H. R. 6

One Hundred Fifth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twenty-seventh day of January, one thousand nine hundred and ninety-eight

An Act

To extend the authorization of programs under the Higher Education Act of 1965,

and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Education Amendments of 1998’’.

(b) TABLE OF CONTENTS.—The table of contents is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. References.

Sec. 3. General effective date.

TITLE I—GENERAL PROVISIONS

Sec. 101. Revision of title I.

Sec. 102. Conforming amendments.

TITLE II—TEACHER QUALITY

Sec. 201. Teacher quality enhancement grants.

TITLE III—INSTITUTIONAL AID

Sec. 301. Transfers and redesignations.

Sec. 302. Findings.

Sec. 303. Strengthening institutions.

Sec. 304. Strengthening HBCU’s.

Sec. 305. Endowment challenge grants.

Sec. 306. HBCU capital financing.

Sec. 307. Minority science and engineering improvement program.

Sec. 308. General provisions.

TITLE IV—STUDENT ASSISTANCE

PART A—GRANTS TO STUDENTS

Sec. 401. Federal Pell Grants.

Sec. 402. Federal TRIO programs.

Sec. 403. Gear up program.

Sec. 404. Academic achievement incentive scholarships.

Sec. 405. Repeals.

Sec. 406. Federal supplemental educational opportunity grants.

Sec. 407. Leveraging educational assistance partnership program.

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

seasonal farmwork.

Sec. 409. Robert C. Byrd Honors Scholarship Program.

Sec. 410. Child care access means parents in school.

Sec. 410A. Learning anytime anywhere partnerships.

PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 411. Limitation repealed.

Sec. 412. Advances to reserve funds.

Sec. 413. Guaranty agency reforms.

Sec. 414. Scope and duration of Federal loan insurance program.
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Sec. 415. Limitations on individual federally insured loans and Federal loan insurance.

Sec. 416. Applicable interest rates.

Sec. 417. Federal payments to reduce student interest costs.

Sec. 418. Voluntary flexible agreements with guaranty agencies.

Sec. 419. Federal PLUS loans.

Sec. 420. Federal consolidation loans.

Sec. 421. Default reduction program.

Sec. 422. Requirements for disbursements of student loans.

Sec. 423. Unsubsidized loans.

Sec. 424. Loan forgiveness for teachers.

Sec. 425. Loan forgiveness for child care providers.

Sec. 426. Notice to Secretary and payment of loss.

Sec. 427. Legal powers and responsibilities.

Sec. 428. Student loan information by eligible lenders.

Sec. 429. Definitions.

Sec. 430. Delegation of functions.

Sec. 431. Discharge.

Sec. 432. Debt management options.

Sec. 433. Special allowances.

Sec. 434. Federal family education loan insurance fund.

PART C—FEDERAL WORK-STUDY PROGRAMS

Sec. 441. Authorization of appropriations; community services.

Sec. 442. Allocation of funds.

Sec. 443. Grants for Federal work-study programs.

Sec. 444. Flexible use of funds.

Sec. 445. Work colleges.

PART D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

Sec. 451. Selection of institutions.

Sec. 452. Terms and conditions.

Sec. 453. Contracts.

Sec. 454. Funds for administrative expenses.

Sec. 455. Authority to sell loans.

Sec. 456. Loan cancellation for teachers.

PART E—FEDERAL PERKINS LOANS

Sec. 461. Authorization of appropriations.

Sec. 462. Allocation of funds.

Sec. 463. Agreements with institutions of higher education.

Sec. 464. Terms of loans.

Sec. 465. Cancellation for public service.

Sec. 466. Distribution of assets from student loan funds.

Sec. 467. Perkins Loan Revolving Fund.

PART F—NEED ANALYSIS

Sec. 471. Cost of attendance.

Sec. 472. Data elements.

Sec. 473. Family contribution for dependent students.

Sec. 474. Family contribution for independent students without dependents other

than a spouse.

Sec. 475. Family contribution for independent students with dependents other than

a spouse.

Sec. 476. Regulations; updated tables and amounts.

Sec. 477. Simplified needs test; zero expected family contribution.

Sec. 478. Discretion of student financial aid administrators.

Sec. 479. Treatment of other financial assistance.

Sec. 480. Clerical amendments.

Sec. 480A. Effective dates.

PART G—GENERAL PROVISIONS

Sec. 481. Master calendar.

Sec. 482. Forms and regulations.

Sec. 483. Student eligibility.

Sec. 484. State court judgments.

Sec. 485. Institutional refunds.

Sec. 486. Institutional and financial assistance information for students.

Sec. 487. National student loan data system.

Sec. 488. Distance education demonstration programs.
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Sec. 489. Program participation agreements.

Sec. 490. Regulatory relief and improvement.

Sec. 490A. Garnishment requirements.

Sec. 490B. Administrative subpoena authority.

Sec. 490C. Advisory Committee on Student Financial Assistance.

Sec. 490D. Meetings and negotiated rulemaking.

Sec. 490E. Year 2000 requirements at the Department of Education.

Sec. 490F. Procedures for cancellations and deferments for eligible disabled veterans.

PART H—PROGRAM INTEGRITY

Sec. 491. State role and responsibilities.

Sec. 492. Accrediting agency recognition.

Sec. 493. Eligibility and certification procedures.

Sec. 494. Program review and data.

Sec. 495. Review of regulations.

TITLE V—DEVELOPING INSTITUTIONS

Sec. 501. Establishment of new title V.

TITLE VI—INTERNATIONAL 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.

TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

Sec. 701. Revision of title VII.

Sec. 702. Repeals.

TITLE VIII—STUDIES, REPORTS, AND RELATED PROGRAMS

PART A—STUDIES

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

Sec. 802. Study of the feasibility of alternative financial instruments for determining lender yields.

Sec. 803. Student-related debt study required.

Sec. 804. Study of transfer of credits.

Sec. 805. Study of opportunities for participation in athletics programs.

Sec. 806. Study of the effectiveness of cohort default rates for institutions with few

student loan borrowers.

PART B—ADVANCED PLACEMENT INCENTIVE PROGRAM

Sec. 810. Advanced placement incentive program.

PART C—COMMUNITY SCHOLARSHIP MOBILIZATION

Sec. 811. Short title.

Sec. 812. Findings.

Sec. 813. Definitions.

Sec. 814. Purpose; endowment grant authority.

Sec. 815. Grant agreement and requirements.

Sec. 816. Authorization of appropriations.

PART D—GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION

TRAINING FOR INCARCERATED YOUTH OFFENDERS

Sec. 821. Grants to States for workplace and community transition training for incarcerated youth offenders.

PART E—GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON CAMPUSES

Sec. 826. Grants to combat violent crimes against women on campuses.

Sec. 827. Study of institutional procedures to report sexual assaults.

PART F—IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING,

AND TECHNOLOGY IN EAST ASIA

Sec. 831. Improving United States understanding of science, engineering, and technology in East Asia.

PART G—OLYMPIC SCHOLARSHIPS

Sec. 836. Extension of authorization.
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PART H—UNDERGROUND RAILROAD

Sec. 841. Underground Railroad educational and cultural program.

PART I—SUMMER TRAVEL AND WORK PROGRAMS

Sec. 846. Authority to administer summer travel and work programs.

PART J—WEB-BASED EDUCATION COMMISSION

Sec. 851. Short title; definitions.

Sec. 852. Establishment of Web-Based Education Commission.

Sec. 853. Duties of the Commission.

Sec. 854. Powers of the Commission.

Sec. 855. Commission personnel matters.

Sec. 856. Termination of the Commission.

Sec. 857. Authorization of appropriations.

PART K—MISCELLANEOUS

Sec. 861. Education-welfare study.

Sec. 862. Release of conditions, covenants, and reversionary interests, Guam Community College conveyance, Barrigada, Guam.

Sec. 863. Sense of Congress regarding good character.

Sec. 864. Educational merchandise licensing codes of conduct.

TITLE IX—AMENDMENTS TO OTHER LAWS

PART A—EXTENSION AND REVISION OF INDIAN HIGHER EDUCATION PROGRAMS

Sec. 901. Tribally controlled colleges and universities.

Sec. 902. Reauthorization of Navajo Community College Act.

PART B—EDUCATION OF THE DEAF

Sec. 911. Short title.

Sec. 912. Elementary and secondary education programs.

Sec. 913. Agreement with Gallaudet University.

Sec. 914. Agreement for the National Technical Institute for the Deaf.

Sec. 915. Definitions.

Sec. 916. Gifts.

Sec. 917. Reports.

Sec. 918. Monitoring, evaluation, and reporting.

Sec. 919. Federal endowment programs.

Sec. 920. Scholarship program.

Sec. 921. Oversight and effect of agreements.

Sec. 922. International students.

Sec. 923. Research priorities.

Sec. 924. National Study on the Education of the Deaf.

Sec. 925. Authorization of appropriations.

PART C—UNITED STATES INSTITUTE OF PEACE

Sec. 931. Authorities of the United States Institute of Peace.

PART D—VOLUNTARY RETIREMENT INCENTIVE PLANS

Sec. 941. Voluntary retirement incentive plans.

PART E—GENERAL EDUCATION PROVISIONS ACT AMENDMENT

Sec. 951. Amendment to Family Educational Rights and Privacy Act of 1974.

Sec. 952. Alcohol or drug possession disclosure.

PART F—LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION

Sec. 961. Liaison for proprietary institutions of higher education.

PART G—AMENDMENTS TO OTHER STATUTES

Sec. 971. Nondischareability of certain claims for educational benefits provided to

obtain higher education.

Sec. 972. GNMA guarantee fee.

PART H—REPEALS

Sec. 981. Repeals.

Sec. 982. Repeals of previous higher education amendments provisions.

SEC. 2. REFERENCES.

Except as otherwise expressly provided, whenever in this Act

an amendment or repeal is expressed in terms of an amendment
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to, or repeal of, a section or other provision, the reference shall

be considered to be made to a section or other provision of the

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

SEC. 3. GENERAL EFFECTIVE DATE.

Except as otherwise provided in this Act or the amendments

made by this Act, the amendments made by this Act shall take

effect on October 1, 1998.

TITLE I—GENERAL PROVISIONS

SEC. 101. REVISION OF TITLE I.

(a) GENERAL PROVISIONS.—Title I (20 U.S.C. 1001 et seq.) is

amended to read as follows:

‘‘TITLE I—GENERAL PROVISIONS

‘‘PART A—DEFINITIONS

‘‘SEC. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

‘‘(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this

Act, other than title IV, the term ‘institution of higher education’

means an educational institution in any State that—

‘‘(1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;

‘‘(2) is legally authorized within such State to provide a

program of education beyond secondary education;

‘‘(3) provides an educational program for which the institution awards a bachelor’s degree or provides not less than a

2-year program that is acceptable for full credit toward such

a degree;

‘‘(4) is a public or other nonprofit institution; and

‘‘(5) is accredited by a nationally recognized accrediting

agency or association, or if not so accredited, is an institution

that has been granted preaccreditation status by such an

agency or association that has been recognized by the Secretary

for the granting of preaccreditation status, and the Secretary

has determined that there is satisfactory assurance that the

institution will meet the accreditation standards of such an

agency or association within a reasonable time.

‘‘(b) ADDITIONAL INSTITUTIONS INCLUDED.—For purposes of this

Act, other than title IV, the term ‘institution of higher education’

also includes—

‘‘(1) any school that provides not less than a 1-year program

of training to prepare students for gainful employment in a

recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a); and

‘‘(2) a public or nonprofit private educational institution

in any State that, in lieu of the requirement in subsection

(a)(1), admits as regular students persons who are beyond

the age of compulsory school attendance in the State in which

the institution is located.

‘‘(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section and section 102, the Secretary shall publish a list of nationally
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recognized accrediting agencies or associations that the Secretary

determines, pursuant to subpart 2 of part H of title IV, to be

reliable authority as to the quality of the education or training

offered.

‘‘SEC. 102. DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR

PURPOSES OF TITLE IV PROGRAMS.

‘‘(a) DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR

PURPOSES OF TITLE IV PROGRAMS.—

‘‘(1) INCLUSION OF ADDITIONAL INSTITUTIONS.—Subject to

paragraphs (2) through (4) of this subsection, the term ‘institution of higher education’ for purposes of title IV includes, in

addition to the institutions covered by the definition in section

101—

‘‘(A) a proprietary institution of higher education (as

defined in subsection (b) of this section);

‘‘(B) a postsecondary vocational institution (as defined

in subsection (c) of this section); and

‘‘(C) only for the purposes of part B of title IV, an

institution outside the United States that is comparable

to an institution of higher education as defined in section

101 and that has been approved by the Secretary for the

purpose of part B of title IV.

‘‘(2) INSTITUTIONS OUTSIDE THE UNITED STATES.—

‘‘(A) IN GENERAL.—For the purpose of qualifying as

an institution under paragraph (1)(C), the Secretary shall

establish criteria by regulation for the approval of institutions outside the United States and for the determination

that such institutions are comparable to an institution

of higher education as defined in section 101. In the case

of a graduate medical or veterinary school outside the

United States, such criteria shall include a requirement

that a student attending such school outside the United

States is ineligible for loans made, insured, or guaranteed

under part B unless—

‘‘(i)(I) at least 60 percent of those enrolled in, and

at least 60 percent of the graduates of, the graduate

medical school outside the United States were not persons described in section 484(a)(5) in the year preceding the year for which a student is seeking a loan

under part B of title IV; and

‘‘(II) at least 60 percent of the individuals who

were students or graduates of the graduate medical

school outside the United States (both nationals of

the United States and others) taking the examinations

administered by the Educational Commission for Foreign Medical Graduates received a passing score in

the year preceding the year for which a student is

seeking a loan under part B of title IV; or

‘‘(ii) the institution has a clinical training program

that was approved by a State as of January 1, 1992,

or the institution’s students complete their clinical

training at an approved veterinary school located in

the United States.

‘‘(B) ADVISORY PANEL.—
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‘‘(i) IN GENERAL.—For the purpose of qualifying

as an institution under paragraph (1)(C) of this subsection, the Secretary shall establish an advisory panel

of medical experts that shall—

‘‘(I) evaluate the standards of accreditation

applied to applicant foreign medical schools; and

‘‘(II) determine the comparability of those

standards to standards for accreditation applied

to United States medical schools.

‘‘(ii) SPECIAL RULE.—If the accreditation standards

described in clause (i) are determined not to be comparable, the foreign medical school shall be required

to meet the requirements of section 101.

‘‘(C) FAILURE TO RELEASE INFORMATION.—The failure

of an institution outside the United States to provide,

release, or authorize release to the Secretary of such

information as may be required by subparagraph (A) shall

render such institution ineligible for the purpose of part

B of title IV.

‘‘(D) SPECIAL RULE.—If, pursuant to this paragraph,

an institution loses eligibility to participate in the programs

under title IV, then a student enrolled at such institution

may, notwithstanding such loss of eligibility, continue to

be eligible to receive a loan under part B while attending

such institution for the academic year succeeding the academic year in which such loss of eligibility occurred.

‘‘(3) LIMITATIONS BASED ON COURSE OF STUDY OR ENROLLMENT.—An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1)

if such institution—

‘‘(A) offers more than 50 percent of such institution’s

courses by correspondence, unless the institution is an

institution that meets the definition in section 521(4)(C)

of the Carl D. Perkins Vocational and Applied Technology

Education Act;

‘‘(B) enrolls 50 percent or more of the institution’s

students in correspondence courses, unless the institution

is an institution that meets the definition in such section,

except that the Secretary, at the request of such institution,

may waive the applicability of this subparagraph to such

institution for good cause, as determined by the Secretary

in the case of an institution of higher education that provides a 2- or 4-year program of instruction (or both) for

which the institution awards an associate or baccalaureate

degree, respectively;

‘‘(C) has a student enrollment in which more than

25 percent of the students are incarcerated, except that

the Secretary may waive the limitation contained in this

subparagraph for a nonprofit institution that provides a

2- or 4-year program of instruction (or both) for which

the institution awards a bachelor’s degree, or an associate’s

degree or a postsecondary diploma, respectively; or

‘‘(D) has a student enrollment in which more than

50 percent of the students do not have a secondary school

diploma or its recognized equivalent, and does not provide

a 2- or 4-year program of instruction (or both) for which

the institution awards a bachelor’s degree or an associate’s
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degree, respectively, except that the Secretary may waive

the limitation contained in this subparagraph if a nonprofit

institution demonstrates to the satisfaction of the Secretary

that the institution exceeds such limitation because the

institution serves, through contracts with Federal, State,

or local government agencies, significant numbers of students who do not have a secondary school diploma or

its recognized equivalent.

‘‘(4) LIMITATIONS BASED ON MANAGEMENT.—An institution

shall not be considered to meet the definition of an institution

of higher education in paragraph (1) if—

‘‘(A) the institution, or an affiliate of the institution

that has the power, by contract or ownership interest,

to direct or cause the direction of the management or

policies of the institution, has filed for bankruptcy, except

that this paragraph shall not apply to a nonprofit institution, the primary function of which is to provide health

care educational services (or an affiliate of such an institution that has the power, by contract or ownership interest,

to direct or cause the direction of the institution’s management or policies) that files for bankruptcy under chapter

11 of title 11, United States Code, between July 1, 1998,

and December 1, 1998; or

‘‘(B) the institution, the institution’s owner, or the

institution’s chief executive officer has been convicted of,

or has pled nolo contendere or guilty to, a crime involving

the acquisition, use, or expenditure of funds under title

IV, or has been judicially determined to have committed

fraud involving funds under title IV.

‘‘(5) CERTIFICATION.—The Secretary shall certify an institution’s qualification as an institution of higher education in

accordance with the requirements of subpart 3 of part H of

title IV.

‘‘(6) LOSS OF ELIGIBILITY.—An institution of higher education shall not be considered to meet the definition of an

institution of higher education in paragraph (1) if such institution is removed from eligibility for funds under title IV as

a result of an action pursuant to part H of title IV.

‘‘(b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.—

‘‘(1) PRINCIPAL CRITERIA.—For the purpose of this section,

the term ‘proprietary institution of higher education’ means

a school that—

‘‘(A) provides an eligible program of training to prepare

students for gainful employment in a recognized occupation;

‘‘(B) meets the requirements of paragraphs (1) and

(2) of section 101(a);

‘‘(C) does not meet the requirement of paragraph (4)

of section 101(a);

‘‘(D) is accredited by a nationally recognized accrediting

agency or association recognized by the Secretary pursuant

to part H of title IV;

‘‘(E) has been in existence for at least 2 years; and

‘‘(F) has at least 10 percent of the school’s revenues

from sources that are not derived from funds provided

under title IV, as determined in accordance with regulations prescribed by the Secretary.
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‘‘(2) ADDITIONAL INSTITUTIONS.—The term ‘proprietary

institution of higher education’ also includes a proprietary educational institution in any State that, in lieu of the requirement

in paragraph (1) of section 101(a), admits as regular students

persons who are beyond the age of compulsory school attendance in the State in which the institution is located.

‘‘(c) POSTSECONDARY VOCATIONAL INSTITUTION.—

‘‘(1) PRINCIPAL CRITERIA.—For the purpose of this section,

the term ‘postsecondary vocational institution’ means a school

that—

‘‘(A) provides an eligible program of training to prepare

students for gainful employment in a recognized occupation;

‘‘(B) meets the requirements of paragraphs (1), (2),

(4), and (5) of section 101(a); and

‘‘(C) has been in existence for at least 2 years.

‘‘(2) ADDITIONAL INSTITUTIONS.—The term ‘postsecondary

vocational institution’ also includes an educational institution

in any State that, in lieu of the requirement in paragraph

(1) of section 101(a), admits as regular students persons who

are beyond the age of compulsory school attendance in the

State in which the institution is located.

‘‘SEC. 103. ADDITIONAL DEFINITIONS.

‘‘In this Act:

‘‘(1) COMBINATION OF INSTITUTIONS OF HIGHER EDUCATION.—The term ‘combination of institutions of higher education’ means a group of institutions of higher education that

have entered into a cooperative arrangement for the purpose

of carrying out a common objective, or a public or private

nonprofit agency, organization, or institution designated or created by a group of institutions of higher education for the

purpose of carrying out a common objective on the group’s

behalf.

‘‘(2) DEPARTMENT.—The term ‘Department’ means the

Department of Education.

‘‘(3) DISABILITY.—The term ‘disability’ has the same meaning given that term under section 3(2) of the Americans With

Disabilities Act of 1990.

‘‘(4) ELEMENTARY SCHOOL.—The term ‘elementary school’

has the same meaning given that term under section 14101

of the Elementary and Secondary Education Act of 1965.

‘‘(5) GIFTED AND TALENTED.—The term ‘gifted and talented’

has the same meaning given that term under section 14101

of the Elementary and Secondary Education Act of 1965.

‘‘(6) LOCAL EDUCATIONAL AGENCY.—The term ‘local educational agency’ has the same meaning given that term under

section 14101 of the Elementary and Secondary Education Act

of 1965.

‘‘(7) NEW BORROWER.—The term ‘new borrower’ when used

with respect to any date means an individual who on that

date has no outstanding balance of principal or interest owing

on any loan made, insured, or guaranteed under title IV.

‘‘(8) NONPROFIT.—The term ‘nonprofit’ as applied to a

school, agency, organization, or institution means a school,

agency, organization, or institution owned and operated by

one or more nonprofit corporations or associations, no part
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of the net earnings of which inures, or may lawfully inure,

to the benefit of any private shareholder or individual.

‘‘(9) SCHOOL OR DEPARTMENT OF DIVINITY.—The term ‘school

or department of divinity’ means an institution, or a department

or a branch of an institution, the program of instruction of

which is designed for the education of students—

‘‘(A) to prepare the students to become ministers of

religion or to enter upon some other religious vocation

(or to provide continuing training for any such vocation);

or

‘‘(B) to prepare the students to teach theological subjects.

‘‘(10) SECONDARY SCHOOL.—The term ‘secondary school’ has

the same meaning given that term under section 14101 of

the Elementary and Secondary Education Act of 1965.

‘‘(11) SECRETARY.—The term ‘Secretary’ means the Secretary of Education.

‘‘(12) SERVICE-LEARNING.—The term ‘service-learning’ has

the same meaning given that term under section 101(23) of

the National and Community Service Act of 1990.

‘‘(13) SPECIAL EDUCATION TEACHER.—The term ‘special education teacher’ means teachers who teach children with disabilities as defined in section 602 of the Individuals with Disabilities Education Act.

‘‘(14) STATE EDUCATIONAL AGENCY.—The term ‘State educational agency’ has the same meaning given that term under

section 14101 of the Elementary and Secondary Education Act

of 1965.

‘‘(15) STATE HIGHER EDUCATION AGENCY.—The term ‘State

higher education agency’ means the officer or agency primarily

responsible for the State supervision of higher education.

‘‘(16) STATE; FREELY ASSOCIATED STATES.—

‘‘(A) STATE.—The term ‘State’ includes, in addition to

the several States of the United States, the Commonwealth

of Puerto Rico, the District of Columbia, Guam, American

Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Freely

Associated States.

‘‘(B) FREELY ASSOCIATED STATES.—The term ‘Freely

Associated States’ means the Republic of the Marshall

Islands, the Federated States of Micronesia, and the Republic of Palau.

‘‘PART B—ADDITIONAL GENERAL PROVISIONS

‘‘SEC. 111. ANTIDISCRIMINATION.

‘‘(a) IN GENERAL.—Institutions of higher education receiving

Federal financial assistance may not use such financial assistance,

directly or indirectly, to undertake any study or project or fulfill

the terms of any contract containing an express or implied provision

that any person or persons of a particular race, religion, sex, or

national origin be barred from performing such study, project, or

contract, except that nothing in this subsection shall be construed

to prohibit an institution from conducting objective studies or

projects concerning the nature, effects, or prevention of discrimination, or to have the institution’s curriculum restricted on the subject

of discrimination.
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‘‘(b) LIMITATIONS ON STATUTORY CONSTRUCTION.—Nothing in

this Act shall be construed to limit the rights or responsibilities

of any individual under the Americans With Disabilities Act of

1990, the Rehabilitation Act of 1973, or any other law.

‘‘SEC. 112. PROTECTION OF STUDENT SPEECH AND ASSOCIATION

RIGHTS.

‘‘(a) PROTECTION OF RIGHTS.—It is the sense of Congress that

no student attending an institution of higher education on a fullor part-time basis should, on the basis of participation in protected

speech or protected association, be excluded from participation in,

be denied the benefits of, or be subjected to discrimination or

official sanction under any education program, activity, or division

of the institution directly or indirectly receiving financial assistance

under this Act, whether or not such program, activity, or division

is sponsored or officially sanctioned by the institution.

‘‘(b) CONSTRUCTION.—Nothing in this section shall be construed—

‘‘(1) to discourage the imposition of an official sanction

on a student that has willfully participated in the disruption

or attempted disruption of a lecture, class, speech, presentation,

or performance made or scheduled to be made under the auspices of the institution of higher education; or

‘‘(2) to prevent an institution of higher education from

taking appropriate and effective action to prevent violations

of State liquor laws, to discourage binge drinking and other

alcohol abuse, to protect students from sexual harassment

including assault and date rape, to prevent hazing, or to regulate unsanitary or unsafe conditions in any student residence.

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

‘‘(1) OFFICIAL SANCTION.—The term ‘official sanction’—

‘‘(A) means expulsion, suspension, probation, censure,

condemnation, reprimand, or any other disciplinary, coercive, or adverse action taken by an institution of higher

education or administrative unit of the institution; and

‘‘(B) includes an oral or written warning made by an

official of an institution of higher education acting in the

official capacity of the official.

‘‘(2) PROTECTED ASSOCIATION.—The term ‘protected association’ means the joining, assembling, and residing with others

that is protected under the first and 14th amendments to

the Constitution, or would be protected if the institution of

higher education involved were subject to those amendments.

‘‘(3) PROTECTED SPEECH.—The term ‘protected speech’

means speech that is protected under the first and 14th amendments to the Constitution, or would be protected if the institution of higher education involved were subject to those amendments.

‘‘SEC. 113. TREATMENT OF TERRITORIES AND TERRITORIAL STUDENT

ASSISTANCE.

‘‘(a) WAIVER AUTHORITY.—The Secretary is required to waive

the eligibility criteria of any postsecondary education program

administered by the Department where such criteria do not take

into account the unique circumstances in Guam, the United States

Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States.
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‘‘(b) ELIGIBILITY.—Notwithstanding any other provision of law,

an institution of higher education that is located in any of the

Freely Associated States, rather than in another State, shall be

eligible, if otherwise qualified, for assistance under chapter 1 of

subpart 2 of part A of title IV. This subsection shall cease to

be effective on September 30, 2004.

‘‘SEC. 114. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND INTEGRITY.

‘‘(a) ESTABLISHMENT.—There is established in the Department

a National Advisory Committee on Institutional Quality and Integrity (hereafter in this section referred to as the ‘Committee’), which

shall be composed of 15 members appointed by the Secretary from

among individuals who are representatives of, or knowledgeable

concerning, education and training beyond secondary education,

including representatives of all sectors and types of institutions

of higher education (as defined in section 102), to assess the process

of eligibility and certification of such institutions under title IV

and the provision of financial aid under title IV.

‘‘(b) TERMS OF MEMBERS.—Terms of office of each member

of the Committee shall be 3 years, except that any member

appointed to fill a vacancy occurring prior to the expiration of

the term for which the member’s predecessor was appointed shall

be appointed for the remainder of such term.

‘‘(c) PUBLIC NOTICE.—The Secretary shall—

‘‘(1) annually publish in the Federal Register a list containing the name of each member of the Committee and the date

of the expiration of the term of office of the member; and

‘‘(2) publicly solicit nominations for each vacant position

or expiring term of office on the Committee.

‘‘(d) FUNCTIONS.—The Committee shall—

‘‘(1) advise the Secretary with respect to establishment

and enforcement of the standards of accrediting agencies or

associations under subpart 2 of part H of title IV;

‘‘(2) advise the Secretary with respect to the recognition

of a specific accrediting agency or association;

‘‘(3) advise the Secretary with respect to the preparation

and publication of the list of nationally recognized accrediting

agencies and associations;

‘‘(4) develop and recommend to the Secretary standards

and criteria for specific categories of vocational training institutions and institutions of higher education for which there are

no recognized accrediting agencies, associations, or State agencies, in order to establish the eligibility of such institutions

on an interim basis for participation in federally funded programs;

‘‘(5) advise the Secretary with respect to the eligibility

and certification process for institutions of higher education

under title IV, together with recommendations for improvements in such process;

‘‘(6) advise the Secretary with respect to the relationship

between—

‘‘(A) accreditation of institutions of higher education

and the certification and eligibility of such institutions;

and

‘‘(B) State licensing responsibilities with respect to such

institutions; and
H. R. 6—13

‘‘(7) carry out such other advisory functions relating to

accreditation and institutional eligibility as the Secretary may

prescribe.

‘‘(e) MEETING PROCEDURES.—The Committee shall meet not

less than twice each year at the call of the Chairperson. The

date of, and agenda for, each meeting of the Committee shall

be submitted in advance to the Secretary for approval. A representative of the Secretary shall be present at all meetings of the Committee.

‘‘(f ) REPORT.—Not later than November 30 of each year, the

Committee shall make an annual report through the Secretary

to Congress. The annual report shall contain—

‘‘(1) a list of the members of the Committee and their

addresses;

‘‘(2) a list of the functions of the Committee;

‘‘(3) a list of dates and places of each meeting during

the preceding fiscal year; and

‘‘(4) a summary of the activities, findings and recommendations made by the Committee during the preceding fiscal year.

‘‘(g) TERMINATION.—The Committee shall cease to exist on

September 30, 2004.

‘‘SEC. 115. STUDENT REPRESENTATION.

‘‘The Secretary shall, in appointing individuals to any commission, committee, board, panel, or other body in connection with

the administration of this Act, include individuals who are, at

the time of appointment, attending an institution of higher education.

‘‘SEC. 116. FINANCIAL RESPONSIBILITY OF FOREIGN STUDENTS.

‘‘Nothing in this Act or any other Federal law shall be construed

to prohibit any institution of higher education from requiring a

student who is a foreign national (and not admitted to permanent

residence in the United States) to guarantee the future payment

of tuition and fees to such institution by—

‘‘(1) making advance payment of such tuition and fees;

‘‘(2) making deposits in an escrow account administered

by such institution for such payments; or

‘‘(3) obtaining a bond or other insurance that such payments will be made.

‘‘SEC. 117. DISCLOSURES OF FOREIGN GIFTS.

‘‘(a) DISCLOSURE REPORT.—Whenever any institution is owned

or controlled by a foreign source or receives a gift from or enters

into a contract with a foreign source, the value of which is $250,000

or more, considered alone or in combination with all other gifts

from or contracts with that foreign source within a calendar year,

the institution shall file a disclosure report with the Secretary

on January 31 or July 31, whichever is sooner.

‘‘(b) CONTENTS OF REPORT.—Each report to the Secretary

required by this section shall contain the following:

‘‘(1) For gifts received from or contracts entered into with

a foreign source other than a foreign government, the aggregate

dollar amount of such gifts and contracts attributable to a

particular country. The country to which a gift is attributable

is the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the
H. R. 6—14

country of incorporation, or if unknown, the principal place

of business, for a foreign source which is a legal entity.

‘‘(2) For gifts received from or contracts entered into with

a foreign government, the aggregate amount of such gifts and

contracts received from each foreign government.

‘‘(3) In the case of an institution which is owned or controlled by a foreign source, the identity of the foreign source,

the date on which the foreign source assumed ownership or

control, and any changes in program or structure resulting

from the change in ownership or control.

‘‘(c) ADDITIONAL DISCLOSURES FOR RESTRICTED AND CONDITIONAL GIFTS.—Notwithstanding the provisions of subsection (b),

whenever any institution receives a restricted or conditional gift

or contract from a foreign source, the institution shall disclose

the following:

‘‘(1) For such gifts received from or contracts entered into

with a foreign source other than a foreign government, the

amount, the date, and a description of such conditions or restrictions. The report shall also disclose the country of citizenship,

or if unknown, the principal residence for a foreign source

which is a natural person, and the country of incorporation,

or if unknown, the principal place of business for a foreign

source which is a legal entity.

‘‘(2) For gifts received from or contracts entered into with

a foreign government, the amount, the date, a description of

such conditions or restrictions, and the name of the foreign

government.

‘‘(d) RELATION TO OTHER REPORTING REQUIREMENTS.— ‘‘(1) STATE REQUIREMENTS.—If an institution described

under subsection (a) is within a State which has enacted

requirements for public disclosure of gifts from or contracts

with a foreign source that are substantially similar to the

requirements of this section, a copy of the disclosure report

filed with the State may be filed with the Secretary in lieu

of a report required under subsection (a). The State in which

the institution is located shall provide to the Secretary such

assurances as the Secretary may require to establish that the

institution has met the requirements for public disclosure under

State law if the State report is filed.

‘‘(2) USE OF OTHER FEDERAL REPORTS.—If an institution

receives a gift from, or enters into a contract with, a foreign

source, where any other department, agency, or bureau of the

executive branch requires a report containing requirements

substantially similar to those required under this section, a

copy of the report may be filed with the Secretary in lieu

of a report required under subsection (a).

‘‘(e) PUBLIC INSPECTION.—All disclosure reports required by

this section shall be public records open to inspection and copying

during business hours.

‘‘(f ) ENFORCEMENT.—

‘‘(1) COURT ORDERS.—Whenever it appears that an institution has failed to comply with the requirements of this section,

including any rule or regulation promulgated under this section,

a civil action may be brought by the Attorney General, at

the request of the Secretary, in an appropriate district court

of the United States, or the appropriate United States court

of any territory or other place subject to the jurisdiction of
H. R. 6—15

the United States, to request such court to compel compliance

with the requirements of this section.

‘‘(2) COSTS.—For knowing or willful failure to comply with

the requirements of this section, including any rule or regulation promulgated thereunder, an institution shall pay to the

Treasury of the United States the full costs to the United

States of obtaining compliance, including all associated costs

of investigation and enforcement.

‘‘(g) REGULATIONS.—The Secretary may promulgate regulations

to carry out this section.

‘‘(h) DEFINITIONS.—For the purpose of this section—

‘‘(1) the term ‘contract’ means any agreement for the

acquisition by purchase, lease, or barter of property or services

by the foreign source, for the direct benefit or use of either

of the parties;

‘‘(2) the term ‘foreign source’ means—

‘‘(A) a foreign government, including an agency of a

foreign government;

‘‘(B) a legal entity, governmental or otherwise, created

solely under the laws of a foreign state or states;

‘‘(C) an individual who is not a citizen or a national

of the United States or a trust territory or protectorate

thereof; and

‘‘(D) an agent, including a subsidiary or affiliate of

a foreign legal entity, acting on behalf of a foreign source;

‘‘(3) the term ‘gift’ means any gift of money or property;

‘‘(4) the term ‘institution’ means any institution, public

or private, or, if a multicampus institution, any single campus

of such institution, in any State, that—

‘‘(A) is legally authorized within such State to provide

a program of education beyond secondary school;

‘‘(B) provides a program for which the institution

awards a bachelor’s degree (or provides not less than a

2-year program which is acceptable for full credit toward

such a degree) or more advanced degrees; and

‘‘(C) is accredited by a nationally recognized accrediting

agency or association and to which institution Federal

financial assistance is extended (directly or indirectly

through another entity or person), or which institution

receives support from the extension of Federal financial

assistance to any of the institution’s subunits; and

‘‘(5) the term ‘restricted or conditional gift or contract’

means any endowment, gift, grant, contract, award, present,

or property of any kind which includes provisions regarding—

‘‘(A) the employment, assignment, or termination of

faculty;

‘‘(B) the establishment of departments, centers,

research or lecture programs, or new faculty positions;

‘‘(C) the selection or admission of students; or

‘‘(D) the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students

of a specified country, religion, sex, ethnic origin, or political opinion.

‘‘SEC. 118. APPLICATION OF PEER REVIEW PROCESS.

‘‘All applications submitted under the provisions of this Act

which require peer review shall be read by a panel of readers
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composed of individuals selected by the Secretary, which shall

include outside readers who are not employees of the Federal

Government. The Secretary shall ensure that no individual assigned

under this section to review any application has any conflict of

interest with regard to that application which might impair the

impartiality with which that individual conducts the review under

this section.

‘‘SEC. 119. BINGE DRINKING ON COLLEGE CAMPUSES.

‘‘(a) SHORT TITLE.—This section may be cited as the ‘Collegiate

Initiative To Reduce Binge Drinking and Illegal Alcohol Consumption’.

‘‘(b) SENSE OF CONGRESS.—It is the sense of Congress that,

in an effort to change the culture of alcohol consumption on college

campuses, all institutions of higher education should carry out

the following:

‘‘(1) The president of the institution should appoint a task

force consisting of school administrators, faculty, students,

Greek system representatives, and others to conduct a full

examination of student and academic life at the institution.

The task force should make recommendations for a broad range

of policy and program changes that would serve to reduce

alcohol and other drug-related problems. The institution should

provide resources to assist the task force in promoting the

campus policies and proposed environmental changes that have

been identified.

‘‘(2) The institution should provide maximum opportunities

for students to live in an alcohol-free environment and to engage

in stimulating, alcohol-free recreational and leisure activities.

‘‘(3) The institution should enforce a ‘zero tolerance’ policy

on the illegal consumption of alcohol by students at the institution.

‘‘(4) The institution should vigorously enforce the institution’s code of disciplinary sanctions for those who violate campus alcohol policies. Students with alcohol or other drug-related

problems should be referred for assistance, including on-campus

counseling programs if appropriate.

‘‘(5) The institution should adopt a policy to discourage

alcoholic beverage-related sponsorship of on-campus activities.

It should adopt policies limiting the advertisement and promotion of alcoholic beverages on campus.

‘‘(6) The institution should work with the local community,

including local businesses, in a ‘Town/Gown’ alliance to encourage responsible policies toward alcohol consumption and to

address illegal alcohol use by students.

‘‘SEC. 120. DRUG AND ALCOHOL ABUSE PREVENTION.

‘‘(a) RESTRICTION ON ELIGIBILITY.—Notwithstanding any other

provision of law, no institution of higher education shall be eligible

to receive funds or any other form of financial assistance under

any Federal program, including participation in any federally

funded or guaranteed student loan program, unless the institution

certifies to the Secretary that the institution has adopted and

has implemented a program to prevent the use of illicit drugs

and the abuse of alcohol by students and employees that, at a

minimum, includes—

‘‘(1) the annual distribution to each student and employee

of—
H. R. 6—17

‘‘(A) standards of conduct that clearly prohibit, at a

minimum, the unlawful possession, use, or distribution of

illicit drugs and alcohol by students and employees on

the institution’s property or as part of any of the institution’s activities;

‘‘(B) a description of the applicable legal sanctions

under local, State, or Federal law for the unlawful possession or distribution of illicit drugs and alcohol;

‘‘(C) a description of the health-risks associated with

the use of illicit drugs and the abuse of alcohol;

‘‘(D) a description of any drug or alcohol counseling,

treatment, or rehabilitation or re-entry programs that are

available to employees or students; and

‘‘(E) a clear statement that the institution will impose

sanctions on students and employees (consistent with local,

State, and Federal law), and a description of those sanctions, up to and including expulsion or termination of

employment and referral for prosecution, for violations of

the standards of conduct required by subparagraph (A);

and

‘‘(2) a biennial review by the institution of the institution’s

program to—

‘‘(A) determine the program’s effectiveness and implement changes to the program if the changes are needed;

and

‘‘(B) ensure that the sanctions required by paragraph

(1)(E) are consistently enforced.

‘‘(b) INFORMATION AVAILABILITY.—Each institution of higher

education that provides the certification required by subsection

(a) shall, upon request, make available to the Secretary and to

the public a copy of each item required by subsection (a)(1) as

well as the results of the biennial review required by subsection

(a)(2).

‘‘(c) REGULATIONS.— ‘‘(1) IN GENERAL.—The Secretary shall publish regulations

to implement and enforce the provisions of this section, including regulations that provide for—

‘‘(A) the periodic review of a representative sample

of programs required by subsection (a); and

‘‘(B) a range of responses and sanctions for institutions

of higher education that fail to implement their programs

or to consistently enforce their sanctions, including

information and technical assistance, the development of

a compliance agreement, and the termination of any form

of Federal financial assistance.

‘‘(2) REHABILITATION PROGRAM.—The sanctions required by

subsection (a)(1)(E) may include the completion of an appropriate rehabilitation program.

‘‘(d) APPEALS.—Upon determination by the Secretary to terminate financial assistance to any institution of higher education

under this section, the institution may file an appeal with an

administrative law judge before the expiration of the 30-day period

beginning on the date such institution is notified of the decision

to terminate financial assistance under this section. Such judge

shall hold a hearing with respect to such termination of assistance

before the expiration of the 45-day period beginning on the date

that such appeal is filed. Such judge may extend such 45-day
H. R. 6—18

period upon a motion by the institution concerned. The decision

of the judge with respect to such termination shall be considered

to be a final agency action.

‘‘(e) ALCOHOL AND DRUG ABUSE PREVENTION GRANTS.—

‘‘(1) PROGRAM AUTHORITY.—The Secretary may make grants

to institutions of higher education or consortia of such institutions, and enter into contracts with such institutions, consortia,

and other organizations, to develop, implement, operate,

improve, and disseminate programs of prevention, and education (including treatment-referral) to reduce and eliminate

the illegal use of drugs and alcohol and the violence associated

with such use. Such grants or contracts may also be used

for the support of a higher education center for alcohol and

drug abuse prevention that will provide training, technical

assistance, evaluation, dissemination, and associated services

and assistance to the higher education community as determined by the Secretary and institutions of higher education.

‘‘(2) AWARDS.—Grants and contracts shall be awarded

under paragraph (1) on a competitive basis.

‘‘(3) APPLICATIONS.—An institution of higher education, a

consortium of such institutions, or another organization that

desires to receive a grant or contract under paragraph (1)

shall submit an application to the Secretary at such time,

in such manner, and containing or accompanied by such

information as the Secretary may reasonably require by regulation.

‘‘(4) ADDITIONAL REQUIREMENTS.—

‘‘(A) PARTICIPATION.—In awarding grants and contracts

under this subsection the Secretary shall make every effort

to ensure—

‘‘(i) the equitable participation of private and public

institutions of higher education (including community

and junior colleges); and

‘‘(ii) the equitable geographic participation of such

institutions.

‘‘(B) CONSIDERATION.—In awarding grants and contracts under this subsection the Secretary shall give appropriate consideration to institutions of higher education with

limited enrollment.

‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—There are

authorized to be appropriated to carry out this subsection

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

necessary for each of the 4 succeeding fiscal years.

‘‘(f ) NATIONAL RECOGNITION AWARDS.—

‘‘(1) PURPOSE.—It is the purpose of this subsection to provide models of innovative and effective alcohol and drug abuse

prevention programs in higher education and to focus national

attention on exemplary alcohol and drug abuse prevention

efforts.

‘‘(2) AWARDS.—

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

National Recognition Awards for outstanding alcohol

prevention programs and 5 National Recognition Awards

for outstanding drug abuse prevention programs, on an

annual basis, to institutions of higher education that—
H. R. 6—19

‘‘(i) have developed and implemented innovative

and effective alcohol prevention programs or drug

abuse prevention programs; and

‘‘(ii) with respect to an application for an alcohol

prevention program award, demonstrate in the application submitted under paragraph (3) that the institution

has undertaken efforts designed to change the culture

of college drinking consistent with the review criteria

described in paragraph (3)(C)(iii).

‘‘(B) CEREMONY.—The awards shall be made at a ceremony in Washington, D.C.

‘‘(C) DOCUMENT.—The Secretary shall publish a document describing the alcohol and drug abuse prevention

programs of institutions of higher education that receive

the awards under this subsection and disseminate the document nationally to all public and private secondary school

guidance counselors for use by secondary school juniors

and seniors preparing to enter an institution of higher

education. The document shall be disseminated not later

than January 1 of each academic year.

‘‘(D) AMOUNT AND USE.—Each institution of higher education selected to receive an award under this subsection

shall receive an award in the amount of $50,000. Such

award shall be used for the maintenance and improvement

of the institution’s outstanding prevention program for the

academic year following the academic year for which the

award is made.

‘‘(3) APPLICATION.—

‘‘(A) IN GENERAL.—Each institution of higher education

desiring an award under this subsection shall submit an

application to the Secretary at such time, in such manner,

and accompanied by such information as the Secretary

may require. Each such application shall contain—

‘‘(i) a clear description of the goals and objectives

of the prevention program of the institution;

‘‘(ii) a description of program activities that focus

on alcohol or drug policy issues, policy development,

modification, or refinement, policy dissemination and

implementation, and policy enforcement;

‘‘(iii) a description of activities that encourage student and employee participation and involvement in

activity development and implementation;

‘‘(iv) the objective criteria used to determine the

effectiveness of the methods used in such programs

and the means used to evaluate and improve the programs’ efforts;

‘‘(v) a description of special initiatives used to

reduce high-risk behavior or increase low-risk behavior;

and

‘‘(vi) a description of coordination and networking

efforts that exist in the community in which the institution is located for purposes of such programs.

‘‘(B) APPLICATION REVIEW.—The Secretary shall

appoint a committee to review applications submitted
H. R. 6—20

under this paragraph. The committee may include representatives of Federal departments or agencies the programs of which include alcohol abuse prevention and education efforts and drug abuse prevention and education

efforts, directors or heads (or their representatives) of

professional associations that focus on alcohol and drug

abuse prevention efforts, and non-Federal scientists who

have backgrounds in social science evaluation and research

methodology and in education. Decisions of the committee

shall be made directly to the Secretary without review

by any other entity in the Department.

‘‘(C) REVIEW CRITERIA.—The committee described in

subparagraph (B) shall develop specific review criteria for

reviewing and evaluating applications submitted under this

paragraph. The review criteria shall include—

‘‘(i) measures of the effectiveness of the program

of the institution, that includes changes in the campus

alcohol or other drug environment or the climate and

changes in alcohol or other drug use before and after

the initiation of the program;

‘‘(ii) measures of program institutionalization,

including—

‘‘(I) an assessment of needs of the institution;

‘‘(II) the institution’s alcohol and drug policies,

staff and faculty development activities, drug

prevention criteria, student, faculty, and campus

community involvement; and

‘‘(III) whether the program will be continued

after the cessation of Federal funding; and

‘‘(iii) with respect to an application for an alcohol

prevention program award, criteria for determining

whether the institution has policies in effect that—

‘‘(I) prohibit alcoholic beverage sponsorship of

athletic events, and prohibit alcoholic beverage

advertising inside athletic facilities;

‘‘(II) prohibit alcoholic beverage marketing on

campus, which may include efforts to ban alcohol

advertising in institutional publications or efforts

to prohibit alcohol-related advertisements at campus events;

‘‘(III) establish or expand upon alcohol-free living arrangements for all college students;

‘‘(IV) establish partnerships with community

members and organizations to further alcohol

prevention efforts on campus and the areas

surrounding campus; and

‘‘(V) establish innovative communications programs involving students and faculty in an effort

to educate students about alcohol-related risks.

‘‘(4) ELIGIBILITY.—In order to be eligible to receive a

National Recognition Award an institution of higher education

shall—

‘‘(A) offer an associate or baccalaureate degree;

‘‘(B) have established an alcohol abuse prevention and

education program or a drug abuse prevention and education program;
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‘‘(C) nominate itself or be nominated by others, such

as professional associations or student organizations, to

receive the award; and

‘‘(D) not have received an award under this subsection

during the 5 academic years preceding the academic year

for which the determination is made.

‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(A) IN GENERAL.—There is authorized to be appro- priated to carry out this subsection $750,000 for fiscal

year 1999.

‘‘(B) AVAILABILITY.—Funds appropriated under

subparagraph (A) shall remain available until expended.

‘‘SEC. 121. PRIOR RIGHTS AND OBLIGATIONS.

‘‘(a) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(1) PRE-1987 PARTS C AND D OF TITLE VII.—There are

authorized to be appropriated such sums as may be necessary

for fiscal year 1999 and for each of the 4 succeeding fiscal

years to pay obligations incurred prior to 1987 under parts

C and D of title VII, as such parts were in effect before the

effective date of the Higher Education Amendments of 1992.

‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—There

are authorized to be appropriated such sums as may be necessary for fiscal year 1999 and for each of the 4 succeeding

fiscal years to pay obligations incurred prior to the date of

enactment of the Higher Education Amendments of 1998 under

part C of title VII, as such part was in effect during the

period—

‘‘(A) after the effective date of the Higher Education

Amendments of 1992; and

‘‘(B) prior to the date of enactment of the Higher Education Amendments of 1998.

‘‘(b) LEGAL RESPONSIBILITIES.— ‘‘(1) PRE-1987 TITLE VII.—All entities with continuing obligations incurred under parts A, B, C, and D of title VII, as

such parts were in effect before the effective date of the Higher

Education Amendments of 1992, shall be subject to the requirements of such part as in effect before the effective date of

the Higher Education Amendments of 1992.

‘‘(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—All entities with continuing obligations incurred under part C of title

VII, as such part was in effect during the period—

‘‘(A) after the effective date of the Higher Education

Amendments of 1992; and

‘‘(B) prior to the date of enactment of the Higher Education Amendments of 1998,

shall be subject to the requirements of such part as such

part was in effect during such period.

‘‘SEC. 122. RECOVERY OF PAYMENTS.

‘‘(a) PUBLIC BENEFIT.—Congress declares that, if a facility constructed with the aid of a grant under part A of title VII as

such part A was in effect prior to the date of enactment of the

Higher Education Amendments of 1998, or part B of such title

as part B was in effect prior to the date of enactment of the

Higher Education Amendments of 1992, is used as an academic

facility for 20 years following completion of such construction, the

public benefit accruing to the United States will equal in value
H. R. 6—22

the amount of the grant. The period of 20 years after completion

of such construction shall therefore be deemed to be the period

of Federal interest in such facility for the purposes of such title

as so in effect.

‘‘(b) RECOVERY UPON CESSATION OF PUBLIC BENEFIT.—If, within

20 years after completion of construction of an academic facility

which has been constructed, in part with a grant under part A

of title VII as such part A was in effect prior to the date of

enactment of the Higher Education Amendments of 1998, or part

B of title VII as such part B was in effect prior to the date

of enactment of the Higher Education Amendments of 1992—

‘‘(1) the applicant under such parts as so in effect (or

the applicant’s successor in title or possession) ceases or fails

to be a public or nonprofit institution; or

‘‘(2) the facility ceases to be used as an academic facility,

or the facility is used as a facility excluded from the term

‘academic facility’ (as such term was defined under title VII,

as so in effect), unless the Secretary determines that there

is good cause for releasing the institution from its obligation,

the United States shall be entitled to recover from such applicant

(or successor) an amount which bears to the value of the facility

at that time (or so much thereof as constituted an approved project

or projects) the same ratio as the amount of Federal grant bore

to the cost of the facility financed with the aid of such grant.

The value shall be determined by agreement of the parties or

by action brought in the United States district court for the district

in which such facility is situated.

‘‘(c) PROHIBITION ON USE FOR RELIGION.—Notwithstanding the

provisions of subsections (a) and (b), no project assisted with funds

under title VII (as in effect prior to the date of enactment of

the Higher Education Amendments of 1998) shall ever be used

for religious worship or a sectarian activity or for a school or

department of divinity.

‘‘PART C—COST OF HIGHER EDUCATION

‘‘SEC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC

ACCOUNTABILITY IN HIGHER EDUCATION.

‘‘(a) IMPROVED DATA COLLECTION.—

‘‘(1) DEVELOPMENT OF UNIFORM METHODOLOGY.—The Secretary shall direct the Commissioner of Education Statistics

to convene a series of forums to develop nationally consistent

methodologies for reporting costs incurred by postsecondary

institutions in providing postsecondary education.

‘‘(2) REDESIGN OF DATA SYSTEMS.—On the basis of the methodologies developed pursuant to paragraph (1), the Secretary

shall redesign relevant parts of the postsecondary education

data systems to improve the usefulness and timeliness of the

data collected by such systems.

‘‘(3) INFORMATION TO INSTITUTIONS.—The Commissioner of

Education Statistics shall—

‘‘(A) develop a standard definition for the following

data elements:

‘‘(i) tuition and fees for a full-time undergraduate

student;
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‘‘(ii) cost of attendance for a full-time undergraduate student, consistent with the provisions of section

472;

‘‘(iii) average amount of financial assistance

received by an undergraduate student who attends

an institution of higher education, including—

‘‘(I) each type of assistance or benefit described

in section 428(a)(2)(C)(i);

‘‘(II) fellowships; and

‘‘(III) institutional and other assistance; and

‘‘(iv) number of students receiving financial assistance described in each of subclauses (I), (II), and (III)

of clause (iii);

‘‘(B) not later than 90 days after the date of enactment

of the Higher Education Amendments of 1998, report the

definitions to each institution of higher education and

within a reasonable period of time thereafter inform the

Committee on Labor and Human Resources of the Senate

and the Committee on Education and the Workforce of

the House of Representatives of those definitions; and

‘‘(C) collect information regarding the data elements

described in subparagraph (A) with respect to at least

all institutions of higher education participating in programs under title IV, beginning with the information from

academic year 2000–2001 and annually thereafter.

‘‘(b) DATA DISSEMINATION.—The Secretary shall make available

the data collected pursuant to subsection (a). Such data shall be

available in a form that permits the review and comparison of

the data submissions of individual institutions of higher education.

Such data shall be presented in a form that is easily understandable

and allows parents and students to make informed decisions based

on the costs for typical full-time undergraduate students.

‘‘(c) STUDY.— ‘‘(1) IN GENERAL.—The Commissioner of Education Statistics shall conduct a national study of expenditures at institutions of higher education. Such study shall include information

with respect to—

‘‘(A) the change in tuition and fees compared with

the consumer price index and other appropriate measures

of inflation;

‘‘(B) faculty salaries and benefits;

‘‘(C) administrative salaries, benefits and expenses;

‘‘(D) academic support services;

‘‘(E) research;

‘‘(F) operations and maintenance; and

‘‘(G) institutional expenditures for construction and

technology and the potential cost of replacing instructional

buildings and equipment.

‘‘(2) EVALUATION.—The study shall include an evaluation

of—

‘‘(A) changes over time in the expenditures identified

in paragraph (1);

‘‘(B) the relationship of the expenditures identified in

paragraph (1) to college costs; and

‘‘(C) the extent to which increases in institutional

financial aid and tuition discounting practices affect tuition

increases, including the demographics of students receiving
H. R. 6—24

such discounts, the extent to which financial aid is provided

to students with limited need in order to attract a student

to a particular institution, and the extent to which Federal

financial aid, including loan aid, has been used to offset

the costs of such practices.

‘‘(3) FINAL REPORT.—The Commissioner of Education Statistics shall submit a report regarding the findings of the study

required by paragraph (1) to the appropriate committees of

Congress not later than September 30, 2002.

‘‘(4) HIGHER EDUCATION MARKET BASKET.—The Bureau of

Labor Statistics, in consultation with the Commissioner of Education Statistics, shall develop a higher education market basket that identifies the items that comprise the costs of higher

education. The Bureau of Labor Statistics shall provide a report

on the market basket to the Committee on Labor and Human

Resources of the Senate and the Committee on Education and

the Workforce of the House of Representatives not later than

September 30, 2002.

‘‘(5) FINES.—In addition to actions authorized in section

487(c), the Secretary may impose a fine in an amount not

to exceed $25,000 on an institution of higher education for

failing to provide the information described in paragraph (1)

in a timely and accurate manner, or for failing to otherwise

cooperate with the National Center for Education Statistics

regarding efforts to obtain data on the cost of higher education

under this section and pursuant to the program participation

agreement entered into under section 487.

‘‘(d) STUDENT AID RECIPIENT SURVEY.—(1) The Secretary shall

survey student aid recipients on a regular cycle, but not less than

once every 3 years—

‘‘(A) to identify the population of students receiving Federal

student aid;

‘‘(B) to determine the income distribution and other socioeconomic characteristics of federally aided students;

‘‘(C) to describe the combinations of aid from State, Federal,

and private sources received by students from all income

groups;

‘‘(D) to describe the debt burden of loan recipients and

their capacity to repay their education debts; and

‘‘(E) to disseminate such information in both published

and machine readable form.

‘‘(2) The survey shall be representative of full-time and parttime, undergraduate, graduate, and professional and current and

former students in all types of institutions, and should be designed

and administered in consultation with the Congress and the postsecondary education community.

‘‘PART D—ADMINISTRATIVE PROVISIONS FOR

DELIVERY OF STUDENT FINANCIAL ASSISTANCE

‘‘SEC. 141. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY

OF FEDERAL STUDENT FINANCIAL ASSISTANCE.

‘‘(a) ESTABLISHMENT AND PURPOSE.—

‘‘(1) ESTABLISHMENT.—There is established in the Department a Performance-Based Organization (hereafter referred to
H. R. 6—25

as the ‘PBO’) which shall be a discrete management unit

responsible for managing the operational functions supporting

the programs authorized under title IV of this Act, as specified

in subsection (b).

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

‘‘(A) to improve service to students and other participants in the student financial assistance programs authorized under title IV, including making those programs more

understandable to students and their parents;

‘‘(B) to reduce the costs of administering those programs;

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

responsible for administering the operational aspects of

these programs;

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

of the operational functions of the Federal student financial

assistance programs;

‘‘(E) to integrate the information systems supporting

the Federal student financial assistance programs;

‘‘(F) to implement an open, common, integrated system

for the delivery of student financial assistance under title

IV; and

‘‘(G) to develop and maintain a student financial assistance system that contains complete, accurate, and timely

data to ensure program integrity.

‘‘(b) GENERAL AUTHORITY.—

‘‘(1) AUTHORITY OF SECRETARY.—Notwithstanding any other

provision of this part, the Secretary shall maintain responsibility for the development and promulgation of policy and regulations relating to the programs of student financial assistance

under title IV. In the exercise of its functions, the PBO shall

be subject to the direction of the Secretary. The Secretary

shall—

‘‘(A) request the advice of, and work in cooperation

with, the Chief Operating Officer in developing regulations,

policies, administrative guidance, or procedures affecting

the information systems administered by the PBO, and

other functions performed by the PBO;

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

Officer for system changes required by specific policies

proposed by the Secretary; and

‘‘(C) assist the Chief Operating Officer in identifying

goals for the administration and modernization of the delivery system for student financial assistance under title IV.

‘‘(2) PBO FUNCTIONS.—Subject to paragraph (1), the PBO

shall be responsible for administration of the information and

financial systems that support student financial assistance programs authorized under this title, excluding the development

of policy relating to such programs but including the following:

‘‘(A) The administrative, accounting, and financial

management functions of the delivery system for Federal

student assistance, including—

‘‘(i) the collection, processing and transmission of

applicant data to students, institutions and authorized

third parties, as provided for in section 483;
H. R. 6—26

‘‘(ii) design and technical specifications for software

development and systems supporting the delivery of

student financial assistance under title IV;

‘‘(iii) all software and hardware acquisitions and

all information technology contracts related to the

delivery and management of student financial assistance under title IV;

‘‘(iv) all aspects of contracting for the information

and financial systems supporting student financial

assistance programs under this title; and

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

user support related to systems that support those

programs.

‘‘(B) Annual development of a budget for the operations

and services of the PBO, in consultation with the Secretary,

and for consideration and inclusion in the Department’s

annual budget submission.

‘‘(3) ADDITIONAL FUNCTIONS.—The Secretary may allocate

to the PBO such additional functions as the Secretary and

the Chief Operating Officer determine are necessary or appropriate to achieve the purposes of the PBO.

‘‘(4) INDEPENDENCE.—Subject to paragraph (1), in carrying

out its functions, the PBO shall exercise independent control

of its budget allocations and expenditures, personnel decisions

and processes, procurements, and other administrative and

management functions.

‘‘(5) AUDITS AND REVIEW.—The PBO shall be subject to

the usual and customary Federal audit procedures and to

review by the Inspector General of the Department.

‘‘(6) CHANGES.— ‘‘(A) IN GENERAL.—The Secretary and the Chief Operating Officer shall consult concerning the effects of policy,

market, or other changes on the ability of the PBO to

achieve the goals and objectives established in the performance plan described in subsection (c).

‘‘(B) REVISIONS TO AGREEMENT.—The Secretary and the

Chief Operating Officer may revise the annual performance

agreement described in subsection (d)(4) in light of policy,

market, or other changes that occur after the Secretary

and the Chief Operating Officer enter into the agreement.

‘‘(c) PERFORMANCE PLAN AND REPORT.— ‘‘(1) PERFORMANCE PLAN.— ‘‘(A) IN GENERAL.—Each year, the Secretary and Chief

Operating Officer shall agree on, and make available to

the public, a performance plan for the PBO for the succeeding 5 years that establishes measurable goals and objectives

for the organization.

‘‘(B) CONSULTATION.—In developing the 5-year performance plan and any revision to the plan, the Secretary

and the Chief Operating Officer shall consult with students,

institutions of higher education, Congress, lenders, the

Advisory Committee on Student Financial Assistance, and

other interested parties not less than 30 days prior to

the implementation of the performance plan or revision.

‘‘(C) AREAS.—The plan shall include a concise statement of the goals for a modernized system for the delivery

of student financial assistance under title IV and identify
H. R. 6—27

action steps necessary to achieve such goals. The plan

shall address the PBO’s responsibilities in the following

areas:

‘‘(i) IMPROVING SERVICE.—Improving service to students and other participants in student financial aid

programs authorized under this title, including making

those programs more understandable to students and

their parents.

‘‘(ii) REDUCING COSTS.—Reducing the costs of

administering those programs.

‘‘(iii) IMPROVEMENT AND INTEGRATION OF SUPPORT

SYSTEMS.—Improving and integrating the information

and delivery systems that support those programs.

‘‘(iv) DELIVERY AND INFORMATION SYSTEM.—

Developing an open, common, and integrated delivery

and information system for programs authorized under

this title.

‘‘(v) OTHER AREAS.—Any other areas identified by

the Secretary.

‘‘(2) ANNUAL REPORT.—Each year, the Chief Operating

Officer shall prepare and submit to Congress, through the

Secretary, an annual report on the performance of the PBO,

including an evaluation of the extent to which the PBO met

the goals and objectives contained in the 5-year performance

plan described in paragraph (1) for the preceding year. The

annual report shall include the following:

‘‘(A) An independent financial audit of the expenditures

of both the PBO and programs administered by the PBO.

‘‘(B) Financial and performance requirements

applicable to the PBO under the Chief Financial Officer

Act of 1990 and the Government Performance and Results

Act of 1993.

‘‘(C) The results achieved by the PBO during the year

relative to the goals established in the organization’s

performance plan.

‘‘(D) The evaluation rating of the performance of the

Chief Operating Officer and senior managers under subsections (d)(4) and (e)(2), including the amounts of bonus

compensation awarded to these individuals.

‘‘(E) Recommendations for legislative and regulatory

changes to improve service to students and their families,

and to improve program efficiency and integrity.

‘‘(F) Other such information as the Director of the

Office of Management and Budget shall prescribe for

performance based organizations.

‘‘(3) CONSULTATION WITH STAKEHOLDERS.—The Chief

Operating Officer, in preparing the report described in paragraph (2), shall establish appropriate means to consult with

borrowers, institutions, lenders, guaranty agencies, secondary

markets, and others involved in the delivery system of student

aid under this title—

‘‘(A) regarding the degree of satisfaction with the

delivery system; and

‘‘(B) to seek suggestions on means to improve the

delivery system.

‘‘(d) CHIEF OPERATING OFFICER.—
H. R. 6—28

‘‘(1) APPOINTMENT.—The management of the PBO shall

be vested in a Chief Operating Officer who shall be appointed

by the Secretary to a term of not less than 3 and not more

than 5 years, and compensated without regard to chapters

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

shall appoint the Chief Operating Officer within 6 months

after the date of enactment of the Higher Education Amendments of 1998. The appointment shall be made on the basis

of demonstrated management ability and expertise in information technology, including experience with financial systems,

and without regard to political affiliation or activity.

‘‘(2) REAPPOINTMENT.—The Secretary may reappoint the

Chief Operating Officer to subsequent terms of not less than

3 and not more than 5 years, so long as the performance

of the Chief Operating Officer, as set forth in the performance

agreement described in paragraph (4), is satisfactory.

‘‘(3) REMOVAL.—The Chief Operating Officer may be

removed by—

‘‘(A) the President; or

‘‘(B) the Secretary, for misconduct or failure to meet

performance goals set forth in the performance agreement

in paragraph (4).

The President or Secretary shall communicate the reasons for

any such removal to the appropriate committees of Congress.

‘‘(4) PERFORMANCE AGREEMENT.—

‘‘(A) IN GENERAL.—Each year, the Secretary and the

Chief Operating Officer shall enter into an annual performance agreement, that shall set forth measurable organization and individual goals for the Chief Operating Officer.

‘‘(B) TRANSMITTAL.—The final agreement, and any revision to the final agreement, shall be transmitted to the

Committee on Education and the Workforce of the House

of Representatives and the Committee on Labor and

Human Resources of the Senate, and made publicly available.

‘‘(5) COMPENSATION.—

‘‘(A) IN GENERAL.—The Chief Operating Officer is

authorized to be paid at an annual rate of basic pay not

to exceed the maximum rate of basic pay for the Senior

Executive Service under section 5382 of title 5, United

States Code, including any applicable locality-based comparability payment that may be authorized under section

5304(h)(2)(B) of such title. The compensation of the Chief

Operating Officer shall be considered for purposes of section

207(c)(2)(A) of title 18, United States Code, to be the

equivalent of that described under clause (ii) of section

207(c)(2)(A) of such title.

‘‘(B) BONUS.—In addition, the Chief Operating Officer

may receive a bonus in an amount that does not exceed

50 percent of such annual rate of basic pay, based upon

the Secretary’s evaluation of the Chief Operating Officer’s

performance in relation to the goals set forth in the

performance agreement described in paragraph (2).

‘‘(C) PAYMENT.—Payment of a bonus under this

subparagraph (B) may be made to the Chief Operating

Officer only to the extent that such payment does not
H. R. 6—29

cause the Chief Operating Officer’s total aggregate compensation in a calendar year to equal or exceed the amount

of the President’s salary under section 102 of title 3, United

States Code.

‘‘(e) SENIOR MANAGEMENT.—

‘‘(1) APPOINTMENT.—

‘‘(A) IN GENERAL.—The Chief Operating Officer may

appoint such senior managers as that officer determines

necessary without regard to the provisions of title 5, United

States Code, governing appointments in the competitive

service.

‘‘(B) COMPENSATION.—The senior managers described

in subparagraph (A) may be paid without regard to the

provisions of chapter 51 and subchapter III of chapter

53 of such title relating to classification and General Schedule pay rates.

‘‘(2) PERFORMANCE AGREEMENT.—Each year, the Chief

Operating Officer and each senior manager appointed under

this subsection shall enter into an annual performance agreement that sets forth measurable organization and individual

goals. The agreement shall be subject to review and renegotiation at the end of each term.

‘‘(3) COMPENSATION.—

‘‘(A) IN GENERAL.—A senior manager appointed under

this subsection may be paid at an annual rate of basic

pay of not more than the maximum rate of basic pay

for the Senior Executive Service under section 5382 of

title 5, United States Code, including any applicable locality-based comparability payment that may be authorized

under section 5304(h)(2)(C) of such title. The compensation

of a senior manager shall be considered for purposes of

section 207(c)(2)(A) of title 18, United States Code, to be

the equivalent of that described under clause (ii) of section

207(c)(2)(A) of such title.

‘‘(B) BONUS.—In addition, a senior manager may

receive a bonus in an amount such that the manager’s

total annual compensation does not exceed 125 percent

of the maximum rate of basic pay for the Senior Executive

Service, including any applicable locality-based comparability payment, based upon the Chief Operating Officer’s

evaluation of the manager’s performance in relation to

the goals set forth in the performance agreement described

in paragraph (2).

‘‘(4) REMOVAL.—A senior manager shall be removable by

the Chief Operating Officer, or by the Secretary if the position

of Chief Operating Officer is vacant.

‘‘(f ) STUDENT LOAN OMBUDSMAN.—

‘‘(1) APPOINTMENT.—The Chief Operating Officer, in consultation with the Secretary, shall appoint a Student Loan

Ombudsman to provide timely assistance to borrowers of loans

made, insured, or guaranteed under title IV by performing

the functions described in paragraph (3).

‘‘(2) PUBLIC INFORMATION.—The Chief Operating Officer

shall disseminate information about the availability and functions of the Ombudsman to borrowers and potential borrowers,

as well as institutions of higher education, lenders, guaranty
H. R. 6—30

agencies, loan servicers, and other participants in those student

loan programs.

‘‘(3) FUNCTIONS OF OMBUDSMAN.—The Ombudsman shall—

‘‘(A) in accordance with regulations of the Secretary,

receive, review, and attempt to resolve informally complaints from borrowers of loans described in paragraph

(1), including, as appropriate, attempts to resolve such

complaints within the Department of Education and with

institutions of higher education, lenders, guaranty agencies,

loan servicers, and other participants in the loan programs

described in paragraph (1)(A); and

‘‘(B) compile and analyze data on borrower complaints

and make appropriate recommendations.

‘‘(4) REPORT.—Each year, the Ombudsman shall submit

a report to the Chief Operating Officer, for inclusion in the

annual report under subsection (c)(2), that describes the activities, and evaluates the effectiveness of the Ombudsman during

the preceding year.

‘‘(g) PERSONNEL FLEXIBILITY.—

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

to any ceiling relating to the number or grade of employees.

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

Officer shall work with the Office of Personnel Management

to develop and implement personnel flexibilities in staffing,

classification, and pay that meet the needs of the PBO, subject

to compliance with title 5, United States Code.

‘‘(3) EXCEPTED SERVICE.—The Chief Operating Officer may

appoint, without regard to the provisions of title 5, United

States Code, governing appointments in the competitive service,

not more than 25 technical and professional employees to

administer the functions of the PBO. These employees may

be paid without regard to the provisions of chapter 51 and

subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates.

‘‘(h) ESTABLISHMENT OF A FAIR AND EQUITABLE SYSTEM FOR

MEASURING STAFF PERFORMANCE.—The PBO shall establish an

annual performance management system, subject to compliance

with title 5, United States Code and consistent with applicable

provisions of law and regulations, which strengthens the organizational effectiveness of the PBO by providing for establishing goals

or objectives for individual, group, or organizational performance

(or any combination thereof), consistent with the performance plan

of the PBO and its performance planning procedures, including

those established under the Government Performance and Results

Act of 1993, and communicating such goals or objectives to employees.

‘‘(i) REPORT.—The Secretary and the Chief Operating Officer,

not later than 180 days after the date of enactment of the Higher

Education Amendments of 1998, shall report to Congress on the

proposed budget and sources of funding for the operation of the

PBO.

‘‘( j) AUTHORIZATION OF APPROPRIATIONS.—The Secretary shall

allocate from funds made available under section 458 such funds

as are appropriate to the functions assumed by the PBO. In addition, there are authorized to be appropriated such sums as may

be necessary to carry out the purposes of this part, including transition costs.
H. R. 6—31

‘‘SEC. 142. PROCUREMENT FLEXIBILITY.

‘‘(a) PROCUREMENT AUTHORITY.—Subject to the authority of

the Secretary, the Chief Operating Officer of a PBO may exercise

the authority of the Secretary to procure property and services

in the performance of functions managed by the PBO. For the

purposes of this section, the term ‘PBO’ includes the Chief Operating

Officer of the PBO and any employee of the PBO exercising procurement authority under the preceding sentence.

‘‘(b) IN GENERAL.—Except as provided in this section, the PBO

shall abide by all applicable Federal procurement laws and regulations when procuring property and services. The PBO shall—

‘‘(1) enter into contracts for information systems supporting

the programs authorized under title IV to carry out the functions set forth in section 141(b)(2); and

‘‘(2) obtain the services of experts and consultants without

regard to section 3109 of title 5, United States Code and set

pay in accordance with such section.

‘‘(c) SERVICE CONTRACTS.— ‘‘(1) PERFORMANCE-BASED SERVICING CONTRACTS.—The

Chief Operating Officer shall, to the extent practicable, maximize the use of performance-based servicing contracts, consistent with guidelines for such contracts published by the Office

of Federal Procurement Policy, to achieve cost savings and

improve service.

‘‘(2) FEE FOR SERVICE ARRANGEMENTS.—The Chief Operating Officer shall, when appropriate and consistent with the

purposes of the PBO, acquire services related to the title IV

delivery system from any entity that has the capability and

capacity to meet the requirements for the system. The Chief

Operating Officer is authorized to pay fees that are equivalent

to those paid by other entities to an organization that provides

an information system or service that meets the requirements

of the PBO, as determined by the Chief Operating Officer.

‘‘(d) TWO-PHASE SOURCE-SELECTION PROCEDURES.— ‘‘(1) IN GENERAL.—The PBO may use a two-phase process

for selecting a source for a procurement of property or services.

‘‘(2) FIRST PHASE.—The procedures for the first phase of

the process for a procurement are as follows:

‘‘(A) PUBLICATION OF NOTICE.—The contracting officer

for the procurement shall publish a notice of the procurement in accordance with section 18 of the Office of Federal

Procurement Policy Act (41 U.S.C. 416) and subsections

(e), (f ), and (g) of section 8 of the Small Business Act

(15 U.S.C. 637), except that the notice shall include only

the following:

‘‘(i) A general description of the scope or purpose

of the procurement that provides sufficient information

on the scope or purpose for sources to make informed

business decisions regarding whether to participate in

the procurement.

‘‘(ii) A description of the basis on which potential

sources are to be selected to submit offers in the second

phase.

‘‘(iii) A description of the information that is to

be required under subparagraph (B).

‘‘(iv) Any additional information that the contracting officer determines appropriate.
H. R. 6—32

‘‘(B) INFORMATION SUBMITTED BY OFFERORS.—Each

offeror for the procurement shall submit basic information,

such as information on the offeror’s qualifications, the proposed conceptual approach, costs likely to be associated

with the proposed conceptual approach, and past performance of the offeror on Federal Government contracts,

together with any additional information that is requested

by the contracting officer.

‘‘(C) SELECTION FOR SECOND PHASE.—The contracting

officer shall select the offerors that are to be eligible to

participate in the second phase of the process. The contracting officer shall limit the number of the selected offerors

to the number of sources that the contracting officer determines is appropriate and in the best interests of the Federal

Government.

‘‘(3) SECOND PHASE.—

‘‘(A) IN GENERAL.—The contracting officer shall conduct

the second phase of the source selection process in accordance with sections 303A and 303B of the Federal Property

and Administrative Services Act of 1949 (41 U.S.C. 253a

and 253b).

‘‘(B) ELIGIBLE PARTICIPANTS.—Only the sources selected

in the first phase of the process shall be eligible to participate in the second phase.

‘‘(C) SINGLE OR MULTIPLE PROCUREMENTS.—The second

phase may include a single procurement or multiple

procurements within the scope, or for the purpose,

described in the notice pursuant to paragraph (2)(A).

‘‘(4) PROCEDURES CONSIDERED COMPETITIVE.—The procedures used for selecting a source for a procurement under

this subsection shall be considered competitive procedures for

all purposes.

‘‘(e) USE OF SIMPLIFIED PROCEDURES FOR COMMERCIAL ITEMS.— Whenever the PBO anticipates that commercial items will be offered

for a procurement, the PBO may use (consistent with the special

rules for commercial items) the special simplified procedures for

the procurement without regard to—

‘‘(1) any dollar limitation otherwise applicable to the use

of those procedures; and

‘‘(2) the expiration of the authority to use special simplified

procedures under section 4202(e) of the Clinger-Cohen Act of

1996 (110 Stat. 654; 10 U.S.C. 2304 note).

‘‘(f ) FLEXIBLE WAIT PERIODS AND DEADLINES FOR SUBMISSION

OF OFFERS OF NONCOMMERCIAL ITEMS.— ‘‘(1) AUTHORITY.—In carrying out a procurement, the PBO

may—

‘‘(A) apply a shorter waiting period for the issuance

of a solicitation after the publication of a notice under

section 18 of the Office of Federal Procurement Policy

Act (41 U.S.C. 416) than is required under subsection

(a)(3)(A) of such section; and

‘‘(B) notwithstanding subsection (a)(3) of such section,

establish any deadline for the submission of bids or proposals that affords potential offerors a reasonable opportunity

to respond to the solicitation.

‘‘(2) INAPPLICABILITY TO COMMERCIAL ITEMS.—Paragraph

(1) does not apply to a procurement of a commercial item.
H. R. 6—33

‘‘(3) CONSISTENCY WITH APPLICABLE INTERNATIONAL AGREEMENTS.—If an international agreement is applicable to the

procurement, any exercise of authority under paragraph (1)

shall be consistent with the international agreement.

‘‘(g) MODULAR CONTRACTING.—

‘‘(1) IN GENERAL.—The PBO may satisfy the requirements

of the PBO for a system incrementally by carrying out successive procurements of modules of the system. In doing so, the

PBO may use procedures authorized under this subsection to

procure any such module after the first module.

‘‘(2) UTILITY REQUIREMENT.—A module may not be procured

for a system under this subsection unless the module is useful

independently of the other modules or useful in combination

with another module previously procured for the system.

‘‘(3) CONDITIONS FOR USE OF AUTHORITY.—The PBO may

use procedures authorized under paragraph (4) for the procurement of an additional module for a system if—

‘‘(A) competitive procedures were used for awarding

the contract for the procurement of the first module for

the system; and

‘‘(B) the solicitation for the first module included—

‘‘(i) a general description of the entire system that

was sufficient to provide potential offerors with reasonable notice of the general scope of future modules;

‘‘(ii) other information sufficient for potential

offerors to make informed business judgments regarding whether to submit offers for the contract for the

first module; and

‘‘(iii) a statement that procedures authorized under

this subsection could be used for awarding subsequent

contracts for the procurement of additional modules

for the system.

‘‘(4) PROCEDURES.—If the procurement of the first module

for a system meets the requirements set forth in paragraph

(3), the PBO may award a contract for the procurement of

an additional module for the system using any of the following

procedures:

‘‘(A) SOLE SOURCE.—Award of the contract on a solesource basis to a contractor who was awarded a contract

for a module previously procured for the system under

competitive procedures or procedures authorized under

subparagraph (B).

‘‘(B) ADEQUATE COMPETITION.—Award of the contract

on the basis of offers made by—

‘‘(i) a contractor who was awarded a contract for

a module previously procured for the system after having been selected for award of the contract under this

subparagraph or other competitive procedures; and

‘‘(ii) at least one other offeror that submitted an

offer for a module previously procured for the system

and is expected, on the basis of the offer for the previously procured module, to submit a competitive offer

for the additional module.

‘‘(C) OTHER.—Award of the contract under any other

procedure authorized by law.

