`[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3221 Reported in House (RH)]

                                                 Union Calendar No. 129
111th CONGRESS
  1st Session
                                H. R. 3221

                          [Report No. 111-232]

   To amend the Higher Education Act of 1965, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 15, 2009

Mr. George Miller of California (for himself, Mr. Hinojosa, Mr. Bishop 
    of New York, Mr. Payne, Mr. Holt, Mr. Courtney, Ms. Hirono, Mr. 
 Andrews, Mr. Kildee, Ms. Shea-Porter, Mr. Grijalva, Mr. Loebsack, Ms. 
 Fudge, Mr. Scott of Virginia, Ms. Eshoo, Mr. Tierney, Mr. Sablan, Mr. 
Wu, Mr. Kucinich, Mr. Hare, Mr. Sestak, Ms. Woolsey, and Mrs. Davis of 
 California) introduced the following bill; which was referred to the 
                    Committee on Education and Labor

                             July 27, 2009

    Additional sponsors: Ms. Clarke, Mr. Pierluisi, Mr. Berman, Mr. 
  Blumenauer, Ms. Bordallo, Mr. Tonko, Mrs. McCarthy of New York, Ms. 
   Castor of Florida, Mr. Honda, Ms. Chu, Mr. Hall of New York, Mr. 
  Dingell, Mr. Levin, Mr. Pascrell, Mr. Wexler, Mr. Abercrombie, Mr. 
                   Sires, Mr. Towns, and Mr. Sherman

                             July 27, 2009

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on July 
                               15, 2009]





_______________________________________________________________________

                                 A BILL


 
   To amend 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.

    This Act may be cited as the ``Student Aid and Fiscal 
Responsibility Act of 2009''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.

              TITLE I--INVESTING IN STUDENTS AND FAMILIES

          Subtitle A--Increasing College Access and Completion

Sec. 101. Federal Pell Grants.
Sec. 102. College Access and Completion Innovation Fund.
Sec. 103. Investment in historically Black colleges and universities 
                            and other minority-serving institutions.
Sec. 104. Investment in cooperative education.
Sec. 105. Loan forgiveness for servicemembers activated for duty.
Sec. 106. Veterans Educational Equity Supplemental Grant Program.

         Subtitle B--Student Financial Aid Form Simplification

Sec. 121. General effective date.
Sec. 122. Treatment of assets in need analysis.
Sec. 123. Changes to total income; aid eligibility.

                     TITLE II--STUDENT LOAN REFORM

                    Subtitle A--Stafford Loan Reform

Sec. 201. Federal Family Education Loan appropriations.
Sec. 202. Scope and duration of Federal loan insurance program.
Sec. 203. Applicable interest rates.
Sec. 204. Federal payments to reduce student interest costs.
Sec. 205. Federal PLUS Loans.
Sec. 206. Federal Consolidation Loan.
Sec. 207. Unsubsidized Stafford loans for middle-income borrowers.
Sec. 208. Loan repayment for civil legal assistance attorneys.
Sec. 209. Special allowances.
Sec. 210. Revised special allowance calculation.
Sec. 211. Origination of Direct Loans at institutions located outside 
                            the United States.
Sec. 212. Agreements with institutions.
Sec. 213. Terms and conditions of loans.
Sec. 214. Contracts.
Sec. 215. Interest rates.

                    Subtitle B--Perkins Loan Reform

Sec. 221. Federal Direct Perkins Loans terms and conditions.
Sec. 222. Authorization of appropriations.
Sec. 223. Allocation of funds.
Sec. 224. Federal Direct Perkins Loan allocation.
Sec. 225. Agreements with institutions of higher education.
Sec. 226. Student loan information by eligible institutions.
Sec. 227. Terms of loans.
Sec. 228. Distribution of assets from student loan funds.
Sec. 229. Implementation of non-title IV revenue requirement.
Sec. 230. Administrative expenses.

            TITLE III--MODERNIZATION, RENOVATION, AND REPAIR

             Subtitle A--Elementary and Secondary Education

Sec. 301. Definitions.

 Chapter 1--Grants for Modernization, Renovation, or Repair of Public 
                           School Facilities

Sec. 311. Purpose.
Sec. 312. Allocation of funds.
Sec. 313. Allowable uses of funds.
Sec. 314. Priority projects.

