such part.

23 ‘‘(2) The Secretary shall submit to the Congress

24 every other year a report concerning the institutions

25 which, although not satisfying the criterion contained in
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1 section 502(a)(2)(A)(ii), have been determined to be eligi2 ble institutions under part A institutions which enroll sig3 nificant numbers of Black American, Hispanic, Native

4 American, Asian American, or Native Hawaiian students

5 under part A, as the case may be. Such report shall—

6 ‘‘(A) identify the factors referred to in para7 graph (1) which were considered by the Secretary as

8 factors that distorted the determination of compli9 ance with section 502(a)(2)(A)(ii); and

10 ‘‘(B) contain a list of each institution deter11 mined to be an eligible institution under part A in12 cluding a statement of the reasons for each such de13 termination.

14 ‘‘SEC. 523. APPLICATION REVIEW PROCESS.

15 ‘‘(a) REVIEW PANEL.—All applications submitted

16 under this title by institutions of higher education shall

17 be read by a panel of readers composed of individuals se18 lected by the Secretary. The Secretary shall assure that

19 no individual assigned under this section to review any ap20 plication has any conflict of interest with regard to the

21 application which might impair the impartiality with which

22 the individual conducts the review under this section.

23 ‘‘(2) All readers selected by the Secretary shall re24 ceive thorough instruction from the Secretary regarding

25 the evaluation process for applications submitted under
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1 this title and consistent with the provisions of this title,

2 including—

3 ‘‘(A) an enumeration of the factors to be used

4 to determine the quality of applications submitted

5 under this title; and

6 ‘‘(B) an enumeration of the factors to be used

7 to determine whether a grant should be awarded for

8 a project under this title, the amount of any such

9 grant, and the duration of any such grant.

10 ‘‘(b) RECOMMENDATIONS OF PANEL.—In awarding

11 grants under this title, the Secretary shall take into con12 sideration the recommendations of the panel made under

13 subsection (a).

14 ‘‘(c) NOTIFICATION.—Not later than June 30 of each

15 year, the Secretary shall notify each institution of higher

16 education making an application under this title of—

17 ‘‘(1) the scores given the applicant by the panel

18 pursuant to this section;

19 ‘‘(2) the recommendations of the panel with re20 spect to such application; and

21 ‘‘(3) the reasons for the decision of the Sec22 retary in awarding or refusing to award a grant

23 under this title, and any modifications, if any, in the

24 recommendations of the panel made by the Sec25 retary.
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1 ‘‘SEC. 524. COOPERATIVE ARRANGEMENTS.

2 ‘‘(a) GENERAL AUTHORITY.—The Secretary may

3 make grants to encourage cooperative arrangements with

4 funds available to carry out part A, between institutions

5 eligible for assistance under part A and between such in6 stitutions and institutions not receiving assistance under

7 this title for the activities described in section 503 so that

8 the resources of the cooperating institutions might be com9 bined and shared to achieve the purposes of such part and

10 avoid costly duplicative efforts and to enhance the develop11 ment of part A eligible institutions.

12 ‘‘(b) PRIORITY.—The Secretary shall give priority to

13 grants for the purposes described under subsection (a)

14 whenever the Secretary determines that the cooperative

15 arrangement is geographically and economically sound or

16 will benefit the applicant institution.

17 ‘‘(c) DURATION.—Grants to institutions having a co18 operative arrangement may be made under this section for

19 a period as determined under section 505.

20 ‘‘SEC. 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER

21 PROGRAMS.

22 ‘‘(a) ASSISTANCE ELIGIBILITY.—Each institution

23 which the Secretary determines to be an institution eligible

24 under part A may be eligible for waivers in accordance

25 with subsection (b).
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1 ‘‘(b) WAIVER APPLICABILITY.—(1) Subject to, and in

2 accordance with, regulations promulgated for the purpose

3 of this section, in the case of any application by an institu4 tion referred to in subsection (a) for assistance under any

5 programs specified in paragraph (2), the Secretary is au6 thorized, if such application is otherwise approvable, to

7 waive any requirement for a non-Federal share of the cost

8 of the program or project, or, to the extent not inconsist9 ent with other law, to give, or require to be given, priority

10 consideration of the application in relation to applications

11 from other institutions.

12 ‘‘(2) The provisions of this section shall apply to any

13 program authorized by title IV or VII of this Act.

14 ‘‘(c) LIMITATION.—The Secretary shall not waive,

15 under subsection (b), the non-Federal share requirement

16 for any program for applications which, if approved, would

17 require the expenditure of more than 10 percent of the

18 appropriations for the program for any fiscal year.

19 ‘‘SEC. 526. LIMITATIONS.

20 The funds appropriated under section 528 may not

21 be used—

22 ‘‘(1) for a school or department of divinity or

23 any religious worship or sectarian activity;
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1 ‘‘(2) for an activity that is inconsistent with a

2 State plan for desegregation of higher education ap3 plicable to such institution;

4 ‘‘(3) for an activity that is inconsistent with a

5 State plan of higher education applicable to such in6 stitution; or

7 ‘‘(4) for purposes other than the purposes set

8 forth in the approved application under which the

9 funds were made available to the institution.

10 ‘‘SEC. 527. PENALTIES.

11 Whoever, being an officer, director, agent, or em12 ployee of, or connected in any capacity with, any recipient

13 of Federal financial assistance or grant pursuant to this

14 title embezzles, willfully misapplies, steals, or obtains by

15 fraud any of the funds which are the subject of such grant

16 or assistance, shall be fined not more than $10,000 or im17 prisoned for not more than 2 years, or both.

18 ‘‘SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

19 ‘‘(a) AUTHORIZATIONS.—There are authorized to be

20 appropriated to carry out part A, $80,000,000 for fiscal

21 year 1999, and such sums as may be necessary for each

22 of the 4 succeeding fiscal years.

23 ‘‘(b) USE OF MULTIPLE YEAR AWARDS.—In the

24 event of a multiple year award to any institution under

25 this title, the Secretary shall make funds available for such
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1 award from funds appropriated for this title for the fiscal

2 year in which such funds are to be used by the recipient.’’.

3 TITLE VI—INTERNATIONAL AND

4 GRADUATE EDUCATION PRO5 GRAMS

6 SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE

7 STUDIES.

8 (a) STATUTORY STRUCTURE.—Title VI is amended—

9 (1) by striking

10 ‘‘PART A—INTERNATIONAL AND FOREIGN

11 LANGUAGE STUDIES’’

12 and inserting the following:

13 ‘‘PART A—INTERNATIONAL EDUCATION

14 ‘‘Subpart 1—International and Foreign Language

15 Studies’’;

16 (2) by striking

17 ‘‘PART B—BUSINESS AND INTERNATIONAL

18 EDUCATION PROGRAMS’’

19 and inserting the following:

20 ‘‘Subpart 2—Business and International Education

21 Programs’’;

22 (3) by striking

23 ‘‘PART C—INSTITUTE FOR INTERNATIONAL

24 PUBLIC POLICY’’

25 and inserting the following:
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1 ‘‘Subpart 3—Institute for International Public

2 Policy’’; and

3 (4) by striking

4 ‘‘PART D—GENERAL PROVISIONS’’

5 and inserting the following:

6 ‘‘Subpart 4—General Provisions’’.

7 (b) FINDINGS AND PURPOSES.—Section 601 (20

8 U.S.C. 1121) is amended to read as follows:

9 ‘‘SEC. 601. FINDINGS AND PURPOSES.

10 ‘‘(a) FINDINGS.—The Congress finds as follows:

11 ‘‘(1) The security, stability, and economic vital12 ity of the United States in a complex global era de13 pend upon American experts in and citizens knowl14 edgeable about world regions, foreign languages and

15 international affairs, as well as on a strong research

16 base in these areas.

17 ‘‘(2) Advances in communications technology

18 and the growth of regional and global problems

19 make knowledge of other countries and the ability to

20 communicate in other languages more essential to

21 the promotion of mutual understanding and coopera22 tion among nations and their peoples.

23 ‘‘(3) Dramatic post-Cold War changes in the

24 world’s geopolitical and economic landscapes are cre25 ating needs for American expertise and knowledge
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1 about a greater diversity of less commonly taught

2 foreign languages and nations of the world.

3 ‘‘(4) Systematic efforts are necessary to en4 hance the capacity of institutions of higher edu5 cation in the United States and to encourage a

6 broader cross-section of institutions of higher edu7 cation to develop and expand programs for produc8 ing graduates with international and foreign lan9 guage expertise and knowledge, and research on

10 such areas, in a variety of disciplines and at all lev11 els of graduate and undergraduate education.

12 ‘‘(5) Cooperative efforts among the Federal

13 Government, institutions of higher education, and

14 the private sector are necessary to promote the gen15 eration and dissemination of information about

16 world regions, foreign languages, and international

17 affairs throughout education, government, business,

18 civic, and nonprofit sectors in the United States.

19 ‘‘(b) PURPOSES.—The purposes of this part are—

20 ‘‘(1)(A) to support centers, programs and fel21 lowships in institutions of higher education in the

22 United States for producing increased numbers of

23 trained personnel and research in foreign languages,

24 area and other international studies;
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1 ‘‘(B) to develop a pool of international experts

2 to meet national needs;

3 ‘‘(C) to develop and validate specialized mate4 rials and techniques for foreign language acquisition

5 and fluency, emphasizing (but not limited to) the

6 less commonly taught languages;

7 ‘‘(D) to promote access to research and training

8 overseas; and

9 ‘‘(E) to advance the internationalization of a

10 variety of disciplines throughout undergraduate and

11 graduate education;

12 ‘‘(2) to support cooperative efforts promoting

13 access to and the dissemination of international and

14 foreign language knowledge, teaching materials and

15 research throughout education, government, busi16 ness, civic and nonprofit sectors in the United States

17 through the use of advanced technologies; and

18 ‘‘(3) to coordinate the programs of the Federal

19 Government in the areas of foreign language, area

20 and other international studies, including profes21 sional international affairs education and research.’’.

22 (c) GRADUATE AND UNDERGRADUATE NATIONAL

23 RESOURCE CENTERS.—

24 (1) NATIONAL RESOURCE CENTERS.—Section

25 602(a) (20 U.S.C. 1122(a)) is amended—
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1 (A) in the heading, by striking ‘‘NATIONAL

2 LANGUAGE AND AREA CENTERS AUTHORIZED’’

3 and inserting ‘‘NATIONAL RESOURCE CENTERS

4 FOR FOREIGN LANGUAGE AND AREA OR

5 INTERNATIONAL STUDIES AUTHORIZED’’;

6 (B) in paragraph (1)(A), by striking ‘‘com7 prehensive language and area centers’’ and in8 serting ‘‘comprehensive foreign language and

9 area or international studies centers’’;

10 (C) in paragraph (1)(B), by striking ‘‘lan11 guage and area centers’’ and inserting ‘‘foreign

12 language and area or international studies cen13 ters’’; and

14 (D) by striking paragraph (2) and insert15 ing the following:

16 ‘‘(2) AUTHORIZED ACTIVITIES.—

17 ‘‘(A) IN GENERAL.—Any grant made

18 under paragraph (1) may be used to pay all or

19 part of the cost of establishing or operating a

20 center or program, in accordance with this sub21 section.