‘‘(5) NOTICE REQUIREMENT.—
H. R. 6—34

‘‘(A) PUBLICATION.—Not less than 30 days before

issuing a solicitation for offers for a contract for a module

for a system under procedures authorized under subparagraph (A) or (B) of paragraph (4), the PBO shall publish

in the Commerce Business Daily a notice of the intent

to use such procedures to enter into the contract.

‘‘(B) EXCEPTION.—Publication of a notice is not required

under this paragraph with respect to a use of procedures

authorized under paragraph (4) if the contractor referred

to in that subparagraph (who is to be solicited to submit

an offer) has previously provided a module for the system

under a contract that contained cost, schedule, and

performance goals and the contractor met those goals.

‘‘(C) CONTENT OF NOTICE.—A notice published under

subparagraph (A) with respect to a use of procedures

described in paragraph (4) shall contain the information

required under section 18(b) of the Office of Federal

Procurement Policy Act (41 U.S.C. 416(b)), other than paragraph (4) of such section, and shall invite the submission

of any assertion that the use of the procedures for the

procurement involved is not in the best interest of the

Federal Government together with information supporting

the assertion.

‘‘(6) DOCUMENTATION.—The basis for an award of a contract

under this subsection shall be documented. However, a justification pursuant to section 303(f ) of the Federal Property and

Administrative Services Act of 1949 (41 U.S.C. 253(f )) or section

8(h) of the Small Business Act (15 U.S.C. 637(h)) is not

required.

‘‘(7) SIMPLIFIED SOURCE-SELECTION PROCEDURES.—The PBO

may award a contract under any other simplified procedures

prescribed by the PBO for the selection of sources for the

procurement of modules for a system, after the first module,

that are not to be procured under a contract awarded on a

sole-source basis.

‘‘(h) USE OF SIMPLIFIED PROCEDURES FOR SMALL BUSINESS SETASIDES FOR SERVICES OTHER THAN COMMERCIAL ITEMS.—

‘‘(1) AUTHORITY.—The PBO may use special simplified

procedures for a procurement of services that are not commercial items if—

‘‘(A) the procurement is in an amount not greater than

$1,000,000;

‘‘(B) the procurement is conducted as a small business

set-aside pursuant to section 15(a) of the Small Business

Act (15 U.S.C. 644(a)); and

‘‘(C) the price charged for supplies associated with

the services procured are items of supply expected to be

less than 20 percent of the total contract price.

‘‘(2) INAPPLICABILITY TO CERTAIN PROCUREMENTS.—The

authority set forth in paragraph (1) may not be used for—

‘‘(A) an award of a contract on a sole-source basis;

or

‘‘(B) a contract for construction.

‘‘(i) GUIDANCE FOR USE OF AUTHORITY.—

‘‘(1) ISSUANCE BY PBO.—The Chief Operating Officer of the

PBO, in consultation with the Administrator for Federal
H. R. 6—35

Procurement Policy, shall issue guidance for the use by PBO

personnel of the authority provided in this section.

‘‘(2) GUIDANCE FROM OFPP.—As part of the consultation

required under paragraph (1), the Administrator for Federal

Procurement Policy shall provide the PBO with guidance that

is designed to ensure, to the maximum extent practicable, that

the authority under this section is exercised by the PBO in

a manner that is consistent with the exercise of the authority

by the heads of the other performance-based organizations.

‘‘(3) COMPLIANCE WITH OFPP GUIDANCE.—The head of the

PBO shall ensure that the procurements of the PBO under

this section are carried out in a manner that is consistent

with the guidance provided for the PBO under paragraph (2).

‘‘( j) LIMITATION ON MULTIAGENCY CONTRACTING.—No department or agency of the Federal Government may purchase property

or services under contracts entered into or administered by a PBO

under this section unless the purchase is approved in advance

by the senior procurement official of that department or agency

who is responsible for purchasing by the department or agency.

‘‘(k) LAWS NOT AFFECTED.—Nothing in this section shall be

construed to waive laws for the enforcement of civil rights or for

the establishment and enforcement of labor standards that are

applicable to contracts of the Federal Government.

‘‘(l) DEFINITIONS.—In this section:

‘‘(1) COMMERCIAL ITEM.—The term ‘commercial item’ has

the meaning given the term in section 4(12) of the Office

of Federal Procurement Policy Act (41 U.S.C. 403(12)).

‘‘(2) COMPETITIVE PROCEDURES.—The term ‘competitive

procedures’ has the meaning given the term in section 309(b)

of the Federal Property and Administrative Services Act of

1949 (41 U.S.C. 259(b)).

‘‘(3) SOLE-SOURCE BASIS.—The term ‘sole-source basis’, with

respect to an award of a contract, means that the contract

is awarded to a source after soliciting an offer or offers from,

and negotiating with, only that source.

‘‘(4) SPECIAL RULES FOR COMMERCIAL ITEMS.—The term

‘special rules for commercial items’ means the regulations set

forth in the Federal Acquisition Regulation pursuant to section

303(g)(1) of the Federal Property and Administrative Services

Act of 1949 (41 U.S.C. 253(g)(1)) and section 31 of the Office

of Federal Procurement Policy Act (41 U.S.C. 427).

‘‘(5) SPECIAL SIMPLIFIED PROCEDURES.—The term ‘special

simplified procedures’ means the procedures applicable to purchases of property and services for amounts not greater than

the simplified acquisition threshold that are set forth in the

Federal Acquisition Regulation pursuant to section 303(g)(1)(B)

of the Federal Property and Administrative Services Act of

1949 (41 U.S.C. 253(g)(1)(A)) and section 31(a)(1) of the Office

of Federal Procurement Policy Act (41 U.S.C. 427(a)(1)).

‘‘SEC. 143. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIVERY.

‘‘(a) IN GENERAL.—In order to improve the efficiency and

effectiveness of the student aid delivery system, the Secretary and

the Chief Operating Officer shall encourage and participate in the

establishment of voluntary consensus standards and requirements
H. R. 6—36

for the electronic transmission of information necessary for the

administration of programs under title IV.

‘‘(b) PARTICIPATION IN STANDARD SETTING ORGANIZATIONS.—

‘‘(1) The Chief Operating Officer shall participate in the

activities of standard setting organizations in carrying out the

provisions of this section.

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

education groups seeking to develop common forms, standards,

and procedures in support of the delivery of Federal student

financial assistance to conduct these activities within a standard setting organization.

‘‘(3) The Chief Operating Officer may pay necessary dues

and fees associated with participating in standard setting

organizations pursuant to this subsection.

‘‘(c) ADOPTION OF VOLUNTARY CONSENSUS STANDARDS.—Except

with respect to the common financial reporting form under section

483(a), the Secretary shall consider adopting voluntary consensus

standards agreed to by the organization described in subsection

(b) for transactions required under title IV, and common data

elements for such transactions, to enable information to be

exchanged electronically between systems administered by the

Department and among participants in the Federal student aid

delivery system.

‘‘(d) USE OF CLEARINGHOUSES.—Nothing in this section shall

restrict the ability of participating institutions and lenders from

using a clearinghouse or servicer to comply with the standards

for the exchange of information established under this section.

‘‘(e) DATA SECURITY.—Any entity that maintains or transmits

information under a transaction covered by this section shall maintain reasonable and appropriate administrative, technical, and

physical safeguards—

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

information; and

‘‘(2) to protect against any reasonably anticipated security

threats, or unauthorized uses or disclosures of the information.

‘‘(f ) DEFINITIONS.— ‘‘(1) CLEARINGHOUSE.—The term ‘clearinghouse’ means a

public or private entity that processes or facilitates the processing of nonstandard data elements into data elements conforming to standards adopted under this section.

‘‘(2) STANDARD SETTING ORGANIZATION.—The term ‘standard

setting organization’ means an organization that—

‘‘(A) is accredited by the American National Standards

Institute;

‘‘(B) develops standards for information transactions,

data elements, or any other standard that is necessary

to, or will facilitate, the implementation of this section;

and

‘‘(C) is open to the participation of the various entities

engaged in the delivery of Federal student financial assistance.

‘‘(3) VOLUNTARY CONSENSUS STANDARD.—The term ‘voluntary consensus standard’ means a standard developed or

used by a standard setting organization described in paragraph

(2).’’.

(b) REPEAL OF OLD GENERAL PROVISIONS.—Title XII (20 U.S.C.

1141 et seq.) is repealed.
H. R. 6—37

(c) REPEAL OF TITLE IV DEFINITION.—Section 481 (20 U.S.C.

1088) is amended—

(1) by striking subsections (a), (b), and (c); and

(2) by redesignating subsections (d) through (f ) as subsections (a) through (c), respectively.

SEC. 102. CONFORMING AMENDMENTS.

(a) CONFORMING AMENDMENTS CORRECTING REFERENCES TO

SECTION 1201.—

(1) AGRICULTURE.—

(A) STUDENT INTERNSHIP PROGRAMS.—Section 922 of

the Federal Agriculture Improvement and Reform Act of

1996 (7 U.S.C. 2279c) is amended—

(i) in subsection (a)(1)(B)—

(I) by striking ‘‘1201’’ and inserting ‘‘101’’; and

(II) by striking ‘‘(20 U.S.C. 1141)’’; and

(ii) in subsection (b)(1)—

(I) by striking ‘‘1201’’ and inserting ‘‘101’’; and

(II) by striking ‘‘(20 U.S.C. 1141)’’.

(B) AGRICULTURAL SCIENCES EDUCATION.—Section

1417( j)(1)(A) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3152( j)(1)(A)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(2) ARMED FORCES.—

(A) SCIENCE AND MATHEMATICS EDUCATION IMPROVEMENT PROGRAM.—Section 2193(c)(1) of title 10, United

States Code, is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(B) SUPPORT OF SCIENCE, MATHEMATICS, AND ENGINEERING EDUCATION.—Section 2199(2) of title 10, United States

Code, is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(C) ALLOWABLE COSTS UNDER DEFENSE CONTRACTS.—

Section 841(c)(2) of the National Defense Authorization

Act for fiscal year 1994 (10 U.S.C. 2324 note) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(D) ENVIRONMENTAL RESTORATION INSTITUTIONAL

GRANTS FOR TRAINING DISLOCATED DEFENSE WORKERS AND

YOUNG ADULTS.—Section 1333(i)(3) of the National Defense

Authorization Act for fiscal year 1994 (10 U.S.C. 2701

note) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(E) ENVIRONMENTAL EDUCATION OPPORTUNITIES PROGRAM.—Section 1334(k)(3) of the National Defense

Authorization Act for fiscal year 1994 (10 U.S.C. 2701

note) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(F) ENVIRONMENTAL SCHOLARSHIP AND FELLOWSHIP

PROGRAMS.—Section 4451(b)(1) of the National Defense
H. R. 6—38

Authorization Act for 1993 (10 U.S.C. 2701 note) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(3) APPLICATION OF ANTITRUST LAWS TO AWARD OF NEEDBASED EDUCATIONAL AID.—Section 568(c)(3) of the Improving

America’s Schools Act of 1994 (15 U.S.C. 1 note) is amended—

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

(B) by striking ‘‘(20 U.S.C. 1141(a))’’.

(4) OMNIBUS PARKS AND PUBLIC LANDS MANAGEMENT ACT

OF 1996.—Section 1007(c)(5) of the Omnibus Parks and Public

Lands Management Act of 1996 (16 U.S.C. 698u–5) is amended

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

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

Act of 1965’’.

(5) RESTRICTIONS ON FORMER OFFICERS, EMPLOYEES, AND

ELECTED OFFICIALS OF THE EXECUTIVE AND LEGISLATIVE

BRANCHES.—Section 207( j)(2)(B) of title 18, United States Code,

is amended by striking ‘‘1201(a)’’ and inserting ‘‘101’’.

(6) EDUCATION.—

(A) HIGHER EDUCATION AMENDMENTS OF 1992.—Section

1(c) of the Higher Education Amendments of 1992 (20

U.S.C. 1001 note) is amended by striking ‘‘1201’’ and inserting ‘‘101’’.

(B) TREATMENT OF BRANCHES.—Section 498( j)(2) of the

Higher Education Act of 1965 (20 U.S.C. 1099c( j)(2)) is

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

(C) DISCLOSURE REQUIREMENTS.—Section

429(d)(2)(B)(ii) of the General Education Provisions Act

(20 U.S.C. 1228c(d)(2)(B)(ii)) is amended by striking

‘‘1201(a)’’ and inserting ‘‘101’’.

(D) HARRY S. TRUMAN SCHOLARSHIPS.—Section 3(4) of

the Harry S. Truman Memorial Scholarship Act (20 U.S.C.

2002(4)) is amended by striking ‘‘1201(a)’’ and inserting

‘‘101’’.

(E) TECH-PREP EDUCATION.—Section 347(2)(A) of the

Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2394e(2)(A)) is amended by striking

‘‘1201(a)’’ and inserting ‘‘101’’.

(F) EDUCATION FOR ECONOMIC SECURITY.—Section 3(6)

of the Education for Economic Security Act (20 U.S.C.

3902(6)) is amended by striking ‘‘1201(a)’’ and inserting

‘‘101’’.

(G) JAMES MADISON MEMORIAL FELLOWSHIPS.—Section

815 of the James Madison Memorial Fellowship Act (20

U.S.C. 4514) is amended—

(i) in paragraph (3), by striking ‘‘1201(a)’’ and

inserting ‘‘101’’; and

(ii) in paragraph (4), by striking ‘‘1201(d) of the

Higher Education Act of 1965’’ and inserting ‘‘14101

of the Elementary and Secondary Education Act of

1965’’.

(H) BARRY GOLDWATER SCHOLARSHIPS.—Section 1403(4)

of the Barry Goldwater Scholarship and Excellence in Education Act (20 U.S.C. 4702(4)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.
H. R. 6—39

(I) MORRIS K. UDALL SCHOLARSHIPS.—Section 4(6) of

the Morris K. Udall Scholarship and Excellence in National

Environmental and Native American Public Policy Act of

1992 (20 U.S.C. 5602(6)) is amended by striking ‘‘1201(a)’’

and inserting ‘‘101’’.

(J) BILINGUAL EDUCATION, AND LANGUAGE ENHANCEMENT AND ACQUISITION.—Section 7501(4) of the Elementary

and Secondary Education Act of 1965 (20 U.S.C. 7601(4))

is amended by striking ‘‘1201(a)’’ and inserting ‘‘101’’.

(K) GENERAL DEFINITIONS.—Section 14101(17) of the

Elementary and Secondary Education Act of 1965 (20

U.S.C. 8801(17)) is amended by striking ‘‘1201(a)’’ and

inserting ‘‘101’’.

(L) NATIONAL EDUCATION STATISTICS.—Section 402(c)(3)

of the National Education Statistics Act of 1994 (20 U.S.C.

9001(c)(3)) is amended by striking ‘‘1201(a)’’ and inserting

‘‘101’’.

(7) FOREIGN RELATIONS.—

(A) ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

EXCHANGE PROGRAM.—Section 240(d) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (22

U.S.C. 2452 note) is amended by striking ‘‘1201(a)’’ and

inserting ‘‘101’’.

(B) SAMANTHA SMITH MEMORIAL EXCHANGE PROGRAM.—

Section 112(a)(8) of the Mutual Educational and Cultural

Exchange Act of 1961 (22 U.S.C. 2460(a)(8)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(C) SOVIET-EASTERN EUROPEAN TRAINING.—Section

803(1) of the Soviet-Eastern European Research and Training Act of 1983 (22 U.S.C. 4502(1)) is amended by striking

‘‘1201(a)’’ and inserting ‘‘101’’.

(D) DEVELOPING COUNTRY SCHOLARSHIPS.—Section

603(d) of the Foreign Relations Authorization Act, Fiscal

Years 1986 and 1987 (22 U.S.C. 4703(d)) is amended by

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

(8) INDIANS.— (A) SNYDER ACT.—The last paragraph of section 410

of the Act entitled ‘‘An Act authorizing appropriations and

expenditures for the administration of Indian Affairs, and

for other purposes’’, approved November 2, 1921 (25 U.S.C.

13) (commonly known as the Snyder Act) is amended by

striking ‘‘1201’’ and inserting ‘‘101’’.

(B) TRIBALLY CONTROLLED COMMUNITY COLLEGE ASSIST- ANCE.—Section 2(a)(5) of the Tribally Controlled Community College Assistance Act (25 U.S.C. 1801(a)(5)) is amended by striking ‘‘1201(a)’’ and inserting ‘‘101’’.

(C) CONSTRUCTION OF NEW FACILITIES.—Section

113(b)(2) of the Tribally Controlled Community College

Assistance Act (25 U.S.C. 1813(b)(2)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(D) AMERICAN INDIAN TEACHER TRAINING.—Section

1371(a)(1)(B) of the Higher Education Amendments of 1992

(25 U.S.C. 3371(a)(1)(B)) is amended by striking ‘‘1201(a)’’

and inserting ‘‘101’’.

(9) LABOR.—
H. R. 6—40

(A) REHABILITATION DEFINITIONS.—Section 6(23) of the

Rehabilitation Act of 1973 (29 U.S.C. 705(23)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(B) TECHNOLOGY RELATED ASSISTANCE FOR INDIVIDUALS

WITH DISABILITIES ACT OF 1988.—Section 3(8) of the Technology Related Assistance for Individuals with Disabilities

Act of 1988 (29 U.S.C. 2202(8)) is amended by striking

‘‘1201(a) of the Higher Education Act of 1965 (20 U.S.C.

1141(a))’’ and inserting ‘‘101 of the Higher Education Act

of 1965’’.

(10) SURFACE MINING CONTROL.—Section 701(32) of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C.

1291(32)) is amended by striking ‘‘1201(a)’’ and inserting ‘‘101’’.

(11) POLLUTION PREVENTION.—Section 112(a)(1) of the Federal Water Pollution Control Act (33 U.S.C. 1262(a)(1)) is

amended by striking ‘‘1201’’ and inserting ‘‘101’’.

(12) POSTAL SERVICE.—Section 3626(b)(3) of title 39, United

States Code, is amended—

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

(B) by striking ‘‘(20 U.S.C. 1141(a))’’.

(13) PUBLIC HEALTH AND WELFARE.—

(A) PUBLIC HEALTH SERVICE ACT.—Section 705(a)(2)(C)

of the Public Health Service Act (42 U.S.C. 292d(a)(2)(C))

is amended by striking ‘‘section 481(a)’’ and inserting ‘‘section 102(a)’’.

(B) SCIENTIFIC AND TECHNICAL EDUCATION.—Section

3(g) of the Scientific and Advanced-Technology Act of 1992

(42 U.S.C. 1862i(g)) is amended—

(i) in paragraph (2)—

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

and

(II) by striking ‘‘(20 U.S.C. 1141(a))’’; and

(ii) in paragraph (3)—

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

and

(II) by striking ‘‘(20 U.S.C. 1141(a))’’.

(C) OLDER AMERICANS.—Section 102(32) of the Older

Americans Act of 1965 (42 U.S.C. 3002(32)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(D) JUSTICE SYSTEM IMPROVEMENT.—Section 901(17)

of the Omnibus Crime Control and Safe Streets Act of

1968 (42 U.S.C. 3791(17)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(E) ENERGY TECHNOLOGY COMMERCIALIZATION SERVICES

PROGRAM.—Section 362(f )(5)(A) of the Energy Policy and

Conservation Act (42 U.S.C. 6322(f )(5)(A)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(F) ENVIRONMENTAL RESTORATION AND WASTE MANAGEMENT.—Section 3132(b)(1) of the National Defense

Authorization Act for Fiscal Years 1992 and 1993 (42 U.S.C.

7274e(b)(1)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.
H. R. 6—41

(G) HEAD START.—Section 649(c)(3) of the Head Start

Act (42 U.S.C. 9844(c)(3)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(H) STATE DEPENDENT CARE DEVELOPMENT GRANTS.—

Section 670G(5) of the Child Care and Development Block

Grant Act of 1990 (42 U.S.C. 9877(5)) is amended by striking ‘‘1201(a)’’ and inserting ‘‘101’’.

(I) INSTRUCTIONAL ACTIVITIES FOR LOW-INCOME

YOUTH.—The matter preceding subparagraph (A) of section

682(b)(1) of the Community Services Block Grant Act (42

U.S.C. 9910c(b)(1)) is amended by striking ‘‘1201(a)’’ and

inserting ‘‘101’’.

(J) DRUG ABUSE EDUCATION.—Section 3601(7) of the

Anti-Drug Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(K) NATIONAL AND COMMUNITY SERVICE.—Section

101(13) of the National and Community Service Act of

1990 (42 U.S.C. 12511(13)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(L) CIVILIAN COMMUNITY CORPS.—Section 166(6) of the

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

12626(6)) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(M) CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT.—Section 457(9) of the Cranston-Gonzalez National

Affordable Housing Act (42 U.S.C. 12899f(9)) is amended

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

(N) COMMUNITY SCHOOLS YOUTH SERVICES AND SUPERVISION GRANT PROGRAM.—The definition of public school

in section 30401(b) of the Community Schools Youth Services and Supervision Grant Program Act of 1994 (42 U.S.C.

13791(b)) is amended—

(i) by striking ‘‘1201’’ each place the term appears

and inserting ‘‘101’’; and

(ii) by striking ‘‘(20 U.S.C. 1141(i))’’.

(O) POLICE CORPS.—The definition of institution of

higher education in section 200103 of the Police Corps

Act (42 U.S.C. 14092) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(P) LAW ENFORCEMENT SCHOLARSHIP PROGRAM.—The

definition of institution of higher education in section

200202 of the Law Enforcement Scholarship and Recruitment Act (42 U.S.C. 14111) is amended—

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

(ii) by striking ‘‘(20 U.S.C. 1141(a))’’.

(14) TELECOMMUNICATIONS.—Section 223(h)(4) of the Telecommunications Act of 1934 (47 U.S.C. 223(h)(4)) is amended—

(A) by striking ‘‘1201’’ and inserting ‘‘101’’; and

(B) by striking ‘‘(20 U.S.C. 1141)’’.
H. R. 6—42

(15) WAR AND NATIONAL DEFENSE.—Section 808(3) of the

David L. Boren National Security Education Act of 1991 (50

U.S.C. 1908(3)) is amended—

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

(B) by striking ‘‘(20 U.S.C. 1141(a))’’.

(b) INTERNAL CROSS REFERENCES.—The Act (20 U.S.C. 1001

et seq.) is amended—

(1) in section 402A(c)(2) (20 U.S.C. 1070a–11(c)(2)), by

striking ‘‘1210’’ and inserting ‘‘118’’;

(2) in section 435(a) (20 U.S.C. 1085(a)), by striking ‘‘section

481’’ and inserting ‘‘section 102’’;

(3) in section 485(f )(1)(I) (20 U.S.C. 1092(f )(1)(I)), by

striking ‘‘1213’’ and inserting ‘‘120’’;

(4) in section 487(d) (20 U.S.C. 1094(d)), by striking ‘‘section

481’’ and inserting ‘‘section 102’’;

(5) in subsections ( j) and (k) of section 496 (20 U.S.C.

1099b), by striking ‘‘section 481’’ each place the term appears

and inserting ‘‘section 102’’;

(6) in section 498(i) (20 U.S.C. 1099c) is amended by

striking ‘‘section 481’’ and inserting ‘‘section 102’’;

(7) in section 498( j) (20 U.S.C. 1099c( j))—

(A) in paragraph (1), by striking ‘‘sections 481(b)(5)

and 481(c)(3)’’ and inserting ‘‘sections 102(b)(1)(E) and

102(c)(1)(C)’’; and

(B) in paragraph (2), by striking ‘‘1201(a)(2)’’ and

inserting ‘‘101(a)(2)’’; and

(8) in section 631(a)(8) (20 U.S.C. 1132(a)(8))—

(A) by striking ‘‘section 1201(a)’’ each place the term

appears and inserting ‘‘section 101’’; and

(B) by striking ‘‘of 1201(a)’’ and inserting ‘‘of section

101’’.

(c) ADDITIONAL CONFORMING AMENDMENTS CORRECTING

REFERENCES TO SECTION 481.—

(1) SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994.—Section

4 of the School-to-Work Opportunities Act of 1994 (20 U.S.C.

6103) is amended—

(A) in paragraph (11)(B)(viii), by striking ‘‘section

481(b)’’ and inserting ‘‘section 102(b)’’; and

(B) in paragraph (12), by striking ‘‘section 481’’ and

inserting ‘‘section 102’’.

(2) NATIONAL AND COMMUNITY SERVICE ACT OF 1990.—

Section 148(g) of the National and Community Service Act

of 1990 (42 U.S.C. 12604(g)) is amended by striking ‘‘section

481(a) of the Higher Education Act of 1965 (20 U.S.C. 1088(a))’’

and inserting ‘‘section 102 of the Higher Education Act of

1965’’.

(d) WORKFORCE INVESTMENT ACT OF 1998.—The Workforce

Investment Act of 1998 is amended—

(1) in section 101(35) (29 U.S.C. 2801(35)), by striking

‘‘section 481 of the Higher Education Act of 1965 (20 U.S.C.

1088)’’ and inserting ‘‘section 102 of the Higher Education Act

of 1965’’; and

(2) in section 203(11) (20 U.S.C. 9202(11)), by striking

‘‘section 1201 of the Higher Education Act of 1965 (20 U.S.C.

1141)’’ and inserting ‘‘section 101 of the Higher Education Act

of 1965’’.
H. R. 6—43

TITLE II—TEACHER QUALITY

SEC. 201. TEACHER QUALITY ENHANCEMENT GRANTS.

The Act is amended by inserting after title I (20 U.S.C. 1001

et seq.) the following:

‘‘TITLE II—TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES

AND PARTNERSHIPS

‘‘SEC. 201. PURPOSES; DEFINITIONS.

‘‘(a) PURPOSES.—The purposes of this title are to—

‘‘(1) improve student achievement;

‘‘(2) improve the quality of the current and future teaching

force by improving the preparation of prospective teachers and

enhancing professional development activities;

‘‘(3) hold institutions of higher education accountable for

preparing teachers who have the necessary teaching skills and

are highly competent in the academic content areas in which

the teachers plan to teach, such as mathematics, science,

English, foreign languages, history, economics, art, civics,

Government, and geography, including training in the effective

uses of technology in the classroom; and

‘‘(4) recruit highly qualified individuals, including individuals from other occupations, into the teaching force.

‘‘(b) DEFINITIONS.—In this title:

‘‘(1) ARTS AND SCIENCES.—The term ‘arts and sciences’

means—

‘‘(A) when referring to an organizational unit of an

institution of higher education, any academic unit that

offers 1 or more academic majors in disciplines or content

areas corresponding to the academic subject matter areas

in which teachers provide instruction; and

‘‘(B) when referring to a specific academic subject matter area, the disciplines or content areas in which academic

majors are offered by the arts and science organizational

unit.

‘‘(2) HIGH NEED LOCAL EDUCATIONAL AGENCY.—The term

‘high need local educational agency’ means a local educational

agency that serves an elementary school or secondary school

located in an area in which there is—

‘‘(A) a high percentage of individuals from families

with incomes below the poverty line;

‘‘(B) a high percentage of secondary school teachers

not teaching in the content area in which the teachers

were trained to teach; or

‘‘(C) a high teacher turnover rate.

‘‘(3) POVERTY LINE.—The term ‘poverty line’ means the

poverty line (as defined by the Office of Management and

Budget, and revised annually in accordance with section 673(2)

of the Community Services Block Grant Act (42 U.S.C. 9902(2)))

applicable to a family of the size involved.
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‘‘SEC. 202. STATE GRANTS.

‘‘(a) IN GENERAL.—From amounts made available under section

210(1) for a fiscal year, the Secretary is authorized to award grants

under this section, on a competitive basis, to eligible States to

enable the eligible States to carry out the activities described in

subsection (d).

‘‘(b) ELIGIBLE STATE.—

‘‘(1) DEFINITION.—In this title, the term ‘eligible State’

means—

‘‘(A) the Governor of a State; or

‘‘(B) in the case of a State for which the constitution

or law of such State designates another individual, entity,

or agency in the State to be responsible for teacher certification and preparation activity, such individual, entity,

or agency.

‘‘(2) CONSULTATION.—The Governor and the individual,

entity, or agency designated under paragraph (1) shall consult

with the Governor, State board of education, State educational

agency, or State agency for higher education, as appropriate,

with respect to the activities assisted under this section.

‘‘(3) CONSTRUCTION.—Nothing in this subsection shall be

construed to negate or supersede the legal authority under

State law of any State agency, State entity, or State public

official over programs that are under the jurisdiction of the

agency, entity, or official.

‘‘(c) APPLICATION.—To be eligible to receive a grant under this

section, an eligible State shall, at the time of the initial grant

application, submit an application to the Secretary that—

‘‘(1) meets the requirement of this section;

‘‘(2) includes a description of how the eligible State intends

to use funds provided under this section; and

‘‘(3) contains such other information and assurances as

the Secretary may require.

‘‘(d) USES OF FUNDS.—An eligible State that receives a grant

under this section shall use the grant funds to reform teacher

preparation requirements, and to ensure that current and future

teachers possess the necessary teaching skills and academic content

knowledge in the subject areas in which the teachers are assigned

to teach, by carrying out 1 or more of the following activities:

‘‘(1) REFORMS.—Implementing reforms that hold institutions of higher education with teacher preparation programs

accountable for preparing teachers who are highly competent

in the academic content areas in which the teachers plan to

teach, and possess strong teaching skills, which may include

the use of rigorous subject matter competency tests and the

requirement that a teacher have an academic major in the

subject area, or related discipline, in which the teacher plans

to teach.

‘‘(2) CERTIFICATION OR LICENSURE REQUIREMENTS.—Reforming teacher certification or licensure requirements to ensure

that teachers have the necessary teaching skills and academic

content knowledge in the subject areas in which teachers are

assigned to teach.

‘‘(3) ALTERNATIVES TO TRADITIONAL PREPARATION FOR

TEACHING.—Providing prospective teachers with alternatives to
H. R. 6—45

traditional preparation for teaching through programs at colleges of arts and sciences or at nonprofit educational organizations.

‘‘(4) ALTERNATIVE ROUTES TO STATE CERTIFICATION.—

Carrying out programs that—

‘‘(A) include support during the initial teaching

experience; and

‘‘(B) establish, expand, or improve alternative routes

to State certification of teachers for highly qualified individuals, including mid-career professionals from other occupations, paraprofessionals, former military personnel and

recent college graduates with records of academic distinction.

‘‘(5) RECRUITMENT; PAY; REMOVAL.—Developing and

implementing effective mechanisms to ensure that local educational agencies and schools are able to effectively recruit

highly qualified teachers, to financially reward those teachers

and principals whose students have made significant progress

toward high academic performance, such as through performance-based compensation systems and access to ongoing professional development opportunities for teachers and administrators, and to expeditiously remove incompetent or unqualified

teachers consistent with procedures to ensure due process for

the teachers.

‘‘(6) SOCIAL PROMOTION.—Development and implementation

of efforts to address the problem of social promotion and to

prepare teachers to effectively address the issues raised by

ending the practice of social promotion.

‘‘(7) RECRUITMENT.—Activities described in section 204(d).

‘‘SEC. 203. PARTNERSHIP GRANTS.

‘‘(a) GRANTS.—From amounts made available under section

210(2) for a fiscal year, the Secretary is authorized to award grants

under this section, on a competitive basis, to eligible partnerships

to enable the eligible partnerships to carry out the activities

described in subsections (d) and (e).

‘‘(b) DEFINITIONS.— ‘‘(1) ELIGIBLE PARTNERSHIPS.—In this title, the term

‘eligible partnerships’ means an entity that—

‘‘(A) shall include—

‘‘(i) a partner institution;

‘‘(ii) a school of arts and sciences; and

‘‘(iii) a high need local educational agency; and

‘‘(B) may include a Governor, State educational agency,

the State board of education, the State agency for higher

education, an institution of higher education not described

in subparagraph (A), a public charter school, a public or

private elementary school or secondary school, a public

or private nonprofit educational organization, a business,

a teacher organization, or a prekindergarten program.

‘‘(2) PARTNER INSTITUTION.—In this section, the term ‘partner institution’ means a private independent or State-supported

public institution of higher education, the teacher training program of which demonstrates that—

‘‘(A) graduates from the teacher training program

exhibit strong performance on State-determined qualifying

assessments for new teachers through—
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‘‘(i) demonstrating that 80 percent or more of the

graduates of the program who intend to enter the

field of teaching have passed all of the applicable State

qualification assessments for new teachers, which shall

include an assessment of each prospective teacher’s

subject matter knowledge in the content area or areas

in which the teacher intends to teach; or

‘‘(ii) being ranked among the highest-performing

teacher preparation programs in the State as determined by the State—

‘‘(I) using criteria consistent with the requirements for the State report card under section

207(b); and

‘‘(II) using the State report card on teacher

preparation required under section 207(b), after

the first publication of such report card and for

every year thereafter; or

‘‘(B) the teacher training program requires all the students of the program to participate in intensive clinical

experience, to meet high academic standards, and—

‘‘(i) in the case of secondary school candidates,

to successfully complete an academic major in the subject area in which the candidate intends to teach or

to demonstrate competence through a high level of

performance in relevant content areas; and

‘‘(ii) in the case of elementary school candidates,

to successfully complete an academic major in the arts

and sciences or to demonstrate competence through

a high level of performance in core academic subject

areas.

‘‘(c) APPLICATION.—Each eligible partnership desiring a grant

under this section shall submit an application to the Secretary

at such time, in such manner, and accompanied by such information

as the Secretary may require. Each such application shall—

‘‘(1) contain a needs assessment of all the partners with

respect to teaching and learning and a description of how

the partnership will coordinate with other teacher training

or professional development programs, and how the activities

of the partnership will be consistent with State, local, and

other education reform activities that promote student achievement;

‘‘(2) contain a resource assessment that describes the

resources available to the partnership, the intended use of

the grant funds, including a description of how the grant funds

will be fairly distributed in accordance with subsection (f ),

and the commitment of the resources of the partnership to

the activities assisted under this title, including financial support, faculty participation, time commitments, and continuation

of the activities when the grant ends; and

‘‘(3) contain a description of—

‘‘(A) how the partnership will meet the purposes of

this title;

‘‘(B) how the partnership will carry out the activities

required under subsection (d) and any permissible activities

under subsection (e); and

‘‘(C) the partnership’s evaluation plan pursuant to section 206(b).
H. R. 6—47

‘‘(d) REQUIRED USES OF FUNDS.—An eligible partnership that

receives a grant under this section shall use the grant funds to

carry out the following activities:

‘‘(1) REFORMS.—Implementing reforms within teacher

preparation programs to hold the programs accountable for

preparing teachers who are highly competent in the academic

content areas in which the teachers plan to teach, and for

promoting strong teaching skills, including working with a

school of arts and sciences and integrating reliable researchbased teaching methods into the curriculum, which curriculum

shall include programs designed to successfully integrate technology into teaching and learning.

‘‘(2) CLINICAL EXPERIENCE AND INTERACTION.—Providing

sustained and high quality preservice clinical experience including the mentoring of prospective teachers by veteran teachers,

and substantially increasing interaction between faculty at

institutions of higher education and new and experienced teachers, principals, and other administrators at elementary schools

or secondary schools, and providing support, including preparation time, for such interaction.

‘‘(3) PROFESSIONAL DEVELOPMENT.—Creating opportunities

for enhanced and ongoing professional development that

improves the academic content knowledge of teachers in the

subject areas in which the teachers are certified to teach or

in which the teachers are working toward certification to teach,

and that promotes strong teaching skills.

‘‘(e) ALLOWABLE USES OF FUNDS.—An eligible partnership that

receives a grant under this section may use such funds to carry

out the following activities:

‘‘(1) TEACHER PREPARATION AND PARENT INVOLVEMENT.— Preparing teachers to work with diverse student populations,

including individuals with disabilities and limited English proficient individuals, and involving parents in the teacher

preparation program reform process.

‘‘(2) DISSEMINATION AND COORDINATION.—Broadly disseminating information on effective practices used by the partnership, and coordinating with the activities of the Governor, State

board of education, State higher education agency, and State

educational agency, as appropriate.

‘‘(3) MANAGERIAL AND LEADERSHIP SKILLS.—Developing and

implementing proven mechanisms to provide principals and

superintendents with effective managerial and leadership skills

that result in increased student achievement.

‘‘(4) TEACHER RECRUITMENT.—Activities described in section

204(d).

‘‘(f ) SPECIAL RULE.—No individual member of an eligible partnership shall retain more than 50 percent of the funds made available to the partnership under this section.

‘‘(g) CONSTRUCTION.—Nothing in this section shall be construed

to prohibit an eligible partnership from using grant funds to coordinate with the activities of more than one Governor, State board

of education, State educational agency, local educational agency,

or State agency for higher education.

‘‘SEC. 204. TEACHER RECRUITMENT GRANTS.

‘‘(a) PROGRAM AUTHORIZED.—From amounts made available

under section 210(3) for a fiscal year, the Secretary is authorized
H. R. 6—48

to award grants, on a competitive basis, to eligible applicants to

enable the eligible applicants to carry out activities described in

subsection (d).

‘‘(b) ELIGIBLE APPLICANT DEFINED.—In this title, the term

‘eligible applicant’ means—

‘‘(1) an eligible State described in section 202(b); or

‘‘(2) an eligible partnership described in section 203(b).

‘‘(c) APPLICATION.—Any eligible applicant desiring to receive

a grant under this section shall submit an application to the Secretary at such time, in such form, and containing such information

as the Secretary may require, including—

‘‘(1) a description of the assessment that the eligible

applicant, and the other entities with whom the eligible

applicant will carry out the grant activities, have undertaken

to determine the most critical needs of the participating highneed local educational agencies;

‘‘(2) a description of the activities the eligible applicant

will carry out with the grant; and

‘‘(3) a description of the eligible applicant’s plan for continuing the activities carried out with the grant, once Federal

funding ceases.

‘‘(d) USES OF FUNDS.—Each eligible applicant receiving a grant

under this section shall use the grant funds—

‘‘(1)(A) to award scholarships to help students pay the

costs of tuition, room, board, and other expenses of completing

a teacher preparation program;

‘‘(B) to provide support services, if needed to enable scholarship recipients to complete postsecondary education programs;

and

‘‘(C) for followup services provided to former scholarship

recipients during the recipients first 3 years of teaching; or

‘‘(2) to develop and implement effective mechanisms to

ensure that high need local educational agencies and schools

are able to effectively recruit highly qualified teachers.

‘‘(e) SERVICE REQUIREMENTS.—The Secretary shall establish

such requirements as the Secretary finds necessary to ensure that

recipients of scholarships under this section who complete teacher

education programs subsequently teach in a high-need local educational agency, for a period of time equivalent to the period for

which the recipients receive scholarship assistance, or repay the

amount of the scholarship. The Secretary shall use any such repayments to carry out additional activities under this section.

‘‘SEC. 205. ADMINISTRATIVE PROVISIONS.

‘‘(a) DURATION; ONE-TIME AWARDS; PAYMENTS.—

‘‘(1) DURATION.—

‘‘(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—

Grants awarded to eligible States and eligible applicants

under this title shall be awarded for a period not to exceed

3 years.

‘‘(B) ELIGIBLE PARTNERSHIPS.—Grants awarded to

eligible partnerships under this title shall be awarded for

a period of 5 years.

‘‘(2) ONE-TIME AWARD.—An eligible State and an eligible

partnership may receive a grant under each of sections 202,

203, and 204 only once.
H. R. 6—49

‘‘(3) PAYMENTS.—The Secretary shall make annual payments of grant funds awarded under this part.

‘‘(b) PEER REVIEW.—

‘‘(1) PANEL.—The Secretary shall provide the applications

submitted under this title to a peer review panel for evaluation.

With respect to each application, the peer review panel shall

initially recommend the application for funding or for disapproval.

‘‘(2) PRIORITY.—In recommending applications to the

Secretary for funding under this title, the panel shall—

‘‘(A) with respect to grants under section 202, give

priority to eligible States serving States that—

‘‘(i) have initiatives to reform State teacher certification requirements that are designed to ensure that

current and future teachers possess the necessary

teaching skills and academic content knowledge in the

subject areas in which the teachers are certified or

licensed to teach;

‘‘(ii) include innovative reforms to hold institutions

of higher education with teacher preparation programs

accountable for preparing teachers who are highly competent in the academic content area in which the teachers plan to teach and have strong teaching skills; or

‘‘(iii) involve the development of innovative efforts

aimed at reducing the shortage of highly qualified

teachers in high poverty urban and rural areas;

‘‘(B) with respect to grants under section 203—

‘‘(i) give priority to applications from eligible partnerships that involve businesses; and

‘‘(ii) take into consideration—

‘‘(I) providing an equitable geographic distribution of the grants throughout the United States;

and

‘‘(II) the potential of the proposed activities

for creating improvement and positive change.

‘‘(3) SECRETARIAL SELECTION.—The Secretary shall determine, based on the peer review process, which application shall

receive funding and the amounts of the grants. In determining

grant amounts, the Secretary shall take into account the total

amount of funds available for all grants under this title and

the types of activities proposed to be carried out.

‘‘(c) MATCHING REQUIREMENTS.— ‘‘(1) STATE GRANTS.—Each eligible State receiving a grant

under section 202 or 204 shall provide, from non-Federal

sources, an amount equal to 50 percent of the amount of the

grant (in cash or in kind) to carry out the activities supported

by the grant.

‘‘(2) PARTNERSHIP GRANTS.—Each eligible partnership

receiving a grant under section 203 or 204 shall provide, from

non-Federal sources (in cash or in kind), an amount equal

to 25 percent of the grant for the first year of the grant,

35 percent of the grant for the second year of the grant, and

50 percent of the grant for each succeeding year of the grant.

‘‘(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible

State or eligible partnership that receives a grant under this title

may not use more than 2 percent of the grant funds for purposes

of administering the grant.
H. R. 6—50

‘‘(e) TEACHER QUALIFICATIONS PROVIDED TO PARENTS UPON

REQUEST.—Any local educational agency or school that benefits

from the activities assisted under this title shall make available,

upon request and in an understandable and uniform format, to

any parent of a student attending any school served by the local

educational agency, information regarding the qualification of the

student’s classroom teacher with regard to the subject matter in

which the teacher provides instruction. The local educational agency

shall inform parents that the parents are entitled to receive the

information upon request.

‘‘SEC. 206. ACCOUNTABILITY AND EVALUATION.

‘‘(a) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State

that receives a grant under section 202 shall submit an annual

accountability report to the Secretary, the Committee on Labor

and Human Resources of the Senate, and the Committee on Education and the Workforce of the House of Representatives. Such

report shall include a description of the degree to which the eligible

State, in using funds provided under such section, has made

substantial progress in meeting the following goals:

‘‘(1) STUDENT ACHIEVEMENT.—Increasing student achievement for all students as defined by the eligible State.

‘‘(2) RAISING STANDARDS.—Raising the State academic

standards required to enter the teaching profession, including,

where appropriate, through the use of incentives to incorporate

the requirement of an academic major in the subject, or related

discipline, in which the teacher plans to teach.

‘‘(3) INITIAL CERTIFICATION OR LICENSURE.—Increasing success in the pass rate for initial State teacher certification or

licensure, or increasing the numbers of highly qualified individuals being certified or licensed as teachers through alternative

programs.

‘‘(4) CORE ACADEMIC SUBJECTS.— ‘‘(A) SECONDARY SCHOOL CLASSES.—Increasing the

percentage of secondary school classes taught in core academic subject areas by teachers—

‘‘(i) with academic majors in those areas or in

a related field;

‘‘(ii) who can demonstrate a high level of competence through rigorous academic subject area tests;

or

‘‘(iii) who can demonstrate competence through a

high level of performance in relevant content areas.

‘‘(B) ELEMENTARY SCHOOL CLASSES.—Increasing the

percentage of elementary school classes taught by teachers—

‘‘(i) with academic majors in the arts and sciences;

or

‘‘(ii) who can demonstrate competence through a

high level of performance in core academic subjects.

‘‘(5) DECREASING TEACHER SHORTAGES.—Decreasing shortages of qualified teachers in poor urban and rural areas.

‘‘(6) INCREASING OPPORTUNITIES FOR PROFESSIONAL

DEVELOPMENT.—Increasing opportunities for enhanced and

ongoing professional development that improves the academic

content knowledge of teachers in the subject areas in which

the teachers are certified or licensed to teach or in which
H. R. 6—51

the teachers are working toward certification or licensure to

teach, and that promotes strong teaching skills.

‘‘(7) TECHNOLOGY INTEGRATION.—Increasing the number of

teachers prepared to integrate technology in the classroom.

‘‘(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each eligible partnership receiving a grant under section 203 shall establish and

include in the application submitted under section 203(c), an evaluation plan that includes strong performance objectives. The plan

shall include objectives and measures for—

‘‘(1) increased student achievement for all students as

measured by the partnership;

‘‘(2) increased teacher retention in the first 3 years of

a teacher’s career;

‘‘(3) increased success in the pass rate for initial State

certification or licensure of teachers; and

‘‘(4) increased percentage of secondary school classes taught

in core academic subject areas by teachers—

‘‘(A) with academic majors in the areas or in a related

field; and

‘‘(B) who can demonstrate a high level of competence

through rigorous academic subject area tests or who can

demonstrate competence through a high level of performance in relevant content areas;

‘‘(5) increasing the percentage of elementary school classes

taught by teachers with academic majors in the arts and

sciences or who demonstrate competence through a high level

of performance in core academic subject areas; and

‘‘(6) increasing the number of teachers trained in technology.

‘‘(c) REVOCATION OF GRANT.—

‘‘(1) REPORT.—Each eligible State or eligible partnership

receiving a grant under this title shall report annually on

the progress of the eligible State or eligible partnership toward

meeting the purposes of this title and the goals, objectives,

and measures described in subsections (a) and (b).

‘‘(2) REVOCATION.—

‘‘(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—If

the Secretary determines that an eligible State or eligible

applicant is not making substantial progress in meeting

the purposes, goals, objectives, and measures, as appropriate, by the end of the second year of a grant under

this title, then the grant payment shall not be made for

the third year of the grant.

‘‘(B) ELIGIBLE PARTNERSHIPS.—If the Secretary determines that an eligible partnership is not making substantial progress in meeting the purposes, goals, objectives,

and measures, as appropriate, by the end of the third

year of a grant under this title, then the grant payments

shall not be made for any succeeding year of the grant.

‘‘(d) EVALUATION AND DISSEMINATION.—The Secretary shall

evaluate the activities funded under this title and report the Secretary’s findings regarding the activities to the Committee on Labor

and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives. The

Secretary shall broadly disseminate successful practices developed

by eligible States and eligible partnerships under this title, and
H. R. 6—52

shall broadly disseminate information regarding such practices that

were found to be ineffective.

‘‘SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

‘‘(a) DEVELOPMENT OF DEFINITIONS AND REPORTING METHODS.—

Within 9 months of the date of enactment of the Higher Education

Amendments of 1998, the Commissioner of the National Center

for Education Statistics, in consultation with States and institutions

of higher education, shall develop key definitions for terms, and

uniform reporting methods (including the key definitions for the

consistent reporting of pass rates), related to the performance of

elementary school and secondary school teacher preparation programs.

‘‘(b) STATE REPORT CARD ON THE QUALITY OF TEACHER

PREPARATION.—Each State that receives funds under this Act shall

provide to the Secretary, within 2 years of the date of enactment

of the Higher Education Amendments of 1998, and annually thereafter, in a uniform and comprehensible manner that conforms with

the definitions and methods established in subsection (a), a State

report card on the quality of teacher preparation in the State,

which shall include at least the following:

‘‘(1) A description of the teacher certification and licensure

assessments, and any other certification and licensure requirements, used by the State.

‘‘(2) The standards and criteria that prospective teachers

must meet in order to attain initial teacher certification or

licensure and to be certified or licensed to teach particular

subjects or in particular grades within the State.

‘‘(3) A description of the extent to which the assessments

and requirements described in paragraph (1) are aligned with

the State’s standards and assessments for students.

‘‘(4) The percentage of teaching candidates who passed

each of the assessments used by the State for teacher certification and licensure, and the passing score on each assessment

that determines whether a candidate has passed that assessment.

‘‘(5) The percentage of teaching candidates who passed

each of the assessments used by the State for teacher certification and licensure, disaggregated and ranked, by the teacher

preparation program in that State from which the teacher

candidate received the candidate’s most recent degree, which

shall be made available widely and publicly.

‘‘(6) Information on the extent to which teachers in the

State are given waivers of State certification or licensure

requirements, including the proportion of such teachers distributed across high- and low-poverty school districts and across

subject areas.

‘‘(7) A description of each State’s alternative routes to

teacher certification, if any, and the percentage of teachers

certified through alternative certification routes who pass State

teacher certification or licensure assessments.

‘‘(8) For each State, a description of proposed criteria for

assessing the performance of teacher preparation programs

within institutions of higher education in the State, including

indicators of teacher candidate knowledge and skills.
H. R. 6—53

‘‘(9) Information on the extent to which teachers or prospective teachers in each State are required to take examinations

or other assessments of their subject matter knowledge in the

area or areas in which the teachers provide instruction, the

standards established for passing any such assessments, and

the extent to which teachers or prospective teachers are

required to receive a passing score on such assessments in

order to teach in specific subject areas or grade levels.

‘‘(c) INITIAL REPORT.—

‘‘(1) IN GENERAL.—Each State that receives funds under

this Act, not later than 6 months of the date of enactment

of the Higher Education Amendments of 1998 and in a uniform

and comprehensible manner, shall submit to the Secretary the

information described in paragraphs (1), (5), and (6) of subsection (b). Such information shall be compiled by the Secretary

and submitted to the Committee on Labor and Human

Resources of the Senate and the Committee on Education and

the Workforce of the House of Representatives not later than

9 months after the date of enactment of the Higher Education

Amendments of 1998.

‘‘(2) CONSTRUCTION.—Nothing in this subsection shall be

construed to require a State to gather information that is

not in the possession of the State or the teacher preparation

programs in the State, or readily available to the State or

teacher preparation programs.

‘‘(d) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER

PREPARATION.—

‘‘(1) REPORT CARD.—The Secretary shall provide to Congress, and publish and make widely available, a report card

on teacher qualifications and preparation in the United States,

including all the information reported in paragraphs (1) through

(9) of subsection (b). Such report shall identify States for which

eligible States and eligible partnerships received a grant under

this title. Such report shall be so provided, published and

made available not later than 2 years 6 months after the

date of enactment of the Higher Education Amendments of

1998 and annually thereafter.

‘‘(2) REPORT TO CONGRESS.—The Secretary shall report to

Congress—

‘‘(A) a comparison of States’ efforts to improve teaching

quality; and

‘‘(B) regarding the national mean and median scores

on any standardized test that is used in more than 1

State for teacher certification or licensure.

‘‘(3) SPECIAL RULE.—In the case of teacher preparation

programs with fewer than 10 graduates taking any single initial

teacher certification or licensure assessment during an academic year, the Secretary shall collect and publish information

with respect to an average pass rate on State certification

or licensure assessments taken over a 3-year period.

‘‘(e) COORDINATION.—The Secretary, to the extent practicable,

shall coordinate the information collected and published under this

title among States for individuals who took State teacher certification or licensure assessments in a State other than the State

in which the individual received the individual’s most recent degree.

‘‘(f ) INSTITUTIONAL REPORT CARDS ON THE QUALITY OF TEACHER

PREPARATION.—
H. R. 6—54

‘‘(1) REPORT CARD.—Each institution of higher education

that conducts a teacher preparation program that enrolls students receiving Federal assistance under this Act, not later

than 18 months after the date of enactment of the Higher

Education Amendments of 1998 and annually thereafter, shall

report to the State and the general public, in a uniform and

comprehensible manner that conforms with the definitions and

methods established under subsection (a), the following

information:

‘‘(A) PASS RATE.—(i) For the most recent year for which

the information is available, the pass rate of the institution’s graduates on the teacher certification or licensure

assessments of the State in which the institution is located,

but only for those students who took those assessments

within 3 years of completing the program.

‘‘(ii) A comparison of the program’s pass rate with

the average pass rate for programs in the State.

‘‘(iii) In the case of teacher preparation programs with

fewer than 10 graduates taking any single initial teacher

certification or licensure assessment during an academic

year, the institution shall collect and publish information

with respect to an average pass rate on State certification

or licensure assessments taken over a 3-year period.

‘‘(B) PROGRAM INFORMATION.—The number of students

in the program, the average number of hours of supervised

practice teaching required for those in the program, and

the faculty-student ratio in supervised practice teaching.

‘‘(C) STATEMENT.—In States that approve or accredit

teacher education programs, a statement of whether the

institution’s program is so approved or accredited.

‘‘(D) DESIGNATION AS LOW-PERFORMING.—Whether the

program has been designated as low-performing by the

State under section 208(a).

‘‘(2) REQUIREMENT.—The information described in paragraph (1) shall be reported through publications such as school

catalogs and promotional materials sent to potential applicants,

secondary school guidance counselors, and prospective employers of the institution’s program graduates.

‘‘(3) FINES.—In addition to the actions authorized in section

487(c), the Secretary may impose a fine not to exceed $25,000

on an institution of higher education for failure to provide

the information described in this subsection in a timely or

accurate manner.

‘‘SEC. 208. STATE FUNCTIONS.

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

Act, a State, not later than 2 years after the date of enactment

of the Higher Education Amendments of 1998, shall have in place

a procedure to identify, and assist, through the provision of technical

assistance, low-performing programs of teacher preparation within

institutions of higher education. Such State shall provide the Secretary an annual list of such low-performing institutions that

includes an identification of those institutions at-risk of being placed

on such list. Such levels of performance shall be determined solely

by the State and may include criteria based upon information

collected pursuant to this title. Such assessment shall be described

in the report under section 207(b).
H. R. 6—55

‘‘(b) TERMINATION OF ELIGIBILITY.—Any institution of higher

education that offers a program of teacher preparation in which

the State has withdrawn the State’s approval or terminated the

State’s financial support due to the low performance of the institution’s teacher preparation program based upon the State assessment

described in subsection (a)—

‘‘(1) shall be ineligible for any funding for professional

development activities awarded by the Department of Education; and

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

that receives aid under title IV of this Act in the institution’s

teacher preparation program.

‘‘(c) NEGOTIATED RULEMAKING.—If the Secretary develops any

regulations implementing subsection (b)(2), the Secretary shall submit such proposed regulations to a negotiated rulemaking process,

which shall include representatives of States, institutions of higher

education, and educational and student organizations.

‘‘SEC. 209. GENERAL PROVISIONS.

‘‘(a) METHODS.—In complying with sections 207 and 208, the

Secretary shall ensure that States and institutions of higher education use fair and equitable methods in reporting and that the

reporting methods protect the privacy of individuals.

‘‘(b) SPECIAL RULE.—For each State in which there are no

State certification or licensure assessments, or for States that do

not set minimum performance levels on those assessments—

‘‘(1) the Secretary shall, to the extent practicable, collect

data comparable to the data required under this title from

States, local educational agencies, institutions of higher education, or other entities that administer such assessments to

teachers or prospective teachers; and

‘‘(2) notwithstanding any other provision of this title, the

Secretary shall use such data to carry out requirements of

this title related to assessments or pass rates.

‘‘(c) LIMITATIONS.— ‘‘(1) FEDERAL CONTROL PROHIBITED.—Nothing in this title

shall be construed to permit, allow, encourage, or authorize

any Federal control over any aspect of any private, religious,

or home school, whether or not a home school is treated as

a private school or home school under State law. This section

shall not be construed to prohibit private, religious, or home

schools from participation in programs or services under this

title.

‘‘(2) NO CHANGE IN STATE CONTROL ENCOURAGED OR

REQUIRED.—Nothing in this title shall be construed to encourage or require any change in a State’s treatment of any private,

religious, or home school, whether or not a home school is

treated as a private school or home school under State law.

‘‘(3) NATIONAL SYSTEM OF TEACHER CERTIFICATION PROHIBITED.—Nothing in this title shall be construed to permit, allow,

encourage, or authorize the Secretary to establish or support

any national system of teacher certification.

‘‘SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

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

title $300,000,000 for fiscal year 1999 and such sums as may

be necessary for each of the 4 succeeding fiscal years, of which—
H. R. 6—56

‘‘(1) 45 percent shall be available for each fiscal year to

award grants under section 202;

‘‘(2) 45 percent shall be available for each fiscal year to

award grants under section 203; and

‘‘(3) 10 percent shall be available for each fiscal year to

award grants under section 204.’’.

TITLE III—INSTITUTIONAL AID

SEC. 301. TRANSFERS AND REDESIGNATIONS.

(a) IN GENERAL.—The Higher Education Act of 1965 is

amended—

(1) by redesignating part D of title III (20 U.S.C. 1066

et seq.) as part F of title III;

(2) by redesignating sections 351, 352, 353, 354, 356, 357,

358, and 360 (20 U.S.C. 1066, 1067, 1068, 1069, 1069b, 1069c,

1069d, and 1069f) as sections 391, 392, 393, 394, 395, 396,

397, and 399, respectively;

(3) by transferring part B of title VII (20 U.S.C. 1132c

et seq.) to title III to follow part C of title III (20 U.S.C.

1065 et seq.), and redesignating such part B as part D;

(4) by redesignating sections 721 through 728 (20 U.S.C.

1132c and 1132c–7) as sections 341 through 348, respectively;

(5) by transferring subparts 1 and 3 of part B of title

X (20 U.S.C. 1135b et seq. and 1135d et seq.) to title III

to follow part D of title III (as redesignated by paragraph

(3)), and redesignating such subpart 3 as subpart 2;

(6) by inserting after part D of title III (as redesignated

by paragraph (3)) the following:

‘‘PART E—MINORITY SCIENCE AND

ENGINEERING IMPROVEMENT PROGRAM’’;

(7) by redesignating sections 1021 through 1023 (20 U.S.C.

1135b and 1135b–2), and sections 1041, 1042, 1043, 1044, 1046,

and 1047 (20 U.S.C. 1135d, 1135d–1, 1135d–2, 1135d–3, 1135d–

5, and 1135d–6) as sections 351 through 353, and sections

361, 362, 363, 364, 365, and 366, respectively; and

(8) by repealing section 366 (as redesignated by paragraph

(7)) (20 U.S.C. 1135d–6).

(b) CONFORMING AMENDMENTS.—Section 361 (as redesignated

by subsection (a)(7)) (20 U.S.C. 1135d) is amended—

(1) in paragraph (1), by inserting ‘‘and’’ after the semicolon;

(2) in paragraph (2), by striking ‘‘; and’’ and inserting

a period; and

(3) by striking paragraph (3).

(c) CROSS REFERENCES.—Title III (20 U.S.C. 1051 et seq.) is

amended—

(1) in section 311(b) (20 U.S.C. 1057(b)), by striking

‘‘360(a)(1)’’ and inserting ‘‘399(a)(1)’’;

(2) in section 312 (20 U.S.C. 1058)—

(A) in subsection (b)(1)(B), by striking ‘‘352(b)’’ and

inserting ‘‘392(b)’’; and

(B) in subsection (c)(2), by striking ‘‘352(a)’’ and

inserting ‘‘392(a)’’;
H. R. 6—57

(3) in section 313(b) (20 U.S.C. 1059(b)), by striking

‘‘354(a)(1)’’ and inserting ‘‘394(a)(1)’’;

(4) in section 342 (as redesignated by subsection (a)(4))

(20 U.S.C. 1132c–1)—

(A) in paragraph (3), by striking ‘‘723(b)’’ and inserting

‘‘343(b)’’;

(B) in paragraph (4), by striking ‘‘723’’ and inserting

‘‘343’’;

(C) in the matter preceding subparagraph (A) of

paragraph (5), by striking ‘‘724(b)’’ and inserting ‘‘344(b)’’;

(D) in paragraph (8), by striking ‘‘725(1)’’ and inserting

‘‘345(1)’’; and

(E) in paragraph (9), by striking ‘‘727’’ and inserting

‘‘347’’;

(5) in section 343 (as redesignated by subsection (a)(4))

(20 U.S.C. 1132c–2)—

(A) in subsection (a), by striking ‘‘724’’ and inserting

‘‘344’’; and

(B) in subsection (b)—

(i) in the matter preceding paragraph (1), by

striking ‘‘725(1) and 726’’ and inserting ‘‘345(1) and

346’’;

(ii) in paragraph (10), by striking ‘‘724’’ and inserting ‘‘344’’; and

(iii) in subsection (d), by striking ‘‘723(c)(1)’’ and

inserting ‘‘343(c)(1)’’;

(6) in section 345(2) (as redesignated by subsection (a)(4))

(20 U.S.C. 1132c–4(2)), by striking ‘‘723’’ and inserting ‘‘343’’;

(7) in section 348 (as redesignated by subsection (a)(4))

(20 U.S.C. 1132c–7), by striking ‘‘725(1)’’ and inserting ‘‘345(1)’’;

(8) in section 353(a) (as redesignated by subsection (a)(7))

(20 U.S.C. 1135b–2(a))—

(A) in paragraph (1), by striking ‘‘1046(6)’’ and

inserting ‘‘365(6)’’;

(B) in paragraph (2), by striking ‘‘1046(7)’’ and

inserting ‘‘365(7)’’;

(C) in paragraph (3), by striking ‘‘1046(8)’’ and

inserting ‘‘365(8)’’; and

(D) in paragraph (4), by striking ‘‘1046(9)’’ and

inserting ‘‘365(9)’’;

(9) in section 361(1) (as redesignated by subsection (a)(7))

(20 U.S.C. 1135d(1)), by striking ‘‘1046(3)’’ and inserting

‘‘365(3)’’;

(10) in section 362(a) (as redesignated by subsection (a)(7))

(20 U.S.C. 1135d–1(a))—

(A) in the matter preceding paragraph (1), by striking

‘‘1041’’ and inserting ‘‘361’’; and

(B) in paragraph (1), by striking ‘‘1021(b)’’ and

inserting ‘‘351(b)’’; and

(11) in section 391(b)(6) (as redesignated by subsection

(a)(2)), by striking ‘‘357’’ and inserting ‘‘396’’.

SEC. 302. FINDINGS.

Section 301(a) (20 U.S.C. 1051(a)) is amended—

(1) by redesignating paragraphs (3) through (7) as paragraphs (4) through (8), respectively; and

(2) by inserting after paragraph (2) the following:
H. R. 6—58

‘‘(3) in order to be competitive and provide a high-quality

education for all, institutions of higher education should

improve their technological capacity and make effective use

of technology;’’.

SEC. 303. STRENGTHENING INSTITUTIONS.

(a) GRANTS.—Section 311 (20 U.S.C. 1057) is amended by

adding at the end the following:

‘‘(c) AUTHORIZED ACTIVITIES.—Grants awarded under this

section shall be used for 1 or more of the following activities:

‘‘(1) Purchase, rental, or lease of scientific or laboratory

equipment for educational purposes, including instructional and

research purposes.

‘‘(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including the integration of computer technology into institutional facilities to create smart buildings.

‘‘(3) Support of faculty exchanges, faculty development, and

faculty fellowships to assist in attaining advanced degrees in

the field of instruction of the faculty.

‘‘(4) Development and improvement of academic programs.

‘‘(5) Purchase of library books, periodicals, and other educational materials, including telecommunications program

material.

‘‘(6) Tutoring, counseling, and student service programs

designed to improve academic success.

‘‘(7) Funds management, administrative management, and

acquisition of equipment for use in strengthening funds

management.

‘‘(8) Joint use of facilities, such as laboratories and libraries.

‘‘(9) Establishing or improving a development office to

strengthen or improve contributions from alumni and the private sector.

‘‘(10) Establishing or improving an endowment fund.

‘‘(11) Creating or improving facilities for Internet or other

distance learning academic instruction capabilities, including

purchase or rental of telecommunications technology equipment

or services.

‘‘(12) Other activities proposed in the application submitted

pursuant to subsection (c) that—

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

program assisted under this part; and

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

review and acceptance of such application.

‘‘(d) ENDOWMENT FUND.—

‘‘(1) IN GENERAL.—An eligible institution may use not more

than 20 percent of the grant funds provided under this part

to establish or increase an endowment fund at such institution.

‘‘(2) MATCHING REQUIREMENT.—In order to be eligible to

use grant funds in accordance with paragraph (1), the eligible

institution shall provide matching funds from non-Federal

sources, in an amount equal to or greater than the Federal

funds used in accordance with paragraph (1), for the establishment or increase of the endowment fund.

‘‘(3) COMPARABILITY.—The provisions of part C, regarding

the establishment or increase of an endowment fund, that
H. R. 6—59

the Secretary determines are not inconsistent with this subsection, shall apply to funds used under paragraph (1).’’.

(b) ENDOWMENT FUND DEFINITION.—Section 312 (as amended

by section 301(c)(2)) (20 U.S.C. 1058) is amended—

(1) by redesignating subsections (c) through (f ) as subsections (d) through (g), respectively; and

(2) by inserting after subsection (b) the following:

‘‘(c) ENDOWMENT FUND.—For the purpose of this part, the term

‘endowment fund’ means a fund that—

‘‘(1) is established by State law, by an institution of higher

education, or by a foundation that is exempt from Federal

income taxation;

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

for the support of the institution; and

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

(c) DURATION OF GRANT.—Section 313 (20 U.S.C. 1059) is

amended—

(1) in subsection (b), by inserting ‘‘subsection (c) and a

grant under’’ before ‘‘section 394(a)(1)’’; and

(2) by adding at the end the following:

‘‘(d) WAIT-OUT-PERIOD.—Each eligible institution that received

a grant under this part for a 5-year period shall not be eligible

to receive an additional grant under this part until 2 years after

the date on which the 5-year grant period terminates.’’.

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

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

‘‘SEC. 314. APPLICATIONS.

‘‘Each eligible institution desiring to receive assistance under

this part shall submit an application in accordance with the requirements of section 391.’’.

(e) AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND

UNIVERSITIES.—Section 316 (20 U.S.C. 1059c) is amended to read

as follows:

‘‘SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND

UNIVERSITIES.

‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants

and related assistance to Indian Tribal Colleges and Universities

to enable such institutions to improve and expand their capacity

to serve Indian students.

‘‘(b) DEFINITIONS.—In this section:

‘‘(1) INDIAN.—The term ‘Indian’ has the meaning given

the term in section 2 of the Tribally Controlled College or

University Assistance Act of 1978.

‘‘(2) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning

given the term in section 2 of the Tribally Controlled College

or University Assistance Act of 1978.

‘‘(3) TRIBAL COLLEGE OR UNIVERSITY.—The term ‘Tribal College or University’ has the meaning give the term ‘tribally

controlled college or university’ in section 2 of the Tribally

Controlled College or University Assistance Act of 1978, and

includes an institution listed in the Equity in Educational

Land Grant Status Act of 1994.

‘‘(4) INSTITUTION OF HIGHER EDUCATION.—The term ‘institution of higher education’ means an institution of higher education as defined in section 101(a), except that paragraph (2)

of such section shall not apply.
H. R. 6—60

‘‘(c) AUTHORIZED ACTIVITIES.—

‘‘(1) IN GENERAL.—Grants awarded under this section shall

be used by Tribal Colleges or Universities to assist such institutions to plan, develop, undertake, and carry out activities to

improve and expand such institutions’ capacity to serve Indian

students.

‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—The activities

described in paragraph (1) may include—

‘‘(A) purchase, rental, or lease of scientific or laboratory

equipment for educational purposes, including instructional

and research purposes;

‘‘(B) construction, maintenance, renovation, and

improvement in classrooms, libraries, laboratories, and

other instructional facilities, including purchase or rental

of telecommunications technology equipment or services;

‘‘(C) support of faculty exchanges, faculty development,

and faculty fellowships to assist in attaining advanced

degrees in the faculty’s field of instruction;

‘‘(D) academic instruction in disciplines in which

Indians are underrepresented;

‘‘(E) purchase of library books, periodicals, and other

educational materials, including telecommunications program material;

‘‘(F) tutoring, counseling, and student service programs

designed to improve academic success;

‘‘(G) funds management, administrative management,

and acquisition of equipment for use in strengthening funds

management;

‘‘(H) joint use of facilities, such as laboratories and

libraries;

‘‘(I) establishing or improving a development office to

strengthen or improve contributions from alumni and the

private sector;

‘‘(J) establishing or enhancing a program of teacher

education designed to qualify students to teach in

elementary schools or secondary schools, with a particular

emphasis on teaching Indian children and youth, that shall

include, as part of such program, preparation for teacher

certification;

‘‘(K) establishing community outreach programs that

encourage Indian elementary school and secondary school

students to develop the academic skills and the interest

to pursue postsecondary education; and

‘‘(L) other activities proposed in the application submitted pursuant to subsection (d) that—

‘‘(i) contribute to carrying out the activities

described in subparagraphs (A) through (K); and

‘‘(ii) are approved by the Secretary as part of the

review and acceptance of such application.

‘‘(3) ENDOWMENT FUND.—

‘‘(A) IN GENERAL.—A Tribal College or University may

use not more than 20 percent of the grant funds provided

under this section to establish or increase an endowment

fund at the institution.

‘‘(B) MATCHING REQUIREMENT.—In order to be eligible

to use grant funds in accordance with subparagraph (A),

the Tribal College or University shall provide matching
H. R. 6—61

funds, in an amount equal to the Federal funds used in

accordance with subparagraph (A), for the establishment

or increase of the endowment fund.

‘‘(C) COMPARABILITY.—The provisions of part C regarding the establishment or increase of an endowment fund,

that the Secretary determines are not inconsistent with

this paragraph, shall apply to funds used under subparagraph (A).

‘‘(d) APPLICATION PROCESS.—

‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligible to receive

assistance under this section, a Tribal College or University

shall be an eligible institution under section 312(b).

‘‘(2) APPLICATION.—Any Tribal College or University desiring to receive assistance under this section shall submit an

application to the Secretary at such time, and in such manner,

as the Secretary may by regulation reasonably require. Each

such application shall include—

‘‘(A) a 5-year plan for improving the assistance provided

by the Tribal College or University to Indian students,

increasing the rates at which Indian secondary school students enroll in higher education, and increasing overall

postsecondary retention rates for Indian students; and

‘‘(B) such enrollment data and other information and

assurances as the Secretary may require to demonstrate

compliance with paragraph (1).

‘‘(3) SPECIAL RULE.—For the purposes of this part, no Tribal

College or University that is eligible for and receives funds

under this section may concurrently receive other funds under

this part or part B.’’.

(f ) ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS.—Part A of title III (20 U.S.C. 1057 et seq.) is amended

by adding at the end the following:

‘‘SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS.

‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants

and related assistance to Alaska Native-serving institutions and

Native Hawaiian-serving institutions to enable such institutions

to improve and expand their capacity to serve Alaska Natives

and Native Hawaiians.

‘‘(b) DEFINITIONS.—For the purpose of this section—

‘‘(1) the term ‘Alaska Native’ has the meaning given the

term in section 9308 of the Elementary and Secondary Education Act of 1965;

‘‘(2) the term ‘Alaska Native-serving institution’ means an

institution of higher education that—

‘‘(A) is an eligible institution under section 312(b); and

‘‘(B) at the time of application, has an enrollment of

undergraduate students that is at least 20 percent Alaska

Native students;

‘‘(3) the term ‘Native Hawaiian’ has the meaning given

the term in section 9212 of the Elementary and Secondary

Education Act of 1965; and

‘‘(4) the term ‘Native Hawaiian-serving institution’ means

an institution of higher education which—

‘‘(A) is an eligible institution under section 312(b); and
H. R. 6—62

‘‘(B) at the time of application, has an enrollment of

undergraduate students that is at least 10 percent Native

Hawaiian students.

‘‘(c) AUTHORIZED ACTIVITIES.—

‘‘(1) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded

under this section shall be used by Alaska Native-serving

institutions and Native Hawaiian-serving institutions to assist

such institutions to plan, develop, undertake, and carry out

activities to improve and expand such institutions’ capacity

to serve Alaska Natives or Native Hawaiians.

‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs

may include—

‘‘(A) purchase, rental, or lease of scientific or laboratory

equipment for educational purposes, including instructional

and research purposes;

‘‘(B) renovation and improvement in classroom, library,

laboratory, and other instructional facilities;

‘‘(C) support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced

degrees in the faculty’s field of instruction;

‘‘(D) curriculum development and academic instruction;

‘‘(E) purchase of library books, periodicals, microfilm,

and other educational materials;

‘‘(F) funds and administrative management, and

acquisition of equipment for use in strengthening funds

management;

‘‘(G) joint use of facilities such as laboratories and

libraries; and

‘‘(H) academic tutoring and counseling programs and

student support services.

‘‘(d) APPLICATION PROCESS.— ‘‘(1) INSTITUTIONAL ELIGIBILITY.—Each Alaska Native-serving institution and Native Hawaiian-serving institution desiring

to receive assistance under this section shall submit to the

Secretary such enrollment data as may be necessary to demonstrate that the institution is an Alaska Native-serving

institution or a Native Hawaiian-serving institution as defined

in subsection (b), along with such other information and data

as the Secretary may by regulation require.

‘‘(2) APPLICATIONS.—Any institution which is determined

by the Secretary to be an Alaska Native-serving institution

or a Native Hawaiian-serving institution may submit an

application for assistance under this section to the Secretary.

Such application shall include—

‘‘(A) a 5-year plan for improving the assistance provided

by the Alaska Native-serving institution or the Native

Hawaiian-serving institution to Alaska Native or Native

Hawaiian students; and

‘‘(B) such other information and assurance as the Secretary may require.

‘‘(e) SPECIAL RULE.—For the purposes of this section, no Alaska

Native-serving institution or Native Hawaiian-serving institution

which is eligible for and receives funds under this section may

concurrently receive other funds under this part or part B.’’.

SEC. 304. STRENGTHENING HBCU’s.

(a) GRANTS.—Section 323 (20 U.S.C. 1062) is amended—
H. R. 6—63

(1) by redesignating subsection (b) as subsection (c);

(2) by inserting after subsection (a) the following:

‘‘(b) ENDOWMENT FUND.—

‘‘(1) IN GENERAL.—An institution may use not more than

20 percent of the grant funds provided under this part to

establish or increase an endowment fund at the institution.

‘‘(2) MATCHING REQUIREMENT.—In order to be eligible to

use grant funds in accordance with paragraph (1), the eligible

institution shall provide matching funds from non-Federal

sources, in an amount equal to or greater than the Federal

funds used in accordance with paragraph (1), for the establishment or increase of the endowment fund.

‘‘(3) COMPARABILITY.—The provisions of part C regarding

the establishment or increase of an endowment fund, that

the Secretary determines are not inconsistent with this subsection, shall apply to funds used under paragraph (1).’’; and

(3) in subsection (c) (as redesignated by paragraph (1)),

by striking paragraph (3).

(b) PROFESSIONAL OR GRADUATE INSTITUTIONS.—

(1) GENERAL AUTHORIZATION.—Section 326(a) (20 U.S.C.

1063b(a)) is amended—

(A) in subsection (a)—

(i) in paragraph (1), by inserting ‘‘in mathematics,

engineering, or the physical or natural sciences’’ after

‘‘graduate education opportunities’’; and

(ii) in paragraph (2)—

(I) by striking ‘‘$500,000’’ and inserting

‘‘$1,000,000’’; and

(II) by striking ‘‘except that’’ and all that follows and inserting the following: ‘‘, except that

no institution shall be required to match any portion of the first $1,000,000 of the institution’s

award from the Secretary. After funds are made

available to each eligible institution under the

funding rules described in subsection (f ), the Secretary shall distribute, on a pro rata basis, any

amounts which were not so made available (by

reason of the failure of an institution to comply

with the matching requirements of this paragraph)

among the institutions that have complied with

such matching requirement.’’; and (B) in subsection (d)(2), by striking ‘‘$500,000’’ and inserting ‘‘$1,000,000’’.

(2) USE OF FUNDS.—Section 326(c) (20 U.S.C. 1063b(c))

is amended by striking paragraphs (1) through (3) and inserting

the following:

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

equipment for educational purposes, including instructional and

research purposes;

‘‘(2) construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional

facilities, including purchase or rental of telecommunications

technology equipment or services;

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

other scientific journals, microfilm, microfiche, and other educational materials, including telecommunications program

materials;
H. R. 6—64

‘‘(4) scholarships, fellowships, and other financial assistance

for needy graduate and professional students to permit the

enrollment of the students in and completion of the doctoral

degree in medicine, dentistry, pharmacy, veterinary medicine,

law, and the doctorate degree in the physical or natural

sciences, engineering, mathematics, or other scientific disciplines in which African Americans are underrepresented;

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

and increase contributions from alumni and the private sector;

‘‘(6) assist in the establishment or maintenance of an

institutional endowment to facilitate financial independence

pursuant to section 331; and

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

acquisition of equipment, including software, for use in

strengthening funds management and management information

systems.’’.

(3) ELIGIBILITY.—Section 326(e) (20 U.S.C. 1063b(e)) is

amended—

(A) in paragraph (1)—

(i) by striking ‘‘include—’’ and inserting ‘‘are the

following’’;

(ii) by inserting ‘‘and other qualified graduate programs’’ before the semicolon at the end of subparagraphs (E) through (J);

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

(O); and

(iv) in subparagraph (P)—

(I) by inserting ‘‘University’’ after ‘‘State’’; and

(II) by striking the period and inserting a

semicolon; and

(III) by adding at the end the following:

‘‘(Q) Norfolk State University qualified graduate

programs; and

‘‘(R) Tennessee State University qualified graduate

programs.’’;

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

the following:

‘‘(2) QUALIFIED GRADUATE PROGRAM.—(A) For the purposes

of this section, the term ‘qualified graduate program’ means

a graduate or professional program that provides a program

of instruction in the physical or natural sciences, engineering,

mathematics, or other scientific discipline in which African

Americans are underrepresented and has students enrolled in

such program at the time of application for a grant under

this section.

‘‘(B) Notwithstanding the enrollment requirement contained in subparagraph (A), an institution may use an amount

equal to not more than 10 percent of the institution’s grant

under this section for the development of a new qualified graduate program.

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

under this section prior to October 1, 1998, shall continue

to receive such grants, subject to the availability of appropriated

funds, regardless of the eligibility of the institutions described

in subparagraphs (Q) and (R) of paragraph (1).’’; and

(C) by adding at the end the following:
H. R. 6—65

‘‘(5) INSTITUTIONAL CHOICE.—The president or chancellor

of the institution may decide which graduate or professional

school or qualified graduate program will receive funds under

the grant in any 1 fiscal year, if the allocation of funds among

the schools or programs is delineated in the application for

funds submitted to the Secretary under this section.’’.

