I 

108TH CONGRESS 

2D SESSION H. R. 4102 

To amend the Higher Education Act of 1965 to provide access and equity 

in higher education, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 1, 2004 

Mr. ANDREWS (for himself, Mr. CARDIN, Mrs. MCCARTHY of New York, Mr. 

HINOJOSA, Mr. FROST, Mr. CROWLEY, Mr. HINCHEY, Mr. BROWN of 

Ohio, Mr. ENGEL, and Ms. MCCOLLUM) introduced the following bill; 

which was referred to the Committee on Education and the Workforce 

A BILL 

To amend the Higher Education Act of 1965 to provide 

access and equity in higher education, and for other 

purposes. 

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

3 SECTION 1. SHORT TITLE; REFERENCES; EFFECTIVE DATE. 

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

5 ‘‘Access and Equity in Higher Education Act’’. 

6 (b) REFERENCES.—Except as otherwise expressly 

7 provided, whenever in this Act an amendment or repeal 

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

9 a section or other provision, the reference shall be consid-
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1 ered to be made to a section or other provision of the 

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

3 (c) EFFECTIVE DATE.—Except as otherwise provided 

4 in this Act, the amendments made by this Act shall apply 

5 with respect to any loan for which the first disbursement 

6 of principal is made on or after the date of enactment of 

7 this Act. 

8 TITLE I—STUDENT ASSISTANCE 

9 SEC. 101. LOAN LIMITS. 

10 (a) FFEL LOANS.— 

11 (1) INCREASES IN SUBSIDIZED LOAN LIMITS.— 

12 Section 428(b)(1) (20 U.S.C. 1078(b)(1)) is amend13 ed— 

14 (A) in subparagraph (A)(i), by striking 

15 ‘‘$2,625’’ in subclause (I) and inserting 

16 ‘‘$4,000’’; 

17 (B) in subparagraph (A)(ii), by striking 

18 ‘‘$3,500’’ in subclause (I) and inserting 

19 ‘‘$6,000’’; 

20 (C) in subparagraph (A)(iii), by striking 

21 subclause (I) and inserting the following: 

22 ‘‘(I) $20,000 minus any amount 

23 previously borrowed during any pre24 ceding academic year in such remain25 der of such program (but excluding 
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1 amounts borrowed under clause (i) or 

2 (ii) for such first and second year); 

3 or’’; 

4 (D) in subparagraph (A)(v), by striking 

5 ‘‘$8,500’’ and inserting ‘‘$10,000’’; 

6 (E) in subparagraph (B)(i), by striking 

7 ‘‘$23,000’’ and inserting ‘‘$30,000’’; and 

8 (F) in subparagraph (B)(ii)— 

9 (i) by striking ‘‘$65,500’’ and insert10 ing ‘‘$60,000’’; 

11 (ii) by striking ‘‘and (I) including’’ 

12 and inserting ‘‘but (I) excluding’’; and 

13 (iii) by striking ‘‘but (II)’’ and insert14 ing ‘‘and (II)’’. 

15 (2) INCREASES IN UNSUBSIDIZED LOAN LIM16 ITS.—Section 428H(d)(1) (20 U.S.C. 1078–8(d)(1)) 

17 is amended— 

18 (A) in subparagraph (A)(i), by striking 

19 ‘‘$4,000’’ and inserting ‘‘$5,500’’; 

20 (B) in subparagraph (B)(i), by striking 

21 ‘‘$5,000’’ and inserting ‘‘$20,000 minus any 

22 amount previously borrowed during any pre23 ceding academic year in such remainder of such 

24 program (but excluding amounts borrowed 
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1 under subparagraph (A) for such first and sec2 ond year)’’; and 

3 (C) in subparagraph (C), by striking 

4 ‘‘$10,000’’ and inserting ‘‘$25,000 minus the 

5 amount borrowed for the same academic year in 

6 a subsidized loan under section 428 or part D’’. 

7 (3) AUTHORITY TO REDUCE LOAN LIMITS.— 

8 Section 428(a)(2)(D) (20 U.S.C. 1078(a)(2)(D)) is 

9 amended by adding at the end the following new 

10 sentence: ‘‘An eligible institution may, in carrying 

11 out such subparagraphs, provide a statement which 

12 certifies the eligibility of a student for a loan 

13 amount that is less than such maximum amount, 

14 and that is less than the amount for which the stu15 dent shows financial need, if the institution has es16 tablished a lesser amount than such maximum 

17 amount as the loan limit applicable to the students 

18 attending such institution.’’. 