22 ‘‘(B) MANDATORY ACTIVITIES.—Activities

23 to be conducted by centers assisted under this

24 subsection shall include—
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1 ‘‘(i) support for the instruction of for2 eign languages and the offering of courses

3 in a variety of nonlanguage disciplines that

4 cover the center’s subject area or topic,

5 and the incorporation of such instruction

6 in baccalaureate and graduate programs of

7 study in a variety of disciplinary, inter8 disciplinary, or professional fields;

9 ‘‘(ii) support for teaching and re10 search materials, including library acquisi11 tions, in the center’s subject area or topic;

12 ‘‘(iii) programs of outreach or linkage

13 with State and local educational agencies,

14 postsecondary education institutions at all

15 levels, professional schools, government,

16 business, media, or the general public; and

17 ‘‘(iv) program coordination and devel18 opment, curriculum planning and develop19 ment, and student advisement.

20 ‘‘(C) PERMISSIBLE ACTIVITIES.—Activities

21 to be conducted by centers assisted under this

22 subsection may include—

23 ‘‘(i) support for the creation of faculty

24 positions in disciplines that are underrep-
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1 resented in the center’s instructional pro2 gram;

3 ‘‘(ii) establishment and maintenance

4 of linkages with overseas institutions of

5 higher education for the purpose of con6 tributing to the teaching and research of

7 the center;

8 ‘‘(iii) support for bringing visiting

9 scholars and faculty to the center to teach

10 or conduct research;

11 ‘‘(iv) professional development of the

12 center’s faculty and staff;

13 ‘‘(v) projects conducted in cooperation

14 with other National Resource Centers ad15 dressing themes of world regional, cross-re16 gional, international, or global importance;

17 ‘‘(vi) summer institutes in the United

18 States or abroad designed to provide lan19 guage and area training in the center’s

20 field or topic; and

21 ‘‘(vii) support for faculty, staff, and

22 student travel in foreign areas, regions, or

23 countries, and for the development and

24 support of educational programs abroad

25 for students.’’.
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1 (2) GRADUATE FELLOWSHIPS; EXPENSE LIMI2 TATIONS.—Section 602 is further amended by strik3 ing subsections (b) and (c) and inserting the follow4 ing:

5 ‘‘(b) GRADUATE FELLOWSHIPS FOR FOREIGN LAN6 GUAGE AND AREA OR INTERNATIONAL STUDIES.—

7 ‘‘(1) AUTHORITY.—The Secretary is authorized

8 to make grants to institutions of higher education or

9 combinations of such institutions for the purpose of

10 paying fellowships to individuals undergoing ad11 vanced training in any center or program approved

12 by the Secretary under this part.

13 ‘‘(2) ELIGIBLE STUDENTS.—Students receiving

14 fellowships described in paragraph (1) shall be indi15 viduals who are engaged in an instructional program

16 with stated performance goals for functional foreign

17 language use or in a program developing such per18 formance goals, in combination with area studies,

19 international studies, or the international aspects of

20 a professional studies program, including

21 predissertation level studies, preparation for dis22 sertation research, dissertation research abroad, and

23 dissertation writing.

24 ‘‘(c) RULES WITH RESPECT TO EXPENSES.—
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1 ‘‘(1) UNDERGRADUATE TRAVEL.—No funds

2 may be expended under this part for undergraduate

3 travel except in accordance with rules prescribed by

4 the Secretary setting forth policies and procedures

5 to assure that Federal funds made available for such

6 travel are expended as part of a formal program of

7 supervised study.

8 ‘‘(2) GRADUATE DEPENDENT AND TRAVEL EX9 PENSES.—Fellowships awarded to graduate level re10 cipients may include allowances for dependents and

11 for travel for research and study in the United

12 States and abroad.’’.

13 (d) LANGUAGE RESOURCE CENTERS.—Section

14 603(a) (20 U.S.C. 1123(a)) is amended—

15 (1) by striking paragraph (5) and inserting the

16 following:

17 ‘‘(5) a significant focus on the teaching and

18 learning needs of the less commonly taught lan19 guages, including an assessment of the strategic

20 needs, the determination of ways to meet those

21 needs nationally, and the publication and dissemina22 tion of instructional materials in the less commonly

23 taught languages;’’;

24 (2) by striking the period at the end of para25 graph (6) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (6) the follow2 ing new paragraph:

3 ‘‘(7) the operation of intensive summer lan4 guage institutes to train advanced foreign language

5 students, provide professional development, and im6 prove language instruction through preservice and

7 inservice language training for teachers.’’.

8 (e) UNDERGRADUATE INTERNATIONAL STUDIES AND

9 FOREIGN LANGUAGE PROGRAMS.—Section 604 (20

10 U.S.C. 1124) is amended—

11 (1) in the heading of subsection (a), by striking

12 ‘‘INCENTIVES’’ and all that follows through ‘‘PRO13 GRAMS’’ and inserting ‘‘PROGRAM INCENTIVES’’;

14 (2) in subsection (a)(1)—

15 (A) by striking ‘‘or combinations of such

16 institutions’’ in the first sentence and inserting

17 ‘‘, combinations of such institutions, or partner18 ships between nonprofit educational organiza19 tions and such institutions,’’;

20 (B) by striking ‘‘a program’’ and inserting

21 ‘‘programs’’; and

22 (C) by striking the second sentence and in23 serting the following: ‘‘Such grants shall be

24 awarded for the purpose of seeking to create

25 new programs or to strengthen existing pro-
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1 grams in undergraduate area studies, foreign

2 languages, and other international fields.’’;

3 (3) by striking paragraphs (2) and (3) and in4 serting the following:

5 ‘‘(2) USE OF FUNDS.—Grants made under this

6 section may be used for Federal share of the cost of

7 projects and activities which are an integral part of

8 such a program, such as—

9 ‘‘(A) planning for the development and ex10 pansion of programs in undergraduate inter11 national studies, and foreign languages and the

12 internationalization of undergraduate education;

13 ‘‘(B) teaching, research, curriculum devel14 opment, and other related activities;

15 ‘‘(C) training of faculty members in for16 eign countries;

17 ‘‘(D) expansion of existing and develop18 ment of new opportunities for learning foreign

19 languages, including the less commonly taught

20 languages;

21 ‘‘(E) programs under which foreign teach22 ers and scholars may visit institutions as visit23 ing faculty;

24 ‘‘(F) international education programs de25 signed to develop or enhance linkages between
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1 two- and four-year institutions of higher edu2 cation, or baccalaureate and postbaccalaureate

3 programs or institutions;

4 ‘‘(G) the development of an international

5 dimension in preservice and inservice teacher

6 training;

7 ‘‘(H) the development of undergraduate

8 educational programs in locations abroad where

9 such opportunities are not otherwise available

10 or which serve students for whom such opportu11 nities are not otherwise available and which

12 provide courses that are closely related to on13 campus foreign language and international cur14 ricula;

15 ‘‘(I) the integration of new and continuing

16 education abroad opportunities for undergradu17 ate students into curricula of specific degree

18 programs;

19 ‘‘(J) the development of model programs to

20 enrich or enhance the effectiveness of edu21 cational programs abroad, including

22 predeparture and postreturn programs, and the

23 integration of educational programs abroad into

24 the curriculum of the home institution;
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1 ‘‘(K) the expansion of library and teaching

2 resources;

3 ‘‘(L) the development of programs de4 signed to integrate professional and technical

5 education with area studies, foreign languages,

6 and other international fields;

7 ‘‘(M) the establishment of linkages over8 seas with institutions of higher education and

9 organizations that contribute to the educational

10 objectives of this subsection;

11 ‘‘(N) the conduct of summer institutes in

12 foreign area and other international fields to

13 provide faculty and curriculum development, in14 cluding the integration of professional and tech15 nical education with foreign area and other

16 international studies, and to provide foreign

17 area and other international knowledge or skills

18 to government personnel or private sector pro19 fessionals in international activities;

20 ‘‘(O) the development of partnerships be21 tween institutions of higher education and the

22 private sector, government, and elementary and

23 secondary education institutions to enhance

24 international knowledge and skills; and
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1 ‘‘(P) the use of innovative technology to in2 crease access to international education pro3 grams.

4 ‘‘(3) NON-FEDERAL SHARE.—The non-Federal

5 share of the cost of the programs assisted under this

6 subsection may be provided in cash from the private

7 sector corporations or foundations in an amount

8 equal to one-third of the total requested grant

9 amount, or may be provided as in-cash or in-kind

10 contribution from institutional and noninstitutional

11 funds, including State and private sector corporation

12 or foundation contributions, equal to one-half of the

13 total requested grant amount.’’;

14 (4) by adding at the end of subsection (a) the

15 following new paragraphs:

16 ‘‘(5) SPECIAL RULE.—The Secretary may waive

17 or reduce the required non-Federal share for title

18 III-eligible institutions which have submitted a grant

19 application under this section.

20 ‘‘(6) EVALUATION CRITERIA AND REPORT.—As

21 a condition for the award of any grant under this

22 subsection, the Secretary may establish criteria for

23 evaluating programs and require an annual report

24 which evaluates the progress and performance of

25 students in such programs.’’.
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1 (5) by striking subsection (b);

2 (6) by redesignating subsection (c) as sub3 section (b); and

4 (7) by adding at the end the following new sub5 section:

6 ‘‘(c) FUNDING SUPPORT.—The Secretary may use no

7 more than 10 percent of the total amount appropriated

8 for this part for carrying out the purposes of this sec9 tion.’’.

10 (f ) INTENSIVE SUMMER LANGUAGE INSTITUTES.—

11 Section 605 (20 U.S.C. 1124a) is repealed.

12 (g) RESEARCH; STUDIES; ANNUAL REPORT.—Section

13 606(a) (20 U.S.C. 1125(a)) is amended—

14 (1) in paragraph (4), by inserting before the

15 semicolon at the end the following: ‘‘, area studies,

16 or other international fields’’;

17 (2) by striking ‘‘and’’ at the end of paragraph

18 (5);

19 (3) by striking the period at the end of para20 graph (6) and inserting ‘‘; and’’; and

21 (4) by inserting after paragraph (6) the follow22 ing new paragraph:

23 ‘‘(7) studies and surveys of the uses of tech24 nology in foreign language, area and international

25 studies programs.’’.
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1 (h) PERIODICALS.—Section 607 (20 U.S.C. 1125a)

2 is amended to read as follows:

3 ‘‘SEC. 607. TECHNOLOGICAL INNOVATION AND COOPERA4 TION FOR FOREIGN INFORMATION ACCESS.

5 ‘‘(a) AUTHORITY.—The Secretary is authorized to

6 make grants to institutions of higher education, public or

7 nonprofit private library institutions, or consortia of such

8 institutions, to develop innovative techniques or programs

9 using new electronic technologies to collect, organize, pre10 serve and widely disseminate information on world regions

11 and countries other than the United States that address

12 the nation’s teaching and research needs in international

13 education and foreign languages.

14 ‘‘(b) AUTHORIZED ACTIVITIES.—Grants under this

15 section may be used—

16 ‘‘(1) to facilitate access to or preserve foreign

17 information resources in print or electronic forms;

18 ‘‘(2) to develop new means of immediate, full19 text document delivery for information and scholar20 ship from abroad;

21 ‘‘(3) to develop new means of shared electronic

22 access to international data;

23 ‘‘(4) to support collaborative projects of index24 ing, cataloging, and other means of bibliographic ac-
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1 cess for scholars to important research materials

2 published or distributed outside the United States;

3 ‘‘(5) to develop methods for the wide dissemina4 tion of resources written in non-Roman language

5 alphabets;

6 ‘‘(6) to assist teachers of less commonly taught

7 languages in acquiring, via electronic and other

8 means, materials suitable for classroom use; and

9 ‘‘(7) to promote collaborative technology based

10 projects in foreign languages, area and international

11 studies among grant recipients under this title.