(4) FUNDING RULE.—Section 326(f ) (20 U.S.C. 1063b(f ))

is amended—

(A) by striking ‘‘Of the amount appropriated’’ and

inserting ‘‘Subject to subsection (g), of the amount appropriated’’;

(B) in paragraph (1)—

(i) by striking ‘‘$12,000,000’’ and inserting

‘‘$26,600,000’’; and

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

‘‘(A) through (P)’’;

(C) by striking paragraph (2) and inserting the

following:

‘‘(2) any amount in excess of $26,600,000, but not in excess

of $28,600,000, shall be available for the purpose of making

grants to institutions or programs described in subparagraphs

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

‘‘(3) any amount in excess of $28,600,000, shall be made

available to each of the institutions or programs identified

in subparagraphs (A) through (R) pursuant to a formula developed by the Secretary that uses the following elements:

‘‘(A) The ability of the institution to match Federal

funds with non-Federal funds.

‘‘(B) The number of students enrolled in the programs

for which the eligible institution received funding under

this section in the previous year.

‘‘(C) The average cost of education per student, for

all full-time graduate or professional students (or the

equivalent) enrolled in the eligible professional or graduate

school, or for doctoral students enrolled in the qualified

graduate programs.

‘‘(D) The number of students in the previous year who

received their first professional or doctoral degree from

the programs for which the eligible institution received

funding under this section in the previous year.

‘‘(E) The contribution, on a percent basis, of the programs for which the institution is eligible to receive funds

under this section to the total number of African Americans

receiving graduate or professional degrees in the professions or disciplines related to the programs for the previous

year.’’.

(5) HOLD HARMLESS RULE.—Section 326 is further amended

by adding at the end the following new subsection:

‘‘(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2)

and (3) of subsection (f ), no institution or qualified program identified in subsection (e)(1) that received a grant for fiscal year 1998

and that is eligible to receive a grant in a subsequent fiscal year

shall receive a grant amount in any such subsequent fiscal year

that is less than the grant amount received for fiscal year 1998,

unless the amount appropriated is not sufficient to provide such
H. R. 6—66

grant amounts to all such institutions and programs, or the institution cannot provide sufficient matching funds to meet the requirements of this section.’’.

SEC. 305. ENDOWMENT CHALLENGE GRANTS.

Section 331(b) (20 U.S.C. 1065(b)) is amended—

(1) in paragraph (1), by striking ‘‘360’’ and inserting ‘‘399’’;

and

(2) in paragraph (2), by striking subparagraphs (B) and

(C) and inserting the following:

‘‘(B) The Secretary may make a grant under this part to an

eligible institution in any fiscal year if the institution—

‘‘(i) applies for a grant in an amount not exceeding

$500,000; and

‘‘(ii) has deposited in the eligible institution’s endowment

fund established under this section an amount which is equal

to 1⁄2 of the amount of such grant.

‘‘(C) An eligible institution of higher education that is awarded

a grant under subparagraph (B) shall not be eligible to receive

an additional grant under subparagraph (B) until 10 years after

the date on which the grant period terminates.’’.

SEC. 306. HBCU CAPITAL FINANCING.

(a) DEFINITION.—Section 342(5) (as redesignated by section

301(a)(4)) (20 U.S.C. 1132c–1(5)) is amended—

(1) by redesignating subparagraphs (B), (C), and (D) as

subparagraphs (C), (G), and (H), respectively;

(2) by inserting after subparagraph (A) the following:

‘‘(B) a facility for the administration of an educational

program, or a student center or student union, except that

not more than 5 percent of the loan proceeds provided

under this part may be used for the facility, center or

union if the facility, center or union is owned, leased,

managed, or operated by a private business, that, in return

for such use, makes a payment to the eligible institution;’’;

(3) in subparagraph (C) (as redesignated by paragraph

(1)), insert ‘‘technology,’’ after ‘‘instructional equipment’’;

(4) by inserting after subparagraph (C) (as redesignated

by paragraph (1)) the following:

‘‘(D) a maintenance, storage, or utility facility that

is essential to the operation of a facility, a library, a dormitory, equipment, instrumentation, a fixture, real property or an interest therein, described in this paragraph;

‘‘(E) a facility designed to provide primarily outpatient

health care for students or faculty;

‘‘(F) physical infrastructure essential to support the

projects authorized under this paragraph, including roads,

sewer and drainage systems, and water, power, lighting,

telecommunications, and other utilities;’’; and

(5) in subparagraph (H) (as redesignated by paragraph

(2)), by striking ‘‘(C)’’ and inserting ‘‘(G)’’.

(b) RESPONSIBILITIES.—Section 343 (as redesignated by section

301(a)(4)) (20 U.S.C. 1132c–2) is amended—

(1) in subsection (b)(8) (as redesignated by section 301(a)(4))

(20 U.S.C. 1132c–2(b)(8)), by striking ‘‘10 percent’’ each place

the term appears and inserting ‘‘5 percent’’; and

(2) by adding at the end the following:
H. R. 6—67

‘‘(e) Notwithstanding any other provision of law, a qualified

bond guaranteed under this part may be sold to any party that

offers terms that the Secretary determines are in the best interest

of the eligible institution.’’.

(c) TECHNICAL ASSISTANCE.—Section 345 (as redesignated by

section 301(a)(4)) (20 U.S.C. 1132c–4) is amended—

(1) in paragraph (5), by striking ‘‘and’’ after the semicolon;

(2) in paragraph (6), by striking the period and inserting

‘‘; and’’; and

(3) by adding at the end the following:

‘‘(7) may, directly or by grant or contract, provide technical

assistance to eligible institutions to prepare the institutions

to qualify, apply for, and maintain a capital improvement loan,

including a loan under this part.’’.

(d) PROHIBITION.—Section 346 (as redesignated by section

301(a)(4)) (20 U.S.C. 1132c–5) is repealed.

(e) ADVISORY BOARD.—Section 347 (as redesignated by section

301(a)(4)) (20 U.S.C. 1132c–6) is amended—

(1) in subsection (b)—

(A) in subparagraph (D), by inserting ‘‘, or the president’s designee.’’ after the period; and

(B) in subparagraph (E), by inserting ‘‘, or the designee

of the Association’’ before the period; and

(2) by striking subsection (c).

SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT

PROGRAM.

(a) MINORITY SCIENCE AND ENGINEERING IMPROVEMENT

PROGRAM FINDINGS.—Subpart 1 of part E of title III (as redesignated by paragraphs (6) and (7) of section 301) (20 U.S.C. 1135b

et seq.) is amended by inserting after the subpart heading the

following:

‘‘SEC. 350. FINDINGS.

‘‘Congress makes the following findings:

‘‘(1) It is incumbent on the Federal Government to support

the technological and economic competitiveness of the United

States by improving and expanding the scientific and technological capacity of the United States. More and better prepared

scientists, engineers, and technical experts are needed to

improve and expand such capacity.

‘‘(2) As the Nation’s population becomes more diverse, it

is important that the educational and training needs of all

Americans are met. Underrepresentation of minorities in

science and technological fields diminishes our Nation’s

competitiveness by impairing the quantity of well prepared

scientists, engineers, and technical experts in these fields.

‘‘(3) Despite significant limitations in resources, minority

institutions provide an important educational opportunity for

minority students, particularly in science and engineering

fields. Aid to minority institutions is a good way to address

the underrepresentation of minorities in science and technological fields.

‘‘(4) There is a strong Federal interest in improving science

and engineering programs at minority institutions as such programs lag behind in program offerings and in student enrollment compared to such programs at other institutions of higher

education.’’.
H. R. 6—68

(b) ELIGIBILITY FOR GRANTS.—Section 361 (as redesignated by

section 301(a)(7)) (20 U.S.C. 1135d) is amended to read as follows:

‘‘SEC. 361. ELIGIBILITY FOR GRANTS.

‘‘Eligibility to receive grants under this part is limited to—

‘‘(1) public and private nonprofit institutions of higher education that—

‘‘(A) award baccalaureate degrees; and

‘‘(B) are minority institutions;

‘‘(2) public or private nonprofit institutions of higher education that—

‘‘(A) award associate degrees; and

‘‘(B) are minority institutions that—

‘‘(i) have a curriculum that includes science or

engineering subjects; and

‘‘(ii) enter into a partnership with public or private

nonprofit institutions of higher education that award

baccalaureate degrees in science and engineering;

‘‘(3) nonprofit science-oriented organizations, professional

scientific societies, and institutions of higher education that

award baccalaureate degrees, that—

‘‘(A) provide a needed service to a group of minority

institutions; or

‘‘(B) provide in-service training for project directors,

scientists, and engineers from minority institutions; or

‘‘(4) consortia of organizations, that provide needed services

to one or more minority institutions, the membership of which

may include—

‘‘(A) institutions of higher education which have a

curriculum in science or engineering;

‘‘(B) institutions of higher education that have a graduate or professional program in science or engineering;

‘‘(C) research laboratories of, or under contract with,

the Department of Energy;

‘‘(D) private organizations that have science or

engineering facilities; or

‘‘(E) quasi-governmental entities that have a significant

scientific or engineering mission.’’.

(c) DEFINITIONS.—Section 365(4) (as redesignated by section

301(a)(7)) (20 U.S.C. 1135d–5(4)) is amended by inserting ‘‘behavioral,’’ after ‘‘physical,’’.

(d) CONFORMING AMENDMENTS.—The heading for subpart 1 of

part E of title III (as redesignated by paragraphs (6) and (7)

of section 301(a)) is amended by inserting ‘‘and Engineering’’ before

‘‘Improvement Program’’.

SEC. 308. GENERAL PROVISIONS.

(a) APPLICATIONS FOR ASSISTANCE.—Subsection (a) of section

391(a) (as redesignated by section 301(a)(2)) (20 U.S.C. 1066(a))

is amended to read as follows:

‘‘(a) APPLICATIONS.—

‘‘(1) APPLICATIONS REQUIRED.—Any institution which is

eligible for assistance under this title shall submit to the Secretary an application for assistance at such time, in such form,

and containing such information, as may be necessary to enable

the Secretary to evaluate the institution’s need for the assistance. Subject to the availability of appropriations to carry out
H. R. 6—69

this title, the Secretary may approve an application for assistance under this title only if the Secretary determines that—

‘‘(A) the application meets the requirements of subsection (b);

‘‘(B) the applicant is eligible for assistance in accordance with the part of this title under which the assistance

is sought; and

‘‘(C) the applicant’s performance goals are sufficiently

rigorous as to meet the purposes of this title and the

performance objectives and indicators for this title established by the Secretary pursuant to the Government

Performance and Results Act of 1993 and the amendments

made by such Act.

‘‘(2) PRELIMINARY APPLICATIONS.—In carrying out paragraph (1), the Secretary may develop a preliminary application

for use by eligible institutions applying under part A prior

to the submission of the principal application.’’.

(b) APPLICATIONS.—Paragraph (1) of section 391(b) (as redesignated by section 301(a)(2)) (20 U.S.C. 1066(b)) is amended by inserting ‘‘, D or E’’ after ‘‘part C’’.

(c) CONTENTS OF APPLICATIONS.—Section 391(b)(6) (as redesignated by section 301(a)(2)) is amended by inserting before the

semicolon the following: ‘‘, except that for purposes of section 316,

paragraphs (2) and (3) of section 396 shall not apply’’.

(d) WAIVERS.—Section 392(a) (as redesignated by section

301(a)(2)) (20 U.S.C. 1067(a)) is amended—

(1) by striking ‘‘or’’ at the end of paragraph (5);

(2) by redesignating paragraph (6) as paragraph (7); and

(3) by inserting after paragraph (5) the following new paragraph:

‘‘(6) that is a tribally controlled college or university as

defined in section 2 of the Tribally Controlled College or University Assistance Act of 1978; or’’.

(e) APPLICATION REVIEW PROCESS.—Section 393(a) (as redesignated by section 301(a)(2)) (20 U.S.C. 1068(a)) is amended—

(1) in paragraph (2), by striking ‘‘Native American colleges

and universities’’ and inserting ‘‘Tribal Colleges and Universities’’; and

(2) by adding at the end the following:

‘‘(d) EXCLUSION.—The provisions of this section shall not apply

to applications submitted under part D.’’.

(f ) WAIVERS.—Paragraph (2) of section 395(b) (as redesignated

by section 301(a)(2)) (20 U.S.C. 1069b(b)) is amended by striking

‘‘title IV, VII, or VIII’’ and inserting ‘‘part D or title IV’’.

(g) CONTINUATION AWARDS.—Part F of title III is amended

by inserting after section 397 (as redesignated by section 301(a)(2))

(20 U.S.C. 1069d) the following:

‘‘SEC. 398. CONTINUATION AWARDS.

‘‘The Secretary shall make continuation awards under this title

for the second and succeeding years of a grant only after determining that the recipient is making satisfactory progress in carrying

out the grant.’’.

(h) AUTHORIZATION OF APPROPRIATIONS.—Section 399(a) (as

redesignated by section 301(a)(2)) (20 U.S.C. 1069f) is amended—

(1) in paragraph (1)—
H. R. 6—70

(A) in subparagraph (A), by striking ‘‘1993’’ and inserting ‘‘1999’’;

(B) in subparagraph (B)—

(i) in clause (i), by striking ‘‘$45,000,000 for fiscal

year 1993’’ and inserting ‘‘$10,000,000 for fiscal year

1999’’;

(ii) by striking clause (ii); and

(iii) by striking ‘‘(B)(i) There’’ and inserting ‘‘(B)

There’’; and

(C) by adding at the end the following:

‘‘(C) There are authorized to be appropriated to carry out

section 317, $5,000,000 for fiscal year 1999 and such sums

as may be necessary for each of the 4 succeeding fiscal years.’’;

(2) in paragraph (2)—

(A) in subparagraph (A), by striking ‘‘1993’’ and inserting ‘‘1999’’; and

(B) in subparagraph (B), by striking ‘‘$20,000,000 for

fiscal year 1993’’ and inserting ‘‘$35,000,000 for fiscal year

1999’’;

(3) in paragraph (3), by striking ‘‘$50,000,000 for fiscal

year 1993’’ and inserting ‘‘$10,000,000 for fiscal year 1999’’;

(4) by adding at the end the following:

‘‘(4) PART D.—(A) There are authorized to be appropriated

to carry out part D (other than section 345(7), but including

section 347), $110,000 for fiscal year 1999, and such sums

as may be necessary for each of the 4 succeeding fiscal years.

‘‘(B) There are authorized to be appropriated to carry out

section 345(7), such sums as may be necessary for fiscal year

1999 and each of the 4 succeeding fiscal years.

‘‘(5) PART E.—There are authorized to be appropriated to carry out part E, $10,000,000 for fiscal year 1999, and such

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

years.’’; and

(5) by striking subsections (c), (d), and (e).

TITLE IV—STUDENT ASSISTANCE

PART A—GRANTS TO STUDENTS

SEC. 401. FEDERAL PELL GRANTS.

(a) EXTENSION OF AUTHORITY.—Section 401(a)(1) (20 U.S.C.

1070a(a)(1)) is amended—

(1) in the first sentence, by striking ‘‘The Secretary shall,

during the period beginning July 1, 1972, and ending September

30, 1998,’’ and inserting ‘‘For each fiscal year through fiscal

year 2004, the Secretary shall’’; and

(2) in the second sentence, by inserting ‘‘until such time

as the Secretary determines and publishes in the Federal Register with an opportunity for comment, an alternative payment

system that provides payments to institutions in an accurate

and timely manner,’’ after ‘‘pay eligible students’’.

(b) AMOUNT OF GRANT.—Paragraph (2)(A) of section 401(b)

is amended to read as follows:

‘‘(2)(A) The amount of the Federal Pell Grant for a student

eligible under this part shall be—

‘‘(i) $4,500 for academic year 1999–2000;
H. R. 6—71

‘‘(ii) $4,800 for academic year 2000–2001;

‘‘(iii) $5,100 for academic year 2001–2002;

‘‘(iv) $5,400 for academic year 2002–2003; and

‘‘(v) $5,800 for academic year 2003–2004,

less an amount equal to the amount determined to be the expected

family contribution with respect to that student for that year.’’.

(c) RELATION OF MAXIMUM GRANT TO TUITION AND EXPENSES.—

Paragraph (3) of section 401(b) is amended to read as follows:

‘‘(3)(A) For any academic year for which an appropriation Act

provides a maximum basic grant in an amount in excess of $2,700,

the amount of a student’s basic grant shall equal $2,700 plus—

‘‘(i) one-half of the amount by which such maximum basic

grant exceeds $2,700; plus

‘‘(ii) the lesser of—

‘‘(I) the remaining one-half of such excess; or

‘‘(II) the sum of the student’s tuition and, if the student

has dependent care expenses (as described in section

472(8)) or disability-related expenses (as described in section 472(9)), an allowance determined by the institution

for such expenses.

‘‘(B) An institution that charged only fees in lieu of tuition

as of October 1, 1998, may include in the institution’s determination

of tuition charged, fees that would normally constitute tuition.’’.

(d) REGULATIONS FOR MULTIPLE AWARDS.—Section 401(b)(6)

is amended—

(1) by redesignating subparagraphs (A) and (B) as clauses

(i) and (ii), respectively;

(2) by inserting ‘‘(A)’’ after the paragraph designation; and

(3) by adding at the end the following:

‘‘(B) The Secretary shall promulgate regulations implementing

this paragraph.’’.

(e) TIME LIMIT TO RECEIVE GRANTS.—Section 401(c) is amended

by adding at the end the following:

‘‘(4) Notwithstanding paragraph (1), the Secretary may allow,

on a case-by-case basis, a student to receive a basic grant if the

student—

‘‘(A) is carrying at least one-half the normal full-time work

load for the course of study the student is pursuing, as determined by the institution of higher education; and

‘‘(B) is enrolled or accepted for enrollment in a

postbaccalaureate program that does not lead to a graduate

degree, and in courses required by a State in order for the

student to receive a professional certification or licensing

credential that is required for employment as a teacher in

an elementary school or secondary school in that State,

except that this paragraph shall not apply to a student who is

enrolled in an institution of higher education that offers a baccalaureate degree in education.’’.

(f ) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.—

Section 401 is amended by adding at the end the following:

‘‘( j) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.—

‘‘(1) IN GENERAL.—No institution of higher education shall

be an eligible institution for purposes of this subpart if such

institution of higher education is ineligible to participate in

a loan program under part B or D as a result of a final

default rate determination made by the Secretary under part
H. R. 6—72

B or D after the final publication of cohort default rates for

fiscal year 1996 or a succeeding fiscal year.

‘‘(2) SANCTIONS SUBJECT TO APPEAL OPPORTUNITY.—No

institution may be subject to the terms of this subsection unless

the institution has had the opportunity to appeal the institution’s default rate determination under regulations issued by

the Secretary for the loan program authorized under part B

or D, as applicable. This subsection shall not apply to an

institution that was not participating in the loan program

authorized under part B or D on the date of enactment of

the Higher Education Amendments of 1998, unless the institution subsequently participates in the loan programs.’’.

(g) CONFORMING AMENDMENTS.— (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by

striking ‘‘basic educational opportunity grants’’ and inserting

‘‘Federal Pell Grants’’.

(2) The heading of subpart 1 of part A of title IV (20

U.S.C. 1070a et seq.) is amended to read as follows:

‘‘Subpart 1—Federal Pell Grants’’.

(3) Section 401 is amended—

(A) in the heading of the section, by striking ‘‘BASIC

EDUCATIONAL OPPORTUNITY’’ and inserting ‘‘FEDERAL

PELL’’;

(B) in subsection (a)(3), by striking ‘‘Basic grants’’ and

inserting ‘‘Grants’’;

(C) by striking ‘‘basic grant’’ each place the term

appears and inserting ‘‘Federal Pell Grant’’; and

(D) by striking ‘‘basic grants’’ each place the term

appears and inserting ‘‘Federal Pell Grants’’.

(4) Section 401(f )(3) is amended by striking ‘‘Education

and Labor’’ and inserting ‘‘Education and the Workforce’’.

(5) Section 452(c) (20 U.S.C. 1087b(c)) is amended by striking ‘‘basic grants’’ and inserting ‘‘Federal Pell Grants’’.

(6) Subsections ( j)(2) and (k)(3) of section 455 (20 U.S.C.

1087e) are each amended by striking ‘‘basic grants’’ and inserting ‘‘Federal Pell Grants’’.

SEC. 402. FEDERAL TRIO PROGRAMS.

(a) PROGRAM AUTHORITY; AUTHORIZATION OF APPROPRIA- TIONS.—(1) DURATION OF GRANTS.—Section 402A(b)(2) (20 U.S.C.

1070a–11(b)(2)) is amended—

(A) by striking ‘‘and’’ at the end of subparagraph (A);

(B) by striking the period at the end of subparagraph

(B) and inserting ‘‘; and’’; and

(C) by inserting after subparagraph (B) the following

new subparagraph:

‘‘(C) grants under section 402H shall be awarded for

a period determined by the Secretary.’’.

(2) MINIMUM GRANTS.—Section 402A(b)(3) is amended to

read as follows:

‘‘(3) MINIMUM GRANTS.—Unless the institution or agency

requests a smaller amount, individual grants under this chapter

shall be no less than—

‘‘(A) $170,000 for programs authorized by sections 402D

and 402G;
H. R. 6—73

‘‘(B) $180,000 for programs authorized by sections 402B

and 402F; and

‘‘(C) $190,000 for programs authorized by sections 402C

and 402E.’’.

(3) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.—

Subsection (c) of section 402A is amended to read as follows:

‘‘(c) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.—

‘‘(1) APPLICATION REQUIREMENTS.—An eligible entity that

desires to receive a grant or contract under this chapter shall

submit an application to the Secretary in such manner and

form, and containing such information and assurances, as the

Secretary may reasonably require.

‘‘(2) PRIOR EXPERIENCE.—In making grants under this chapter, the Secretary shall consider each applicant’s prior experience of service delivery under the particular program for which

funds are sought. The level of consideration given the factor

of prior experience shall not vary from the level of consideration

given such factor during fiscal years 1994 through 1997, except

that grants made under section 402H shall not be given prior

experience consideration.

‘‘(3) ORDER OF AWARDS; PROGRAM FRAUD.—(A) Except with

respect to grants made under sections 402G and 402H and

as provided in subparagraph (B), the Secretary shall award

grants and contracts under this chapter in the order of the

scores received by the application for such grant or contract

in the peer review process required under paragraph (4) and

adjusted for prior experience in accordance with paragraph

(2) of this subsection.

‘‘(B) The Secretary is not required to provide assistance

to a program otherwise eligible for assistance under this chapter, if the Secretary has determined that such program has

involved the fraudulent use of funds under this chapter.

‘‘(4) PEER REVIEW PROCESS.—(A) The Secretary shall ensure

that, to the extent practicable, members of groups underrepresented in higher education, including African Americans, Hispanics, Native Americans, Alaska Natives, Asian Americans,

and Native American Pacific Islanders (including Native

Hawaiians), are represented as readers of applications submitted under this chapter. The Secretary shall also ensure that

persons from urban and rural backgrounds are represented

as readers.

‘‘(B) The Secretary shall ensure that each application

submitted under this chapter is read by at least three readers

who are not employees of the Federal Government (other than

as readers of applications).

‘‘(5) NUMBER OF APPLICATIONS FOR GRANTS AND CONTRACTS.—The Secretary shall not limit the number of applications submitted by an entity under any program authorized

under this chapter if the additional applications describe programs serving different populations or campuses.

‘‘(6) COORDINATION WITH OTHER PROGRAMS FOR DISADVANTAGED STUDENTS.—The Secretary shall encourage coordination

of programs assisted under this chapter with other programs

for disadvantaged students operated by the sponsoring institution or agency, regardless of the funding source of such programs. The Secretary shall not limit an entity’s eligibility to

receive funds under this chapter because such entity sponsors
H. R. 6—74

a program similar to the program to be assisted under this

chapter, regardless of the funding source of such program.

The Secretary shall permit the Director of a program receiving

funds under this chapter to administer one or more additional

programs for disadvantaged students operated by the sponsoring institution or agency, regardless of the funding sources

of such programs.

‘‘(7) APPLICATION STATUS.—The Secretary shall inform each

entity operating programs under this chapter regarding the

status of their application for continued funding at least 8

months prior to the expiration of the grant or contract. The

Secretary, in the case of an entity that is continuing to operate

a successful program under this chapter, shall ensure that

the start-up date for a new grant or contract for such program

immediately follows the termination of the preceding grant

or contract so that no interruption of funding occurs for such

successful reapplicants. The Secretary shall inform each entity

requesting assistance under this chapter for a new program

regarding the status of their application at least 8 months

prior to the proposed startup date of such program.’’.

(4) AUTHORIZATION OF APPROPRIATIONS.—Section 402A(f )

is amended by striking ‘‘$650,000,000 for fiscal year 1993’’

and inserting ‘‘$700,000,000 for fiscal year 1999’’.

(5) WAIVER.—Section 402A(g) is amended by adding at

the end the following:

‘‘(4) WAIVER.—The Secretary may waive the service requirements in subparagraph (A) or (B) of paragraph (3) if the Secretary determines the application of the service requirements

to a veteran will defeat the purpose of a program under this

chapter.’’.

(b) TALENT SEARCH.—Section 402B(b) (20 U.S.C. 1070a–12(b))

is amended—

(1) by striking paragraph (4) and inserting the following:

‘‘(4) guidance on and assistance in secondary school reentry,

entry to general educational development (GED) programs,

other alternative education programs for secondary school dropouts, or postsecondary education;’’;

(2) in paragraph (5), by inserting ‘‘, or activities designed

to acquaint individuals from disadvantaged backgrounds with

careers in which the individuals are particularly underrepresented’’ before the semicolon;

(3) in paragraph (8), by striking ‘‘parents’’ and inserting

‘‘families’’; and

(4) in paragraph (9), by inserting ‘‘or counselors’’ after

‘‘teachers’’.

(c) UPWARD BOUND.—Section 402C (20 U.S.C. 1070a–13) is

amended—

(1) in subsection (b)—

(A) in paragraph (2), by striking ‘‘personal counseling’’

and inserting ‘‘counseling and workshops’’;

(B) in paragraph (9)—

(i) by inserting ‘‘or counselors’’ after ‘‘teachers’’;

and

(ii) by striking ‘‘and’’ after the semicolon;

(C) by redesignating paragraph (10) as paragraph (12);

(D) by inserting after paragraph (9) the following:
H. R. 6—75

‘‘(10) work-study positions where youth participating in

the project are exposed to careers requiring a postsecondary

degree;

‘‘(11) special services to enable veterans to make the transition to postsecondary education; and’’; and

(E) in paragraph (12) (as redesignated by subparagraph

(C)), by striking ‘‘(9)’’ and inserting ‘‘(11)’’; and

(2) in subsection (e), by striking ‘‘and not in excess of

$40 per month during the remaining period of the year.’’ and

inserting ‘‘except that youth participating in a work-study position under subsection (b)(10) may be paid a stipend of $300

per month during June, July, and August. Youths participating

in a project proposed to be carried out under any application

may be paid stipends not in excess of $40 per month during

the remaining period of the year.’’.

(d) STUDENT SUPPORT SERVICES.—Paragraph (6) of section

402D(c) (20 U.S.C. 1070a–14(c)(6)) is amended to read as follows:

‘‘(6) consider, in addition to such other criteria as the

Secretary may prescribe, the institution’s effort, and where

applicable past history, in—

‘‘(A) providing sufficient financial assistance to meet

the full financial need of each student in the project; and

‘‘(B) maintaining the loan burden of each such student

at a manageable level.’’.

(e) POSTBACCALAUREATE ACHIEVEMENT PROGRAM.—Section

402E(e)(1) (20 U.S.C. 1070a–15(e)(1)) is amended by striking

‘‘$2,400’’ and inserting ‘‘$2,800’’.

(f ) STAFF DEVELOPMENT ACTIVITIES.—Section 402G (20 U.S.C.

1070a–17) is amended—

(1) in subsection (a), by inserting ‘‘participating in,’’ after

‘‘leadership personnel employed in,’’; and

(2) in subsection (b), by inserting after paragraph (3) the

following new paragraph:

‘‘(4) The use of appropriate educational technology in the

operation of projects assisted under this chapter.’’.

(g) EVALUATION AND DISSEMINATION.—Section 402H (20 U.S.C.

1070a–18) is amended to read as follows:

‘‘SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT

AND DISSEMINATION PARTNERSHIP PROJECTS.

‘‘(a) EVALUATIONS.— ‘‘(1) IN GENERAL.—For the purpose of improving the

effectiveness of the programs and projects assisted under this

chapter, the Secretary may make grants to or enter into contracts with institutions of higher education and other public

and private institutions and organizations to evaluate the

effectiveness of the programs and projects assisted under this

chapter.

‘‘(2) PRACTICES.—The evaluations described in paragraph

(1) shall identify institutional, community, and program or

project practices that are particularly effective in enhancing

the access of low-income individuals and first-generation college

students to postsecondary education, the preparation of the

individuals and students for postsecondary education, and the

success of the individuals and students in postsecondary education. Such evaluations shall also investigate the effectiveness

of alternative and innovative methods within Federal TRIO
H. R. 6—76

programs of increasing access to, and retention of, students

in postsecondary education.

‘‘(b) GRANTS.—The Secretary may award grants to institutions

of higher education or other private and public institutions and

organizations, that are carrying out a program or project assisted

under this chapter prior to the date of enactment of the Higher

Education Amendments of 1998, to enable the institutions and

organizations to expand and leverage the success of such programs

or projects by working in partnership with other institutions,

community-based organizations, or combinations of such institutions

and organizations, that are not receiving assistance under this

chapter and are serving low-income students and first generation

college students, in order to—

‘‘(1) disseminate and replicate best practices of programs

or projects assisted under this chapter; and

‘‘(2) provide technical assistance regarding programs and

projects assisted under this chapter.

‘‘(c) RESULTS.—In order to improve overall program or project

effectiveness, the results of evaluations and grants described in

this section shall be disseminated by the Secretary to similar programs or projects assisted under this subpart, as well as other

individuals concerned with postsecondary access for and retention

of low-income individuals and first-generation college students.’’.

SEC. 403. GEAR UP PROGRAM.

Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 1070a–

21 et seq.) is amended to read as follows:

‘‘CHAPTER 2—GAINING EARLY AWARENESS

AND READINESS FOR UNDERGRADUATE

PROGRAMS

‘‘SEC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PROGRAM AUTHORIZED.

‘‘(a) PROGRAM AUTHORIZED.—The Secretary is authorized, in

accordance with the requirements of this chapter, to establish a

program that—

‘‘(1) encourages eligible entities to provide or maintain a

guarantee to eligible low-income students who obtain a secondary school diploma (or its recognized equivalent), of the financial

assistance necessary to permit the students to attend an institution of higher education; and

‘‘(2) supports eligible entities in providing—

‘‘(A) additional counseling, mentoring, academic support, outreach, and supportive services to elementary

school, middle school, and secondary school students who

are at risk of dropping out of school; and

‘‘(B) information to students and their parents about

the advantages of obtaining a postsecondary education and

the college financing options for the students and their

parents.

‘‘(b) AWARDS.—

‘‘(1) IN GENERAL.—From funds appropriated under section

404H for each fiscal year, the Secretary shall make awards
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to eligible entities described in paragraphs (1) and (2) of subsection (c) to enable the entities to carry out the program

authorized under subsection (a).

‘‘(2) PRIORITY.—In making awards to eligible entities

described in paragraph (c)(1), the Secretary shall—

‘‘(A) give priority to eligible entities that—

‘‘(i) on the day before the date of enactment of

the Higher Education Amendments of 1998, carried

out successful educational opportunity programs under

this chapter (as this chapter was in effect on such

day); and

‘‘(ii) have a prior, demonstrated commitment to

early intervention leading to college access through

collaboration and replication of successful strategies;

‘‘(B) ensure that students served under this chapter

on the day before the date of enactment of the Higher

Education Amendments of 1998 continue to receive assistance through the completion of secondary school.

‘‘(c) DEFINITION OF ELIGIBLE ENTITY.—For the purposes of this

chapter, the term ‘eligible entity’ means—

‘‘(1) a State; or

‘‘(2) a partnership consisting of—

‘‘(A) one or more local educational agencies acting on

behalf of—

‘‘(i) one or more elementary schools or secondary

schools; and

‘‘(ii) the secondary schools that students from the

schools described in clause (i) would normally attend;

‘‘(B) one or more degree granting institutions of higher

education; and

‘‘(C) at least two community organizations or entities,

such as businesses, professional associations, communitybased organizations, philanthropic organizations, State

agencies, institutions or agencies sponsoring programs

authorized under subpart 4, or other public or private

agencies or organizations.

‘‘SEC. 404B. REQUIREMENTS.

‘‘(a) FUNDING RULES.— ‘‘(1) CONTINUATION AWARDS.—From the amount appropriated under section 404H for a fiscal year, the Secretary

shall continue to award grants to States under this chapter

(as this chapter was in effect on the day before the date of

enactment of the Higher Education Amendments of 1998) in

accordance with the terms and conditions of such grants.

‘‘(2) DISTRIBUTION.—From the amount appropriated under

section 404H that remains after making continuation awards

under paragraph (1) for a fiscal year, the Secretary shall—

‘‘(A) make available—

‘‘(i) not less than 33 percent of the amount to

eligible entities described in section 404A(c)(1); and

‘‘(ii) not less than 33 percent of the amount to

eligible entities described in section 404A(c)(2); and

‘‘(B) award the remainder of the amount to eligible

entities described in paragraph (1) or (2) of section 404A(c).

‘‘(3) SPECIAL RULE.—The Secretary shall annually

reevaluate the distribution of funds described in paragraph
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(2)(B) based on number, quality, and promise of the applications

and adjust the distribution accordingly.’’.

‘‘(b) LIMITATION.—Each eligible entity described in section

404A(c)(1), and each eligible entity described in section 404A(c)(2)

that conducts a scholarship component under section 404E, shall

use not less than 25 percent and not more than 50 percent of

grant funds received under this chapter for the early intervention

component of an eligible entity’s program under this chapter, except

that the Secretary may waive the 50 percent limitation if the

eligible entity demonstrates that the eligible entity has another

means of providing the students with financial assistance that

is described in the plan submitted under section 404C.

‘‘(c) COORDINATION.—Each eligible entity shall ensure that the

activities assisted under this chapter are, to the extent practicable,

coordinated with, and complement and enhance—

‘‘(1) services under this chapter provided by other eligible

entities serving the same school district or State; and

‘‘(2) related services under other Federal or non-Federal

programs.

‘‘(d) DESIGNATION OF FISCAL AGENT.—An eligible entity

described in section 404A(c)(2) shall designate an institution of

higher education or a local educational agency as the fiscal agent

for the eligible entity.

‘‘(e) COORDINATORS.—An eligible entity described in section

404A(c)(2) shall have a full-time program coordinator or a parttime program coordinator, whose primary responsibility is a project

under section 404C.

‘‘(f ) DISPLACEMENT.—An eligible entity described in 404A(c)(2)

shall ensure that the activities assisted under this chapter will

not displace an employee or eliminate a position at a school assisted

under this chapter, including a partial displacement such as a

reduction in hours, wages or employment benefits.

‘‘(g) COHORT APPROACH.—

‘‘(1) IN GENERAL.—The Secretary shall require that eligible

entities described in section 404A(c)(2)—

‘‘(A) provide services under this chapter to at least

one grade level of students, beginning not later than 7th

grade, in a participating school that has a 7th grade and

in which at least 50 percent of the students enrolled are

eligible for free or reduced-price lunch under the National

School Lunch Act (or, if an eligible entity determines that

it would promote the effectiveness of a program, an entire

grade level of students, beginning not later than the 7th

grade, who reside in public housing as defined in section

3(b)(1) of the United States Housing Act of 1937); and

‘‘(B) ensure that the services are provided through

the 12th grade to students in the participating grade level.

‘‘(2) COORDINATION REQUIREMENT.—In order for the Secretary to require the cohort approach described in paragraph

(1), the Secretary shall, where applicable, ensure that the cohort

approach is done in coordination and collaboration with existing

early intervention programs and does not duplicate the services

already provided to a school or community.

‘‘SEC. 404C. ELIGIBLE ENTITY PLANS.

‘‘(a) PLAN REQUIRED FOR ELIGIBILITY.—
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‘‘(1) IN GENERAL.—In order for an eligible entity to qualify

for a grant under this chapter, the eligible entity shall submit

to the Secretary a plan for carrying out the program under

this chapter. Such plan shall provide for the conduct of a

scholarship component if required or undertaken pursuant to

section 404E and an early intervention component required

pursuant to section 404D.

‘‘(2) CONTENTS.—Each plan submitted pursuant to paragraph (1) shall be in such form, contain or be accompanied

by such information or assurances, and be submitted at such

time as the Secretary may require by regulation. Each such

plan shall—

‘‘(A) describe the activities for which assistance under

this chapter is sought; and

‘‘(B) provide such additional assurances as the Secretary determines necessary to ensure compliance with the

requirements of this chapter.

‘‘(b) MATCHING REQUIREMENT.—

‘‘(1) IN GENERAL.—The Secretary shall not approve a plan

submitted under subsection (a) unless such plan—

‘‘(A) provides that the eligible entity will provide, from

State, local, institutional, or private funds, not less than

50 percent of the cost of the program, which matching

funds may be provided in cash or in kind;

‘‘(B) specifies the methods by which matching funds

will be paid; and

‘‘(C) includes provisions designed to ensure that funds

provided under this chapter shall supplement and not supplant funds expended for existing programs.

‘‘(2) SPECIAL RULE.—Notwithstanding the matching requirement described in paragraph (1)(A), the Secretary may by regulation modify the percentage requirement described in paragraph (1)(A) for eligible entities described in section 404A(c)(2).

‘‘(c) METHODS FOR COMPLYING WITH MATCHING REQUIRE- MENT.—An eligible entity may count toward the matching requirement described in subsection (b)(1)(A)—

‘‘(1) the amount of the financial assistance paid to students

from State, local, institutional, or private funds under this

chapter;

‘‘(2) the amount of tuition, fees, room or board waived

or reduced for recipients of financial assistance under this

chapter; and

‘‘(3) the amount expended on documented, targeted, longterm mentoring and counseling provided by volunteers or paid

staff of nonschool organizations, including businesses, religious

organizations, community groups, postsecondary educational

institutions, nonprofit and philanthropic organizations, and

other organizations.

‘‘(d) PEER REVIEW PANELS.—The Secretary shall convene peer

review panels to assist in making determinations regarding the

awarding of grants under this chapter.

‘‘SEC. 404D. EARLY INTERVENTION.

‘‘(a) SERVICES.—

‘‘(1) IN GENERAL.—In order to receive a grant under this

chapter, an eligible entity shall demonstrate to the satisfaction

of the Secretary, in the plan submitted under section 404C,
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that the eligible entity will provide comprehensive mentoring,

counseling, outreach, and supportive services to students

participating in programs under this chapter. Such counseling

shall include—

‘‘(A) financial aid counseling and information regarding

the opportunities for financial assistance under this title;

and

‘‘(B) activities or information regarding—

‘‘(i) fostering and improving parent involvement

in promoting the advantages of a college education,

academic admission requirements, and the need to take

college preparation courses;

‘‘(ii) college admissions and achievement tests; and

‘‘(iii) college application procedures.

‘‘(2) METHODS.—The eligible entity shall demonstrate

in such plan, pursuant to regulations of the Secretary,

the methods by which the eligible entity will target services

on priority students described in subsection (c), if

applicable.

‘‘(b) USES OF FUNDS.—

‘‘(1) IN GENERAL.—The Secretary shall, by regulation, establish criteria for determining whether comprehensive mentoring,

counseling, outreach, and supportive services programs may

be used to meet the requirements of subsection (a).

‘‘(2) PERMISSIBLE ACTIVITIES.—Examples of activities that

meet the requirements of subsection (a) include the following:

‘‘(A) Providing eligible students in preschool through

grade 12 with a continuing system of mentoring and advising that—

‘‘(i) is coordinated with the Federal and State

community service initiatives; and

‘‘(ii) may include such support services as after

school and summer tutoring, assistance in obtaining

summer jobs, career mentoring, and academic counseling.

‘‘(B) Requiring each student to enter into an agreement

under which the student agrees to achieve certain academic

milestones, such as completing a prescribed set of courses

and maintaining satisfactory progress described in section

484(c), in exchange for receiving tuition assistance for a

period of time to be established by each eligible entity.

‘‘(C) Activities designed to ensure secondary school

completion and college enrollment of at-risk children, such

as identification of at-risk children, after school and summer tutoring, assistance in obtaining summer jobs, academic counseling, volunteer and parent involvement,

providing former or current scholarship recipients as mentor or peer counselors, skills assessment, providing access

to rigorous core courses that reflect challenging academic

standards, personal counseling, family counseling and home

visits, staff development, and programs and activities

described in this subparagraph that are specially designed

for students of limited English proficiency.

‘‘(D) Summer programs for individuals who are in their

sophomore or junior years of secondary school or are planning to attend an institution of higher education in the

succeeding academic year that—
H. R. 6—81

‘‘(i) are carried out at an institution of higher

education that has programs of academic year supportive services for disadvantaged students through

projects authorized under section 402D or through comparable projects funded by the State or other sources;

‘‘(ii) provide for the participation of the individuals

who are eligible for assistance under section 402D

or who are eligible for comparable programs funded

by the State;

‘‘(iii)(I) provide summer instruction in remedial,

developmental or supportive courses;

‘‘(II) provide such summer services as counseling,

tutoring, or orientation; and

‘‘(III) provide financial assistance to the individuals

to cover the individuals’ summer costs for books, supplies, living costs, and personal expenses; and

‘‘(iv) provide the individuals with financial assistance during each academic year the individuals are

enrolled at the participating institution after the summer program.

‘‘(E) Requiring eligible students to meet other standards or requirements as the State determines necessary

to meet the purposes of this section.

‘‘(c) PRIORITY STUDENTS.—For eligible entities not using a

cohort approach, the eligible entity shall treat as priority students

any student in preschool through grade 12 who is eligible—

‘‘(1) to be counted under section 1124(c) of the Elementary

and Secondary Education Act of 1965;

‘‘(2) for free or reduced price meals under the National

School Lunch Act; or

‘‘(3) for assistance pursuant to part A of title IV of the

Social Security Act.

‘‘(d) ALLOWABLE PROVIDERS.—In the case of eligible entities

described in section 404A(c)(1), the activities required by this section

may be provided by service providers such as community-based

organizations, schools, institutions of higher education, public and

private agencies, nonprofit and philanthropic organizations,

businesses, institutions and agencies sponsoring programs authorized under subpart 4, and other organizations the State deems

appropriate.

‘‘SEC. 404E. SCHOLARSHIP COMPONENT.

‘‘(a) IN GENERAL.— ‘‘(1) STATES.—In order to receive a grant under this chapter,

an eligible entity described in section 404A(c)(1) shall establish

or maintain a financial assistance program that awards scholarships to students in accordance with the requirements of this

section. The Secretary shall encourage the eligible entity to

ensure that a scholarship provided pursuant to this section

is available to an eligible student for use at any institution

of higher education.

‘‘(2) PARTNERSHIPS.—An eligible entity described in section

404A(c)(2) may award scholarships to eligible students in

accordance with the requirements of this section.

‘‘(b) GRANT AMOUNTS.—The maximum amount of a scholarship

that an eligible student shall be eligible to receive under this

section shall be established by the eligible entity. The minimum
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amount of the scholarship for each fiscal year shall not be less

than the lesser of—

‘‘(1) 75 percent of the average cost of attendance for an

in-State student, in a 4-year program of instruction, at public

institutions of higher education in such State, as determined

in accordance with regulations prescribed by the Secretary;

or

‘‘(2) the maximum Federal Pell Grant funded under section

401 for such fiscal year.

‘‘(c) RELATION TO OTHER ASSISTANCE.—Scholarships provided

under this section shall not be considered for the purpose of awarding Federal grant assistance under this title, except that in no

case shall the total amount of student financial assistance awarded

to a student under this title exceed such student’s total cost of

attendance.

‘‘(d) ELIGIBLE STUDENTS.—A student eligible for assistance

under this section is a student who—

‘‘(1) is less than 22 years old at time of first scholarship

award under this section;

‘‘(2) receives a secondary school diploma or its recognized

equivalent on or after January 1, 1993;

‘‘(3) is enrolled or accepted for enrollment in a program

of undergraduate instruction at an institution of higher education that is located within the State’s boundaries, except

that, at the State’s option, an eligible entity may offer scholarship program portability for recipients who attend institutions

of higher education outside such State; and

‘‘(4) who participated in the early intervention component

required under section 404D.

‘‘(e) PRIORITY.—The Secretary shall ensure that each eligible

entity places a priority on awarding scholarships to students who

will receive a Federal Pell Grant for the academic year for which

the scholarship is awarded under this section.

‘‘(f ) SPECIAL RULE.—An eligible entity may consider students

who have successfully participated in programs funded under chapter 1 to have met the requirements of subsection (d)(4).

‘‘SEC. 404F. 21ST CENTURY SCHOLAR CERTIFICATES.

‘‘(a) AUTHORITY.—The Secretary, using funds appropriated

under section 404H that do not exceed $200,000 for a fiscal year—

‘‘(1) shall ensure that certificates, to be known as 21st

Century Scholar Certificates, are provided to all students

participating in programs under this chapter; and

‘‘(2) may, as practicable, ensure that such certificates are

provided to all students in grades 6 through 12 who attend

schools at which at least 50 percent of the students enrolled

are eligible for a free or reduced price lunch under the National

School Lunch Act.

‘‘(b) INFORMATION REQUIRED.—A 21st Century Scholar Certificate shall be personalized for each student and indicate the amount

of Federal financial aid for college which a student may be eligible

to receive.

‘‘SEC. 404G. EVALUATION AND REPORT.

‘‘(a) EVALUATION.—Each eligible entity receiving a grant under

this chapter shall biennially evaluate the activities assisted under
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this chapter in accordance with the standards described in subsection (b) and shall submit to the Secretary a copy of such evaluation. The evaluation shall permit service providers to track eligible

student progress during the period such students are participating

in the activities and shall be consistent with the standards developed by the Secretary pursuant to subsection (b).

‘‘(b) EVALUATION STANDARDS.—The Secretary shall prescribe

standards for the evaluation described in subsection (a). Such standards shall—

‘‘(1) provide for input from eligible entities and service

providers; and

‘‘(2) ensure that data protocols and procedures are consistent and uniform.

‘‘(c) FEDERAL EVALUATION.—In order to evaluate and improve

the impact of the activities assisted under this chapter, the Secretary shall, from not more than 0.75 percent of the funds appropriated under section 404H for a fiscal year, award one or more

grants, contracts, or cooperative agreements to or with public and

private institutions and organizations, to enable the institutions

and organizations to evaluate the effectiveness of the program

and, as appropriate, disseminate the results of the evaluation.

‘‘(d) REPORT.—The Secretary shall biennially report to Congress

regarding the activities assisted under this chapter and the evaluations conducted pursuant to this section.

‘‘SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

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

chapter $200,000,000 for fiscal year 1999 and such sums as may

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

SEC. 404. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS.

Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 1070a–

31 et seq.) is amended to read as follows:

‘‘CHAPTER 3—ACADEMIC ACHIEVEMENT INCENTIVE

SCHOLARSHIPS

‘‘SEC. 406A. SCHOLARSHIPS AUTHORIZED.

‘‘The Secretary is authorized to award scholarships to students

who graduate from secondary school after May 1, 2000, to enable

the students to pay the cost of attendance at an institution of

higher education during the students first 2 academic years of

undergraduate education, if the students—

‘‘(1) are eligible to receive Federal Pell Grants for the

year in which the scholarships are awarded; and

‘‘(2) demonstrate academic achievement by graduating in

the top 10 percent of their secondary school graduating class.

‘‘SEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS.

‘‘(a) AMOUNT OF AWARD.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

the amount of a scholarship awarded under this chapter for

any academic year shall be equal to 100 percent of the amount

of the Federal Pell Grant for which the recipient is eligible

for the academic year.

‘‘(2) ADJUSTMENT FOR INSUFFICIENT APPROPRIATIONS.—If,

after the Secretary determines the total number of eligible

applicants for an academic year in accordance with section
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406C, funds available to carry out this chapter for the academic

year are insufficient to fully fund all awards under this chapter

for the academic year, the amount of the scholarship paid

to each student under this chapter shall be reduced proportionately.

‘‘(b) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE.—A

scholarship awarded under this chapter to any student, in combination with the Federal Pell Grant assistance and other student

financial assistance available to such student, may not exceed the

student’s cost of attendance.

‘‘SEC. 406C. ELIGIBILITY OF SCHOLARS.

‘‘(a) PROCEDURES ESTABLISHED BY REGULATION.—The Secretary

shall establish by regulation procedures for the determination of

eligibility of students for the scholarships awarded under this chapter. Such procedures shall include measures to prevent any secondary school from certifying more than 10 percent of the school’s

students for eligibility under this section.

‘‘(b) COORDINATION.—In prescribing procedures under subsection (a), the Secretary shall ensure that the determination of

eligibility and the amount of the scholarship is determined in a

timely and accurate manner consistent with the requirements of

section 482 and the submission of the financial aid form required

by section 483. For such purposes, the Secretary may provide that,

for the first academic year of a student’s 2 academic years of

eligibility under this chapter, class rank may be determined prior

to graduation from secondary school, at such time and in such

manner as the Secretary may specify in regulations prescribed

under this chapter.

‘‘SEC. 406D. STUDENT REQUIREMENTS.

‘‘(a) IN GENERAL.—Each eligible student desiring a scholarship

under this chapter shall submit an application to the Secretary

at such time, in such manner, and containing such information

as the Secretary may reasonably require.

‘‘(b) CONTINUING ELIGIBILITY.—In order for a student to continue to be eligible to receive a scholarship under this chapter

for the second year of undergraduate education, the eligible student

shall maintain eligibility to receive a Federal Pell Grant for that

year, including fulfilling the requirements for satisfactory progress

described in section 484(c).

‘‘SEC. 407E. AUTHORIZATION OF APPROPRIATIONS.

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

chapter $200,000,000 for fiscal year 1999 and such sums as may

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

SEC. 405. REPEALS.

Chapters 4 through 8 of subpart 2 of part A of title IV (20

U.S.C. 1070a–41 et seq. and 1070a–81 et seq.) are repealed.

SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY

GRANTS.

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 413A(b)(1) (20

U.S.C. 1070b(b)(1)) is amended by striking ‘‘1993’’ and inserting

‘‘1999’’.
H. R. 6—85

(b) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.—Subsection (d) of section 413C (20 U.S.C. 1070b–2) is amended to

read as follows:

‘‘(d) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.—

If the institution’s allocation under this subpart is directly or

indirectly based in part on the financial need demonstrated by

students who are independent students or attending the institution

on less than a full-time basis, then a reasonable proportion of

the allocation shall be made available to such students.’’.

(c) ALLOCATION OF FUNDS.—

(1) UPDATING THE BASE PERIOD.—Section 413D(a) (20

U.S.C. 1070b–3(a)) is amended—

(A) in paragraph (1), by striking ‘‘received and used

under this part for fiscal year 1985’’ and inserting ‘‘received

under subsections (a) and (b) of this section for fiscal year

1999 (as such subsections were in effect with respect to

allocations for such fiscal year)’’;

(B) in paragraph (2)—

(i) in subparagraphs (A) and (B), by striking ‘‘1985’’

each place the term appears and inserting ‘‘1999’’; and

(ii) in subparagraph (C)(i), by striking ‘‘1986’’ and

inserting ‘‘2000’’.

(2) ELIMINATION OF PRO RATA SHARE.—Section 413D is

further amended—

(A) by striking subsection (b);

(B) in subsection (c)(1), by striking ‘‘three-quarters of

the remainder’’ and inserting ‘‘the remainder’’;

(C) in subsection (c)(2)(A)(i), by striking ‘‘subsection

(d)’’ and inserting ‘‘subsection (c)’’; and

(D) by redesignating subsections (c), (d), (e), and (f )

as subsections (b), (c), (d), and (e), respectively.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to allocations of amounts appropriated pursuant to section 413A(b) of the Higher Education

Act of 1965 for fiscal year 2000 or any succeeding fiscal year.

(d) CARRYOVER AND CARRYBACK AUTHORITY.—Subpart 3 of part

A of title IV (20 U.S.C. 1070b et seq.) is amended by adding

at the end the following:

‘‘SEC. 413E. CARRYOVER AND CARRYBACK AUTHORITY.

‘‘(a) CARRYOVER AUTHORITY.—Of the sums made available to

an eligible institution under this subpart for a fiscal year, not

more than 10 percent may, at the discretion of the institution,

remain available for expenditure during the succeeding fiscal year

to carry out the program under this subpart.

‘‘(b) CARRYBACK AUTHORITY.—

‘‘(1) IN GENERAL.—Of the sums made available to an eligible

institution under this subpart for a fiscal year, not more than

10 percent may, at the discretion of the institution, be used

by the institution for expenditure for the fiscal year preceding

the fiscal year for which the sums were appropriated.

‘‘(2) USE OF CARRIED-BACK FUNDS.—An eligible institution

may make grants to students after the end of the academic

year, but prior to the beginning of the succeeding fiscal year,

from such succeeding fiscal year’s appropriations.’’.
H. R. 6—86

SEC. 407. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP

PROGRAM.

(a) AMENDMENT TO SUBPART HEADING.—

(1) IN GENERAL.—The heading for subpart 4 of part A

of title IV (20 U.S.C. 1070c et seq.) is amended to read as

follows:

‘‘SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP

PROGRAM’’.

(2) CONFORMING AMENDMENTS.—Subpart 4 of part A of

title IV (20 U.S.C. 1070c et seq.) is amended—

(A) in section 415B(b) (20 U.S.C. 1070c–1(b)), by striking ‘‘State student grant incentive’’ and inserting

‘‘leveraging educational assistance partnership’’; and

(B) in the heading for section 415C (20 U.S.C. 1070c–

2), by striking ‘‘STATE STUDENT INCENTIVE GRANT’’ and

inserting ‘‘LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP’’.

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 415A(b) (20

U.S.C. 1070c(b)) is amended—

(1) in paragraph (1), by striking ‘‘1993’’ and inserting

‘‘1999’’;

(2) by redesignating paragraph (2) as paragraph (3); and

(3) by inserting after paragraph (1) the following:

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

amount appropriated under paragraph (1) exceeds $30,000,000,

the excess shall be available to carry out section 415E.’’.

(c) SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM.—Subpart 4 of part A of title IV (20 U.S.C. 1070c

et seq.) is amended—

(1) by redesignating section 415E as 415F; and

(2) by inserting after section 415D the following:

‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM.

‘‘(a) IN GENERAL.—From amounts reserved under section

415A(b)(2) for each fiscal year, the Secretary shall—

‘‘(1) make allotments among States in the same manner

as the Secretary makes allotments among States under section

415B; and

‘‘(2) award grants to States, from allotments under paragraph (1), to enable the States to pay the Federal share of

the cost of the authorized activities described in subsection

(c).

‘‘(b) APPLICABILITY RULE.—The provisions of this subpart which

are not inconsistent with this section shall apply to the program

authorized by this section.

‘‘(c) AUTHORIZED ACTIVITIES.—Each State receiving a grant

under this section may use the grant funds for—

‘‘(1) increasing the dollar amount of grants awarded under

section 415B to eligible students who demonstrate financial

need;

‘‘(2) carrying out transition programs from secondary school

to postsecondary education for eligible students who demonstrate financial need;
H. R. 6—87

‘‘(3) carrying out a financial aid program for eligible students who demonstrate financial need and wish to enter careers

in information technology, or other fields of study determined

by the State to be critical to the State’s workforce needs;

‘‘(4) making funds available for community service workstudy activities for eligible students who demonstrate financial

need;

‘‘(5) creating a postsecondary scholarship program for

eligible students who demonstrate financial need and wish

to enter teaching;

‘‘(6) creating a scholarship program for eligible students

who demonstrate financial need and wish to enter a program

of study leading to a degree in mathematics, computer science,

or engineering;

‘‘(7) carrying out early intervention programs, mentoring

programs, and career education programs for eligible students

who demonstrate financial need; and

‘‘(8) awarding merit or academic scholarships to eligible

students who demonstrate financial need.

‘‘(d) MAINTENANCE OF EFFORT REQUIREMENT.—Each State

receiving a grant under this section for a fiscal year shall provide

the Secretary an assurance that the aggregate amount expended

per student or the aggregate expenditures by the State, from funds

derived from non-Federal sources, for the authorized activities

described in subsection (c) for the preceding fiscal year were not

less than the amount expended per student or the aggregate

expenditures by the State for the activities for the second preceding

fiscal year.

‘‘(e) FEDERAL SHARE.—The Federal share of the cost of the

authorized activities described in subsection (c) for any fiscal year

shall be not more than 331⁄3 percent.’’.

(c) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) PURPOSE.—Subsection (a) of section 415A (20 U.S.C.

1070c(a)) is amended to read as follows:

‘‘(a) PURPOSE OF SUBPART.—It is the purpose of this subpart

to make incentive grants available to States to assist States in—

‘‘(1) providing grants to—

‘‘(A) eligible students attending institutions of higher

education or participating in programs of study abroad

that are approved for credit by institutions of higher education at which such students are enrolled; and

‘‘(B) eligible students for campus-based community

service work-study; and

‘‘(2) carrying out the activities described in section 415F.’’.

(2) ALLOTMENT.—Section 415B(a)(1) (20 U.S.C. 1070c–

1(a)(1)) is amended by inserting ‘‘and not reserved under section

415A(b)(2)’’ after ‘‘415A(b)(1)’’.

SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE

ENGAGED IN MIGRANT AND SEASONAL FARMWORK.

(a) COORDINATION.—Section 418A(d) (20 U.S.C. 1070d–2(d)) is

amended by inserting after ‘‘contains assurances’’ the following:

‘‘that the grant recipient will coordinate the project, to the extent

feasible, with other local, State, and Federal programs to maximize

the resources available for migrant students, and’’.
H. R. 6—88

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 418A(g) is

amended by striking ‘‘1993’’ each place the term appears and inserting ‘‘1999’’.

(c) DATA COLLECTION.—Section 418A is amended—

(1) by redesignating subsection (g) (as amended by subsection (b)) as subsection (h); and

(2) by inserting after subsection (f ) the following:

‘‘(g) DATA COLLECTION.—The National Center for Education

Statistics shall collect postsecondary education data on migrant

students.’’.

(d) TECHNICAL AMENDMENT.—Section 418A(e) is amended by

striking ‘‘authorized by subpart 4 of this part in accordance with

section 417A(b)(2)’’ and inserting ‘‘in accordance with section

402A(c)(1)’’.

SEC. 409. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM.

(a) FAS ELIGIBILITY.—Section 419D (20 U.S.C. 1070d–34) is

amended by adding at the end thereof the following:

‘‘(e) FAS ELIGIBILITY.—

‘‘(1) FISCAL YEARS 2000 THROUGH 2004.—Notwithstanding

any other provision of this subpart, in the case of students

from the Freely Associated States who may be selected to

receive a scholarship under this subpart for the first time

for any of the fiscal years 2000 through 2004—

‘‘(A) there shall be 10 scholarships in the aggregate

awarded to such students for each of the fiscal years 2000

through 2004; and

‘‘(B) the Pacific Regional Educational Laboratory shall

administer the program under this subpart in the case

of scholarships for students in the Freely Associated States.

‘‘(2) TERMINATION OF ELIGIBILITY.—A student from the

Freely Associated States shall not be eligible to receive a scholarship under this subpart after September 30, 2004.’’.

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 419K (20

U.S.C. 1070d–41) is amended by striking ‘‘$10,000,000 for fiscal

year 1993’’ and inserting ‘‘$45,000,000 for fiscal year 1999’’.

SEC. 410. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.

Part A of title IV (20 U.S.C. 1070 et seq.) is amended by

inserting after subpart 6 (20 U.S.C. 1070d–31 et seq.) the following:

‘‘Subpart 7—Child Care Access Means Parents in

School

‘‘SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.

‘‘(a) PURPOSE.—The purpose of this section is to support the

participation of low-income parents in postsecondary education

through the provision of campus-based child care services.

‘‘(b) PROGRAM AUTHORIZED.—

‘‘(1) AUTHORITY.—The Secretary may award grants to

institutions of higher education to assist the institutions in

providing campus-based child care services to low-income students.

‘‘(2) AMOUNT OF GRANTS.—

‘‘(A) IN GENERAL.—The amount of a grant awarded

to an institution of higher education under this section

for a fiscal year shall not exceed 1 percent of the total
H. R. 6—89

amount of all Federal Pell Grant funds awarded to students

enrolled at the institution of higher education for the

preceding fiscal year.

‘‘(B) MINIMUM.—A grant under this section shall be

awarded in an amount that is not less than $10,000.

‘‘(3) DURATION; RENEWAL; AND PAYMENTS.—

‘‘(A) DURATION.—The Secretary shall award a grant

under this section for a period of 4 years.

‘‘(B) PAYMENTS.—Subject to subsection (e)(2), the Secretary shall make annual grant payments under this section.

‘‘(4) ELIGIBLE INSTITUTIONS.—An institution of higher education shall be eligible to receive a grant under this section

for a fiscal year if the total amount of all Federal Pell Grant

funds awarded to students enrolled at the institution of higher

education for the preceding fiscal year equals or exceeds

$350,000.

‘‘(5) USE OF FUNDS.—Grant funds under this section shall

be used by an institution of higher education to support or

establish a campus-based child care program primarily serving

the needs of low-income students enrolled at the institution

of higher education. Grant funds under this section may be

used to provide before and after school services to the extent

necessary to enable low-income students enrolled at the institution of higher education to pursue postsecondary education.

‘‘(6) CONSTRUCTION.—Nothing in this section shall be construed to prohibit an institution of higher education that

receives grant funds under this section from serving the child

care needs of the community served by the institution.

‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—For the purpose

of this section, the term ‘‘low-income student’’ means a student

who is eligible to receive a Federal Pell Grant for the fiscal

year for which the determination is made.

‘‘(c) APPLICATIONS.—An institution of higher education desiring

a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such

information as the Secretary may require. Each application shall—

‘‘(1) demonstrate that the institution is an eligible institution described in subsection (b)(4);

‘‘(2) specify the amount of funds requested;

‘‘(3) demonstrate the need of low-income students at the

institution for campus-based child care services by including

in the application—

‘‘(A) information regarding student demographics;

‘‘(B) an assessment of child care capacity on or near

campus;

‘‘(C) information regarding the existence of waiting

lists for existing child care;

‘‘(D) information regarding additional needs created

by concentrations of poverty or by geographic isolation;

and

‘‘(E) other relevant data;

‘‘(4) contain a description of the activities to be assisted,

including whether the grant funds will support an existing

child care program or a new child care program;

‘‘(5) identify the resources, including technical expertise

and financial support, the institution will draw upon to support
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the child care program and the participation of low-income

students in the program, such as accessing social services funding, using student activity fees to help pay the costs of child

care, using resources obtained by meeting the needs of parents

who are not low-income students, and accessing foundation,

corporate or other institutional support, and demonstrate that

the use of the resources will not result in increases in student

tuition;

‘‘(6) contain an assurance that the institution will meet

the child care needs of low-income students through the provision of services, or through a contract for the provision of

services;

‘‘(7) describe the extent to which the child care program

will coordinate with the institution’s early childhood education

curriculum, to the extent the curriculum is available, to meet

the needs of the students in the early childhood education

program at the institution, and the needs of the parents and

children participating in the child care program assisted under

this section;

‘‘(8) in the case of an institution seeking assistance for

a new child care program—

‘‘(A) provide a timeline, covering the period from receipt

of the grant through the provision of the child care services,

delineating the specific steps the institution will take to

achieve the goal of providing low-income students with

child care services;

‘‘(B) specify any measures the institution will take

to assist low-income students with child care during the

period before the institution provides child care services;

and

‘‘(C) include a plan for identifying resources needed

for the child care services, including space in which to

provide child care services, and technical assistance if necessary;

‘‘(9) contain an assurance that any child care facility

assisted under this section will meet the applicable State or

local government licensing, certification, approval, or registration requirements; and

‘‘(10) contain a plan for any child care facility assisted

under this section to become accredited within 3 years of the

date the institution first receives assistance under this section.

‘‘(d) PRIORITY.—The Secretary shall give priority in awarding

grants under this section to institutions of higher education that

submit applications describing programs that—

‘‘(1) leverage significant local or institutional resources,

including in-kind contributions, to support the activities

assisted under this section; and

‘‘(2) utilize a sliding fee scale for child care services provided

under this section in order to support a high number of lowincome parents pursuing postsecondary education at the

institution.

‘‘(e) REPORTING REQUIREMENTS; CONTINUING ELIGIBILITY.—

‘‘(1) REPORTING REQUIREMENTS.—

‘‘(A) REPORTS.—Each institution of higher education

receiving a grant under this section shall report to the

Secretary 18 months, and 36 months, after receiving the

first grant payment under this section.
H. R. 6—91

‘‘(B) CONTENTS.—The report shall include—

‘‘(i) data on the population served under this

section;

‘‘(ii) information on campus and community

resources and funding used to help low-income students access child care services;

‘‘(iii) information on progress made toward accreditation of any child care facility; and

‘‘(iv) information on the impact of the grant on

the quality, availability, and affordability of campusbased child care services.

‘‘(2) CONTINUING ELIGIBILITY.—The Secretary shall make

the third annual grant payment under this section to an institution of higher education only if the Secretary determines, on

the basis of the 18-month report submitted under paragraph

(1), that the institution is making a good faith effort to ensure

that low-income students at the institution have access to

affordable, quality child care services.

‘‘(f ) CONSTRUCTION.—No funds provided under this section shall

be used for construction, except for minor renovation or repair

to meet applicable State or local health or safety requirements.

‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $45,000,000 for fiscal

year 1999 and such sums as may be necessary for each of the

4 succeeding fiscal years.’’.

SEC. 411. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.

Subpart 8 of part A of title IV (20 U.S.C. 1070 et seq.) is

amended to read as follows:

‘‘Subpart 8—Learning Anytime Anywhere

Partnerships

‘‘SEC. 420D. FINDINGS.

‘‘Congress makes the following findings:

‘‘(1) The nature of postsecondary education delivery is

changing, and new technology and other related innovations

can provide promising education opportunities for individuals

who are currently not being served, particularly for individuals

without easy access to traditional campus-based postsecondary

education or for whom traditional courses are a poor match

with education or training needs.

‘‘(2) Individuals, including individuals seeking basic or technical skills or their first postsecondary experience, individuals

with disabilities, dislocated workers, individuals making the

transition from welfare-to-work, and individuals who are limited by time and place constraints can benefit from nontraditional, noncampus-based postsecondary education opportunities

and appropriate support services.

‘‘(3) The need for high-quality, nontraditional, technologybased education opportunities is great, as is the need for skill

competency credentials and other measures of educational

progress and attainment that are valid and widely accepted,

but neither need is likely to be adequately addressed by the

uncoordinated efforts of agencies and institutions acting

independently and without assistance.
H. R. 6—92

‘‘(4) Partnerships, consisting of institutions of higher education, community organizations, or other public or private

agencies or organizations, can coordinate and combine institutional resources—

‘‘(A) to provide the needed variety of education options

to students; and

‘‘(B) to develop new means of ensuring accountability

and quality for innovative education methods.

‘‘SEC. 420E. PURPOSE; PROGRAM AUTHORIZED.

‘‘(a) PURPOSE.—It is the purpose of this subpart to enhance

the delivery, quality, and accountability of postsecondary education

and career-oriented lifelong learning through technology and related

innovations.

‘‘(b) PROGRAM AUTHORIZED.—

‘‘(1) GRANTS.—

‘‘(A) IN GENERAL.—The Secretary may, from funds

appropriated under section 420J make grants to, or enter

into contracts or cooperative agreements with, eligible partnerships to carry out the authorized activities described

in section 420G.

‘‘(B) DURATION.—Grants under this subpart shall be

awarded for periods that do not exceed 5 years.

‘‘(2) DEFINITION OF ELIGIBLE PARTNERSHIP.—For purposes

of this subpart, the term ‘eligible partnership’ means a partnership consisting of 2 or more independent agencies, organizations, or institutions. The agencies, organizations, or institutions may include institutions of higher education, community

organizations, and other public and private institutions, agencies, and organizations.

‘‘SEC. 420F. APPLICATION.

‘‘(a) REQUIREMENT.—An eligible partnership desiring to receive

a grant under this subpart shall submit an application to the

Secretary, in such form and containing such information, as the

Secretary may require.

‘‘(b) CONTENTS.—Each application shall include—

‘‘(1) the name of each partner and a description of the

responsibilities of the partner, including the designation of

a nonprofit organization as the fiscal agent for the partnership;

‘‘(2) a description of the need for the project, including

a description of how the project will build on any existing

services and activities;

‘‘(3) a listing of human, financial (other than funds provided

under this subpart), and other resources that each member

of the partnership will contribute to the partnership, and a

description of the efforts each member of the partnership will

make in seeking additional resources; and

‘‘(4) a description of how the project will operate, including

how funds awarded under this subpart will be used to meet

the purpose of this subpart.

‘‘SEC. 420G. AUTHORIZED ACTIVITIES.

‘‘Funds awarded to an eligible partnership under this subpart

shall be used to—

‘‘(1) develop and assess model distance learning programs

or innovative educational software;
H. R. 6—93

‘‘(2) develop methodologies for the identification and

measurement of skill competencies;

‘‘(3) develop and assess innovative student support services;

or

‘‘(4) support other activities that are consistent with the

purpose of this subpart.

‘‘SEC. 420H. MATCHING REQUIREMENT.

‘‘Federal funds shall provide not more than 50 percent of the

cost of a project under this subpart. The non-Federal share of

project costs may be in cash or in kind, fairly evaluated, including

services, supplies, or equipment.

‘‘SEC. 420I. PEER REVIEW.

‘‘The Secretary shall use a peer review process to review

applications under this subpart and to make recommendations for

funding under this subpart to the Secretary.

‘‘SEC. 420J. AUTHORIZATION OF APPROPRIATIONS.

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

subpart $10,000,000 for fiscal year 1999 and such sums as may

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

PART B—FEDERAL FAMILY EDUCATION LOAN

PROGRAM

SEC. 411. LIMITATION REPEALED.

Section 421 (20 U.S.C. 1071) is amended by striking subsection

(d).

SEC. 412. ADVANCES TO RESERVE FUNDS.

Section 422 (20 U.S.C. 1072) is amended—

(1) in subsection (a)(2), by striking ‘‘428(c)(10)(E)’’ and

inserting ‘‘428(c)(9)(E)’’;

(2) in subsection (c)—

(A) in paragraph (6)(B)(i), by striking ‘‘written’’ and

inserting ‘‘written, electronic,’’;

(B) in paragraph (7)(A), by striking ‘‘during the transition from the Federal Family Education Loan Program

under this part to the Federal Direct Student Loan Program under part D of this title’’; and

(C) in paragraph (7)(B), by striking ‘‘428(c)(10)(F)(v)’’

and inserting ‘‘428(c)(9)(F)(v)’’;

(3) in the first and second sentences of subsection (g)(1),

by striking ‘‘or the program authorized by part D of this title’’

each place it appears; and

(4) by adding at the end the following:

‘‘(i) ADDITIONAL RECALL OF RESERVES.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

law and subject to paragraph (4), the Secretary shall recall,

from reserve funds held in the Federal Student Loan Reserve

Funds established under section 422A by guaranty agencies—

‘‘(A) $85,000,000 in fiscal year 2002;

‘‘(B) $82,500,000 in fiscal year 2006; and

‘‘(C) $82,500,000 in fiscal year 2007.

‘‘(2) DEPOSIT.—Funds recalled by the Secretary under this

subsection shall be deposited in the Treasury.
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‘‘(3) REQUIRED SHARE.—The Secretary shall require each

guaranty agency to return reserve funds under paragraph (1)

on the basis of the agency’s required share. For purposes of

this paragraph, a guaranty agency’s required share shall be

determined as follows:

‘‘(A) EQUAL PERCENTAGE.—The Secretary shall require

each guaranty agency to return an amount representing

an equal percentage reduction in the amount of reserve

funds held by the agency on September 30, 1996.

‘‘(B) CALCULATION.—The equal percentage reduction

shall be the percentage obtained by dividing— ‘‘(i) $250,000,000, by

‘‘(ii) the total amount of all guaranty agencies’

reserve funds held on September 30, 1996, less any

amounts subject to recall under subsection (h).

‘‘(C) SPECIAL RULE.—Notwithstanding subparagraphs

(A) and (B), the percentage reduction under subparagraph

(B) shall not result in the depletion of the reserve funds

of any agency which charges the 1.0 percent insurance

premium pursuant to section 428(b)(1)(H) below an amount

equal to the amount of lender claim payments paid during

the 90 days prior to the date of the return under this

subsection. If any additional amount is required to be

returned after deducting the total of the required shares

under subparagraph (B) and as a result of the preceding

sentence, such additional amount shall be obtained by

imposing on each guaranty agency to which the preceding

sentence does not apply, an equal percentage reduction

in the amount of the agency’s remaining reserve funds.

‘‘(4) OFFSET OF REQUIRED SHARES.—If any guaranty agency

returns to the Secretary any reserve funds in excess of the

amount required under this subsection or subsection (h), the

total amount required to be returned under paragraph (1) shall

be reduced by the amount of such excess reserve funds returned.

‘‘(5) DEFINITION OF RESERVE FUNDS.—The term ‘reserve

funds’ when used with respect to a guaranty agency—

‘‘(A) includes any reserve funds in cash or liquid assets

held by the guaranty agency, or held by, or under the

control of, any other entity; and

‘‘(B) does not include buildings, equipment, or other

nonliquid assets.’’.

SEC. 413. GUARANTY AGENCY REFORMS.

(a) FEDERAL STUDENT LOAN RESERVE FUND.—Part B of title

IV is amended by inserting after section 422 (20 U.S.C. 1072)

the following new section:

‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

‘‘(a) ESTABLISHMENT.—Each guaranty agency shall, not later

than 60 days after the date of enactment of this section, deposit

all funds, securities, and other liquid assets contained in the reserve

fund established pursuant to section 422 into a Federal Student

Loan Reserve Fund (in this section and section 422B referred to

as the ‘Federal Fund’), which shall be an account of a type selected

by the agency, with the approval of the Secretary.

‘‘(b) INVESTMENT OF FUNDS.—Funds transferred to the Federal

Fund shall be invested in obligations issued or guaranteed by

the United States or a State, or in other similarly low-risk securities
H. R. 6—95

selected by the guaranty agency, with the approval of the Secretary.

Earnings from the Federal Fund shall be the sole property of

the Federal Government.

‘‘(c) ADDITIONAL DEPOSITS.—After the establishment of the Federal Fund, a guaranty agency shall deposit into the Federal Fund—

‘‘(1) all amounts received from the Secretary as payment

of reinsurance on loans pursuant to section 428(c)(1);

‘‘(2) from amounts collected on behalf of the obligation

of a defaulted borrower, a percentage amount equal to the

complement of the reinsurance percentage in effect when payment under the guaranty agreement was made—

‘‘(A) with respect to the defaulted loan pursuant to

sections 428(c)(6)(A) and 428F(a)(1)(B); and

‘‘(B) with respect to a loan that the Secretary has

repaid or discharged under section 437;

‘‘(3) insurance premiums collected from borrowers pursuant

to sections 428(b)(1)(H) and 428H(h);

‘‘(4) all amounts received from the Secretary as payment

for supplemental preclaims activity performed prior to the date

of enactment of this section;

‘‘(5) 70 percent of amounts received after such date of

enactment from the Secretary as payment for administrative

cost allowances for loans upon which insurance was issued

prior to such date of enactment; and

‘‘(6) other receipts as specified in regulations of the Secretary.

‘‘(d) USES OF FUNDS.—Subject to subsection (f ), the Federal

Fund may only be used by a guaranty agency—

‘‘(1) to pay lender claims pursuant to sections 428(b)(1)(G),

428( j), 437, and 439(q); and

‘‘(2) to pay into the Agency Operating Fund established

pursuant to section 422B (in this section and section 422B

referred to as the ‘‘Operating Fund’’) a default aversion fee

in accordance with section 428(l).

‘‘(e) OWNERSHIP OF FEDERAL FUND.—The Federal Fund, and

any nonliquid asset (such as a building or equipment) developed

or purchased by the guaranty agency in whole or in part with

Federal reserve funds, regardless of who holds or controls the

Federal reserve funds or such asset, shall be considered to be

the property of the United States, prorated based on the percentage

of such asset developed or purchased with Federal reserve funds,

which property shall be used in the operation of the program

authorized by this part, as provided in subsection (d). The Secretary

may restrict or regulate the use of such asset only to the extent

necessary to reasonably protect the Secretary’s prorated share of

the value of such asset. The Secretary may direct a guaranty

agency, or such agency’s officers or directors, to cease any activity

involving expenditures, use, or transfer of the Federal Fund

administered by the guaranty agency that the Secretary determines

is a misapplication, misuse, or improper expenditure of the Federal

Fund or the Secretary’s share of such asset.

‘‘(f ) TRANSITION.—

‘‘(1) IN GENERAL.—In order to establish the Operating Fund,

each guaranty agency may transfer not more than 180 days’

cash expenses for normal operating expenses (not including

claim payments) as a working capital reserve as defined in
H. R. 6—96

Office of Management and Budget Circular A–87 (Cost Accounting Standards) from the Federal Fund for deposit into the

Operating Fund for use in the performance of the guaranty

agency’s duties under this part. Such transfers may occur during the first 3 years following the establishment of the Operating Fund. However, no agency may transfer in excess of 45

percent of the balance, as of September 30, 1998, of the agency’s

Federal Fund to the agency’s Operating Fund during such

3-year period. In determining the amount that may be transferred, the agency shall ensure that sufficient funds remain

in the Federal Fund to pay lender claims within the required

time periods and to meet the reserve recall requirements of

this section and subsections (h) and (i) of section 422.

‘‘(2) SPECIAL RULE.—A limited number of guaranty agencies

may transfer interest earned on the Federal Fund to the

Operating Fund during the first 3 years after the date of

enactment of this section if the guaranty agency demonstrates

to the Secretary that—

‘‘(A) the cash flow in the Operating Fund will be negative without the transfer of such interest; and

‘‘(B) the transfer of such interest will substantially

improve the financial circumstances of the guaranty

agency.

‘‘(3) REPAYMENT PROVISIONS.—Each guaranty agency shall

begin repayment of sums transferred pursuant to this subsection not later than the start of the fourth year after the

establishment of the Operating Fund, and shall repay all

amounts transferred not later than 5 years from the date

of the establishment of the Operating Fund. With respect to

amounts transferred from the Federal Fund, the guaranty

agency shall not be required to repay any interest on the

funds transferred and subsequently repaid. The guaranty

agency shall provide to the Secretary a reasonable schedule

for repayment of the sums transferred and an annual financial

analysis demonstrating the agency’s ability to comply with the

schedule and repay all outstanding sums transferred.

‘‘(4) PROHIBITION.—If a guaranty agency transfers funds

from the Federal Fund in accordance with this section, and

fails to make scheduled repayments to the Federal Fund, the

agency may not receive any other funds under this part until

the Secretary determines that the agency has made such repayments. The Secretary shall pay to the guaranty agency any

funds withheld in accordance with this paragraph immediately

upon making the determination that the guaranty agency has

made all such repayments.