 Chapter 2--Supplemental Grants for Louisiana, Mississippi, and Alabama

Sec. 321. Purpose.
Sec. 322. Allocation to local educational agencies.
Sec. 323. Allowable uses of funds.

                     Chapter 3--General Provisions

Sec. 331. Impermissible uses of funds.
Sec. 332. Supplement, not supplant.
Sec. 333. Prohibition regarding State aid.
Sec. 334. Maintenance of effort.
Sec. 335. Special rule on contracting.
Sec. 336. Use of American iron, steel, and manufactured goods.
Sec. 337. Labor standards.
Sec. 338. Charter schools.
Sec. 339. Green schools.
Sec. 340. Reporting.
Sec. 341. Special rules.
Sec. 342. Promotion of employment experiences.
Sec. 343. Advisory Council on Green, High-Performing Public School 
                            Facilities.
Sec. 344. Education regarding projects.
Sec. 345. Availability of funds.

                      Subtitle B--Higher Education

Sec. 351. Federal assistance for community college modernization and 
                            construction.

                TITLE IV--EARLY LEARNING CHALLENGE FUND

Sec. 401. Purpose.
Sec. 402. Programs authorized.
Sec. 403. Quality pathways grants.
Sec. 404. Development grants.
Sec. 405. Research and evaluation.
Sec. 406. Reporting requirements.
Sec. 407. Construction.
Sec. 408. Definitions.
Sec. 409. Availability of funds.

                TITLE V--AMERICAN GRADUATION INITIATIVE

Sec. 501. Authorization and appropriation.
Sec. 502. Definitions; grant priority.
Sec. 503. Grants to eligible entities for community college reform.
Sec. 504. Grants to eligible States for community college programs.
Sec. 505. National activities.

SEC. 3. REFERENCES.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment 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.).

              TITLE I--INVESTING IN STUDENTS AND FAMILIES

          Subtitle A--Increasing College Access and Completion

SEC. 101. FEDERAL PELL GRANTS.