12 ‘‘(c) APPLICATION.—Each institution or consortium

13 desiring a grant under this section shall submit an appli14 cation to the Secretary at such time, in such manner, and

15 accompanied by such information and assurances as the

16 Secretary may reasonably require.

17 ‘‘(d) MATCH REQUIRED.—The Federal share of the

18 total cost of carrying out a program supported by a grant

under this section shall not be more than 662 19 ⁄3 percent.

20 The non-Federal share of such cost may be provided either

21 in-kind or in cash, and may include contributions from pri22 vate sector corporations or foundations.’’.

23 (i) DEVELOPMENT GRANTS.—Section 610 (20 U.S.C.

24 1127) is amended by adding at the end the following new

25 subsection:
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1 ‘‘(d) DEVELOPMENT GRANTS AUTHORIZED.—The

2 Secretary is encouraged to consider the establishment of

3 new centers, and may use at least 10 percent of the funds

4 available for this section to make grants for the establish5 ment of such new centers.’’.

6 (j) AUTHORIZATION OF APPROPRIATIONS.—Section

7 610A (20 U.S.C. 1128) is amended by striking ‘‘1993’’

8 and inserting ‘‘1999’’.

9 (k) CONFORMING AMENDMENT.—Title VI is further

10 amended by redesignating sections 606, 607, 608, 609,

11 610, and 610A as sections 605 through 610, respectively.

12 SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PRO13 GRAMS.

14 (a) CENTERS FOR INTERNATIONAL BUSINESS EDU15 CATION.—Section 612 (20 U.S.C. 1130–1) is amended—

16 (1) in subsection (c)(1)(B), by striking ‘‘ad17 vanced’’;

18 (2) in subsection (c)(1)(C), by striking ‘‘evening

19 or summer programs,’’ and inserting ‘‘programs’’;

20 (3) in subsection (c)(2)—

21 (A) by striking ‘‘and’’ at the end of sub22 paragraph (E);

23 (B) by redesignating subparagraph (F) as

24 subparagraph (G); and
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1 (C) by inserting after subparagraph (E)

2 the following new subparagraph:

3 ‘‘(F) professional graduate degrees in

4 translation and interpretation; and’’; and

5 (4) in subsection (d)(2)(G), by inserting before

6 the period at the end the following: ‘‘, such as a rep7 resentative of a community college in the region

8 served by the center’’.

9 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

10 614 (20 U.S.C. 1130b) is amended by striking ‘‘1993’’

11 each place it appears and inserting ‘‘1999’’.

12 (c) TECHNICAL AMENDMENT.—The heading of sec13 tion 611 (20 U.S.C. 1130) is amended to read as follows:

14 ‘‘SEC. 611. FINDINGS AND PURPOSES.’’.

15 SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

16 (a) MINORITY FOREIGN SERVICE PROFESSIONAL

17 DEVELOPMENT PROGRAM.—Section 621(e) (20 U.S.C.

18 1131(e)) is amended by striking ‘‘one-fourth’’ and insert19 ing ‘‘one-half’’.

20 (b) JUNIOR YEAR AND SUMMER ABROAD PRO21 GRAM.—Section 622 (20 U.S.C. 1131a) is amended—

22 (1) in the heading of such section, by inserting

23 ‘‘AND SUMMER’’ after ‘‘YEAR’’;

24 (2) in subsection (a)—
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1 (A) by striking ‘‘shall conduct’’ and insert2 ing ‘‘is authorized to conduct’’;

3 (B) by inserting ‘‘and summer’’ after ‘‘jun4 ior year’’ each place it appears in the first and

5 second sentences;

6 (C) by inserting ‘‘in a junior year abroad

7 program’’ after ‘‘Each student’’ in the last sen8 tence;

9 (3) in subsection (b)(2), by inserting ‘‘or sum10 mer’’ after ‘‘junior year’’; and

11 (4) in subsection (c)—

12 (A) by inserting ‘‘or summer abroad pro13 gram’’ after ‘‘junior year abroad program’’ each

14 place it appears; and

15 (B) by striking ‘‘abroad or internship’’ and

16 inserting ‘‘abroad, summer abroad, or intern17 ship’’.

18 (c) INTERNSHIPS.—Section 624 (20 U.S.C. 1132c)

19 is amended—

20 (1) by striking ‘‘The Institute’’ and inserting

21 ‘‘(a) IN GENERAL.—The Institute’’; and

22 (2) by adding at the end the following new sub23 section:

24 ‘‘(b) POSTBACCALAUREATE INTERNSHIPS.—The In25 stitute shall enter into agreements with institutions of
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1 higher education described in the first sentence of sub2 section (a) to conduct internships in Washington, D.C.,

3 for students who have completed study for the bacca4 laureate degree. The Internship program authorized by

5 this subsection shall—

6 ‘‘(1) be designated to assist the students to pre7 pare for a master’s degree program;

8 ‘‘(2) be carried out with the assistance of the

9 Woodrow Wilson Fellowship program;

10 ‘‘(3) contain work experience for the students

11 designated to contribute to the objectives set forth in

12 paragraph (1); and

13 ‘‘(4) contain such other elements as the Insti14 tute determines will carry out the objectives of this

15 subsection.’’.

16 (d) NEW PROGRAMS.—Title VI is further amended—

17 (1) by redesignating sections 625 through 627

18 (20 U.S.C. 1131d–1131f) as sections 627 through

19 629; and

20 (2) by inserting after section 624 the following

21 new sections:

22 ‘‘SEC. 625. INSTITUTIONAL DEVELOPMENT.

23 ‘‘(a) IN GENERAL.—The Institute shall make grants,

24 from amounts available to it in each fiscal year, to Histori25 cally Black Colleges and Universities, Hispanic-serving In-
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1 stitutions, Tribally Controlled Indian Community Colleges,

2 and minority institutions, to enable such colleges, univer3 sities, and institutions to strengthen international affairs

4 programs.

5 ‘‘(b) APPLICATION.—No grant may be made by the

6 Institute under this section unless an application is made

7 by the college, university, or institution at such time, in

8 such manner, and accompanied by such information as the

9 Institute may require.

10 ‘‘(c) DEFINITIONS.—As used in this section—

11 ‘‘(1) the term ‘Historically Black College and

12 University’ has the same meaning given the term by

13 section 322(2) of this Act;

14 ‘‘(2) the term ‘Hispanic-serving Institution’ has

15 the same meaning given the term by section

16 316(b)(1) of this Act;

17 ‘‘(3) the term ‘Tribally controlled Indian com18 munity college’ has the same meaning given that

19 term by the Tribally Controlled Community College

20 Assistance Act of 1978; and

21 ‘‘(4) the term ‘minority institution’ has the

22 same meaning given that term in section 347 of this

23 Act.
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1 ‘‘SEC. 626. INTERAGENCY COMMITTEE ON MINORITY CA2 REERS IN INTERNATIONAL AFFAIRS.

3 ‘‘(a) ESTABLISHMENT.—There is established in the

4 executive branch of the Federal Government an Inter5 agency Committee on Minority Careers in International

6 Affairs composed of 7 members. The members of the Com7 mittee shall be—

8 ‘‘(1) the Undersecretary for International Af9 fairs and Commodity Programs of the Department

10 of Agriculture, appointed by the Secretary of Agri11 culture;

12 ‘‘(2) the Assistant Secretary and Director Gen13 eral, the Commercial Service of the Department of

14 Commerce, appointed by the Secretary of Commerce;

15 ‘‘(3) the Undersecretary of Defense for Person16 nel and Readiness of the Department of Defense,

17 appointed by the Secretary of Defense;

18 ‘‘(4) the Assistant Secretary for Postsecondary

19 Education in the Department of Education, ap20 pointed by the Secretary of Education;

21 ‘‘(5) the Director General of the Foreign Serv22 ice of the Department of State, appointed by the

23 Secretary of State;

24 ‘‘(6) the General Counsel of the Agency for

25 International Development, appointed by the Admin26 istrator; and
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1 ‘‘(7) the Associate Director for Educational and

2 Cultural Affairs of the United States Information

3 Agency, appointed by the Director.

4 ‘‘(b) FUNCTIONS.—The Interagency Committee es5 tablished by this section shall—

6 ‘‘(1) advise the Secretary and the Institute with

7 respect to programs authorized by this part; and

8 ‘‘(2) promote policies in each department and

9 agency participating on the Committee that are de10 signed to carry out the objectives of this part.’’.

11 (e) AUTHORIZATION.—Section 629 (20 U.S.C.

12 1131f) (as redesignated by subsection (d)) is amended by

13 striking ‘‘1993’’ and inserting ‘‘1999’’.

14 SEC. 604. GENERAL PROVISIONS.

15 (a) DEFINITIONS.—Section 631(a) (20 U.S.C.

16 1132(a)) is amended—

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

18 (7);

19 (2) by striking the period at the end of para20 graph (8) and inserting ‘‘; and’’; and

21 (3) by inserting after paragraph (8) the follow22 ing new paragraphs:

23 ‘‘(9) the term ‘internationalization of under24 graduate education’ means the incorporation of for25 eign languages and area and international studies
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1 perspectives in any undergraduate course or curricu2 lum in order to provide international content for

3 that course of study; and

4 ‘‘(10) the term ‘educational programs abroad’

5 means programs of study, internships, or service

6 learning outside the United States which are part of

7 a foreign language or other international curriculum

8 at the undergraduate or graduate education levels.’’.

9 (b) REPEAL.—Section 632 (20 U.S.C. 1132–1) is re10 pealed.

11 SEC. 605. TRANSFER AND REAUTHORIZATION OF GRAD12 UATE ASSISTANCE IN AREAS OF NATIONAL

13 NEED PROGRAM.

14 (a) AMENDMENT.—Title VI is amended by adding at

15 the end the following new part:

16 ‘‘PART B—GRADUATE ASSISTANCE IN AREAS OF

17 NATIONAL NEED

18 ‘‘SEC. 651. PURPOSE.

19 ‘‘In order to sustain and enhance the capacity for

20 graduate education in areas of national need, it is the pur21 pose of this part to provide, through academic depart22 ments and programs of institutions of higher education,

23 a fellowship program to assist graduate students of supe24 rior ability who demonstrate financial need.
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1 ‘‘SEC. 652. GRANTS TO ACADEMIC DEPARTMENTS AND PRO2 GRAMS OF INSTITUTIONS.

3 ‘‘(a) GRANT AUTHORITY.—

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

5 grants to academic departments and programs and

6 other academic units of institutions of higher edu7 cation that provide courses of study leading to a

8 graduate degree in order to enable such institutions

9 to provide assistance to graduate students in accord10 ance with this part. The Secretary shall coordinate

11 the administration and regulation of programs under

12 this part with other Federal programs providing

13 graduate assistance to minimize duplication and im14 prove efficiency.

15 ‘‘(2) ADDITIONAL GRANTS.—The Secretary may

16 also make grants to such departments and programs

17 and to other units of institutions of higher education

18 granting graduate degrees which submit joint pro19 posals involving nondegree granting institutions

20 which have formal arrangements for the support of

21 doctoral dissertation research with degree-granting

22 institutions. Nondegree granting institutions eligible

23 for awards as part of such joint proposals include

24 any organization which—

25 ‘‘(A) is described in section 501(c)(3) of

26 the Internal Revenue Code of 1986, and is ex-
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1 empt from tax under section 501(a) of such

2 Code;

3 ‘‘(B) is organized and operated substan4 tially to conduct scientific and cultural research

5 and graduate training programs;

6 ‘‘(C) is not a private foundation;

7 ‘‘(D) has academic personnel for instruc8 tion and counseling who meet the standards of

9 the institution of higher education in which the

10 students are enrolled; and

11 ‘‘(E) has necessary research resources not

12 otherwise readily available in such institutions

13 to such students.