‘‘(5) WAIVER.—The Secretary may—

‘‘(A) waive the requirements of paragraph (3), but only

with respect to repayment of interest that was transferred

in accordance with paragraph (2); and

‘‘(B) waive paragraph (4);

for a guaranty agency, if the Secretary determines that there

are extenuating circumstances (such as State constitutional

prohibitions) beyond the control of the agency that justify such

a waiver.

‘‘(6) EXTENSION OF REPAYMENT PERIOD FOR INTEREST.—
H. R. 6—97

‘‘(A) EXTENSION PERMITTED.—The Secretary shall

extend the period for repayment of interest that was transferred in accordance with paragraph (2) from 2 years to

5 years if the Secretary determines that—

‘‘(i) the cash flow of the Operating Fund will be

negative as a result of repayment as required by paragraph (3);

‘‘(ii) the repayment of the interest transferred will

substantially diminish the financial circumstances of

the guaranty agency; and

‘‘(iii) the guaranty agency has demonstrated—

‘‘(I) that the agency is able to repay all transferred funds by the end of the 8th year following

the date of establishment of the Operating Fund;

and

‘‘(II) that the agency will be financially sound

on the completion of repayment.

‘‘(B) REPAYMENT OF INCOME ON TRANSFERRED FUNDS.—

All repayments made to the Federal Fund during the 6th,

7th, and 8th years following the establishment of the

Operating Fund of interest that was transferred shall

include the sums transferred plus any income earned from

the investment of the sums transferred after the 5th year.

‘‘(7) INVESTMENT OF FEDERAL FUNDS.—Funds transferred

from the Federal Fund to the Operating Fund for operating

expenses shall be invested in obligations issued or guaranteed

by the United States or a State, or in other similarly lowrisk securities selected by the guaranty agency, with the

approval of the Secretary.

‘‘(8) SPECIAL RULE.—In calculating the minimum reserve

level required by section 428(c)(9)(A), the Secretary shall

include all amounts owed to the Federal Fund by the guaranty

agency in the calculation.’’.

(b) AGENCY OPERATING FUND ESTABLISHED.—Part B of title

IV is further amended by inserting after section 422A (as added

by subsection (a)) the following new section:

‘‘SEC. 422B. AGENCY OPERATING FUND.

‘‘(a) ESTABLISHMENT.—Each guaranty agency shall, not later

than 60 days after the date of enactment of this section, establish

a fund designated as the Operating Fund.

‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into the Operating Fund shall be invested at the discretion of the guaranty agency

in accordance with prudent investor standards.

‘‘(c) ADDITIONAL DEPOSITS.—After the establishment of the

Operating Fund, the guaranty agency shall deposit into the Operating Fund—

‘‘(1) the loan processing and issuance fee paid by the

Secretary pursuant to section 428(f );

‘‘(2) 30 percent of amounts received after the date of enactment of this section from the Secretary as payment for administrative cost allowances for loans upon which insurance was

issued prior to such date of enactment;

‘‘(3) the account maintenance fee paid by the Secretary

in accordance with section 458;

‘‘(4) the default aversion fee paid in accordance with section

428(l);
H. R. 6—98

‘‘(5) amounts remaining pursuant to section 428(c)(6)(B)

from collection on defaulted loans held by the agency, after

payment of the Secretary’s equitable share, excluding amounts

deposited in the Federal Fund pursuant to section 422A(c)(2);

and

‘‘(6) other receipts as specified in regulations of the

Secretary.

‘‘(d) USES OF FUNDS.—

‘‘(1) IN GENERAL.—Funds in the Operating Fund shall be

used for application processing, loan disbursement, enrollment

and repayment status management, default aversion activities

(including those described in section 422(h)(8)), default collection activities, school and lender training, financial aid awareness and related outreach activities, compliance monitoring,

and other student financial aid related activities, as selected

by the guaranty agency.

‘‘(2) SPECIAL RULE.—The guaranty agency may, in the agency’s discretion, transfer funds from the Operating Fund to

the Federal Fund for use pursuant to section 422A. Such transfer shall be irrevocable, and any funds so transferred shall

become the sole property of the United States.

‘‘(3) DEFINITIONS.—For purposes of this subsection:

‘‘(A) DEFAULT COLLECTION ACTIVITIES.—The term

‘default collection activities’ means activities of a guaranty

agency that are directly related to the collection of the

loan on which a default claim has been paid to the participating lender, including the due diligence activities

required pursuant to regulations of the Secretary.

‘‘(B) DEFAULT AVERSION ACTIVITIES.—The term ‘default

aversion activities’ means activities of a guaranty agency

that are directly related to providing collection assistance

to the lender on a delinquent loan, prior to the loan’s

being legally in a default status, including due diligence

activities required pursuant to regulations of the Secretary.

‘‘(C) ENROLLMENT AND REPAYMENT STATUS MANAGEMENT.—The term ‘enrollment and repayment status

management’ means activities of a guaranty agency that

are directly related to ascertaining the student’s enrollment

status, including prompt notification to the lender of such

status, an audit of the note or written agreement to determine if the provisions of that note or agreement are consistent with the records of the guaranty agency as to the

principal amount of the loan guaranteed, and an examination of the note or agreement to assure that the repayment

provisions are consistent with the provisions of this part.

‘‘(e) OWNERSHIP AND REGULATION OF OPERATING FUND.—

‘‘(1) OWNERSHIP.—The Operating Fund, with the exception

of funds transferred from the Federal Fund in accordance with

section 422A(f ), shall be considered to be the property of the

guaranty agency.

‘‘(2) REGULATION.—Except as provided in paragraph (3),

the Secretary may not regulate the uses or expenditure of

moneys in the Operating Fund, but the Secretary may require

such necessary reports and audits as provided in section

428(b)(2).
H. R. 6—99

‘‘(3) EXCEPTION.—Notwithstanding paragraphs (1) and (2),

during any period in which funds are owed to the Federal

Fund as a result of transfer under section 422A(f )—

‘‘(A) moneys in the Operating Fund may only be used

for expenses related to the student loan programs authorized under this part; and

‘‘(B) the Secretary may regulate the uses or expenditure

of moneys in the Operating Fund.’’.

SEC. 414. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.

Section 424(a) (20 U.S.C. 1074(a)) is amended—

(1) by striking ‘‘October 1, 2002’’ and inserting ‘‘October

1, 2004’’; and

(2) by striking ‘‘September 30, 2006’’ and inserting ‘‘September 30, 2008’’.

SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS

AND FEDERAL LOAN INSURANCE.

Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended—

(1) in clause (i)—

(A) by inserting ‘‘and’’ after the semicolon at the end

of subclause (I); and

(B) by striking subclauses (II) and (III) and inserting

the following:

‘‘(II) if such student is enrolled in a program of

undergraduate education which is less than one academic year, the maximum annual loan amount that

such student may receive may not exceed the amount

that bears the same ratio to the amount specified

in subclause (I) as the length of such program measured in semester, trimester, quarter, or clock hours

bears to one academic year;’’; and

(2) by inserting ‘‘and’’ after the semicolon at the end of

clause (iii).

SEC. 416. APPLICABLE INTEREST RATES.

(a) APPLICABLE INTEREST RATES.— (1) AMENDMENT.—Section 427A (20 U.S.C. 1077a) is

amended—

(A) by redesignating subsections (k) and (l) as subsections (l) and (m), respectively; and

(B) by inserting after subsection ( j) the following:

‘‘(k) INTEREST RATES FOR NEW LOANS ON OR AFTER OCTOBER

1, 1998, AND BEFORE JULY 1, 2003.—

‘‘(1) IN GENERAL.—Notwithstanding subsection (h) and subject to paragraph (2) of this subsection, with respect to any

loan made, insured, or guaranteed under this part (other than

a loan made pursuant to section 428B or 428C) for which

the first disbursement is made on or after October 1, 1998,

and before July 1, 2003, the applicable rate of interest shall,

during any 12-month period beginning on July 1 and ending

on June 30, be determined on the preceding June 1 and be

equal to—

‘‘(A) the bond equivalent rate of 91-day Treasury bills

auctioned at the final auction held prior to such June

1; plus

‘‘(B) 2.3 percent,
H. R. 6—100

except that such rate shall not exceed 8.25 percent.

‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding subsection (h), with respect to any loan under this part

(other than a loan made pursuant to section 428B or 428C)

for which the first disbursement is made on or after October

1, 1998, and before July 1, 2003, the applicable rate of interest

for interest which accrues—

‘‘(A) prior to the beginning of the repayment period

of the loan; or

‘‘(B) during the period in which principal need not

be paid (whether or not such principal is in fact paid)

by reason of a provision described in section 427(a)(2)(C)

or 428(b)(1)(M),

shall be determined under paragraph (1) by substituting ‘1.7

percent’ for ‘2.3 percent’.

‘‘(3) PLUS LOANS.—Notwithstanding subsection (h), with

respect to any loan under section 428B for which the first

disbursement is made on or after October 1, 1998, and before

July 1, 2003, the applicable rate of interest shall be determined

under paragraph (1)—

‘‘(A) by substituting ‘3.1 percent’ for ‘2.3 percent’; and

‘‘(B) by substituting ‘9.0 percent’ for ‘8.25 percent’.

‘‘(4) CONSOLIDATION LOANS.—With respect to any consolidation loan under section 428C for which the application is

received by an eligible lender on or after October 1, 1998,

and before July 1, 2003, the applicable rate of interest shall

be at an annual rate on the unpaid principal balance of the

loan that is equal to the lesser of—

‘‘(A) the weighted average of the interest rates on

the loans consolidated, rounded to the nearest higher oneeighth of 1 percent; or

‘‘(B) 8.25 percent.

‘‘(5) CONSULTATION.—The Secretary shall determine the

applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such

rate in the Federal Register as soon as practicable after the

date of determination.’’.

(2) CONFORMING AMENDMENT.—Section 428B(d)(4) (20

U.S.C. 1078–2(d)(4)) is amended by striking ‘‘section 427A(c)’’

and inserting ‘‘section 427A’’.

(b) SPECIAL ALLOWANCES.—

(1) AMENDMENT.—Section 438(b)(2) (20 U.S.C. 1087–1(b)(2))

is amended by adding at the end the following:

‘‘(H) LOANS DISBURSED ON OR AFTER OCTOBER 1, 1998,

AND BEFORE JULY 1, 2003.—

‘‘(i) IN GENERAL.—Subject to paragraph (4) and

clauses (ii), (iii), and (iv) of this subparagraph, and

except as provided in subparagraph (B), the special

allowance paid pursuant to this subsection on loans

for which the first disbursement is made on or after

October 1, 1998, and before July 1, 2003, shall be

computed—

‘‘(I) by determining the average of the bond

equivalent rates of 91-day Treasury bills auctioned

for such 3-month period;
H. R. 6—101

‘‘(II) by subtracting the applicable interest

rates on such loans from such average bond equivalent rate;

‘‘(III) by adding 2.8 percent to the resultant

percent; and

‘‘(IV) by dividing the resultant percent by 4.

‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In the case

of any loan for which the first disbursement is made

on or after October 1, 1998, and before July 1, 2003,

and for which the applicable rate of interest is

described in section 427A(k)(2), clause (i)(III) of this

subparagraph shall be applied by substituting ‘2.2 percent’ for ‘2.8 percent’.

‘‘(iii) PLUS LOANS.—In the case of any loan for

which the first disbursement is made on or after October 1, 1998, and before July 1, 2003, and for which

the applicable rate of interest is described in section

427A(k)(3), clause (i)(III) of this subparagraph shall

be applied by substituting ‘3.1 percent’ for ‘2.8 percent’,

subject to clause (v) of this subparagraph.

‘‘(iv) CONSOLIDATION LOANS.—In the case of any

consolidation loan for which the application is received

by an eligible lender on or after October 1, 1998, and

before July 1, 2003, and for which the applicable

interest rate is determined under section 427A(k)(4),

clause (i)(III) of this subparagraph shall be applied

by substituting ‘3.1 percent’ for ‘2.8 percent’, subject

to clause (vi) of this subparagraph.

‘‘(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS

LOANS.—In the case of PLUS loans made under section

428B and first disbursed on or after October 1, 1998,

and before July 1, 2003, for which the interest rate

is determined under section 427A(k)(3), a special allowance shall not be paid for such loan during any 12-

month period beginning on July 1 and ending on June

30 unless, on the June 1 preceding such July 1—

‘‘(I) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior

to such June 1 (as determined by the Secretary

for purposes of such section); plus

‘‘(II) 3.1 percent,

exceeds 9.0 percent.

‘‘(vi) LIMITATION ON SPECIAL ALLOWANCES FOR

CONSOLIDATION LOANS.—In the case of consolidation

loans made under section 428C and for which the

application is received on or after October 1, 1998,

and before July 1, 2003, for which the interest rate

is determined under section 427A(k)(4), a special allowance shall not be paid for such loan during any 3-

month period ending March 31, June 30, September

30, or December 31 unless—

‘‘(I) the average of the bond equivalent rate

of 91-day Treasury bills auctioned for such 3-

month period; plus

‘‘(II) 3.1 percent,

exceeds the rate determined under section 427A(k)(4).’’.
H. R. 6—102

(2) CONSOLIDATION LOANS.—Section 428C(c)(1) (20 U.S.C.

1078–3(c)(1)) is amended by striking everything preceding

subparagraph (B) and inserting the following:

‘‘(1) INTEREST RATE.—(A) Notwithstanding subparagraphs

(B) and (C), with respect to any loan made under this section

for which the application is received by an eligible lender on

or after October 1, 1998, and before July 1, 2003, the applicable

interest rate shall be determined under section 427A(k)(4).’’.

(3) CONFORMING AMENDMENT.—Section 438(b)(2) (20 U.S.C.

1087–1(b)(2)(C)(ii)) is amended—

(A) in subparagraph (A), by striking ‘‘(F), and (G)’’

and inserting ‘‘(F), (G), and (H)’’;

(B) in subparagraph (B)(iv), by striking ‘‘(F), or (G)’’

and inserting ‘‘(F), (G), or (H)’’; and

(C) in subparagraph (C)(ii), by striking ‘‘subparagraph

(G)’’ and inserting ‘‘subparagraphs (G) and (H)’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to any loan made, insured, or guaranteed

under part B of title IV of the Higher Education Act of 1965

for which the first disbursement is made on or after October 1,

1998, and before July 1, 2003, except that such amendments shall

apply with respect to any loan made under section 428C of such

Act for which the application is received by an eligible lender

on or after October 1, 1998, and before July 1, 2003.

SEC. 417. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

(a) FEDERAL INTEREST SUBSIDIES.—

(1) REQUIREMENTS TO RECEIVE SUBSIDY.—Section 428(a)(2)

(20 U.S.C. 1078(a)(2)) is amended—

(A) in subparagraph (A)(i), by striking subclauses (I),

(II), and (III) and inserting the following:

‘‘(I) sets forth the loan amount for which the student shows financial need; and

‘‘(II) sets forth a schedule for disbursement of the

proceeds of the loan in installments, consistent with

the requirements of section 428G; and’’; and

(B) by amending subparagraph (B) to read as follows:

‘‘(B) For the purpose of clause (ii) of subparagraph (A),

a student shall qualify for a portion of an interest payment

under paragraph (1) if the eligible institution has determined

and documented the student’s amount of need for a loan based

on the student’s estimated cost of attendance, estimated financial assistance, and, for the purpose of an interest payment

pursuant to this section, expected family contribution (as determined under part F), subject to the provisions of subparagraph

(D).’’;

(C) by amending subparagraph (C) to read as follows:

‘‘(C) For the purpose of subparagraph (B) and this

paragraph—

‘‘(i) a student’s cost of attendance shall be determined

under section 472;

‘‘(ii) a student’s estimated financial assistance means,

for the period for which the loan is sought—

‘‘(I) the amount of assistance such student will

receive under subpart 1 of part A (as determined in

accordance with section 484(b)), subpart 3 of part A,

and parts C and E;
H. R. 6—103

‘‘(II) any veterans’ education benefits paid because

of enrollment in a postsecondary education institution,

including veterans’ education benefits (as defined in

section 480(c), but excluding benefits described in paragraph (2)(E) of such section); plus

‘‘(III) other scholarship, grant, or loan assistance,

but excluding any national service education award

or post-service benefit under title I of the National

and Community Service Act of 1990; and

‘‘(iii) the determination of need and of the amount

of a loan by an eligible institution under subparagraph

(B) with respect to a student shall be calculated in accordance with part F.’’; and

(D) by striking subparagraph (F).

(2) DURATION OF AUTHORITY.—Section 428(a)(5) is

amended—

(A) by striking ‘‘September 30, 2002’’ and inserting

‘‘September 30, 2004’’; and

(B) by striking ‘‘September 30, 2006’’ and inserting

‘‘September 30, 2008’’.

(b) INSURANCE PROGRAM AGREEMENTS.—

(1) ANNUAL LOAN LIMITS.—Section 428(b)(1)(A) is

amended—

(A) in the matter preceding clause (i), by inserting

‘‘, as defined in section 481(a)(2),’’ after ‘‘academic year’’;

(B) in clause (i)—

(i) in subclause (I), by striking ‘‘length (as determined under section 481);’’ and inserting ‘‘length; and’’;

and

(ii) by striking subclauses (II) and (III) and inserting the following:

‘‘(II) if such student is enrolled in a program

of undergraduate education which is less than 1

academic year, the maximum annual loan amount

that such student may receive may not exceed

the amount that bears the same ratio to the

amount specified in subclause (I) as the length

of such program measured in semester, trimester,

quarter, or clock hours bears to 1 academic year;’’;

(C) in clause (iv), by striking ‘‘and’’ after the semicolon;

(D) in clause (v), by inserting ‘‘and’’ after the semicolon;

and

(E) by inserting before the matter following clause

(v) the following:

‘‘(vi) in the case of a student enrolled in coursework

specified in sections 484(b)(3)(B) and 484(b)(4)(B)—

‘‘(I) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate

program, and, in the case of a student who has

obtained a baccalaureate degree, $5,500 for

coursework necessary for enrollment in a graduate

or professional degree or certification program; and

‘‘(II) in the case of a student who has obtained

a baccalaureate degree, $5,500 for coursework necessary for a professional credential or certification

from a State required for employment as a teacher

in an elementary school or secondary school;’’.
H. R. 6—104

(2) SELECTION OF REPAYMENT PLANS.—Clause (ii) of section

428(b)(1)(D) is amended to read as follows: ‘‘(ii) the student

borrower may annually change the selection of a repayment

plan under this part, and’’.

(3) REPAYMENT PLANS.—Subparagraph (E) of section

428(b)(1) is amended to read as follows:

‘‘(E) subject to subparagraphs (D) and (L), and except

as provided by subparagraph (M), provides that—

‘‘(i) not more than 6 months prior to the date

on which the borrower’s first payment is due, the

lender shall offer the borrower of a loan made, insured,

or guaranteed under this section or section 428H, the

option of repaying the loan in accordance with a standard, graduated, income-sensitive, or extended repayment schedule (as described in paragraph (9)) established by the lender in accordance with regulations

of the Secretary; and

‘‘(ii) repayment of loans shall be in installments

in accordance with the repayment plan selected under

paragraph (9) and commencing at the beginning of

the repayment period determined under paragraph

(7);’’;

(4) COINSURANCE.—Section 428(b)(1)(G) is amended by

striking ‘‘not less than’’.

(5) PAYMENT AMOUNTS.—Section 428(b)(1)(L)(i) is

amended—

(A) by inserting ‘‘except as otherwise provided by a

repayment plan selected by the borrower under clause (ii)

or (iii) of paragraph (9)(A),’’ before ‘‘during any’’; and

(B) by inserting ‘‘, notwithstanding any payment plan

under paragraph (9)(A)’’ after ‘‘due and payable’’.

(6) DEFERMENTS.—Section 428(b)(1)(M) is amended—

(A) in clause (i)(I), by inserting before the semicolon

the following: ‘‘, except that no borrower, notwithstanding

the provisions of the promissory note, shall be required

to borrow an additional loan under this title in order to

be eligible to receive a deferment under this clause’’; and

(B) in clause (ii), by inserting before the semicolon

the following: ‘‘, except that no borrower who provides

evidence of eligibility for unemployment benefits shall be

required to provide additional paperwork for a deferment

under this clause’’.

(7) LIMITATION, SUSPENSION, AND TERMINATION.—Section

428(b)(1)(U) is amended—

(A) by striking ‘‘emergency action,,’’ each place the

term appears and inserting ‘‘emergency action,’’; and

(B) in clause (iii)(I), by inserting ‘‘that originates or

holds more than $5,000,000 in loans made under this title

for any lender fiscal year (except that each lender described

in section 435(d)(1)(A)(ii)(III) shall annually submit the

results of an audit required by this clause),’’ before ‘‘at

least once a year’’.

(8) ADDITIONAL INSURANCE PROGRAM REQUIREMENTS.—

Section 428(b)(1) is further amended—

(A) by striking ‘‘and’’ at the end of subparagraph (W);

(B) in subparagraph (X)—
H. R. 6—105

(i) by striking ‘‘428(c)(10)’’ and inserting ‘‘428(c)(9)’’;

and

(ii) by striking the period at the end and inserting

‘‘; and’’;

(C) by adding at the end the following new subparagraph:

‘‘(Y) provides that—

‘‘(i) the lender shall determine the eligibility of

a borrower for a deferment described in subparagraph

(M)(i) based on receipt of—

‘‘(I) a request for deferment from the borrower

and documentation of the borrower’s eligibility for

the deferment;

‘‘(II) a newly completed loan application that

documents the borrower’s eligibility for a

deferment; or

‘‘(III) student status information received by

the lender that the borrower is enrolled on at

least a half-time basis; and

‘‘(ii) the lender will notify the borrower of the

granting of any deferment under clause (i)(II) or (III)

of this subparagraph and of the option to continue

paying on the loan.’’.

(9) RESTRICTIONS ON INDUCEMENTS.—Section 428(b)(3) is

amended—

(A) by striking subparagraph (C) and inserting the

following:

‘‘(C) conduct unsolicited mailings of student loan

application forms to students enrolled in secondary school

or a postsecondary institution, or to parents of such students, except that applications may be mailed to borrowers

who have previously received loans guaranteed under this

part by the guaranty agency; or’’; and

(B) by adding at the end the following new sentence:

‘‘It shall not be a violation of this paragraph for a guaranty

agency to provide assistance to institutions of higher education

comparable to the kinds of assistance provided to institutions

of higher education by the Department of Education.’’.

(10) DELAY IN COMMENCEMENT OF REPAYMENT PERIOD.— Section 428(b)(7) is amended by adding at the end the following:

‘‘(D) There shall be excluded from the 6-month period that

begins on the date on which a student ceases to carry at

least one-half the normal full-time academic workload as

described in subparagraph (A)(i) any period not to exceed 3

years during which a borrower who is a member of a reserve

component of the Armed Forces named in section 10101 of

title 10, United States Code, is called or ordered to active

duty for a period of more than 30 days (as defined in section

101(d)(2) of such title). Such period of exclusion shall include

the period necessary to resume enrollment at the borrower’s

next available regular enrollment period.’’.

(11) REPAYMENT PLANS.—Section 428(b) is amended by

adding at the end the following:

‘‘(9) REPAYMENT PLANS.—

‘‘(A) DESIGN AND SELECTION.—In accordance with regulations promulgated by the Secretary, the lender shall offer

a borrower of a loan made under this part the plans
H. R. 6—106

described in this subparagraph for repayment of such loan,

including principal and interest thereon. No plan may

require a borrower to repay a loan in less than 5 years

unless the borrower, during the 6 months immediately

preceding the start of the repayment period, specifically

requests that repayment be made over of a shorter period.

The borrower may choose from—

‘‘(i) a standard repayment plan, with a fixed

annual repayment amount paid over a fixed period

of time, not to exceed 10 years;

‘‘(ii) a graduated repayment plan paid over a fixed

period of time, not to exceed 10 years;

‘‘(iii) an income-sensitive repayment plan, with

income-sensitive repayment amounts paid over a fixed

period of time, not to exceed 10 years, except that

the borrower’s scheduled payments shall not be less

than the amount of interest due; and

‘‘(iv) for new borrowers on or after the date of

enactment of the Higher Education Amendments of

1998 who accumulate (after such date) outstanding

loans under this part totaling more than $30,000, an

extended repayment plan, with a fixed annual or graduated repayment amount paid over an extended period

of time, not to exceed 25 years, except that the borrower shall repay annually a minimum amount determined in accordance with paragraph (1)(L)(i).

‘‘(B) LENDER SELECTION OF OPTION IF BORROWER DOES

NOT SELECT.—If a borrower of a loan made under this

part does not select a repayment plan described in subparagraph (A), the lender shall provide the borrower with a

repayment plan described in subparagraph (A)(i).’’.

(c) GUARANTEE AGREEMENTS.—

(1) REINSURANCE PAYMENTS.—

(A) AMENDMENTS.—Section 428(c)(1) (20 U.S.C.

1078(c)(1)) is amended—

(i) in subparagraph (A), by striking ‘‘98 percent’’

and inserting ‘‘95 percent’’;

(ii) in subparagraph (B)(i), by striking ‘‘88 percent’’

and inserting ‘‘85 percent’’;

(iii) in subparagraph (B)(ii), by striking ‘‘78 percent’’ and inserting ‘‘75 percent’’;

(iv) in subparagraph (E)—

(I) in clause (i), by striking ‘‘98 percent’’ and

inserting ‘‘95 percent’’;

(II) in clause (ii), by striking ‘‘88 percent’’ and

inserting ‘‘85 percent’’; and

(III) in clause (iii), by striking ‘‘78 percent’’

and inserting ‘‘75 percent’’; and

(v) in subparagraph (F)—

(I) in clause (i), by striking ‘‘98 percent’’ and

inserting ‘‘95 percent’’;

(II) in clause (ii), by striking ‘‘88 percent’’ and

inserting ‘‘85 percent’’; and

(III) in clause (iii), by striking ‘‘78 percent’’

and inserting ‘‘75 percent’’.
H. R. 6—107

(B) EFFECTIVE DATE.—The amendments made by

subparagraph (A) of this paragraph apply to loans for which

the first disbursement is made on or after October 1, 1998.

(2) NOTICE TO INSTITUTIONS OF DEFAULTS.—Section

428(c)(2) is amended—

(A) in subparagraph (A), by striking ‘‘proof that reasonable attempts were made’’ and inserting ‘‘proof that the

institution was contacted and other reasonable attempts

were made’’; and

(B) in subparagraph (G), by striking ‘‘certifies to the

Secretary that diligent attempts have been made’’ and

inserting ‘‘certifies to the Secretary that diligent attempts,

including contact with the institution, have been made’’.

(3) GUARANTY AGENCY INFORMATION TO ELIGIBLE INSTITUTIONS.—Section 428(c)(2)(H)(ii) is amended to read as follows:

‘‘(ii) the guaranty agency shall not require the

payment from the institution of any fee for such

information; and’’.

(4) FORBEARANCE.—Section 428(c)(3) is amended—

(A) in subparagraph (A)(i), by striking ‘‘written’’;

(B) in subparagraph (B), by striking ‘‘and’’ after the

semicolon;

(C) in subparagraph (C), by striking the period and

inserting ‘‘; and’’; and

(D) by inserting before the matter following subparagraph (C) the following:

‘‘(D) shall contain provisions that specify that—

‘‘(i) forbearance for a period not to exceed 60 days

may be granted if the lender reasonably determines

that such a suspension of collection activity is warranted following a borrower’s request for deferment,

forbearance, a change in repayment plan, or a request

to consolidate loans, in order to collect or process appropriate supporting documentation related to the request,

and

‘‘(ii) during such period interest shall accrue but

not be capitalized.’’.

(5) EQUITABLE SHARE.—Paragraph (6) of section 428(c) is

amended to read as follows:

‘‘(6) SECRETARY’S EQUITABLE SHARE.—For the purpose of

paragraph (2)(D), the Secretary’s equitable share of payments

made by the borrower shall be that portion of the payments

remaining after the guaranty agency with which the Secretary

has an agreement under this subsection has deducted from

such payments—

‘‘(A) a percentage amount equal to the complement

of the reinsurance percentage in effect when payment under

the guaranty agreement was made with respect to the

loan; and

‘‘(B) an amount equal to 24 percent of such payments

for use in accordance with section 422B, except that, beginning on October 1, 2003, this subparagraph shall be applied

by substituting ‘23 percent’ for ‘24 percent’.’’.

(6) ASSIGNMENT.—Section 428(c)(8) is amended—

(A) by striking ‘‘(A) If’’ and inserting ‘‘If’’; and

(B) by striking subparagraph (B).
H. R. 6—108

(7) GUARANTY AGENCY RESERVE LEVEL; AGENCY TERMINATION.—Section 428(c)(9) is amended—

(A) in subparagraph (A), by striking ‘‘maintain a current minimum reserve level of at least .5 percent’’ and

inserting ‘‘maintain in the agency’s Federal Student Loan

Reserve Fund established under section 422A a current

minimum reserve level of at least 0.25 percent’’;

(B) in subparagraph (C)—

(i) by striking ‘‘80 percent pursuant to section

428(c)(1)(B)(ii)’’ and inserting ‘‘85 percent pursuant to

paragraph (1)(B)(i)’’;

(ii) by striking ‘‘, as appropriate,’’; and

(iii) by striking ‘‘30 working days’’ and inserting

‘‘45 working days’’;

(C) in subparagraph (E)—

(i) by inserting ‘‘or’’ at the end of clause (iv);

(ii) by striking ‘‘; or’’ at the end of clause (v) and

inserting a period; and

(iii) by striking clause (vi);

(D) in subparagraph (F)(vii), by striking ‘‘to avoid

disruption’’ and everything that follows and inserting ‘‘and

to avoid disruption of the student loan program.’’;

(E) in subparagraph (I), by inserting ‘‘that, if commenced after September 24, 1998, shall be on the record’’

after ‘‘for a hearing’’; and

(F) in subparagraph (K)—

(i) by striking ‘‘and Labor’’ and inserting ‘‘and the

Workforce’’; and

(ii) by striking everything after ‘‘guaranty agency

system’’ and inserting a period.

(d) PAYMENT FOR LENDER REFERRAL SERVICES; INCOME-SEN- SITIVE REPAYMENT.—Subsection (e) of section 428 is amended to

read as follows:

‘‘(e) NOTICE OF AVAILABILITY OF INCOME-SENSITIVE REPAYMENT

OPTION.—At the time of offering a borrower a loan under this

part, and at the time of offering the borrower the option of repaying

a loan in accordance with this section, the lender shall provide

the borrower with a notice that informs the borrower, in a form

prescribed by the Secretary by regulation—

‘‘(1) that all borrowers are eligible for income-sensitive

repayment, including through loan consolidation under section

428C;

‘‘(2) the procedures by which the borrower may elect

income-sensitive repayment; and

‘‘(3) where and how the borrower may obtain additional

information concerning income-sensitive repayment.’’.

(e) PAYMENT OF CERTAIN COSTS.—Subsection (f ) of section 428

is amended to read as follows:

‘‘(f ) PAYMENTS OF CERTAIN COSTS.—

‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—

‘‘(A) IN GENERAL.—The Secretary—

‘‘(i) for loans originated during fiscal years beginning on or after October 1, 1998, and before October

1, 2003, and in accordance with the provisions of this

paragraph, shall, except as provided in subparagraph

(C), pay to each guaranty agency, a loan processing

and issuance fee equal to 0.65 percent of the total
H. R. 6—109

principal amount of the loans on which insurance was

issued under this part during such fiscal year by such

agency; and

‘‘(ii) for loans originated during fiscal years beginning on or after October 1, 2003, and in accordance

with the provisions of this paragraph, shall, except

as provided in subparagraph (C), pay to each guaranty

agency, a loan processing and issuance fee equal to

0.40 percent of the total principal amount of the loans

on which insurance was issued under this part during

such fiscal year by such agency.

‘‘(B) PAYMENT.—The payment required by subparagraph (A) shall be paid on a quarterly basis. The guaranty

agency shall be deemed to have a contractual right against

the United States to receive payments according to the

provisions of this paragraph. Payments shall be made

promptly and without administrative delay to any guaranty

agency submitting an accurate and complete application

under this subparagraph.

‘‘(C) REQUIREMENT FOR PAYMENT.—No payment may

be made under this paragraph for loans for which the

disbursement checks have not been cashed or for which

electronic funds transfers have not been completed.’’.

(f ) ACTION ON AGREEMENTS.—Section 428(g) is amended by

striking ‘‘and Labor’’ and inserting ‘‘and the Workforce’’.

(g) LENDERS-OF-LAST-RESORT.—Paragraph (3) of section 428( j)

is amended—

(1) in the paragraph heading, by striking ‘‘DURING TRANSI- TION TO DIRECT LENDING’’;

(2) in subparagraph (A)—

(A) by striking ‘‘during the transition from the Federal

Family Education Loan Program under this part to the

Federal Direct Student Loan Program under part D of

this title,’’ and inserting a comma;

(B) by inserting ‘‘designated for a State’’ after ‘‘a

guaranty agency’’; and

(C) by inserting ‘‘subparagraph (C) and’’ before ‘‘section

422(c)(7),’’; and

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

‘‘(C) The Secretary shall exercise the authority described

in subparagraph (A) only if the Secretary determines that

eligible borrowers are seeking and are unable to obtain loans

under this part, and that the guaranty agency designated for

that State has the capability to provide lender-of-last-resort

loans in a timely manner, in accordance with the guaranty

agency’s obligations under paragraph (1), but cannot do so

without advances provided by the Secretary under this paragraph. If the Secretary makes the determinations described

in the preceding sentence and determines that it would be

cost-effective to do so, the Secretary may provide advances

under this paragraph to such guaranty agency. If the Secretary

determines that such guaranty agency does not have such

capability, or will not provide such loans in a timely fashion,

the Secretary may provide such advances to enable another

guaranty agency, that the Secretary determines to have such

capability, to make lender-of-last-resort loans to eligible borrowers in that State who are experiencing loan access problems.’’.
H. R. 6—110

(h) DEFAULT AVERSION ASSISTANCE.—Subsection (l) of section

428 is amended to read as follows:

‘‘(l) DEFAULT AVERSION ASSISTANCE.—

‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of a complete

request from a lender received not earlier than the 60th day

of delinquency, a guaranty agency having an agreement with

the Secretary under subsection (c) shall engage in default aversion activities designed to prevent the default by a borrower

on a loan covered by such agreement.

‘‘(2) REIMBURSEMENT.—

‘‘(A) IN GENERAL.—A guaranty agency, in accordance

with the provisions of this paragraph, may transfer from

the Federal Student Loan Reserve Fund under section

422A to the Agency Operating Fund under section 422B

a default aversion fee. Such fee shall be paid for any

loan on which a claim for default has not been paid as

a result of the loan being brought into current repayment

status by the guaranty agency on or before the 300th

day after the loan becomes 60 days delinquent.

‘‘(B) AMOUNT.—The default aversion fee shall be equal

to 1 percent of the total unpaid principal and accrued

interest on the loan at the time the request is submitted

by the lender. A guaranty agency may transfer such fees

earned under this subsection not more frequently than

monthly. Such a fee shall not be paid more than once

on any loan for which the guaranty agency averts the

default unless—

‘‘(i) at least 18 months has elapsed between the

date the borrower entered current repayment status

and the date the lender filed a subsequent default

aversion assistance request; and

‘‘(ii) during the period between such dates, the

borrower was not more than 30 days past due on

any payment of principal and interest on the loan.

‘‘(C) DEFINITION.—For the purpose of earning the

default aversion fee, the term ‘current repayment status’

means that the borrower is not delinquent in the payment

of any principal or interest on the loan.’’.

(i) INCOME CONTINGENT REPAYMENT.—Section 428(m) is amended by striking ‘‘shall require at least 10 percent of the borrowers’’

and inserting ‘‘may require borrowers’’.

( j) STATE SHARE OF DEFAULT COSTS.—Subsection (n) of section

428 is repealed.

(k) BLANKET CERTIFICATE OF GUARANTY.—Section 428 is

amended by adding at the end the following:

‘‘(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—

‘‘(1) IN GENERAL.—Subject to paragraph (3), any guaranty

agency that has entered into or enters into any insurance

program agreement with the Secretary under this part may—

‘‘(A) offer eligible lenders participating in the agency’s

guaranty program a blanket certificate of loan guaranty

that permits the lender to make loans without receiving

prior approval from the guaranty agency of individual loans

for eligible borrowers enrolled in eligible programs at

eligible institutions; and

‘‘(B) provide eligible lenders with the ability to transmit

electronically data to the agency concerning loans the
H. R. 6—111

lender has elected to make under the agency’s insurance

program via standard reporting formats, with such reporting to occur at reasonable and standard intervals.

‘‘(2) LIMITATIONS ON BLANKET CERTIFICATE OF GUARANTY.— (A) An eligible lender may not make a loan to a borrower

under this section after such lender receives a notification

from the guaranty agency that the borrower is not an eligible

borrower.

‘‘(B) A guaranty agency may establish limitations or restrictions on the number or volume of loans issued by a lender

under the blanket certificate of guaranty.

‘‘(3) PARTICIPATION LEVEL.—During fiscal years 1999 and

2000, the Secretary may permit, on a pilot basis, a limited

number of guaranty agencies to offer blanket certificates of

guaranty under this subsection. Beginning in fiscal year 2001,

any guaranty agency that has an insurance program agreement

with the Secretary may offer blanket certificates of guaranty

under this subsection.

‘‘(4) REPORT REQUIRED.—The Secretary shall, at the conclusion of the pilot program under paragraph (3), provide a report

to the Committee on Education and the Workforce of the House

of Representatives and the Committee on Labor and Human

Resources of the Senate on the impact of the blanket certificates

of guaranty on program efficiency and integrity.’’.

SEC. 418. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY

AGENCIES.

Part B of title IV (20 U.S.C. 1071 et seq.) is amended by

inserting after section 428 (20 U.S.C. 1078) the following:

‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY

AGENCIES.

‘‘(a) VOLUNTARY AGREEMENTS.— ‘‘(1) AUTHORITY.—Subject to paragraph (2), the Secretary

may enter into a voluntary, flexible agreement with a guaranty

agency under this section, in lieu of agreements with a guaranty

agency under subsections (b) and (c) of section 428. The Secretary may waive or modify any requirement under such subsections, except that the Secretary may not waive—

‘‘(A) any statutory requirement pertaining to the terms

and conditions attached to student loans or default claim

payments made to lenders; or

‘‘(B) the prohibitions on inducements contained in section 428(b)(3) unless the Secretary determines that such

a waiver is consistent with the purposes of this section

and is limited to activities of the guaranty agency within

the State or States for which the guaranty agency serves

as the designated guarantor.

‘‘(2) SPECIAL RULE.—If the Secretary grants a waiver pursuant to paragraph (1)(B), any guaranty agency doing business

within the affected State or States may request, and the Secretary shall grant, an identical waiver to such guaranty agency

under the same terms and conditions (including service area

limitations) as govern the original waiver.

‘‘(3) ELIGIBILITY.—During fiscal years 1999, 2000, and 2001,

the Secretary may enter into a voluntary, flexible agreement

with not more than 6 guaranty agencies that had 1 or more

agreements with the Secretary under subsections (b) and (c)
H. R. 6—112

of section 428 as of the day before the date of enactment

of the Higher Education Amendments of 1998. Beginning in

fiscal year 2002, any guaranty agency or consortium thereof

may enter into a voluntary flexible agreement with the Secretary.

‘‘(4) REPORT REQUIRED.—Not later than September 30,

2001, the Secretary shall report to the Committee on Labor

and Human Resources of the Senate and the Committee on

Education and the Workforce of the House of Representatives

regarding the impact that the voluntary flexible agreements

have had upon program integrity, program and cost efficiencies,

and the availability and delivery of student financial aid. Such

report shall include—

‘‘(A) a description of each voluntary flexible agreement

and the performance goals established by the Secretary

for each agreement;

‘‘(B) a list of participating guaranty agencies and the

specific statutory or regulatory waivers provided to each

guaranty agency and any waivers provided to other guaranty agencies under paragraph (2);

‘‘(C) a description of the standards by which each

agency’s performance under the agency’s voluntary flexible

agreement was assessed and the degree to which each

agency achieved the performance standards; and

‘‘(D) an analysis of the fees paid by the Secretary,

and the costs and efficiencies achieved under each voluntary agreement.

‘‘(b) TERMS OF AGREEMENT.—An agreement between the Secretary and a guaranty agency under this section—

‘‘(1) shall be developed by the Secretary, in consultation

with the guaranty agency, on a case-by-case basis;

‘‘(2) may only include provisions—

‘‘(A) specifying the responsibilities of the guaranty

agency under the agreement, with respect to—

‘‘(i) administering the issuance of insurance on

loans made under this part on behalf of the Secretary;

‘‘(ii) monitoring insurance commitments made

under this part;

‘‘(iii) default aversion activities;

‘‘(iv) review of default claims made by lenders;

‘‘(v) payment of default claims;

‘‘(vi) collection of defaulted loans;

‘‘(vii) adoption of internal systems of accounting

and auditing that are acceptable to the Secretary, and

reporting the result thereof to the Secretary in a timely

manner, and on an accurate, and auditable basis;

‘‘(viii) timely and accurate collection and reporting

of such other data as the Secretary may require to

carry out the purposes of the programs under this

title;

‘‘(ix) monitoring of institutions and lenders participating in the program under this part; and

‘‘(x) informational outreach to schools and students

in support of access to higher education;

‘‘(B) regarding the fees the Secretary shall pay, in

lieu of revenues that the guaranty agency may otherwise

receive under this part, to the guaranty agency under
H. R. 6—113

the agreement, and other funds that the guaranty agency

may receive or retain under the agreement, except that

in no case may the cost to the Secretary of the agreement,

as reasonably projected by the Secretary, exceed the cost

to the Secretary, as similarly projected, in the absence

of the agreement;

‘‘(C) regarding the use of net revenues, as described

in the agreement under this section, for such other activities in support of postsecondary education as may be agreed

to by the Secretary and the guaranty agency;

‘‘(D) regarding the standards by which the guaranty

agency’s performance of the agency’s responsibilities under

the agreement will be assessed, and the consequences for

a guaranty agency’s failure to achieve a specified level

of performance on 1 or more performance standards;

‘‘(E) regarding the circumstances in which a guaranty

agency’s agreement under this section may be ended in

advance of the agreement’s expiration date;

‘‘(F) regarding such other businesses, previously purchased or developed with reserve funds, that relate to

the program under this part and in which the Secretary

permits the guaranty agency to engage; and

‘‘(G) such other provisions as the Secretary may determine to be necessary to protect the United States from

the risk of unreasonable loss and to promote the purposes

of this part;

‘‘(3) shall provide for uniform lender participation with

the guaranty agency under the terms of the agreement; and

‘‘(4) shall not prohibit or restrict borrowers from selecting

a lender of the borrower’s choosing, subject to the prohibitions

and restrictions applicable to the selection under this Act.

‘‘(c) PUBLIC NOTICE.— ‘‘(1) IN GENERAL.—The Secretary shall publish in the

Federal Register a notice to all guaranty agencies that sets

forth—

‘‘(A) an invitation for the guaranty agencies to enter

into agreements under this section; and

‘‘(B) the criteria that the Secretary will use for selecting

the guaranty agencies with which the Secretary will enter

into agreements under this section.

‘‘(2) AGREEMENT NOTICE.—The Secretary shall notify the

Chairperson and the Ranking Minority Member of the Committee on Labor and Human Resources of the Senate and the

Committee on Education and the Workforce of the House of

Representatives not later than 30 days prior to concluding

an agreement under this section. The notice shall contain—

‘‘(A) a description of the voluntary flexible agreement

and the performance goals established by the Secretary

for the agreement;

‘‘(B) a list of participating guaranty agencies and the

specific statutory or regulatory waivers provided to each

guaranty agency;

‘‘(C) a description of the standards by which each guaranty agency’s performance under the agreement will be

assessed; and

‘‘(D) a description of the fees that will be paid to

each participating guaranty agency.
H. R. 6—114

‘‘(3) WAIVER NOTICE.—The Secretary shall notify the Chairperson and the Ranking Minority Member of the Committee

on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives not later than 30 days prior to the granting of a waiver

pursuant to subsection (a)(2) to a guaranty agency that is

not a party to a voluntary flexible agreement.

‘‘(4) PUBLIC AVAILABILITY.—The text of any voluntary flexible agreement, and any subsequent revisions, and any waivers

related to section 428(b)(3) that are not part of such an agreement, shall be readily available to the public.

‘‘(5) MODIFICATION NOTICE.—The Secretary shall notify the

Chairperson and the Ranking Minority Members of the

Committee on Labor and Human Resources of the Senate and

the Committee on Education and the Workforce of the House

of Representatives 30 days prior to any modifications to an

agreement under this section.

‘‘(d) TERMINATION.—At the expiration or early termination of

an agreement under this section, the Secretary shall reinstate the

guaranty agency’s prior agreements under subsections (b) and (c)

of section 428, subject only to such additional requirements as

the Secretary determines to be necessary in order to ensure the

efficient transfer of responsibilities between the agreement under

this section and the agreements under subsections (b) and (c) of

section 428, and including the guaranty agency’s compliance with

reserve requirements under sections 422 and 428.’’.

SEC. 419. FEDERAL PLUS LOANS.

Section 428B (20 U.S.C. 1078–2) is amended—

(1) by amending subsection (a) to read as follows:

‘‘(a) AUTHORITY TO BORROW.—

‘‘(1) AUTHORITY AND ELIGIBILITY.—Parents of a dependent

student shall be eligible to borrow funds under this section

in amounts specified in subsection (b), if—

‘‘(A) the parents do not have an adverse credit history

as determined pursuant to regulations promulgated by the

Secretary; and

‘‘(B) the parents meet such other eligibility criteria

as the Secretary may establish by regulation, after consultation with guaranty agencies, eligible lenders, and

other organizations involved in student financial assistance.

‘‘(2) TERMS, CONDITIONS, AND BENEFITS.—Except as provided in subsections (c), (d), and (e), loans made under this

section shall have the same terms, conditions, and benefits

as all other loans made under this part.

‘‘(3) SPECIAL RULE.—Whenever necessary to carry out the

provisions of this section, the terms ‘student’ and ‘borrower’

as used in this part shall include a parent borrower under

this section.’’; and

(2) by adding at the end the following:

‘‘(f ) VERIFICATION OF IMMIGRATION STATUS AND SOCIAL

SECURITY NUMBER.—A parent who wishes to borrow funds under

this section shall be subject to verification of the parent’s—

‘‘(1) immigration status in the same manner as immigration

status is verified for students under section 484(g); and
H. R. 6—115

‘‘(2) social security number in the same manner as social

security numbers are verified for students under section

484(p).’’.

SEC. 420. FEDERAL CONSOLIDATION LOANS.

(a) DEFINITION OF ELIGIBLE BORROWER.—Section 428C(a)(3) (20

U.S.C. 1078–3(a)(3)) is amended by striking everything preceding

subparagraph (C) and inserting the following:

‘‘(3) DEFINITION OF ELIGIBLE BORROWER.—(A) For the

purpose of this section, the term ‘eligible borrower’ means a

borrower who—

‘‘(i) is not subject to a judgment secured through litigation with respect to a loan under this title or to an order

for wage garnishment under section 488A; and

‘‘(ii) at the time of application for a consolidation loan—

‘‘(I) is in repayment status;

‘‘(II) is in a grace period preceding repayment; or

‘‘(III) is a defaulted borrower who has made

arrangements to repay the obligation on the defaulted

loans satisfactory to the holders of the defaulted loans.

‘‘(B)(i) An individual’s status as an eligible borrower under

this section terminates upon receipt of a consolidation loan

under this section, except that—

‘‘(I) an individual who receives eligible student loans

after the date of receipt of the consolidation loan may

receive a subsequent consolidation loan;

‘‘(II) loans received prior to the date of the consolidation

loan may be added during the 180-day period following

the making of the consolidation loan;

‘‘(III) loans received following the making of the consolidation loan may be added during the 180-day period following the making of the consolidation loan; and

‘‘(IV) loans received prior to the date of the first consolidation loan may be added to a subsequent consolidation

loan.’’.

(b) DEFINITION OF ELIGIBLE STUDENT LOAN.—Section 428C(a)(4)

is amended by striking subparagraph (C) and inserting the

following:

‘‘(C) made under part D of this title;’’.

(c) CONTENTS OF AGREEMENTS.—Section 428C(b) is amended—

(1) in paragraph (1)(A)(i), by inserting ‘‘except that this

clause shall not apply in the case of a borrower with multiple

holders of loans under this part,’’ after ‘‘under this section,’’;

(2) in paragraph (4)(C)(ii)—

(A) in the matter preceding subclause (I), by inserting

‘‘during any such period’’ after ‘‘and be paid’’;

(B) in subclause (I), by striking ‘‘, or on or after October

1, 1998,’’; and

(C) in subclause (II), by striking ‘‘and before October

1, 1998,’’;

(3) in paragraph (6)(A), by inserting before the semicolon

at the end the following: ‘‘, except that a lender is not required

to consolidate loans described in subparagraph (D) or (E) of

subsection (a)(4) or subsection (d)(1)(C)(ii)’’.
H. R. 6—116

(d) EXTENSION OF AUTHORITY.—Section 428C(e) is amended

by striking ‘‘September 30, 2002’’ and inserting ‘‘September 30,

2004’’.

(e) SPECIAL RULE.—Section 428C(f ) is amended—

(1) by redesignating paragraph (2) as paragraph (3); and

(2) by inserting after paragraph (1) the following:

‘‘(2) SPECIAL RULE.—For consolidation loans based on

applications received during the period from October 1, 1998

through January 31, 1999, inclusive, the rebate described in

paragraph (1) shall be equal to 0.62 percent of the principal

plus accrued unpaid interest on such loan.’’.

SEC. 421. DEFAULT REDUCTION PROGRAM.

The heading for subsection (b) of section 428F (20 U.S.C. 1078–

6) is amended by striking ‘‘SPECIAL RULE’’ and inserting ‘‘SATISFACTORY REPAYMENT ARRANGEMENTS TO RENEW ELIGIBILITY’’.

SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS.

(a) SPECIAL RULE.—Section 428G(a) (20 U.S.C. 1078–7(a)) is

amended by adding at the end the following:

‘‘(3) SPECIAL RULE.—An institution whose cohort default

rate (as determined under section 435(m)) for each of the 3

most recent fiscal years for which data are available is less

than 10 percent may disburse any loan made, insured, or

guaranteed under this part in a single installment for any

period of enrollment that is not more than 1 semester, 1 trimester, 1 quarter, or 4 months.’’.

(b) DISBURSEMENT.—Section 428G(b)(1) is amended by adding

at the end the following new sentence: ‘‘An institution whose cohort

default rate (as determined under section 435(m)) for each of the

three most recent fiscal years for which data are available is less

than 10 percent shall be exempt from the requirements of this

paragraph.’’.

(c) EXCLUSIONS.—Section 428G(e) is amended—

(1) by striking ‘‘or made’’ and inserting ‘‘, made’’; and

(2) by inserting ‘‘, or made to a student to cover the cost

of attendance in a program of study abroad approved by the

home eligible institution if the home eligible institution has

a cohort default rate (as calculated under section 435(m)) of

less than 5 percent’’ before the period.

(d) EFFECTIVE DATE.—The amendments made by subsections

(a) and (b) shall be effective during the period beginning on October

1, 1998, and ending on September 30, 2002.

SEC. 423. UNSUBSIDIZED LOANS.

(a) ELIGIBLE BORROWERS.—Subsection (b) of section 428H (20

U.S.C. 1078–8(b)) is amended to read as follows:

‘‘(b) ELIGIBLE BORROWERS.—Any student meeting the requirements for student eligibility under section 484 (including graduate

and professional students as defined in regulations promulgated

by the Secretary) shall be entitled to borrow an unsubsidized Federal Stafford Loan if the eligible institution at which the student

has been accepted for enrollment, or at which the student is in

attendance, has—

‘‘(1) determined and documented the student’s need for

the loan based on the student’s estimated cost of attendance

(as determined under section 472) and the student’s estimated
H. R. 6—117

financial assistance, including a loan which qualifies for interest

subsidy payments under section 428; and

‘‘(2) provided the lender a statement—

‘‘(A) certifying the eligibility of the student to receive

a loan under this section and the amount of the loan

for which such student is eligible, in accordance with subsection (c); and

‘‘(B) setting forth a schedule for disbursement of the

proceeds of the loan in installments, consistent with the

requirements of section 428G.’’.

(b) LOAN LIMITS.—Section 428H(d) is amended—

(1) in paragraph (2)—

(A) in the matter preceding subparagraph (A)—

(i) by inserting ‘‘(as defined in section 481(a)(2))’’

after ‘‘academic year’’; and

(ii) by striking ‘‘or in any period of 7 consecutive

months, whichever is longer,’’;

(B) in subparagraph (A)—

(i) in clause (i), by striking ‘‘length (as determined

under section 481);’’ and inserting ‘‘length; and’’; and

(ii) by striking clauses (ii) and (iii) and inserting

the following:

‘‘(ii) if such student is enrolled in a program of

undergraduate education which is less than one academic year, the maximum annual loan amount that

such student may receive may not exceed the amount

that bears the same ratio to the amount specified

in clause (i) as the length of such program measured

in semester, trimester, quarter, or clock hours bears

to one academic year;’’.

(C) in subparagraph (C), by inserting ‘‘and’’ after the

semicolon; and

(D) by inserting before the matter following subparagraph (C) the following:

‘‘(D) in the case of a student enrolled in coursework

specified in sections 484(b)(3)(B) and 484(b)(4)(B)—

‘‘(i) $4,000 for coursework necessary for enrollment

in an undergraduate degree or certificate program,

and, in the case of a student who has obtained a

baccalaureate degree, $5,000 for coursework necessary

for enrollment in a graduate or professional program;

and

‘‘(ii) in the case of a student who has obtained

a baccalaureate degree, $5,000 for coursework necessary for a professional credential or certification from

a State required for employment as a teacher in an

elementary or secondary school;’’; and

(2) in paragraph (3), by adding at the end the following:

‘‘Interest capitalized shall not be deemed to exceed such maximum aggregate amount.’’.

(c) CAPITALIZATION OF INTEREST.—Paragraph (2) of section

428H(e) is amended to read as follows:

‘‘(2) CAPITALIZATION OF INTEREST.—(A) Interest on loans

made under this section for which payments of principal are

not required during the in-school and grace periods or for

which payments are deferred under sections 427(a)(2)(C) and
H. R. 6—118

428(b)(1)(M) shall, if agreed upon by the borrower and the

lender—

‘‘(i) be paid monthly or quarterly; or

‘‘(ii) be added to the principal amount of the loan

by the lender only—

‘‘(I) when the loan enters repayment;

‘‘(II) at the expiration of a grace period, in the

case of a loan that qualifies for a grace period;

‘‘(III) at the expiration of a period of deferment

or forbearance; or

‘‘(IV) when the borrower defaults.

‘‘(B) The capitalization of interest described in subparagraph (A) shall not be deemed to exceed the annual insurable

limit on account of the student.’’.

(d) EXTENDED REPAYMENT PLAN.—Section 428H(e)(6) is

amended by striking ‘‘10 year repayment period under section

428(b)(1)(D)’’ and inserting ‘‘repayment period under section

428(b)(9)’’.

(e) QUALIFICATION.—Section 428H(e) is amended by adding at

the end the following:

‘‘(7) QUALIFICATION FOR FORBEARANCE.—A lender may

grant the borrower of a loan under this section a forbearance

for a period not to exceed 60 days if the lender reasonably

determines that such a forbearance from collection activity

is warranted following a borrower’s request for forbearance,

deferment, or a change in repayment plan, or a request to

consolidate loans in order to collect or process appropriate

supporting documentation related to the request. During any

such period, interest on the loan shall accrue but not be capitalized.’’.

(f ) REPEAL.—Subsection (f ) of section 428H is repealed.

SEC. 424. LOAN FORGIVENESS FOR TEACHERS.

Section 428J (20 U.S.C. 1078–10) is amended to read as follows:

‘‘SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of this section

to encourage individuals to enter and continue in the teaching

profession.

‘‘(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a

program, through the holder of the loan, of assuming the obligation

to repay a qualified loan amount for a loan made under section

428 or 428H, in accordance with subsection (c), for any new borrower

on or after October 1, 1998, who—

‘‘(1) has been employed as a full-time teacher for 5 consecutive complete school years—

‘‘(A) in a school that qualifies under section 465(a)(2)(A)

for loan cancellation for Perkins loan recipients who teach

in such schools;

‘‘(B) if employed as a secondary school teacher, is teaching a subject area that is relevant to the borrower’s academic major as certified by the chief administrative officer

of the public or nonprofit private secondary school in which

the borrower is employed; and

‘‘(C) if employed as an elementary school teacher, has

demonstrated, as certified by the chief administrative officer of the public or nonprofit private elementary school

in which the borrower is employed, knowledge and teaching
H. R. 6—119

skills in reading, writing, mathematics, and other areas

of the elementary school curriculum; and

‘‘(2) is not in default on a loan for which the borrower

seeks forgiveness.

‘‘(c) QUALIFIED LOANS AMOUNT.—

‘‘(1) IN GENERAL.—The Secretary shall repay not more than

$5,000 in the aggregate of the loan obligation on a loan made

under section 428 or 428H that is outstanding after the completion of the fifth complete school year of teaching described

in subsection (b)(1). No borrower may receive a reduction of

loan obligations under both this section and section 460.

‘‘(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount

for a loan made under section 428C may be a qualified loan

amount for the purposes of this subsection only to the extent

that such loan amount was used to repay a Federal Direct

Stafford Loan, a Federal Direct Unsubsidized Stafford Loan,

or a loan made under section 428 or 428H for a borrower

who meets the requirements of subsection (b), as determined

in accordance with regulations prescribed by the Secretary.

‘‘(d) REGULATIONS.—The Secretary is authorized to issue such

regulations as may be necessary to carry out the provisions of

this section.

‘‘(e) CONSTRUCTION.—Nothing in this section shall be construed

to authorize any refunding of any repayment of a loan.

‘‘(f ) LIST.—If the list of schools in which a teacher may perform

service pursuant to subsection (b) is not available before May 1

of any year, the Secretary may use the list for the year preceding

the year for which the determination is made to make such service

determination.

‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.— ‘‘(1) CONTINUED ELIGIBILITY.—Any teacher who performs

service in a school that—

‘‘(A) meets the requirements of subsection (b)(1)(A) in

any year during such service; and

‘‘(B) in a subsequent year fails to meet the requirements of such subsection,

may continue to teach in such school and shall be eligible

for loan forgiveness pursuant to subsection (b).

‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may,

for the same service, receive a benefit under both this subsection and subtitle D of title I of the National and Community

Service Act of 1990 (42 U.S.C. 12571 et seq.).

‘‘(h) DEFINITION.—For purposes of this section, the term ‘year’,

where applied to service as a teacher, means an academic year

as defined by the Secretary.’’.

SEC. 425. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

Part B (20 U.S.C. 1071 et seq.) is amended by inserting after

section 428J (20 U.S.C. 1078–10) the following:

‘‘SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

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

‘‘(1) to bring more highly trained individuals into the early

child care profession; and

‘‘(2) to keep more highly trained child care providers in

the early child care field for longer periods of time.

‘‘(b) DEFINITIONS.—In this section:
H. R. 6—120

‘‘(1) CHILD CARE FACILITY.—The term ‘child care facility’

means a facility, including a home, that—

‘‘(A) provides child care services; and

‘‘(B) meets applicable State or local government licensing, certification, approval, or registration requirements,

if any.

‘‘(2) CHILD CARE SERVICES.—The term ‘child care services’

means activities and services provided for the education and

care of children from birth through age 5 by an individual

who has a degree in early childhood education.

‘‘(3) DEGREE.—The term ‘degree’ means an associate’s or

bachelor’s degree awarded by an institution of higher education.

‘‘(4) EARLY CHILDHOOD EDUCATION.—The term ‘early childhood education’ means education in the areas of early child

education, child care, or any other educational area related

to child care that the Secretary determines appropriate.

‘‘(5) INSTITUTION OF HIGHER EDUCATION.—Notwithstanding

section 102, the term ‘institution of higher education’ has the

meaning given the term in section 101.

‘‘(c) DEMONSTRATION PROGRAM.—

‘‘(1) IN GENERAL.—The Secretary may carry out a demonstration program of assuming the obligation to repay, pursuant to subsection (d), a loan made, insured, or guaranteed

under this part or part D (excluding loans made under sections

428B and 428C or comparable loans made under part D) for

any new borrower after the date of enactment of the Higher

Education Amendments of 1998, who—

‘‘(A) completes a degree in early childhood education;

‘‘(B) obtains employment in a child care facility; and

‘‘(C) has worked full time for the 2 consecutive years

preceding the year for which the determination is made

as a child care provider in a low-income community.

‘‘(2) LOW-INCOME COMMUNITY.—For the purposes of this

subsection, the term ‘low-income community’ means a community in which 70 percent of households within the community

earn less than 85 percent of the State median household income.

‘‘(3) AWARD BASIS; PRIORITY.—

‘‘(A) AWARD BASIS.—Subject to subparagraph (B), loan

repayment under this section shall be on a first-come,

first-served basis and subject to the availability of appropriations.

‘‘(B) PRIORITY.—The Secretary shall give priority in

providing loan repayment under this section for a fiscal

year to student borrowers who received loan repayment

under this section for the preceding fiscal year.

‘‘(4) REGULATIONS.—The Secretary is authorized to prescribe such regulations as may be necessary to carry out the

provisions of this section.

‘‘(d) LOAN REPAYMENT.—

‘‘(1) IN GENERAL.—The Secretary shall assume the obligation to repay—

‘‘(A) after the second consecutive year of employment

described in subparagraphs (B) and (C) of subsection (c)(1),

20 percent of the total amount of all loans made after

date of enactment of the Higher Education Amendments

of 1998, to a student under this part or part D;
H. R. 6—121

‘‘(B) after the third consecutive year of such employment, 20 percent of the total amount of all such loans;

and

‘‘(C) after each of the fourth and fifth consecutive years

of such employment, 30 percent of the total amount of

all such loans.

‘‘(2) CONSTRUCTION.—Nothing in this section shall be construed to authorize the refunding of any repayment of a loan

made under this part or part D.

‘‘(3) INTEREST.—If a portion of a loan is repaid by the

Secretary under this section for any year, the proportionate

amount of interest on such loan which accrues for such year

shall be repaid by the Secretary.

‘‘(4) SPECIAL RULE.—In the case where a student borrower

who is not participating in loan repayment pursuant to this

section returns to an institution of higher education after

graduation from an institution of higher education for the purpose of obtaining a degree in early childhood education, the

Secretary is authorized to assume the obligation to repay the

total amount of loans made under this part or part D incurred

for a maximum of two academic years in returning to an

institution of higher education for the purpose of obtaining

a degree in early childhood education. Such loans shall only

be repaid for borrowers who qualify for loan repayment pursuant to the provisions of this section, and shall be repaid in

accordance with the provisions of paragraph (1).

‘‘(5) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS.—No student borrower may, for the same volunteer service, receive a benefit under both this section and subtitle D

of title I of the National and Community Service Act of 1990

(42 U.S.C. 12601 et seq.).

‘‘(e) REPAYMENT TO ELIGIBLE LENDERS.—The Secretary shall

pay to each eligible lender or holder for each fiscal year an amount

equal to the aggregate amount of loans which are subject to repayment pursuant to this section for such year.

‘‘(f ) APPLICATION FOR REPAYMENT.—

‘‘(1) IN GENERAL.—Each eligible individual desiring loan

repayment under this section shall submit a complete and

accurate application to the Secretary at such time, in such

manner, and containing such information as the Secretary may

require.

‘‘(2) CONDITIONS.—An eligible individual may apply for loan

repayment under this section after completing each year of

qualifying employment. The borrower shall receive forbearance

while engaged in qualifying employment unless the borrower

is in deferment while so engaged.

‘‘(g) EVALUATION.—

‘‘(1) IN GENERAL.—The Secretary shall conduct, by grant

or contract, an independent national evaluation of the impact

of the demonstration program assisted under this section on

the field of early childhood education.

‘‘(2) COMPETITIVE BASIS.—The grant or contract described

in subsection (b) shall be awarded on a competitive basis.

‘‘(3) CONTENTS.—The evaluation described in this subsection shall—
H. R. 6—122

‘‘(A) determine the number of individuals who were

encouraged by the demonstration program assisted under

this section to pursue early childhood education;

‘‘(B) determine the number of individuals who remain

employed in a child care facility as a result of participation

in the program;

‘‘(C) identify the barriers to the effectiveness of the

program;

‘‘(D) assess the cost-effectiveness of the program in

improving the quality of—

‘‘(i) early childhood education; and

‘‘(ii) child care services;

‘‘(E) identify the reasons why participants in the program have chosen to take part in the program;

‘‘(F) identify the number of individuals participating

in the program who received an associate’s degree and

the number of such individuals who received a bachelor’s

degree; and

‘‘(G) identify the number of years each individual

participates in the program.

‘‘(4) INTERIM AND FINAL EVALUATION REPORTS.—The Secretary shall prepare and submit to the President and the Congress such interim reports regarding the evaluation described

in this subsection as the Secretary deems appropriate, and

shall prepare and so submit a final report regarding the evaluation by January 1, 2002.

‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $10,000,000 for fiscal

year 1999, and such sums as may be necessary for each of the

4 succeeding fiscal years.’’.

SEC. 426. NOTICE TO SECRETARY AND PAYMENT OF LOSS.

The third sentence of section 430(a) (20 U.S.C. 1080(a)) is

amended by inserting ‘‘the institution was contacted and other’’

after ‘‘submit proof that’’.

SEC. 427. LEGAL POWERS AND RESPONSIBILITIES.

(a) AUDIT OF FINANCIAL TRANSACTIONS.—Section 432(f )(1) is

amended—

(1) in subparagraph (B), by striking ‘‘section 435(d)(1) (D),

(F), or (H);’’ and inserting ‘‘section 435(d)(1); and’’;

(2) in subparagraph (C)—

(A) by striking ‘‘and Labor’’ and inserting ‘‘and the

Workforce’’; and

(B) by striking ‘‘; and’’ inserting a period; and

(3) by striking subparagraph (D).

(b) PROGRAM OF ASSISTANCE.—Section 432(k)(3) is amended

by striking ‘‘Within 1 year’’ and everything that follows through

‘‘1992, the’’ and inserting ‘‘The’’.

(c) COMMON FORMS AND FORMATS.—Section 432(m) is

amended—

(1) in paragraph (1)—

(A) in subparagraph (A), by striking ‘‘a common

application form and promissory note’’ and inserting ‘‘common application forms and promissory notes, or master

promissory notes,’’;

(B) in subparagraph (B)—
H. R. 6—123

(i) by striking ‘‘The form’’ and inserting ‘‘The

forms’’;

(ii) by striking clause (iii); and

(C) by amending subparagraph (C) to read as follows:

‘‘(C) FREE APPLICATION FORM.—For academic year

1999–2000 and succeeding academic years, the Secretary

shall prescribe the form developed under section 483 as

the application form under this part, other than for loans

under sections 428B and 428C.’’;

(D) by amending subparagraph (D) to read as follows:

‘‘(D) MASTER PROMISSORY NOTE.—

‘‘(i) IN GENERAL.—The Secretary shall develop and

require the use of master promissory note forms for

loans made under this part and part D. Such forms

shall be available for periods of enrollment beginning

not later than July 1, 2000. Each form shall allow

eligible borrowers to receive, in addition to initial loans,

additional loans for the same or subsequent periods

of enrollment through a student confirmation process

approved by the Secretary. Such forms shall be used

for loans made under this part or part D as directed

by the Secretary.

‘‘(ii) CONSULTATION.—In developing the master

promissory note under this subsection, the Secretary

shall consult with representatives of guaranty agencies,

eligible lenders, institutions of higher education, students, and organizations involved in student financial

assistance.

‘‘(iii) SALE; ASSIGNMENT; ENFORCEABILITY.—Notwithstanding any other provision of law, each loan

made under a master promissory note under this subsection may be sold or assigned independently of any

other loan made under the same promissory note and

each such loan shall be separately enforceable in all

Federal and State courts on the basis of an original

or copy of the master promissory note in accordance

with the terms of the master promissory note.

‘‘(iv) PERFECTION OF SECURITY INTERESTS IN STUDENT LOANS.—Notwithstanding the provisions of any

State law to the contrary, including the Uniform

Commercial Code as in effect in any State, a security

interest in loans made under this part created on

behalf of any eligible lender as defined in section 435(d)

may be perfected either through the taking of possession of such loans (which can be through taking possession of an original or copy of the master promissory

note) or by the filing of notice of such security interest

in such loans in the manner provided by such State

law for perfection of security interests in accounts.’’;

and

(2) by adding at the end the following:

‘‘(4) ELECTRONIC FORMS.—Nothing in this section shall be

construed to limit the development and use of electronic forms

and procedures.’’.

(d) DEFAULT REDUCTION MANAGEMENT.—Section 432(n) is

amended—
H. R. 6—124

(1) in paragraph (1), by striking ‘‘1993’’ and inserting

‘‘1999’’; and

(2) in paragraph (3), by striking ‘‘and Labor’’ and inserting

‘‘and the Workforce’’.

(e) REPORTING REQUIREMENT.—Section 432(p) is amended by

striking ‘‘State postsecondary reviewing entities designated under

subpart 1 of part H,’’.

SEC. 428. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

(a) REQUIRED DISCLOSURE BEFORE DISBURSEMENT.—Section

433(a) (20 U.S.C. 1083(a)) is amended by amending the matter

preceding paragraph (1) to read as follows:

‘‘(a) REQUIRED DISCLOSURE BEFORE DISBURSEMENT.—Each

eligible lender, at or prior to the time such lender disburses a

loan that is insured or guaranteed under this part (other than

a loan made under section 428C), shall provide thorough and

accurate loan information on such loan to the borrower in simple

and understandable terms. Any disclosure required by this subsection may be made by an eligible lender by written or electronic

means, including as part of the application material provided to

the borrower, as part of the promissory note evidencing the loan,

or on a separate written form provided to the borrower. Each

lender shall provide to each borrower a telephone number, and

may provide an electronic address, through which additional loan

information can be obtained. The disclosure shall include—’’.

(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Section 433(b)

is amended by amending the matter preceding paragraph (1) to

read as follows:

‘‘(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Each eligible

lender shall, at or prior to the start of the repayment period of

the student borrower on loans made, insured, or guaranteed under

this part, disclose to the borrower by written or electronic means

the information required under this subsection in simple and understandable terms. Each eligible lender shall provide to each borrower

a telephone number, and may provide an electronic address, through

which additional loan information can be obtained. For any loan

made, insured, or guaranteed under this part, other than a loan

made under section 428B or 428C, such disclosure required by

this subsection shall be made not less than 30 days nor more

than 240 days before the first payment on the loan is due from

the borrower. The disclosure shall include—’’.

SEC. 429. DEFINITIONS.

(a) COHORT DEFAULT RATE.—Section 435(a) (20 U.S.C. 1085(a))

is amended—

(1) in paragraph (2)—

(A) in subparagraph (A)—

(i) by striking ‘‘or’’ at the end of clause (i);

(ii) by striking clause (ii) and inserting the following:

‘‘(ii) there are exceptional mitigating circumstances

within the meaning of paragraph (4); or

‘‘(iii) there are, in the judgment of the Secretary, other

exceptional mitigating circumstances that would make the

application of this paragraph inequitable.’’; and

(iii) by adding after the matter following clause

(iii) (as added by clause (ii)) the following:
H. R. 6—125

‘‘If an institution continues to participate in a program under

this part, and the institution’s appeal of the loss of eligibility

is unsuccessful, the institution shall be required to pay to

the Secretary an amount equal to the amount of interest,

special allowance, reinsurance, and any related payments made

by the Secretary (or which the Secretary is obligated to make)

with respect to loans made under this part to students attending, or planning to attend, that institution during the pendency

of such appeal.’’; and

(B) in subparagraph (C), by striking ‘‘July 1, 1998,’’

and inserting ‘‘July 1, 1999,’’;

(2) in the matter following subparagraph (C) of paragraph (3)—

(A) by inserting ‘‘for a reasonable period of time, not

to exceed 30 days,’’ after ‘‘access’’; and

(B) by striking ‘‘of the affected guaranty agencies and

loan servicers for a reasonable period of time, not to exceed

30 days’’ and inserting ‘‘used by a guaranty agency in

determining whether to pay a claim on a defaulted loan

or by the Department in determining an institution’s

default rate in the loan program under part D of this

title’’; and

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

‘‘(4) DEFINITION OF MITIGATING CIRCUMSTANCES.—(A) For

purposes of paragraph (2)(A)(ii), an institution of higher education shall be treated as having exceptional mitigating circumstances that make application of that paragraph inequitable

if such institution, in the opinion of an independent auditor,

meets the following criteria:

‘‘(i) For a 12-month period that ended during the 6

months immediately preceding the fiscal year for which

the cohort of borrowers used to calculate the institution’s

cohort default rate is determined, at least two-thirds of

the students enrolled on at least a half-time basis at the

institution—

‘‘(I) are eligible to receive a Federal Pell Grant

award that is at least equal to one-half the maximum

Federal Pell Grant award for which a student would

be eligible based on the student’s enrollment status;

or

‘‘(II) have an adjusted gross income that when

added with the adjusted gross income of the student’s

parents (unless the student is an independent student),

of less than the poverty level, as determined by the

Department of Health and Human Services.

‘‘(ii) In the case of an institution of higher education

that offers an associate, baccalaureate, graduate or professional degree, 70 percent or more of the institution’s regular

students who were initially enrolled on a full-time basis

and were scheduled to complete their programs during

the same 12-month period described in clause (i)—

‘‘(I) completed the educational programs in which

the students were enrolled;

‘‘(II) transferred from the institution to a higher

level educational program;
H. R. 6—126

‘‘(III) at the end of the 12-month period, remained

enrolled and making satisfactory progress toward

completion of the student’s educational programs; or

‘‘(IV) entered active duty in the Armed Forces of

the United States.

‘‘(iii)(I) In the case of an institution of higher education

that does not award a degree described in clause (ii), had

a placement rate of 44 percent or more with respect to

the institution’s former regular students who—

‘‘(aa) remained in the program beyond the point

the students would have received a 100 percent tuition

refund from the institution;

‘‘(bb) were initially enrolled on at least a halftime basis; and

‘‘(cc) were originally scheduled, at the time of

enrollment, to complete their educational programs

during the same 12-month period described in clause

(i).

‘‘(II) The placement rate shall not include students

who are still enrolled and making satisfactory progress

in the educational programs in which the students were

originally enrolled on the date following 12 months after

the date of the student’s last date of attendance at the

institution.

‘‘(III) The placement rate is calculated by determining

the percentage of all those former regular students who—

‘‘(aa) are employed, in an occupation for which

the institution provided training, on the date following

12 months after the date of their last day of attendance

at the institution;

‘‘(bb) were employed, in an occupation for which

the institution provided training, for at least 13 weeks

before the date following 12 months after the date

of their last day of attendance at the institution; or

‘‘(cc) entered active duty in the Armed Forces of

the United States.

‘‘(IV) The placement rate shall not include as placements a student or former student for whom the institution

is the employer.

‘‘(B) For purposes of determining a rate of completion and

a placement rate under this paragraph, a student is originally

scheduled, at the time of enrollment, to complete the educational program on the date when the student will have been

enrolled in the program for the amount of time normally

required to complete the program. The amount of time normally

required to complete the program for a student who is initially

enrolled full-time is the period of time specified in the institution’s enrollment contract, catalog, or other materials, for

completion of the program by a full-time student. For a student

who is initially enrolled less than full-time, the period is the

amount of time it would take the student to complete the

program if the student remained enrolled at that level of enrollment throughout the program.

‘‘(5) REDUCTION OF DEFAULT RATES AT CERTAIN MINORITY

INSTITUTIONS.—
H. R. 6—127

‘‘(A) BENEFICIARIES OF EXCEPTION REQUIRED TO ESTABLISH MANAGEMENT PLAN.—After July 1, 1999, any institution that has a cohort default rate that equals or exceeds

25 percent for each of the three most recent fiscal years

for which data are available and that relies on the exception

in subparagraph (B) to continue to be an eligible institution

shall—

‘‘(i) submit to the Secretary a default management

plan which the Secretary, in the Secretary’s discretion,

after consideration of the institution’s history,

resources, dollars in default, and targets for default

reduction, determines is acceptable and provides

reasonable assurance that the institution will, by July

1, 2002, have a cohort default rate that is less than

25 percent;

‘‘(ii) engage an independent third party (which may

be paid with funds received under section 317 or part

B of title III) to provide technical assistance in

implementing such default management plan; and

‘‘(iii) provide to the Secretary, on an annual basis

or at such other intervals as the Secretary may require,

evidence of cohort default rate improvement and

successful implementation of such default management

plan.

‘‘(B) DISCRETIONARY ELIGIBILITY CONDITIONED ON

IMPROVEMENT.—Notwithstanding the expiration of the

exception in paragraph (2)(C), the Secretary may, in the

Secretary’s discretion, continue to treat an institution

described in subparagraph (A) of this paragraph as an

eligible institution for each of the 1-year periods beginning

on July 1 of 1999, 2000, and 2001, only if the institution

submits by the beginning of such period evidence satisfactory to the Secretary that—

‘‘(i) such institution has complied and is continuing

to comply with the requirements of subparagraph (A);

and

‘‘(ii) such institution has made substantial

improvement, during each of the preceding 1-year periods, in the institution’s cohort default rate.

‘‘(6) PARTICIPATION RATE INDEX.—

‘‘(A) IN GENERAL.—An institution that demonstrates

to the Secretary that the institution’s participation rate

index is equal to or less than 0.0375 for any of the 3

most recent fiscal years for which data is available shall

not be subject to paragraph (2). The participation rate

index shall be determined by multiplying the institution’s

cohort default rate for loans under part B or D, or weighted

average cohort default rate for loans under parts B and

D, by the percentage of the institution’s regular students,

enrolled on at least a half-time basis, who received a loan

made under part B or D for a 12-month period ending

during the 6 months immediately preceding the fiscal year

for which the cohort of borrowers used to calculate the

institution’s cohort default rate is determined.
H. R. 6—128

‘‘(B) DATA.—An institution shall provide the Secretary

with sufficient data to determine the institution’s participation rate index within 30 days after receiving an initial

notification of the institution’s draft cohort default rate.

‘‘(C) NOTIFICATION.—Prior to publication of a final

cohort default rate for an institution that provides the

data described in subparagraph (B), the Secretary shall

notify the institution of the institution’s compliance or noncompliance with subparagraph (A).’’.