    (a) Amount of Grants.--Section 401(b) (20 U.S.C. 1070a(b)) is 
amended--
            (1) by amending paragraph (2)(A) to read as follows:
                    ``(A) The amount of the Federal Pell Grant for a 
                student eligible under this part shall be--
                            ``(i) the maximum Federal Pell Grant, as 
                        specified in the last enacted appropriation Act 
                        applicable to that award year, plus
                            ``(ii) the amount of the increase 
                        calculated under paragraph (8)(B) for that 
                        year, less
                            ``(iii) an amount equal to the amount 
                        determined to be the expected family 
                        contribution with respect to that student for 
                        that year.''; and
            (2) by amending paragraph (8), as amended by the Higher 
        Education Opportunity Act (Public Law 110-315), to read as 
        follows:
            ``(8) Additional funds.--
                    ``(A) In general.--There are authorized to be 
                appropriated, and there are appropriated, to carry out 
                subparagraph (B) of this paragraph (in addition to any 
                other amounts appropriated to carry out this section 
                and out of any money in the Treasury not otherwise 
                appropriated) the following amounts--
                            ``(i) $2,030,000,000 for fiscal year 2008;
                            ``(ii) $2,733,000,000 for fiscal year 2009; 
                        and
                            ``(iii) such sums as may be necessary for 
                        fiscal year 2010 and each subsequent fiscal 
                        year to provide the amount of increase of the 
                        maximum Federal Pell Grant required by clauses 
                        (ii) and (iii) of subparagraph (B).
                    ``(B) Increase in federal pell grants.--The amounts 
                made available pursuant to subparagraph (A) shall be 
                used to increase the amount of the maximum Federal Pell 
                Grant for which a student shall be eligible during an 
                award year, as specified in the last enacted 
                appropriation Act applicable to that award year, by--
                            ``(i) $490 for each of the award years 
                        2008-2009 and 2009-2010;
                            ``(ii) $690 for the award year 2010-2011; 
                        and
                            ``(iii) the amount determined under 
                        subparagraph (C) for each succeeding award 
                        year.
                    ``(C) Inflation-adjusted amounts.--
                            ``(i) Award year 2011-2012.--For award year 
                        2011-2012, the amount determined under this 
                        subparagraph for purposes of subparagraph 
                        (B)(iii) shall be equal to--
                                    ``(I) $5,550 or the total maximum 
                                Federal Pell Grant for the preceding 
                                award year (as determined under clause 
                                (iv)(II)), whichever is greater, 
                                increased by a percentage equal to the 
                                annual adjustment percentage for award 
                                year 2011-2012; reduced by
                                    ``(II) $4,860 or the maximum 
                                Federal Pell Grant for which a student 
                                was eligible for the preceding award 
                                year, as specified in the last enacted 
                                appropriation Act applicable to that 
                                year, whichever is greater; and
                                    ``(III) rounded to the nearest $5.
                            ``(ii) Subsequent award years.--For award 
                        year 2012-2013 and each of the subsequent award 
                        years, the amount determined under this 
                        subparagraph for purposes of subparagraph 
                        (B)(iii) shall be equal to--
                                    ``(I) the total maximum Federal 
                                Pell Grant for the preceding award year 
                                (as determined under clause (iv)(II)), 
                                increased by a percentage equal to the 
                                annual adjustment percentage for the 
                                award year for which the amount under 
                                this subparagraph is being determined; 
                                reduced by
                                    ``(II) $4,860 or the maximum 
                                Federal Pell Grant for which a student 
                                was eligible for the preceding award 
                                year, as specified in the last enacted 
                                appropriation Act applicable to that 
                                year, whichever is greater; and
                                    ``(III) rounded to the nearest $5.
                            ``(iii) Limitation on decreases.--
                        Notwithstanding clauses (i) and (ii), if the 
                        amount determined under clause (i) or (ii) for 
                        an award year is less than the amount 
                        determined under this paragraph for the 
                        preceding award year, the amount determined 
                        under such clause for such award year shall be 
                        the amount determined under this paragraph for 
                        the preceding award year.
                            ``(iv) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) the term `annual adjustment 
                                percentage' as it applies to an award 
                                year is equal to the sum of--
                                            ``(aa) the estimated 
                                        percentage change in the 
                                        Consumer Price Index (as 
                                        determined by the Secretary, 
                                        using the definition in section 
                                        478(f)) for the most recent 
                                        calendar year ending prior to 
                                        the beginning of that award 
                                        year; and
                                            ``(bb) one percentage 
                                        point; and
                                    ``(II) the term `total maximum 
                                Federal Pell Grant' as it applies to a 
                                preceding award year is equal to the 
                                sum of--
                                            ``(aa) the maximum Federal 
                                        Pell Grant for which a student 
                                        is eligible during an award 
                                        year, as specified in the last 
                                        enacted appropriation Act 
                                        applicable to that preceding 
                                        award year; and
                                            ``(bb) the amount of the 
                                        increase in the maximum Federal 
                                        Pell Grant required by this 
                                        paragraph for that preceding 
                                        award year.
                    ``(D) Program requirements and operations otherwise 
                unaffected.--Except as provided in subparagraphs (B) 
                and (C), nothing in this paragraph shall be construed 
                to alter the requirements and operations of the Federal 
                Pell Grant Program as authorized under this section, or 
                to authorize the imposition of additional requirements 
                or operations for the determination and allocation of 
                Federal Pell Grants under this section.
                    ``(E) Availability of funds.--The amounts made 
                available by subparagraph (A) for any fiscal year shall 
                be available beginning on October 1 of that fiscal 
                year, and shall remain available through September 30 
                of the succeeding fiscal year.''.
    (b) Conforming Amendments.--Title IV (20 U.S.C. 1070 et seq.) is 
further amended--
            (1) in section 401(b)(6), as amended by the Higher 
        Education Opportunity Act (Public Law 110-315), by striking 
        ``the grant level specified in the appropriate Appropriation 
        Act for this subpart for such year'' and inserting ``the 
        Federal Pell Grant amount, determined under paragraph (2)(A), 
        for which a student is eligible during such award year'';
            (2) in section 402D(d)(1), by striking ``exceed the maximum 
        appropriated Pell Grant'' and inserting ``exceed the Federal 
        Pell Grant amount, determined under section 401(b)(2)(A), for 
        which a student is eligible'';
            (3) in section 435(a)(5)(A)(i)(I), by striking ``one-half 
        the maximum Federal Pell Grant award for which a student would 
        be eligible'' and inserting ``one-half the Federal Pell Grant 
        amount, determined under section 401(b)(2)(A), for which a 
        student would be eligible'';
            (4) in section 483(e)(3)(ii), by striking ``based on the 
        maximum Federal Pell Grant award at the time of application'' 
        and inserting ``based on the Federal Pell Grant amount, 
        determined under section 401(b)(2)(A), for which a student is 
        eligible at the time of application'';
            (5) in section 485E(b)(1)(A), by striking ``of such 
        students' potential eligibility for a maximum Federal Pell 
        Grant under subpart 1 of part A'' and inserting ``of such 
        students' potential eligibility for the Federal Pell Grant 
        amount, determined under section 401(b)(2)(A), for which the 
        student would be eligible''; and
            (6) in section 894(f)(2)(C)(ii)(I), by striking ``the 
        maximum Federal Pell Grant for each award year'' and inserting 
        ``the Federal Pell Grant amount, determined under section 
        401(b)(2)(A), for which a student may be eligible for each 
        award year''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
of this section shall take effect on July 1, 2010.

SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVATION FUND.

    (a) Header.--Part E of title VII (20 U.S.C. 1141 et seq.) is 
amended by striking the header of such part and inserting the 
following:

       ``PART E--COLLEGE ACCESS AND COMPLETION INNOVATION FUND''.

    (b) Purpose.--Part E of title VII (20 U.S.C. 1141 et seq.) is 
further amended by inserting before section 781 the following:

``SEC. 780. PURPOSES.

    ``The purposes of this part are--
            ``(1) to promote innovation in postsecondary education 
        practices and policies by institutions of higher education, 
        States, and nonprofit organizations to improve student success, 
        completion, and post-completion employment, particularly for 
        students from groups that are underrepresented in postsecondary 
        education; and
            ``(2) to assist States in developing longitudinal data 
        systems, common metrics, and reporting systems to enhance the 
        quality and availability of information about student success, 
        completion, and post-completion employment.''.
    (c) Authorization and Appropriation.--Section 781(a) (20 U.S.C. 
1141(a)) is amended to read as follows:
    ``(a) Authorization and Appropriation.--
            ``(1) In general.--There are authorized to be appropriated, 
        and there are appropriated, to carry out this part (in addition 
        to any other amounts appropriated to carry out this part and 
        out of any money in the Treasury not otherwise appropriated), 
        $600,000,000 for each of the fiscal years 2010 through 2014.
            ``(2) Allocations.--Of the amount appropriated for any 
        fiscal year under paragraph (1)--
                    ``(A) 25 percent shall be made available to carry 
                out section 781;
                    ``(B) 50 percent shall be made available to carry 
                out section 782;
                    ``(C) 23 percent shall be made available to carry 
                out section 783; and
                    ``(D) 2 percent shall be made available to carry 
                out section 784.''.
    (d) State Grants and Grants to Eligible Entities.--Part E of title 
VII (20 U.S.C. 1141 et seq.) is further amended by adding at the end 
the following:

``SEC. 782. STATE INNOVATION COMPLETION GRANTS.