14 ‘‘(b) AWARD AND DURATION OF GRANTS.—

15 ‘‘(1) AWARDS.—The principal criterion for the

16 allocation of awards shall be the relative quality of

17 the graduate programs presented in competing appli18 cations. Consistent with an allocation of awards

19 based on quality of competing applications, the Sec20 retary shall, in making such grants, promote an eq21 uitable geographic distribution among eligible public

22 and private institutions of higher education.

23 ‘‘(2) DURATION.—The Secretary shall approve

24 a grant recipient under this part for a 3-year period.

25 From the sums appropriated under this part for any
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1 fiscal year, the Secretary shall not make a grant to

2 any academic department or program of an institu3 tion of higher education of less than $125,000 or

4 greater than $750,000 per fiscal year.

5 ‘‘(3) REALLOTMENT.—Whenever the Secretary

6 determines that an academic department or program

7 of an institution of higher education is unable to use

8 all of the amounts available to it under this part, the

9 Secretary shall, on such dates during each fiscal

10 year as the Secretary may fix, reallot the amounts

11 not needed to academic departments and programs

12 of institutions which can use the grants authorized

13 by this part.

14 ‘‘SEC. 653. INSTITUTIONAL ELIGIBILITY.

15 ‘‘(a) ELIGIBILITY CRITERIA.—Any academic depart16 ment or program of an institution of higher education that

17 offers a program of postbaccalaureate study leading to a

18 graduate degree in an area of national need (as designated

19 under subsection (b)) may apply for a grant under this

20 part. No department or program shall be eligible for a

21 grant unless the program of postbaccalaureate study has

22 been in existence for at least 4 years at the time of appli23 cation for assistance under this part.

24 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL

25 NEED.—After consultation with appropriate Federal and
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1 nonprofit agencies and organizations, the Secretary shall

2 designate areas of national need. In making such designa3 tions, the Secretary shall take into account the extent to

4 which the interest is compelling, the extent to which other

5 Federal programs support postbaccalaureate study in the

6 area concerned, and an assessment of how the program

7 could achieve the most significant impact with available

8 resources.

9 ‘‘SEC. 654. CRITERIA FOR APPLICATIONS.

10 ‘‘(a) SELECTION OF APPLICATIONS.—The Secretary

11 shall make grants to academic departments and programs

12 of institutions of higher education on the basis of applica13 tions submitted in accordance with subsection (b). Appli14 cations shall be ranked on program quality by review pan15 els of nationally recognized scholars and evaluated on the

16 quality and effectiveness of the academic program and the

17 achievement and promise of the students to be served. To

18 the extent possible (consistent with other provisions of this

19 section), the Secretary shall make awards that are consist20 ent with recommendations of the review panels.

21 ‘‘(b) CONTENTS OF APPLICATIONS.—An academic

22 department or program of an institution of higher edu23 cation, in its application for a grant, shall—

24 ‘‘(1) describe the current academic program of

25 the applicant for which the grant is sought;
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1 ‘‘(2) provide assurances that the applicant will

2 provide, from other non-Federal funds, for the pur3 poses of the fellowship program under this part an

4 amount equal to at least 25 percent of the amount

5 of the grant received under this part, which con6 tribution may be in cash or in kind fairly valued;

7 ‘‘(3) describe the number, types, and amounts

8 of the fellowships that the applicant intends to offer

9 under the grant;

10 ‘‘(4) set forth policies and procedures to assure

11 that, in making fellowship awards under this part,

12 the institution will make awards to individuals

13 who—

14 ‘‘(A) have financial need, as determined

15 under part F of title IV;

16 ‘‘(B) have excellent academic records in

17 their previous programs of study; and

18 ‘‘(C) plan to pursue the highest possible

19 degree available in their course of study;

20 ‘‘(5) set forth policies and procedures to ensure

21 that Federal funds made available under this part

22 for any fiscal year will be used to supplement and,

23 to the extent practical, increase the funds that would

24 otherwise be made available for the purpose of this

25 part and in no case to supplant those funds;
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1 ‘‘(6) provide assurances that, in the event that

2 funds made available to the academic department or

3 program under this part are insufficient to provide

4 the assistance due a student under the commitment

5 entered into between the academic department or

6 program and the student, the academic department

7 or program will, from any funds available to it, ful8 fill the commitment to the student;

9 ‘‘(7) provide that the applicant will comply with

10 the limitations set forth in section 655;

11 ‘‘(8) provide assurances that the academic de12 partment will provide at least 1 year of supervised

13 training in instruction for students; and

14 ‘‘(9) include such other information as the Sec15 retary may prescribe.

16 ‘‘SEC. 655. AWARDS TO GRADUATE STUDENTS.

17 ‘‘(a) COMMITMENTS TO GRADUATE STUDENTS.—

18 ‘‘(1) IN GENERAL.—An academic department or

19 program of an institution of higher education shall

20 make commitments to eligible graduate students as

21 defined in section 484 (including students pursuing

22 a doctoral degree after having completed a master’s

23 degree program at an institution of higher edu24 cation) at any point in their graduate study to pro25 vide stipends for the length of time necessary for a
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1 student to complete the course of graduate study,

2 but in no case longer than 3 years.

3 ‘‘(2) SPECIAL RULE.—No such commitments

4 shall be made to students under this part unless the

5 academic department or program has determined

6 adequate funds are available to fulfill the commit7 ment either from funds received or anticipated under

8 this part, or from institutional funds.

9 ‘‘(b) AMOUNT OF STIPENDS.—The Secretary shall

10 make payments to institutions of higher education for the

11 purpose of paying stipends to individuals who are awarded

12 fellowships under this part. The stipends the Secretary es13 tablishes shall reflect the purpose of this program to en14 courage highly talented students to undertake graduate

15 study as described in this part. In the case of an individual

16 who receives such individual’s first stipend under this part

17 in academic year 1999–2000 or any succeeding academic

18 year, such stipend shall be set at a level of support equal

19 to that provided by the National Science Foundation grad20 uate fellowships, except such amount shall be adjusted as

21 necessary so as not to exceed the fellow’s demonstrated

22 level of need as determined under part F of title IV.

23 ‘‘(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—

24 An institution of higher education that makes institutional

25 payments for tuition and fees on behalf of individuals sup-
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1 ported by fellowships under this part in amounts that ex2 ceed the institutional payments made by the Secretary

3 pursuant to section 656(a) may count the excess of such

4 payments toward the amounts the institution is required

5 to provide pursuant to section 654(b)(2).

6 ‘‘(d) ACADEMIC PROGRESS REQUIRED.—Notwith7 standing the provisions of subsection (a), no student shall

8 receive an award—

9 ‘‘(1) except during periods in which such stu10 dent is maintaining satisfactory progress in, and de11 voting essentially full time to, study or research in

12 the field in which such fellowship was awarded; or

13 ‘‘(2) if the student is engaging in gainful em14 ployment other than part-time employment involved

15 in teaching, research, or similar activities determined

16 by the institution to be in support of the student’s

17 progress towards a degree.

18 ‘‘SEC. 656. ADDITIONAL ASSISTANCE FOR COST OF EDU19 CATION.

20 ‘‘(a) INSTITUTIONAL PAYMENTS.—(1) The Secretary

21 shall (in addition to stipends paid to individuals under this

22 part) pay to the institution of higher education, for each

23 individual awarded a fellowship under this part at such

24 institution, an institutional allowance. Except as provided

25 in paragraph (2), such allowance shall be—
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1 ‘‘(A) $10,000 annually with respect to individ2 uals who first received fellowships under this part

3 prior to academic year 1999–2000; and

4 ‘‘(B) with respect to individuals who first re5 ceive fellowships during or after academic year

6 1999–2000—

7 ‘‘(i) $10,000 for the academic year 1999–

8 2000; and

9 ‘‘(ii) for succeeding academic years,

10 $10,000 adjusted annually thereafter in accord11 ance with inflation as determined by the De12 partment of Labor’s Consumer Price Index for

13 the previous calendar year.

14 ‘‘(2) The institutional allowance paid under para15 graph (1) shall be reduced by the amount the institution

16 charges and collects from a fellowship recipient for tuition

17 and other expenses as part of the recipient’s instructional

18 program.

19 ‘‘(b) USE FOR OVERHEAD PROHIBITED.—Funds

20 made available pursuant to this part may not be used for

21 the general operational overhead of the academic depart22 ment or program.

23 ‘‘SEC. 657. CONTINUATION AWARDS.

24 ‘‘Before making new awards under this part for any

25 fiscal year, the Secretary shall, as appropriate, making
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1 continuation awards to recipients of awards under parts

2 B, C, and D of title IX as in effect prior to the enactment

3 of the Higher Education Amendments of 1998.

4 ‘‘SEC. 658. AUTHORIZATION OF APPROPRIATIONS.

5 ‘‘There are authorized to be appropriated

6 $40,000,000 for fiscal year 1999 and such sums as may

7 be necessary for each of the 4 succeeding fiscal years to

8 carry out this part.’’.

9 (b) REPEAL.—Title IX (20 U.S.C. 1134 et seq.) is

10 repealed.

11 TITLE VII—CONSTRUCTION, RE12 CONSTRUCTION, AND REN13 OVATION OF ACADEMIC FA14 CILITIES

15 SEC. 701. EXTENSION OF PRIOR RIGHTS AND OBLIGATIONS.

16 Section 702(a) (20 U.S.C. 1132a–1(a)) is amended

17 by striking ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year

18 1999’’.

19 SEC. 702. REPEAL OF PART A.

20 (a) REPEAL.—Part A of title VII (20 U.S.C. 1132b

21 et seq.) is repealed.

22 (b) CONFORMING AMENDMENTS.—

23 (1) Section 701(b) (20 U.S.C. 1132a(b)) is

24 amended by striking ‘‘part A or B’’ and inserting

25 ‘‘part B’’.
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1 (2) Part B of title VII is amended by striking

2 section 726 (20 U.S.C. 1132c–5).

3 (3) Section 781 (20 U.S.C. 1132i) is amended

4 by striking ‘‘part A of this title, or’’ each place it

5 appears.

6 SEC. 703. EXTENSION OF AUTHORIZATION OF PART B.

7 Section 727(c) (20 U.S.C. 1132c–6(c)) is amended

8 by striking ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year

9 1999’’.

10 SEC. 704. EXTENSION OF AUTHORIZATION OF PART C.

11 Section 735 (20 U.S.C. 1132d–4) is amended by

12 striking ‘‘fiscal year 1993’’ and inserting ‘‘fiscal year

13 1999’’.