19 (4) CONFORMING AMENDMENTS TO FISL.— 

20 (A) ANNUAL LIMITS.—Section 

21 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is 

22 amended— 

23 (i) in clause (i)(I), by striking 

24 ‘‘$2,625’’ in subclause (I) and inserting 

25 ‘‘$4,000’’; 
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1 (ii) in clause (ii)(I), by striking 

2 ‘‘$3,500’’ in subclause (I) and inserting 

3 ‘‘$6,000’’; 

4 (iii) in clause (iii), by striking sub5 clause (I) and inserting the following: 

6 ‘‘(I) $20,000 minus the amount 

7 previously borrowed during any pre8 ceding academic year in such remain9 der of such program (and excluding 

10 amounts borrowed under clause (i) or 

11 (ii) for such first and second year); 

12 or’’; and 

13 (iv) in clause (iv), by striking 

14 ‘‘$8,500’’ and inserting ‘‘$10,000’’. 

15 (B) AGGREGATE LIMITS.—Section 

16 425(a)(2)(A) is amended— 

17 (i) in clause (i), by striking ‘‘$23,000’’ 

18 and inserting ‘‘$30,000’’; and 

19 (ii) in clause (ii)— 

20 (I) by striking ‘‘$65,500’’ and in21 serting ‘‘$60,000’’; 

22 (II) by striking ‘‘and (I) includ23 ing’’ and inserting ‘‘but (I) exclud24 ing’’; and 
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1 (III) by striking ‘‘but (II)’’ and 

2 inserting ‘‘and (II)’’. 

3 SEC. 102. ORIGINATION FEES. 

4 (a) FEDERAL FAMILY EDUCATION LOAN PRO5 GRAM.—Section 438(c) of the Higher Education Act of 

6 1965 (20 U.S.C. 1087–1(c)) is amended by adding at the 

7 end the following new paragraph: 

8 ‘‘(9) ORIGINATION FEES TERMINATED.— 

9 ‘‘(A) IN GENERAL.—Notwithstanding any 

10 other provision of this subsection except for 

11 subparagraph (B) of this paragraph, with re12 spect to any loan made, insured, or guaranteed 

13 under this part on or after July 1, 2005, other 

14 than a loan made under section 428B or 

15 428H— 

16 ‘‘(i) no eligible lender may collect di17 rectly or indirectly from any borrower any 

18 origination fee with respect to such loan; 

19 and 

20 ‘‘(ii) the Secretary shall not collect 

21 such origination fee from the lender under 

22 this subsection. 

23 ‘‘(B) UNSUBSIDIZED LOANS.—Notwith24 standing subparagraph (A), with respect to any 
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1 loan made under section 428H on or after July 

2 1, 2005— 

3 ‘‘(i) an eligible lender may collect an 

4 origination fee with respect to such loan 

5 under paragraph (2), except that such 

6 paragraph shall be applied by substituting 

7 ‘1.5 percent’ for ‘3.0 percent’; and 

8 ‘‘(ii) the Secretary shall collect any 

9 such origination fee from the lender under 

10 paragraph (1) of this subsection.’’. 

11 (b) FEDERAL DIRECT LOAN PROGRAM.— 

12 (1) AMENDMENT.—Section 455(c) (20 U.S.C. 

13 1087e(c)) is amended to read as follows: 

14 ‘‘(c) LOAN FEE.—The Secretary shall charge— 

15 ‘‘(1) the borrower of a Federal Direct Stafford 

16 Loan an origination fee of 1.0 percent of the prin17 cipal amount of the loan; 

18 ‘‘(2) the borrower of a Federal Direct Stafford 

19 Unsubsidized Stafford Loan an origination fee of 2.5 

20 percent of the principal amount of the loan; and 

21 ‘‘(3) the borrower of a Federal Direct PLUS 

22 loan an origination fee of 4.0 percent of the prin23 cipal amount of the loan.’’. 

24 (2) EFFECTIVE DATE.—The amendment made 

25 by paragraph (1) shall apply with respect to any 
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1 loan made under part D of title IV on an after July 

2 1, 2005. 

3 SEC. 103. LOAN FLEX. 

4 (a) AMENDMENT.—Section 428(b)(9)(A) (20 U.S.C. 

5 1078(b)(9)(A)) is amended by striking clauses (iii) and 

6 (iv) and inserting the following: 

7 ‘‘(iii) an income-sensitive repayment 

8 plan, with income-sensitive repayment 

9 amounts paid over an extended period of 

10 time prescribed by the Secretary, not to 

11 exceed 25 years, except that— 

12 ‘‘(I) after 10 years, if the indi13 vidual has not made adequate 

14 progress in repaying the principal of 

15 the loan (defined by the Secretary as 

16 percentage of principal) the lender 

17 may use an alternative formula, to be 

18 determined by the Secretary, by which 

19 the loan could be expected to be re20 paid in full within the remaining 15 

21 years; 