    ``(a) Program Authorization.--From the amount appropriated under 
section 781(a)(2)(B) to carry out this section, the Secretary shall 
award grants to States on a competitive basis to promote student 
persistence in, and completion of, postsecondary education.
    ``(b) Federal Share; Non-Federal Share.--
            ``(1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be equal to \2/3\ of the 
        costs of the activities and services described in subsection 
        (d)(1) that are carried out under the grant.
            ``(2) Non-federal share.--The amount of the non-Federal 
        share under this section shall be equal to \1/3\ of the costs 
        of the activities and services described in subsection (d)(1). 
        The non-Federal share may be in cash or in kind, and may be 
        provided from State resources, contributions from private 
        organizations, or both.
            ``(3) Supplement, not supplant.--The Federal and non-
        Federal shares required by this paragraph shall be used to 
        supplement, and not supplant, State and private resources that 
        would otherwise be expended to carry out activities and 
        services to promote student persistence in and completion of 
        postsecondary education.
    ``(c) Application and Selection.--
            ``(1) Application requirements.--For each fiscal year for 
        which a State desires to receive a grant under this section, 
        the State agency with jurisdiction over higher education, or 
        another agency designated by the Governor or chief executive of 
        the State to administer the grant program under this section, 
        shall submit an application to the Secretary at such time, in 
        such manner, and containing such information as the Secretary 
        may require. Such application shall include--
                    ``(A) a description of the State's capacity to 
                administer the grant under this section;
                    ``(B) a description of the State's plans for using 
                the grant funds for activities described in subsection 
                (d)(1), including plans for how the State will make 
                special efforts to provide benefits to students in the 
                State who are from groups that are underrepresented in 
                postsecondary education;
                    ``(C) a description of how the State will provide 
                for the non-Federal share from State resources, private 
                contributions, or both;
                    ``(D) a description of--
                            ``(i) the administrative system that the 
                        State has in place to administer the activities 
                        and services described in subsection (d)(1); or
                            ``(ii) the plan to develop such 
                        administrative system;
                    ``(E) a description of the data system the State 
                has or will have in place to measure the performance 
                and progress toward the State's goals included in the 
                Access and Completion Plan submitted, or that will be 
                submitted, under paragraph (2)(A); and
                    ``(F) the assurances under paragraph (2).
            ``(2) State assurances.--The assurances required in 
        paragraph (1)(F) shall include an assurance of each of the 
        following:
                    ``(A) That the State will submit, not later than 
                July 1, 2011, an Access and Completion Plan to increase 
                the State's rate of persistence in and completion of 
                postsecondary education. Such plan shall include--
                            ``(i) the State's annual and long-term 
                        quantifiable goals with respect to--
                                    ``(I) the rates of postsecondary 
                                enrollment, persistence, and 
                                completion, disaggregated by income, 
                                race, ethnicity, sex, disability, and 
                                age of students;
                                    ``(II) closing gaps in enrollment, 
                                persistence, and completion rates for 
                                students from groups that are 
                                underrepresented in postsecondary 
                                education;
                                    ``(III) targeting education and 
                                training programs to address labor 
                                market needs in the State, as such 
                                needs are determined by the State, or 
                                the State in coordination with the 
                                State public employment service, the 
                                State workforce investment board, or 
                                industry or sector partnerships in the 
                                State; and
                                    ``(IV) improving coordination 
                                between two-year and four-year 
                                institutions of higher education in the 
                                State, including supporting 
                                comprehensive articulation agreements 
                                between such institutions; and
                            ``(ii) the State's plan to develop an 
                        interoperable statewide longitudinal data 
                        system that--
                                    ``(I) can be linked to other data 
                                systems, as applicable, including 
                                elementary and secondary education and 
                                workforce data systems;
                                    ``(II) will collect, maintain, 
                                disaggregate (by institution, income, 
                                race, ethnicity, sex, disability, and 
                                age of students), and analyze 
                                postsecondary education and workforce 
                                information, including--
                                            ``(aa) postsecondary 
                                        education enrollment, 
                                        persistence, and completion 
                                        information;
                                            ``(bb) post-completion 
                                        employment outcomes of students 
                                        who enrolled in postsecondary 
                                        programs and training programs 
                                        offered by eligible training 
                                        providers under the Workforce 
                                        Investment Act of 1998 (29 
                                        U.S.C. 2801 et seq.);
                                            ``(cc) postsecondary 
                                        education and employment 
                                        outcomes of students who move 
                                        out of the State; and
                                            ``(dd) postsecondary 
                                        instructional workforce 
                                        information; and
                                    ``(III) makes the information 
                                described in subclause (I) available to 
                                the general public in a manner that is 
                                transparent and user-friendly.
                    ``(B) That the State has a comprehensive planning 
                or policy formulation process with respect to 
                increasing postsecondary enrollment, persistence, and 
                completion that--
                            ``(i) encourages coordination between the 
                        State administration of grants under this 
                        section and similar State programs;
                            ``(ii) encourages State policies that are 
                        designed to improve rates of enrollment and 
                        persistence in, and completion of, 
                        postsecondary education for all categories of 
                        institutions of higher education described in 
                        section 132(d) in the State;
                            ``(iii) considers the postsecondary 
                        education needs of students from groups that 
                        are underrepresented in postsecondary 
                        education;
                            ``(iv) considers the resources of public 
                        and private institutions of higher education, 