14 TITLE VIII—ADDITIONAL

15 PROVISIONS

16 SEC. 801. STUDY OF TRANSFER OF CREDITS.

17 (a) STUDY REQUIRED.—The Secretary of Education

18 shall conduct a study to evaluate policies or practices insti19 tuted by recognized accrediting agencies or associations

20 regarding the treatment of the transfer of credits from

21 one institution of higher education to another, giving par22 ticular attention to—

23 (1) adopted policies regarding the transfer of

24 credits between institutions of higher education
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1 which are accredited by different agencies or asso2 ciations and the reasons for such policies;

3 (2) adopted policies regarding the transfer of

4 credits between institutions of higher education

5 which are accredited by national agencies or associa6 tions and institutions of higher education which are

7 accredited by regional agencies and associations and

8 the reasons for such policies;

9 (3) the effect of the adoption of such policies on

10 students transferring between such institutions of

11 higher education, including time required to matric12 ulate, increases to the student of tuition and fees

13 paid, and increases to the student with regard to

14 student loan burden;

15 (4) the extent to which Federal financial aid is

16 awarded to such students for the duplication of

17 coursework already completed at another institution;

18 and

19 (5) the aggregate cost to the Federal Govern20 ment of the adoption of such policies.

21 (b) REPORT.—Not later than one year after the date

22 of enactment of this Act, the Secretary shall submit a re23 port to the Chairman and Ranking Minority Member of

24 the Committee on Education and the Workforce of the

25 House of Representatives and the Committee on Labor
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1 and Human Resources of the Senate detailing his findings

2 regarding the study conducted under subsection (a). The

3 Secretary’s report shall include such recommendation with

4 respect to the recognition of accrediting agencies or asso5 ciations as the Secretary deems advisable.

6 SEC. 802. STUDY OF MARKET MECHANISMS IN FEDERAL

7 STUDENT LOAN PROGRAMS.

8 (a) STUDY REQUIRED.—The Comptroller General, in

9 consultation with interested parties, shall conduct a study

10 of the potential to use auctions or other market mecha11 nisms in the delivery of Federal student loans in order

12 to reduce costs both to the Federal Government and to

13 borrowers. Such study shall include an examination of—

14 (1) the feasibility of using an auction of lending

15 authority for Federal student loans, and the appro16 priate Federal role in the operation of such an auc17 tion or other alternative market mechanisms;

18 (2) methods for operating such a system to en19 sure loan access for all eligible borrowers, while

20 maximizing the cost-effectiveness (for the Govern21 ment and borrowers) in the delivery of such loans;

22 (3) the impact of such mechanisms on student

23 loan availability;

24 (4) any necessary transition procedures for im25 plementing such mechanisms;
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1 (5) the costs or savings likely to be attained for

2 the Government and borrowers;

3 (6) the feasibility of incorporating income-con4 tingent repayment options into the student loan sys5 tem and requiring borrowers to repay through in6 come tax withholding, and the impact of such an op7 tion on the willingness of lenders to participate in

8 auctions or other market mechanisms and on the ef9 ficiency of Federal management of student loan pro10 grams;

11 (7) the ability of the Department of the Treas12 ury to effectively auction the right to make student

13 loans; and

14 (8) other relevant issues.

15 (b) RECOMMENDATIONS.—Within 2 years after the

16 date of enactment of this Act, the Comptroller General

17 shall submit to the Congress a report on the study re18 quired by subsection (a) and shall include with such report

19 any legislative recommendations the Comptroller General

20 considers appropriate.

21 SEC. 803. IMPROVEMENTS IN MARKET INFORMATION AND

22 PUBLIC ACCOUNTABILITY IN HIGHER EDU23 CATION.

24 (a) IMPROVED DATA COLLECTION.—
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1 (1) DEVELOPMENT OF UNIFORM METHODOL2 OGY.—The Secretary shall direct the Commissioner

3 of Education Statistics to convene a series of forums

4 to develop nationally consistent methodologies for re5 porting costs incurred by postsecondary institutions

6 in providing postsecondary education.

7 (2) SEPARATION OF UNDERGRADUATE AND

8 GRADUATE COSTS.—Such consistent methodologies

9 shall permit the Secretary to collect and disseminate

10 separate data with respect to the costs incurred in

11 providing undergraduate and graduate postsecond12 ary education.

13 (3) REDESIGN OF DATA SYSTEMS.—On the

14 basis of the methodologies developed pursuant to

15 paragraph (1), the Secretary shall redesign relevant

16 parts of the postsecondary education data systems to

17 improve the usefulness and timeliness of the data

18 collected by such systems.

19 (b) DATA DISSEMINATION.—The Secretary shall

20 publish, in both printed and electronic form, of the data

21 collected pursuant to subsection (a). Such data shall be

22 available in a form that permits the review and compari23 son of the data submissions of individual institutions of

24 higher education. Such data shall be presented in a form

25 that is easily understandable and allows parents and stu-
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1 dents to make informed decisions based on the following

2 costs for typical full-time undergraduate or graduate stu3 dents—

4 (1) tuition charges published by the institution;

5 (2) the institution’s cost of educating students

6 on a full-time equivalent basis;

7 (3) the general subsidy on a full-time equivalent

8 basis;

9 (4) instructional cost by level of instruction;

10 (5) the total price of attendance; and

11 (6) the average amount of per student financial

12 aid received, including and excluding assistance in

13 the form of loans.

14 SEC. 804. DIFFERENTIAL REGULATION.

15 (a) GAO STUDY.—The Comptroller General shall

16 conduct a study of the extent to which unnecessary costs

17 are imposed on postsecondary education as a consequence

18 of the applicability to postsecondary facilities and equip19 ment of regulations prescribed for purposes of regulating

20 industrial and commercial enterprises.

21 (b) REPORT REQUIRED.—Within one year after the

22 date of enactment of this Act, the Comptroller General

23 shall submit a report to the Congress on the results of

24 the study required by subsection (a).
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1 SEC. 805. ANNUAL REPORT ON COST OF HIGHER EDU2 CATION.

3 (a) GAO REPORT REQUIRED.—The Comptroller

4 General shall conduct an on-going analysis of the follow5 ing:

6 (1) The increase in tuition compared with other

7 commodities and services.

8 (2) Trends in college and university administra9 tive costs, including administrative staffing, ratio of

10 administrative staff to instructors, ratio of adminis11 trative staff to students, remuneration of adminis12 trative staff, and remuneration of college and univer13 sity presidents or chancellors.

14 (3) Trends in: (A) faculty workload and remu15 neration (including the use of adjunct faculty); (B)

16 faculty-to-student ratios; (C) number of hours spent

17 in the classroom by faculty; and (D) tenure prac18 tices, and the impact of such trends on tuition.

19 (4) Trends in: (A) the construction and renova20 tion of academic and other collegiate facilities; and

21 (B) the modernization of facilities to access and uti22 lize new technologies, and the impact of such trends

23 on tuition.

24 (5) The extent to which increases in institu25 tional financial aid and tuition discounting have af26 fected tuition increases, including the demographics
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1 of students receiving such aid, the extent to which

2 such aid is provided to students with limited need in

3 order to attract such students to particular institu4 tions or major fields of study, and the extent to

5 which Federal financial aid, including loan aid, has

6 been used to offset such increases.

7 (6) The extent to which Federal, State, and

8 local laws, regulations, or other mandates contribute

9 to increasing tuition, and recommendations on re10 ducing those mandates.

11 (7) The establishment of a mechanism for a

12 more timely and widespread distribution of data on

13 tuition trends and other costs of operating colleges

14 and universities.

15 (8) The extent to which student financial aid

16 programs have contributed to changes in tuition.

17 (9) Trends in State fiscal policies that have af18 fected college costs.

19 (10) Other related topics determined to be ap20 propriate by the Comptroller General.

21 (b) ANNUAL REPORT TO CONGRESS.—The Comptrol22 ler General shall submit to the Congress an annual report

23 on the results of the analysis required by subsection (a).
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1 SEC. 806. STUDY OF CONSOLIDATION OPTIONS.

2 No later than 2 years after the date of enactment

3 of this Act, the Secretary shall report to Congress on the

4 desirability and feasibility of possible new Federal efforts

5 to assist individuals who have substantial alternative stu6 dent loans (other than direct student loans and federally

7 guaranteed student loans) to repay their student loans.

8 The report shall include an analysis of the extent to which

9 the high monthly payments associated with such loans

10 deter such individuals from jobs (including public-interest

11 and public-service jobs) with lower salaries than the aver12 age in relevant professions. The report shall include an

13 analysis of the desirability and feasibility of allowing the

14 consolidation of alternative student loans held by such in15 dividuals through the Federal student loan consolidation

16 program or the use of other means to provide income-con17 tingent repayment plans for alternative student loans.

18 SEC. 807. EDUCATIONAL MERCHANDISE LICENSING CODES

19 OF CONDUCT.

20 It is the sense of the Congress that all American col21 leges and universities should adopt rigorous educational

22 merchandise licensing codes of conduct to assure that uni23 versity and college licensed merchandise is not made by

24 sweatshop and exploited adult or child labor either domes25 tically or abroad and that such codes should include at

26 least the following:
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1 (1) public reporting of the code and the compa2 nies adhering to it;

3 (2) independent monitoring of the companies

4 adhering to the code by entities not limited to major

5 international accounting firms;

6 (3) an explicit prohibition on the use of child

7 labor;

8 (4) an explicit requirement that companies pay

9 workers at least the governing minimum wage and

10 applicable overtime;

11 (5) an explicit requirement that companies

12 allow workers the right to organize without retribu13 tion; and

14 (6) an explicit requirement that companies

15 maintain a safe and healthy workplace.

16 SEC. 808. REPEALS AND EXTENSIONS OF PREVIOUS HIGH17 ER EDUCATION AMENDMENTS PROVISIONS.

18 (a) HIGHER EDUCATION AMENDMENTS OF 1986.—

19 Title XIII of the Higher Education Amendments of 1986

20 (20 U.S.C. 1091 note, 1121 note, 1221e–1 note, 1011

21 note, 1070a note, 1071 note, 1221–1 note, and 1091 note)

22 is repealed.

23 (b) HIGHER EDUCATION AMENDMENTS OF 1992.—

24 (1) TITLE XIV.—Title XIV of the Higher Edu25 cation Amendments of 1992 (20 U.S.C. 1071 note,
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1 1080 note, 1221e note, 1070 note, 1221e–1 note,

2 1070a–21 note, 1134 note, 1132a note, 1221–1

3 note, and 1101 note) is repealed.

4 (2) TITLE XV.—Parts A, B, C, D, and E of

5 title XV of the Higher Education Amendments of

6 1992 (29 U.S.C. 2401 et seq., 20 U.S.C. 1452 note,

7 1101 note, 1145h, and 1070 note) are repealed.

8 (3) OLYMPIC SCHOLARSHIPS.—Section 1543(d)

9 of the Higher Education Amendments of 1992 is

10 amended by striking ‘‘1993’’ and inserting ‘‘1999’’.

11 SEC. 809. LIMITATION.

12 None of the funds appropriated under the Higher

13 Education Act of 1965 or any other Act shall be made

14 available by any Federal agency to the National Board for

15 Professional Teaching Standards.

16 SEC. 810. PROCEDURES FOR CANCELLATIONS AND

17 DEFERMENTS FOR ELIGIBLE DISABLED VET18 ERANS.

19 The Secretary shall, in consultation with the Sec20 retary of Veterans Affairs, develop and implement a proce21 dure under which Department of Veterans Affairs physi22 cians shall provide the certification and affidavits needed

23 to enable eligible disabled veterans to document their eligi24 bility for deferments and cancellations of student loans

25 made, insured, or guaranteed under this title. Not later
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1 than 6 months after the date of the enactment of this Act,

2 the Secretaries of Education and Veterans Affairs shall

3 jointly report to Congress on the progress made in devel4 oping and implementing this procedure.