(b) ELIGIBLE LENDER.—Section 435(d) (20 U.S.C. 1085(d)) is

amended—

(1) in paragraph (1)—

(A) in subparagraph (A)(ii)—

(i) by striking ‘‘or’’ after ‘‘1992,’’; and

(ii) by inserting before the semicolon the following:

‘‘, or (III) it is a bank (as defined in section 3(a)(1)

of the Federal Deposit Insurance Act (12 U.S.C.

1813(a)(1)) that is a wholly owned subsidiary of a nonprofit foundation, the foundation is described in section

501(c)(3) of the Internal Revenue Code of 1986 and

exempt from taxation under section 501(1) of such

Code, and the bank makes loans under this part only

to undergraduate students who are age 22 or younger

and has a portfolio of such loans that is not more

than $5,000,000’’;

(B) by striking ‘‘and’’ at the end of subparagraph (I);

(C) by striking the period at the end of subparagraph

(J) and inserting ‘‘; and’’; and

(D) by adding at the end the following new subparagraph:

‘‘(K) a consumer finance company subsidiary of a

national bank which, as of the date of enactment of this

subparagraph, through one or more subsidiaries: (i) acts

as a small business lending company, as determined under

regulations of the Small Business Administration under

section 120.470 of title 13, Code of Federal Regulations

(as such section is in effect on the date of enactment

of this subparagraph); and (ii) participates in the program

authorized by this part pursuant to subparagraph (C), provided the national bank and all of the bank’s direct and

indirect subsidiaries taken together as a whole, do not

have, as their primary consumer credit function, the making or holding of loans made to students under this part.’’;

and

(2) in paragraph (5), by adding at the end the following

new sentence:

‘‘It shall not be a violation of this paragraph for a lender

to provide assistance to institutions of higher education comparable to the kinds of assistance provided to institutions of

higher education by the Department of Education.’’.

(c) DEFINITION OF DEFAULT.—

(1) AMENDMENT.—Section 435(l) is amended—

(A) by striking ‘‘180 days’’ and inserting ‘‘270 days’’;

and

(B) by striking ‘‘240 days’’ and inserting ‘‘330 days’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply with respect to loans for which the first day
H. R. 6—129

of delinquency occurs on or after the date of enactment of

this Act.

(d) COHORT DEFAULT RATE.—Section 435(m) is amended—

(1) in paragraph (1)(B), by striking ‘‘insurance, and, in

considering appeals with respect to cohort default rates pursuant to subsection (a)(3), exclude’’ and inserting ‘‘insurance. In

considering appeals with respect to cohort default rates pursuant to subsection (a)(3), the Secretary shall exclude, from the

calculation of the number of students who entered repayment

and from the calculation of the number of students who

default,’’; and

(2) in paragraph (2)(C), by adding at the end the following:

‘‘The Secretary may require guaranty agencies to collect data

with respect to defaulted loans in a manner that will permit

the identification of any defaulted loan for which (i) the borrower is currently making payments and has made not less

than 6 consecutive on-time payments by the end of such following fiscal year, and (ii) a guaranty agency has renewed the

borrower’s title IV eligibility as provided in section 428F(b).’’;

and

(3) in paragraph (4), by adding at the end the following:

‘‘(D) The Secretary shall publish the report described in

subparagraph (C) by September 30 of each year.’’.

SEC. 430. DELEGATION OF FUNCTIONS.

Section 436 (20 U.S.C. 1086) is amended to read as follows:

‘‘SEC. 436. DELEGATION OF FUNCTIONS.

‘‘(a) IN GENERAL.—An eligible lender or guaranty agency that

contracts with another entity to perform any of the lender’s or

agency’s functions under this title, or otherwise delegates the

performance of such functions to such other entity—

‘‘(1) shall not be relieved of the lender’s or agency’s duty

to comply with the requirements of this title; and

‘‘(2) shall monitor the activities of such other entity for

compliance with such requirements.

‘‘(b) SPECIAL RULE.—A lender that holds a loan made under

part B in the lender’s capacity as a trustee is responsible for

complying with all statutory and regulatory requirements imposed

on any other holder of a loan made under this part.’’.

SEC. 431. DISCHARGE.

Section 437(c)(1) (20 U.S.C. 1087(c)(1)) is amended—

(1) by inserting after ‘‘falsely certified by the eligible institution,’’ the following: ‘‘or if the institution failed to make a

refund of loan proceeds which the institution owed to such

student’s lender,’’; and

(2) by adding at the end the following new sentences:

‘‘In the case of a discharge based upon a failure to refund,

the amount of the discharge shall not exceed that portion

of the loan which should have been refunded. The Secretary

shall report to the Committee on Education and the Workforce

of the House of Representatives and the Committee on Labor

and Human Resources of the Senate annually as to the dollar

amount of loan discharges attributable to failures to make

refunds.’’.
H. R. 6—130

SEC. 432. DEBT MANAGEMENT OPTIONS.

Section 437A (20 U.S.C. 1087–0) is repealed.

SEC. 433. SPECIAL ALLOWANCES.

(a) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE

SUBSIDIES.—Paragraph (1) of section 438(c) (20 U.S.C. 1087–1) is

amended to read as follows:

‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE

SUBSIDIES.—(A) Notwithstanding subsection (b), the Secretary

shall collect the amount the lender is authorized to charge

as an origination fee in accordance with paragraph (2) of this

subsection—

‘‘(i) by reducing the total amount of interest and special

allowance payable under section 428(a)(3)(A) and subsection (b) of this section, respectively, to any holder; or

‘‘(ii) directly from the holder of the loan, if the lender

fails or is not required to bill the Secretary for interest

and special allowance or withdraws from the program with

unpaid loan origination fees.

‘‘(B) If the Secretary collects the origination fee under this

subsection through the reduction of interest and special allowance, and the total amount of interest and special allowance

payable under section 428(a)(3)(A) and subsection (b) of this

section, respectively, is less than the amount the lender was

authorized to charge borrowers for origination fees in that

quarter, the Secretary shall deduct the excess amount from

the subsequent quarters’ payments until the total amount has

been deducted.’’.

(b) ORIGINATION FEES.—Section 438(c) is amended—

(1) in paragraph (2)—

(A) by striking ‘‘(other than’’ and inserting ‘‘(including

loans made under section 428H, but excluding’’; and

(B) by adding at the end the following new sentence:

‘‘Except as provided in paragraph (8), a lender that charges

an origination fee under this paragraph shall assess the

same fee to all student borrowers.’’; and

(2) by adding at the end the following new paragraph:

‘‘(8) EXCEPTION.—Notwithstanding paragraph (2), a lender

may assess a lesser origination fee for a borrower demonstrating

greater financial need as determined by such borrower’s

adjusted gross family income.’’.

(c) COLLECTION OF FEES.—Paragraph (1) of section 438(d) is

amended to read as follows:

‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE

SUBSIDIES.—

‘‘(A) IN GENERAL.—Notwithstanding subsection (b), the

Secretary shall collect a loan fee in an amount determined

in accordance with paragraph (2)—

‘‘(i) by reducing the total amount of interest and

special allowance payable under section 428(a)(3)(A)

and subsection (b), respectively, to any holder of a

loan; or

‘‘(ii) directly from the holder of the loan, if the

lender—

‘‘(I) fails or is not required to bill the Secretary

for interest and special allowance payments; or
H. R. 6—131

‘‘(II) withdraws from the program with unpaid

loan fees.

‘‘(B) SPECIAL RULE.—If the Secretary collects loan fees

under this subsection through the reduction of interest

and special allowance payments, and the total amount

of interest and special allowance payable under section

428(a)(3)(A) and subsection (b), respectively, is less than

the amount of such loan fees, then the Secretary shall

deduct the amount of the loan fee balance from the amount

of interest and special allowance payments that would

otherwise be payable, in subsequent quarterly increments

until the balance has been deducted.’’.

(d) LENDING FROM PROCEEDS OF TAX-EXEMPT OBLIGATIONS.— (1) AMENDMENT.—Subsection (e) of section 438 is amended

to read as follows:

‘‘(e) NONDISCRIMINATION.—In order for the holders of loans

which were made or purchased with funds obtained by the holder

from an Authority issuing obligations, the income from which is

exempt from taxation under the Internal Revenue Code of 1986,

to be eligible to receive a special allowance under subsection (b)(2)

on any such loans, the Authority shall not engage in any pattern

or practice which results in a denial of a borrower’s access to

loans under this part because of the borrower’s race, sex, color,

religion, national origin, age, disability status, income, attendance

at a particular eligible institution within the area served by the

Authority, length of the borrower’s educational program, or the

borrower’s academic year in school.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall be effective as of the date the plan required by section

438(e)(1) (as such section was in effect prior to such amendment) was approved by the Secretary or the Governor (whichever was the case). No Authority shall have a right or cause

of action against the Secretary for any amounts paid to or

offset by the Secretary pursuant to a final settlement agreement

entered into prior to July 1, 1998, resolving any audit or program review findings alleging violations of any provision of

section 438(e) (as in effect prior to such amendment).

SEC. 434. FEDERAL FAMILY EDUCATION LOAN INSURANCE FUND.

Any funds in the insurance fund, as established under section

431 of the Higher Education Act of 1965 (20 U.S.C. 1081), on

the date of enactment of this Act shall be transferred to and

deposited in the Treasury. All funds received by the Secretary

of Education under subsection (a) of such section after the date

of enactment of this Act shall be deposited into the fund in accordance with such subsection.

PART C—FEDERAL WORK-STUDY PROGRAMS

SEC. 441. AUTHORIZATION OF APPROPRIATIONS; COMMUNITY

SERVICES.

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 441(b) (42

U.S.C. 2751(b)) is amended by striking ‘‘$800,000,000 for fiscal

year 1993’’ and inserting ‘‘$1,000,000,000 for fiscal year 1999’’.

(b) DEFINITION OF COMMUNITY SERVICES.—Section 441(c) is

amended—
H. R. 6—132

(1) in paragraph (1), by inserting ‘‘(including child care

services provided on campus that are open and accessible to

the community)’’ after ‘‘child care’’; and

(2) in paragraph (3), by inserting ‘‘, including students

with disabilities who are enrolled at the institution’’ before

the semicolon.

SEC. 442. ALLOCATION OF FUNDS.

(a) UPDATING THE BASE PERIOD.—Section 442(a) (20 U.S.C.

2752(a)) is amended—

(1) in paragraph (1), by striking ‘‘received and used under

this part for fiscal year 1985’’ and inserting ‘‘received under

subsections (a) and (b) for fiscal year 1999 (as such subsections

were in effect with respect to allocations for such fiscal year)’’;

(2) in paragraph (2)—

(A) in subparagraphs (A) and (B), by striking ‘‘1985’’

each place the term appears and inserting ‘‘1999’’; and

(B) in subparagraph (C)(i), by striking ‘‘1986’’ and

inserting ‘‘2000’’.

(b) ELIMINATION OF PRO RATA SHARE.—Section 442 is

amended—

(1) by striking subsection (b);

(2) by redesignating subsections (c) through (f ) as subsections (b) through (e), respectively;

(3) in subsection (b)(1) (as redesignated by paragraph (2)),

by striking ‘‘three-quarters of’’;

(4) in subsection (b)(2)(A)(i) (as so redesignated), by striking

‘‘subsection (d)’’ and inserting ‘‘subsection (c)’’;

(5) in subsection (c)(3) (as so redesignated), by striking

‘‘the Secretary, for academic year 1988–1989 shall use the

procedures employed for academic year 1986–1987, and, for

any subsequent academic years,’’; and

(6) in subsection (d)(1) (as so redesignated)—

(A) by striking ‘‘10 percent’’ and inserting ‘‘5 percent’’;

(B) by striking ‘‘in community service’’ and inserting

‘‘in tutoring in reading and family literacy activities’’; and

(C) by striking ‘‘subsection (c)’’ and inserting ‘‘subsection (b)’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to allocations of amounts appropriated

pursuant to section 441(b) for fiscal year 2000 or any succeeding

fiscal year.

SEC. 443. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

(a) ELIGIBLE EMPLOYMENT.—Section 443(b)(1) (42 U.S.C.

2753(b)(1)) is amended by inserting ‘‘, including internships,

practica, or research assistantships as determined by the Secretary,’’

after ‘‘part-time employment’’.

(b) COMMUNITY SERVICE.—Section 443(b)(2)(A) is amended—

(1) by striking ‘‘in fiscal year 1994 and succeeding fiscal

years,’’ and inserting ‘‘for fiscal year 1999,’’; and

(2) by inserting ‘‘(including a reasonable amount of time

spent in travel or training directly related to such community

service)’’ after ‘‘community service’’.

(c) TUTORING AND LITERACY ACTIVITIES.—Section 443 is

amended—

(1) in subsection (b)(2)—

(A) by striking ‘‘and’’ at the end of subparagraph (A);
H. R. 6—133

(B) by redesignating subparagraph (B) as subparagraph (C); and

(C) by inserting after subparagraph (A) the following:

‘‘(B) for fiscal year 2000 and succeeding fiscal years,

an institution shall use at least 7 percent of the total

amount of funds granted to such institution under this

section for such fiscal year to compensate students

employed in community service, and shall ensure that not

less than 1 tutoring or family literacy project (as described

in subsection (d)) is included in meeting the requirement

of this subparagraph, except that the Secretary may waive

this subparagraph if the Secretary determines that enforcing this subparagraph would cause hardship for students

at the institution; and’’; and

(2) by adding at the end the following new subsection:

‘‘(d) TUTORING AND LITERACY ACTIVITIES.—

‘‘(1) USE OF FUNDS.—In any academic year to which subsection (b)(2)(B) applies, an institution shall ensure that funds

granted to such institution under this section are used in

accordance with such subsection to compensate (including compensation for time spent in training and travel directly related

to tutoring in reading and family literacy activities) students—

‘‘(A) employed as reading tutors for children who are

preschool age or are in elementary school; or

‘‘(B) employed in family literacy projects.

‘‘(2) PRIORITY FOR SCHOOLS.—To the extent practicable, an

institution shall—

‘‘(A) give priority to the employment of students in

the provision of tutoring in reading in schools that are

participating in a reading reform project that—

‘‘(i) is designed to train teachers how to teach

reading on the basis of scientifically-based research

on reading; and

‘‘(ii) is funded under the Elementary and Secondary Education Act of 1965; and

‘‘(B) ensure that any student compensated with the

funds described in paragraph (1) who is employed in a

school participating in a reading reform project described

in subparagraph (A) receives training from the employing

school in the instructional practices used by the school.

‘‘(3) FEDERAL SHARE.—The Federal share of the compensation of work-study students compensated under this subsection

may exceed 75 percent.’’.

(d) USE OF FUNDS FOR INDEPENDENT AND LESS THAN FULL- TIME STUDENTS.—Paragraph (3) of section 443(b) is amended to

read as follows:

‘‘(3) provide that in the selection of students for employment

under such work-study program, only students who demonstrate financial need in accordance with part F and meet

the requirements of section 484 will be assisted, except that

if the institution’s grant under this part is directly or indirectly

based in part on the financial need demonstrated by students

who are (A) attending the institution on less than a full-time

basis, or (B) independent students, a reasonable portion of

the grant shall be made available to such students;’’.

(e) FEDERAL SHARE.—Paragraph (5) of section 443(b) is

amended to read as follows:
H. R. 6—134

‘‘(5) provide that the Federal share of the compensation

of students employed in the work-study program in accordance

with the agreement shall not exceed 75 percent, except that—

‘‘(A) the Federal share may exceed 75 percent, but

not exceed 90 percent, if, consistent with regulations of

the Secretary—

‘‘(i) the student is employed at a nonprofit private

organization or a government agency that—

‘‘(I) is not a part of, and is not owned, operated,

or controlled by, or under common ownership, operation, or control with, the institution;

‘‘(II) is selected by the institution on an

individual case-by-case basis for such student; and

‘‘(III) would otherwise be unable to afford the

costs of such employment; and

‘‘(ii) not more than 10 percent of the students

compensated through the institution’s grant under this

part during the academic year are employed in positions for which the Federal share exceeds 75 percent;

and

‘‘(B) the Federal share may exceed 75 percent if the

Secretary determines, pursuant to regulations promulgated

by the Secretary establishing objective criteria for such

determinations, that a Federal share in excess of such

amounts is required in furtherance of the purpose of this

part;’’.

(f ) AVAILABILITY OF EMPLOYMENT.—Section 443(b)(6) is

amended by striking ‘‘, and to make’’ and all that follows through

‘‘such employment’’.

(g) ACADEMIC RELEVANCE.—Section 443(c)(4) is amended by

inserting before the semicolon at the end the following: ‘‘, to the

maximum extent practicable’’.

SEC. 444. FLEXIBLE USE OF FUNDS.

Section 445 (42 U.S.C. 2755) is amended by adding at the

end the following:

‘‘(c) FLEXIBLE USE OF FUNDS.—An eligible institution may, upon

the request of a student, make payments to the student under

this part by crediting the student’s account at the institution or

by making a direct deposit to the student’s account at a depository

institution. An eligible institution may only credit the student’s

account at the institution for (1) tuition and fees, (2) in the case

of institutionally owned housing, room and board, and (3) other

institutionally provided goods and services.’’.

SEC. 445. WORK COLLEGES.

Section 448 (42 U.S.C. 2756b) is amended—

(1) in subsection (b)(2)—

(A) in subparagraph (C), by striking ‘‘and’’ after the

semicolon;

(B) in subparagraph (D)(ii), by striking the period and

inserting a semicolon; and

(C) by adding at the end the following:

‘‘(E) coordinate and carry out joint projects and activities to promote work service learning; and

‘‘(F) carry out a comprehensive, longitudinal study of

student academic progress and academic and career outcomes, relative to student self-sufficiency in financing their
H. R. 6—135

higher education, repayment of student loans, continued

community service, kind and quality of service performed,

and career choice and community service selected after

graduation.’’; and

(2) in subsection (f ), by striking ‘‘1993’’ and inserting

‘‘1999’’.

PART D—WILLIAM D. FORD FEDERAL DIRECT

LOAN PROGRAM

SEC. 451. SELECTION OF INSTITUTIONS.

(a) GENERAL AUTHORITY.—Section 453(a) (20 U.S.C. 1087c(a))

is amended—

(1) by striking ‘‘PHASE-IN’’ and everything that follows

through ‘‘GENERAL AUTHORITY.—’’ and inserting ‘‘GENERAL

AUTHORITY.—’’; and

(2) by striking paragraphs (2), (3), and (4).

(b) SELECTION CRITERIA.—Section 453(b)(2) is amended by striking ‘‘prescribe,’’ and everything that follows through the end of

subparagraph (B) and inserting ‘‘prescribe.’’.

(c) ORIGINATION.—Section 453(c) is amended—

(1) in paragraph (2)—

(A) in the heading, by striking ‘‘TRANSITION SELECTION

CRITERIA’’ and inserting ‘‘SELECTION CRITERIA’’;

(B) by striking ‘‘For academic year 1994–1995, the

Secretary’’ and inserting ‘‘The Secretary’’;

(C) by striking subparagraph (A);

(D) by striking subparagraph (E); and

(E) by redesignating subparagraphs (B), (C), (D), (F),

(G), and (H) as subparagraphs (A) through (F), respectively;

and

(2) in paragraph (3)—

(A) in the paragraph heading, by striking ‘‘AFTER

TRANSITION’’; and

(B) by striking ‘‘For academic year 1995–1996 and

subsequent academic years, the’’ and inserting ‘‘The’’.

SEC. 452. TERMS AND CONDITIONS.

(a) DIRECT LOAN INTEREST RATES.— (1) AMENDMENT.—Section 455(b) (20 U.S.C. 1087e(b)) is

amended by adding at the end the following:

‘‘(6) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER

OCTOBER 1, 1998, AND BEFORE JULY 1, 2003.— ‘‘(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the

preceding paragraphs of this subsection, for Federal Direct

Stafford Loans and Federal Direct Unsubsidized Stafford

Loans for which the first disbursement is made on or

after October 1, 1998, and before July 1, 2003, the

applicable rate of interest shall, during any 12-month

period beginning on July 1 and ending on June 30, be

determined on the preceding June 1 and be equal to—

‘‘(i) the bond equivalent rate of 91-day Treasury

bills auctioned at the final auction held prior to such

June 1; plus

‘‘(ii) 2.3 percent,

except that such rate shall not exceed 8.25 percent.
H. R. 6—136

‘‘(B) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding the preceding paragraphs of this subsection, with

respect to any Federal Direct Stafford Loan or Federal

Direct Unsubsidized Stafford Loan for which the first

disbursement is made on or after October 1, 1998, and

before July 1, 2003, the applicable rate of interest for

interest which accrues—

‘‘(i) prior to the beginning of the repayment period

of the loan; or

‘‘(ii) during the period in which principal need

not be paid (whether or not such principal is in fact

paid) by reason of a provision described in section

428(b)(1)(M) or 427(a)(2)(C),

shall be determined under subparagraph (A) by substituting ‘1.7 percent’ for ‘2.3 percent’.

‘‘(C) PLUS LOANS.—Notwithstanding the preceding

paragraphs of this subsection, with respect to Federal

Direct PLUS Loan for which the first disbursement is

made on or after October 1, 1998, and before July 1, 2003,

the applicable rate of interest shall be determined under

subparagraph (A)—

‘‘(i) by substituting ‘3.1 percent’ for ‘2.3 percent’;

and

‘‘(ii) by substituting ‘9.0 percent’ for ‘8.25 percent’.

‘‘(D) CONSOLIDATION LOANS.—Notwithstanding the

preceding paragraphs of this subsection, any Federal Direct

Consolidation loan for which the application is received

on or after February 1, 1999, and before July 1, 2003,

shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of—

‘‘(i) the weighted average of the interest rates on

the loans consolidated, rounded to the nearest higher

one-eighth of one percent; or

‘‘(ii) 8.25 percent.

‘‘(E) TEMPORARY RULES FOR CONSOLIDATION LOANS.— Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which

the application is received on or after October 1, 1998,

and before February 1, 1999, shall bear interest at an

annual rate on the unpaid principal balance of the loan

that is equal to—

‘‘(i) the bond equivalent rate of 91-day Treasury

bills auctioned at the final auction held prior to such

June 1; plus

‘‘(ii) 2.3 percent,

except that such rate shall not exceed 8.25 percent.’’.

(2) LIMITATION ON CONSOLIDATION LOANS DURING TEMPORARY INTEREST RATE.—Notwithstanding section 455(g) of the

Higher Education Act of 1965, a borrower who is enrolled

or accepted for enrollment in an institution of higher education

may not consolidate loans under such section during the period

beginning October 1, 1998, and ending February 1, 1999, unless

the borrower certifies that the borrower has no outstanding

loans made, insured, or guaranteed under title IV of such

Act other than loans made under part D of such title.

(b) REPAYMENT INCENTIVES.—Section 455(b) (20 U.S.C.

1087e(b)) is further amended by adding at the end the following:
H. R. 6—137

‘‘(7) REPAYMENT INCENTIVES.— ‘‘(A) IN GENERAL.—Notwithstanding any other provision of this part, the Secretary is authorized to prescribe

by regulation such reductions in the interest rate paid

by a borrower of a loan made under this part as the

Secretary determines appropriate to encourage on-time

repayment of the loan. Such reductions may be offered

only if the Secretary determines the reductions are cost

neutral and in the best financial interest of the Federal

Government. Any increase in subsidy costs resulting from

such reductions shall be completely offset by corresponding

savings in funds available for the William D. Ford Federal

Direct Loan Program in that fiscal year from section 458

and other administrative accounts.

‘‘(B) ACCOUNTABILITY.—Prior to publishing regulations

proposing repayment incentives, the Secretary shall ensure

the cost neutrality of such reductions. The Secretary shall

not prescribe such regulations in final form unless an official report from the Director of the Office of Management

and Budget to the Secretary and a comparable report from

the Director of the Congressional Budget Office to the

Congress each certify that any such reductions will be

completely cost neutral. Such reports shall be transmitted

to the Committee on Labor and Human Resources of the

Senate and the Committee on Education and the Workforce

of the House of Representatives not less than 60 days

prior to the publication of regulations proposing such reductions.’’.

(c) CONSOLIDATION LOANS.—The first sentence of section 455(g)

is amended by striking everything after ‘‘section 428C(a)(4)’’ and

inserting a period.

(d) EFFECTIVE DATE.—The amendments made by subsection

(a) shall apply with respect to any loan made under part D of

title IV of the Higher Education Act of 1965 for which the first

disbursement is made on or after October 1, 1998, and before

July 1, 2003, except that such amendments shall apply with respect

to a Federal Direct Consolidation Loan for which the application

is received on or after October 1, 1998, and before July 1, 2003.

SEC. 453. CONTRACTS.

Section 456(b) (20 U.S.C. 1087f(b)) is amended—

(1) in paragraph (3), by inserting ‘‘and’’ after the semicolon;

(2) by striking paragraph (4); and

(3) by redesignating paragraph (5) as paragraph (4).

SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES.

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

(1) by amending subsection (a) to read as follows:

‘‘(a) ADMINISTRATIVE EXPENSES.— ‘‘(1) IN GENERAL.—Each fiscal year there shall be available

to the Secretary, from funds not otherwise appropriated, funds

to be obligated for—

‘‘(A) administrative costs under this part and part B,

including the costs of the direct student loan programs

under this part; and

‘‘(B) account maintenance fees payable to guaranty

agencies under part B and calculated in accordance with

subsections (b) and (c),
H. R. 6—138

not to exceed (from such funds not otherwise appropriated)

$617,000,000 in fiscal year 1999, $735,000,000 in fiscal year

2000, $770,000,000 in fiscal year 2001, $780,000,000 in fiscal

year 2002, and $795,000,000 in fiscal year 2003.

‘‘(2) ACCOUNT MAINTENANCE FEES.—Account maintenance

fees under paragraph (1)(B) shall be paid quarterly and deposited in the Agency Operating Fund established under section

422B.

‘‘(3) CARRYOVER.—The Secretary may carry over funds

made available under this section to a subsequent fiscal year.’’;

(2) by amending subsection (b) to read as follows:

‘‘(b) CALCULATION BASIS.—Except as provided in subsection (c),

account maintenance fees payable to guaranty agencies under paragraph (1)(B) shall be calculated—

‘‘(1) for fiscal years 1999 and 2000, on the basis of 0.12

percent of the original principal amount of outstanding loans

on which insurance was issued under part B; and

‘‘(2) for fiscal years 2001, 2002, and 2003, on the basis

of 0.10 percent of the original principal amount of outstanding

loans on which insurance was issued under part B.’’;

(3) by striking subsection (d);

(4) by redesignating subsection (c) as subsection (d); and

(5) by inserting after subsection (b) the following:

‘‘(c) SPECIAL RULES.—

‘‘(1) FEE CAP.—The total amount of account maintenance

fees payable under this section—

‘‘(A) for fiscal year 1999, shall not exceed $177,000,000;

‘‘(B) for fiscal year 2000, shall not exceed $180,000,000;

‘‘(C) for fiscal year 2001, shall not exceed $170,000,000;

‘‘(D) for fiscal year 2002, shall not exceed $180,000,000;

and

‘‘(E) for fiscal year 2003, shall not exceed $195,000,000.

‘‘(2) INSUFFICIENT FUNDING.— ‘‘(A) IN GENERAL.—If the amounts set forth in paragraph (1) are insufficient to pay the account maintenance

fees payable to guaranty agencies pursuant to subsection

(b) for a fiscal year, the Secretary shall pay the insufficiency

by requiring guaranty agencies to transfer funds from the

Federal Student Loan Reserve Funds under section 422A

to the Agency Operating Funds under section 422B.

‘‘(B) ENTITLEMENT.—A guaranty agency shall be

deemed to have a contractual right against the United

States to receive payments according to the provisions of

subparagraph (A).’’.

SEC. 455. AUTHORITY TO SELL LOANS.

Part D of title IV (20 U.S.C. 1087a et seq.) is amended by

adding at the end the following:

‘‘SEC. 459. AUTHORITY TO SELL LOANS.

‘‘The Secretary, in consultation with the Secretary of the Treasury, is authorized to sell loans made under this part on such

terms as the Secretary determines are in the best interest of the

United States, except that any such sale shall not result in any

cost to the Federal Government. Notwithstanding any other provision of law, the proceeds of any such sale may be used by the

Secretary to offer reductions in the interest rate paid by a borrower
H. R. 6—139

of a loan made under this part as the Secretary determines appropriate to encourage on-time repayment in accordance with section

455(b)(7). Such reductions may be offered only if the Secretary

determines the reductions are in the best financial interests of

the Federal Government.’’.

SEC. 456. LOAN CANCELLATION FOR TEACHERS.

Part D of title IV (20 U.S.C. 1087a et seq.) is further amended

by adding after section 459 (as added by section 455) the following:

‘‘SEC. 460. LOAN CANCELLATION FOR TEACHERS.

‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of this section

to encourage individuals to enter and continue in the teaching

profession.

‘‘(b) PROGRAM AUTHORIZED.—

‘‘(1) IN GENERAL.—The Secretary shall carry out a program

of canceling the obligation to repay a qualified loan amount

in accordance with subsection (c) for Federal Direct Stafford

Loans and Federal Direct Unsubsidized Stafford Loans made

under this part for any new borrower on or after October

1, 1998, who—

‘‘(A) has been employed as a full-time teacher for 5

consecutive complete school years—

‘‘(i) in a school that qualifies under section

465(a)(2)(A) for loan cancellation for Perkins loan

recipients who teach in such schools;

‘‘(ii) if employed as a secondary school teacher,

is teaching a subject area that is relevant to the

borrower’s academic major as certified by the chief

administrative officer of the public or non-profit private

secondary school in which the borrower is employed;

and

‘‘(iii) if employed as an elementary school teacher,

has demonstrated, as certified by the chief administrative officer of the public or nonprofit private elementary

school in which the borrower is employed, knowledge

and teaching skills in reading, writing, mathematics

and other areas of the elementary school curriculum;

and

‘‘(B) is not in default on a loan for which the borrower

seeks forgiveness.

‘‘(2) SPECIAL RULE.—No borrower may obtain a reduction

of loan obligations under both this section and section 428J.

‘‘(c) QUALIFIED LOAN AMOUNTS.— ‘‘(1) IN GENERAL.—The Secretary shall cancel not more

than $5,000 in the aggregate of the loan obligation on a Federal

Direct Stafford Loan or a Federal Direct Unsubsidized Stafford

Loan that is outstanding after the completion of the fifth complete school year of teaching described in subsection (b)(1)(A).

‘‘(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount

for a Federal Direct Consolidation Loan may be a qualified

loan amount for the purposes of this subsection only to the

extent that such loan amount was used to repay a Federal

Direct Stafford Loan, a Federal Direct Unsubsidized Stafford

Loan, or a loan made under section 428 or 428H, for a borrower

who meets the requirements of subsection (b), as determined

in accordance with regulations prescribed by the Secretary.
H. R. 6—140

‘‘(d) REGULATIONS.—The Secretary is authorized to issue such

regulations as may be necessary to carry out the provisions of

this section.

‘‘(e) CONSTRUCTION.—Nothing in this section shall be construed

to authorize any refunding of any canceled loan.

‘‘(f ) LIST.—If the list of schools in which a teacher may perform

service pursuant to subsection (b) is not available before May 1

of any year, the Secretary may use the list for the year preceding

the year for which the determination is made to make such service

determination.

‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.— ‘‘(1) CONTINUED ELIGIBILITY.—Any teacher who performs

service in a school that—

‘‘(A) meets the requirements of subsection (b)(1)(A) in

any year during such service; and

‘‘(B) in a subsequent year fails to meet the requirements of such subsection, may continue to teach in such

school and shall be eligible for loan cancellation pursuant

to subsection (b).

‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may,

for the same volunteer service, receive a benefit under both

this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12571 et seq.).

‘‘(h) DEFINITION.—For the purpose of this section, the term

‘year’ where applied to service as a teacher means an academic

year as defined by the Secretary.’’.

PART E—FEDERAL PERKINS LOANS

SEC. 461. AUTHORIZATION OF APPROPRIATIONS.

Subsection (b) of section 461 (20 U.S.C. 1087aa) is amended—

(1) in paragraph (1), by striking ‘‘1993’’ and inserting

‘‘1999’’; and

(2) in paragraph (2), by striking ‘‘1997’’ each place the

term appears and inserting ‘‘2003’’.

SEC. 462. ALLOCATION OF FUNDS.

(a) CHANGES IN ALLOCATION FORMULA.— (1) UPDATING THE BASE PERIOD.—Section 462(a) (20 U.S.C.

1087bb(a)) is amended—

(A) in paragraph (1)(A), by striking ‘‘the amount of

the Federal capital contribution allocated to such institution under this part for fiscal year 1985’’ and inserting

‘‘the amount received under subsections (a) and (b) of this

section for fiscal year 1999 (as such subsections were in

effect with respect to allocations for such fiscal year)’’;

(B) in paragraph (2)—

(i) in subparagraphs (A) and (B), by striking ‘‘1985’’

each place the term appears and inserting ‘‘1999’’; and

(ii) in subparagraph (C)(i), by striking ‘‘1986’’ and

inserting ‘‘2000’’.

(2) ELIMINATION OF PRO RATA SHARE.—Section 462 is further amended—

(A) in subsection (a)—

(i) in paragraph (1)(B), by striking ‘‘subsection (f )’’

and inserting ‘‘subsection (e)’’;
H. R. 6—141

(ii) in the matter following paragraph (1)(B), by

striking ‘‘subsection (g)’’ and inserting ‘‘subsection (f)’’;

(iii) in paragraph (2)(D)(ii), by striking ‘‘subsection

(f)’’ and inserting ‘‘subsection (e)’’; and

(iv) in the matter following paragraph (2)(D)(ii),

by striking ‘‘subsection (g)’’ and inserting ‘‘subsection

(f)’’;

(B) by striking subsection (b);

(C) in subsection (c)(1), by striking ‘‘three-quarters of

the remainder’’ and inserting ‘‘the remainder’’;

(D) in the matter following subsection (c)(2)(B), by

striking ‘‘subsection (g)’’ and inserting ‘‘subsection (f )’’;

(E) in subsection (c)(3)—

(i) in subparagraph (A), by striking ‘‘subsection

(d)’’ and inserting ‘‘subsection (c)’’;

(ii) in subparagraph (C), by striking ‘‘subsection

(f )’’ and inserting ‘‘subsection (e)’’; and

(iii) in the matter following subparagraph (C), by

striking ‘‘subsection (g)’’ and inserting ‘‘subsection (f )’’;

(F) in subsection ( j)(1)(B)(i), by striking ‘‘1985’’ and

inserting ‘‘1999’’;

(G) in subsection ( j)(2)—

(i) in subparagraph (A), by striking ‘‘paragraph

(3) of subsection (c)’’ and inserting ‘‘subsection (b)(3)’’;

and

(ii) in subparagraph (B), by striking ‘‘subsection

(c) of section 462’’ and inserting ‘‘subsection (b)’’; and

(H) by redesignating subsections (c) through ( j) as

subsections (b) through (i), respectively.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to allocations of amounts appropriated pursuant to section 461(b) for fiscal year 2000 or any

succeeding fiscal year.

(b) SELF-HELP NEED.—The matter preceding subparagraph (A)

of section 462(c)(3) (as redesignated by subsection (a)(2)(G)) is

amended by striking ‘‘the Secretary, for’’ and all that follows through

‘‘years,’’.

(c) DEFAULT PENALTIES.—Subsections (e) and (f ) of section 462

(as redesignated by subsection (a)(2)(G)) are amended to read as

follows:

‘‘(e) DEFAULT PENALTIES.— ‘‘(1) YEARS PRECEDING FISCAL YEAR 2000.—For any fiscal

year preceding fiscal year 2000, any institution with a cohort

default rate that—

‘‘(A) equals or exceeds 15 percent, shall establish a

default reduction plan pursuant to regulations prescribed

by the Secretary, except that such plan shall not be

required with respect to an institution that has a default

rate of less than 20 percent and that has less than 100

students who have loans under this part in such academic

year;

‘‘(B) equals or exceeds 20 percent, but is less than

25 percent, shall have a default penalty of 0.9;

‘‘(C) equals or exceeds 25 percent, but is less than

30 percent, shall have a default penalty of 0.7; and

‘‘(D) equals or exceeds 30 percent shall have a default

penalty of zero.
H. R. 6—142

‘‘(2) YEARS FOLLOWING FISCAL YEAR 2000.—For fiscal year

2000 and any succeeding fiscal year, any institution with a

cohort default rate (as defined under subsection (g)) that equals

or exceeds 25 percent shall have a default penalty of zero.

‘‘(3) INELIGIBILITY.—

‘‘(A) IN GENERAL.—For fiscal year 2000 and any

succeeding fiscal year, any institution with a cohort default

rate (as defined in subsection (g)) that equals or exceeds

50 percent for each of the 3 most recent years for which

data are available shall not be eligible to participate in

a program under this part for the fiscal year for which

the determination is made and the 2 succeeding fiscal

years, unless, within 30 days of receiving notification from

the Secretary of the loss of eligibility under this paragraph,

the institution appeals the loss of eligibility to the Secretary. The Secretary shall issue a decision on any such

appeal within 45 days after the submission of the appeal.

Such decision may permit the institution to continue to

participate in a program under this part if—

‘‘(i) the institution demonstrates to the satisfaction

of the Secretary that the calculation of the institution’s

cohort default rate is not accurate, and that recalculation would reduce the institution’s cohort default rate

for any of the 3 fiscal years below 50 percent; or

‘‘(ii) there are, in the judgment of the Secretary,

such a small number of borrowers entering repayment

that the application of this subparagraph would be

inequitable.

‘‘(B) CONTINUED PARTICIPATION.—During an appeal

under subparagraph (A), the Secretary may permit the

institution to continue to participate in a program under

this part.

‘‘(C) RETURN OF FUNDS.—Within 90 days after the date

of any termination pursuant to subparagraph (A), or the

conclusion of any appeal pursuant to subparagraph (B),

whichever is later, the balance of the student loan fund

established under this part by the institution that is the

subject of the termination shall be distributed as follows:

‘‘(i) The Secretary shall first be paid an amount

which bears the same ratio to such balance (as of

the date of such distribution) as the total amount of

Federal capital contributions to such fund by the Secretary under this part bears to the sum of such Federal

capital contributions and the capital contributions to

such fund made by the institution.

‘‘(ii) The remainder of such student loan fund shall

be paid to the institution.

‘‘(D) USE OF RETURNED FUNDS.—Any funds returned

to the Secretary under this paragraph shall be reallocated

to institutions of higher education pursuant to subsection

(i).

‘‘(E) DEFINITION.—For the purposes of subparagraph

(A), the term ‘loss of eligibility’ shall be defined as the

mandatory liquidation of an institution’s student loan fund,

and assignment of the institution’s outstanding loan portfolio to the Secretary.

‘‘(f ) APPLICABLE MAXIMUM COHORT DEFAULT RATE.—
H. R. 6—143

‘‘(1) AWARD YEARS PRIOR TO 2000.—For award years prior

to award year 2000, the applicable maximum cohort default

rate is 30 percent.

‘‘(2) AWARD YEAR 2000 AND SUCCEEDING AWARD YEARS.—

For award year 2000 and subsequent years, the applicable

maximum cohort default rate is 25 percent.’’.

(d) COHORT DEFAULT RATE DEFINITION.—Section 462(g) (as

redesignated by subsection (a)(2)(G)) is amended—

(1) by striking the subsection heading and paragraphs (1)

and (2) and inserting the following:

‘‘(g) DEFINITION OF COHORT DEFAULT RATE.—’’;

(2) by striking ‘‘(3)(A) For award year 1994 and any

succeeding award year, the term’’ and inserting the following:

‘‘(1)(A) The term’’;

(3) in paragraph (1) (as redesignated by paragraph (2))—

(A) by striking subparagraphs (B) and (E); and

(B) by redesignating subparagraphs (C), (D), (F), and

(G) as subparagraphs (B), (C), (D), and (F), respectively;

(C) by inserting after subparagraph (D) (as redesignated by subparagraph (B)) the following:

‘‘(E) In determining the number of students who default

before the end of such award year, the institution, in calculating

the cohort default rate, shall exclude—

‘‘(i) any loan on which the borrower has, after the

time periods specified in paragraph (2)—

‘‘(I) voluntarily made 6 consecutive payments;

‘‘(II) voluntarily made all payments currently due;

‘‘(III) repaid in full the amount due on the

loan; or

‘‘(IV) received a deferment or forbearance, based

on a condition that began prior to such time periods;

‘‘(ii) any loan which has, after the time periods specified

in paragraph (2), been rehabilitated or canceled; and

‘‘(iii) any other loan that the Secretary determines

should be excluded from such determination.’’; and

(4) by striking paragraph (4) and inserting the following:

‘‘(2) For purposes of calculating the cohort default rate

under this subsection, a loan shall be considered to be in

default—

‘‘(A) 240 days (in the case of a loan repayable monthly),

or

‘‘(B) 270 days (in the case of a loan repayable quarterly),

after the borrower fails to make an installment payment when

due or to comply with other terms of the promissory note.’’.

(e) CONFORMING AMENDMENTS.—Section 462 (20 U.S.C. 1087bb)

is amended—

(1) in the matter following paragraphs (1)(B) and (2)(D)(ii)

of subsection (a), by inserting ‘‘cohort’’ before ‘‘default’’ each

place the term appears;

(2) in the matter following paragraphs (2)(B) and (3)(C)

of subsection (b) (as redesignated by subsection (a)(2)(G)), by

inserting ‘‘cohort’’ before ‘‘default’’ each place the term appears;

(3) in subsection (d)(2) (as redesignated by subsection

(a)(2)(G)), by inserting ‘‘cohort’’ before ‘‘default’’; and

(4) in subsection (g)(1)(F) (as redesignated by subsections

(a)(2)(G) and (d)(3)(B)), by inserting ‘‘cohort’’ before ‘‘default’’.
H. R. 6—144

SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

(a) CONTENTS OF AGREEMENTS.—Section 463(a) (20 U.S.C.

1087cc(a)) is amended—

(1) by amending subparagraph (B) of paragraph (2) to

read as follows:

‘‘(B) a capital contribution by an institution in an

amount equal to one-third of the Federal capital contributions described in subparagraph (A);’’;

(2) by striking paragraph (4); and

(3) by redesignating paragraphs (5) through (10) as paragraphs (4) through (9);

(b) AGREEMENTS WITH CREDIT BUREAUS.—Section 463(c) is

amended—

(1) in paragraph (1)—

(A) by striking ‘‘the Secretary shall’’ and inserting ‘‘the

Secretary and each institution of higher education participating in the program under this part shall’’; and

(B) by inserting ‘‘and regarding loans held by the Secretary or an institution’’ after ‘‘section 467’’;

(2) in paragraph (2)—

(A) in the matter preceding subparagraph (A), by striking ‘‘by the Secretary’’ and all that follows through ‘‘of—

’’ and inserting ‘‘by the Secretary or an institution, as

the case may be, to such organizations, with respect to

any loan held by the Secretary or the institution, respectively, of—’’;

(B) by amending subparagraph (A) to read as follows:

‘‘(A) the date of disbursement and the amount of such

loans made to any borrower under this part at the time

of disbursement of the loan;’’;

(C) in subparagraph (B)—

(i) by inserting ‘‘the repayment and’’ after ‘‘concerning’’; and

(ii) by striking ‘‘any defaulted’’ and inserting

‘‘such’’; and

(D) in subparagraph (C), by inserting ‘‘, or upon cancellation or discharge of the borrower’s obligation on the

loan for any reason’’ before the period;

(3) in paragraph (3)—

(A) in the matter preceding subparagraph (A)—

(i) by inserting ‘‘or an institution’’ after ‘‘from the

Secretary’’; and

(ii) by striking ‘‘until—’’ and inserting ‘‘until the

loan is paid in full.’’; and

(B) by striking subparagraphs (A) and (B);

(4) by amending paragraph (4) to read as follows:

‘‘(4)(A) Except as provided in subparagraph (B), an institution

of higher education, after consultation with the Secretary and

pursuant to the agreements entered into under paragraph (1), shall

disclose at least annually to any credit bureau organization with

which the Secretary has such an agreement the information set

forth in paragraph (2), and shall disclose promptly to such credit

bureau organization any changes to the information previously disclosed.

‘‘(B) The Secretary may promulgate regulations establishing

criteria under which an institution of higher education may cease
H. R. 6—145

reporting the information described in paragraph (2) before a loan

is paid in full.’’; and

(4) by inserting after paragraph (4) the following:

‘‘(5) Each institution of higher education shall notify the appropriate credit bureau organizations whenever a borrower of a loan

that is made and held by the institution and that is in default

makes 6 consecutive monthly payments on such loan, for the purpose of encouraging such organizations to update the status of

information maintained with respect to that borrower.’’.

(c) CONFORMING AMENDMENT.—Section 463(d) is

amended by striking ‘‘subsection (a)(10)’’ and inserting ‘‘subsection

(a)(9)’’.

SEC. 464. TERMS OF LOANS.

(a) TERMS AND CONDITIONS; ANNUAL LIMITS.—Paragraph (2)

of section 464(a) (20 U.S.C. 1087dd(a)) is amended to read as

follows:

‘‘(2)(A) Except as provided in paragraph (4), the total of loans

made to a student in any academic year or its equivalent by an

institution of higher education from a loan fund established pursuant to an agreement under this part shall not exceed—

‘‘(i) $4,000, in the case of a student who has not successfully

completed a program of undergraduate education; or

‘‘(ii) $6,000, in the case of a graduate or professional student

(as defined in regulations issued by the Secretary).

‘‘(B) Except as provided in paragraph (4), the aggregate unpaid

principal amount for all loans made to a student by institutions

of higher education from loan funds established pursuant to agreements under this part may not exceed— ‘‘(i) $40,000, in the case of any graduate or professional

student (as defined by regulations issued by the Secretary,

and including any loans from such funds made to such person

before such person became a graduate or professional student); ‘‘(ii) $20,000, in the case of a student who has successfully

completed 2 years of a program of education leading to a

bachelor’s degree but who has not completed the work necessary

for such a degree (determined under regulations issued by

the Secretary), and including any loans from such funds made

to such person before such person became such a student;

and

‘‘(iii) $8,000, in the case of any other student.’’.

(b) NEED AND ELIGIBILITY.—Section 464(b) is amended—

(1) in paragraph (1), by adding at the end the following:

‘‘A student who is in default on a loan under this part shall

not be eligible for an additional loan under this part unless

such loan meets one of the conditions for exclusion under section

462(g)(1)(E).’’; and

(2) by amending paragraph (2) to read as follows:

‘‘(2) If the institution’s capital contribution under section 462

is directly or indirectly based in part on the financial need demonstrated by students who are (A) attending the institution less

than full time, or (B) independent students, then a reasonable

portion of the loans made from the institution’s student loan fund

containing the contribution shall be made available to such students.’’.

(c) CONTENTS OF LOAN AGREEMENT.—Section 464(c) is

amended—
H. R. 6—146

(1) in paragraph (1)(D)—

(A) by striking ‘‘(i) 3 percent’’ and all that follows

through ‘‘or (iii)’’; and

(B) by striking ‘‘subparagraph (A)(i)’’ and inserting

‘‘paragraph (2)(A)(i)’’;

(2) in the matter following clause (iv) of paragraph (2)(A),

by striking ‘‘subparagraph (B)’’ and inserting ‘‘subparagraph

(A) of paragraph (1)’’;

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

‘‘(C) An individual with an outstanding loan balance who meets

the eligibility criteria for a deferment described in subparagraph

(A) as in effect on the date of enactment of this subparagraph

shall be eligible for deferment under this paragraph notwithstanding any contrary provision of the promissory note under which

the loan or loans were made, and notwithstanding any amendment

(or effective date provision relating to any amendment) to this

section made prior to the date of such deferment.’’; and

(4) by adding at the end the following:

‘‘(7) There shall be excluded from the 9-month period that

begins on the date on which a student ceases to carry at least

one-half the normal full-time academic workload (as described in

paragraph (1)(A)) any period not to exceed 3 years during which

a borrower who is a member of a reserve component of the Armed

Forces named in section 10101 of title 10, United States Code,

is called or ordered to active duty for a period of more than 30

days (as defined in section 101(d)(2) of such title). Such period

of exclusion shall include the period necessary to resume enrollment

at the borrower’s next available regular enrollment period.’’.

(d) DISCHARGE; REHABILITATION; INCENTIVE REPAYMENT.—

Section 464 is amended by adding at the end the following:

‘‘(g) DISCHARGE.—

‘‘(1) IN GENERAL.—If a student borrower who received a

loan made under this part on or after January 1, 1986, is

unable to complete the program in which such student is

enrolled due to the closure of the institution, then the Secretary

shall discharge the borrower’s liability on the loan (including

the interest and collection fees) and shall subsequently pursue

any claim available to such borrower against the institution

and the institution’s affiliates and principals, or settle the loan

obligation pursuant to the financial responsibility standards

described in section 498(c).

‘‘(2) ASSIGNMENT.—A borrower whose loan has been discharged pursuant to this subsection shall be deemed to have

assigned to the United States the right to a loan refund in

an amount that does not exceed the amount discharged against

the institution and the institution’s affiliates and principals.

‘‘(3) ELIGIBILITY FOR ADDITIONAL ASSISTANCE.—The period

during which a student was unable to complete a course of

study due to the closing of the institution shall not be considered for purposes of calculating the student’s period of eligibility

for additional assistance under this title.

‘‘(4) SPECIAL RULE.—A borrower whose loan has been discharged pursuant to this subsection shall not be precluded,

because of that discharge, from receiving additional grant, loan,

or work assistance under this title for which the borrower
H. R. 6—147

would be otherwise eligible (but for the default on the discharged loan). The amount discharged under this subsection

shall be treated as an amount canceled under section 465(a).

‘‘(5) REPORTING.—The Secretary or institution, as the case

may be, shall report to credit bureaus with respect to loans

that have been discharged pursuant to this subsection.

‘‘(h) REHABILITATION OF LOANS.—

‘‘(1) REHABILITATION.—

‘‘(A) IN GENERAL.—If the borrower of a loan made

under this part who has defaulted on the loan makes

12 ontime, consecutive, monthly payments of amounts owed

on the loan, as determined by the institution, or by the

Secretary in the case of a loan held by the Secretary,

the loan shall be considered rehabilitated, and the institution that made that loan (or the Secretary, in the case

of a loan held by the Secretary) shall request that any

credit bureau organization or credit reporting agency to

which the default was reported remove the default from

the borrower’s credit history.

‘‘(B) COMPARABLE CONDITIONS.—As long as the borrower continues to make scheduled repayments on a loan

rehabilitated under this paragraph, the rehabilitated loan

shall be subject to the same terms and conditions, and

qualify for the same benefits and privileges, as other loans

made under this part.

‘‘(C) ADDITIONAL ASSISTANCE.—The borrower of a

rehabilitated loan shall not be precluded by section 484

from receiving additional grant, loan, or work assistance

under this title (for which the borrower is otherwise

eligible) on the basis of defaulting on the loan prior to

such rehabilitation.

‘‘(D) LIMITATIONS.—A borrower only once may obtain

the benefit of this paragraph with respect to rehabilitating

a loan under this part.

‘‘(2) RESTORATION OF ELIGIBILITY.—If the borrower of a

loan made under this part who has defaulted on that loan

makes 6 ontime, consecutive, monthly payments of amounts

owed on such loan, the borrower’s eligibility for grant, loan,

or work assistance under this title shall be restored to the

extent that the borrower is otherwise eligible. A borrower only

once may obtain the benefit of this paragraph with respect

to restored eligibility.

‘‘(i) INCENTIVE REPAYMENT PROGRAM.—

‘‘(1) IN GENERAL.—Each institution of higher education may

establish, with the approval of the Secretary, an incentive

repayment program designed to reduce default and to replenish

student loan funds established under this part. Each such

incentive repayment program may—

‘‘(A) offer a reduction of the interest rate on a loan

on which the borrower has made 48 consecutive, monthly

repayments, but in no event may the rate be reduced

by more than 1 percent;

‘‘(B) provide for a discount on the balance owed on

a loan on which the borrower pays the principal and

interest in full prior to the end of the applicable repayment

period, but in no event may the discount exceed 5 percent
H. R. 6—148

of the unpaid principal balance due on the loan at the

time the early repayment is made; and

‘‘(C) include such other incentive repayment options

as the institution determines will carry out the objectives

of this subsection.

‘‘(2) LIMITATION.—No incentive repayment option under an

incentive repayment program authorized by this subsection

may be paid for with Federal funds, including any Federal

funds from the student loan fund, or with institutional funds

from the student loan fund.’’.

SEC. 465. CANCELLATION FOR PUBLIC SERVICE.

Section 465 (20 U.S.C. 1087ee) is amended—

(1) in subsection (a)—

(A) in paragraph (2)(C), by striking ‘‘section 676(b)(9)’’

and inserting ‘‘section 635(a)(10)’’;

(B) in the last sentence of paragraph (2), by striking

‘‘section 602(a)(1)’’ and inserting ‘‘section 602’’; and

(C) by adding at the end the following new paragraph:

‘‘(7) An individual with an outstanding loan obligation under

this part who performs service of any type that is described in

paragraph (2) as in effect on the date of enactment of this paragraph

shall be eligible for cancellation under this section for such service

notwithstanding any contrary provision of the promissory note

under which the loan or loans were made, and notwithstanding

any amendment (or effective date provision relating to any amendment) to this section made prior to the date of such service.’’;

and

(2) in subsection (b), by adding at the end the following

new sentence: ‘‘To the extent feasible, the Secretary shall pay

the amounts for which any institution qualifies under this

subsection not later than 3 months after the institution files

an institutional application for campus-based funds.’’.

SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

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

(1) in subsection (a)—

(A) in the matter preceding paragraph (1)—

(i) by striking ‘‘1996’’ and inserting ‘‘2003’’; and

(ii) by striking ‘‘1997’’ and inserting ‘‘2004’’; and

(B) in paragraph (1), by striking ‘‘1996’’ and inserting

‘‘2003’’;

(2) in subsection (b)—

(A) by striking ‘‘2005’’ and inserting ‘‘2012’’; and

(B) by striking ‘‘1996’’ and inserting ‘‘2003’’; and

(3) in subsection (c), by striking ‘‘1997’’ and inserting

‘‘2004’’.

SEC. 467. PERKINS LOAN REVOLVING FUND.

(a) REPEAL.—Subsection (c) of section 467 (20 U.S.C. 1087gg(c))

is repealed.

(b) TRANSFER OF BALANCE.—Any funds in the Perkins Loan

Revolving Fund on the date of enactment of this Act shall be

transferred to and deposited in the Treasury.
H. R. 6—149

PART F—NEED ANALYSIS

SEC. 471. COST OF ATTENDANCE.

Section 472 (20 U.S.C. 1087ll) is amended—

(1) in paragraph (2), by inserting after ‘‘personal expenses’’

the following: ‘‘, including a reasonable allowance for the documented rental or purchase of a personal computer,’’;

(2) in paragraph (3)—

(A) in subparagraph (A), by striking ‘‘of not less than $1,500’’ and inserting ‘‘determined by the institution’’; and

(B) in subparagraph (C), by striking ‘‘, except that the amount may not be less than $2,500’’;

(3) in paragraph (10), by striking everything after ‘‘determining costs’’ and inserting a semicolon; and

(4) in paragraph (11), by striking ‘‘placed’’ and inserting

‘‘engaged’’.

SEC. 472. DATA ELEMENTS.

Section 474(b)(3) (20 U.S.C. 1087nn(b)(3)) is amended by

inserting ‘‘, excluding the student’s parents,’’ after ‘‘family of the

student’’.

SEC. 473. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

(a) PARENTS’ CONTRIBUTION FROM ADJUSTED AVAILABLE

INCOME.—Section 475(b)(3) (20 U.S.C. 1087oo(b)(3)) is amended by

inserting ‘‘, excluding the student’s parents,’’ after ‘‘number of family

members’’.

(b) STUDENT CONTRIBUTION FROM AVAILABLE INCOME.—Section

475(g) is amended—

(1) in paragraph (2)— (A) in subparagraph (D), by striking ‘‘$1,750; and’’ and inserting ‘‘$2,200 (or a successor amount prescribed by

the Secretary under section 478);’’;

(B) by striking the period at the end of subparagraph

(E) and inserting ‘‘; and’’; and

(C) by inserting after subparagraph (E) the following

new subparagraph:

‘‘(F) an allowance for parents’ negative available

income, determined in accordance with paragraph (6).’’;

and

(2) by adding at the end the following new paragraph:

‘‘(6) ALLOWANCE FOR PARENTS’ NEGATIVE AVAILABLE

INCOME.—The allowance for parents’ negative available income

is the amount, if any, by which the sum of the amounts

deducted under subparagraphs (A) through (F) of subsection

(c)(1) exceeds the sum of the parents’ total income (as defined

in section 480) and the parents’ contribution from assets (as

determined in accordance with subsection (d)).’’.

(c) ADJUSTMENTS TO STUDENT’S CONTRIBUTION FOR ENROLLMENT PERIODS OTHER THAN NINE MONTHS.—Section 475 is amended by adding at the end the following:

‘‘( j) ADJUSTMENTS TO STUDENT’S CONTRIBUTION FOR ENROLLMENT PERIODS OF LESS THAN NINE MONTHS.—For periods of enrollment of less than 9 months, the student’s contribution from adjusted

available income (as determined under subsection (g)) is determined,

for purposes other than subpart 2 of part A, by dividing the amount
H. R. 6—150

determined under such subsection by 9, and multiplying the result

by the number of months in the period of enrollment.’’.

SEC. 474. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT DEPENDENTS OTHER THAN A SPOUSE.

(a) ADJUSTMENTS FOR ENROLLMENT PERIODS OF LESS THAN

NINE MONTHS.—Section 476(a) (20 U.S.C. 1087pp(a)) is amended—

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

(2) by inserting ‘‘and’’ after the semicolon at the end of

paragraph (2); and

(3) by inserting after paragraph (2) the following new paragraph:

‘‘(3) for periods of enrollment of less than 9 months, for

purposes other than subpart 2 of part A—

‘‘(A) dividing the quotient resulting under paragraph

(2) by 9; and

‘‘(B) multiplying the result by the number of months

in the period of enrollment;’’.

(b) CONTRIBUTION FROM AVAILABLE INCOME.—Section

476(b)(1)(A)(iv) is amended—

(1) by striking ‘‘allowance of—’’ and inserting ‘‘allowance

of the following amount (or a successor amount prescribed

by the Secretary under section 478)—’’;

(2) in subclauses (I) and (II), by striking ‘‘$3,000’’ each

place the term appears and inserting ‘‘$5,000’’; and

(3) in subclause (III), by striking ‘‘$6,000’’ and inserting

‘‘$8,000’’.

SEC. 475. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH

DEPENDENTS OTHER THAN A SPOUSE.

Section 477(a) (20 U.S.C. 1087qq(a)) is amended—

(1) by striking ‘‘and’’ at the end of paragraph (2);

(2) by inserting ‘‘and’’ after the semicolon at the end of

paragraph (3); and

(3) by inserting after paragraph (3) the following new paragraph:

‘‘(4) for periods of enrollment of less than 9 months, for

purposes other than subpart 2 of part A—

‘‘(A) dividing the quotient resulting under paragraph

(3) by 9; and

‘‘(B) multiplying the result by the number of months

in the period of enrollment;’’.

SEC. 476. REGULATIONS; UPDATED TABLES AND AMOUNTS.

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

(1) by striking ‘‘For each academic year’’ and inserting

the following:

‘‘(1) REVISED TABLES.—For each academic year’’; and

(2) by adding at the end the following new paragraph:

‘‘(2) REVISED AMOUNTS.—For each academic year after academic year 2000–2001, the Secretary shall publish in the Federal Register revised income protection allowances for the purpose of sections 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised

allowances shall be developed by increasing each of the dollar

amounts contained in such section by a percentage equal to

the estimated percentage increase in the Consumer Price Index

(as determined by the Secretary) between December 1999 and
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the December next preceding the beginning of such academic

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

SEC. 477. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAMILY CONTRIBUTION.

Section 479 (20 U.S.C. 1087ss) is amended—

(1) in subsection (b)(3)—

(A) in the matter preceding subparagraph (A), by striking ‘‘this paragraph’’ and inserting ‘‘this subsection, or subsection (c), as the case may be,’’;

(B) in subparagraph (A), by striking ‘‘or’’ at the end

thereof;

(C) by redesignating subparagraph (B) as subparagraph (C); and

(D) by inserting after subparagraph (A) the following

new subparagraph:

‘‘(B) a form 1040 (including any prepared or electronic

version of such form) required pursuant to the Internal

Revenue Code of 1986, except that such form shall be

considered a qualifying form only if the student or family

files such form in order to take a tax credit under section

25A of the Internal Revenue Code of 1986, and would

otherwise be eligible to file a form described in subparagraph (A); or’’;

(2) in subsection (c)—

(A) by amending paragraph (1)(A) to read as follows:

‘‘(A) the student’s parents file, or are eligible to file,

a form described in subsection (b)(3), or certify that the

parents are not required to file an income tax return and

the student files, or is eligible to file, such a form, or

certifies that the student is not required to file an income

tax return; and’’; and

(B) by amending paragraph (2)(A) to read as follows:

‘‘(A) the student (and the student’s spouse, if any)

files, or is eligible to file, a form described in subsection

(b)(3), or certifies that the student (and the student’s

spouse, if any) is not required to file an income tax return;

and’’.

SEC. 478. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

Section 479A (20 U.S.C. 1087tt) is amended—

(1) in subsection (a), by inserting after the second sentence

the following: ‘‘Special circumstances may include tuition

expenses at an elementary or secondary school, medical or

dental expenses not covered by insurance, unusually high child

care costs, recent unemployment of a family member, the number of parents enrolled at least half-time in a degree, certificate,

or other program leading to a recognized educational credential

at an institution with a program participation agreement under

section 487, or other changes in a family’s income, a family’s

assets, or a student’s status.’’; and

(2) by amending subsection (c) to read as follows:

‘‘(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFICATIONS.—On

a case-by-case basis, an eligible institution may refuse to certify

a statement that permits a student to receive a loan under part

B or D, or may certify a loan amount or make a loan that is

less than the student’s determination of need (as determined under

this part), if the reason for the action is documented and provided
H. R. 6—152

in written form to the student. No eligible institution shall discriminate against any borrower or applicant in obtaining a loan on

the basis of race, national origin, religion, sex, marital status,

age, or disability status.’’.

SEC. 479. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

Section 480( j) (20 U.S.C. 1087vv( j)) is amended—

(1) in paragraph (1), by inserting before the period at

the end the following: ‘‘, and national service educational

awards or post-service benefits under title I of the National

and Community Service Act of 1990 (42 U.S.C. 12571 et seq.)’’;

(2) by striking paragraph (3); and

(3) by redesignating paragraph (4) as paragraph (3).

SEC. 480. CLERICAL AMENDMENTS.

(a) AMOUNT OF NEED.—Section 471 (20 U.S.C. 1087kk) is

amended by striking ‘‘or 4’’ and inserting ‘‘or 2’’.

(b) FAMILY CONTRIBUTION.—Section 473 (20 U.S.C. 1087mm)

is amended by striking ‘‘subpart 4’’ and inserting ‘‘subpart 2’’.

SEC. 480A. EFFECTIVE DATES.

(a) IN GENERAL.—Except as provided in subsection (b), the

amendments made by this part are effective on the date of enactment of this Act.

(b) PROVISIONS EFFECTIVE FOR ACADEMIC YEAR 2000–2001, AND

THEREAFTER.—The amendments made by sections 472, 473, 474,

and 475 shall apply with respect to determinations of need under

part F of title IV of the Higher Education Act of 1965 for academic

years beginning on or after July 1, 2000.

PART G—GENERAL PROVISIONS

SEC. 481. MASTER CALENDAR.

(a) REQUIRED SCHEDULE.—Section 482(a) (20 U.S.C. 1089(a))

is amended by adding at the end the following:

‘‘(3) The Secretary shall, to the extent practicable, notify

eligible institutions, guaranty agencies, lenders, interested software providers, and, upon request, other interested parties,

by December 1 prior to the start of an award year of minimal

hardware and software requirements necessary to administer

programs under this title.

‘‘(4) The Secretary shall attempt to conduct training activities for financial aid administrators and others in an expeditious and timely manner prior to the start of an award year

in order to ensure that all participants are informed of all

administrative requirements.’’.

(b) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS.—Subsection (c) of section 482 is amended to read as follows:

‘‘(c) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS.—(1)

Except as provided in paragraph (2), any regulatory changes initiated by the Secretary affecting the programs under this title that

have not been published in final form by November 1 prior to

the start of the award year shall not become effective until the

beginning of the second award year after such November 1 date.

‘‘(2)(A) The Secretary may designate any regulatory provision

that affects the programs under this title and is published in

final form after November 1 as one that an entity subject to the

provision may, in the entity’s discretion, choose to implement prior
H. R. 6—153

to the effective date described in paragraph (1). The Secretary

may specify in the designation when, and under what conditions,

an entity may implement the provision prior to that effective date.

The Secretary shall publish any designation under this subparagraph in the Federal Register.

‘‘(B) If an entity chooses to implement a regulatory provision

prior to the effective date described in paragraph (1), as permitted

by subparagraph (A), the provision shall be effective with respect

to that entity in accordance with the terms of the Secretary’s

designation.’’.

SEC. 482. FORMS AND REGULATIONS.

(a) COMMON FINANCIAL AID FORM DEVELOPMENT.—Section

483(a) (20 U.S.C. 1090(a)) is amended—

(1) in the subsection heading, by striking ‘‘FORM’’ and

inserting ‘‘FORM DEVELOPMENT’’;

(2) in paragraph (1)—

(A) by striking ‘‘A, C, D, and E’’ and inserting ‘‘A

through E’’;

(B) by striking ‘‘and to determine the need of a student

for the purpose of part B of this title’’;

(C) by striking the second sentence and inserting the

following: ‘‘The Secretary shall include on the form developed under this subsection such data items as the Secretary

determines are appropriate for inclusion. Such items shall

be selected in consultation with States to assist in the

awarding of State financial assistance. In no case shall

the number of such data items be less than the number

included on the form on the date of enactment of the

Higher Education Amendments of 1998.’’; and

(D) by striking the last sentence;

(3) in paragraph (2)—

(A) by striking ‘‘A, C, D, and E’’ each place the term

appears and inserting ‘‘A through E’’;

(B) by striking ‘‘and the need of a student for the

purpose of part B of this title,’’; and

(C) by striking ‘‘or have the student’s need established

for the purpose of part B of this title’’;

(4) by amending paragraph (3) to read as follows:

‘‘(3) DISTRIBUTION OF DATA.—Institutions of higher education, guaranty agencies, and States shall receive, without

charge, the data collected by the Secretary using the form

developed pursuant to this section for the purposes of processing

loan applications and determining need and eligibility for

institutional and State financial aid awards. Entities designated

by institutions of higher education, guaranty agencies, or States

to receive such data shall be subject to all the requirements

of this section, unless such requirements are waived by the

Secretary.’’;

(5) by adding at the end the following:

‘‘(5) ELECTRONIC FORMS.—(A) The Secretary, in cooperation

with representatives of agencies and organizations involved

in student financial assistance, including private computer software providers, shall develop an electronic version of the form

described in paragraph (1). As permitted by the Secretary,

such an electronic version shall not require a signature to

be collected at the time such version is submitted, if a signature
H. R. 6—154

is subsequently submitted by the applicant. The Secretary shall

prescribe such version not later than 120 days after the date

of enactment of the Higher Education Amendments of 1998.

‘‘(B) Nothing in this section shall be construed to prohibit

the use of the form developed by the Secretary pursuant to

subparagraph (A) by an eligible institution, eligible lender,

guaranty agency, State grant agency, private computer software

providers, a consortium thereof, or such other entities as the

Secretary may designate.

‘‘(C) No fee shall be charged to students in connection

with the use of the electronic version of the form, or of any

other electronic forms used in conjunction with such form in

applying for Federal or State student financial assistance.

‘‘(D) The Secretary shall ensure that data collection complies with section 552a of title 5, United States Code, and

that any entity using the electronic version of the form developed by the Secretary pursuant to subparagraph (A) shall maintain reasonable and appropriate administrative, technical, and

physical safeguards to ensure the integrity and confidentiality

of the information, and to protect against security threats,

or unauthorized uses or disclosures of the information provided

on the electronic version of the form. Data collected by such

version of the form shall be used only for the application,

award, and administration of aid awarded under this title,

State aid, or aid awarded by eligible institutions or such entities

as the Secretary may designate. No data collected by such

version of the form shall be used for making final aid awards

under this title until such data have been processed by the

Secretary or a contractor or designee of the Secretary.

‘‘(6) THIRD PARTY SERVICERS AND PRIVATE SOFTWARE

PROVIDERS.—To the extent practicable and in a timely manner,

the Secretary shall provide, to private organizations and consortia that develop software used by eligible institutions for the

administration of funds under this title, all the necessary specifications that the organizations and consortia must meet for

the software the organizations and consortia develop, produce,

and distribute (including any diskette, modem, or network

communications) which are so used. The specifications shall

contain record layouts for required data. The Secretary shall

develop in advance of each processing cycle an annual schedule

for providing such specifications. The Secretary, to the extent

practicable, shall use means of providing such specifications,

including conferences and other meetings, outreach, and technical support mechanisms (such as training and printed reference materials). The Secretary shall, from time to time, solicit

from such organizations and consortia means of improving the

support provided by the Secretary.

‘‘(7) PARENT’S SOCIAL SECURITY NUMBER AND BIRTH DATE.—

The Secretary is authorized to include on the form developed

under this subsection space for the social security number

and birth date of parents of dependent students seeking financial assistance under this title.’’.

(b) STREAMLINED REAPPLICATION PROCESS.—Section 483(b)(1)

is amended by striking ‘‘, within 240 days’’ and all that follows

through ‘‘of 1992,’’.

(c) INFORMATION TO COMMITTEES.—Section 483(c) is amended

by striking ‘‘and Labor’’ and inserting ‘‘and the Workforce’’.
H. R. 6—155

(d) TOLL-FREE INFORMATION.—Section 483(d) is amended by

striking ‘‘section 633(c)’’ and inserting ‘‘section 685(d)(2)(C)’’.

(e) REPEAL.—Subsection (f ) of section 483 is repealed.

SEC. 483. STUDENT ELIGIBILITY.

(a) IN GENERAL.—Section 484(a) (20 U.S.C. 1091(a)) is

amended—

(1) in paragraph (4), by striking ‘‘the institution’’ and everything that follows through ‘‘lender), a document’’ and inserting

‘‘the Secretary, as part of the original financial aid application

process, a certification,’’; and

(2) in paragraph (5), by striking ‘‘or a permanent resident

of the Trust Territory of the Pacific Islands, Guam, or the

Northern Mariana Islands’’ and inserting ‘‘a citizen of any

one of the Freely Associated States’’.

(b) HOME-SCHOOLED STUDENTS.—Section 484(d) is amended—

(1) in the matter preceding paragraph (1), by striking

‘‘either’’; and

(2) by adding at the end the following:

‘‘(3) The student has completed a secondary school education in a home school setting that is treated as a home

school or private school under State law.’’.

(c) TERMINATION OF ELIGIBILITY.—Section 484( j) is amended

to read as follows:

‘‘( j) ASSISTANCE UNDER SUBPARTS 1 AND 3 OF PART A, AND

PART C.—Notwithstanding any other provision of law, a student

shall be eligible until September 30, 2004, for assistance under

subparts 1 and 3 of part A, and part C, if the student is otherwise

qualified and—

‘‘(1) is a citizen of any one of the Freely Associated States

and attends an institution of higher education in a State or

a public or nonprofit private institution of higher education

in the Freely Associated States; or

‘‘(2) meets the requirements of subsection (a)(5) and attends

a public or nonprofit private institution of higher education

in any one of the Freely Associated States.’’.

(d) CORRESPONDENCE COURSES.—Paragraph (1) of section 484(l)

is amended to read as follows:

‘‘(1) RELATION TO CORRESPONDENCE COURSES.—

‘‘(A) IN GENERAL.—A student enrolled in a course of

instruction at an institution of higher education that is

offered in whole or in part through telecommunications

and leads to a recognized certificate for a program of study

of 1 year or longer, or a recognized associate, baccalaureate,

or graduate degree, conferred by such institution, shall

not be considered to be enrolled in correspondence courses

unless the total amount of telecommunications and correspondence courses at such institution equals or exceeds

50 percent of the total amount of all courses at the institution.

‘‘(B) REQUIREMENT.—An institution of higher education

referred to in subparagraph (A) is an institution of higher

education—

‘‘(i) that is not an institute or school described

in section 521(4)(C) of the Carl D. Perkins Vocational

and Applied Technology Education Act; and
H. R. 6—156

‘‘(ii) for which at least 50 percent of the programs

of study offered by the institution lead to the award

of a recognized associate, baccalaureate, or graduate

degree.’’.

(e) VERIFICATION OF INCOME DATA.—Section 484 is amended

by adding at the end the following:

‘‘(q) VERIFICATION OF INCOME DATA.—

‘‘(1) CONFIRMATION WITH IRS.—The Secretary of Education,

in cooperation with the Secretary of the Treasury, is authorized

to confirm with the Internal Revenue Service the adjusted

gross income, Federal income taxes paid, filing status, and

exemptions reported by applicants (including parents) under

this title on their Federal income tax returns for the purpose

of verifying the information reported by applicants on student

financial aid applications.

‘‘(2) NOTIFICATION.—The Secretary shall establish procedures under which an applicant is notified that the Internal

Revenue Service will disclose to the Secretary tax return

information as authorized under section 6103(l)(13) of the

Internal Revenue Code of 1986.’’.

(f ) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED OFFENSES.—

(1) AMENDMENT.—Section 484 is amended by adding at

the end thereof the following:

‘‘(r) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED

OFFENSES.—

‘‘(1) IN GENERAL.—A student who has been convicted of

any offense under any Federal or State law involving the

possession or sale of a controlled substance shall not be eligible

to receive any grant, loan, or work assistance under this title

during the period beginning on the date of such conviction

and ending after the interval specified in the 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: Ineligibility period is:

First offense ................................. 2 years

Second offense ............................. Indefinite.

‘‘(2) REHABILITATION.—A student whose eligibility has been

suspended under paragraph (1) may resume eligibility before

the end of the ineligibility period determined under such paragraph if—

‘‘(A) the student satisfactorily completes a drug

rehabilitation program that—

‘‘(i) complies with such criteria as the Secretary

shall prescribe in regulations for purposes of this paragraph; and

‘‘(ii) includes two unannounced drug tests; or

‘‘(B) the conviction is reversed, set aside, or otherwise

rendered nugatory.

‘‘(3) DEFINITIONS.—In this subsection, the term ‘controlled

substance’ has the meaning given the term in section 102(6)

of the Controlled Substances Act (21 U.S.C. 802(6)).’’.
H. R. 6—157

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1), regarding suspension of eligibility for drug-related offenses,

shall apply with respect to financial assistance to cover the

costs of attendance for periods of enrollment beginning after

the date of enactment of this Act.

SEC. 484. STATE COURT JUDGMENTS.

Section 484A (20 U.S.C. 1091a) is amended—

(1) in the heading of the section by inserting ‘‘, AND STATE

COURT JUDGMENTS’’ after ‘‘LIMITATIONS’’; and

(2) by adding at the end the following:

‘‘(c) STATE COURT JUDGMENTS.—A judgment of a State court

for the recovery of money provided as grant, loan, or work assistance

under this title that has been assigned or transferred to the Secretary under this title may be registered in any district court

of the United States by filing a certified copy of the judgment

and a copy of the assignment or transfer. A judgment so registered

shall have the same force and effect, and may be enforced in

the same manner, as a judgment of the district court of the district

in which the judgment is registered.’’.

SEC. 485. INSTITUTIONAL REFUNDS.

Section 484B (20 U.S.C. 1091b) is amended to read as follows:

‘‘SEC. 484B. INSTITUTIONAL REFUNDS.

‘‘(a) RETURN OF TITLE IV FUNDS.—

‘‘(1) IN GENERAL.—If a recipient of assistance under this

title withdraws from an institution during a payment period

or period of enrollment in which the recipient began attendance,

the amount of grant or loan assistance (other than assistance

received under part C) to be returned to the title IV programs

is calculated according to paragraph (3) and returned in accordance with subsection (b).

‘‘(2) LEAVE OF ABSENCE.— ‘‘(A) LEAVE NOT TREATED AS WITHDRAWAL.—In the case

of a student who takes a leave of absence from an institution for not more than a total of 180 days in any 12-

month period, the institution may consider the student

as not having withdrawn from the institution during the

leave of absence, and not calculate the amount of grant

and loan assistance provided under this title that is to

be returned in accordance with this section if—

‘‘(i) the institution has a formal policy regarding

leaves of absence;

‘‘(ii) the student followed the institution’s policy

in requesting a leave of absence; and

‘‘(iii) the institution approved the student’s request

in accordance with the institution’s policy.

‘‘(B) CONSEQUENCES OF FAILURE TO RETURN.—If a student does not return to the institution at the expiration

of an approved leave of absence that meets the requirements of subparagraph (A), the institution shall calculate

the amount of grant and loan assistance provided under

this title that is to be returned in accordance with this

section based on the day the student withdrew (as determined under subsection (c)).

‘‘(3) CALCULATION OF AMOUNT OF TITLE IV ASSISTANCE

EARNED.—
H. R. 6—158

‘‘(A) IN GENERAL.—The amount of grant or loan assistance under this title that is earned by the recipient for

purposes of this section is calculated by—

‘‘(i) determining the percentage of grant and loan

assistance under this title that has been earned by

the student, as described in subparagraph (B); and

‘‘(ii) applying such percentage to the total amount

of such grant and loan assistance that was disbursed

(and that could have been disbursed) to the student,

or on the student’s behalf, for the payment period

or period of enrollment for which the assistance was

awarded, as of the day the student withdrew.

‘‘(B) PERCENTAGE EARNED.—For purposes of subparagraph (A)(i), the percentage of grant or loan assistance

under this title that has been earned by the student is—

‘‘(i) equal to the percentage of the payment period

or period of enrollment for which assistance was

awarded that was completed (as determined in accordance with subsection (d)) as of the day the student

withdrew, provided that such date occurs on or before

the completion of 60 percent of the payment period

or period of enrollment; or

‘‘(ii) 100 percent, if the day the student withdrew

occurs after the student has completed 60 percent of

the payment period or period of enrollment.

‘‘(C) PERCENTAGE AND AMOUNT NOT EARNED.—For purposes of subsection (b), the amount of grant and loan assistance awarded under this title that has not been earned

by the student shall be calculated by—

‘‘(i) determining the complement of the percentage

of grant or loan assistance under this title that has

been earned by the student described in subparagraph

(B); and

‘‘(ii) applying the percentage determined under

clause (i) to the total amount of such grant and loan

assistance that was disbursed (and that could have

been disbursed) to the student, or on the student’s

behalf, for the payment period or period of enrollment,

as of the day the student withdrew.