                        organizations, and agencies within the State 
                        that are capable of providing access to 
                        postsecondary education opportunities within 
                        the State; and
                            ``(v) provides for direct, equitable, and 
                        active participation in the comprehensive 
                        planning or policy formulation process or 
                        processes, through membership on State planning 
                        commissions, State advisory councils, or other 
                        State entities established by the State and 
                        consistent with State law, by representatives 
                        of--
                                    ``(I) institutions of higher 
                                education, including at least one 
                                member from a junior or community 
                                college (as defined in section 312(f));
                                    ``(II) students;
                                    ``(III) other providers of 
                                postsecondary education services 
                                (including organizations providing 
                                access to such services);
                                    ``(IV) the general public in the 
                                State; and
                                    ``(V) postsecondary education 
                                faculty members, including at least one 
                                faculty member whose primary 
                                responsibilities are teaching and 
                                scholarship.
                    ``(C) That the State will incorporate policies and 
                practices that, through the activities funded under 
                this section, are determined to be effective in 
                improving rates of postsecondary education enrollment, 
                persistence, and completion into the future 
                postsecondary education policies and practices of the 
                State to ensure that the benefits achieved through the 
                activities funded under this section continue beyond 
                the period of the grant.
                    ``(D) That the State will participate in the 
                evaluation required under section 784.
            ``(3) Subgrants to nonprofit organizations.--A State 
        receiving a payment under this section may elect to make a 
        subgrant to one or more nonprofit organizations in the State, 
        including agencies with agreements with the Secretary under 
        subsections (b) and (c) of section 428 on the date of the 
        enactment of the Student Aid and Fiscal Responsibility Act of 
        2009, or a partnership of such organizations, to carry out 
        activities and services described in subsection (d)(1), if the 
        nonprofit organization or partnership--
                    ``(A) was in existence on the day before the date 
                of the enactment of the Student Aid and Fiscal 
                Responsibility Act of 2009; and
                    ``(B) as of such day, was participating in 
                activities and services related to promoting 
                persistence in, and completion of, postsecondary 
                education, such as the activities and services 
                described in subsection (d)(1).
            ``(4) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to States that enter into a 
        partnership with one of the following entities to carry out the 
        activities and services described in subsection (d)(1):
                    ``(A) A philanthropic organization, as such term is 
                defined in section 781(i)(1).
                    ``(B) An agency with an agreement with the 
                Secretary under subsections (b) and (c) of section 428 
                on the date of the enactment of Student Aid and Fiscal 
                Responsibility Act of 2009.
    ``(d) Uses of Funds.--
            ``(1) Authorized uses.--A State receiving a grant under 
        this section shall use the grant funds to--
                    ``(A) provide programs in such State that increase 
                persistence in, and completion of, postsecondary 
                education, which may include--
                            ``(i) assisting institutions of higher 
                        education in providing financial literacy, 
                        education, and counseling to enrolled students;
                            ``(ii) assisting students enrolled in an 
                        institution of higher education to reduce the 
                        amount of loan debt incurred by such students;
                            ``(iii) providing grants to students 
                        described in section 415A(a)(1), in accordance 
                        with the terms of that section; and
                            ``(iv) carrying out the activities 
                        described in section 415E(a); and
                    ``(B) support the development and implementation of 
                a statewide longitudinal data system, as described in 
                subsection (c)(2)(A)(ii).
            ``(2) Prohibited uses.--Funds made available under this 
        section shall not be used to promote any lender's loans.
            ``(3) Restrictions on use of funds.--A State--
                    ``(A) shall use not less than \1/3\ of the sum of 
                the Federal and non-Federal share used for paragraph 
                (1)(A) on activities that benefit students enrolled in 
                junior or community colleges (as defined in section 
                312(f)), two-year public institutions, or two-year 
                programs of instruction at four-year public 
                institutions;
                    ``(B) may use not more than 10 percent of the sum 
                of the Federal and non-Federal share under this section 
                for activities described in paragraph (1)(B); and
                    ``(C) may use not more than 6 percent of the sum of 
                the Federal and non-Federal share under this section 
                for administrative purposes relating to the grant under 
                this section.
    ``(e) Annual Report.--Each State receiving a grant under this 
section shall submit to the Secretary an annual report on--
            ``(1) the activities and services described in subsection 
        (d)(1) that are carried out with such grant;
            ``(2) the effectiveness of such activities and services in 
        increasing postsecondary persistence and completion, as 
        determined by measurable progress in achieving the State's 
        goals for persistence and completion described in the Access 
        and Completion Plan submitted by the State under subsection 
        (c)(2)(A), if such plan has been submitted; and
            ``(3) any other information or assessments the Secretary 
        may require.
    ``(f) Definitions.--In this section:
            ``(1) Industry or sector partnership.--The term `industry 
        or sector partnership' means a workforce collaborative that 
        organizes key stakeholders in a targeted industry cluster into 
        a working group that focuses on the human capital needs of a 
        targeted industry cluster and that includes, at the appropriate 
        stage of development of the partnership--
                    ``(A) representatives of multiple firms or 
                employers (including workers) in a targeted industry 
                cluster, including small- and medium-sized employers 
                when practicable;
                    ``(B) 1 or more representatives of State labor 
                organizations, central labor coalitions, or other labor 
                organizations;
                    ``(C) 1 or more representatives of local workforce 
                investment boards;
                    ``(D) 1 or more representatives of postsecondary 
                educational institutions or other training providers; 
                and
                    ``(E) 1 or more representatives of State workforce 
                agencies or other entities providing employment 
                services.
            ``(2) State public employment service.--The term `State 
        public employment service' has the meaning given such term in 
        section 502(a)(9) of the Student Aid and Fiscal Responsibility 
        Act of 2009.
            ``(3) State workforce investment board; local workforce 
        investment board.--The terms `State workforce investment board' 
        and `local workforce investment board' have the meanings given 
        such terms in section 502(a)(10) of the Student Aid and Fiscal 
        Responsibility Act of 2009.

``SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLETION NATIONAL 
              ACTIVITIES.

    ``(a) Programs Authorized.--From the amount appropriated under 
section 781(a)(2)(C) to carry out this section, the Secretary shall 
award grants, on a competitive basis, to eligible entities in 
accordance with this section to conduct innovative programs that 
advance knowledge about, and adoption of, policies and practices that 
increase the number of individuals with postsecondary degrees or 
certificates.
    ``(b) Eligible Entities.--The Secretary is authorized to award 
grants under subsection (a) to--
            ``(1) institutions of higher education;
            ``(2) States;
            ``(3) nonprofit organizations with demonstrated experience 
        in the operation of programs to increase postsecondary 
        completion;
            ``(4) philanthropic organizations (as such term is defined 
        in section 781(i)(1));
            ``(5) entities receiving a grant under chapter 1 of subpart 
        2 of part A of title IV; and
            ``(6) consortia of any of the entities described in 
        paragraphs (1) through (5).
    ``(c) Innovation Grants.--
            ``(1) Minimum award.--A grant awarded under subsection (a) 
        shall be not less than $1,000,000.
            ``(2) Grants uses.--The Secretary's authority to award 
        grants under subsection (a) includes--
                    ``(A) the authority to award to an eligible entity 
                a grant in an amount equal to all or part of the amount 
                of funds received by such entity from philanthropic 
                organizations (as such term is defined in section 
                781(i)(1)) to conduct innovative programs that advance 
                knowledge about, and adoption of, policies and 
                practices that increase the number of individuals with 
                postsecondary degrees or certificates; and
                    ``(B) the authority to award an eligible entity a 
                grant to develop 2-year programs that provide 
                supplemental grant or loan benefits to students that--
                            ``(i) are designed to improve student 
                        outcomes, including degree completion, 
                        graduation without student loan debt, and post-
                        completion employment;
                            ``(ii) are in addition to the student 
                        financial aid available under title IV of this 
                        Act; and
                            ``(iii) do not result in the reduction of 
                        the amount of that aid or any other student 
                        financial aid for which a student is otherwise 
                        eligible under Federal law.
            ``(3) Application.--To be eligible to receive a grant under 
        subsection (a), an eligible entity shall submit an application 
        at such time, in such manner, and containing such information 
        as the Secretary shall require.
            ``(4) Priorities.--In awarding grants under subsection (a), 
        the Secretary shall give priority to applications that--
                    ``(A) are from an eligible entity with demonstrated 
                experience in serving students from groups that are 
                underrepresented in postsecondary education, including 
                institutions of higher education that are eligible for 
                assistance under title III or V, or are from a 
                consortium that includes an eligible entity with such 
                experience;
                    ``(B) are from an eligible entity that is a public 
                institution of higher education that does not 
                predominantly provide an educational program for which 
                it awards a bachelor's degree (or an equivalent 
                degree), or from a consortium that includes at least 
                one such institution;
                    ``(C) include activities to increase degree or 
                certificate completion in the fields of science, 
                technology, engineering, and mathematics, including 
                preparation for, or entry into, postbaccaluareate 
                study, especially for women and other groups of 
                students who are underrepresented in such fields;
                    ``(D) are from an eligible entity that is a 
                philanthropic organization with the primary purpose of 
                providing scholarships and support services to students 
                from groups that are underrepresented in postsecondary 
                education, or are from a consortium that includes such 
                an organization; or
                    ``(E) are from an eligible entity that encourages 
                partnerships between institutions of higher education 
                with high degree-completion rates and institutions of 
                higher education with low degree-completion rates from 
                the same category of institutions described in section 
                132(d) to facilitate the sharing of information 
                relating to, and the implementation of, best practices 
                for increasing postsecondary completion.
            ``(5) Technical assistance.--The Secretary may reserve up 
        to $5,000,000 per year to award grants and contracts to provide 
        technical assistance to eligible entities receiving a grant 
        under subsection (a), including technical assistance on the 
        evaluation conducted in accordance with section 784 and 
        establishing networks of eligible entities receiving grants 
        under such subsection.
    ``(d) Reports.--
            ``(1) Annual reports by entities.--Each eligible entity 
        receiving a grant under subsection (a) shall submit to the 
        Secretary an annual report on--
                    ``(A) the effectiveness of the program carried out 
                with such grant in increasing postsecondary completion, 
                as determined by measurable progress in achieving the 
                goals of the program, as described in the application 
                for such grant; and
                    ``(B) any other information or assessments the 
                Secretary may require.
            ``(2) Annual report to congress.--The Secretary shall 
        submit to the authorizing committees an annual report on grants 
        awarded under subsection (a), including--
                    ``(A) the amount awarded to each eligible entity 
                receiving a grant under such subsection; and
                    ``(B) a description of the activities conducted by 
                each such eligible entity.