5 TITLE IX—AMENDMENTS TO

6 OTHER LAWS

7 PART A—EDUCATION OF THE DEAF ACT

8 Subpart 1—Gallaudet University

9 SEC. 901. BOARD OF TRUSTEES MEMBERSHIP.

10 Section 103(a)(1) of the Education of the Deaf Act

11 of 1986 (20 U.S.C. 4303(a)(1)) is amended—

12 (1) in the matter preceding subparagraph (A),

13 by striking ‘‘twenty-one’’ and inserting ‘‘twenty14 two’’;

15 (2) in subparagraph (A), by striking ‘‘and’’ at

16 the end;

17 (3) in subparagraph (B), by striking the period

18 at the end and inserting ‘‘; and’’; and

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

20 ‘‘(C) the liaison designated under section 206,

21 who shall serve as an ex-officio, nonvoting mem22 ber.’’.
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1 SEC. 902. ELEMENTARY AND SECONDARY EDUCATION PRO2 GRAMS.

3 (a) COMPLIANCE WITH CERTAIN REQUIREMENTS

4 UNDER THE INDIVIDUALS WITH DISABILITIES EDU5 CATION ACT.—Section 104(b)(3) of the Education of the

6 Deaf Act of 1986 (20 U.S.C. 4304(b)(3)) is amended by

7 striking ‘‘intermediate educational unit’’ and inserting

8 ‘‘educational service agency’’.

9 (b) ADDITIONAL REQUIREMENTS.—Section

10 104(b)(4)(C) of such Act (20 U.S.C. 4304(b)(4)(C)) is

11 amended by striking clauses (i) through (iv) and inserting

12 the following:

13 ‘‘(i) Paragraph (1) and paragraphs (3)

14 through (6) of subsection (b).

15 ‘‘(ii) Subsections (e) through (g).

16 ‘‘(iii) Subsection (h), except the provision

17 contained in such subsection that requires that

18 findings of fact and decisions be transmitted to

19 the State advisory panel.

20 ‘‘(iv) Paragraphs (1) and (2) of subsection

21 (i).

22 ‘‘(v) Subsection (j), except that such sub23 section shall not be applicable to a decision by

24 the University to refuse to admit or to dismiss

25 a child, except that, before dismissing any child,

26 the University shall give at least 60 days notice
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1 to the child’s parents and to the local edu2 cational agency in which the child resides.

3 ‘‘(vi) Subsections (k) through (m).’’.

4 SEC. 903. AGREEMENT WITH GALLAUDET UNIVERSITY.

5 Section 105(a) of the Education of the Deaf Act of

6 1986 (20 U.S.C. 4305(a)) is amended—

7 (1) in the first sentence, by striking ‘‘within 1

8 year after enactment of the Education of the Deaf

9 Act Amendments of 1992, a new’’ and inserting

10 ‘‘and periodically update, an’’; and

11 (2) by amending the second sentence to read as

12 follows: ‘‘The necessity of the periodic update re13 ferred to in the preceding sentence shall be deter14 mined by the Secretary or the University.’’.

15 Subpart 2—National Institute For The Deaf

16 SEC. 911. AGREEMENT FOR THE NATIONAL TECHNICAL IN17 STITUTE FOR THE DEAF.

18 Section 112 of the Education of the Deaf Act of 1986

19 (20 U.S.C. 4332) is amended—

20 (1) in subsection (a)(2), by striking ‘‘under this

21 section’’ and all that follows and inserting the fol22 lowing: ‘‘under this section—

23 ‘‘(A) shall periodically assess the need for modi24 fication of the agreement; and
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1 ‘‘(B) shall also periodically update the agree2 ment as determined to be necessary by the Secretary

3 or the institution.’’; and

4 (2) in subsection (b)(3), by striking ‘‘Commit5 tee on Education and Labor’’ and inserting ‘‘Com6 mittee on Education and the Workforce’’.

7 Subpart 3—General Provisions

8 SEC. 921. DEFINITIONS.

9 Section 201 of the Education of the Deaf Act of 1986

10 (20 U.S.C. 4351) is amended—

11 (1) in paragraph (1)(C), by striking ‘‘Palau

12 (but only until the Compact of Free Association with

13 Palau takes effect),’’; and

14 (2) in paragraph (5)—

15 (A) by inserting ‘‘and’’ before ‘‘the Com16 monwealth of the Northern Mariana Islands’’;

17 and

18 (B) by striking ‘‘, and Palau’’ and all that

19 follows and inserting a period.

20 SEC. 922. AUDITS.

21 Section 203(b) of the Education of the Deaf Act of

22 1986 (20 U.S.C. 4353(b)) is amended in the first sentence

23 by inserting before the period at the end the following:

24 ‘‘, including the national mission and school operations of

25 the elementary and secondary programs’’.
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1 SEC. 923. REPORTS.

2 Section 204 of the Education of the Deaf Act of 1986

3 (20 U.S.C. 4354) is amended in the matter preceding

4 paragraph (1) by striking ‘‘Committee on Education and

5 Labor’’ and inserting ‘‘Committee on Education and the

6 Workforce’’.

7 SEC. 924. MONITORING, EVALUATION, AND REPORTING.

8 Section 205(c) of the Education of the Deaf Act of

9 1986 (20 U.S.C. 4355(c)) is amended by striking ‘‘1993,

10 1994, 1995, 1996, and 1997’’ and inserting ‘‘1999

11 through 2003’’.

12 SEC. 925. RESPONSIBILITY OF THE LIAISON.

13 Section 206 of the Education of the Deaf Act (20

14 U.S.C. 4356) is amended—

15 (1) in subsection (a), by striking ‘‘Not later

16 than 30 days after the date of enactment of this

17 Act, the’’ and inserting ‘‘The’’; and

18 (2) in subsection (b)—

19 (A) in paragraph (2), by striking ‘‘and’’ at

20 the end;

21 (B) by redesignating paragraph (3) as

22 paragraph (4); and

23 (C) by inserting after paragraph (2) the

24 following:

25 ‘‘(3) serve as an ex-officio, nonvoting member

26 of the Board of Trustees under section 103; and’’.
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1 SEC. 926. FEDERAL ENDOWMENT PROGRAMS.

2 (a) FEDERAL PAYMENTS.—Section 207(b) of the

3 Education of the Deaf Act of 1986 (20 U.S.C. 4357(b))

4 is amended—

5 (1) in paragraph (2) to read as follows:

6 ‘‘(2) Subject to the availability of appropria7 tions, the Secretary shall make payments to each

8 Federal endowment fund in amounts equal to sums

9 contributed to the fund from non-Federal sources

10 during the fiscal year in which the appropriations

11 are made available (excluding transfers from other

12 endowment funds of the institution involved).’’; and

13 (2) by striking paragraph (3).

14 (b) WITHDRAWALS AND EXPENDITURES.—Section

15 207(d)(2)(C) of such Act (20 U.S.C. 4357(d)(2)(C)) is

16 amended by striking ‘‘Beginning on October 1, 1992, the’’

17 and inserting ‘‘The’’.

18 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

19 207(h) of such Act (20 U.S.C. 4357(h)) is amended by

20 striking ‘‘fiscal years 1993 through 1997’’ each place it

21 appears and inserting ‘‘fiscal years 1999 through 2003’’.

22 SEC. 927. SCHOLARSHIP PROGRAM.

23 Section 208 of the Education of the Deaf Act of 1986

24 (20 U.S.C. 4358) is hereby repealed.
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1 SEC. 928. OVERSIGHT AND EFFECT OF AGREEMENTS.

2 Section 209 of the Education of the Deaf Act of 1986

3 (20 U.S.C. 4359) is amended—

4 (1) in subsection (a), by striking ‘‘Committee

5 on Education and Labor’’ and inserting ‘‘Committee

6 on Education and the Workforce’’; and

7 (2) by redesignating such section as section

8 208.

9 SEC. 929. INTERNATIONAL STUDENTS.

10 (a) ENROLLMENT.—Section 210(a) of the Education

11 of the Deaf Act of 1986 (20 U.S.C. 4359a(a)) is amended

12 to read as follows:

13 ‘‘(a) ENROLLMENT.—A qualified United States citi14 zen seeking admission to the University or NTID shall not

15 be denied admission in a given year due to the enrollment

16 of international students.’’.

17 (b) CONFORMING AMENDMENT.—Section 210 of

18 such Act (20 U.S.C. 4359a) is amended by redesignating

19 such section as section 209.

20 SEC. 930. AUTHORIZATION OF APPROPRIATIONS.

21 Section 211 of the Education of the Deaf Act of 1986

22 (20 U.S.C. 4360) is amended—

23 (1) in subsection (a), by striking ‘‘such sums as

24 may be necessary for each of the fiscal years 1993

25 through 1997’’ and inserting ‘‘$83,480,000 for fiscal

26 year 1999, $84,732,000 for fiscal year 2000,
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1 $86,003,000 for fiscal year 2001, $87,293,000 for

2 fiscal year 2002, and $88,603,000 for fiscal year

3 2003’’;

4 (2) in subsection (b), by striking ‘‘such sums as

5 may be necessary for each of the fiscal years 1993

6 through 1997’’ and inserting ‘‘$44,791,000 for fiscal

7 year 1999, $46,303,000 for fiscal year 2000,

8 $50,136,000 for fiscal year 2001, $50,818,000 for

9 fiscal year 2002, and $46,850,000 for fiscal year

10 2003’’; and

11 (3) by redesignating such section as section

12 210.

13 PART B—EXTENSION AND REVISION OF INDIAN

14 HIGHER EDUCATION PROGRAMS

15 SEC. 951. TRIBALLY CONTROLLED COLLEGES AND UNIVER16 SITIES.

17 (a) EXTENSION TO COLLEGES AND UNIVERSITIES.—

18 The Tribally Controlled Community College Assistance

19 Act of 1978 (25 U.S.C. 1801 et seq.) is amended—

20 (1) by striking ‘‘community college’’ each place

21 it appears and inserting ‘‘college or university’’;

22 (2) by striking ‘‘community colleges’’ each place

23 it appears and inserting ‘‘colleges and universities’’;
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1 (3) by striking ‘‘COMMUNITY COLLEGES’’

2 in the heading of title I and inserting ‘‘COLLEGES

3 AND UNIVERSITIES’’;

4 (4) by striking ‘‘community college’s’’ in section

5 2(b)(5) and inserting ‘‘college’s or university’s’’;

6 (5) by striking ‘‘the college’’ in sections 102(b),

7 113(c)(2), and 305(a) and inserting ‘‘the college or

8 university’’;

9 (6) by striking ‘‘such colleges’’ in sections

10 104(a)(2) and 111(a)(2) and inserting ‘‘such col11 leges and universities’’;

12 (7) by striking ‘‘COMMUNITY COLLEGES’’ in the

13 heading of section 107 and inserting ‘‘COLLEGES

14 AND UNIVERSITIES’’;

15 (8) by striking ‘‘such college’’ each place it ap16 pears in sections 108(a), 113(b)(2), 113(c)(2), 302,

17 303, 304, and 305 and inserting ‘‘such college or

18 university’’;

19 (9) by striking ‘‘such colleges’’ in section

20 109(b) and inserting ‘‘such college or university’’;

21 (10) in section 110(a)(4), by striking ‘‘Tribally

22 Controlled Community Colleges’’ and inserting ‘‘trib23 ally controlled colleges and universities’’;
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1 (11) by striking ‘‘COMMUNITY COLLEGE’’

2 in the heading of title III and inserting ‘‘COLLEGE

3 AND UNIVERSITY’’;

4 (11) by striking ‘‘that college’’ in sections

5 302(b)(4) and 305(a) and inserting ‘‘such college or

6 university’’; and

7 (12) by striking ‘‘other colleges’’ in section

8 302(b)(4) and insert ‘‘other colleges and univer9 sities’’.