‘‘(4) DIFFERENCES BETWEEN AMOUNTS EARNED AND

AMOUNTS RECEIVED.—

‘‘(A) IN GENERAL.—If the student has received less

grant or loan assistance than the amount earned as calculated under subparagraph (A) of paragraph (3), the

institution of higher education shall comply with the procedures for late disbursement specified by the Secretary in

regulations.

‘‘(B) RETURN.—If the student has received more grant

or loan assistance than the amount earned as calculated

under paragraph (3)(A), the unearned funds shall be

returned by the institution or the student, or both, as

may be required under paragraphs (1) and (2) of subsection

(b), to the programs under this title in the order specified

in subsection (b)(3).

‘‘(b) RETURN OF TITLE IV PROGRAM FUNDS.—
H. R. 6—159

‘‘(1) RESPONSIBILITY OF THE INSTITUTION.—The institution

shall return, in the order specified in paragraph (3), the lesser

of—

‘‘(A) the amount of grant and loan assistance awarded

under this title that has not been earned by the student,

as calculated under subsection (a)(3)(C); or

‘‘(B) an amount equal to—

‘‘(i) the total institutional charges incurred by the

student for the payment period or period of enrollment

for which such assistance was awarded; multiplied by

‘‘(ii) the percentage of grant and loan assistance

awarded under this title that has not been earned

by the student, as described in subsection (a)(3)(C)(i).

‘‘(2) RESPONSIBILITY OF THE STUDENT.—

‘‘(A) IN GENERAL.—The student shall return assistance

that has not been earned by the student as described

in subsection (a)(3)(C)(ii) in the order specified in paragraph

(3) minus the amount the institution is required to return

under paragraph (1).

‘‘(B) SPECIAL RULE.—The student (or parent in the

case of funds due to a loan borrowed by a parent under

part B or D) shall return or repay, as appropriate, the

amount determined under subparagraph (A) to—

‘‘(i) a loan program under this title in accordance

with the terms of the loan; and

‘‘(ii) a grant program under this title, as an overpayment of such grant and shall be subject to—

‘‘(I) repayment arrangements satisfactory to

the institution; or

‘‘(II) overpayment collection procedures prescribed by the Secretary.

‘‘(C) REQUIREMENT.—Notwithstanding subparagraphs

(A) and (B), a student shall not be required to return

50 percent of the grant assistance received by the student

under this title, for a payment period or period of enrollment, that is the responsibility of the student to repay

under this section.

‘‘(3) ORDER OF RETURN OF TITLE IV FUNDS.—

‘‘(A) IN GENERAL.—Excess funds returned by the

institution or the student, as appropriate, in accordance

with paragraph (1) or (2), respectively, shall be credited

to outstanding balances on loans made under this title

to the student or on behalf of the student for the payment

period or period of enrollment for which a return of funds

is required. Such excess funds shall be credited in the

following order:

‘‘(i) To outstanding balances on loans made under

section 428H for the payment period or period of enrollment for which a return of funds is required.

‘‘(ii) To outstanding balances on loans made under

section 428 for the payment period or period of enrollment for which a return of funds is required.

‘‘(iii) To outstanding balances on unsubsidized

loans (other than parent loans) made under part D

for the payment period or period of enrollment for

which a return of funds is required.
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‘‘(iv) To outstanding balances on subsidized loans

made under part D for the payment period or period

of enrollment for which a return of funds is required.

‘‘(v) To outstanding balances on loans made under

part E for the payment period or period of enrollment

for which a return of funds is required.

‘‘(vi) To outstanding balances on loans made under

section 428B for the payment period or period of enrollment for which a return of funds is required.

‘‘(vii) To outstanding balances on parent loans

made under part D for the payment period or period

of enrollment for which a return of funds is required.

‘‘(B) REMAINING EXCESSES.—If excess funds remain

after repaying all outstanding loan amounts, the remaining

excess shall be credited in the following order:

‘‘(i) To awards under subpart 1 of part A for the

payment period or period of enrollment for which a

return of funds is required.

‘‘(ii) To awards under subpart 3 of part A for

the payment period or period of enrollment for which

a return of funds is required.

‘‘(iii) To other assistance awarded under this title

for which a return of funds is required.

‘‘(c) WITHDRAWAL DATE.—

‘‘(1) IN GENERAL.—In this section, the term ‘day the student

withdrew’—

‘‘(A) is the date that the institution determines—

‘‘(i) the student began the withdrawal process prescribed by the institution;

‘‘(ii) the student otherwise provided official

notification to the institution of the intent to withdraw;

or

‘‘(iii) in the case of a student who does not begin

the withdrawal process or otherwise notify the institution of the intent to withdraw, the date that is the

mid-point of the payment period for which assistance

under this title was disbursed or a later date documented by the institution; or

‘‘(B) for institutions required to take attendance, is

determined by the institution from such attendance records.

‘‘(2) SPECIAL RULE.—Notwithstanding paragraph (1), if the

institution determines that a student did not begin the withdrawal process, or otherwise notify the institution of the intent

to withdraw, due to illness, accident, grievous personal loss,

or other such circumstances beyond the student’s control, the

institution may determine the appropriate withdrawal date.

‘‘(d) PERCENTAGE OF THE PAYMENT PERIOD OR PERIOD OF

ENROLLMENT COMPLETED.—For purposes of subsection (a)(3)(B)(i),

the percentage of the payment period or period of enrollment for

which assistance was awarded that was completed, is determined—

‘‘(1) in the case of a program that is measured in credit

hours, by dividing the total number of calendar days comprising

the payment period or period of enrollment for which assistance

is awarded into the number of calendar days completed in

that period as of the day the student withdrew; and

‘‘(2) in the case of a program that is measured in clock

hours, by dividing the total number of clock hours comprising
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the payment period or period of enrollment for which assistance

is awarded into the number of clock hours—

‘‘(A) completed by the student in that period as of

the day the student withdrew; or

‘‘(B) scheduled to be completed as of the day the student withdrew, if the clock hours completed in the period

are not less than a percentage, to be determined by the

Secretary in regulations, of the hours that were scheduled

to be completed by the student in the period.

‘‘(e) EFFECTIVE DATE.—The provisions of this section shall take

effect 2 years after the date of enactment of the Higher Education

Amendments of 1998. An institution of higher education may choose

to implement such provisions prior to that date.’’.

SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION

FOR STUDENTS.

(a) INFORMATION DISSEMINATION ACTIVITIES.—Section 485(a)

(20 U.S.C. 1092(a)) is amended—

(1) in paragraph (1)—

(A) in the second sentence, by striking ‘‘, through appropriate publications and mailings, to all current students,

and to any prospective student upon request’’ and inserting

‘‘upon request, through appropriate publications, mailings,

and electronic media, to an enrolled student and to any

prospective student’’;

(B) by inserting after the second sentence the following:

‘‘Each eligible institution shall, on an annual basis, provide

to all enrolled students a list of the information that is

required to be provided by institutions to students by this

section and section 444 of the General Education Provisions

Act (also referred to as the Family Educational Rights

and Privacy Act of 1974), together with a statement of

the procedures required to obtain such information.’’;

(C) by amending subparagraph (F) to read as follows:

‘‘(F) a statement of—

‘‘(i) the requirements of any refund policy with which

the institution is required to comply;

‘‘(ii) the requirements under section 484B for the return

of grant or loan assistance provided under this title; and

‘‘(iii) the requirements for officially withdrawing from

the institution;’’; and

(D) by striking ‘‘and’’ at the end of subparagraph (M);

(E) by striking the period at the end of subparagraph

(N) and inserting ‘‘; and’’; and

(F) by adding at the end the following:

‘‘(O) the campus crime report prepared by the institution

pursuant to subsection (f ), including all required reporting

categories.’’;

(2) in paragraph (3), by amending subparagraph (A) to

read as follows:

‘‘(A) shall be made available by July 1 each year to enrolled

students and prospective students prior to the students enrolling or entering into any financial obligation; and’’; and

(3) by adding at the end the following:

‘‘(6) Each institution may provide supplemental information

to enrolled and prospective students showing the completion or
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graduation rate for students described in paragraph (4) or for students transferring into the institution or information showing the

rate at which students transfer out of the institution.’’.

(b) EXIT COUNSELING FOR BORROWERS.—Section 485(b) (20

U.S.C. 1092(b)) is amended—

(1) in paragraph (1)(A), by striking ‘‘(individually or in

groups)’’; and

(2) in paragraph (2), by adding at the end the following:

‘‘(C) Nothing in this subsection shall be construed to prohibit

an institution of higher education from utilizing electronic means

to provide personalized exit counseling.’’.

(c) DEPARTMENTAL PUBLICATIONS.—Section 485(d) is amended—

(1) by striking ‘‘(1) assist’’ and inserting ‘‘(A) assist’’;

(2) by striking ‘‘(2) assist’’ and inserting ‘‘(B) assist’’;

(3) by inserting ‘‘(1)’’ before ‘‘The Secretary’’ the first place

the term appears; and

(4) by adding at the end the following:

‘‘(2) The Secretary, to the extent the information is available,

shall compile information describing State and other prepaid tuition

programs and savings programs and disseminate such information

to States, eligible institutions, students, and parents in departmental publications.

‘‘(3) The Secretary, to the extent practicable, shall update the

Department’s Internet site to include direct links to databases

that contain information on public and private financial assistance

programs. The Secretary shall only provide direct links to databases

that can be accessed without charge and shall make reasonable

efforts to verify that the databases included in a direct link are

not providing fraudulent information. The Secretary shall prominently display adjacent to any such direct link a disclaimer indicating that a direct link to a database does not constitute an endorsement or recommendation of the database, the provider of the database, or any services or products of such provider. The Secretary

shall provide additional direct links to information resources from

which students may obtain information about fraudulent and deceptive practices in the provision of services related to student financial

aid.’’.

(d) DISCLOSURES.—Section 485(e) is amended—

(1) in paragraph (2)—

(A) by striking ‘‘his parents, his guidance’’ and inserting ‘‘the student’s parents, guidance’’; and

(B) by adding at the end the following: ‘‘If the institution is a member of a national collegiate athletic association

that compiles graduation rate data on behalf of the association’s member institutions that the Secretary determines

is substantially comparable to the information described

in paragraph (1), the distribution of the compilation of

such data to all secondary schools in the United States

shall fulfill the responsibility of the institution to provide

information to a prospective student athlete’s guidance

counselor and coach.’’; and

(2) by amending paragraph (9) to read as follows:

‘‘(9) The reports required by this subsection shall be due each

July 1 and shall cover the 1-year period ending August 31 of

the preceding year.’’.

(e) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS

CRIME STATISTICS.—Section 485(f ) (20 U.S.C. 1092(f )) is amended—
H. R. 6—163

(1) in paragraph (1)—

(A) by amending subparagraph (F) to read as follows:

‘‘(F) Statistics concerning the occurrence on campus, in

or on noncampus buildings or property, and on public property

during the most recent calendar year, and during the 2 preceding calendar years for which data are available—

‘‘(i) of the following criminal offenses reported to campus security authorities or local police agencies:

‘‘(I) murder;

‘‘(II) sex offenses, forcible or nonforcible;

‘‘(III) robbery;

‘‘(IV) aggravated assault;

‘‘(V) burglary;

‘‘(VI) motor vehicle theft;

‘‘(VII) manslaughter;

‘‘(VIII) arson; and

‘‘(IX) arrests or persons referred for campus disciplinary action for liquor law violations, drug-related

violations, and weapons possession; and

‘‘(ii) of the crimes described in subclauses (I) through

(VIII) of clause (i), and other crimes involving bodily injury

to any person in which the victim is intentionally selected

because of the actual or perceived race, gender, religion,

sexual orientation, ethnicity, or disability of the victim

that are reported to campus security authorities or local

police agencies, which data shall be collected and reported

according to category of prejudice.’’;

(B) by striking subparagraph (H); and

(C) by redesignating subparagraph (I) as subparagraph

(H);

(2) in paragraph (4)—

(A) by striking ‘‘Upon request of the Secretary, each’’

and inserting ‘‘On an annual basis, each’’;

(B) by striking ‘‘paragraphs (1)(F) and (1)(H)’’ and

inserting ‘‘paragraph (1)(F)’’;

(C) by striking ‘‘and Labor’’ and inserting ‘‘and the

Workforce’’;

(D) by striking ‘‘1995’’ and inserting ‘‘2000’’;

(E) by striking ‘‘and’’ at the end of subparagraph (A);

(F) by redesignating subparagraph (B) as subparagraph

(C); and

(G) by inserting after subparagraph (A) the following:

‘‘(B) make copies of the statistics submitted to the Secretary

available to the public; and’’;

(3) by amending paragraph (5)(A) to read as follows:

‘‘(5)(A) In this subsection:

‘‘(i) The term ‘campus’ means—

‘‘(I) any building or property owned or controlled by

an institution of higher education within the same reasonably contiguous geographic area of the institution and used

by the institution in direct support of, or in a manner

related to, the institution’s educational purposes, including

residence halls; and

‘‘(II) property within the same reasonably contiguous

geographic area of the institution that is owned by the

institution but controlled by another person, is used by
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students, and supports institutional purposes (such as a

food or other retail vendor).

‘‘(ii) The term ‘noncampus building or property’ means—

‘‘(I) any building or property owned or controlled by

a student organization recognized by the institution; and

‘‘(II) any building or property (other than a branch

campus) owned or controlled by an institution of higher

education that is used in direct support of, or in relation

to, the institution’s educational purposes, is used by students, and is not within the same reasonably contiguous

geographic area of the institution.

‘‘(iii) The term ‘public property’ means all public property

that is within the same reasonably contiguous geographic area

of the institution, such as a sidewalk, a street, other thoroughfare, or parking facility, and is adjacent to a facility owned

or controlled by the institution if the facility is used by the

institution in direct support of, or in a manner related to

the institution’s educational purposes.’’;

(4) in paragraph (6)—

(A) by striking ‘‘paragraphs (1)(F) and (1)(H)’’ and

inserting ‘‘paragraph (1)(F)’’; and

(B) by adding at the end the following: ‘‘Such statistics

shall not identify victims of crimes or persons accused

of crimes.’’;

(5) by redesignating paragraphs (4) through (7) as paragraphs (5) through (8), respectively;

(6) by inserting after paragraph (3) the following:

‘‘(4)(A) Each institution participating in any program under

this title that maintains a police or security department of any

kind shall make, keep, and maintain a daily log, written in a

form that can be easily understood, recording all crimes reported

to such police or security department, including—

‘‘(i) the nature, date, time, and general location of each

crime; and

‘‘(ii) the disposition of the complaint, if known.

‘‘(B)(i) All entries that are required pursuant to this paragraph

shall, except where disclosure of such information is prohibited

by law or such disclosure would jeopardize the confidentiality of

the victim, be open to public inspection within two business days

of the initial report being made to the department or a campus

security authority.

‘‘(ii) If new information about an entry into a log becomes

available to a police or security department, then the new information shall be recorded in the log not later than two business days

after the information becomes available to the police or security

department.

‘‘(iii) If there is clear and convincing evidence that the release

of such information would jeopardize an ongoing criminal investigation or the safety of an individual, cause a suspect to flee or

evade detection, or result in the destruction of evidence, such

information may be withheld until that damage is no longer likely

to occur from the release of such information.’’; and

(7) by adding at the end the following:

‘‘(9) The Secretary shall provide technical assistance in complying with the provisions of this section to an institution of higher

education who requests such assistance.
H. R. 6—165

‘‘(10) Nothing in this section shall be construed to require

the reporting or disclosure of privileged information.

‘‘(11) The Secretary shall report to the appropriate committees

of Congress each institution of higher education that the Secretary

determines is not in compliance with the reporting requirements

of this subsection.

‘‘(12) For purposes of reporting the statistics with respect to

crimes described in paragraph (1)(F), an institution of higher education shall distinguish, by means of separate categories, any criminal offenses that occur—

‘‘(A) on campus;

‘‘(B) in or on a noncampus building or property;

‘‘(C) on public property; and

‘‘(D) in dormitories or other residential facilities for students on campus.

‘‘(13) Upon a determination pursuant to section 487(c)(3)(B)

that an institution of higher education has substantially misrepresented the number, location, or nature of the crimes required to

be reported under this subsection, the Secretary shall impose a

civil penalty upon the institution in the same amount and pursuant

to the same procedures as a civil penalty is imposed under section

487(c)(3)(B).

‘‘(14)(A) Nothing in this subsection may be construed to—

‘‘(i) create a cause of action against any institution of

higher education or any employee of such an institution for

any civil liability; or

‘‘(ii) establish any standard of care.

‘‘(B) Notwithstanding any other provision of law, evidence

regarding compliance or noncompliance with this subsection shall

not be admissible as evidence in any proceeding of any court,

agency, board, or other entity, except with respect to an action

to enforce this subsection.

‘‘(15) This subsection may be cited as the ‘Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act’.’’.

(f ) DATA REQUIRED.—Section 485(g) is amended—

(1) in paragraph (1), by adding at the end the following:

‘‘(I)(i) The total revenues, and the revenues from football, men’s basketball, women’s basketball, all other men’s

sports combined and all other women’s sports combined,

derived by the institution from the institution’s intercollegiate athletics activities.

‘‘(ii) For the purpose of clause (i), revenues from intercollegiate athletics activities allocable to a sport shall

include (without limitation) gate receipts, broadcast revenues, appearance guarantees and options, concessions, and

advertising, but revenues such as student activities fees

or alumni contributions not so allocable shall be included

in the calculation of total revenues only.

‘‘(J)(i) The total expenses, and the expenses attributable to football, men’s basketball, women’s basketball,

all other men’s sports combined, and all other women’s

sports combined, made by the institution for the institution’s intercollegiate athletics activities.

‘‘(ii) For the purpose of clause (i), expenses for intercollegiate athletics activities allocable to a sport shall

include (without limitation) grants-in-aid, salaries, travel,

equipment, and supplies, but expenses such as general
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and administrative overhead not so allocable shall be

included in the calculation of total expenses only.’’; and

(2) by striking paragraph (5);

(3) by redesignating paragraph (4) as paragraph (5); and

(4) by inserting after paragraph (3) the following:

‘‘(4) SUBMISSION; REPORT; INFORMATION AVAILABILITY.—(A)

On an annual basis, each institution of higher education

described in paragraph (1) shall provide to the Secretary, within

15 days of the date that the institution makes available the

report under paragraph (1), the information contained in the

report.

‘‘(B) The Secretary shall prepare a report regarding the

information received under subparagraph (A) and submit such

report to the Committee on Education and the Workforce of

the House of Representatives and the Committee on Labor

and Human Resources of the Senate by April 1, 2000. The

report shall—

‘‘(i) summarize the information and identify trends in

the information;

‘‘(ii) aggregate the information by divisions of the

National Collegiate Athletic Association; and

‘‘(iii) contain information on each individual institution

of higher education.

‘‘(C) The Secretary shall ensure that the reports described

in subparagraph (A) and the report to Congress described in

subparagraph (B) are made available to the public within a

reasonable period of time.

‘‘(D) Not later than 180 days after the date of enactment

of the Higher Education Amendments of 1998, the Secretary

shall notify all secondary schools in all States regarding the

availability of the information reported under subparagraph

(B) and the information made available under paragraph (1),

and how such information may be accessed.’’.

SEC. 487. NATIONAL STUDENT LOAN DATA SYSTEM.

Section 485B(a) (20 U.S.C. 1092b(a)) is amended by inserting

before the period at the end of the third sentence the following:

‘‘not later than one year after the date of enactment of the Higher

Education Amendments of 1998’’.

SEC. 488. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

Section 486 (20 U.S.C. 1083) is amended to read as follows:

‘‘SEC. 486. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

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

‘‘(1) to allow demonstration programs that are strictly monitored by the Department of Education to test the quality

and viability of expanded distance education programs currently restricted under this Act;

‘‘(2) to provide for increased student access to higher education through distance education programs; and

‘‘(3) to help determine—

‘‘(A) the most effective means of delivering quality education via distance education course offerings;

‘‘(B) the specific statutory and regulatory requirements

which should be altered to provide greater access to high

quality distance education programs; and
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‘‘(C) the appropriate level of Federal assistance for

students enrolled in distance education programs.

‘‘(b) DEMONSTRATION PROGRAMS AUTHORIZED.—

‘‘(1) IN GENERAL.—In accordance with the provisions of

subsection (d), the Secretary is authorized to select institutions

of higher education, systems of such institutions, or consortia

of such institutions for voluntary participation in a Distance

Education Demonstration Program that provides participating

institutions with the ability to offer distance education programs that do not meet all or a portion of the sections or

regulations described in paragraph (2).

‘‘(2) WAIVERS.—The Secretary is authorized to waive for

any institution of higher education, system of institutions of

higher education, or consortium participating in a Distance

Education Demonstration Program, the requirements of section

472(5) as the section relates to computer costs, sections 481(a)

and 481(b) as such sections relate to requirements for a minimum number of weeks of instruction, sections 102(a)(3)(A),

102(a)(3)(B), and 484(l)(1), or one or more of the regulations

prescribed under this part or part F which inhibit the operation

of quality distance education programs.

‘‘(3) ELIGIBLE APPLICANTS.—

‘‘(A) ELIGIBLE INSTITUTIONS.—Except as provided in

subparagraphs (B), (C), and (D), only an institution of

higher education that is eligible to participate in programs

under this title shall be eligible to participate in the demonstration program authorized under this section.

‘‘(B) PROHIBITION.—An institution of higher education

described in section 102(a)(1)(C) shall not be eligible to

participate in the demonstration program authorized under

this section.

‘‘(C) SPECIAL RULE.—Subject to subparagraph (B), an

institution of higher education that meets the requirements

of subsection (a) of section 102, other than the requirement

of paragraph (3)(A) or (3)(B) of such subsection, and that

provides a 2-year or 4-year program of instruction for which

the institution awards an associate or baccalaureate degree,

shall be eligible to participate in the demonstration program authorized under this section.

‘‘(D) REQUIREMENT.—Notwithstanding any other provision of this paragraph, Western Governors University shall

be considered eligible to participate in the demonstration

program authorized under this section. In addition to the

waivers described in paragraph (2), the Secretary may

waive the provisions of title I and parts G and H of this

title for such university that the Secretary determines to

be appropriate because of the unique characteristics of

such university. In carrying out the preceding sentence,

the Secretary shall ensure that adequate program integrity

and accountability measures apply to such university’s

participation in the demonstration program authorized

under this section.

‘‘(c) APPLICATION.—

‘‘(1) IN GENERAL.—Each institution, system, or consortium

of institutions desiring to participate in a demonstration program under this section shall submit an application to the
H. R. 6—168

Secretary at such time and in such manner as the Secretary

may require.

‘‘(2) CONTENTS.—Each application shall include—

‘‘(A) a description of the institution, system, or consortium’s consultation with a recognized accrediting agency

or association with respect to quality assurances for the

distance education programs to be offered;

‘‘(B) a description of the statutory and regulatory

requirements described in subsection (b)(2) or, if applicable,

subsection (b)(3)(D) for which a waiver is sought and the

reasons for which the waiver is sought;

‘‘(C) a description of the distance education programs

to be offered;

‘‘(D) a description of the students to whom distance

education programs will be offered;

‘‘(E) an assurance that the institution, system, or

consortium will offer full cooperation with the ongoing

evaluations of the demonstration program provided for in

this section; and

‘‘(F) such other information as the Secretary may

require.

‘‘(d) SELECTION.—

‘‘(1) IN GENERAL.—For the first year of the demonstration

program authorized under this section, the Secretary is authorized to select for participation in the program not more than

15 institutions, systems of institutions, or consortia of institutions. For the third year of the demonstration program authorized under this section, the Secretary may select not more

than 35 institutions, systems, or consortia, in addition to the

institutions, systems, or consortia selected pursuant to the

preceding sentence, to participate in the demonstration program

if the Secretary determines that such expansion is warranted

based on the evaluations conducted in accordance with subsections (f ) and (g).

‘‘(2) CONSIDERATIONS.—In selecting institutions to participate in the demonstration program in the first or succeeding

years of the program, the Secretary shall take into account—

‘‘(A) the number and quality of applications received;

‘‘(B) the Department’s capacity to oversee and monitor

each institution’s participation;

‘‘(C) an institution’s—

‘‘(i) financial responsibility;

‘‘(ii) administrative capability; and

‘‘(iii) program or programs being offered via distance education; and

‘‘(D) ensuring the participation of a diverse group of

institutions with respect to size, mission, and geographic

distribution.

‘‘(e) NOTIFICATION.—The Secretary shall make available to the

public and to the Committee on Labor and Human Resources of

the Senate and the Committee on Education and the Workforce

of the House of Representatives a list of institutions, systems or

consortia selected to participate in the demonstration program

authorized by this section. Such notice shall include a listing of

the specific statutory and regulatory requirements being waived

for each institution, system or consortium and a description of

the distance education courses to be offered.
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‘‘(f ) EVALUATIONS AND REPORTS.—

‘‘(1) EVALUATION.—The Secretary shall evaluate the demonstration programs authorized under this section on an annual

basis. Such evaluations specifically shall review—

‘‘(A) the extent to which the institution, system or

consortium has met the goals set forth in its application

to the Secretary, including the measures of program quality

assurance;

‘‘(B) the number and types of students participating

in the programs offered, including the progress of participating students toward recognized certificates or degrees

and the extent to which participation in such programs

increased;

‘‘(C) issues related to student financial assistance for

distance education;

‘‘(D) effective technologies for delivering distance education course offerings; and

‘‘(E) the extent to which statutory or regulatory

requirements not waived under the demonstration program

present difficulties for students or institutions.

‘‘(2) POLICY ANALYSIS.—The Secretary shall review current

policies and identify those policies that present impediments

to the development and use of distance education and other

nontraditional methods of expanding access to education.

‘‘(3) REPORTS.—

‘‘(A) IN GENERAL.—Within 18 months of the initiation

of the demonstration program, the Secretary shall report

to the Committee on Labor and Human Resources of the

Senate and the Committee on Education and the Workforce

of the House of Representatives with respect to—

‘‘(i) the evaluations of the demonstration programs

authorized under this section; and

‘‘(ii) any proposed statutory changes designed to

enhance the use of distance education.

‘‘(B) ADDITIONAL REPORTS.—The Secretary shall provide additional reports to the Committee on Labor and

Human Resources of the Senate and the Committee on

Education and the Workforce of the House of Representatives on an annual basis regarding—

‘‘(i) the demonstration programs authorized under

this section; and

‘‘(ii) the number and types of students receiving

assistance under this title for instruction leading to

a recognized certificate, as provided for in section

484(l)(1), including the progress of such students

toward recognized certificates and the degree to which

participation in such programs leading to such certificates increased.

‘‘(g) OVERSIGHT.—In conducting the demonstration program

authorized under this section, the Secretary shall, on a continuing

basis—

‘‘(1) assure compliance of institutions, systems or consortia

with the requirements of this title (other than the sections

and regulations that are waived under subsections (b)(2) and

(b)(3)(D));

‘‘(2) provide technical assistance;
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‘‘(3) monitor fluctuations in the student population enrolled

in the participating institutions, systems or consortia; and

‘‘(4) consult with appropriate accrediting agencies or

associations and appropriate State regulatory authorities.

‘‘(h) DEFINITION.—For the purpose of this section, the term

‘distance education’ means an educational process that is characterized by the separation, in time or place, between instructor and

student. Such term may include courses offered principally through

the use of—

‘‘(1) television, audio, or computer transmission, such as

open broadcast, closed circuit, cable, microwave, or satellite

transmission;

‘‘(2) audio or computer conferencing;

‘‘(3) video cassettes or discs; or

‘‘(4) correspondence.’’.

SEC. 489. PROGRAM PARTICIPATION AGREEMENTS.

(a) REQUIRED CONTENT.—Section 487(a) (20 U.S.C. 1094(a))

is amended—

(1) in paragraph (3)—

(A) by striking subparagraph (B); and

(B) by redesignating subparagraphs (C) and (D) as

subparagraphs (B) and (C), respectively;

(2) in paragraph (4), by striking ‘‘subsection (b)’’ and

inserting ‘‘subsection (c)’’;

(3) in paragraph (9), by striking ‘‘part B’’ and inserting

‘‘part B or D’’;

(4) in paragraph (14)—

(A) in subparagraph (A), by striking ‘‘part B’’ and

inserting ‘‘part B or D’’; and

(B) in subparagraph (B), by striking ‘‘part B’’ and

inserting ‘‘part B or D’’; and

(C) by adding at the end the following:

‘‘(C) This paragraph shall not apply in the case of an

institution in which (i) neither the parent nor the subordinate

institution has a cohort default rate in excess of 10 percent,

and (ii) the new owner of such parent or subordinate institution

does not, and has not, owned any other institution with a

cohort default rate in excess of 10 percent.’’;

(5) in paragraph (15), by striking ‘‘State review entities’’

and inserting ‘‘the State agencies’’;

(6) by amending paragraph (18) to read as follows:

‘‘(18) The institution will meet the requirements established

pursuant to section 485(g).’’; and

(7) by amending paragraph (21) to read as follows:

‘‘(21) The institution will meet the requirements established

by the Secretary and accrediting agencies or associations, and

will provide evidence to the Secretary that the institution has

the authority to operate within a State.’’.

(b) PROVISION OF VOTER REGISTRATION FORMS.—

(1) PROGRAM PARTICIPATION REQUIREMENT.—Section 487(a)

(20 U.S.C. 1094(a)) is amended by adding at the end the

following:

‘‘(23)(A) The institution, if located in a State to which

section 4(b) of the National Voter Registration Act (42 U.S.C.

1973gg–2(b)) does not apply, will make a good faith effort

to distribute a mail voter registration form, requested and
H. R. 6—171

received from the State, to each student enrolled in a degree

or certificate program and physically in attendance at the

institution, and to make such forms widely available to students

at the institution.

‘‘(B) The institution shall request the forms from the State

120 days prior to the deadline for registering to vote within

the State. If an institution has not received a sufficient quantity

of forms to fulfill this section from the State within 60 days

prior to the deadline for registering to vote in the State, the

institution shall not be held liable for not meeting the requirements of this section during that election year.

‘‘(C) This paragraph shall apply to elections as defined

in section 301(1) of the Federal Election Campaign Act of

1971 (2 U.S.C. 431(1)), and includes the election for Governor

or other chief executive within such State).’’.

(2) REGULATION PROHIBITED.—No officer of the executive

branch is authorized to instruct the institution in the manner

in which the amendment made by this subsection is carried

out.

(c) AUDITS; FINANCIAL RESPONSIBILITY.—Section 487(c) is

amended—

(1) in paragraph (1)(A)—

(A) in clause (i)—

(i) by striking ‘‘clause (ii)’’ and inserting ‘‘clauses

(ii) and (iii)’’;

(ii) by striking ‘‘State review entities referred to

in’’ and inserting ‘‘appropriate State agency notifying

the Secretary under’’; and

(iii) by striking ‘‘or’’ after the semicolon;

(B) in clause (ii), by inserting ‘‘or’’ after the semicolon;

and

(C) by adding at the end the following:

‘‘(iii) at the discretion of the Secretary, with regard to

an eligible institution (other than an eligible institution

described in section 102(a)(1)(C)) that has obtained less than

$200,000 in funds under this title during each of the 2 award

years that precede the audit period and submits a letter of

credit payable to the Secretary equal to not less than 1⁄2 of

the annual potential liabilities of such institution as determined

by the Secretary, deeming an audit conducted every 3 years

to satisfy the requirements of clause (i), except for the award

year immediately preceding renewal of the institution’s eligibility under section 498(g);’’;

(2) in paragraph (4), by striking ‘‘, after consultation with

each State review entity designated under subpart 1 of part

H,’’; and

(3) in paragraph (5), by striking ‘‘State review entities

designated’’ and inserting ‘‘State agencies notifying the Secretary’’.

SEC. 490. REGULATORY RELIEF AND IMPROVEMENT.

Section 487A (20 U.S.C. 1094a) is amended to read as follows:

‘‘SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

‘‘(a) QUALITY ASSURANCE PROGRAM.—

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

institutions for voluntary participation in a Quality Assurance
H. R. 6—172

Program that provides participating institutions with an alternative management approach through which individual schools

develop and implement their own comprehensive systems,

related to processing and disbursement of student financial

aid, verification of student financial aid application data, and

entrance and exit interviews, thereby enhancing program integrity within the student aid delivery system.

‘‘(2) CRITERIA AND CONSIDERATION.—The Quality Assurance

Program authorized by this section shall be based on criteria

that include demonstrated institutional performance, as determined by the Secretary, and shall take into consideration current quality assurance goals, as determined by the Secretary.

The selection criteria shall ensure the participation of a diverse

group of institutions of higher education with respect to size,

mission, and geographical distribution.

‘‘(3) WAIVER.—The Secretary is authorized to waive for

any institution participating in the Quality Assurance Program

any regulations dealing with reporting or verification requirements in this title that are addressed by the institution’s alternative management system, and may substitute such quality

assurance reporting as the Secretary determines necessary to

ensure accountability and compliance with the purposes of the

programs under this title. The Secretary shall not modify or

waive any statutory requirements pursuant to this paragraph.

‘‘(4) DETERMINATION.—The Secretary is authorized to determine—

‘‘(A) when an institution that is unable to administer

the Quality Assurance Program shall be removed from

such program; and

‘‘(B) when institutions desiring to cease participation

in such program will be required to complete the current

award year under the requirements of the Quality Assurance Program.

‘‘(5) REVIEW AND EVALUATION.—The Secretary shall review

and evaluate the Quality Assurance Program conducted by

each participating institution and, on the basis of that evaluation, make recommendations regarding amendments to this

Act that will streamline the administration and enhance the

integrity of Federal student assistance programs. Such recommendations shall be submitted to the Committee on Labor

and Human Resources of the Senate and the Committee on

Education and the Workforce of the House of Representatives.

‘‘(b) REGULATORY IMPROVEMENT AND STREAMLINING EXPERI- MENTS.—

‘‘(1) IN GENERAL.—The Secretary may continue any experimental sites in existence on the date of enactment of the

Higher Education Amendments of 1998. Any activities approved

by the Secretary prior to such date that are inconsistent with

this section shall be discontinued not later than June 30, 1999.

‘‘(2) REPORT.—The Secretary shall review and evaluate the

experience of institutions participating as experimental sites

during the period of 1993 through 1998 under this section

(as such section was in effect on the day before the date

of enactment of the Higher Education Amendments of 1998),

and shall submit a report based on this review and evaluation

to the Committee on Labor and Human Resources of the Senate

and the Committee on Education and the Workforce of the
H. R. 6—173

House of Representatives not later than 6 months after the

enactment of the Higher Education Amendments of 1998. Such

report shall include—

‘‘(A) a list of participating institutions and the specific

statutory or regulatory waivers granted to each institution;

‘‘(B) the findings and conclusions reached regarding

each of the experiments conducted; and

‘‘(C) recommendations for amendments to improve and

streamline this Act, based on the results of the experiment.

‘‘(3) SELECTION.—

‘‘(A) IN GENERAL.—Upon the submission of the report

required by paragraph (2), the Secretary is authorized to

select a limited number of additional institutions for voluntary participation as experimental sites to provide recommendations to the Secretary on the impact and effectiveness of proposed regulations or new management initiatives.

‘‘(B) CONSULTATION.—Prior to approving any additional

experimental sites, the Secretary shall consult with the

Committee on Labor and Human Resources of the Senate

and the Committee on Education and the Workforce of

the House of Representatives and shall provide to such

Committees—

‘‘(i) a list of institutions proposed for participation

in the experiment and the specific statutory or regulatory waivers proposed to be granted to each institution;

‘‘(ii) a statement of the objectives to be achieved

through the experiment; and

‘‘(iii) an identification of the period of time over

which the experiment is to be conducted.

‘‘(C) WAIVERS.—The Secretary is authorized to waive,

for any institution participating as an experimental site

under subparagraph (A), any requirements in this title,

or regulations prescribed under this title, that will bias

the results of the experiment, except that the Secretary

shall not waive any provisions with respect to award rules,

grant and loan maximum award amounts, and need analysis requirements.

‘‘(c) DEFINITIONS.—For purposes of this section, the term ‘current award year’ means the award year during which the participating institution indicates the institution’s intention to cease participation.’’.

SEC. 490A. GARNISHMENT REQUIREMENTS.

Section 488A (20 U.S.C. 1095a) is amended—

(1) by redesignating subsection (d) as subsection (e); and

(2) by inserting after subsection (c) the following:

‘‘(d) NO ATTACHMENT OF STUDENT ASSISTANCE.—Except as

authorized in this section, notwithstanding any other provision

of Federal or State law, no grant, loan, or work assistance awarded

under this title, or property traceable to such assistance, shall

be subject to garnishment or attachment in order to satisfy any

debt owed by the student awarded such assistance, other than

a debt owed to the Secretary and arising under this title.’’.
H. R. 6—174

SEC. 490B. ADMINISTRATIVE SUBPOENA AUTHORITY.

Part G of title IV is further amended by inserting immediately

after section 490 (20 U.S.C. 1097) the following:

‘‘SEC. 490A. ADMINISTRATIVE SUBPOENAS.

‘‘(a) AUTHORITY.—To assist the Secretary in the conduct of

investigations of possible violations of the provisions of this title,

the Secretary is authorized to require by subpoena the production

of information, documents, reports, answers, records, accounts,

papers, and other documentary evidence pertaining to participation

in any program under this title. The production of any such records

may be required from any place in a State.

‘‘(b) ENFORCEMENT.—In case of contumacy by, or refusal to

obey a subpoena issued to, any person, the Secretary may request

the Attorney General to invoke the aid of any court of the United

States where such person resides or transacts business for a court

order for the enforcement of this section.’’.

SEC. 490C. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

Section 491 (20 U.S.C. 1098) is amended—

(1) in subsection (b)—

(A) in the second sentence, by striking ‘‘and expenditures’’ and inserting ‘‘, expenditures and staffing levels’’;

and

(B) by inserting after the third sentence the following:

‘‘Reports, publications, and other documents of the Advisory

Committee, including such reports, publications, and documents in electronic form, shall not be subject to review

by the Secretary.’’;

(2) in subsection (e)—

(A) by redesignating paragraphs (3), (4), and (5), as

paragraphs (4), (5), and (6), respectively; and

(B) by inserting after paragraph (2) the following:

‘‘(3) No officers or full-time employees of the Federal Government shall serve as members of the Advisory Committee.’’;

(3) in subsection (g), by striking ‘‘(1) Members’’ and all

that follows through ‘‘of the United States may each’’ and

inserting ‘‘Members of the Advisory Committee may each’’;

(4) in subsection (h)(1)—

(A) by inserting ‘‘determined’’ after ‘‘as may be’’; and

(B) by adding at the end the following: ‘‘The Advisory

Committee may appoint not more than 1 full-time equivalent, nonpermanent, consultant without regard to the provisions of title 5, United States Code. The Advisory Committee shall not be required by the Secretary to reduce personnel to meet agency personnel reduction goals.’’;

(5) in subsection (i), by striking ‘‘$750,000’’ and inserting

‘‘$800,000’’;

(6) by amending subsection ( j) to read as follows:

‘‘( j) SPECIAL ANALYSES AND ACTIVITIES.—The Advisory

Committee shall—

‘‘(1) monitor and evaluate the modernization of student

financial aid systems and delivery processes, including the

implementation of a performance-based organization within the
H. R. 6—175

Department, and report to Congress regarding such modernization on not less than an annual basis, including recommendations for improvement;

‘‘(2) assess the adequacy of current methods for disseminating information about programs under this title and recommend

improvements, as appropriate, regarding early needs assessment and information for first-year secondary school students;

‘‘(3) assess and make recommendations concerning the feasibility and degree of use of appropriate technology in the

application for, and delivery and management of, financial

assistance under this title, as well as policies that promote

use of such technology to reduce cost and enhance service

and program integrity, including electronic application and reapplication, just-in-time delivery of funds, reporting of disbursements and reconciliation;

‘‘(4) assess the implications of distance education on student

eligibility and other requirements for financial assistance under

this title, and make recommendations that will enhance access

to postsecondary education through distance education while

maintaining access, through on-campus instruction at eligible

institutions, and program integrity; and

‘‘(5) make recommendations to the Secretary regarding

redundant or outdated provisions of and regulations under

this Act, consistent with the Secretary’s requirements under

section 498B.’’;

(7) in subsection (k), by striking ‘‘1998’’ and inserting

‘‘2004’’; and

(8) by repealing subsection (l).

SEC. 490D. MEETINGS AND NEGOTIATED RULEMAKING.

(a) MEETINGS.—Section 492(a) (20 U.S.C. 1098a) is amended—

(1) in paragraph (1)—

(A) by striking ‘‘convene regional meetings to’’;

(B) by striking ‘‘parts B, G, and H of this title,’’ and

inserting ‘‘this title;’’; and

(C) by striking ‘‘Such meetings shall include’’ and

inserting ‘‘The Secretary shall obtain the advice of and

recommendations from’’; and

(2) in paragraph (2)—

(A) by striking ‘‘During such meetings the’’ and inserting ‘‘The’’;

(B) by striking ‘‘parts B, G, and H’’ and inserting

‘‘this title’’;

(C) by striking ‘‘1992’’ and inserting ‘‘1998 through

such mechanisms as regional meetings and electronic

exchanges of information’’; and

(D) by striking ‘‘at such meetings’’ and inserting

‘‘through such mechanisms’’.

(b) DRAFT REGULATIONS.—Section 492(b) is amended—

(1) by striking ‘‘After’’ and inserting the following:

‘‘(1) IN GENERAL.—After’’;

(2) in paragraph (1) (as redesignated by paragraph (1))—

(A) by striking ‘‘holding regional meetings’’ and inserting ‘‘obtaining the advice and recommendations described

in subsection (a)(1)’’;

(B) by striking ‘‘parts B, G, and H of this title’’ and

inserting ‘‘this title’’;
H. R. 6—176

(C) by striking ‘‘1992’’ and inserting ‘‘1998’’;

(D) by striking ‘‘The Secretary shall follow the guidance

provided in sections 305.82–4 and 305.85–5 of chapter 1,

Code of Federal Regulations, and any successor recommendation, regulation, or law.’’;

(E) by striking ‘‘participating in the regional meetings’’;

(F) by striking ‘‘240-day’’ and inserting ‘‘360-day’’; and

(G) by striking ‘‘section 431(g)’’ and inserting ‘‘section

437(e)’’; and

(3) by adding at the end the following:

‘‘(2) EXPANSION OF NEGOTIATED RULEMAKING.—All regulations pertaining to this title that are promulgated after the

date of enactment of this paragraph shall be subject to a

negotiated rulemaking (including the selection of the issues

to be negotiated), unless the Secretary determines that applying

such a requirement with respect to given regulations is impracticable, unnecessary, or contrary to the public interest (within

the meaning of section 553(b)(3)(B) of title 5, United States

Code), and publishes the basis for such determination in the

Federal Register at the same time as the proposed regulations

in question are first published. All published proposed regulations shall conform to agreements resulting from such negotiated rulemaking unless the Secretary reopens the negotiated

rulemaking process or provides a written explanation to the

participants in that process why the Secretary has decided

to depart from such agreements. Such negotiated rulemaking

shall be conducted in accordance with the provisions of paragraph (1), and the Secretary shall ensure that a clear and

reliable record of agreements reached during the negotiations

process is maintained.’’.

SEC. 490E. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT OF

EDUCATION.

Part G of title IV (20 U.S.C. 1088 et seq.) is amended by

adding at the end the following:

‘‘SEC. 493A. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT.

‘‘(a) PREPARATIONS FOR YEAR 2000.—In order to ensure that

the processing, delivery, and administration of grant, loan, and

work assistance provided under this title is not interrupted due

to operational problems related to the inability of computer systems

to indicate accurately dates after December 31, 1999, the Secretary

of Education shall—

‘‘(1) take such actions as are necessary to ensure that

all internal and external systems, hardware, and data exchange

infrastructure administered by the Department that are necessary for the processing, delivery, and administration of the

grant, loan, and work assistance are Year 2000 compliant by

March 31, 1999, such that there will be no business interruption

after December 31, 1999;

‘‘(2) ensure that the Robert T. Stafford Federal Student

Loan Program and the William D. Ford Federal Direct Loan

Program are equal in level of priority with respect to addressing, and that resources are managed to equally provide for

successful resolution of, the Year 2000 computer problem in

both programs by December 31, 1999;

‘‘(3) work with the Department’s various data exchange

partners under this title to fully test all data exchange routes
H. R. 6—177

for Year 2000 compliance via end-to-end testing, and submit

a report describing the parameters and results of such tests

to the Comptroller General not later than March 31, 1999;

‘‘(4) ensure that the Inspector General of the Department

(or an external, independent entity selected by the Inspector

General) performs and publishes a risk assessment of the systems and hardware under the Department’s management, that

has been reviewed by an independent entity, and make such

assessment publicly available not later than 60 days after the

date of enactment of the Higher Education Amendments of

1998;

‘‘(5) not later than June 30, 1999, ensure that the Inspector

General (or an external, independent entity selected by the

Inspector General) conducts a review of the Department’s Year

2000 compliance for the processing, delivery, and administration of grant, loan, and work assistance, and submits a report

reflecting the results of that review to the Chairperson of

the Committee on Labor and Human Resources of the Senate

and the Chairperson of the Committee on Education and the

Workforce of the House of Representatives;

‘‘(6) develop a contingency plan to ensure the programs

under this title will continue to run uninterrupted in the event

of widespread disruptions in the flow of accurate computerized

data, which contingency plan shall include a prioritization of

mission critical systems and strategies to allow data partners

to transfer data through alternate means; and

‘‘(7) alert Congress at the earliest possible time if mission

critical deadlines will not be met.

‘‘(b) POSTPONEMENT AUTHORITY FOR THE YEAR 2000.—

‘‘(1) PURPOSE.—It is the purpose of this subsection to

provide the Secretary with the flexibility necessary to—

‘‘(A) ensure that the resources and capabilities of

institutions, lenders, and guaranty agencies are not overburdened by the combination of student aid processing

and delivery requirements added or modified by the amendments made by the Higher Education Amendments of 1998

and by the changes required to ensure that the systems

of the institutions, lenders and guaranty agencies are Year

2000 compliant; and

‘‘(B) avoid the disruption of grant, loan, or work assistance funds awarded to students because of Year 2000

compliance problems at a substantial number of institutions, lenders, and guaranty agencies.

‘‘(2) AUTHORITY TO POSTPONE.—The Secretary may postpone, for a period of time described in paragraph (3), the

implementation of any requirements under part B, D, E, or

G that are added or modified by the amendments made by

the Higher Education Amendments of 1998 related to the

processing or delivery of grant, loan, and work assistance (which

shall not include the determination of need for such assistance)

provided under this title, if the Secretary—

‘‘(A) determines that—

‘‘(i) implementation of such requirements would

require extensive changes to the existing systems of

institutions, lenders, or guaranty agencies; and

‘‘(ii) postponement is necessary to avoid jeopardizing the ability of a substantial number of institutions,
H. R. 6—178

lenders, or guaranty agencies to ensure that all of

the systems of the institutions, lenders, or guaranty

agencies related to the processing or delivery of such

assistance function successfully after December 31,

1999; and

‘‘(B) promptly publishes in the Federal Register a list

of, and notifies Congress of, any provisions, the

implementation of which the Secretary intends to postpone,

with the reasons for such postponement.

‘‘(3) EXCEPTIONS TO AUTHORITY.—The Secretary may not

postpone the implementation of one or more provisions

described in this subsection longer than the earlier of—

‘‘(A) the period of time that the Secretary determines

necessary to ensure that the processing and delivery systems of the institutions, lenders, and guaranty agencies

referred to in paragraph (1)(A)(ii) are capable of functioning

successfully after December 31, 1999; or

‘‘(B) one award year after the effective date applicable

to such provision under the Higher Education Amendments

of 1998.’’.

SEC. 490F. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS FOR

ELIGIBLE DISABLED VETERANS.

Part G of title IV (20 U.S.C. 1088 et seq.) is amended by

adding after section 493A (as added by section 490E) the following:

‘‘SEC. 493B. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS

FOR ELIGIBLE DISABLED VETERANS.

‘‘The Secretary, in consultation with the Secretary of Veterans

Affairs, shall develop and implement a procedure to permit Department of Veterans Affairs physicians to provide the certifications

and affidavits needed to enable disabled veterans enrolled in the

Department of Veterans Affairs health care system to document

such veterans’ eligibility for deferments or cancellations of student

loans made, insured, or guaranteed under this title. Not later

than 6 months after the date of enactment of the Higher Education

Amendments of 1998, the Secretary and the Secretary of Veterans

Affairs jointly shall report to Congress on the progress made in

developing and implementing the procedure.’’.

PART H—PROGRAM INTEGRITY

SEC. 491. STATE ROLE AND RESPONSIBILITIES.

Part H of title IV (20 U.S.C. 1099a et seq.) is amended by—

(1) striking the heading of such part and inserting the

following:

‘‘PART H—PROGRAM INTEGRITY’’;

and

(2) by amending subpart 1 (20 U.S.C. 1099a et seq.) to

read as follows:
H. R. 6—179

‘‘Subpart 1—State Role

‘‘SEC. 495. STATE RESPONSIBILITIES.

‘‘(a) STATE RESPONSIBILITIES.—As part of the integrity program

authorized by this part, each State, through one State agency

or several State agencies selected by the State, shall—

‘‘(1) furnish the Secretary, upon request, information with

respect to the process for licensing or other authorization for

institutions of higher education to operate within the State;

‘‘(2) notify the Secretary promptly whenever the State

revokes a license or other authority to operate an institution

of higher education; and

‘‘(3) notify the Secretary promptly whenever the State has

credible evidence that an institution of higher education within

the State—

‘‘(A) has committed fraud in the administration of the

student assistance programs authorized by this title; or

‘‘(B) has substantially violated a provision of this title.

‘‘(b) INSTITUTIONAL RESPONSIBILITY.—Each institution of higher

education shall provide evidence to the Secretary that the institution has authority to operate within a State at the time the institution is certified under subpart 3.’’.

SEC. 492. ACCREDITING AGENCY RECOGNITION.

(a) RECOGNITION.—

(1) SUBPART HEADING.—The heading of subpart 2 of part

H is amended by striking ‘‘Approval’’ and inserting ‘‘Recognition’’.

(2) SECTION 496 HEADING.—The heading of section 496 is

amended by striking ‘‘APPROVAL’’ and inserting ‘‘RECOGNI- TION’’.

(b) STANDARDS.—Section 496(a) (20 U.S.C. 1099b(a)) is

amended—

(1) in the subsection heading, by striking ‘‘STANDARDS’’ and inserting ‘‘CRITERIA’’;

(2) in the matter preceding paragraph (1), by striking

‘‘standards’’ each place the term appears and inserting ‘‘criteria’’;

(3) in paragraph (4)—

(A) by striking ‘‘at the institution’’ and inserting

‘‘offered by the institution’’; and

(B) by inserting ‘‘, including distance education courses

or programs,’’ after ‘‘higher education’’; and

(4) in paragraph (5)—

(A) by striking ‘‘of accreditation’’ and inserting ‘‘for

accreditation’’;

(B) by striking subparagraphs (H), (I), and (J);

(C) by redesignating subparagraphs (A) through (G)

as subparagraphs (B) through (H), respectively;

(D) by redesignating subparagraphs (K) and (L) as

subparagraphs (I) and (J), respectively;

(E) by inserting before subparagraph (B) the following:

‘‘(A) success with respect to student achievement in

relation to the institution’s mission, including, as appropriate, consideration of course completion, State licensing

examinations, and job placement rates;’’;
H. R. 6—180

(F) in subparagraph (H) (as redesignated by subparagraph (C)), by striking ‘‘program length and tuition and

fees in relation to the subject matters taught’’ and inserting

‘‘measures of program length’’;

(G) in subparagraph (J) (as redesignated by subparagraph (D))—

(i) by inserting ‘‘record of’’ before ‘‘compliance’’;

(ii) by striking ‘‘Act, including any’’ and inserting

‘‘Act based on the most recent student loan default

rate data provided by the Secretary, the’’; and

(iii) by inserting ‘‘any’’ after ‘‘reviews, and’’; and

(H) in the matter following subparagraph (J) (as

redesignated by subparagraph (D)), by striking ‘‘(G), (H),

(I), (J), and (L)’’ and inserting ‘‘(A), (H), and (J)’’;

(5) in paragraph (7), by striking ‘‘State postsecondary

review entity’’ and inserting ‘‘State licensing or authorizing

agency’’; and

(6) in paragraph (8), by striking ‘‘State postsecondary’’ and

everything that follows through ‘‘is located’’ and inserting ‘‘State

licensing or authorizing agency’’.

(c) OPERATING PROCEDURES.—Section 496(c) is amended—

(1) by striking ‘‘approved by the Secretary’’ and inserting

‘‘recognized by the Secretary’’; and

(2) in paragraph (1), by striking ‘‘(at least’’ and everything

that follows through ‘‘unannounced),’’ and inserting ‘‘(which

may include unannounced site visits)’’.

(d) CONFORMING AMENDMENTS.—Section 496 is further

amended—

(1) in subsection (d)—

(A) by striking ‘‘APPROVAL’’ in the heading of such

subsection and inserting ‘‘RECOGNITION’’; and

(B) by striking ‘‘approved’’ and inserting ‘‘recognized’’;

(2) in subsection (f ), by striking ‘‘approved’’ and inserting

‘‘recognized’’;

(3) in subsection (g)—

(A) in the heading of such subsection, by striking

‘‘STANDARDS’’ and inserting ‘‘CRITERIA’’; and

(B) by striking ‘‘standards’’ the first place such term

appears and inserting ‘‘criteria’’;

(4) in subsection (k)—

(A) in the matter preceding paragraph (1), by striking

‘‘section 481’’ and inserting ‘‘section 102’’; and

(B) in paragraph (2), by striking ‘‘standards’’ and

inserting ‘‘criteria’’;

(5) in subsection (l), by striking everything preceding paragraph (2) and inserting the following:

‘‘(l) LIMITATION, SUSPENSION, OR TERMINATION OF RECOGNITION.—(1) If the Secretary determines that an accrediting agency

or association has failed to apply effectively the criteria in this

section, or is otherwise not in compliance with the requirements

of this section, the Secretary shall—

‘‘(A) after notice and opportunity for a hearing, limit, suspend, or terminate the recognition of the agency or association;

or

‘‘(B) require the agency or association to take appropriate

action to bring the agency or association into compliance with
H. R. 6—181

such requirements within a timeframe specified by the Secretary, except that—

‘‘(i) such timeframe shall not exceed 12 months unless

the Secretary extends such period for good cause; and

‘‘(ii) if the agency or association fails to bring the

agency or association into compliance within such timeframe, the Secretary shall, after notice and opportunity

for a hearing, limit, suspend, or terminate the recognition

of the agency or association.’’; and

(6) in subsection (n)—

(A) by striking ‘‘standards’’ each place the term appears

and inserting ‘‘criteria’’;

(B) in paragraph (3)—

(i) by striking ‘‘approval process’’ and inserting

‘‘recognition process’’;

(ii) by striking ‘‘approval or disapproval’’ and

inserting ‘‘recognition or denial of recognition’’; and

(iii) by adding at the end the following: ‘‘When

the Secretary decides to recognize an accrediting

agency or association, the Secretary shall determine

the agency or association’s scope of recognition. If the

agency or association reviews institutions offering distance education courses or programs and the Secretary

determines that the agency or association meets the

requirements of this section, then the agency shall

be recognized and the scope of recognition shall include

accreditation of institutions offering distance education

courses or programs.’’; and

(C) by striking paragraph (4) and inserting the

following:

‘‘(4) The Secretary shall maintain sufficient documentation to

support the conclusions reached in the recognition process, and,

if the Secretary does not recognize any accreditation agency or

association, shall make publicly available the reason for denying

recognition, including reference to the specific criteria under this

section which have not been fulfilled.’’.

SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES.

(a) SINGLE APPLICATION FORM.—Section 498(b) (20 U.S.C.

1099c(b)) is amended—

(1) in paragraph (1), by striking ‘‘and capability’’ and inserting ‘‘financial responsibility, and administrative capability’’;

(2) by amending paragraph (3) to read as follows:

‘‘(3) requires—

‘‘(A) a description of the third party servicers of an

institution of higher education; and

‘‘(B) the institution to maintain a copy of any contract

with a financial aid service provider or loan servicer, and

provide a copy of any such contract to the Secretary upon

request;’’;

(3) in paragraph (4), by striking the period and inserting

‘‘; and’’; and

(4) by adding at the end the following:

‘‘(5) provides, at the option of the institution, for participation in one or more of the programs under part B or D.’’.

(b) FINANCIAL RESPONSIBILITY STANDARDS.—Section 498(c) is

amended—
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(1) in paragraph (2)—

(A) in the first sentence, by striking ‘‘with respect

to operating losses, net worth, asset to liabilities ratios,

or operating fund deficits’’ and inserting ‘‘regarding ratios

that demonstrate financial responsibility,’’; and

(B) in the second sentence, by inserting ‘‘, public,’’

after ‘‘for profit’’;

(2) in paragraph (3)(A), by inserting ‘‘that the Secretary

determines are reasonable’’ after ‘‘guarantees’’; and

(3) in paragraph (4)—

(A) in the matter preceding subparagraph (A), by

striking ‘‘ratio of current assets to current liabilities’’ and

inserting ‘‘criteria’’; and

(B) in subparagraph (C), by striking ‘‘current operating

ratio requirement’’ and inserting ‘‘criteria’’.

(c) FINANCIAL GUARANTEES FROM OWNERS.—

(1) AMENDMENT.—Section 498(e) is amended by adding at

the end the following:

‘‘(6) Notwithstanding any other provision of law, any individual

who—

‘‘(A) the Secretary determines, in accordance with paragraph (2), exercises substantial control over an institution

participating in, or seeking to participate in, a program under

this title;

‘‘(B) is required to pay, on behalf of a student or borrower,

a refund of unearned institutional charges to a lender, or to

the Secretary; and

‘‘(C) willfully fails to pay such refund or willfully attempts

in any manner to evade payment of such refund,

shall, in addition to other penalties provided by law, be liable

to the Secretary for the amount of the refund not paid, to the

same extent with respect to such refund that such an individual

would be liable as a responsible person for a penalty under section

6672(a) of Internal Revenue Code of 1986 with respect to the

nonpayment of taxes.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall be effective with respect to any unpaid refunds that

were first required to be paid to a lender or to the Secretary

on or after 90 days after the date of enactment of this Act.

(d) APPLICATIONS AND SITE VISITS.—Section 498(f ) is

amended—

(1) in the subsection heading, by striking ‘‘; SITE VISITS

AND FEES’’ and inserting ‘‘AND SITE VISITS’’;

(2) in the second sentence, by striking ‘‘shall’’ and inserting

‘‘may’’;

(3) in the third sentence—

(A) by striking ‘‘may establish’’ and insert ‘‘shall

establish’’; and

(B) by striking ‘‘may coordinate’’ and inserting ‘‘shall,

to the extent practicable, coordinate’’; and

(4) by striking the fourth sentence.

(e) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY.—

Subsection (g) of section 498 is amended to read as follows:

‘‘(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY.—

‘‘(1) GENERAL RULE.—After the expiration of the certification of any institution under the schedule prescribed under

this section (as this section was in effect prior to the enactment
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of the Higher Education Act Amendments of 1998), or upon

request for initial certification from an institution not previously certified, the Secretary may certify the eligibility for

the purposes of any program authorized under this title of

each such institution for a period not to exceed 6 years.

‘‘(2) NOTIFICATION.—The Secretary shall notify each institution of higher education not later than 6 months prior to

the date of the expiration of the institution’s certification.

‘‘(3) INSTITUTIONS OUTSIDE THE UNITED STATES.—The

Secretary shall promulgate regulations regarding the recertification requirements applicable to an institution of higher education outside of the United States that meets the requirements

of section 102(a)(1)(C) and received less than $500,000 in funds

under part B for the most recent year for which data are

available.’’.

(f ) PROVISIONAL CERTIFICATION.—Section 498(h)(2) is

amended—

(1) by striking ‘‘the approval’’ and inserting ‘‘the recognition’’; and

(2) by striking ‘‘of approval’’ and inserting ‘‘of recognition’’.

(g) CHANGE IN OWNERSHIP.—Section 498(i) is amended by

adding at the end the following:

‘‘(4)(A) The Secretary may provisionally certify an institution

seeking approval of a change in ownership based on the preliminary

review by the Secretary of a materially complete application that

is received by the Secretary within 10 business days of the transaction for which the approval is sought.

‘‘(B) A provisional certification under this paragraph shall

expire not later than the end of the month following the month

in which the transaction occurred, except that if the Secretary

has not issued a decision on the application for the change of

ownership within that period, the Secretary may continue such

provisional certification on a month-to-month basis until such decision has been issued.’’.

(h) TREATMENT OF BRANCHES.—The second sentence of section

498( j)(1) is amended by inserting ‘‘after the branch is certified

by the Secretary as a branch campus participating in a program

under this title,’’ after ‘‘2 years’’.

SEC. 494. PROGRAM REVIEW AND DATA.

Section 498A (20 U.S.C. 1099c–1) is amended—

(1) in subsection (a)—

(A) in paragraph (2)—

(i) in the matter preceding subparagraph (A), by

striking ‘‘may’’ and inserting ‘‘shall’’;

(ii) by amending subparagraph (C) to read as follows:

‘‘(C) institutions with a significant fluctuation in Federal Stafford Loan volume, Federal Direct Stafford/Ford

Loan volume, or Federal Pell Grant award volume, or

any combination thereof, in the year for which the determination is made, compared to the year prior to such

year, that are not accounted for by changes in the Federal

Stafford Loan program, the Federal Direct Stafford/Ford

Loan program, or the Pell Grant program, or any combination thereof;’’;
H. R. 6—184

(iii) by amending subparagraph (D) to read as

follows:

‘‘(D) institutions reported to have deficiencies or financial aid problems by the State licensing or authorizing

agency, or by the appropriate accrediting agency or association;’’;

(iv) in subparagraph (E), by inserting ‘‘and’’ after

the semicolon; and

(v) by striking subparagraphs (F) and (G) and

inserting the following:

‘‘(F) such other institutions that the Secretary determines may pose a significant risk of failure to comply

with the administrative capability or financial responsibility provisions of this title; and’’; and

(B) in paragraph (3)(A), by inserting ‘‘relevant’’ after

‘‘all’’; and

(2) by amending subsection (b) to read as follows:

‘‘(b) SPECIAL ADMINISTRATIVE RULES.—In carrying out paragraphs (1) and (2) of subsection (a) and any other relevant provisions

of this title, the Secretary shall—

‘‘(1) establish guidelines designed to ensure uniformity of

practice in the conduct of program reviews of institutions of

higher education;

‘‘(2) make available to each institution participating in

programs authorized under this title complete copies of all

review guidelines and procedures used in program reviews;

‘‘(3) permit the institution to correct or cure an administrative, accounting, or recordkeeping error if the error is not

part of a pattern of error and there is no evidence of fraud

or misconduct related to the error;

‘‘(4) base any civil penalty assessed against an institution

of higher education resulting from a program review or audit

on the gravity of the violation, failure, or misrepresentation;

and

‘‘(5) inform the appropriate State and accrediting agency

or association whenever the Secretary takes action against

an institution of higher education under this section, section

498, or section 432.’’.

SEC. 495. REVIEW OF REGULATIONS.

Part H of title IV is further amended by adding at the end

the following:

‘‘SEC. 498B. REVIEW OF REGULATIONS.

‘‘(a) REVIEW REQUIRED.—The Secretary shall review each regulation issued under this title that is in effect at the time of the

review and applies to the operations or activities of any participant

in the programs assisted under this title. The review shall include

a determination of whether the regulation is duplicative, or is

no longer necessary. The review may involve one or more of the

following:

‘‘(1) An assurance of the uniformity of interpretation and

application of such regulations.

‘‘(2) The establishment of a process for ensuring that eligibility and compliance issues, such as institutional audit, program review, and recertification, are considered simultaneously.

‘‘(3) A determination of the extent to which unnecessary

costs are imposed on institutions of higher education as a
H. R. 6—185

consequence of the applicability to the facilities and equipment

of such institutions of regulations prescribed for purposes of

regulating industrial and commercial enterprises.

‘‘(b) REGULATORY AND STATUTORY RELIEF FOR SMALL VOLUME

INSTITUTIONS.—The Secretary shall review and evaluate ways in

which regulations under and provisions of this Act affecting institution of higher education (other than institutions described in section

102(a)(1)(C)), that have received in each of the two most recent

award years prior to the date of the enactment of the Higher

Education Amendments of 1998 less than $200,000 in funds through

this title, may be improved, streamlined, or eliminated.

‘‘(c) CONSULTATION.—In carrying out subsections (a) and (b),

the Secretary shall consult with relevant representatives of institutions participating in the programs authorized by this title.

‘‘(d) REPORTS TO CONGRESS.—

‘‘(1) IN GENERAL.—The Secretary shall submit, not later

than 1 year after the date of the enactment of the Higher

Education Amendments of 1998, a report to the Committee

on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives detailing the Secretary’s findings and recommendations

based on the reviews conducted under subsections (a) and (b),

including a timetable for implementation of any recommended

changes in regulations and a description of any recommendations for legislative changes.

‘‘(2) ADDITIONAL REPORTS.—Not later than January 1, 2003,

the Secretary shall submit a report to the Committee on Labor

and Human Resources of the Senate and the Committee on

Education and the Workforce of the House of Representatives

detailing the Secretary’s findings and recommendations based

on the review conducted under subsection (a), including a timetable for implementation of any recommended changes in regulations and a description of any recommendations for legislative

changes.’’.

TITLE V—DEVELOPING INSTITUTIONS

SEC. 501. ESTABLISHMENT OF NEW TITLE V.

Title V (20 U.S.C. 1101 et seq.) is amended to read as follows:

‘‘TITLE V—DEVELOPING INSTITUTIONS

‘‘PART A—HISPANIC-SERVING INSTITUTIONS

‘‘SEC. 501. FINDINGS; PURPOSE; AND PROGRAM AUTHORITY.

‘‘(a) FINDINGS.—Congress makes the following findings:

‘‘(1) Hispanic Americans are at high risk of not enrolling

or graduating from institutions of higher education.

‘‘(2) Disparities between the enrollment of non-Hispanic

white students and Hispanic students in postsecondary education are increasing. Between 1973 and 1994, enrollment of

white secondary school graduates in 4-year institutions of

higher education increased at a rate two times higher than

that of Hispanic secondary school graduates.
H. R. 6—186

‘‘(3) Despite significant limitations in resources, Hispanicserving institutions provide a significant proportion of postsecondary opportunities for Hispanic students.

‘‘(4) Relative to other institutions of higher education, Hispanic-serving institutions are underfunded. Such institutions

receive significantly less in State and local funding, per fulltime equivalent student, than other institutions of higher education.

‘‘(5) Hispanic-serving institutions are succeeding in educating Hispanic students despite significant resource problems

that—

‘‘(A) limit the ability of such institutions to expand

and improve the academic programs of such institutions;

and

‘‘(B) could imperil the financial and administrative

stability of such institutions.

‘‘(6) There is a national interest in remedying the disparities described in paragraphs (2) and (4) and ensuring that

Hispanic students have an equal opportunity to pursue postsecondary opportunities.

‘‘(b) PURPOSE.—The purpose of this title is to—

‘‘(1) expand educational opportunities for, and improve the

academic attainment of, Hispanic students; and

‘‘(2) expand and enhance the academic offerings, program

quality, and institutional stability of colleges and universities

that are educating the majority of Hispanic college students

and helping large numbers of Hispanic students and other

low-income individuals complete postsecondary degrees.

‘‘(c) PROGRAM AUTHORITY.—The Secretary shall provide grants

and related assistance to Hispanic-serving institutions to enable

such institutions to improve and expand their capacity to serve

Hispanic students and other low-income individuals.

‘‘SEC. 502. DEFINITIONS; ELIGIBILITY.

‘‘(a) DEFINITIONS.—For the purpose of this title:

‘‘(1) EDUCATIONAL AND GENERAL EXPENDITURES.—The term

‘educational and general expenditures’ means the total amount

expended by an institution for instruction, research, public

service, academic support (including library expenditures), student services, institutional support, scholarships and fellowships, operation and maintenance expenditures for the physical

plant, and any mandatory transfers that the institution is

required to pay by law.

‘‘(2) ELIGIBLE INSTITUTION.—The term ‘eligible institution’

means—

‘‘(A) an institution of higher education—

‘‘(i) that has an enrollment of needy students as

required by subsection (b);

‘‘(ii) except as provided in section 512(b), the average educational and general expenditures of which are

low, per full-time equivalent undergraduate student,

in comparison with the average educational and general expenditures per full-time equivalent undergraduate student of institutions that offer similar instruction;

‘‘(iii) that is—
H. R. 6—187

‘‘(I) legally authorized to provide, and provides

within the State, an educational program for which

the institution awards a bachelor’s degree; or

‘‘(II) a junior or community college;

‘‘(iv) that is accredited by a nationally recognized

accrediting agency or association determined by the

Secretary to be reliable authority as to the quality

of training offered or that is, according to such an

agency or association, making reasonable progress

toward accreditation;

‘‘(v) that meets such other requirements as the

Secretary may prescribe; and

‘‘(vi) that is located in a State; and

‘‘(B) any branch of any institution of higher education

described under subparagraph (A) that by itself satisfies

the requirements contained in clauses (i) and (ii) of such

subparagraph.

For purposes of the determination of whether an institution

is an eligible institution under this paragraph, the factor

described under subparagraph (A)(i) shall be given twice the

weight of the factor described under subparagraph (A)(ii).

‘‘(3) ENDOWMENT FUND.—The term ‘endowment fund’

means a fund that—

‘‘(A) is established by State law, by a Hispanic-serving

institution, or by a foundation that is exempt from Federal

income taxation;

‘‘(B) is maintained for the purpose of generating income

for the support of the institution; and

‘‘(C) does not include real estate.

‘‘(4) FULL-TIME EQUIVALENT STUDENTS.—The term ‘full-time

equivalent students’ means the sum of the number of students

enrolled full time at an institution, plus the full-time equivalent

of the number of students enrolled part time (determined on

the basis of the quotient of the sum of the credit hours of

all part-time students divided by 12) at such institution.

‘‘(5) HISPANIC-SERVING INSTITUTION.—The term ‘Hispanicserving institution’ means an institution of higher education

that—

‘‘(A) is an eligible institution;

‘‘(B) at the time of application, has an enrollment of

undergraduate full-time equivalent students that is at least

25 percent Hispanic students; and

‘‘(C) provides assurances that not less than 50 percent

of the institution’s Hispanic students are low-income

individuals.

‘‘(6) JUNIOR OR COMMUNITY COLLEGE.—The term ‘junior

or community college’ means an institution of higher education—

‘‘(A) that admits as regular students persons who are

beyond the age of compulsory school attendance in the

State in which the institution is located and who have

the ability to benefit from the training offered by the

institution;

‘‘(B) that does not provide an educational program

for which the institution awards a bachelor’s degree (or

an equivalent degree); and

‘‘(C) that—
H. R. 6—188

‘‘(i) provides an educational program of not less

than 2 years in duration that is acceptable for full

credit toward such a degree; or

‘‘(ii) offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed

to prepare a student to work as a technician or at

the semiprofessional level in engineering, scientific, or

other technological fields requiring the understanding

and application of basic engineering, scientific, or

mathematical principles of knowledge.

‘‘(7) LOW-INCOME INDIVIDUAL.—The term ‘low-income

individual’ means an individual from a family whose taxable

income for the preceding year did not exceed 150 percent of

an amount equal to the poverty level determined by using

criteria of poverty established by the Bureau of the Census.

‘‘(b) ENROLLMENT OF NEEDY STUDENTS.—For the purpose of

this title, the term ‘enrollment of needy students’ means an enrollment at an institution with respect to which—

‘‘(1) at least 50 percent of the degree students so enrolled

are receiving need-based assistance under title IV in the second

fiscal year preceding the fiscal year for which the determination

is made (other than loans for which an interest subsidy is

paid pursuant to section 428); or

‘‘(2) a substantial percentage of the students so enrolled

are receiving Federal Pell Grants in the second fiscal year

preceding the fiscal year for which determination is made,

compared to the percentage of students receiving Federal Pell

Grants at all such institutions in the second fiscal year preceding the fiscal year for which the determination is made, unless

the requirement of this paragraph is waived under section

512(a).

‘‘SEC. 503. AUTHORIZED ACTIVITIES.

‘‘(a) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded under

this title shall be used by Hispanic-serving institutions of higher

education to assist the institutions to plan, develop, undertake,

and carry out programs to improve and expand the institutions’

capacity to serve Hispanic students and other low-income students.

‘‘(b) AUTHORIZED ACTIVITIES.—Grants awarded under this section shall be used for one or more of the following activities:

‘‘(1) Purchase, rental, or lease of scientific or laboratory

equipment for educational purposes, including instructional and

research purposes.

‘‘(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.

‘‘(3) Support of faculty exchanges, faculty development,

curriculum development, academic instruction, and faculty

fellowships to assist in attaining advanced degrees in the fellow’s field of instruction.

‘‘(4) Purchase of library books, periodicals, and other educational materials, including telecommunications program

material.

‘‘(5) Tutoring, counseling, and student service programs

designed to improve academic success.
H. R. 6—189

‘‘(6) Funds management, administrative management, and

acquisition of equipment for use in strengthening funds

management.

‘‘(7) Joint use of facilities, such as laboratories and libraries.

‘‘(8) Establishing or improving a development office to

strengthen or improve contributions from alumni and the private sector.

‘‘(9) Establishing or improving an endowment fund.

‘‘(10) Creating or improving facilities for Internet or other

distance learning academic instruction capabilities, including

purchase or rental of telecommunications technology equipment

or services.

‘‘(11) Establishing or enhancing a program of teacher education designed to qualify students to teach in public

elementary schools and secondary schools.

‘‘(12) Establishing community outreach programs that will

encourage elementary school and secondary school students

to develop the academic skills and the interest to pursue postsecondary education.

‘‘(13) Expanding the number of Hispanic and other underrepresented graduate and professional students that can be

served by the institution by expanding courses and institutional

resources.

‘‘(14) Other activities proposed in the application submitted

pursuant to section 504 that—

‘‘(A) contribute to carrying out the purposes of this

title; and

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

review and acceptance of such application.

‘‘(c) ENDOWMENT FUND LIMITATIONS.— ‘‘(1) PORTION OF GRANT.—A Hispanic-serving institution

may not use more than 20 percent of the grant funds provided

under this title for any fiscal year for establishing or improving

an endowment fund.

‘‘(2) MATCHING REQUIRED.—A Hispanic-serving institution

that uses any portion of the grant funds provided under this

title for any fiscal year for establishing or improving an endowment fund shall provide from non-Federal funds an amount

equal to or greater than the portion.

‘‘(3) COMPARABILITY.—The provisions of part C of title III

regarding the establishment or increase of an endowment fund,

that the Secretary determines are not inconsistent with this

subsection, shall apply to funds used under paragraph (1).

‘‘SEC. 504. DURATION OF GRANT.

‘‘(a) AWARD PERIOD.—

‘‘(1) IN GENERAL.—The Secretary may award a grant to

a Hispanic-serving institution under this title for 5 years.

‘‘(2) WAITOUT PERIOD.—A Hispanic-serving institution shall

not be eligible to secure a subsequent 5-year grant award

under this title until 2 years have elapsed since the expiration

of the institution’s most recent 5-year grant award under this

title, except that for the purpose of this subsection a grant

under section 514(a) shall not be considered a grant under

this title.

‘‘(b) PLANNING GRANTS.—Notwithstanding subsection (a), the

Secretary may award a grant to a Hispanic-serving institution
H. R. 6—190

under this title for a period of 1 year for the purpose of preparation

of plans and applications for a grant under this title.

‘‘SEC. 505. SPECIAL RULE.

‘‘No Hispanic-serving institution that is eligible for and receives

funds under this title may receive funds under part A or B of

title III during the period for which funds under this title are

awarded.

‘‘PART B—GENERAL PROVISIONS

‘‘SEC. 511. ELIGIBILITY; APPLICATIONS.

‘‘(a) INSTITUTIONAL ELIGIBILITY.—Each Hispanic-serving

institution desiring to receive assistance under this title shall submit to the Secretary such enrollment data as may be necessary

to demonstrate that the institution is a Hispanic-serving institution

as defined in section 502, along with such other data and information as the Secretary may by regulation require.

‘‘(b) APPLICATIONS.—

‘‘(1) APPLICATIONS REQUIRED.—Any institution which is

eligible for assistance under this title shall submit to the Secretary an application for assistance at such time, in such form,

and containing such information, as may be necessary to enable

the Secretary to evaluate the institution’s need for assistance.

Subject to the availability of appropriations to carry out this

title, the Secretary may approve an application for a grant

under this title only if the Secretary determines that—

‘‘(A) the application meets the requirements of subsection (b); and

‘‘(B) the institution is eligible for assistance in accordance with the provisions of this title under which the

assistance is sought.

‘‘(2) PRELIMINARY APPLICATIONS.—In carrying out paragraph (1), the Secretary may develop a preliminary application

for use by Hispanic-serving institutions applying under this

title prior to the submission of the principal application.

‘‘(c) CONTENTS.—A Hispanic-serving institution, in the institution’s application for a grant, shall—

‘‘(1) set forth, or describe how the institution will develop,

a comprehensive development plan to strengthen the institution’s academic quality and institutional management, and

otherwise provide for institutional self-sufficiency and growth

(including measurable objectives for the institution and the

Secretary to use in monitoring the effectiveness of activities

under this title);

‘‘(2) include a 5-year plan for improving the assistance

provided by the Hispanic-serving institution to Hispanic students and other low-income individuals;

‘‘(3) set forth policies and procedures to ensure that Federal

funds made available under this title for any fiscal year will

be used to supplement and, to the extent practical, increase

the funds that would otherwise be made available for the

purposes of section 501(b), and in no case supplant those funds;

‘‘(4) set forth policies and procedures for evaluating the

effectiveness in accomplishing the purpose of the activities for

which a grant is sought under this title;
H. R. 6—191

‘‘(5) provide for such fiscal control and fund accounting

procedures as may be necessary to ensure proper disbursement

of and accounting for funds made available to the institution

under this title;

‘‘(6) provide that the institution will comply with the limitations set forth in section 516;

‘‘(7) describe in a comprehensive manner any proposed

project for which funds are sought under the application and

include—

‘‘(A) a description of the various components of the

proposed project, including the estimated time required

to complete each such component;

‘‘(B) in the case of any development project that consists of several components (as described by the institution

pursuant to subparagraph (A)), a statement identifying

those components which, if separately funded, would be

sound investments of Federal funds and those components

which would be sound investments of Federal funds only

if funded under this title in conjunction with other parts

of the development project (as specified by the institution);

‘‘(C) an evaluation by the institution of the priority

given any proposed project for which funds are sought

in relation to any other projects for which funds are sought

by the institution under this title, and a similar evaluation

regarding priorities among the components of any single

proposed project (as described by the institution pursuant

to subparagraph (A));

‘‘(D) a detailed budget showing the manner in which

funds for any proposed project would be spent by the

institution; and

‘‘(E) a detailed description of any activity which involves the expenditure of more than $25,000, as identified

in the budget referred to in subparagraph (D);

‘‘(8) provide for making reports, in such form and containing

such information, as the Secretary may require to carry out

the Secretary’s functions under this title, including not less

than one report annually setting forth the institution’s progress

toward achieving the objectives for which the funds were

awarded and for keeping such records and affording such access

to such records, as the Secretary may find necessary to assure

the correctness and verification of such reports; and

‘‘(9) include such other information as the Secretary may

prescribe.