22 ‘‘(II) after 25 years, if the loan is 

23 not repaid, the Secretary shall acquire 

24 the loan from the lender and admin-
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1 ister the loan under part D of this 

2 title; and 

3 ‘‘(III) the other terms and condi4 tions of which shall be comparable to 

5 the terms and conditions applicable to 

6 income contingent repayment under 

7 section 455(d)(1)(D) and 455(e); and 

8 ‘‘(iv) an extended repayment plan, 

9 with a fixed annual or graduated repay10 ment amount paid over an extended period 

11 of time, not to exceed 25 years, except that 

12 in the first 2 years of repayment, the bor13 rower shall have the option of paying the 

14 interest as it accrues or having such inter15 est be added to principal for repayment 

16 during the remainder of the repayment pe17 riod.’’. 

18 (b) CONFORMING AMENDMENT.—Clause (i) of sec19 tion 428(b)(1)(L) (20 U.S.C. 1078(b)(1)(L)) is amended 

20 to read as follows: 

21 ‘‘(i) except as otherwise provided by a 

22 repayment plan selected by the borrower 

23 under clause (ii), (iii), or (iv) of paragraph 

24 (9)(A), during any year of any repayment 

25 period with respect to the aggregate 
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1 amount of all loans to that borrower which 

2 are insured under this part shall not, un3 less the borrower and the lender otherwise 

4 agree, be less than $600 or the balance of 

5 all such loans (together with interest there6 on), whichever amount is less; and’’. 

7 SEC. 104. CONSOLIDATION LOAN INTEREST RATES. 

8 (a) INTEREST RATE TIED TO INCOME.—Paragraph 

9 (3) of section 427A(l) (20 U.S.C. 1077a(n)) is amended 

10 to read as follows: 

11 ‘‘(3) CONSOLIDATION LOANS.— 

12 ‘‘(A) IN GENERAL.—With respect to any 

13 consolidation loan under section 428C for which 

14 the application is received by an eligible lender 

15 on or after the date of enactment of the Access 

16 and Equity in Higher Education Act, the appli17 cable rate of interest shall, during any 12- 

18 month period beginning on July 1 and ending 

19 on June 30, be determined on the preceding 

20 June 1 and be equal to— 

21 ‘‘(i) the bond equivalent rate of 91- 

22 day Treasury bills auctioned at the final 

23 auction held prior to such June 1; plus 

24 ‘‘(ii) 2.3 percent, 
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1 except that such rate shall not exceed 8.25 per2 cent, and except that for any loan under section 

3 428C that is used exclusively to consolidate 

4 loans made under section 428B, clause (ii) shall 

5 be applied by substituting ‘3.1 percent’ for ‘2.3 

6 percent’. 

7 ‘‘(B) VARIATION OF INTEREST RATE

8 BASED ON INCOME.—In the case of— 

9 ‘‘(i) a borrower who demonstrates to 

10 the lender, in accordance with regulations 

11 prescribed by the Secretary, that during 

12 such 12-month period, the sum of the bor13 rower’s monthly payments during a year 

14 will exceed— 

15 ‘‘(I) 8 percent of the borrower 

16 total income, subparagraph (A)(ii) 

17 shall be applied by substituting ‘1.0 

18 percent’ for ‘2.3 percent’; or 

19 ‘‘(II) 9 percent of the borrower’s 

20 total income, subparagraph (A)(ii) 

21 shall be applied by substituting ‘0.0 

22 percent’ for ‘2.3 percent’; and 

23 ‘‘(ii) a borrower who so demonstrates 

24 that the sum of the borrower’s monthly 

25 payments during a year will exceed— 
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1 ‘‘(I) 10 percent of the borrower’s 

2 total income, subparagraph (A) shall 

3 be applied by substituting ‘5 percent’ 

4 for ‘8.25 percent’; 

5 ‘‘(II) 11 percent of the bor6 rower’s total income, subparagraph 

7 (A) shall be applied by substituting ‘4 

8 percent’ for ‘8.25 percent’; or 

9 ‘‘(III) 12 percent of the bor10 rower’s total income, subparagraph 

11 (A) shall be applied by substituting ‘3 

12 percent’ for ‘8.25 percent’.’’. 

13 (b) CONFORMING AMENDMENT.—Section 427A(k)(4) 

14 is amended by striking ‘‘July 1, 2006,’’ and inserting ‘‘the 

15 date of enactment of the Access and Equity in Higher 

16 Education Act’’. 

17 SEC. 105. LOAN FORGIVENESS FOR PUBLIC SERVICE EM18 PLOYEES. 

19 Section 428K (20 U.S.C. 1078–11) is amended to 

20 read as follows: 

21 ‘‘SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EM22 PLOYEES. 