10 (b) TITLE I ELIGIBLE GRANT RECIPIENTS.—Section

11 103 of the Tribally Controlled Community College Assist12 ance Act of 1978 (25 U.S.C. 1804) is amended—

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

14 (2);

15 (2) by striking the period at the end of para16 graph (3) and inserting ‘‘; and’’; and

17 (3) by adding at the end the following new

18 paragraph:

19 ‘‘(4) has been accredited by a nationally recog20 nized accrediting agency or association determined

21 by the Secretary of Education to be a reliable au22 thority as to the quality of training offered, or is, ac23 cording to such an agency or association, making

24 reasonable progress toward such accreditation.’’.
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1 (c) AMOUNT OF TITLE I GRANTS.—Section

2 108(a)(2) of such Act (25 U.S.C. 1808(a)(2)) is amended

3 by striking ‘‘$5,820’’ and inserting ‘‘$6,000’’.

4 (d) CLERICAL AMENDMENT.—Section 109 of such

5 Act (25 U.S.C. 1809) is amended by redesignating sub6 section (d) as subsection (c).

7 (e) AUTHORIZATION OF APPROPRIATIONS FOR TITLE

8 I.—Section 110 of such Act (25 U.S.C. 1810) is amend9 ed—

10 (1) by striking ‘‘1993’’ each place it appears

11 and inserting ‘‘1999’’; and

12 (2) in subsection (a)(2), by striking

13 ‘‘$30,000,000’’ and inserting ‘‘$40,000,000’’.

14 (f) AUTHORIZATION OF APPROPRIATIONS FOR TI15 TLES III AND IV.—Sections 306 and 403 of such Act (25

16 U.S.C. 1836, 1852) are each amended by striking ‘‘1993’’

17 and inserting ‘‘1999’’.

18 SEC. 952. REAUTHORIZATION OF PROVISIONS FROM HIGH19 ER EDUCATION AMENDMENTS OF 1992.

20 Title XIII of the Higher Education Amendments of

21 1992 (25 U.S.C. 3301 et seq.) is amended by striking

22 ‘‘1993’’ each place it appears in sections 1348, 1365, and

23 1371(e), and inserting ‘‘1999’’.
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1 SEC. 953. REAUTHORIZATION OF NAVAJO COMMUNITY COL2 LEGE ACT.

3 Section 5(a)(1) of the Navajo Community College Act

4 (25 U.S.C. 640c–1) is amended by striking ‘‘1993’’ and

5 inserting ‘‘1999’’.

6 Part C—GENERAL EDUCATION PROVISIONS ACT

7 SEC. 961. ACCESS TO RECORDS CONCERNING CRIMES OF

8 VIOLENCE.

9 Section 444(h) of the General Education Provisions

10 Act (20 U.S.C. 1232g(h)) is amended to read as follows:

11 ‘‘(h) DISCIPLINARY RECORDS.—(1) Nothing in this

12 section shall prohibit an educational agency or institution

13 from—

14 ‘‘(A) including appropriate information in the

15 education record of any student concerning discipli16 nary action taken against such student for conduct

17 that posed a significant risk to the safety or well18 being of that student, other students, or other mem19 bers of the school community; or

20 ‘‘(B) disclosing such information to teachers

21 and school officials, including teachers and school of22 ficials in other schools, who have legitimate edu23 cational interests in the behavior of the student.

24 ‘‘(2) Nothing in this section shall prohibit any post25 secondary educational agency or institution from disclos26 ing disciplinary records of any kind which contain infor-
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1 mation that personally identifies a student or students

2 who have either admitted to or been found to have com3 mitted any act, which is a crime of violence (as that term

4 is defined in section 16 of title 18, United States Code),

5 in violation of institutional policy, either as a violation of

6 the law or a specific institutional policy, where such

7 records are directly related to such misconduct.’’.

8 TITLE X—FACULTY RETIREMENT

9 PROVISIONS

10 SEC. 1001. VOLUNTARY RETIREMENT INCENTIVE PLANS.

11 (a) IN GENERAL.—Section 4 of the Age Discrimina12 tion in Employment Act of 1967 (29 U.S.C. 623) is

13 amended by adding at the end the following:

14 ‘‘(m) Notwithstanding subsection (f )(2)(B), it shall

15 not be a violation of subsection (a), (b), (c), or (e) solely

16 because a plan of an institution of higher education (as

17 defined in section 1201(a) of the Higher Education Act

18 of 1965 (20 U.S.C. 1141(a))) offers employees who are

19 serving under a contract of unlimited tenure (or similar

20 arrangement providing for unlimited tenure) supplemental

21 benefits upon voluntary retirement that are reduced or

22 eliminated on the basis of age, if—

23 ‘‘(1) such institution does not implement with

24 respect to such employees any age-based reduction

25 or cessation of benefits that are not such supple-
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1 mental benefits, except as permitted by other provi2 sions of this Act;

3 ‘‘(2) such supplemental benefits are in addition

4 to any retirement or severance benefits which have

5 been offered generally to employees serving under a

6 contract of unlimited tenure (or similar arrangement

7 providing for unlimited tenure), independent of any

8 early retirement or exit-incentive plan, within the

9 preceding 365 days; and

10 ‘‘(3) any employee who attains the minimum

11 age and satisfies all non-age-based conditions for re12 ceiving a benefit under the plan has an opportunity

13 lasting not less than 180 days to elect to retire and

14 to receive the maximum benefit that could then be

15 elected by a younger but otherwise similarly situated

16 employee, and the plan does not require retirement

17 to occur sooner than 180 days after such election.’’.

18 (b) PLANS PERMITTED.—Section 4(i)(6) of the Age

19 Discrimination in Employment Act of 1967 (29 U.S.C.

20 623(i)(6)) is amended by adding after the word ‘‘accruals’’

21 the following: ‘‘or it is a plan permitted by subsection

22 (m).’’

23 (c) CONSTRUCTION.—Nothing in the amendment

24 made by subsection (a) shall affect the application of sec-
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1 tion 4 of the Age Discrimination in Employment Act of

2 1967 (29 U.S.C. 623) with respect to—

3 (1) any plan described in subsection (m) of sec4 tion 4 of such Act (as added by subsection (a)), for

5 any period prior to enactment of such Act;

6 (2) any plan not described in subsection (m) of

7 section 4 of such Act (as added by subsection (a));

8 or

9 (3) any employer other than an institution of

10 higher education (as defined in section 1201(a) of

11 the Higher Education Act of 1965).

12 (d) EFFECTIVE DATE.—

13 (1) IN GENERAL.—This section shall take effect

14 on the date of enactment of this Act.

15 (2) EFFECT ON CAUSES OF ACTION EXISTING

16 BEFORE DATE OF ENACTMENT.—The amendment

17 made by subsection (a) shall not apply with respect

18 to any cause of action arising under the Age Dis19 crimination in Employment Act of 1967 prior to the

20 date of enactment of this Act.

21 TITLE XI—OFFESTS REQUIRED

22 SEC. 1101. ASSURANCE OF OFFSETS.

23 (a) DECLARATION.—None of the provisions in this

24 Act should take effect unless it contains the mandatory

25 offsets set forth in subsection (b).
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1 (b) ENUMERATION OF OFFSETS.—The offsets re2 ferred to in subsection (a) are provisions that—

3 (1) change the definition of default contained in

4 section 435(1) to extend the period of delinquency

5 prior to default by an additional 90 days;

6 (2) capitalize the interest accrued on unsub7 sidized and parent loans at the time that the bor8 rower enters repayment;

9 (3) recall $65,000,000 in guaranty agency re10 serves, in addition to the amount required to be re11 called pursuant to the amendments in section 422 of

12 the Higher Education Act of 1965 contained in this

13 Act;

14 (4) eliminate the dischargeability in bankruptcy

15 of student loans made after the date of the enact16 ment of this Act for the cost of attendance for a

17 baccalaureate or advanced degree, and for which the

18 first payment was due more than seven years before

19 the commencement of the bankruptcy action; and

20 (5) sell sufficient commodities from the Na21 tional Defense stockpile to generate receipts of

22 $80,000,000 in fiscal year 1999 and $480,000,000

23 over five years.
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1 TITLE XII—ALCOHOL

2 CONSUMPTION

3 SEC. 1201. SENSE OF THE HOUSE OF REPRESENTATIVES.

4 It is the sense of the House of Representatives that,

5 in an effort to change the culture of alcohol consumption

6 on college campuses, all college and university administra7 tors should adopt the following code of principles:

8 (1) For an institution of higher education, the

9 president of the institution shall appoint a task force

10 consisting of school administrators, faculty, stu11 dents, Greek system representatives, and others to

12 conduct a full examination of student and academic

13 life at the institution. The task force will make rec14 ommendations for a broad range of policy and pro15 gram changes that would serve to reduce alcohol and

16 other drug-related problems. The institution shall

17 provide resources to assist the task force in promot18 ing the campus policies and proposed environmental

19 changes that have been identified.

20 (2) The institution shall provide maximum op21 portunities for students to live in an alcohol-free en22 vironment and to engage in stimulating, alcohol-free

23 recreational and leisure activities.

24 (3) The institution shall enforce a ‘‘zero toler25 ance’’ policy on the illegal consumption and binge
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1 drinking of alcohol by its students and will take

2 steps to reduce the opportunities for students, fac3 ulty, staff, and alumni to legally consume alcohol on

4 campus.

5 (4) The institution shall vigorously enforce its

6 code of disciplinary sanctions for those who violate

7 campus alcohol policies. Students with alcohol or

8 other drug-related problems shall be referred to an

9 on-campus counseling program.

10 (5) The institution shall adopt a policy to dis11 courage alcoholic beverage-related sponsorship of on12 campus activities. It shall adopt policies limiting the

13 advertisement and promotion of alcoholic beverages

14 on campus.

15 (6) Recognizing that school-centered policies on

16 alcohol will be unsuccessful if local businesses sell al17 cohol to underage or intoxicated students, the insti18 tution shall form a ‘‘Town/Gown’’ alliance with com19 munity leaders. That alliance shall encourage local

20 commercial establishments that promote or sell alco21 holic beverages to curtail illegal student access to al22 cohol and adopt responsible alcohol marketing and

23 service practices.
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1 TITLE XIII—PROTECTION OF

2 STUDENT SPEECH AND ASSO3 CIATION RIGHTS

4 SEC. 1301. PROTECTION OF STUDENT SPEECH AND ASSO5 CIATION RIGHTS.

6 (a) PROTECTION OF RIGHTS.—It is the sense of the

7 House of Representatives that no student attending an in8 stitution of higher education on a full- or part-time basis

9 should, on the basis of protected speech and association,

10 be excluded from participation in, be denied the benefits

11 of, or be subjected to discrimination or official sanction

12 under any education program, activity, or division directly

13 or indirectly receiving financial assistance under the High14 er Education Act of 1965, whether or not such program,

15 activity, or division is sponsored or officially sanctioned

16 by the institution.

17 (b) SANCTIONS FOR DISRUPTION PERMITTED.—

18 Nothing in this section shall be construed to discourage

19 the imposition of an official sanction on a student that

20 has willfully participated in the disruption or attempted

21 disruption of a lecture, class, speech, presentation, or per22 formance made or scheduled to be made under the aus23 pices of the institution of higher education.