‘‘(d) PRIORITY.—With respect to applications for assistance

under this section, the Secretary shall give priority to an application

that contains satisfactory evidence that the Hispanic-serving

institution has entered into or will enter into a collaborative

arrangement with at least one local educational agency or community-based organization to provide such agency or organization with

assistance (from funds other than funds provided under this title)

in reducing dropout rates for Hispanic students, improving rates

of academic achievement for Hispanic students, and increasing the

rates at which Hispanic secondary school graduates enroll in higher

education.

‘‘(e) ELIGIBILITY DATA.—The Secretary shall use the most recent

and relevant data concerning the number and percentage of students receiving need-based assistance under title IV in making
H. R. 6—192

eligibility determinations and shall advance the base-year for the

determinations forward following each annual grant cycle.

‘‘SEC. 512. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

‘‘(a) WAIVER REQUIREMENTS; NEED-BASED ASSISTANCE STU- DENTS.—The Secretary may waive the requirements set forth in

section 502(a)(2)(A)(i) in the case of an institution—

‘‘(1) that is extensively subsidized by the State in which

the institution is located and charges low or no tuition;

‘‘(2) that serves a substantial number of low-income students as a percentage of the institution’s total student population;

‘‘(3) that is contributing substantially to increasing higher

education opportunities for educationally disadvantaged, underrepresented, or minority students, who are low-income individuals;

‘‘(4) which is substantially increasing higher educational

opportunities for individuals in rural or other isolated areas

which are unserved by postsecondary institutions; or

‘‘(5) wherever located, if the Secretary determines that

the waiver will substantially increase higher education

opportunities appropriate to the needs of Hispanic Americans.

‘‘(b) WAIVER DETERMINATIONS; EXPENDITURES.— ‘‘(1) WAIVER DETERMINATIONS.—The Secretary may waive

the requirements set forth in section 502(a)(2)(A)(ii) if the Secretary determines, based on persuasive evidence submitted by

the institution, that the institution’s failure to meet the requirements is due to factors which, when used in the determination

of compliance with the requirements, distort such determination, and that the institution’s designation as an eligible institution under part A is otherwise consistent with the purposes

of this title.

‘‘(2) EXPENDITURES.—The Secretary shall submit to Congress every other year a report concerning the institutions

that, although not satisfying the requirements of section

502(a)(2)(A)(ii), have been determined to be eligible institutions

under part A. Such report shall—

‘‘(A) identify the factors referred to in paragraph (1)

that were considered by the Secretary as factors that distorted the determination of compliance with clauses (i)

and (ii) of section 502(a)(2)(A); and

‘‘(B) contain a list of each institution determined to

be an eligible institution under part A including a statement of the reasons for each such determination.

‘‘SEC. 513. APPLICATION REVIEW PROCESS.

‘‘(a) REVIEW PANEL.—All applications submitted under this title

by Hispanic-serving institutions shall be read by a panel of readers

composed of individuals who are selected by the Secretary and

who include individuals representing Hispanic-serving institutions.

The Secretary shall ensure that no individual assigned under this

section to review any application has any conflict of interest with

regard to the application that might impair the impartiality with

which the individual conducts the review under this section.

‘‘(b) INSTRUCTION.—All readers selected by the Secretary shall

receive thorough instruction from the Secretary regarding the

evaluation process for applications submitted under this title that

are consistent with the provisions of this title, including—
H. R. 6—193

‘‘(1) an enumeration of the factors to be used to determine

the quality of applications submitted under this title; and

‘‘(2) an enumeration of the factors to be used to determine

whether a grant should be awarded for a project under this

title, the amount of any such grant, and the duration of any

such grant.

‘‘(c) RECOMMENDATIONS OF PANEL.—In awarding grants under

this title, the Secretary shall take into consideration the recommendations of the panel made under subsection (a).

‘‘(d) NOTIFICATION.—Not later than June 30 of each year, the

Secretary shall notify each Hispanic-serving institution making an

application under this title of—

‘‘(1) the scores given the institution by the panel pursuant

to this section;

‘‘(2) the recommendations of the panel with respect to such

application; and

‘‘(3) the reasons for the decision of the Secretary in awarding or refusing to award a grant under this title, and any

modifications, if any, in the recommendations of the panel

made by the Secretary.

‘‘SEC. 514. COOPERATIVE ARRANGEMENTS.

‘‘(a) GENERAL AUTHORITY.—The Secretary may make grants

to encourage cooperative arrangements with funds available to carry

out this title, between Hispanic-serving institutions eligible for

assistance under this title, and between such institutions and

institutions not receiving assistance under this title, for the activities described in section 503 so that the resources of the cooperating

institutions might be combined and shared in order to achieve

the purposes of this title, to avoid costly duplicative efforts, and

to enhance the development of Hispanic-serving institutions.

‘‘(b) PRIORITY.—The Secretary shall give priority to grants for

the purposes described under subsection (a) whenever the Secretary

determines that the cooperative arrangement is geographically and

economically sound or will benefit the applicant Hispanic-serving

institution.

‘‘(c) DURATION.—Grants to Hispanic-serving institutions having

a cooperative arrangement may be made under this section for

a period determined under section 505.

‘‘SEC. 515. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

‘‘(a) ASSISTANCE ELIGIBILITY.—Each Hispanic-serving institution that the Secretary determines to be an institution eligible

under this title may be eligible for waivers in accordance with

subsection (b).

‘‘(b) WAIVER APPLICABILITY.— ‘‘(1) IN GENERAL.—Subject to, and in accordance with, regulations promulgated for the purpose of this section, in the

case of any application by a Hispanic-serving institution

referred to in subsection (a) for assistance under any programs

specified in paragraph (2), the Secretary is authorized, if such

application is otherwise approvable, to waive any requirement

for a non-Federal share of the cost of the program or project,

or, to the extent not inconsistent with other law, to give, or

require to be given, priority consideration of the application

in relation to applications from other institutions.

‘‘(2) PROGRAMS.—The provisions of this section shall apply

to any program authorized by title IV or section 604.
H. R. 6—194

‘‘(c) LIMITATION.—The Secretary shall not waive, under subsection (b), the non-Federal share requirement for any program

for applications which, if approved, would require the expenditure

of more than 10 percent of the appropriations for the program

for any fiscal year.

‘‘SEC. 516. LIMITATIONS.

‘‘The funds appropriated under section 518 may not be used—

‘‘(1) for a school or department of divinity or any religious

worship or sectarian activity;

‘‘(2) for an activity that is inconsistent with a State plan

for desegregation of higher education applicable to a Hispanicserving institution;

‘‘(3) for an activity that is inconsistent with a State plan

of higher education applicable to a Hispanic-serving institution;

or

‘‘(4) for purposes other than the purposes set forth in the

approved application under which the funds were made available to a Hispanic-serving institution.

‘‘SEC. 517. PENALTIES.

‘‘Whoever, being an officer, director, agent, or employee of,

or connected in any capacity with, any recipient of Federal financial

assistance or grant pursuant to this title embezzles, willfully

misapplies, steals, or obtains by fraud any of the funds that are

the subject of such grant or assistance, shall be fined not more

than $10,000 or imprisoned for not more than 2 years, or both.

‘‘SEC. 518. AUTHORIZATIONS OF APPROPRIATIONS.

‘‘(a) AUTHORIZATIONS.—There are authorized to be appropriated

to carry out this title $62,500,000 for fiscal year 1999 and such

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

years.

‘‘(b) USE OF MULTIPLE YEAR AWARDS.—In the event of a multiple year award to any Hispanic-serving institution under this

title, the Secretary shall make funds available for such award

from funds appropriated for this title for the fiscal year in which

such funds are to be used by the institution.’’.

TITLE VI—INTERNATIONAL EDUCATION

PROGRAMS

SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

Part A of title VI (20 U.S.C. 1121 et seq.) is amended to

read as follows:

‘‘PART A—INTERNATIONAL AND FOREIGN

LANGUAGE STUDIES

‘‘SEC. 601. FINDINGS AND PURPOSES.

‘‘(a) FINDINGS.—Congress finds as follows:

‘‘(1) The security, stability, and economic vitality of the

United States in a complex global era depend upon American

experts in and citizens knowledgeable about world regions,

foreign languages, and international affairs, as well as upon

a strong research base in these areas.
H. R. 6—195

‘‘(2) Advances in communications technology and the

growth of regional and global problems make knowledge of

other countries and the ability to communicate in other languages more essential to the promotion of mutual understanding and cooperation among nations and their peoples.

‘‘(3) Dramatic post-Cold War changes in the world’s geopolitical and economic landscapes are creating needs for American expertise and knowledge about a greater diversity of less

commonly taught foreign languages and nations of the world.

‘‘(4) Systematic efforts are necessary to enhance the capacity of institutions of higher education in the United States

for—

‘‘(A) producing graduates with international and foreign language expertise and knowledge; and

‘‘(B) research regarding such expertise and knowledge.

‘‘(5) Cooperative efforts among the Federal Government,

institutions of higher education, and the private sector are

necessary to promote the generation and dissemination of

information about world regions, foreign languages, and international affairs throughout education, government, business,

civic, and nonprofit sectors in the United States.

‘‘(b) PURPOSES.—The purposes of this part are—

‘‘(1)(A) to support centers, programs, and fellowships in

institutions of higher education in the United States for producing increased numbers of trained personnel and research in

foreign languages, area studies, and other international studies;

‘‘(B) to develop a pool of international experts to meet

national needs;

‘‘(C) to develop and validate specialized materials and techniques for foreign language acquisition and fluency, emphasizing (but not limited to) the less commonly taught languages;

‘‘(D) to promote access to research and training overseas;

and

‘‘(E) to advance the internationalization of a variety of

disciplines throughout undergraduate and graduate education;

‘‘(2) to support cooperative efforts promoting access to and

the dissemination of international and foreign language knowledge, teaching materials, and research, throughout education,

government, business, civic, and nonprofit sectors in the United

States, through the use of advanced technologies; and

‘‘(3) to coordinate the programs of the Federal Government

in the areas of foreign language, area studies, and other international studies, including professional international affairs

education and research.

‘‘SEC. 602. GRADUATE AND UNDERGRADUATE LANGUAGE AND AREA

CENTERS AND PROGRAMS.

‘‘(a) NATIONAL LANGUAGE AND AREA CENTERS AND PROGRAMS

AUTHORIZED.—

‘‘(1) CENTERS AND PROGRAMS.—

‘‘(A) IN GENERAL.—The Secretary is authorized—

‘‘(i) to make grants to institutions of higher education, or combinations thereof, for the purpose of

establishing, strengthening, and operating comprehensive foreign language and area or international studies

centers and programs; and
H. R. 6—196

‘‘(ii) to make grants to such institutions or combinations for the purpose of establishing, strengthening, and operating a diverse network of undergraduate

foreign language and area or international studies centers and programs.

‘‘(B) NATIONAL RESOURCES.—The centers and programs

referred to in paragraph (1) shall be national resources

for—

‘‘(i) teaching of any modern foreign language;

‘‘(ii) instruction in fields needed to provide full

understanding of areas, regions, or countries in which

such language is commonly used;

‘‘(iii) research and training in international studies,

and the international and foreign language aspects

of professional and other fields of study; and

‘‘(iv) instruction and research on issues in world

affairs that concern one or more countries.

‘‘(2) AUTHORIZED ACTIVITIES.—Any such grant may be used

to pay all or part of the cost of establishing or operating

a center or program, including the cost of—

‘‘(A) teaching and research materials;

‘‘(B) curriculum planning and development;

‘‘(C) establishing and maintaining linkages with overseas institutions of higher education and other organizations that may contribute to the teaching and research

of the center or program;

‘‘(D) bringing visiting scholars and faculty to the center

to teach or to conduct research;

‘‘(E) professional development of the center’s faculty

and staff;

‘‘(F) projects conducted in cooperation with other centers addressing themes of world regional, cross-regional,

international, or global importance;

‘‘(G) summer institutes in the United States or abroad

designed to provide language and area training in the

center’s field or topic; and

‘‘(H) support for faculty, staff, and student travel in

foreign areas, regions, or countries, and for the development

and support of educational programs abroad for students.

‘‘(3) GRANTS TO MAINTAIN LIBRARY COLLECTIONS.—The Secretary may make grants to centers described in paragraph

(1) having important library collections, as determined by the

Secretary, for the maintenance of such collections.

‘‘(4) OUTREACH GRANTS AND SUMMER INSTITUTES.—The

Secretary may make additional grants to centers described

in paragraph (1) for any one or more of the following purposes:

‘‘(A) Programs of linkage or outreach between foreign

language, area studies, or other international fields, and

professional schools and colleges.

‘‘(B) Programs of linkage or outreach with 2- and 4-

year colleges and universities.

‘‘(C) Programs of linkage or outreach with departments

or agencies of Federal and State governments.

‘‘(D) Programs of linkage or outreach with the news

media, business, professional, or trade associations.

‘‘(E) Summer institutes in foreign area, foreign language, and other international fields designed to carry
H. R. 6—197

out the programs of linkage and outreach described in

subparagraphs (A), (B), (C), and (D).

‘‘(b) GRADUATE FELLOWSHIPS FOR FOREIGN LANGUAGE AND AREA

OR INTERNATIONAL STUDIES.—

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

grants to institutions of higher education or combinations of

such institutions for the purpose of paying stipends to individuals undergoing advanced training in any center or program

approved by the Secretary.

‘‘(2) ELIGIBLE STUDENTS.—Students receiving stipends

described in paragraph (1) shall be individuals who are engaged

in an instructional program with stated performance goals for

functional foreign language use or in a program developing

such performance goals, in combination with area studies, international studies, or the international aspects of a professional

studies program, including predissertation level studies,

preparation for dissertation research, dissertation research

abroad, and dissertation writing.

‘‘(c) SPECIAL RULE WITH RESPECT TO TRAVEL.—No funds may

be expended under this part for undergraduate travel except in

accordance with rules prescribed by the Secretary setting forth

policies and procedures to assure that Federal funds made available

for such travel are expended as part of a formal program of supervised study.

‘‘(d) ALLOWANCES.—Stipends awarded to graduate level recipients may include allowances for dependents and for travel for

research and study in the United States and abroad.

‘‘SEC. 603. LANGUAGE RESOURCE CENTERS.

‘‘(a) LANGUAGE RESOURCE CENTERS AUTHORIZED.—The Secretary is authorized to make grants to and enter into contracts

with institutions of higher education, or combinations of such

institutions, for the purpose of establishing, strengthening, and

operating a small number of national language resource and training centers, which shall serve as resources to improve the capacity

to teach and learn foreign languages effectively.

‘‘(b) AUTHORIZED ACTIVITIES.—The activities carried out by the

centers described in subsection (a)—

‘‘(1) shall include effective dissemination efforts, whenever

appropriate; and

‘‘(2) may include—

‘‘(A) the conduct and dissemination of research on new

and improved teaching methods, including the use of

advanced educational technology;

‘‘(B) the development and dissemination of new teaching materials reflecting the use of such research in effective

teaching strategies;

‘‘(C) the development, application, and dissemination

of performance testing appropriate to an educational setting for use as a standard and comparable measurement

of skill levels in all languages;

‘‘(D) the training of teachers in the administration

and interpretation of performance tests, the use of effective

teaching strategies, and the use of new technologies;

‘‘(E) a significant focus on the teaching and learning

needs of the less commonly taught languages, including

an assessment of the strategic needs of the United States,
H. R. 6—198

the determination of ways to meet those needs nationally,

and the publication and dissemination of instructional

materials in the less commonly taught languages;

‘‘(F) the development and dissemination of materials

designed to serve as a resource for foreign language teachers at the elementary and secondary school levels; and

‘‘(G) the operation of intensive summer language

institutes to train advanced foreign language students, to

provide professional development, and to improve language

instruction through preservice and inservice language

training for teachers.

‘‘(c) CONDITIONS FOR GRANTS.—Grants under this section shall

be made on such conditions as the Secretary determines to be

necessary to carry out the provisions of this section.

‘‘SEC. 604. UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN

LANGUAGE PROGRAMS.

‘‘(a) INCENTIVES FOR THE CREATION OF NEW PROGRAMS AND

THE STRENGTHENING OF EXISTING PROGRAMS IN UNDERGRADUATE

INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS.—

‘‘(1) AUTHORITY.—The Secretary is authorized to make

grants to institutions of higher education, combinations of such

institutions, or partnerships between nonprofit educational

organizations and institutions of higher education, to assist

such institutions, combinations or partnerships in planning,

developing, and carrying out programs to improve undergraduate instruction in international studies and foreign languages.

Such grants shall be awarded to institutions, combinations

or partnerships seeking to create new programs or to strengthen

existing programs in foreign languages, area studies, and other

international fields.

‘‘(2) USE OF FUNDS.—Grants made under this section may

be used for Federal share of the cost of projects and activities

which are an integral part of such a program, such as—

‘‘(A) planning for the development and expansion of

undergraduate programs in international studies and

foreign languages;

‘‘(B) teaching, research, curriculum development,

faculty training in the United States or abroad, and other

related activities, including—

‘‘(i) the expansion of library and teaching

resources; and

‘‘(ii) preservice and inservice teacher training;

‘‘(C) expansion of opportunities for learning foreign

languages, including less commonly taught languages;

‘‘(D) programs under which foreign teachers and

scholars may visit institutions as visiting faculty;

‘‘(E) programs designed to develop or enhance linkages

between 2- and 4-year institutions of higher education,

or baccalaureate and post-baccalaureate programs or

institutions;

‘‘(F) the development of undergraduate educational programs—

‘‘(i) in locations abroad where such opportunities

are not otherwise available or that serve students for

whom such opportunities are not otherwise available;

and
H. R. 6—199

‘‘(ii) that provide courses that are closely related

to on-campus foreign language and international

curricula;

‘‘(G) the integration of new and continuing education

abroad opportunities for undergraduate students into

curricula of specific degree programs;

‘‘(H) the development of model programs to enrich or

enhance the effectiveness of educational programs abroad,

including predeparture and postreturn programs, and the

integration of educational programs abroad into the

curriculum of the home institution;

‘‘(I) the development of programs designed to integrate

professional and technical education with foreign languages, area studies, and other international fields;

‘‘(J) the establishment of linkages overseas with

institutions of higher education and organizations that

contribute to the educational programs assisted under this

subsection;

‘‘(K) the conduct of summer institutes in foreign area,

foreign language, and other international fields to provide

faculty and curriculum development, including the integration of professional and technical education with foreign

area and other international studies, and to provide foreign

area and other international knowledge or skills to government personnel or private sector professionals in international activities;

‘‘(L) the development of partnerships between—

‘‘(i) institutions of higher education; and

‘‘(ii) the private sector, government, or elementary

and secondary education institutions,

in order to enhance international knowledge and skills;

and

‘‘(M) the use of innovative technology to increase access

to international education programs.

‘‘(3) NON-FEDERAL SHARE.—The non-Federal share of the

cost of the programs assisted under this subsection—

‘‘(A) may be provided in cash from the private sector

corporations or foundations in an amount equal to onethird of the total cost of the programs assisted under this

section; or

‘‘(B) may be provided as an in-cash or in-kind contribution from institutional and noninstitutional funds, including State and private sector corporation or foundation contributions, equal to one-half of the total cost of the programs assisted under this section.

‘‘(4) SPECIAL RULE.—The Secretary may waive or reduce

the required non-Federal share for institutions that—

‘‘(A) are eligible to receive assistance under part A

or B of title III or under title V; and

‘‘(B) have submitted a grant application under this

section.

‘‘(5) PRIORITY.—In awarding grants under this section, the

Secretary shall give priority to applications from institutions

of higher education, combinations or partnerships that require

entering students to have successfully completed at least 2

years of secondary school foreign language instruction or that
H. R. 6—200

require each graduating student to earn 2 years of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in the case of

a 2-year degree granting institution, offer 2 years of postsecondary credit in a foreign language.

‘‘(6) GRANT CONDITIONS.—Grants under this subsection

shall be made on such conditions as the Secretary determines

to be necessary to carry out this subsection.

‘‘(7) APPLICATION.—Each application for assistance under

this subsection shall include—

‘‘(A) evidence that the applicant has conducted extensive planning prior to submitting the application;

‘‘(B) an assurance that the faculty and administrators

of all relevant departments and programs served by the

applicant are involved in ongoing collaboration with regard

to achieving the stated objectives of the application;

‘‘(C) an assurance that students at the applicant

institutions, as appropriate, will have equal access to, and

derive benefits from, the program assisted under this subsection; and

‘‘(D) an assurance that each institution, combination

or partnership will use the Federal assistance provided

under this subsection to supplement and not supplant nonFederal funds the institution expends for programs to

improve undergraduate instruction in international studies

and foreign languages.

‘‘(8) EVALUATION.—The Secretary may establish requirements for program evaluations and require grant recipients

to submit annual reports that evaluate the progress and

performance of students participating in programs assisted

under this subsection.

‘‘(b) PROGRAMS OF NATIONAL SIGNIFICANCE.—The Secretary

may also award grants to public and private nonprofit agencies

and organizations, including professional and scholarly associations,

whenever the Secretary determines such grants will make an especially significant contribution to improving undergraduate international studies and foreign language programs.

‘‘(c) FUNDING SUPPORT.—The Secretary may use not more than

10 percent of the total amount appropriated for this part for carrying out the purposes of this section.

‘‘SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

‘‘(a) AUTHORIZED ACTIVITIES.—The Secretary may, directly or

through grants or contracts, conduct research and studies that

contribute to achieving the purposes of this part. Such research

and studies may include—

‘‘(1) studies and surveys to determine needs for increased

or improved instruction in foreign language, area studies, or

other international fields, including the demand for foreign

language, area, and other international specialists in government, education, and the private sector;

‘‘(2) studies and surveys to assess the utilization of graduates of programs supported under this title by governmental,

educational, and private sector organizations and other studies

assessing the outcomes and effectiveness of programs so supported;
H. R. 6—201

‘‘(3) evaluation of the extent to which programs assisted

under this title that address national needs would not otherwise

be offered;

‘‘(4) comparative studies of the effectiveness of strategies

to provide international capabilities at institutions of higher

education;

‘‘(5) research on more effective methods of providing

instruction and achieving competency in foreign languages, area

studies, or other international fields;

‘‘(6) the development and publication of specialized materials for use in foreign language, area studies, and other international fields, or for training foreign language, area, and other

international specialists;

‘‘(7) studies and surveys of the uses of technology in foreign

language, area studies, and international studies programs;

‘‘(8) studies and evaluations of effective practices in the

dissemination of international information, materials, research,

teaching strategies, and testing techniques throughout the education community, including elementary and secondary schools;

and

‘‘(9) the application of performance tests and standards

across all areas of foreign language instruction and classroom

use.

‘‘(b) ANNUAL REPORT.—The Secretary shall prepare, publish,

and announce an annual report listing the books and research

materials produced with assistance under this section.

‘‘SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR

FOREIGN INFORMATION ACCESS.

‘‘(a) AUTHORITY.—The Secretary is authorized to make grants

to institutions of higher education, public or nonprofit private libraries, or consortia of such institutions or libraries, to develop innovative techniques or programs using new electronic technologies to

collect, organize, preserve, and widely disseminate information on

world regions and countries other than the United States that

address our Nation’s teaching and research needs in international

education and foreign languages.

‘‘(b) AUTHORIZED ACTIVITIES.—Grants under this section may

be used—

‘‘(1) to facilitate access to or preserve foreign information

resources in print or electronic forms;

‘‘(2) to develop new means of immediate, full-text document

delivery for information and scholarship from abroad;

‘‘(3) to develop new means of shared electronic access to

international data;

‘‘(4) to support collaborative projects of indexing, cataloging,

and other means of bibliographic access for scholars to important research materials published or distributed outside the

United States;

‘‘(5) to develop methods for the wide dissemination of

resources written in non-Roman language alphabets;

‘‘(6) to assist teachers of less commonly taught languages

in acquiring, via electronic and other means, materials suitable

for classroom use; and

‘‘(7) to promote collaborative technology based projects in

foreign languages, area studies, and international studies

among grant recipients under this title.
H. R. 6—202

‘‘(c) APPLICATION.—Each institution or consortium desiring a

grant under this section shall submit an application to the Secretary

at such time, in such manner, and accompanied by such information

and assurances as the Secretary may reasonably require.

‘‘(d) MATCH REQUIRED.—The Federal share of the total cost

of carrying out a program supported by a grant under this section

shall not be more than 662⁄3 percent. The non-Federal share of

such cost may be provided either in-kind or in cash, and may

include contributions from private sector corporations or foundations.’’.

‘‘SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS.

‘‘(a) COMPETITIVE GRANTS.—The Secretary shall award grants

under section 602 competitively on the basis of criteria that

separately, but not less rigorously, evaluates the applications for

comprehensive and undergraduate language and area centers and

programs.

‘‘(b) SELECTION CRITERIA.—The Secretary shall set criteria for

grants awarded under section 602 by which a determination of

excellence shall be made to meet the differing objectives of graduate

and undergraduate institutions.

‘‘(c) EQUITABLE DISTRIBUTION OF GRANTS.—The Secretary shall,

to the extent practicable, award grants under this part (other than

section 602) in such manner as to achieve an equitable distribution

of the grant funds throughout the United States, based on the

merit of a proposal as determined pursuant to a peer review process

involving broadly representative professionals.

‘‘SEC. 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

‘‘(a) SELECTION CRITERIA.—The Secretary shall make excellence

the criterion for selection of grants awarded under section 602.

‘‘(b) EQUITABLE DISTRIBUTION.—To the extent practicable and

consistent with the criterion of excellence, the Secretary shall award

grants under this part (other than section 602) in such a manner

as will achieve an equitable distribution of funds throughout the

United States.

‘‘(c) SUPPORT FOR UNDERGRADUATE EDUCATION.—The Secretary

shall also award grants under this part in such manner as to

ensure that an appropriate portion of the funds appropriated for

this part (as determined by the Secretary) are used to support

undergraduate education.

‘‘SEC. 609. AMERICAN OVERSEAS RESEARCH CENTERS.

‘‘(a) CENTERS AUTHORIZED.—The Secretary is authorized to

make grants to and enter into contracts with any American overseas

research center that is a consortium of institutions of higher education (hereafter in this section referred to as a ‘‘center’’) to enable

such center to promote postgraduate research, exchanges and area

studies.

‘‘(b) USE OF GRANTS.—Grants made and contracts entered into

pursuant to this section may be used to pay all or a portion

of the cost of establishing or operating a center or program,

including—

‘‘(1) the cost of faculty and staff stipends and salaries;

‘‘(2) the cost of faculty, staff, and student travel;

‘‘(3) the cost of the operation and maintenance of overseas

facilities;

‘‘(4) the cost of teaching and research materials;
H. R. 6—203

‘‘(5) the cost of acquisition, maintenance, and preservation

of library collections;

‘‘(6) the cost of bringing visiting scholars and faculty to

a center to teach or to conduct research;

‘‘(7) the cost of organizing and managing conferences; and

‘‘(8) the cost of publication and dissemination of material

for the scholarly and general public.

‘‘(c) LIMITATION.—The Secretary shall only award grants to

and enter into contracts with centers under this section that—

‘‘(1) receive more than 50 percent of their funding from

public or private United States sources;

‘‘(2) have a permanent presence in the country in which

the center is located; and

‘‘(3) are organizations described in section 501(c)(3) of the

Internal Revenue Code of 1986 which are exempt from taxation

under section 501(a) of such Code.

‘‘(d) DEVELOPMENT GRANTS.—The Secretary is authorized to

make grants for the establishment of new centers. The grants

may be used to fund activities that, within 1 year, will result

in the creation of a center described in subsection (c).

‘‘SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

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

part $80,000,000 for fiscal year 1999, and such sums as may be

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

SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

(a) AMENDMENT TO HEADING.—The heading for section 611

(20 U.S.C. 1130) is amended to read as follows:

‘‘SEC. 611. FINDINGS AND PURPOSES.’’.

(b) CENTERS.—Section 612 (20 U.S.C. 1130–1) is amended—

(1) in subsection (c)—

(A) in paragraph (1)—

(i) in subparagraph (B), by striking ‘‘advanced’’;

and

(ii) in subparagraph (C), by striking ‘‘evening or

summer’’; and

(B) in paragraph (2)(C), by inserting ‘‘foreign language

studies,’’ after ‘‘area studies,’’; and

(2) in subsection (d)(2)(G), by inserting ‘‘, such as a representative of a community college in the region served by

the center’’ before the period.

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 614 (20 U.S.C.

1130b) is amended—

(1) in subsection (a), by striking ‘‘1993’’ and inserting

‘‘1999’’; and

(2) in subsection (b), by striking ‘‘1993’’ and inserting

‘‘1999’’.

SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

(a) MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT

PROGRAM.—Section 621(e) (20 U.S.C. 1131(e)) is amended by striking ‘‘one-fourth’’ and inserting ‘‘one-half’’.

(b) INSTITUTIONAL DEVELOPMENT.—Part C of title VI (20 U.S.C.

1131 et seq.) is amended—
H. R. 6—204

(1) by redesignating sections 622 through 627 (20 U.S.C.

1131a through 1131f) as sections 623 through 628, respectively;

and

(2) by inserting after section 621 (20 U.S.C. 1131) the

following:

‘‘SEC. 622. INSTITUTIONAL DEVELOPMENT.

‘‘(a) IN GENERAL.—The Institute shall award grants, from

amounts available to the Institute for each fiscal year, to historically

Black colleges and universities, Hispanic-serving institutions, Tribally Controlled Colleges or Universities, and minority institutions,

to enable such colleges, universities, and institutions to strengthen

international affairs programs.

‘‘(b) APPLICATION.—No grant may be made by the Institute

unless an application is made by the college, university, or institution at such time, in such manner, and accompanied by such

information as the Institute may require.

‘‘(c) DEFINITIONS.—In this section—

‘‘(1) the term ‘historically Black college and university’ has

the meaning given the term in section 322;

‘‘(2) the term ‘Hispanic-serving institution’ has the meaning

given the term in section 502;

‘‘(3) the term ‘Tribally Controlled College or University’

has the meaning given the term in section 2 of the Tribally

Controlled College or University Assistance Act of 1978 (25

U.S.C. 1801); and

‘‘(4) the term ‘minority institution’ has the meaning given

the term in section 365.’’.

(c) STUDY ABROAD PROGRAM.—Section 623 (as redesignated

by subsection(b)(1)) (20 U.S.C. 1131a)—

(1) in the section heading, by striking ‘‘JUNIOR YEAR’’ and

inserting ‘‘STUDY’’;

(2) in subsection (b)(2)—

(A) by inserting ‘‘, or completing the third year of

study in the case of a summer abroad program,’’ after

‘‘study’’; and

(B) by striking ‘‘junior year’’ and inserting ‘‘study’’;

and

(3) in subsection (c)—

(A) in the matter preceding paragraph (1), by striking

‘‘junior year’’ and inserting ‘‘study’’;

(B) in paragraph (1), by striking ‘‘junior year’’ and

inserting ‘‘study’’; and

(C) in paragraph (2)—

(i) by striking ‘‘one-half’’ and inserting ‘‘one-third’’;

and

(ii) by striking ‘‘junior year’’ and inserting ‘‘study’’.

(d) INTERNSHIPS.—Section 625 (as redesignated by subsection

(b)(1)) (20 U.S.C. 1132c)—

(1) by striking ‘‘The Institute’’ and inserting ‘‘(a) IN

GENERAL.—The Institute’’; and

(2) by adding at the end the following:

‘‘(b) POSTBACCALAUREATE INTERNSHIPS.—The Institute shall

enter into agreements with institutions of higher education

described in the first sentence of subsection (a) to conduct internships for students who have completed study for a baccalaureate
H. R. 6—205

degree. The internship program authorized by this subsection

shall—

‘‘(1) assist the students to prepare for a master’s degree

program;

‘‘(2) be carried out with the assistance of the Woodrow

Wilson International Center for Scholars;

‘‘(3) contain work experience for the students designed to

contribute to the students’ preparation for a master’s degree

program; and

‘‘(4) be assisted by the Interagency Committee on Minority

Careers in International Affairs established under subsection

(c).

‘‘(c) INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTERNATIONAL AFFAIRS.—

‘‘(1) ESTABLISHMENT.—There is established in the executive

branch of the Federal Government an Interagency Committee

on Minority Careers in International Affairs composed of not

less than 7 members, including—

‘‘(A) the Under Secretary for Farm and Foreign Agricultural Services of the Department of Agriculture, or the

Under Secretary’s designee;

‘‘(B) the Assistant Secretary and Director General, of

the United States and Foreign Commercial Service of the

Department of Commerce, or the Assistant Secretary and

Director General’s designee;

‘‘(C) the Under Secretary of Defense for Personnel and

Readiness of the Department of Defense, or the Under

Secretary’s designee;

‘‘(D) the Assistant Secretary for Postsecondary Education in the Department of Education, or the Assistant

Secretary’s designee;

‘‘(E) the Director General of the Foreign Service of

the Department of State, or the Director General’s designee;

‘‘(F) the General Counsel of the Agency for International Development, or the General Counsel’s designee;

and

‘‘(G) the Associate Director for Educational and Cultural Affairs of the United States Information Agency, or

the Associate Director’s designee.

‘‘(2) FUNCTIONS.—The Interagency Committee established

by this section shall—

‘‘(A) on an annual basis inform the Secretary and the

Institute regarding ways to advise students participating

in the internship program assisted under this section with

respect to goals for careers in international affairs;

‘‘(B) locate for students potential internship opportunities in the Federal Government related to international

affairs; and

‘‘(C) promote policies in each department and agency

participating in the Committee that are designed to carry

out the objectives of this part.’’.

(f ) CONFORMING AMENDMENT.—Section 627 (as redesignated

by subsection (b)(1)) (20 U.S.C. 1131e) is amended by striking

‘‘625’’ and inserting ‘‘626’’.
H. R. 6—206

(g) AUTHORIZATION OF APPROPRIATIONS.—Section 628 (as

redesignated by subsection (b)(1)) (20 U.S.C. 1131f ), by striking

‘‘1993’’ and inserting ‘‘1999’’.

SEC. 604. GENERAL PROVISIONS.

(a) DEFINITIONS.—Section 631(a) (20 U.S.C. 1132(a)) is

amended—

(1) by striking ‘‘and’’ at the end of paragraph (7);

(2) by striking the period at the end of paragraph (8)

and inserting ‘‘; and’’; and

(3) by inserting after paragraph (8) the following:

‘‘(9) the term ‘educational programs abroad’ means programs of study, internships, or service learning outside the

United States which are part of a foreign language or other

international curriculum at the undergraduate or graduate education levels.’’.

(b) REPEAL.—Section 632 (20 U.S.C. 1132–1) is repealed.

TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

SEC. 701. REVISION OF TITLE VII.

Title VII (20 U.S.C. 1132a et seq.) is amended to read as

follows:

‘‘TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

‘‘SEC. 700. PURPOSE.

‘‘It is the purpose of this title—

‘‘(1) to authorize national graduate fellowship programs—

‘‘(A) in order to attract students of superior ability

and achievement, exceptional promise, and demonstrated

financial need, into high-quality graduate programs and

provide the students with the financial support necessary

to complete advanced degrees; and

‘‘(B) that are designed to—

‘‘(i) sustain and enhance the capacity for graduate

education in areas of national need; and

‘‘(ii) encourage talented students to pursue scholarly careers in the humanities, social sciences, and

the arts; and

‘‘(2) to promote postsecondary programs.

‘‘PART A—GRADUATE EDUCATION PROGRAMS

‘‘Subpart 1—Jacob K. Javits Fellowship Program

‘‘SEC. 701. AWARD OF JACOB K. JAVITS FELLOWSHIPS.

‘‘(a) AUTHORITY AND TIMING OF AWARDS.—The Secretary is

authorized to award fellowships in accordance with the provisions
H. R. 6—207

of this subpart for graduate study in the arts, humanities, and

social sciences by students of superior ability selected on the basis

of demonstrated achievement, financial need, and exceptional promise. The fellowships shall be awarded to students who are eligible

to receive any grant, loan, or work assistance pursuant to section

484 and intend to pursue a doctoral degree, except that fellowships

may be granted to students pursuing a master’s degree in those

fields in which the master’s degree is the terminal highest degree

awarded in the area of study. All funds appropriated in a fiscal

year shall be obligated and expended to the students for fellowships

for use in the academic year beginning after July 1 of the fiscal

year following the fiscal year for which the funds were appropriated.

The fellowships shall be awarded for only 1 academic year of study

and shall be renewable for a period not to exceed 4 years of

study.

‘‘(b) DESIGNATION OF FELLOWS.—Students receiving awards

under this subpart shall be known as ‘Jacob K. Javits Fellows’.

‘‘(c) INTERRUPTIONS OF STUDY.—The institution of higher education may allow a fellowship recipient to interrupt periods of

study for a period not to exceed 12 months for the purpose of

work, travel, or independent study away from the campus, if such

independent study is supportive of the fellowship recipient’s academic program and shall continue payments for those 12-month

periods during which the student is pursuing travel or independent

study supportive of the recipient’s academic program.

‘‘(d) PROCESS AND TIMING OF COMPETITION.—The Secretary

shall make applications for fellowships under this part available

not later than October 1 of the academic year preceding the academic year for which fellowships will be awarded, and shall

announce the recipients of fellowships under this section not later

than March 1 of the academic year preceding the academic year

for which the fellowships are awarded.

‘‘(e) AUTHORITY TO CONTRACT.—The Secretary is authorized

to enter into a contract with a nongovernmental agency to administer the program assisted under this part if the Secretary determines that entering into the contract is an efficient means of

carrying out the program.

‘‘SEC. 702. ALLOCATION OF FELLOWSHIPS.

‘‘(a) FELLOWSHIP BOARD.— ‘‘(1) APPOINTMENT.—The Secretary shall appoint a Jacob

K. Javits Fellows Program Fellowship Board (hereinafter in

this subpart referred to as the ‘Board’) consisting of 9 individuals representative of both public and private institutions of

higher education who are especially qualified to serve on the

Board. In making appointments, the Secretary shall give due

consideration to the appointment of individuals who are highly

respected in the academic community. The Secretary shall

assure that individuals appointed to the Board are broadly

representative of a range of disciplines in graduate education

in arts, humanities, and social sciences.

‘‘(2) DUTIES.—The Board shall—

‘‘(A) establish general policies for the program established by this subpart and oversee the program’s operation;

‘‘(B) establish general criteria for the award of fellowships in academic fields identified by the Board, or, in

the event that the Secretary enters into a contract with
H. R. 6—208

a nongovernmental entity to administer the program

assisted under this subpart, by such nongovernmental

entity;

‘‘(C) appoint panels of academic scholars with distinguished backgrounds in the arts, humanities, and social

sciences for the purpose of selecting fellows, except that,

in the event that the Secretary enters into a contract

with a nongovernmental entity to administer the program,

such panels may be appointed by such nongovernmental

entity; and

‘‘(D) prepare and submit to the Congress at least once

in every 3-year period a report on any modifications in

the program that the Board determines are appropriate.

‘‘(3) CONSULTATIONS.—In carrying out its responsibilities,

the Board shall consult on a regular basis with representatives

of the National Science Foundation, the National Endowment

for the Humanities, the National Endowment for the Arts,

and representatives of institutions of higher education and

associations of such institutions, learned societies, and professional organizations.

‘‘(4) TERM.—The term of office of each member of the Board

shall be 4 years, except that any member appointed to fill

a vacancy shall serve for the remainder of the term for which

the predecessor of the member was appointed. No member

may serve for a period in excess of 6 years.

‘‘(5) INITIAL MEETING; VACANCY.—The Secretary shall call

the first meeting of the Board, at which the first order of

business shall be the election of a Chairperson and a Vice

Chairperson, who shall serve until 1 year after the date of

the appointment of the Chairperson and Vice Chairperson.

Thereafter each officer shall be elected for a term of 2 years.

In case a vacancy occurs in either office, the Board shall elect

an individual from among the members of the Board to fill

such vacancy.

‘‘(6) QUORUM; ADDITIONAL MEETINGS.—(A) A majority of

the members of the Board shall constitute a quorum.

‘‘(B) The Board shall meet at least once a year or more

frequently, as may be necessary, to carry out the Board’s

responsibilities.

‘‘(7) COMPENSATION.—Members of the Board, while serving

on the business of the Board, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding

the rate of basic pay payable for level IV of the Executive

Schedule, including travel time, and while so serving away

from their homes or regular places of business, the members

may be allowed travel expenses, including per diem in lieu

of subsistence, as authorized by section 5703 of title 5, United

States Code, for persons in Government service employed intermittently.

‘‘(b) USE OF SELECTION PANELS.—The recipients of fellowships

shall be selected in each designated field from among all applicants

nationwide in each field by distinguished panels appointed by the

Board to make such selections under criteria established by the

Board, except that, in the event that the Secretary enters into

a contract with a nongovernmental entity to administer the program, such panels may be appointed by such nongovernmental

entity. The number of recipients in each field in each year shall
H. R. 6—209

not exceed the number of fellows allocated to that field for that

year by the Board.

‘‘(c) FELLOWSHIP PORTABILITY.—Each recipient shall be entitled

to use the fellowship in a graduate program at any accredited

institution of higher education in which the recipient may decide

to enroll.

‘‘SEC. 703. STIPENDS.

‘‘(a) AWARD BY SECRETARY.—The Secretary shall pay to individuals awarded fellowships under this subpart such stipends as the

Secretary may establish, reflecting the purpose of this program

to encourage highly talented students to undertake graduate study

as described in this subpart. In the case of an individual who

receives such individual’s first stipend under this subpart in academic year 1999–2000 or any succeeding academic year, such stipend shall be set at a level of support equal to that provided

by the National Science Foundation graduate fellowships, except

such amount shall be adjusted as necessary so as not to exceed

the fellow’s demonstrated level of need determined in accordance

with part F of title IV.

‘‘(b) INSTITUTIONAL PAYMENTS.— ‘‘(1) IN GENERAL.—(A) The Secretary shall (in addition to

stipends paid to individuals under this subpart) pay to the

institution of higher education, for each individual awarded

a fellowship under this subpart at such institution, an institutional allowance. Except as provided in subparagraph (B), such

allowance shall be, for 1999–2000 and succeeding academic

years, the same amount as the institutional payment made

for 1998–1999 under section 933(b) (as such section was in

effect on the day before the date of enactment of the Higher

Education Amendments of 1998) adjusted for 1999–2000 and

annually thereafter in accordance with inflation as determined

by the Department of Labor’s Consumer Price Index for the

previous calendar year.

‘‘(B) The institutional allowance paid under subparagraph

(A) shall be reduced by the amount the institution charges

and collects from a fellowship recipient for tuition and other

expenses as part of the recipient’s instructional program.

‘‘(2) SPECIAL RULES.—(A) Beginning March 1, 1992, any

applicant for a fellowship under this subpart who has been

notified in writing by the Secretary that such applicant has

been selected to receive such a fellowship and is subsequently

notified that the fellowship award has been withdrawn, shall

receive such fellowship unless the Secretary subsequently

makes a determination that such applicant submitted fraudulent information on the application.

‘‘(B) Subject to the availability of appropriations, amounts

payable to an institution by the Secretary pursuant to this

subsection shall not be reduced for any purpose other than

the purposes specified under paragraph (1).

‘‘SEC. 704. FELLOWSHIP CONDITIONS.

‘‘(a) REQUIREMENTS FOR RECEIPT.—An individual awarded a

fellowship under the provisions of this subpart shall continue to

receive payments provided in section 703 only during such periods

as the Secretary finds that such individual is maintaining satisfactory proficiency in, and devoting essentially full time to, study

or research in the field in which such fellowship was awarded,
H. R. 6—210

in an institution of higher education, and is not engaging in gainful

employment other than part-time employment by such institution

in teaching, research, or similar activities, approved by the Secretary.

‘‘(b) REPORTS FROM RECIPIENTS.—The Secretary is authorized

to require reports containing such information in such form and

filed at such times as the Secretary determines necessary from

any person awarded a fellowship under the provisions of this subpart. The reports shall be accompanied by a certificate from an

appropriate official at the institution of higher education, library,

archive, or other research center approved by the Secretary, stating

that such individual is making satisfactory progress in, and is

devoting essentially full time to the program for which the fellowship was awarded.

‘‘SEC. 705. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated $30,000,000 for fiscal

year 1999 and such sums as may be necessary for each of the

4 succeeding fiscal years to carry out this subpart.

‘‘Subpart 2—Graduate Assistance in Areas of

National Need

‘‘SEC. 711. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF

INSTITUTIONS.

‘‘(a) GRANT AUTHORITY.—

‘‘(1) IN GENERAL.—The Secretary shall make grants to academic departments, programs and other academic units of

institutions of higher education that provide courses of study

leading to a graduate degree in order to enable such institutions

to provide assistance to graduate students in accordance with

this subpart.

‘‘(2) ADDITIONAL GRANTS.—The Secretary may also make

grants to such departments, programs and other academic units

of institutions of higher education granting graduate degrees

which submit joint proposals involving nondegree granting

institutions which have formal arrangements for the support

of doctoral dissertation research with degree-granting institutions. Nondegree granting institutions eligible for awards as

part of such joint proposals include any organization which—

‘‘(A) is described in section 501(c)(3) of the Internal

Revenue Code of 1986, and is exempt from tax under

section 501(a) of such Code;

‘‘(B) is organized and operated substantially to conduct

scientific and cultural research and graduate training programs;

‘‘(C) is not a private foundation;

‘‘(D) has academic personnel for instruction and counseling who meet the standards of the institution of higher

education in which the students are enrolled; and

‘‘(E) has necessary research resources not otherwise

readily available in such institutions to such students.

‘‘(b) AWARD AND DURATION OF GRANTS.—

‘‘(1) AWARDS.—The principal criterion for the award of

grants shall be the relative quality of the graduate programs

presented in competing applications. Consistent with an allocation of awards based on quality of competing applications,
H. R. 6—211

the Secretary shall, in awarding such grants, promote an equitable geographic distribution among eligible public and private

institutions of higher education.

‘‘(2)DURATION AND AMOUNT.—

‘‘(A) DURATION.—The Secretary shall award a grant

under this subpart for a period of 3 years.

‘‘(B) AMOUNT.—The Secretary shall award a grant to

an academic department, program or unit of an institution

of higher education under this subpart for a fiscal year

in an amount that is not less than $100,000 and not greater

than $750,000.

‘‘(3) REALLOTMENT.—Whenever the Secretary determines

that an academic department, program or unit of an institution

of higher education is unable to use all of the amounts available

to the department, program or unit under this subpart, the

Secretary shall, on such dates during each fiscal year as the

Secretary may fix, reallot the amounts not needed to academic

departments, programs and units of institutions which can

use the grants authorized by this subpart.

‘‘(c) PREFERENCE TO CONTINUING GRANT RECIPIENTS.—

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

awards under this subpart only to the extent that each previous

grant recipient under this subpart has received continued funding in accordance with subsection (b)(2)(A).

‘‘(2) RATABLE REDUCTION.—To the extent that appropriations under this subpart are insufficient to comply with paragraph (1), available funds shall be distributed by ratably reducing the amounts required to be awarded under subsection

(b)(2)(A).

‘‘SEC. 712. INSTITUTIONAL ELIGIBILITY.

‘‘(a) ELIGIBILITY CRITERIA.—Any academic department, program

or unit of an institution of higher education that offers a program

of postbaccalaureate study leading to a graduate degree in an

area of national need (as designated under subsection (b)) may

apply for a grant under this subpart. No department, program

or unit shall be eligible for a grant unless the program of

postbaccalaureate study has been in existence for at least 4 years

at the time of application for assistance under this subpart.

‘‘(b) DESIGNATION OF AREAS OF NATIONAL NEED.—After consultation with appropriate Federal and nonprofit agencies and

organizations, the Secretary shall designate areas of national need.

In making such designations, the Secretary shall take into account

the extent to which the interest in the area is compelling, the

extent to which other Federal programs support postbaccalaureate

study in the area concerned, and an assessment of how the program

could achieve the most significant impact with available resources.

‘‘SEC. 713. CRITERIA FOR APPLICATIONS.

‘‘(a) SELECTION OF APPLICATIONS.—The Secretary shall make

grants to academic departments, programs and units of institutions

of higher education on the basis of applications submitted in accordance with subsection (b). Applications shall be ranked on program

quality by review panels of nationally recognized scholars and evaluated on the quality and effectiveness of the academic program

and the achievement and promise of the students to be served.

To the extent possible (consistent with other provisions of this
H. R. 6—212

section), the Secretary shall make awards that are consistent with

recommendations of the review panels.

‘‘(b) CONTENTS OF APPLICATIONS.—An academic department,

program or unit of an institution of higher education, in the department, program or unit’s application for a grant, shall—

‘‘(1) describe the current academic program of the applicant

for which the grant is sought;

‘‘(2) provide assurances that the applicant will provide,

from other non-Federal sources, for the purposes of the fellowship program under this subpart an amount equal to at least

25 percent of the amount of the grant received under this

subpart, which contribution may be in cash or in kind, fairly

valued;

‘‘(3) set forth policies and procedures to assure that, in

making fellowship awards under this subpart, the institution

will seek talented students from traditionally underrepresented

backgrounds, as determined by the Secretary;

‘‘(4) describe the number, types, and amounts of the fellowships that the applicant intends to offer with grant funds

provided under this part;

‘‘(5) set forth policies and procedures to assure that, in

making fellowship awards under this subpart, the institution

will make awards to individuals who—

‘‘(A) have financial need, as determined under part

F of title IV;

‘‘(B) have excellent academic records in their previous

programs of study; and

‘‘(C) plan to pursue the highest possible degree available in their course of study;

‘‘(6) set forth policies and procedures to ensure that Federal

funds made available under this subpart for any fiscal year

will be used to supplement and, to the extent practical, increase

the funds that would otherwise be made available for the

purpose of this subpart and in no case to supplant those funds;

‘‘(7) provide assurances that, in the event that funds made

available to the academic department, program or unit under

this subpart are insufficient to provide the assistance due a

student under the commitment entered into between the academic department, program or unit and the student, the academic department, program or unit will, from any funds available to the department, program or unit, fulfill the commitment

to the student;

‘‘(8) provide that the applicant will comply with the limitations set forth in section 715;

‘‘(9) provide assurances that the academic department will

provide at least 1 year of supervised training in instruction

for students; and

‘‘(10) include such other information as the Secretary may

prescribe.

‘‘SEC. 714. AWARDS TO GRADUATE STUDENTS.

‘‘(a) COMMITMENTS TO GRADUATE STUDENTS.—

‘‘(1) IN GENERAL.—An academic department, program or

unit of an institution of higher education shall make commitments to graduate students who are eligible students under

section 484 (including students pursuing a doctoral degree after

having completed a master’s degree program at an institution
H. R. 6—213

of higher education) at any point in their graduate study to

provide stipends for the length of time necessary for a student

to complete the course of graduate study, but in no case longer

than 5 years.

‘‘(2) SPECIAL RULE.—No such commitments shall be made

to students under this subpart unless the academic department,

program or unit has determined adequate funds are available

to fulfill the commitment from funds received or anticipated

under this subpart, or from institutional funds.

‘‘(b) AMOUNT OF STIPENDS.—The Secretary shall make payments to institutions of higher education for the purpose of paying

stipends to individuals who are awarded fellowships under this

subpart. The stipends the Secretary establishes shall reflect the

purpose of the program under this subpart to encourage highly

talented students to undertake graduate study as described in

this subpart. In the case of an individual who receives such individual’s first stipend under this subpart in academic year 1999–2000

or any succeeding academic year, such stipend shall be set at

a level of support equal to that provided by the National Science

Foundation graduate fellowships, except such amount shall be

adjusted as necessary so as not to exceed the fellow’s demonstrated

level of need as determined under part F of title IV.

‘‘(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—An institution

of higher education that makes institutional payments for tuition

and fees on behalf of individuals supported by fellowships under

this subpart in amounts that exceed the institutional payments

made by the Secretary pursuant to section 716(a) may count such

excess toward the amounts the institution is required to provide

pursuant to section 714(b)(2).

‘‘(d) ACADEMIC PROGRESS REQUIRED.—Notwithstanding the

provisions of subsection (a), no student shall receive an award—

‘‘(1) except during periods in which such student is

maintaining satisfactory progress in, and devoting essentially

full time to, study or research in the field in which such

fellowship was awarded; or

‘‘(2) if the student is engaging in gainful employment other

than part-time employment involved in teaching, research, or

similar activities determined by the institution to be in support

of the student’s progress towards a degree.

‘‘SEC. 715. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

‘‘(a) INSTITUTIONAL PAYMENTS.— ‘‘(1) IN GENERAL.—The Secretary shall (in addition to stipends paid to individuals under this subpart) pay to the institution of higher education, for each individual awarded a fellowship under this subpart at such institution, an institutional

allowance. Except as provided in paragraph (2), such allowance

shall be, for 1999–2000 and succeeding academic years, the

same amount as the institutional payment made for 1998–

1999 adjusted annually thereafter in accordance with inflation

as determined by the Department of Labor’s Consumer Price

Index for the previous calendar year.

‘‘(2) REDUCTION.—The institutional allowance paid under

paragraph (1) shall be reduced by the amount the institution

charges and collects from a fellowship recipient for tuition

and other expenses as part of the recipient’s instructional program.
H. R. 6—214

‘‘(b) USE FOR OVERHEAD PROHIBITED.—Funds made available

pursuant to this subpart may not be used for the general operational

overhead of the academic department or program.

‘‘SEC. 716. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated $35,000,000 for fiscal

year 1999 and such sums as may be necessary for each of the

4 succeeding fiscal years to carry out this subpart.

‘‘Subpart 3—Thurgood Marshall Legal

Educational Opportunity Program

‘‘SEC. 721. LEGAL EDUCATIONAL OPPORTUNITY PROGRAM.

‘‘(a) PROGRAM AUTHORITY.—The Secretary shall carry out a

program to be known as the ‘Thurgood Marshall Legal Educational

Opportunity Program’ designed to provide low-income, minority,

or disadvantaged college students with the information, preparation,

and financial assistance to gain access to and complete law school

study.

‘‘(b) ELIGIBILITY.—A college student is eligible for assistance

under this section if the student is—

‘‘(1) from a low-income family;

‘‘(2) a minority; or

‘‘(3) from an economically or otherwise disadvantaged background.

‘‘(c) CONTRACT OR GRANT AUTHORIZED.—The Secretary is

authorized to enter into a contract with, or make a grant to,

the Council on Legal Education Opportunity, for a period of not

less than 5 years—

‘‘(1) to identify college students who are from low-income

families, are minorities, or are from disadvantaged backgrounds

described in subsection (b)(3);

‘‘(2) to prepare such students for study at accredited law

schools;

‘‘(3) to assist such students to select the appropriate law

school, make application for entry into law school, and receive

financial assistance for such study;

‘‘(4) to provide support services to such students who are

first-year law students to improve retention and success in

law school studies; and

‘‘(5) to motivate and prepare such students with respect

to law school studies and practice in low-income communities.

‘‘(d) SERVICES PROVIDED.—In carrying out the purposes

described in subsection (c), the contract or grant shall provide

for the delivery of services through prelaw information resource

centers, summer institutes, midyear seminars, and other educational activities, conducted under this section. Such services may

include—

‘‘(1) information and counseling regarding—

‘‘(A) accredited law school academic programs, especially tuition, fees, and admission requirements;

‘‘(B) course work offered and required for graduation;

‘‘(C) faculty specialties and areas of legal emphasis;

and

‘‘(D) undergraduate preparatory courses and curriculum selection;
H. R. 6—215

‘‘(2) tutoring and academic counseling, including assistance

in preparing for bar examinations;

‘‘(3) prelaw mentoring programs, involving law school

faculty, members of State and local bar associations, and retired

and sitting judges, justices, and magistrates;

‘‘(4) assistance in identifying preparatory courses and

material for the law school aptitude or admissions tests;

‘‘(5) summer institutes for Thurgood Marshall Fellows that

expose the Fellows to a rigorous curriculum that emphasizes

abstract thinking, legal analysis, research, writing, and examination techniques; and

‘‘(6) midyear seminars and other educational activities that

are designed to reinforce reading, writing, and studying skills

of Thurgood Marshall Fellows.

‘‘(e) DURATION OF THE PROVISION OF SERVICES.—The services

described in subsection (d) may be provided—

‘‘(1) prior to the period of law school study;

‘‘(2) during the period of law school study; and

‘‘(3) during the period following law school study and prior

to taking a bar examination.

‘‘(f ) SUBCONTRACTS AND SUBGRANTS.—For the purposes of planning, developing, or delivering one or more of the services described

in subsection (d), the Council on Legal Education Opportunity shall

enter into subcontracts with, and make subgrants to, institutions

of higher education, law schools, public and private agencies and

organizations, and combinations of such institutions, schools, agencies, and organizations.

‘‘(g) STIPENDS.—The Secretary shall annually establish the

maximum stipend to be paid (including allowances for participant

travel and for the travel of the dependents of the participant)

to Thurgood Marshall Fellows for the period of participation in

summer institutes and midyear seminars. A Fellow may be eligible

for such a stipend only if the Thurgood Marshall Fellow maintains

satisfactory academic progress toward the Juris Doctor or Bachelor

of Laws degree, as determined by the respective institutions.

‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $5,000,000 for fiscal

year 1999 and each of the 4 succeeding fiscal years.

‘‘Subpart 4—General Provisions

‘‘SEC. 731. ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1, 2, AND 3.

‘‘(a) COORDINATED ADMINISTRATION.—In carrying out the purpose described in section 700(1), the Secretary shall provide for

coordinated administration and regulation of graduate programs

assisted under subparts 1, 2, and 3 with other Federal programs

providing assistance for graduate education in order to minimize

duplication and improve efficiency to ensure that the programs

are carried out in a manner most compatible with academic practices and with the standard timetables for applications for, and

notifications of acceptance to, graduate programs.

‘‘(b) HIRING AUTHORITY.—For purposes of carrying out subparts

1, 2, and 3, the Secretary shall appoint, without regard to the

provisions of title 5, United States Code, that govern appointments

in the competitive service, such administrative and technical

employees, with the appropriate educational background, as shall
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be needed to assist in the administration of such parts. The employees shall be paid without regard to the provisions of chapter 51

and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates.

‘‘(c) USE FOR RELIGIOUS PURPOSES PROHIBITED.—No institutional payment or allowance under section 703(b) or 715(a) shall

be paid to a school or department of divinity as a result of the

award of a fellowship under subpart 1 or 2, respectively, to an

individual who is studying for a religious vocation.

‘‘(d) EVALUATION.—The Secretary shall evaluate the success

of assistance provided to individuals under subpart 1, 2, or 3 with

respect to graduating from their degree programs, and placement

in faculty and professional positions.

‘‘(e) CONTINUATION AWARDS.—The Secretary, using funds appropriated to carry out subparts 1 and 2, and before awarding any

assistance under such parts to a recipient that did not receive

assistance under part C or D of title IX (as such parts were

in effect prior to the date of enactment of the Higher Education

Amendments of 1998) shall continue to provide funding to recipients

of assistance under such part C or D (as so in effect), as the

case may be, pursuant to any multiyear award of such assistance.

‘‘PART B—FUND FOR THE IMPROVEMENT OF

POSTSECONDARY EDUCATION

‘‘SEC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY

EDUCATION.

‘‘(a) AUTHORITY.—The Secretary is authorized to make grants

to, or enter into contracts with, institutions of higher education,

combinations of such institutions, and other public and private

nonprofit institutions and agencies, to enable such institutions,

combinations, and agencies to improve postsecondary education

opportunities by—

‘‘(1) encouraging the reform, innovation, and improvement

of postsecondary education, and providing equal educational

opportunity for all;

‘‘(2) the creation of institutions, programs, and joint efforts

involving paths to career and professional training, and combinations of academic and experiential learning;

‘‘(3) the establishment of institutions and programs based

on the technology of communications;

‘‘(4) the carrying out, in postsecondary educational institutions, of changes in internal structure and operations designed

to clarify institutional priorities and purposes;

‘‘(5) the design and introduction of cost-effective methods

of instruction and operation;

‘‘(6) the introduction of institutional reforms designed to

expand individual opportunities for entering and reentering

institutions and pursuing programs of study tailored to individual needs;

‘‘(7) the introduction of reforms in graduate education, in

the structure of academic professions, and in the recruitment

and retention of faculties; and

‘‘(8) the creation of new institutions and programs for

examining and awarding credentials to individuals, and the

introduction of reforms in current institutional practices related

thereto.
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‘‘(b) PLANNING GRANTS.—The Secretary is authorized to make

planning grants to institutions of higher education for the development and testing of innovative techniques in postsecondary education. Such grants shall not exceed $20,000.

‘‘SEC. 742. BOARD OF THE FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

‘‘(a) ESTABLISHMENT.—There is established a National Board

of the Fund for the Improvement of Postsecondary Education (in

this part referred to as the ‘Board’). The Board shall consist of

15 members appointed by the Secretary for overlapping 3-year

terms. A majority of the Board shall constitute a quorum. Any

member of the Board who has served for 6 consecutive years shall

thereafter be ineligible for appointment to the Board during a

2-year period following the expiration of such sixth year.

‘‘(b) MEMBERSHIP.— ‘‘(1) IN GENERAL.—The Secretary shall designate one of

the members of the Board as Chairperson of the Board. A

majority of the members of the Board shall be public interest

representatives, including students, and a minority shall be

educational representatives. All members selected shall be

individuals able to contribute an important perspective on priorities for improvement in postsecondary education and strategies

of educational and institutional change.

‘‘(2) APPOINTMENT OF DIRECTOR.—The Secretary shall

appoint the Director of the Fund for the Improvement of Postsecondary Education (hereafter in this part referred to as the

‘Director’).

‘‘(c) DUTIES.—The Board shall—

‘‘(1) advise the Secretary and the Director on priorities

for the improvement of postsecondary education and make such

recommendations as the Board may deem appropriate for the

improvement of postsecondary education and for the evaluation,

dissemination, and adaptation of demonstrated improvements

in postsecondary educational practice;

‘‘(2) advise the Secretary and the Director on the operation

of the Fund for the Improvement of Postsecondary Education,

including advice on planning documents, guidelines, and procedures for grant competitions prepared by the Fund; and

‘‘(3) meet at the call of the Chairperson, except that the

Board shall meet whenever one-third or more of the members

request in writing that a meeting be held.

‘‘(d) INFORMATION AND ASSISTANCE.—The Director shall make

available to the Board such information and assistance as may

be necessary to enable the Board to carry out its functions.

‘‘SEC. 743. ADMINISTRATIVE PROVISIONS.

‘‘(a) TECHNICAL EMPLOYEES.—The Secretary may appoint, for

terms not to exceed 3 years, without regard to the provisions

of title 5, United States Code, governing appointments in the

competitive service, not more than 7 technical employees to administer this part who may be paid without regard to the provisions

of chapter 51 and subchapter III of chapter 53 of such title relating

to classification and General Schedule pay rates.

‘‘(b) PROCEDURES.—The Director shall establish procedures for

reviewing and evaluating grants and contracts made or entered

into under this part. Procedures for reviewing grant applications

or contracts for financial assistance under this section may not
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be subject to any review outside of officials responsible for the

administration of the Fund for the Improvement of Postsecondary

Education.

‘‘SEC. 744. SPECIAL PROJECTS.

‘‘(a) GRANT AUTHORITY.—The Director is authorized to make

grants to institutions of higher education, or consortia thereof,

and such other public agencies and nonprofit organizations as the

Director deems necessary for innovative projects concerning one

or more areas of particular national need identified by the Director.

‘‘(b) APPLICATION.—No grant shall be made under this part

unless an application is made at such time, in such manner, and

contains or is accompanied by such information as the Secretary

may require.

‘‘(c) AREAS OF NATIONAL NEED.—Areas of national need shall

initially include, but shall not be limited to, the following:

‘‘(1) Institutional restructuring to improve learning and

promote productivity, efficiency, quality improvement, and cost

and price control.

‘‘(2) Articulation between 2- and 4-year institutions of

higher education, including developing innovative methods for

ensuring the successful transfer of students from 2- to 4-year

institutions of higher education.

‘‘(3) Evaluation and dissemination of model programs.

‘‘(4) International cooperation and student exchange among

postsecondary educational institutions.

‘‘SEC. 745. AUTHORIZATION OF APPROPRIATIONS.

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

part $30,000,000 for fiscal year 1999 and such sums as may be

necessary for each of the 4 succeeding fiscal years.

‘‘PART C—URBAN COMMUNITY SERVICE

‘‘SEC. 751. FINDINGS.

‘‘The Congress finds that—

‘‘(1) the Nation’s urban centers are facing increasingly

pressing problems and needs in the areas of economic development, community infrastructure and service, social policy, public health, housing, crime, education, environmental concerns,

planning and work force preparation;

‘‘(2) there are, in the Nation’s urban institutions, people

with underutilized skills, knowledge, and experience who are

capable of providing a vast range of services toward the

amelioration of the problems described in paragraph (1);

‘‘(3) the skills, knowledge and experience in these urban

institutions, if applied in a systematic and sustained manner,

can make a significant contribution to the solution of such

problems; and

‘‘(4) the application of such skills, knowledge and experience

is hindered by the limited funds available to redirect attention

to solutions to such urban problems.

‘‘SEC. 752. PURPOSE; PROGRAM AUTHORIZED.

‘‘(a) PURPOSE.—It is the purpose of this part to provide incentives to urban academic institutions to enable such institutions
H. R. 6—219

to work with private and civic organizations to devise and implement solutions to pressing and severe problems in their communities.

‘‘(b) PROGRAM AUTHORIZED.—The Secretary is authorized to

carry out a program of providing assistance to eligible institutions

to enable such institutions to carry out the activities described

in section 754 in accordance with the provisions of this part.

‘‘SEC. 753. APPLICATION FOR URBAN COMMUNITY SERVICE GRANTS.

‘‘(a) APPLICATION.— ‘‘(1) IN GENERAL.—An eligible institution seeking assistance

under this part shall submit to the Secretary an application

at such time, in such form, and containing or accompanied

by such information and assurances as the Secretary may

require by regulation.

‘‘(2) CONTENTS.—Each application submitted pursuant to

paragraph (1) shall—

‘‘(A) describe the activities and services for which

assistance is sought; and

‘‘(B) include a plan that is agreed to by the members

of a consortium that includes, in addition to the eligible

institution, one or more of the following entities:

‘‘(i) A community college.

‘‘(ii) An urban school system.

‘‘(iii) A local government.

‘‘(iv) A business or other employer.

‘‘(v) A nonprofit institution.

‘‘(3) WAIVER.—The Secretary may waive the consortium

requirements described in paragraph (2) for any applicant who

can demonstrate to the satisfaction of the Secretary that the

applicant has devised an integrated and coordinated plan which

meets the purpose of this part.

‘‘(b) PRIORITY IN SELECTION OF APPLICATIONS.—The Secretary

shall give priority to applications that propose to conduct joint

projects supported by other local, State, and Federal programs.

In addition, the Secretary shall give priority to eligible institutions

submitting applications that demonstrate the eligible institution’s

commitment to urban community service.

‘‘(c) SELECTION PROCEDURES.—The Secretary shall, by regulation, develop a formal procedure for the submission of applications

under this part and shall publish in the Federal Register an

announcement of that procedure and the availability of funds under

this part.

‘‘SEC. 754. ALLOWABLE ACTIVITIES.

‘‘Funds made available under this part shall be used to support

planning, applied research, training, resource exchanges or technology transfers, the delivery of services, or other activities the

purpose of which is to design and implement programs to assist

urban communities to meet and address their pressing and severe

problems, such as the following:

‘‘(1) Work force preparation.

‘‘(2) Urban poverty and the alleviation of such poverty.

‘‘(3) Health care, including delivery and access.

‘‘(4) Underperforming school systems and students.

‘‘(5) Problems faced by the elderly and individuals with

disabilities in urban settings.

‘‘(6) Problems faced by families and children.
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‘‘(7) Campus and community crime prevention, including

enhanced security and safety awareness measures as well as

coordinated programs addressing the root causes of crime.

‘‘(8) Urban housing.

‘‘(9) Urban infrastructure.

‘‘(10) Economic development.

‘‘(11) Urban environmental concerns.

‘‘(12) Other problem areas which participants in the consortium described in section 753(a)(2)(B) concur are of high priority

in the urban area.

‘‘(13)(A) Problems faced by individuals with disabilities

regarding accessibility to institutions of higher education and

other public and private community facilities.

‘‘(B) Amelioration of existing attitudinal barriers that prevent full inclusion by individuals with disabilities in their

community.

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

‘‘SEC. 755. PEER REVIEW.

‘‘The Secretary shall designate a peer review panel to review

applications submitted under this part and make recommendations

for funding to the Secretary. In selecting the peer review panel,

the Secretary may consult with other appropriate Cabinet-level

officials and with non-Federal organizations, to ensure that the

panel will be geographically balanced and be composed of representatives from public and private institutions of higher education,

labor, business, and State and local government, who have expertise

in urban community service or in education.

‘‘SEC. 756. DISBURSEMENT OF FUNDS.

‘‘(a) MULTIYEAR AVAILABILITY.—Subject to the availability of

appropriations, grants under this part may be made on a multiyear

basis, except that no institution, individually or as a participant

in a consortium of such institutions, may receive such a grant

for more than 5 years.

‘‘(b) EQUITABLE GEOGRAPHIC DISTRIBUTION.—The Secretary

shall award grants under this part in a manner that achieves

an equitable geographic distribution of such grants.

‘‘(c) MATCHING REQUIREMENT.—An applicant under this part

and the local governments associated with the application shall

contribute to the conduct of the program supported by the grant

an amount from non-Federal funds equal to at least one-fourth

of the amount of the grant, which contribution may be in cash

or in kind.

‘‘SEC. 757. DESIGNATION OF URBAN GRANT INSTITUTIONS.

‘‘The Secretary shall publish a list of eligible institutions under

this part and shall designate these institutions of higher education

as ‘Urban Grant Institutions’. The Secretary shall establish a

national network of Urban Grant Institutions so that the results

of individual projects achieved in one metropolitan area can then

be generalized, disseminated, replicated, and applied throughout

the Nation. The information developed as a result of this section

shall be made available to Urban Grant Institutions and to any

other interested institution of higher education by any appropriate

means.
H. R. 6—221

‘‘SEC. 758. DEFINITIONS.

‘‘As used in this part:

‘‘(1) URBAN AREA.—The term ‘urban area’ means a metropolitan statistical area having a population of not less than

350,000, or two contiguous metropolitan statistical areas having

a population of not less than 350,000, or, in any State which

does not have a metropolitan statistical area which has such

a population, the eligible entity in the State submitting an

application under section 753, or, if no such entity submits

an application, the Secretary, shall designate one urban area

for the purposes of this part.

‘‘(2) ELIGIBLE INSTITUTION.—The term ‘eligible institution’

means—

‘‘(A) a nonprofit municipal university, established by

the governing body of the city in which it is located, and

operating as of the date of enactment of the Higher Education Amendments of 1992 under that authority; or

‘‘(B) an institution of higher education, or a consortium

of such institutions any one of which meets all of the

requirements of this paragraph, which—

‘‘(i) is located in an urban area;

‘‘(ii) draws a substantial portion of its undergraduate students from the urban area in which such institution is located, or from contiguous areas;

‘‘(iii) carries out programs to make postsecondary

educational opportunities more accessible to residents

of such urban area, or contiguous areas;

‘‘(iv) has the present capacity to provide resources

responsive to the needs and priorities of such urban

area and contiguous areas;

‘‘(v) offers a range of professional, technical, or

graduate programs sufficient to sustain the capacity

of such institution to provide such resources; and

‘‘(vi) has demonstrated and sustained a sense of

responsibility to such urban area and contiguous areas

and the people of such areas.

‘‘SEC. 759. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated $20,000,000 for fiscal

year 1999 and such sums as may be necessary for each of the

4 succeeding fiscal years to carry out this part.

‘‘PART D—DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES RECEIVE A QUALITY HIGHER EDUCATION

‘‘SEC. 761. PURPOSES.

‘‘It is the purpose of this part to support model demonstration

projects to provide technical assistance or professional development

for faculty and administrators in institutions of higher education

in order to provide students with disabilities a quality postsecondary

education.

‘‘SEC. 762. GRANTS AUTHORIZED.

‘‘(a) COMPETITIVE GRANTS AUTHORIZED.—The Secretary may

award grants, contracts, and cooperative agreements, on a competitive basis, to institutions of higher education, of which at least
H. R. 6—222

two such grants shall be awarded to institutions that provide professional development and technical assistance in order for students

with learning disabilities to receive a quality postsecondary education.

‘‘(b) DURATION; ACTIVITIES.—

‘‘(1) DURATION.—Grants under this part shall be awarded

for a period of 3 years.

‘‘(2) AUTHORIZED ACTIVITIES.—Grants under this part shall

be used to carry out one or more of the following activities:

‘‘(A) TEACHING METHODS AND STRATEGIES.—The

development of innovative, effective, and efficient teaching

methods and strategies to provide faculty and administrators with the skills and supports necessary to teach students with disabilities. Such methods and strategies may

include inservice training, professional development, customized and general technical assistance, workshops, summer institutes, distance learning, and training in the use

of assistive and educational technology.

‘‘(B) SYNTHESIZING RESEARCH AND INFORMATION.—

Synthesizing research and other information related to the

provision of postsecondary educational services to students

with disabilities.

‘‘(C) PROFESSIONAL DEVELOPMENT AND TRAINING SESSIONS.—Conducting professional development and training

sessions for faculty and administrators from other institutions of higher education to enable the faculty and administrators to meet the postsecondary educational needs of

students with disabilities.

‘‘(3) MANDATORY EVALUATION AND DISSEMINATION.—Grants

under this part shall be used for evaluation, and dissemination

to other institutions of higher education, of the information

obtained through the activities described in subparagraphs (A)

through (C).

‘‘(c) CONSIDERATIONS IN MAKING AWARDS.—In awarding grants,

contracts, or cooperative agreements under this section, the Secretary shall consider the following:

‘‘(1) GEOGRAPHIC DISTRIBUTION.—Providing an equitable

geographic distribution of such grants.

‘‘(2) RURAL AND URBAN AREAS.—Distributing such grants

to urban and rural areas.

‘‘(3) RANGE AND TYPE OF INSTITUTION.—Ensuring that the

activities to be assisted are developed for a range of types

and sizes of institutions of higher education.

‘‘(4) PRIOR EXPERIENCE OR EXCEPTIONAL PROGRAMS.—

Institutions of higher education with demonstrated prior experience in, or exceptional programs for, meeting the postsecondary

educational needs of students with disabilities.

‘‘SEC. 763. APPLICATIONS.

‘‘Each institution of higher education desiring to receive a grant,

contract, or cooperative agreement under this part shall submit

an application to the Secretary at such time, in such manner,

and accompanied by such information as the Secretary may require.

Each application shall include—

‘‘(1) a description of how such institution plans to address

each of the activities required under this part;
H. R. 6—223

‘‘(2) a description of how the institution consulted with

a broad range of people within the institution to develop activities for which assistance is sought; and

‘‘(3) a description of how the institution will coordinate

and collaborate with the office that provides services to students

with disabilities within the institution.

‘‘SEC. 764. RULE OF CONSTRUCTION.

‘‘Nothing in this part shall be construed to impose any additional duty, obligation, or responsibility on an institution of higher

education or on the institution’s faculty, administrators, or staff

than are required by section 504 of the Rehabilitation Act of 1973

and the Americans with Disabilities Act of 1990.

‘‘SEC. 765. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated for this part $10,000,000 for fiscal year 1999 and such sums as may be necessary

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

SEC. 702. REPEALS.

Except as otherwise provided in section 301(a), titles VIII (20

U.S.C. 1133 et seq.), IX (20 U.S.C. 1134 et seq.), X (20 U.S.C.

1135 et seq.), XI (20 U.S.C. 1136), and XII (20 U.S.C. 1141) are

repealed.

TITLE VIII—STUDIES, REPORTS, AND

RELATED PROGRAMS

PART A—STUDIES

SEC. 801. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT

LOAN PROGRAMS.

(a) STUDY REQUIRED.—The Comptroller General and the Secretary of Education shall convene a study group including the

Secretary of the Treasury, the Director of the Office of Management

and Budget, the Director of the Congressional Budget Office, representatives of entities making loans under part B of title IV

of the Higher Education Act of 1965, representatives of other entities in the financial services community, representatives of other

participants in the student loan programs, and such other individuals as the Comptroller General and the Secretary may designate.

The Comptroller General and Secretary, in consultation with the

study group, shall design and conduct a study to identify and

evaluate means of establishing a market mechanism for the delivery

of loans made pursuant to such title IV.

(b) DESIGN OF STUDY.—The study required under this section

shall identify not fewer than 3 different market mechanisms for

use in determining lender return on student loans while continuing

to meet the other objectives of the programs under parts B and

D of such title IV, including the provision of loans to all eligible

students. Consideration may be given to the use of auctions and

to the feasibility of incorporating income-contingent repayment

options into the student loan system and requiring borrowers to

repay through income tax withholding.

(c) EVALUATION OF MARKET MECHANISMS.—The mechanisms

identified under subsection (b) shall be evaluated in terms of the

following areas:
H. R. 6—224

(1) The cost or savings of loans to or for borrowers, including parent borrowers.

(2) The cost or savings of the mechanism to the Federal

Government.

(3) The cost, effect, and distribution of Federal subsidies

to or for participants in the program.

(4) The ability of the mechanism to accommodate the potential distribution of subsidies to students through an incomecontingent repayment option.

(5) The effect on the simplicity of the program, including

the effect of the plan on the regulatory burden on students,

institutions, lenders, and other program participants.

(6) The effect on investment in human capital and

resources, loan servicing capability, and the quality of service

to the borrower.

(7) The effect on the diversity of lenders, including community-based lenders, originating and secondary market lenders.

(8) The effect on program integrity.