23 ‘‘(a) PURPOSES.—The purposes of this section are— 
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1 ‘‘(1) to reduce the burden of student debt, par2 ticularly for Americans who dedicate their careers to 

3 meeting certain urgent national needs; and 

4 ‘‘(2) to attract more excellent individuals into 

5 important public service careers. 

6 ‘‘(b) LOAN FORGIVENESS.— 

7 ‘‘(1) IN GENERAL.—The Secretary shall assume 

8 the obligation to repay, pursuant to subsection (c), 

9 a loan made under section 428, 428C, or 428H, a 

10 Federal Direct Stafford Loan or Federal Direct Un11 subsidized Stafford Loan, a Federal Direct Consoli12 dation Loan, to an individual who— 

13 ‘‘(A) has been employed full time in a 

14 qualified public service position described in 

15 paragraph (2) for at least 8 years; 

16 ‘‘(B) has been in an income contingent or 

17 income sensitive repayment plan for 15 years; 

18 and 

19 ‘‘(C) is not in default on a loan for which 

20 the borrower seeks forgiveness. 

21 ‘‘(2) QUALIFIED PUBLIC SERVICE POSITIONS.— 

22 For purposes of this section, an individual shall be 

23 treated as employed in a qualified public service po24 sition if the individual is employed in— 
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1 ‘‘(A) any Federal, State, or local govern2 ment agency; 

3 ‘‘(B) any corporation which is exempt from 

4 income taxation under section 501(c)(3) of the 

5 Internal Revenue Code of 1986; or 

6 ‘‘(C) in any profession identified by the 

7 Secretary of Education, in consultation with the 

8 Secretary of Homeland Security and the Sec9 retary of Health and Human Services, to be 

10 providing important public service to the United 

11 States. 

12 ‘‘(c) LOAN REPAYMENT.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall assume 

14 the obligation to repay the remainder of a qualifying 

15 individual’s student obligations. 

16 ‘‘(2) TREATMENT OF CONSOLIDATION LOANS.— 

17 A loan amount for a loan made under section 428C 

18 or for a Federal Direct Consolidation Loan may be 

19 a qualified loan amount for the purposes of this sub20 section only to the extent that such loan amount was 

21 used to repay a loan described in subsection (b)(1) 

22 for a borrower who meets the requirements of sub23 section (b), as determined in accordance with regula24 tions prescribed by the Secretary. 
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1 ‘‘(3) CONSTRUCTION.—Nothing in this section 

2 shall be construed to authorize the refunding of any 

3 repayment of a described in subsection (b)(1). 

4 ‘‘(4) INTEREST.—If a portion of a loan is re5 paid by the Secretary under this section for any 

6 year, the proportionate amount of interest on such 

7 loan that accrues for such year shall be repaid by 

8 the Secretary. 

9 ‘‘(5) INELIGIBILITY OF NATIONAL SERVICE

10 AWARD RECIPIENTS.—No student borrower may, for 

11 the same service, receive a benefit under both this 

12 section and subtitle D of title I of the National and 

13 Community Service Act of 1990 (42 U.S.C. 12601 

14 et seq.). 

15 ‘‘(6) INELIGIBILITY FOR DOUBLE BENEFITS.— 

16 No borrower may receive a reduction of loan obliga17 tions under both this section and section 428J or 

18 460. 

19 ‘‘(d) REPAYMENT TO ELIGIBLE LENDERS AND

20 HOLDERS.—The Secretary shall pay to each eligible lend21 er or holder for each fiscal year an amount equal to the 

22 aggregate amount of the lender’s or holder’s loans that 

23 are subject to repayment pursuant to this section for such 

24 year. 

25 ‘‘(e) APPLICATION FOR REPAYMENT.— 
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1 ‘‘(1) IN GENERAL.—Each eligible individual de2 siring loan repayment under this section shall sub3 mit a complete and accurate application to the Sec4 retary at such time, in such manner, and containing 

5 such information as the Secretary may require. 

6 ‘‘(2) CONDITIONS.—An eligible individual may 

7 apply for loan repayment under this section after 

8 completing the years of qualifying service described 

9 in subsection (c)(2). 

10 ‘‘(f) REGULATIONS.—The Secretary is authorized to 

11 prescribe such regulations as may be necessary to carry 

12 out the provisions of this section.’’. 

13 TITLE II—REAUTHORIZATION OF 

14 HBCU PROGRAMS 

15 SEC. 201. REAUTHORIZATION OF PART B OF TITLE III. 

16 Paragraph (2) of section 399(a) (20 U.S.C. 

17 1068h(a)) is amended to read as follows: 

18 ‘‘(2) PART B.—There are authorized to be ap19 propriated to carry out part B (other than section 

20 326), $335,000,000 for fiscal year 2005, and such 

21 sums as may be necessary for each of the 5 suc22 ceeding fiscal years.’’. 

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