24 (c) DEFINITIONS.—For the purposes of this section:
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1 (1) PROTECTED SPEECH.—The term ‘‘protected

2 speech’’ means speech that is protected under the

3 1st and 14th amendments to the United States Con4 stitution, or would be so protected if the institution

5 of higher education were subjected to those amend6 ments.

7 (2) PROTECTED ASSOCIATION.—The term ‘‘pro8 tected association’’ means the right to join, assem9 ble, and reside with others that is protected under

10 the 1st and 14th amendments to the United States

11 Constitution, or would be protected if the institution

12 of higher education were subject to those amend13 ments.

14 (3) OFFICIAL SANCTION.—The term ‘‘official

15 sanction’’—

16 (A) means expulsion, suspension, proba17 tion, censure, condemnation, reprimand, or any

18 other disciplinary, coercive, or adverse action

19 taken by an institution of higher education or

20 administrative unit of the institution; and

21 (B) includes an oral or written warning

22 made by an official of an institution of higher

23 education acting in the official capacity of the

24 official.
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1 TITLE XIV—DRUG AND ALCOHOL

2 PREVENTION

3 SEC. 1401. DRUG AND ALCOHOL ABUSE PREVENTION.

4 (a) GRANTS AND RECONGNITION AWARDS.—Section

5 111, as redesignated by section 101(a)(3)(E), is amended

6 by adding at the end the following new subsections:

7 ‘‘(e) ALCOHOL AND DRUG ABUSE PREVENTION

8 GRANTS.—

9 ‘‘(1) PROGRAM AUTHORITY.—The Secretary

10 may make grants to institutions of higher education

11 or consortia of such institutions and contracts with

12 such institutions and other organizations to develop,

13 implement, operate, improve, and disseminate pro14 grams of prevention, and education (including treat15 ment-referral) to reduce and eliminate the illegal use

16 of drugs and alcohol and their associated violence.

17 Such contracts may also be used for the support of

18 a higher education center for alcohol and drug abuse

19 prevention which will provide training, technical as20 sistance, evaluation, dissemination and associated

21 services and assistance to the higher education com22 munity as defined by the Secretary and the institu23 tions of higher education.

24 ‘‘(2) AWARDS.—Grants and contracts shall be

25 made available under paragraph (1) on a competitive
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1 basis. An institution of higher education, a consor2 tium of such institutions, or other organizations

3 which desire to receive a grant or contract under

4 paragraph (1) shall submit an application to the

5 Secretary at such time, in such manner, and con6 taining or accompanied by such information as the

7 Secretary may reasonably require by regulation.

8 ‘‘(3) ADDITIONAL REQUIREMENTS.—The Sec9 retary shall make every effort to ensure—

10 ‘‘(A) the equitable participation of private

11 and public institutions of higher education (in12 cluding community and junior colleges); and

13 ‘‘(B) the equitable geographic participation

14 of such institutions,

15 in grants and contracts under paragraph (1). In the

16 award of such grants and contracts, the Secretary

17 shall give appropriate consideration to institutions of

18 higher education with limited enrollment.

19 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

20 There are authorized to be appropriated to carry out

21 this subsection $5,000,000 for fiscal year 1999 and

22 such sums as may be necessary for each of the 4

23 succeeding fiscal years.

24 ‘‘(f) NATIONAL RECOGNITION AWARDS.—
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1 ‘‘(1) AWARDS.—For the purpose of providing

2 models of alcohol and drug abuse prevention and

3 education (including treatment-referral) programs in

4 higher education and to focus national attention on

5 exemplary alcohol and drug abuse prevention efforts,

6 the Secretary of Education shall, on an annual

7 basis, make 10 National Recognition Awards to in8 stitutions of higher education that have developed

9 and implemented effective alcohol and drug abuse

10 prevention and education programs. Such awards

11 shall be made at a ceremony in Washington, D.C.

12 and a document describing the programs of those

13 who receive the awards shall be distributed nation14 ally.

15 ‘‘(2) APPLICATION.—

16 ‘‘(A) IN GENERAL.—A national recognition

17 award shall be made under paragraph (1) to in18 stitutions of higher education which have ap19 plied for such award. Such an application shall

20 contain—

21 ‘‘(i) a clear description of the goals

22 and objectives of the alcohol and drug

23 abuse programs of the institution applying;

24 ‘‘(ii) a description of program activi25 ties that focus on alcohol and other drug
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1 policy issues, policy development, modifica2 tion, or refinement, policy dissemination

3 and implementation, and policy enforce4 ment;

5 ‘‘(iii) a description of activities that

6 encourage student and employee participa7 tion and involvement in both activity devel8 opment and implementation;

9 ‘‘(iv) the objective criteria used to de10 termine the effectiveness of the methods

11 used in such programs and the means used

12 to evaluate and improve the program ef13 forts;

14 ‘‘(v) a description of special initiatives

15 used to reduce high-risk behavior or in16 crease low risk behavior, or both; and

17 ‘‘(vi) a description of coordination and

18 networking efforts that exist in the com19 munity in which the institution is located

20 for purposes of such programs.

21 ‘‘(B) ELIGIBILITY CRITERIA.—All institu22 tions of higher education which are two- and

23 four-year colleges and universities that have es24 tablished a drug and alcohol prevention and

25 education program are eligible to apply for a
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1 National Recognition Award. To receive such

2 an Award an institution of higher education

3 must be nominated to receive it. An institution

4 of higher education may nominate itself or be

5 nominated by others such as professional asso6 ciations or student organizations.

7 ‘‘(C) APPLICATION REVIEW.—The Sec8 retary of Education shall appoint a committee

9 to review applications submitted under subpara10 graph (A). The committee may include rep11 resentatives of Federal departments or agencies

12 whose programs include alcohol and drug abuse

13 prevention and education efforts, directors or

14 heads (or their representatives) of professional

15 associations that focus on prevention efforts,

16 and non-Federal scientists who have back17 grounds in social science evaluation and re18 search methodology and in education. Decisions

19 of the committee shall be made directly to the

20 Secretary without review by any other entity in

21 the Department of Education.

22 ‘‘(D) REVIEW CRITERIA.—Specific review

23 criteria shall be developed by the Secretary in

24 conjunction with the appropriate experts. In re-
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1 viewing applications under subparagraph (C)

2 the committee shall consider—

3 ‘‘(i) measures of effectiveness of the

4 program of the applicant that should in5 clude changes in the campus alcohol and

6 other drug environment or climate and

7 changes in alcohol and other drug use be8 fore and after the initiation of the pro9 gram; and

10 ‘‘(ii) measures of program institu11 tionalization, including an assessment of

12 needs of the institution, the institution’s

13 alcohol and drug policies, staff and faculty

14 development activities, drug prevention cri15 teria, student, faculty, and campus com16 munity involvement, and a continuation of

17 the program after the cessation of external

18 funding.

19 ‘‘(3) AUTHORIZATION.—For the implementation

20 of the awards program under this subsection, there

21 are authorized to be appropriated $25,000 for fiscal

22 year 1998, $66,000 for each of the fiscal years 1999

23 and 2000, and $72,000 for each of the fiscal years

24 2001, 2002, 2003, and 2004.’’.
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1 (b) REPEAL.—Section 4122 of the Elementary and

2 Secondary Education Act of 1965 (20 U.S.C. 7132) is re3 pealed.

4 TITLE XV—EQUAL OPPOR5 TUNITY FOR INDIVIDUALS

6 WITH LEARNING DISABIL7 ITIES

8 SEC. 1501. DEMONSTRATION PROJECTS ENSURING EQUAL

9 OPPORTUNITY FOR INDIVIDUALS WITH

10 LEARNING DISABILITIES.

11 Subpart 2 of part A of title IV, as amended by section

12 405, is further amended by adding at the end the follow13 ing:

14 ‘‘CHAPTER 6—DEMONSTRATION PROJECTS EN15 SURING EQUAL OPPORTUNITY FOR INDIVID16 UALS WITH LEARNING DISABILITIES

17 ‘‘SEC. 412A. PROGRAM AUTHORITY.

18 ‘‘(a) IN GENERAL.—The Secretary may award grants

19 to, and enter into contracts and cooperative agreements

20 with, not more than 5 institutions of higher education that

21 are described in section 412B for demonstration projects

22 to develop, test, and disseminate, in accordance with sec23 tion 412C, methods, techniques, and procedures for ensur24 ing equal educational opportunity for individuals with

25 learning disabilities in postsecondary education.
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1 ‘‘(b) AWARD BASIS.—Grants, contracts, and coopera2 tive agreements shall be awarded on a competitive basis.

3 ‘‘(c) AWARD PERIOD.—Grants, contracts, and coop4 erative agreements shall be awarded for a period of 3

5 years.

6 ‘‘SEC. 412B. ELIGIBLE ENTITIES.

7 ‘‘Entities eligible to apply for a grant, contract, or

8 cooperative agreement under this chapter are institutions

9 of higher education with demonstrated prior experience in

10 meeting the postsecondary educational needs of individ11 uals with learning disabilities.

12 ‘‘SEC. 412C. REQUIRED ACTIVITIES.

13 ‘‘A recipient of a grant, contract, or cooperative

14 agreement under this chapter shall use the funds received

15 under this chapter to carry out each of the following activi16 ties:

17 ‘‘(1) Developing or identifying innovative, effec18 tive, and efficient approaches, strategies, supports,

19 modifications, adaptations, and accommodations that

20 enable individuals with learning disabilities to fully

21 participate in postsecondary education.

22 ‘‘(2) Synthesizing research and other informa23 tion related to the provision of services to individuals

24 with learning disabilities in postsecondary education.
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1 ‘‘(3) Conducting training sessions for personnel

2 from other institutions of higher education to enable

3 them to meet the special needs of postsecondary stu4 dents with learning disabilities.

5 ‘‘(4) Preparing and disseminating products

6 based upon the activities described in paragraphs (1)

7 through (3).

8 ‘‘(5) Coordinating findings and products from

9 the activities described in paragraphs (1) through

10 (4) with other similar products and findings through

11 participation in conferences, groups, and profes12 sional networks involved in the dissemination of

13 technical assistance and information on postsecond14 ary education.

15 ‘‘SEC. 412D. AUTHORIZATION OF APPROPRIATIONS.

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

17 this chapter $10,000,000 for each of the fiscal years 1999

18 through 2001.’’.
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1 TITLE XVI—SENSE OF THE

2 HOUSE OF REPRESENTA3 TIVES REGARDING DETEC4 TION OF LEARNING DISABIL5 ITIES, PARTICULARLY DYS6 LEXIA, IN POSTSECONDARY

7 EDUCATION

8 SEC. 1601. SENSE OF THE HOUSE OF REPRESENTATIVES.

9 It is the sense of the House of Representatives that

10 colleges and universities receiving assistance under the

11 Higher Education Act of 1965 shall establish policies for

12 identifying students with learning disabilities, specifically

13 students with dyslexia, early during their postsecondary

14 educational training so they may have the ability to receive

15 higher education opportunities.

16 TITLE XVII—SPECIAL

17 PROVISION

18 SEC. 1701. TERMINATION OF EFFECTIVENESS.

19 Notwithstanding section 4 of the Act, subparagraph

20 (K) of section 485(g)(1) of the Higher Education Act of

21 1965, as amended by this Act, shall cease to be effective

22 on October 1, 1998.

Passed the House of Representatives May 6, 1998.

Attest: ROBIN H. CARLE,

Clerk.