(9) The degree to which the mechanism will provide market

incentives to encourage continuous improvement in the delivery

and servicing of loans.

(10) The availability of loans to students by region, income

level, and by categories of institutions.

(11) The proposed Federal and State role in the operation

of the mechanism.

(12) A description of how the mechanism will be administered and operated.

(13) Transition procedures, including the effect on loan

availability during a transition period.

(14) Any other areas the study group may include.

(d) PRELIMINARY FINDINGS AND PUBLICATION OF STUDY.—Not

later than November 15, 2000, the study group shall make the

group’s preliminary findings, including any additional or dissenting

views, available to the public with a 60-day request for public

comment. The study group shall review these comments and the

Comptroller General and the Secretary shall transmit a final report,

including any additional or dissenting views, to the Committee

on Education and the Workforce of the House of Representatives,

the Committee on Labor and Human Resources of the Senate,

and the Committees on the Budget of the House of Representatives

and the Senate not later than May 15, 2001.

SEC. 802. STUDY OF THE FEASIBILITY OF ALTERNATIVE FINANCIAL

INSTRUMENTS FOR DETERMINING LENDER YIELDS.

(a) STUDY REQUIRED.—The Comptroller General and the Secretary of Education shall convene a study group including the

Secretary of the Treasury, the Director of the Office of Management

and Budget, the Director of the Congressional Budget Office, representatives of entities making loans under part B of title IV

of the Higher Education Act of 1965, representatives of other entities in the financial services community, representatives of other

participants in the student loan programs, and such other individuals as the Comptroller General and the Secretary of Education

may designate. The Comptroller General and the Secretary of Education, in consultation with the study group, shall evaluate the

91-day Treasury bill, 30-day and 90-day commercial paper, and
H. R. 6—225

the 90-day London Interbank Offered Rate (in this section referred

to as ‘‘LIBOR’’) in terms of the following:

(1) The historical liquidity of the market for each, and

a historical comparison of the spread between: (A) the 30-

day and 90-day commercial paper rate, respectively, and the

91-day Treasury bill rate; and (B) the spread between the

LIBOR and the 91-day Treasury bill rate.

(2) The historical volatility of the rates and projections

of future volatility.

(3) Recent changes in the liquidity of the market for each

such instrument in a balanced Federal budget environment

and a low-interest rate environment, and projections of future

liquidity assuming the Federal budget remains in balance.

(4) The cost or savings to lenders with small, medium,

and large student loan portfolios of basing lender yield on

either the 30-day or 90-day commercial paper rate or the LIBOR

while continuing to base the borrower rate on the 91-day Treasury bill, and the effect of such change on the diversity of

lenders participating in the program.

(5) The cost or savings to the Federal Government of basing

lender yield on either the 30-day or 90-day commercial paper

rate or the LIBOR while continuing to base the borrower rate

on the 91-day Treasury bill.

(6) Any possible risks or benefits to the student loan programs under the Higher Education Act of 1965 and to student

borrowers.

(7) Any other areas the Comptroller General and the

Secretary of Education agree to include.

(b) REPORT REQUIRED.—Not later than 6 months after the

date of enactment of this Act, the Comptroller General and the

Secretary shall submit a final report regarding the findings of

the study group to the Committee on Education and the Workforce

of the House of Representatives and the Committee on Labor and

Human Resources of the Senate.

SEC. 803. STUDENT-RELATED DEBT STUDY REQUIRED.

(a) IN GENERAL.—The Secretary of Education shall conduct

a study that analyzes the distribution and increase in studentrelated debt in terms of—

(1) demographic characteristics, such as race or ethnicity,

and family income;

(2) type of institution and whether the institution is a

public or private institution;

(3) loan source, such as Federal, State, institutional or

other, and, if the loan source is Federal, whether the loan

is or is not subsidized;

(4) academic field of study;

(5) parent loans, and whether the parent loans are federally

guaranteed, private, or property-secured such as home equity

loans; and

(6) relation of student debt or anticipated debt to—

(A) students’ decisions about whether and where to

enroll in college and whether or how much to borrow in

order to attend college;

(B) the length of time it takes students to earn baccalaureate degrees;
H. R. 6—226

(C) students’ decisions about whether and where to

attend graduate school;

(D) graduates’ employment decisions;

(E) graduates’ burden of repayment as reflected by

the graduates’ ability to save for retirement or invest in

a home; and

(F) students’ future earnings.

(b) REPORT.—After conclusion of the study required by subsection (a), the Secretary of Education shall submit a final report

regarding the findings of the study to the Committee on Labor

and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives not later

than 18 months after the date of enactment of the Higher Education

Amendments of 1998.

(c) INFORMATION.—After the study and report under this section

are concluded, the Secretary of Education shall determine which

information described in subsection (a) would be useful for families

to know and shall include such information as part of the comparative information provided to families about the costs of higher

education under the provisions of part C of title I.

SEC. 804. STUDY OF TRANSFER OF CREDITS.

(a) STUDY REQUIRED.—The Secretary of Education shall conduct

a study to evaluate policies or practices instituted by recognized

accrediting agencies or associations regarding the treatment of the

transfer of credits from one institution of higher education to

another, giving particular attention to—

(1) adopted policies regarding the transfer of credits

between institutions of higher education which are accredited

by different agencies or associations and the reasons for such

policies;

(2) adopted policies regarding the transfer of credits

between institutions of higher education which are accredited

by national agencies or associations and institutions of higher

education which are accredited by regional agencies and

associations and the reasons for such policies;

(3) the effect of the adoption of such policies on students

transferring between such institutions of higher education,

including time required to matriculate, increases to the student

of tuition and fees paid, and increases to the student with

regard to student loan burden;

(4) the extent to which Federal financial aid is awarded

to such students for the duplication of coursework already

completed at another institution; and

(5) the aggregate cost to the Federal Government of the

adoption of such policies.

(b) REPORT.—Not later than one year after the date of enactment of this Act, the Secretary of Education shall submit a report

to the Chairman and Ranking Minority Member of the Committee

on Education and the Workforce of the House of Representatives

and the Committee on Labor and Human Resources of the Senate

detailing the Secretary’s findings regarding the study conducted

under subsection (a). The Secretary’s report shall include such

recommendation with respect to the recognition of accrediting agencies or associations as the Secretary deems advisable.
H. R. 6—227

SEC. 805. STUDY OF OPPORTUNITIES FOR PARTICIPATION IN ATHLETICS PROGRAMS.

(a) STUDY.—The Comptroller General shall conduct a study

of the opportunities for participation in intercollegiate athletics.

The study shall address issues including—

(1) the extent to which the number of—

(A) secondary school athletic teams has increased or

decreased in the 20 years preceding 1998 (in aggregate

terms); and

(B) intercollegiate athletic teams has increased or

decreased in the 20 years preceding 1998 (in aggregate

terms) at 2-year and 4-year institutions of higher education;

(2) the extent to which participation by student-athletes

in secondary school and intercollegiate athletics has increased

or decreased in the 20 years preceding 1998 (in aggregate

terms);

(3) over the 20-year period preceding 1998, a list of the

men’s and women’s secondary school and intercollegiate sports,

ranked in order of the sports most affected by increases or

decreases in levels of participation and numbers of teams (in

the aggregate);

(4) all factors that have influenced campus officials to add

or discontinue sports teams at secondary schools and institutions of higher education, including—

(A) institutional mission and priorities;

(B) budgetary pressures;

(C) institutional reforms and restructuring;

(D) escalating liability insurance premiums;

(E) changing student and community interest in a

sport;

(F) advancement of diversity among students;

(G) lack of necessary level of competitiveness of the

sports program;

(H) club level sport achieving a level of competitiveness

to make the sport a viable varsity level sport;

(I) injuries or deaths; and

(J) conference realignment;

(5) the actions that institutions of higher education have

taken when decreasing the level of participation in intercollegiate sports, or the number of teams, in terms of providing

information, advice, scholarship maintenance, counseling,

advance warning, and an opportunity for student-athletes to

be involved in the decisionmaking process;

(6) the administrative processes and procedures used by

institutions of higher education when determining whether to

increase or decrease intercollegiate athletic teams or participation by student-athletes;

(7) the budgetary or fiscal impact, if any, of a decision

by an institution of higher education—

(A) to increase or decrease the number of intercollegiate

athletic teams or the participation of student-athletes; or

(B) to be involved in a conference realignment; and

(8) the alternatives, if any, institutions of higher education

have pursued in lieu of eliminating, or severely reducing the

funding for, an intercollegiate sport, and the success of such

alternatives.
H. R. 6—228

(b) REPORT.—The Comptroller General shall submit a report

regarding the results of the study to the Committee on Labor

and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives.

SEC. 806. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT RATES

FOR INSTITUTIONS WITH FEW STUDENT LOAN BORROWERS.

(a) STUDY REQUIRED.—The Secretary of Education shall conduct

a study of the effectiveness of cohort default rates as an indicator

of administrative capability and program quality for institutions

of higher education at which less than 15 percent of students

eligible to borrow participate in the Federal student loan programs

under title IV of the Higher Education Act of 1965 and fewer

than 30 borrowers enter repayment in any fiscal year. At a minimum, the study shall include—

(1) identification of the institutions included in the study

and of the student populations the institutions serve;

(2) analysis of cohort default rates as indicators of administrative shortcomings and program quality at the institutions;

(3) analysis of the effectiveness of cohort default rates

as a means to prevent fraud and abuse in the programs assisted

under such title;

(4) analysis of the extent to which the institutions with

high cohort default rates are no longer participants in the

Federal student loan programs under such title; and

(5) analysis of the costs incurred by the Department of

Education for the calculation, publication, correction, and

appeal of cohort default rates for the institutions in relation

to any benefits to taxpayers.

(b) CONSULTATION.—In conducting the study described in subsection (a), the Secretary of Education shall consult with institutions

of higher education.

(c) REPORT TO CONGRESS.—The Secretary of Education shall

report to the Committee on Labor and Human Resources of the

Senate and the Committee on Education and the Workforce of

the House of Representatives not later than September 30, 1999,

regarding the results of the study described in subsection (a).

PART B—ADVANCED PLACEMENT INCENTIVE

PROGRAM

SEC. 810. ADVANCED PLACEMENT INCENTIVE PROGRAM.

(a) PROGRAM ESTABLISHED.—The Secretary of Education is

authorized to make grants to States having applications approved

under subsection (c) to enable the States to reimburse low-income

individuals to cover part or all of the cost of advanced placement

test fees, if the low-income individuals—

(1) are enrolled in an advanced placement class; and

(2) plan to take an advanced placement test.

(b) INFORMATION DISSEMINATION.—The State educational

agency shall disseminate information regarding the availability of

test fee payments under this section to eligible individuals through

secondary school teachers and guidance counselors.

(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for grants the Secretary of Education shall—
H. R. 6—229

(1) require that each such application contain a description

of the advanced placement test fees the State will pay on

behalf of individual students;

(2) require an assurance that any funds received under

this section, other than funds used in accordance with subsection (d), shall be used only to pay advanced placement test

fees;

(3) contain such information as the Secretary may require

to demonstrate that the State will ensure that a student is

eligible for payments under this section, including the documentation required by chapter 1 of subpart 2 of part A of

title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a–

11 et seq.); and

(4) consider the number of children eligible to be counted

under section 1124(c) of the Elementary and Secondary Education Act of 1965 in the State in relation to the number

of such children in all the States in determining grant award

amounts.

(d) FUNDING RULES.—

(1) USE OF FUNDS.—A State educational agency in a State

in which no eligible low-income individual is required to pay

more than a nominal fee to take advanced placement tests

in core subjects may use any grant funds provided to that

State educational agency, that remain after fees have been

paid on behalf of all eligible low-income individuals, for activities directly related to increasing—

(A) the enrollment of low-income individuals in

advanced placement courses;

(B) the participation of low-income individuals in

advanced placement tests; and

(C) the availability of advanced placement courses in

schools serving high poverty areas.

(2) SUPPLEMENT, NOT SUPPLANT, RULE.—Funds provided

under this section shall supplement and not supplant other

non-Federal funds that are available to assist low-income

individuals in paying advanced placement test fees.

(e) REGULATIONS.—The Secretary of Education shall prescribe

such regulations as are necessary to carry out this section.

(f ) REPORT.—Each State annually shall report to the Secretary

of Education regarding—

(1) the number of low-income individuals in the State who

receive assistance under this section; and

(2) the activities described in subsection (d)(1), if applicable.

(g) DEFINITION.—In this section:

(1) ADVANCED PLACEMENT TEST.—The term ‘‘advanced

placement test’’ includes only an advanced placement test

approved by the Secretary of Education for the purposes of

this section.

(2) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income

individual’’ has the meaning given the term in section

402A(g)(2) of the Higher Education Act of 1965 (20 U.S.C.

1070a–11(g)(2)).

(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated $6,800,000 for fiscal year 1999 and such sums

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

to carry out this section.
H. R. 6—230

PART C—COMMUNITY SCHOLARSHIP

MOBILIZATION

SEC. 811. SHORT TITLE.

This part may be cited as the ‘‘Community Scholarship

Mobilization Act’’.

SEC. 812. FINDINGS.

Congress finds that—

(1) the local community, when properly organized and challenged, is one of the best sources of academic support, motivation toward achievement, and financial resources for aspiring

postsecondary students;

(2) local communities, working to complement or augment

services currently offered by area schools and colleges, can

raise the educational expectations and increase the rate of

postsecondary attendance of their youth by forming locallybased organizations that provide both academic support (including guidance, counseling, mentoring, tutoring, encouragement,

and recognition) and tangible, locally raised, effectively targeted, publicly recognized, financial assistance;

(3) proven methods of stimulating these community efforts

can be promoted through Federal support for the establishment

of regional, State, or community program centers to organize

and challenge community efforts to develop educational incentives and support for local students; and

(4) using Federal funds to leverage private contributions

to help students from low-income families attain educational

and career goals is an efficient and effective investment of

scarce taxpayer-provided resources.

SEC. 813. DEFINITIONS.

In this part:

(1) REGIONAL, STATE, OR COMMUNITY PROGRAM CENTER.—

The term ‘‘regional, State, or community program center’’ means

an organization that—

(A) is a division or member of, responsible to, and

overseen by, a national organization; and

(B) is staffed by professionals trained to create, develop,

and sustain local entities in towns, cities, and neighborhoods.

(2) LOCAL ENTITY.—The term ‘‘local entity’’ means an

organization that—

(A) is a nonprofit organization that is described in

section 501(c)(3) of the Internal Revenue Code of 1986,

and exempt from taxation under section 501(a) of such

Code (or shall meet this criteria through affiliation with

the national organization);

(B) is formed for the purpose of providing educational

scholarships and academic support for residents of the

local community served by such organization;

(C) solicits broad-based community support in its academic support and fund-raising activities;

(D) is broadly representative of the local community

in the structures of its volunteer-operated organization and

has a board of directors that includes leaders from local

neighborhood organizations and neighborhood residents,
H. R. 6—231

such as school or college personnel, parents, students,

community agency representatives, retirees, and representatives of the business community;

(E) awards scholarships without regard to age, sex,

marital status, race, creed, color, religion, national origin,

or disability; and

(F) gives priority to awarding scholarships for postsecondary education to deserving students from low-income

families in the local community.

(3) NATIONAL ORGANIZATION.—The term ‘‘national organization’’ means an organization that—

(A) has the capacity to create, develop and sustain

local entities and affiliated regional, State, or community

program centers;

(B) has the capacity to sustain newly created local

entities in towns, cities, and neighborhoods through

ongoing training support programs;

(C) is described in section 501(c)(3) of the Internal

Revenue Code of 1986, and exempt from taxation under

section 501(a) of such Code;

(D) is a publicly supported organization within the

meaning of section 170(b)(1)(A)(iv) of such Code;

(E) ensures that each of the organization’s local entities

meet the criteria described in subparagraphs (C) and (D);

and

(F) has a program for or experience in cooperating

with secondary and postsecondary institutions in carrying

out the organization’s scholarship and academic support

activities.

(4) HIGH POVERTY AREA.—The term ‘‘high poverty area’’

means a community with a higher percentage of children from

low-income families than the national average of such percentage and a lower percentage of children pursuing postsecondary

education than the national average of such percentage.

(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary

of Education.

(6) STUDENTS FROM LOW-INCOME FAMILIES.—The term ‘‘students from low-income families’’ means students determined,

pursuant to part F of title IV of the Higher Education Act

of 1965 (20 U.S.C. 1087kk et seq.), to be eligible for a Federal

Pell Grant under subpart 1 of part A of title IV of such Act

(20 U.S.C. 1070a).

SEC. 814. PURPOSE; ENDOWMENT GRANT AUTHORITY.

(a) PURPOSE.—It is the purpose of this part to establish and

support regional, State or community program centers to enable

such centers to foster the development of local entities in high

poverty areas that promote higher education goals for students

from low-income families by—

(1) providing academic support, including guidance, counseling, mentoring, tutoring, and recognition; and

(2) providing scholarship assistance for the cost of postsecondary education.

(b) ENDOWMENT GRANT AUTHORITY.—From the funds appropriated pursuant to the authority of section 816, the Secretary

shall award an endowment grant, on a competitive basis, to a

national organization to enable such organization to support the
H. R. 6—232

establishment or ongoing work of regional, State or community

program centers that foster the development of local entities in

high poverty areas to improve secondary school graduation rates

and postsecondary attendance through the provision of academic

support services and scholarship assistance for the cost of postsecondary education.

SEC. 815. GRANT AGREEMENT AND REQUIREMENTS.

(a) IN GENERAL.—The Secretary shall award one or more

endowment grants described in section 814(b) pursuant to an agreement between the Secretary and a national organization. Such

agreement shall—

(1) require a national organization to establish an endowment fund in the amount of the grant, the corpus of which

shall remain intact and the interest income from which shall

be used to support the activities described in paragraphs (2)

and (3);

(2) require a national organization to use 70 percent of

the interest income from the endowment fund in any fiscal

year to support the establishment or ongoing work of regional,

State or community program centers to enable such centers

to work with local communities to establish local entities in

high poverty areas and provide ongoing technical assistance,

training workshops, and other activities to help ensure the

ongoing success of the local entities;

(3) require a national organization to use 30 percent of

the interest income from the endowment fund in any fiscal

year to provide scholarships for postsecondary education to

students from low-income families, which scholarships shall

be matched on a dollar-for-dollar basis from funds raised by

the local entities;

(4) require that at least 50 percent of all the interest

income from the endowment be allocated to establish new local

entities or support regional, State or community program centers in high poverty areas;

(5) require a national organization to submit, for each

fiscal year in which such organization uses the interest from

the endowment fund, a report to the Secretary that contains—

(A) a description of the programs and activities supported by the interest on the endowment fund;

(B) the audited financial statement of the national

organization for the preceding fiscal year;

(C) a plan for the programs and activities to be supported by the interest on the endowment fund as the Secretary may require;

(D) an evaluation of the programs and activities supported by the interest on the endowment fund as the Secretary may require; and

(E) data indicating the number of students from lowincome families who receive scholarships from local entities, and the amounts of such scholarships;

(6) contain such assurances as the Secretary may require

with respect to the management and operation of the endowment fund; and

(7) contain an assurance that if the Secretary determines

that such organization is not in substantial compliance with

the provisions of this part, then the national organization shall
H. R. 6—233

pay to the Secretary an amount equal to the corpus of the

endowment fund plus any accrued interest on such fund that

is available to the national organization on the date of such

determination.

(b) RETURNED FUNDS.—All funds returned to the Secretary

pursuant to subsection (a)(7) shall be available to the Secretary

to carry out any scholarship or grant program assisted under title

IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).

SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this part $10,000,000 for fiscal year 2000.

PART D—GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION

TRAINING FOR INCARCERATED YOUTH OFFENDERS

SEC. 821. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY

TRANSITION TRAINING FOR INCARCERATED YOUTH

OFFENDERS.

(a) FINDINGS.—Congress makes the following findings:

(1) Over 150,000 youth offenders age 21 and younger are

incarcerated in the Nation’s jails, juvenile facilities, and prisons.

(2) Most youth offenders who are incarcerated have been

sentenced as first-time adult felons.

(3) Approximately 75 percent of youth offenders are high

school dropouts who lack basic literacy and life skills, have

little or no job experience, and lack marketable skills.

(4) The average incarcerated youth has attended school

only through grade 10.

(5) Most of these youths can be diverted from a life of

crime into productive citizenship with available educational,

vocational, work skills, and related service programs.

(6) If not involved with educational programs while incarcerated, almost all of these youths will return to a life of

crime upon release.

(7) The average length of sentence for a youth offender

is about 3 years. Time spent in prison provides a unique opportunity for education and training.

(8) Even with quality education and training provided during incarceration, a period of intense supervision, support, and

counseling is needed upon release to ensure effective reintegration of youth offenders into society.

(9) Research consistently shows that the vast majority of

incarcerated youths will not return to the public schools to

complete their education.

(10) There is a need for alternative educational opportunities during incarceration and after release.

(b) DEFINITION.—For purposes of this part, the term ‘‘youth

offender’’ means a male or female offender under the age of 25,

who is incarcerated in a State prison, including a prerelease facility.

(c) GRANT PROGRAM.—The Secretary of Education (in this section referred to as the ‘‘Secretary’’) shall establish a program in

accordance with this section to provide grants to the State correctional education agencies in the States, from allocations for the
H. R. 6—234

States under subsection (i), to assist and encourage incarcerated

youths to acquire functional literacy, life, and job skills, through

the pursuit of a postsecondary education certificate, or an associate

of arts or bachelor’s degree while in prison, and employment counseling and other related services which start during incarceration

and continue through prerelease and while on parole.

(d) APPLICATION.—To be eligible for a grant under this section,

a State correctional education agency shall submit to the Secretary

a proposal for a youth offender program that—

(1) identifies the scope of the problem, including the number of incarcerated youths in need of postsecondary education

and vocational training;

(2) lists the accredited public or private educational institution or institutions that will provide postsecondary educational

services;

(3) lists the cooperating agencies, public and private, or

businesses that will provide related services, such as counseling

in the areas of career development, substance abuse, health,

and parenting skills;

(4) describes the evaluation methods and performance

measures that the State correctional education agency will

employ, which methods and measures—

(A) shall be appropriate to meet the goals and objectives of the proposal; and

(B) shall include measures of—

(i) program completion;

(ii) student academic and vocational skill attainment;

(iii) success in job placement and retention; and

(iv) recidivism;

(5) describes how the proposed programs are to be

integrated with existing State correctional education programs

(such as adult education, graduate education degree programs,

and vocational training) and State industry programs;

(6) addresses the educational needs of youth offenders who

are in alternative programs (such as boot camps); and

(7) describes how students will be selected so that only

youth offenders eligible under subsection (f ) will be enrolled

in postsecondary programs.

(e) PROGRAM REQUIREMENTS.—Each State correctional education agency receiving a grant under this section shall—

(1) integrate activities carried out under the grant with

the objectives and activities of the school-to-work programs

of such State, including—

(A) work experience or apprenticeship programs;

(B) transitional worksite job training for vocational

education students that is related to the occupational goals

of such students and closely linked to classroom and laboratory instruction;

(C) placement services in occupations that the students

are preparing to enter;

(D) employment-based learning programs; and

(E) programs that address State and local labor shortages;

(2) annually report to the Secretary and the Attorney

General on the results of the evaluations conducted using the
H. R. 6—235

methods and performance measures contained in the proposal;

and

(3) provide to each State for each student eligible under

subsection (f ) not more than $1,500 annually for tuition, books,

and essential materials, and not more than $300 annually

for related services such as career development, substance

abuse counseling, parenting skills training, and health education, for each eligible incarcerated youth.

(f ) STUDENT ELIGIBILITY.—A youth offender shall be eligible

for participation in a program receiving a grant under this section

if the youth offender—

(1) is eligible to be released within 5 years (including

a youth offender who is eligible for parole within such time);

and

(2) is 25 years of age or younger.

(g) LENGTH OF PARTICIPATION.—A State correctional education

agency receiving a grant under this section shall provide educational

and related services to each participating youth offender for a

period not to exceed 5 years, 1 year of which may be devoted

to study in a graduate education degree program or to remedial

education services for students who have obtained a secondary

school diploma or its recognized equivalent. Educational and related

services shall start during the period of incarceration in prison

or prerelease and may continue during the period of parole.

(h) EDUCATION DELIVERY SYSTEMS.—State correctional education agencies and cooperating institutions shall, to the extent

practicable, use high-tech applications in developing programs to

meet the requirements and goals of this section.

(i) ALLOCATION OF FUNDS.—From the funds appropriated pursuant to subsection ( j) for each fiscal year, the Secretary shall allot

to each State an amount that bears the same relationship to such

funds as the total number of students eligible under subsection

(f ) in such State bears to the total number of such students in

all States.

( j) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $17,000,000 for fiscal

year 1999 and such sums as may be necessary for each of the

4 succeeding fiscal years.

PART E—GRANTS TO COMBAT VIOLENT

CRIMES AGAINST WOMEN ON CAMPUSES

SEC. 826. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON

CAMPUSES.

(a) GRANTS AUTHORIZED.—

(1) IN GENERAL.—The Attorney General is authorized to

make grants to institutions of higher education, for use by

such institutions or consortia consisting of campus personnel,

student organizations, campus administrators, security personnel, and regional crisis centers affiliated with the institution,

to develop and strengthen effective security and investigation

strategies to combat violent crimes against women on campuses,

and to develop and strengthen victim services in cases involving

violent crimes against women on campuses, which may include

partnerships with local criminal justice authorities and community-based victim services agencies.
H. R. 6—236

(2) AWARD BASIS.—The Attorney General shall award

grants and contracts under this section on a competitive basis.

(3) EQUITABLE PARTICIPATION.—The Attorney General shall

make every effort to ensure—

(A) the equitable participation of private and public

institutions of higher education in the activities assisted

under this section; and

(B) the equitable geographic distribution of grants

under this section among the various regions of the United

States.

(b) USE OF GRANT FUNDS.—Grant funds awarded under this

section may be used for the following purposes:

(1) To provide personnel, training, technical assistance,

data collection, and other equipment with respect to the

increased apprehension, investigation, and adjudication of persons committing violent crimes against women on campus.

(2) To train campus administrators, campus security

personnel, and personnel serving on campus disciplinary or

judicial boards to more effectively identify and respond to violent crimes against women on campus, including the crimes

of sexual assault, stalking, and domestic violence.

(3) To implement and operate education programs for the

prevention of violent crimes against women.

(4) To develop, enlarge, or strengthen support services programs, including medical or psychological counseling, for victims of sexual offense crimes.

(5) To create, disseminate, or otherwise provide assistance

and information about victims’ options on and off campus to

bring disciplinary or other legal action.

(6) To develop and implement more effective campus policies, protocols, orders, and services specifically devoted to prevent, identify, and respond to violent crimes against women

on campus, including the crimes of sexual assault, stalking,

and domestic violence.

(7) To develop, install, or expand data collection and

communication systems, including computerized systems, linking campus security to the local law enforcement for the purpose

of identifying and tracking arrests, protection orders, violations

of protection orders, prosecutions, and convictions with respect

to violent crimes against women on campus, including the

crimes of sexual assault, stalking, and domestic violence.

(8) To develop, enlarge, or strengthen victim services programs for the campus and to improve delivery of victim services

on campus.

(9) To provide capital improvements (including improved

lighting and communications facilities but not including the

construction of buildings) on campuses to address violent crimes

against women on campus, including the crimes of sexual

assault, stalking, and domestic violence.

(10) To support improved coordination among campus

administrators, campus security personnel, and local law

enforcement to reduce violent crimes against women on campus.

(c) APPLICATIONS.—

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

a grant under this section for any fiscal year, an institution

of higher education shall submit an application to the Attorney
H. R. 6—237

General at such time and in such manner as the Attorney

General shall prescribe.

(2) CONTENTS.—Each application submitted under paragraph (1) shall—

(A) describe the need for grant funds and the plan

for implementation for any of the purposes described in

subsection (b);

(B) describe how the campus authorities shall consult

and coordinate with nonprofit and other victim services

programs, including sexual assault and domestic violence

victim services programs;

(C) describe the characteristics of the population being

served, including type of campus, demographics of the population, and number of students;

(D) provide measurable goals and expected results from

the use of the grant funds;

(E) provide assurances that the Federal funds made

available under this section shall be used to supplement

and, to the extent practical, increase the level of funds

that would, in the absence of Federal funds, be made

available by the institution for the purposes described in

subsection (b); and

(F) include such other information and assurances as

the Attorney General reasonably determines to be necessary.

(3) COMPLIANCE WITH CAMPUS CRIME REPORTING

REQUIRED.—No institution of higher education shall be eligible

for a grant under this section unless such institution is in

compliance with the requirements of section 485(f ) of the

Higher Education Act of 1965.

(d) GENERAL TERMS AND CONDITIONS.—

(1) NONMONETARY ASSISTANCE.—In addition to the assistance provided under this section, the Attorney General may

request any Federal agency to use the agency’s authorities

and the resources granted to the agency under Federal law

(including personnel, equipment, supplies, facilities, and managerial, technical, and advisory services) in support of campus

security, and investigation and victim service efforts.

(2) GRANTEE REPORTING.—

(A) ANNUAL REPORT.—Each institution of higher education receiving a grant under this section shall submit

an annual performance report to the Attorney General.

The Attorney General shall suspend funding under this

section for an institution of higher education if the institution fails to submit an annual performance report.

(B) FINAL REPORT.—Upon completion of the grant

period under this section, the institution shall file a

performance report with the Attorney General and the

Secretary of Education explaining the activities carried

out under this section together with an assessment of the

effectiveness of those activities in achieving the purposes

described in subsection (b).

(3) REPORT TO CONGRESS.—Not later than 180 days after

the end of the fiscal year for which grants are awarded under

this section, the Attorney General shall submit to the committees of the House of Representatives and the Senate responsible
H. R. 6—238

for issues relating to higher education and crime, a report

that includes—

(A) the number of grants, and the amount of funds,

distributed under this section;

(B) a summary of the purposes for which the grants

were provided and an evaluation of the progress made

under the grant;

(C) a statistical summary of the persons served, detailing the nature of victimization, and providing data on

age, sex, race, ethnicity, language, disability, relationship

to offender, geographic distribution, and type of campus;

and

(D) an evaluation of the effectiveness of programs

funded under this part, including information obtained

from reports submitted pursuant to section 485(f ) of the

Higher Education Act of 1965.

(4) REGULATIONS OR GUIDELINES.—Not later than 120 days

after the date of enactment of this section, the Attorney General, in consultation with the Secretary of Education, shall

publish proposed regulations or guidelines implementing this

section. Not later than 180 days after the date of enactment

of this section, the Attorney General shall publish final regulations or guidelines implementing this section.

(f ) DEFINITIONS.—In this section—

(1) the term ‘‘domestic violence’’ includes acts or threats

of violence, not including acts of self defense, committed by

a current or former spouse of the victim, by a person with

whom the victim shares a child in common, by a person who

is cohabitating with or has cohabitated with the victim, by

a person similarly situated to a spouse of the victim under

the domestic or family violence laws of the jurisdiction, or

by any other person against a victim who is protected from

that person’s acts under the domestic or family violence laws

of the jurisdiction;

(2) the term ‘‘sexual assault’’ means any conduct proscribed

by chapter 109A of title 18, United States Code, whether or

not the conduct occurs in the special maritime and territorial

jurisdiction of the United States or in a Federal prison, including both assaults committed by offenders who are strangers

to the victim and assaults committed by offenders who are

known or related by blood or marriage to the victim; and

(3) the term ‘‘victim services’’ means a nonprofit, nongovernmental organization that assists domestic violence or

sexual assault victims, including campus women’s centers, rape

crisis centers, battered women’s shelters, and other sexual

assault or domestic violence programs, including campus counseling support and victim advocate organizations with domestic

violence, stalking, and sexual assault programs, whether or

not organized and staffed by students.

(g) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of

carrying out this part, there are authorized to be appropriated

$10,000,000 for fiscal year 1999 and such sums as may be necessary

for each of the 4 succeeding fiscal years.
H. R. 6—239

SEC. 827. STUDY OF INSTITUTIONAL PROCEDURES TO REPORT SEXUAL

ASSAULTS.

(a) IN GENERAL.—The Attorney General, in consultation with

the Secretary of Education, shall provide for a national study to

examine procedures undertaken after an institution of higher education receives a report of sexual assault.

(b) REPORT.—The study required by subsection (a) shall include

an analysis of—

(1) the existence and publication of the institution of higher

education’s and State’s definition of sexual assault;

(2) the existence and publication of the institution’s policy

for campus sexual assaults;

(3) the individuals to whom reports of sexual assault are

given most often and—

(A) how the individuals are trained to respond to the

reports; and

(B) the extent to which the individuals are trained;

(4) the reporting options that are articulated to the victim

or victims of the sexual assault regarding—

(A) on-campus reporting and procedure options; and

(B) off-campus reporting and procedure options;

(5) the resources available for victims’ safety, support,

medical health, and confidentiality, including—

(A) how well the resources are articulated both specifically to the victim of sexual assault and generally to the

campus at large; and

(B) the security of the resources in terms of confidentiality or reputation;

(6) policies and practices that may prevent or discourage

the reporting of campus sexual assaults to local crime authorities, or that may otherwise obstruct justice or interfere with

the prosecution of perpetrators of campus sexual assaults;

(7) policies and practices found successful in aiding the

report and any ensuing investigation or prosecution of a campus

sexual assault;

(8) the on-campus procedures for investigation and disciplining the perpetrator of a sexual assault, including—

(A) the format for collecting evidence; and

(B) the format of the investigation and disciplinary

proceeding, including the faculty responsible for running

the disciplinary procedure and the persons allowed to

attend the disciplinary procedure; and

(9) types of punishment for offenders, including—

(A) whether the case is directed outside the institution

for further punishment; and

(B) how the institution punishes perpetrators.

(c) SUBMISSION OF REPORT.—The report required by subsection

(b) shall be submitted to Congress not later than September 1,

2000.

(d) DEFINITION.—For purposes of this section, the term ‘‘campus

sexual assaults’’ means sexual assaults occurring at institutions

of higher education and sexual assaults committed against or by

students or employees of such institutions.

(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized

to be appropriated to carry out this section $1,000,000 for fiscal

year 2000.
H. R. 6—240

PART F—IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, AND

TECHNOLOGY IN EAST ASIA

SEC. 831. IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE,

ENGINEERING, AND TECHNOLOGY IN EAST ASIA.

(a) ESTABLISHMENT.—The Director of the National Science

Foundation is authorized, beginning in fiscal year 2000, to carry

out an interdisciplinary program of education and research on East

Asian science, engineering, and technology. The Director shall carry

out the interdisciplinary program in consultation with the Secretary

of Education.

(b) PURPOSES.—The purposes of the program established under

this section shall be to—

(1) increase understanding of East Asian research, and

innovation for the creative application of science and technology

to the problems of society;

(2) provide scientists, engineers, technology managers, and

students with training in East Asian languages, and with an

understanding of research, technology, and management of

innovation, in East Asian countries;

(3) provide program participants with opportunities to be

directly involved in scientific and engineering research, and

activities related to the management of scientific and technological innovation, in East Asia; and

(4) create mechanisms for cooperation and partnerships

among United States industry, universities, colleges, not-forprofit institutions, Federal laboratories (within the meaning

of section 4(6) of the Stevenson-Wydler Technology Innovation

Act of 1980 (15 U.S.C. 3703(6))), and government, to disseminate the results of the program assisted under this section

for the benefit of United States research and innovation.

(c) PARTICIPATION BY FEDERAL SCIENTISTS, ENGINEERS, AND

MANAGERS.—Scientists, engineers, and managers of science and

engineering programs in Federal agencies and the Federal laboratories shall be eligible to participate in the program assisted under

this section on a reimbursable basis.

(d) REQUIREMENT FOR MERIT REVIEW.—Awards made under

the program established under this section shall only be made

using a competitive, merit-based review process.

(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized

to be appropriated to carry out this section $10,000,000 for fiscal

year 2000.

PART G—OLYMPIC SCHOLARSHIPS

SEC. 836. EXTENSION OF AUTHORIZATION.

Section 1543(d) of the Higher Education Amendments of 1992

is amended by striking ‘‘1993’’ and inserting ‘‘1999’’.

PART H—UNDERGROUND RAILROAD

SEC. 841. UNDERGROUND RAILROAD EDUCATIONAL AND CULTURAL

PROGRAM.

(a) PROGRAM ESTABLISHED.—The Secretary of Education, in

consultation and cooperation with the Secretary of the Interior,
H. R. 6—241

is authorized to make grants to 1 or more nonprofit educational

organizations that are established to research, display, interpret,

and collect artifacts relating to the history of the Underground

Railroad.

(b) GRANT AGREEMENT.—Each nonprofit educational organization awarded a grant under this section shall enter into an agreement with the Secretary of Education. Each such agreement shall

require the organization—

(1) to establish a facility to house, display, and interpret

the artifacts related to the history of the Underground Railroad,

and to make the interpretive efforts available to institutions

of higher education that award a baccalaureate or graduate

degree;

(2) to demonstrate substantial private support for the facility through the implementation of a public-private partnership

between a State or local public entity and a private entity

for the support of the facility, which private entity shall provide

matching funds for the support of the facility in an amount

equal to 4 times the amount of the contribution of the State

or local public entity, except that not more than 20 percent

of the matching funds may be provided by the Federal Government;

(3) to create an endowment to fund any and all shortfalls

in the costs of the on-going operations of the facility;

(4) to establish a network of satellite centers throughout

the United States to help disseminate information regarding

the Underground Railroad throughout the United States, if

such satellite centers raise 80 percent of the funds required

to establish the satellite centers from non-Federal public and

private sources;

(5) to establish the capability to electronically link the

facility with other local and regional facilities that have collections and programs which interpret the history of the Underground Railroad; and

(6) to submit, for each fiscal year for which the organization

receives funding under this section, a report to the Secretary

of Education that contains—

(A) a description of the programs and activities supported by the funding;

(B) the audited financial statement of the organization

for the preceding fiscal year;

(C) a plan for the programs and activities to be supported by the funding as the Secretary may require; and

(D) an evaluation of the programs and activities supported by the funding as the Secretary may require.

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $6,000,000 for fiscal

year 1999, $6,000,000 for fiscal year 2000, $6,000,000 for fiscal

year 2001, $3,000,000 for fiscal year 2002, and $3,000,000 for fiscal

year 2003.
H. R. 6—242

PART I—SUMMER TRAVEL AND WORK

PROGRAMS

SEC. 846. AUTHORITY TO ADMINISTER SUMMER TRAVEL AND WORK

PROGRAMS.

The Director of the United States Information Agency is authorized to administer summer travel and work programs without

regard to preplacement requirements.

PART J—WEB-BASED EDUCATION

COMMISSION

SEC. 851. SHORT TITLE; DEFINITIONS.

(a) IN GENERAL.—This part may be cited as the ‘‘Web-Based

Education Commission Act’’.

(b) DEFINITIONS.—In this part:

(1) COMMISSION.—The term ‘‘Commission’’ means the WebBased Education Commission established under section 852.

(2) INFORMATION TECHNOLOGY.—The term ‘‘information

technology’’ has the meaning given that term in section 5002

of the Information Technology Management Reform Act of 1996

(110 Stat. 679).

(3) STATE.—The term ‘‘State’’ means each of the several

States of the United States and the District of Columbia.

SEC. 852. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION.

(a) ESTABLISHMENT.—There is established a commission to be

known as the Web-Based Education Commission.

(b) MEMBERSHIP.— (1) COMPOSITION.—The Commission shall be composed of

14 members, of which—

(A) three members shall be appointed by the President,

from among individuals representing the Internet technology industry;

(B) three members shall be appointed by the Secretary,

from among individuals with expertise in accreditation,

establishing statewide curricula, and establishing information technology networks pertaining to education curricula;

(C) two members shall be appointed by the Majority

Leader of the Senate;

(D) two members shall be appointed by the Minority

Leader of the Senate;

(E) two members shall be appointed by the Speaker

of the House of Representatives; and

(F) two members shall be appointed by the Minority

Leader of the House of Representatives.

(2) DATE.—The appointments of the members of the

Commission shall be made not later than 45 days after the

date of enactment of this Act.

(c) PERIOD OF APPOINTMENT; VACANCIES.—Members shall be

appointed for the life of the Commission. Any vacancy in the

Commission shall not affect its powers, but shall be filled in the

same manner as the original appointment.

(d) INITIAL MEETING.—Not later than 30 days after the date

on which all members of the Commission have been appointed,

the Commission shall hold the Commission’s first meeting.
H. R. 6—243

(e) MEETINGS.—The Commission shall meet at the call of the

Chairperson.

(f ) QUORUM.—A majority of the members of the Commission

shall constitute a quorum, but a lesser number of members may

hold hearings.

(g) CHAIRPERSON AND VICE CHAIRPERSON.—The Commission

shall select a chairperson and vice chairperson from among the

members of the Commission.

SEC. 853. DUTIES OF THE COMMISSION.

(a) STUDY.—

(1) IN GENERAL.—The Commission shall conduct a thorough

study to assess the educational software available in retail

markets for secondary and postsecondary students who choose

to use such software.

(2) PUBLIC HEARINGS.—As part of the study conducted

under this subsection, the Commission shall hold public hearings in each region of the United States concerning the assessment referred to in paragraph (1).

(3) EXISTING INFORMATION.—To the extent practicable, in

carrying out the study under this subsection, the Commission

shall identify and use existing information related to the assessment referred to in paragraph (1).

(b) REPORT.—Not later than 6 months after the first meeting

of the Commission, the Commission shall submit a report to the

President and Congress that shall contain a detailed statement

of the findings and conclusions of the Commission resulting from

the study, together with the Commission’s recommendations—

(1) for such legislation and administrative actions as the

Commission considers to be appropriate; and

(2) regarding the appropriate Federal role in determining

quality educational software products.

(c) FACILITATION OF EXCHANGE OF INFORMATION.—In carrying

out the study under subsection (a), the Commission shall, to the

extent practicable, facilitate the exchange of information concerning

the issues that are the subject of the study among—

(1) officials of the Federal Government, and State governments and political subdivisions of States; and

(2) educators from Federal, State, and local institutions

of higher education and secondary schools.

SEC. 854. POWERS OF THE COMMISSION.

(a) HEARINGS.—The Commission may hold such hearings, sit

and act at such times and places, take such testimony, and receive

such evidence as the Commission considers advisable to carry out

the duties of the Commission.

(b) INFORMATION FROM FEDERAL AGENCIES.—The Commission

may request from the head of any Federal agency or instrumentality

such information as the Commission considers necessary to carry

out the provisions of this part. Each such agency or instrumentality

shall, to the extent permitted by law and subject to the exceptions

set forth in section 552 of title 5, United States Code (commonly

referred to as the Freedom of Information Act), furnish such

information to the Commission upon request.

(c) POSTAL SERVICES.—The Commission may use the United

States mails in the same manner and under the same conditions

as other departments and agencies of the Federal Government.
H. R. 6—244

(d) GIFTS.—The Commission may accept, use, and dispose of

gifts or donations of services or property.

SEC. 855. COMMISSION PERSONNEL MATTERS.

(a) COMPENSATION OF MEMBERS.—Except as provided in subsection (b), each member of the Commission who is not an officer

or employee of the Federal Government shall serve without compensation. All members of the Commission who are officers or

employees of the United States shall serve without compensation

in addition to that received for their services as officers or employees

of the United States.

(b) TRAVEL EXPENSES.—The members of the Commission shall

be allowed travel expenses, including per diem in lieu of subsistence,

at rates authorized for employees of agencies under subchapter

I of chapter 57 of title 5, United States Code, while away from

their homes or regular places of business in the performance of

services for the Commission.

(c) STAFF.—

(1) IN GENERAL.—The Chairperson of the Commission may,

without regard to the civil service laws and regulations, appoint

and terminate an executive director and such other additional

personnel as may be necessary to enable the Commission to

perform the Commission’s duties. The employment of an executive director shall be subject to confirmation by the Commission.

(2) COMPENSATION.—The Chairperson of the Commission

may fix the compensation of the executive director and other

personnel without regard to the provisions of chapter 51 and

subchapter III of chapter 53 of title 5, United States Code,

relating to classification of positions and General Schedule pay

rates, except that the rate of pay for the executive director

and other personnel may not exceed the rate payable for level

V of the Executive Schedule under section 5316 of such title.

(d) DETAIL OF GOVERNMENT EMPLOYEES.—Any Federal Government employee may be detailed to the Commission without

reimbursement, and such detail shall be without interruption or

loss of civil service status or privilege.

(e) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The Chairperson of the Commission may procure temporary

and intermittent services under section 3109(b) of title 5, United

States Code, at rates for individuals that do not exceed the daily

equivalent of the annual rate of basic pay prescribed for level

V of the Executive Schedule under section 5316 of such title.

SEC. 856. TERMINATION OF THE COMMISSION.

The Commission shall terminate on the date that is 90 days

after the date on which the Commission submits the Commission’s

report under section 853(b).

SEC. 857. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated

$450,000 for fiscal year 1999 to the Commission to carry out this

part.

(b) AVAILABILITY.—Any sums appropriated under the authorization contained in this section shall remain available, without fiscal

year limitation, until expended.
H. R. 6—245

PART K—MISCELLANEOUS

SEC. 861. EDUCATION-WELFARE STUDY.

(a) STUDY.—The Comptroller General of the United States shall

conduct a study of the effectiveness of educational approaches

(including vocational and post-secondary education approaches) and

rapid employment approaches to helping welfare recipients and

other low-income adults become employed and economically selfsufficient. Such study shall include—

(1) a survey of the available scientific evidence and research

data on the subject, including a comparison of the effects of

programs emphasizing a vocational or postsecondary educational approach to programs emphasizing a rapid employment

approach, along with research on the impacts of programs

which emphasize a combination of such approaches;

(2) an examination of the research regarding the impact

of postsecondary education on the educational attainment of

the children of recipients who have completed a postsecondary

education program; and

(3) information regarding short and long-term employment,

wages, duration of employment, poverty rates, sustainable economic self-sufficiency, prospects for career advancement or wage

increases, access to quality child care, placement in employment

with benefits including health care, life insurance and retirement, and related program outcomes.

(b) REPORT.—Not later than August 1, 1999, the Comptroller

General of the United States shall prepare and submit to the

Committees on Ways and Means and on Education and the

Workforce of the House of Representatives and the Committees

on Finance and on Labor and Human Resources of the Senate,

a report that contains the finding of the study required by subsection (a).

SEC. 862. RELEASE OF CONDITIONS, COVENANTS, AND REVERSIONARY

INTERESTS, GUAM COMMUNITY COLLEGE CONVEYANCE,

BARRIGADA, GUAM.

(a) RELEASE.—The Secretary of Education shall release all

conditions and covenants that were imposed by the United States,

and the reversionary interests that were retained by the United

States, as part of the conveyance of a parcel of Federal surplus

property located in Barrigada, Guam, consisting of approximately

314.28 acres and known as Naval Communications Area Master

Station, WESTPAC, parcel IN, which was conveyed to the Guam

Community College pursuant to—

(1) the quitclaim deed dated June 8, 1990, conveying 61.45

acres, between the Secretary, acting through the Administrator

for Management Services, and the Guam Community College,

acting through its Board of Trustees; and

(2) the quitclaim deed dated June 8, 1990, conveying 252.83

acres, between the Secretary, acting through the Administrator

for Management Services, and the Guam Community College,

acting through its Board of Trustees, and the Governor of

Guam.

(b) CONSIDERATION.—The Secretary shall execute the release

of the conditions, covenants, and reversionary interests under subsection (a) without consideration.
H. R. 6—246

(c) INSTRUMENT OF RELEASE.—The Secretary shall execute and

file in the appropriate office or offices a deed of release, amended

deed, or other appropriate instrument effectuating the release of

the conditions, covenants, and reversionary interests under subsection (a).

SEC. 863. SENSE OF CONGRESS REGARDING GOOD CHARACTER.

(a) FINDINGS.—Congress finds that—

(1) the future of our Nation and world will be determined

by the young people of today;

(2) record levels of youth crime, violence, teenage pregnancy, and substance abuse indicate a growing moral crisis

in our society;

(3) character development is the long-term process of helping young people to know, care about, and act upon such

basic values as trustworthiness, respect for self and others,

responsibility, fairness, compassion, and citizenship;

(4) these values are universal, reaching across cultural

and religious differences;

(5) a recent poll found that 90 percent of Americans support

the teaching of core moral and civic values;

(6) parents will always be children’s primary character

educators;

(7) good moral character is developed best in the context

of the family;

(8) parents, community leaders, and school officials are

establishing successful partnerships across the Nation to implement character education programs;

(9) character education programs also ask parents, faculty,

and staff to serve as role models of core values, to provide

opportunities for young people to apply these values, and to

establish high academic standards that challenge students to

set high goals, work to achieve the goals, and persevere in

spite of difficulty;

(10) the development of virtue and moral character, those

habits of mind, heart, and spirit that help young people to

know, desire, and do what is right, has historically been a

primary mission of colleges and universities; and

(11) the Congress encourages parents, faculty, and staff

across the Nation to emphasize character development in the

home, in the community, in our schools, and in our colleges

and universities.

(b) SENSE OF CONGRESS.—It is the sense of Congress that

Congress should support and encourage character building initiatives in schools across America and urge colleges and universities

to affirm that the development of character is one of the primary

goals of higher education.

SEC. 864. EDUCATIONAL MERCHANDISE LICENSING CODES OF CONDUCT.

It is the sense of Congress that all American colleges and

universities should adopt rigorous educational merchandise licensing codes of conduct to assure that university and college licensed

merchandise is not made by sweatshop and exploited adult or

child labor either domestically or abroad, and that such codes

should include at least the following:

(1) Public reporting of the code and the companies adhering

to the code.
H. R. 6—247

(2) Independent monitoring of the companies adhering to

the code by entities not limited to major international accounting firms.

(3) An explicit prohibition on the use of child labor.

(4) An explicit requirement that companies pay workers

at least the governing minimum wage and applicable overtime.

(5) An explicit requirement that companies allow workers

the right to organize without retribution.

(6) An explicit requirement that companies maintain a

safe and healthy workplace.

TITLE IX—AMENDMENTS TO OTHER

LAWS

PART A—EXTENSION AND REVISION OF

INDIAN HIGHER EDUCATION PROGRAMS

SEC. 901. TRIBALLY CONTROLLED COLLEGES AND UNIVERSITIES.

(a) REAUTHORIZATION.—

(1) AMOUNT OF GRANTS.—Section 108(a)(2) of the Tribally

Controlled Community College Assistance Act of 1978 (25

U.S.C. 1808(a)(2)) is amended by striking ‘‘$5,820’’ and inserting

‘‘$6,000’’.

(2) AUTHORIZATION OF APPROPRIATIONS.—

(A) TITLE I.—Section 110(a) of the Tribally Controlled

Community College Assistance Act of 1978 (25 U.S.C.

1810(a)) is amended—

(i) in paragraph (1), by striking ‘‘1993’’ and

inserting ‘‘1999’’; (ii) in paragraph (2), by striking ‘‘$30,000,000 for fiscal year 1993’’ and inserting ‘‘$40,000,000 for fiscal

year 1999’’;

(iii) in paragraph (3), by striking ‘‘1993’’ and

inserting ‘‘1999’’; and

(iv) in paragraph (4), by striking ‘‘1993’’ and

inserting ‘‘1999’’.

(B) TITLE III.—Section 306(a) of the Tribally Controlled

Community College Assistance Act of 1978 (25 U.S.C.

1836(a)) is amended by striking ‘‘1993’’ and inserting

‘‘1999’’.

(C) TITLE IV.—Section 403 of the Tribal Economic

Development and Technology Related Education Assistance

Act of 1990 (25 U.S.C. 1852) is amended by striking ‘‘1993’’

and inserting ‘‘1999’’.

(b) EXTENSION TO COLLEGES AND UNIVERSITIES.—The Tribally

Controlled Community College Assistance Act of 1978 (25 U.S.C.

1801 et seq.) is amended—

(1) in the first section (25 U.S.C. 1801 note), by striking

‘‘Community College’’ and inserting ‘‘College or University’’;

(2) in the heading for title I (25 U.S.C. 1802 et seq.),

by striking ‘‘COMMUNITY COLLEGES’’ and inserting ‘‘COLLEGES OR UNIVERSITIES’’;

(3) in the heading for title III (25 U.S.C. 1831 et seq.),

by striking ‘‘COMMUNITY COLLEGE’’ and inserting ‘‘COLLEGE OR UNIVERSITY’’;
H. R. 6—248

(4) in the heading for section 107, by striking ‘‘COMMUNITY

COLLEGES’’ and inserting ‘‘COLLEGES OR UNIVERSITIES’’;

(5) in sections 2(a)(4), 2(a)(7), 2(b)(4), 102(b), 103, 105,

106(b), 107(a), 107(b), 108(a), 108(b)(3)(A), 108(b)(3)(B),

108(b)(4), 109(b)(2), 109(b)(3), 109(d), 113(a), 113(b), 113(c)(1),

113(c)(2), 302(b), 303, 304, 305(a), and 305(b) (25 U.S.C.

1801(a)(4), 1801(a)(7), 1801(b)(4), 1803(b), 1804, 1805, 1806(b),

1807(a), 1807(b), 1808(a), 1808(b)(3)(A), 1808(b)(3)(B),

1808(b)(4), 1809(b)(2), 1809(b)(3), 1809(d), 1813(a), 1813(b),

1813(c)(1), 1813(c)(2), 1832(b), 1833, 1834, 1835(a), and

1835(b)), by striking ‘‘community college’’ each place the term

appears and inserting ‘‘college or university’’;

(6) in sections 101, 102(a), 104(a)(1), 107(a), 108(c)(2),

109(b)(1), 111(a)(2), 112(a), 112(a)(2), 112(c)(2)(B), 301, 302(a),

and 402(a) (25 U.S.C. 1802, 1803(a), 1804a(a)(1), 1807(a),

1808(c)(2), 1809(b)(1), 1811(a)(2), 1812(a), 1812(a)(2),

1812(c)(2)(B), 1831, 1832(a), and 1851(a)), by striking ‘‘community colleges’’ each place the term appears and inserting ‘‘colleges or universities’’;

(7) in sections 108(a)(1), 108(a), 113(b)(2), 113(c)(2), 302(a),

302(b), 302(b)(2)(B), 302(b)(4), 303, 304, 305(a), and 305(b) (25

U.S.C. 1808(a)(1), 1808(a), 1813(b)(2), 1813(c)(2), 1832(a),

1832(b), 1832(b)(2)(B), 1832(b)(4), 1833, 1834, 1835(a), and

1835(b)), by striking ‘‘such college’’ each place the term appears

and inserting ‘‘such college or university’’;

(8) in sections 104(a)(2), 109(b)(1), and 111(a)(2) (25 U.S.C.

1804a(a)(2), 1809(b)(1), and 1811(a)(2)), by striking ‘‘such colleges’’ and inserting ‘‘such colleges or universities’’;

(9) in section 2(b)(5) (25 U.S.C. 1801(b)(5)), by striking

‘‘community college’s’’ and inserting ‘‘college or university’s’’;

(10) in section 109(a) (25 U.S.C. 1809(a)), by inserting

‘‘or university’’ after ‘‘tribally controlled college’’;

(11) in section 110(a)(4) (25 U.S.C. 1810(a)(4)), by striking

‘‘Tribally Controlled Community Colleges’’ and inserting ‘‘tribally controlled colleges or universities’’;

(12) in sections 102(b), 109(d), 113(c)(2)(E), 302(b)(6), and

305(a) (25 U.S.C. 1803(b), 1809(d), 1813(c)(2)(E), 1832(b)(6),

and 1835(a)), by striking ‘‘the college’’ and inserting ‘‘the college

or university’’;

(13) in section 112(c)(1) (25 U.S.C. 1812(c)(1)), by striking

‘‘colleges’’ and inserting ‘‘colleges or universities’’;

(14) in sections 302(b)(4) and 305(a) (25 U.S.C. 1832(b)(4)

and 1835(a)), by striking ‘‘that college’’ and inserting ‘‘that

college or university’’; and

(15) in section 302(b)(4) (25 U.S.C. 1832(b)(4)), by striking

‘‘other colleges’’ and inserting ‘‘other colleges or universities’’.

(c) ADDITIONAL CONFORMING AMENDMENTS.—

(1) RECOMMENDED LEGISLATION.—The Secretary of Education shall prepare and submit to Congress recommended

legislation containing technical and conforming amendments

to reflect the changes made by subsection (b).

(2) SUBMISSION TO CONGRESS.—Not later than 6 months

after the effective date of this title, the Secretary of Education

shall submit the recommended legislation referred to under

paragraph (1).

(d) REFERENCES.—Any reference to a section or other provision

of the Tribally Controlled Community College Assistance Act of
H. R. 6—249

1978 shall be deemed to be a reference to the Tribally Controlled

College or University Assistance Act of 1978.

(e) CLERICAL AMENDMENT.—Section 109 of the Tribally Controlled Colleges or University Act of 1978 (as renamed by subsection

(b)(1)) (25 U.S.C. 1809) is amended by redesignating subsection

(d) as subsection (c).

SEC. 902. REAUTHORIZATION OF NAVAJO COMMUNITY COLLEGE ACT.

Section 5(a)(1) of the Navajo Community College Act (25 U.S.C.

640c–1) is amended by striking ‘‘1993’’ and inserting ‘‘1999’’.

PART B—EDUCATION OF THE DEAF

SEC. 911. SHORT TITLE.

This part may be cited as the ‘‘Education of the Deaf Amendments of 1998’’.

SEC. 912. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

Section 104(b) of the Education of the Deaf Act of 1986 (20

U.S.C. 4304(b)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (A), by inserting ‘‘and’’ after the

semicolon;

(B) in subparagraph (B), by striking ‘‘; and’’ and

inserting a period; and

(C) by striking subparagraph (C);

(2) in the matter preceding subparagraph (A) of paragraph

(2)—

(A) by striking ‘‘paragraph (1)’’ and inserting ‘‘paragraph (1)(B)’’; and

(B) by striking ‘‘section 618(b)’’ and inserting ‘‘section

618(a)(1)(A)’’;

(3) in paragraph (3), by striking ‘‘intermediate educational

unit’’ and inserting ‘‘educational service agency’’;

(4) in paragraph (4)—

(A) in subparagraph (A), by striking ‘‘intermediate educational unit’’ and inserting ‘‘educational service agency’’;

and

(B) in subparagraph (B), by striking ‘‘intermediate educational units’’ and inserting ‘‘educational service agencies’’;

and

(5) by amending subparagraph (C) to read as follows:

‘‘(C) provide the child a free appropriate public education in accordance with part B of the Individuals with

Disabilities Education Act and procedural safeguards in

accordance with the following provisions of section 615

of such Act:

‘‘(i) Paragraphs (1), and (3) through (6) of subsection (b).

‘‘(ii) Subsections (c) through (g).

‘‘(iii) Subsection (h), except for the matter in paragraph (4) pertaining to transmission of findings and

decisions to a State advisory panel.

‘‘(iv) Paragraphs (1) and (2) of subsection (i).

‘‘(v) Subsection ( j)—

‘‘(I) except that such subsection shall not be

applicable to a decision by the University to refuse

to admit a child; or
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‘‘(II) to dismiss a child, except that, before

dismissing any child, the University shall give at

least 60 days written notice to the child’s parents

and to the local educational agency in which the

child resides, unless the dismissal involves a

suspension, expulsion, or other change in placement covered under section 615(k).

‘‘(vi) Subsections (k) through (m).’’.

SEC. 913. AGREEMENT WITH GALLAUDET UNIVERSITY.

Section 105(a) of the Education of the Deaf Act of 1986 (20

U.S.C. 4305(a)) is amended—

(1) by striking ‘‘within 1 year after enactment of the Education of the Deaf Act Amendments of 1992, a new’’ and inserting ‘‘and periodically update, an’’; and

(2) by amending the second sentence to read as follows:

‘‘The Secretary or the University shall determine the necessity

for the periodic update described in the preceding sentence.’’.

SEC. 914. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE

FOR THE DEAF.

Paragraph (2) of section 112(a) of the Education of the Deaf

Act of 1986 (20 U.S.C. 4332(a)) is amended to read as follows:

‘‘(2) The Secretary and the institution of higher education with

which the Secretary has an agreement under this section—

‘‘(A) shall periodically assess the need for modification of

the agreement; and

‘‘(B) shall periodically update the agreement as determined

necessary by the Secretary or the institution.’’.

SEC. 915. DEFINITIONS.

Section 201 of the Education of the Deaf Act of 1986 (20

U.S.C. 4351) is amended—

(1) in paragraph (1)(C), by striking ‘‘Palau (but only until

the Compact of Free Association with Palau takes effect),’’;

and

(2) in paragraph (5)—

(A) by inserting ‘‘and’’ after ‘‘Virgin Islands,’’; and

(B) by striking ‘‘, and Palau (but only until the Compact

of Free Association with Palau takes effect)’’.

SEC. 916. GIFTS.

Subsection (b) of section 203 of the Education of the Deaf

Act of 1986 (20 U.S.C. 4353) is amended to read as follows:

‘‘(b) INDEPENDENT FINANCIAL AND COMPLIANCE AUDIT.— ‘‘(1) IN GENERAL.—Gallaudet University shall have an

annual independent financial and compliance audit made of

the programs and activities of the University, including the

national mission and school operations of the elementary and

secondary education programs at Gallaudet. The institution

of higher education with which the Secretary has an agreement

under section 112 shall have an annual independent financial

and compliance audit made of the programs and activities

of such institution of higher education, including NTID, and

containing specific schedules and analyses for all NTID funds,

as determined by the Secretary.

‘‘(2) COMPLIANCE.—As used in paragraph (1), compliance

means compliance with sections 102(b), 105(b)(4), 112(b)(5),
H. R. 6—251

and 203(c), paragraphs (2) and (3) of section 207(b), subsections

(b)(2), (b)(3), and (c) through (f ), of section 207, and subsections

(b) and (c) of section 210.

‘‘(3) SUBMISSION OF AUDITS.—A copy of each audit described

in paragraph (1) shall be provided to the Secretary within

15 days of acceptance of the audit by the University or the

institution authorized to establish and operate the NTID under

section 112(a), as the case may be, but not later than January

10 of each year.’’.

SEC. 917. REPORTS.

Section 204(3) of the Education of the Deaf Act of 1986 (20

U.S.C. 4354(3)) is amended—

(1) in subparagraph (A), by striking ‘‘The annual’’ and

inserting ‘‘A summary of the annual’’; and

(2) in subparagraph (B), by striking ‘‘the annual’’ and

inserting ‘‘a summary of the annual’’.

SEC. 918. MONITORING, EVALUATION, AND REPORTING.

Section 205(c) of the Education of the Deaf Act of 1986 (20

U.S.C. 4355(c)) is amended by striking ‘‘1993, 1994, 1995, 1996,

and 1997’’ and inserting ‘‘1998 through 2003’’.

SEC. 919. FEDERAL ENDOWMENT PROGRAMS.

Section 207 of the Education of the Deaf Act of 1986 (20

U.S.C. 4357) is amended—

(1) in subsection (b)—

(A) by amending paragraph (2) to read as follows:

‘‘(2) Subject to the availability of appropriations, the Secretary

shall make payments to each Federal endowment fund in amounts

equal to sums contributed to the fund from non-Federal sources

during the fiscal year in which the appropriations are made available (excluding transfers from other endowment funds of the institution involved).’’; and

(B) by striking paragraph (3);

(2) in subsection (c)(1), by inserting ‘‘the Federal contribution of’’ after ‘‘shall invest’’;

(3) in subsection (d)—

(A) in paragraph (2)(C), by striking ‘‘Beginning on

October 1, 1992, the’’ and inserting ‘‘The’’; and

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

inserting ‘‘current’’; and

(4) in subsection (h)—

(A) in paragraph (1), by striking ‘‘1993 through 1997’’

and inserting ‘‘1998 through 2003’’; and

(B) in paragraph (2), by striking ‘‘1993 through 1997’’

and inserting ‘‘1998 through 2003’’.

SEC. 920. SCHOLARSHIP PROGRAM.

Section 208 of the Education of the Deaf Act of 1986 (20

U.S.C. 4358) is repealed.

SEC. 921. OVERSIGHT AND EFFECT OF AGREEMENTS.

Section 209 of the Education of the Deaf Act of 1986 (20

U.S.C. 4359) is amended—

(1) in subsection (a), by striking ‘‘Committee on Education

and Labor’’ and inserting ‘‘Committee on Education and the

Workforce’’; and
H. R. 6—252

(2) by redesignating such section as section 208.

SEC. 922. INTERNATIONAL STUDENTS.

(a) AMENDMENT.—Section 210 of the Education of the Deaf

Act of 1986 (20 U.S.C. 4359a) is amended—

(1) in subsection (a)—

(A) by striking ‘‘10 percent’’ and inserting ‘‘15 percent’’;

and

(B) by inserting before the period the following: ‘‘,

except that in any school year no United States citizen

who is qualified to be admitted to the University or NTID

and applies for admission to the University or NTID shall

be denied admission because of the admission of an international student’’; and

(2) in subsection (b), by striking ‘‘surcharge of 75 percent

for the academic year 1993–1994 and 90 percent beginning

with the academic year 1994–1995’’ and inserting ‘‘surcharge

of 100 percent for the academic year 1999–2000 and any

succeeding academic year’’.

(b) CONFORMING AMENDMENT.—Section 210 of such Act (20

U.S.C. 4359a) is amended by redesignating such section as section

209.

SEC. 923. RESEARCH PRIORITIES.

Title II of the Education of the Deaf Act of 1986 is amended

by striking section 211 (20 U.S.C. 4360) and inserting the following:

‘‘SEC. 210. RESEARCH PRIORITIES.

‘‘(a) RESEARCH PRIORITIES.—Gallaudet University and the

National Technical Institute for the Deaf shall each establish and

disseminate priorities for their national mission with respect to

deafness related research, development, and demonstration activities, that reflect public input, through a process that includes

consumers, constituent groups, and the heads of other federally

funded programs. The priorities for the University shall include

activities conducted as part of the University’s elementary and

secondary education programs under section 104.

‘‘(b) RESEARCH REPORTS.—The University and NTID shall each

prepare and submit an annual research report, to the Secretary,

the Committee on Education and the Workforce of the House of

Representatives, and the Committee on Labor and Human

Resources of the Senate, not later than January 10 of each year,

that shall include—

‘‘(1) a summary of the public input received as part of

the establishment and dissemination of priorities required by

subsection (a), and the University’s and NTID’s response to

the input; and

‘‘(2) a summary description of the research undertaken

by the University and NTID, the start and projected end dates

for each research project, the projected cost and source or

sources of funding for each project, and any products resulting

from research completed in the prior fiscal year.’’.

SEC. 924. NATIONAL STUDY ON THE EDUCATION OF THE DEAF.

The Education of the Deaf Act of 1986 (20 U.S.C. 4301 et

seq.) is amended by adding after section 210 (as inserted by section

923) the following:
H. R. 6—253

‘‘SEC. 211. NATIONAL STUDY ON THE EDUCATION OF THE DEAF.

‘‘(a) CONDUCT OF STUDY.— ‘‘(1) IN GENERAL.—The Secretary shall conduct a national

study on the education of the deaf, to identify education-related

barriers to successful postsecondary education experiences and

employment for individuals who are deaf, and those educationrelated factors that contribute to successful postsecondary education experiences and employment for individuals who are

deaf.

‘‘(2) DEFINITION.—In this section the term ‘deaf’, when used

with respect to an individual, means an individual with a

hearing impairment, including an individual who is hard of

hearing, an individual deafened later in life, and an individual

who is profoundly deaf.

‘‘(b) PUBLIC INPUT AND CONSULTATION.— ‘‘(1) IN GENERAL.—In conducting such study, the Secretary

shall obtain input from the public. To obtain such input, the

Secretary shall—

‘‘(A) publish a notice with an opportunity for comment

in the Federal Register;

‘‘(B) consult with individuals and organizations representing a wide range of perspectives on deafness-related

issues, including organizations representing individuals

who are deaf, parents of children who are deaf, educators,

and researchers; and

‘‘(C) take such other action as the Secretary deems

appropriate, which may include holding public meetings.

‘‘(2) STRUCTURED OPPORTUNITIES.—The Secretary shall

provide structured opportunities to receive and respond to the

viewpoints of the individuals and organizations described in

paragraph (1)(B).

‘‘(c) REPORT.—The Secretary shall report to Congress not later

than 18 months after the date of enactment of the Education

of the Deaf Amendments of 1998 regarding the results of the

study. The report shall contain—

‘‘(1) recommendations, including recommendations for

legislation, that the Secretary deems appropriate; and

‘‘(2) a detailed summary of the input received under subsection (b) and the ways in which the report addresses such

input.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated $1,000,000 for each of the fiscal years 1999

and 2000 to carry out the provisions of this section.’’.

SEC. 925. AUTHORIZATION OF APPROPRIATIONS.

Title II of the Education of the Deaf Act of 1986 (20 U.S.C.

4351 et seq.) is amended by adding after section 211 (as inserted

by section 924) the following:

‘‘SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

‘‘(a) GALLAUDET UNIVERSITY.—There are authorized to be appropriated such sums as may be necessary for each of the fiscal

years 1998 through 2003 to carry out the provisions of title I

and this title, relating to—

‘‘(1) Gallaudet University;

‘‘(2) Kendall Demonstration Elementary School; and

‘‘(3) the Model Secondary School for the Deaf.
H. R. 6—254

‘‘(b) NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.—There

are authorized to be appropriated such sums as may be necessary

for each of the fiscal years 1998 through 2003 to carry out the

provisions of title I and this title relating to the National Technical

Institute for the Deaf.’’.

PART C—UNITED STATES INSTITUTE OF

PEACE

SEC. 931. AUTHORITIES OF THE UNITED STATES INSTITUTE OF PEACE.

The United States Institute of Peace Act (22 U.S.C. 4601 et

seq.) is amended—

(1) in section 1705 (22 U.S.C. 4604)—

(A) in subsection (f ), by inserting ‘‘personal service

and other’’ after ‘‘may enter into’’; and

(B) in subsection (o), by inserting after ‘‘Services’’ the

following: ‘‘and use all sources of supply and services of

the General Services Administration’’;

(2) in section 1710(a)(1) (22 U.S.C. 4609(a)(1))—

(A) by striking ‘‘1993’’ and inserting ‘‘1999’’; and

(B) by striking ‘‘6’’ and inserting ‘‘4’’; and

(3) in the second and third sentences of section 1712 (22

U.S.C. 4611), by striking ‘‘shall’’ each place the term appears

and inserting ‘‘may’’.

PART D—VOLUNTARY RETIREMENT

INCENTIVE PLANS

SEC. 941. VOLUNTARY RETIREMENT INCENTIVE PLANS.

(a) IN GENERAL.—Section 4 of the Age Discrimination in

Employment Act of 1967 (29 U.S.C. 623) is amended by adding

at the end the following:

‘‘(m) Notwithstanding subsection (f )(2)(B), it shall not be a

violation of subsection (a), (b), (c), or (e) solely because a plan

of an institution of higher education (as defined in section 101

of the Higher Education Act of 1965) offers employees who are

serving under a contract of unlimited tenure (or similar arrangement providing for unlimited tenure) supplemental benefits upon

voluntary retirement that are reduced or eliminated on the basis

of age, if—

‘‘(1) such institution does not implement with respect to

such employees any age-based reduction or cessation of benefits

that are not such supplemental benefits, except as permitted

by other provisions of this Act;

‘‘(2) such supplemental benefits are in addition to any

retirement or severance benefits which have been offered generally to employees serving under a contract of unlimited tenure

(or similar arrangement providing for unlimited tenure),

independent of any early retirement or exit-incentive plan,

within the preceding 365 days; and

‘‘(3) any employee who attains the minimum age and satisfies all non-age-based conditions for receiving a benefit under

the plan has an opportunity lasting not less than 180 days

to elect to retire and to receive the maximum benefit that

could then be elected by a younger but otherwise similarly
H. R. 6—255

situated employee, and the plan does not require retirement

to occur sooner than 180 days after such election.’’.

(b) PLANS PERMITTED.—Section 4(i)(6) of the Age Discrimination

in Employment Act of 1967 (29 U.S.C. 623(i)(6)) is amended by

adding after the word ‘‘accruals’’ the following: ‘‘or it is a plan

permitted by subsection (m).’’

(c) CONSTRUCTION.—Nothing in the amendment made by subsection (a) shall affect the application of section 4 of the Age

Discrimination in Employment Act of 1967 (29 U.S.C. 623) with

respect to—

(1) any plan described in subsection (m) of section 4 of

such Act (as added by subsection (a)), for any period prior

to enactment of such Act;

(2) any plan not described in subsection (m) of section

4 of such Act (as added by subsection (a)); or

(3) any employer other than an institution of higher education (as defined in section 101 of the Higher Education Act

of 1965).

(d) EFFECTIVE DATE.— (1) IN GENERAL.—This section shall take effect on the date

of enactment of this Act.

(2) EFFECT ON CAUSES OF ACTION EXISTING BEFORE DATE

OF ENACTMENT.—The amendment made by subsection (a) shall

not apply with respect to any cause of action arising under

the Age Discrimination in Employment Act of 1967 prior to

the date of enactment of this Act.

PART E—GENERAL EDUCATION PROVISIONS

ACT AMENDMENT

SEC. 951. AMENDMENT TO FAMILY EDUCATIONAL RIGHTS AND PRIVACY ACT OF 1974

Section 444(b) of the General Education Provisions Act (20

U.S.C. 1232g(b)), also known as the Family Educational Rights

and Privacy Act of 1974, is amended—

(1) in paragraph (1), by amending subparagraph (C) to

read as follows:

‘‘(C)(i) authorized representatives of (I) the Comptroller

General of the United States, (II) the Secretary, or (III) State

educational authorities, under the conditions set forth in paragraph (3), or (ii) authorized representatives of the Attorney

General for law enforcement purposes under the same conditions as apply to the Secretary under paragraph (3);’’; and

(2) in paragraph (6)—

(A) by inserting ‘‘(A)’’ after ‘‘(6)’’;

(B) in subparagraph (A), as designated by subparagraph (A) of this paragraph—

(i) by striking ‘‘the results’’ and inserting ‘‘or a

nonforcible sex offense, the final results’’; and

(ii) by striking ‘‘such crime’’ each place the term

appears and inserting ‘‘such crime or offense’’; and

(C) adding at the end thereof the following:

‘‘(B) Nothing in this section shall be construed to prohibit

an institution of postsecondary education from disclosing the final

results of any disciplinary proceeding conducted by such institution

against a student who is an alleged perpetrator of any crime of

violence (as that term is defined in section 16 of title 18, United
H. R. 6—256

States Code), or a nonforcible sex offense, if the institution determines as a result of that disciplinary proceeding that the student

committed a violation of the institution’s rules or policies with

respect to such crime or offense.

‘‘(C) For the purpose of this paragraph, the final results of

any disciplinary proceeding—

‘‘(i) shall include only the name of the student, the violation

committed, and any sanction imposed by the institution on

that student; and

‘‘(ii) may include the name of any other student, such

as a victim or witness, only with the written consent of that

other student.’’.

SEC. 952. ALCOHOL OR DRUG POSSESSION DISCLOSURE.

Section 444 of the General Education Provisions Act (20 U.S.C.

1232g) is amended by adding at the end the following:

‘‘(i) DRUG AND ALCOHOL VIOLATION DISCLOSURES.—

‘‘(1) IN GENERAL.—Nothing in this Act or the Higher Education Act of 1965 shall be construed to prohibit an institution

of higher education from disclosing, to a parent or legal guardian of a student, information regarding any violation of any

Federal, State, or local law, or of any rule or policy of the

institution, governing the use or possession of alcohol or a

controlled substance, regardless of whether that information

is contained in the student’s education records, if—

‘‘(A) the student is under the age of 21; and

‘‘(B) the institution determines that the student has

committed a disciplinary violation with respect to such

use or possession.

‘‘(2) STATE LAW REGARDING DISCLOSURE.—Nothing in paragraph (1) shall be construed to supersede any provision of

State law that prohibits an institution of higher education

from making the disclosure described in subsection (a).’’.

PART F—LIAISON FOR PROPRIETARY

INSTITUTIONS OF HIGHER EDUCATION

SEC. 961. LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION.

Title II of the Department of Education Organization Act (20

U.S.C. 3411 et seq.) is amended by adding at the end the following:

‘‘SEC. 219. LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION.

‘‘(a) ESTABLISHMENT.—There shall be in the Department a Liaison for Proprietary Institutions of Higher Education, who shall

be an officer of the Department appointed by the Secretary.

‘‘(b) APPOINTMENT.—The Secretary shall appoint, not later than

6 months after the date of enactment of the Higher Education

Amendments of 1998 a Liaison for Proprietary Institutions of

Higher Education who shall be a person who—

‘‘(1) has attained a certificate or degree from a proprietary

institution of higher education; or

‘‘(2) has been employed in a proprietary institution setting

for not less than 5 years.
H. R. 6—257

‘‘(c) DUTIES.—The Liaison for Proprietary Institutions of Higher

Education shall—

‘‘(1) serve as the principal advisor to the Secretary on

matters affecting proprietary institutions of higher education;

‘‘(2) provide guidance to programs within the Department

that involve functions affecting proprietary institutions of

higher education; and

‘‘(3) work with the Federal Interagency Committee on Education to improve the coordination of—

‘‘(A) the outreach programs in the numerous Federal

departments and agencies that administer education and

job training programs;

‘‘(B) collaborative business and education partnerships;

and

‘‘(C) education programs located in, and involving, rural

areas.’’.

PART G—AMENDMENTS TO OTHER STATUTES

SEC. 971. NONDISCHAREABILITY OF CERTAIN CLAIMS FOR EDUCATIONAL BENEFITS PROVIDED TO OBTAIN HIGHER

EDUCATION.

(a) AMENDMENT.—Section 523(a)(8) of title 11, United States

Code, is amended by striking ‘‘unless—’’ and all that follows through

‘‘(B) excepting such debt’’ and inserting ‘‘unless excepting such

debt’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply only with respect to cases commenced under title 11,

United States Code, after the date of enactment of this Act.

SEC. 972. GNMA GUARANTEE FEE.

(a) IN GENERAL.—Section 306(g)(3)(A) of the National Housing

Act (12 U.S.C. 1721(g)(3)(A)) is amended by striking ‘‘No fee or

charge’’ and all that follows through ‘‘States)’’ and inserting ‘‘The

Association shall assess and collect a fee in an amount equal to

nine basis points’’.

(b) EFFECTIVE DATE.—The amendment made by this section

shall take effect on October 1, 2004.
H. R. 6—258

PART H—REPEALS

SEC. 981. REPEALS.

Section 4122 of the Elementary and Secondary Education Act

of 1965 (20 U.S.C. 7132) is repealed.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.