``SEC. 784. EVALUATION.

    ``From the amount appropriated under section 781(a)(2)(D), the 
Director of the Institute of Education Sciences shall evaluate the 
programs funded under this part. Not later than January 30, 2016, the 
Director shall issue a final report on such evaluation to the 
authorizing committees and the Secretary, and shall make such report 
available to the public.

``SEC. 785. VETERANS RESOURCE OFFICER GRANTS.

    ``(a) Program Authorized.--The Secretary shall award grants, on a 
competitive basis, to eligible institutions of higher education to hire 
a Veterans Resource Officer to increase the college completion rates 
for veterans enrolled at such institutions.
    ``(b) Definitions.--In this section:
            ``(1) Eligible institution of higher education.--The term 
        `eligible institution of higher education' means an institution 
        of higher education that has an enrollment of at least 100 
        full-time equivalent students who are veterans.
            ``(2) Full-time equivalent students.--The term `full-time 
        equivalent students' has the meaning given such term in section 
        312(e).
            ``(3) Veteran.--The term `veteran' has the meaning give 
        such term in section 480(c).
    ``(c) Application.--To be eligible to receive a grant under this 
section, an eligible institution of higher education shall submit an 
application at such time, in such manner, and containing such 
information as the Secretary shall require.
    ``(d) Uses of Funds.--
            ``(1) In general.--An eligible institution of higher 
        education receiving a grant under this section shall use such 
        grant to hire 1 or 2 Veterans Resource Officers (in the case of 
        an institution that has an enrollment of at least 200 full-time 
        equivalent students who are veterans) to serve in the office of 
        campus programs, or a similar office, at such institution and 
        carry out the activities described in paragraph (2).
            ``(2) Activities.--A Veterans Resource Officer shall carry 
        out activities at an eligible institution of higher education 
        to help increase the completion rates for veterans enrolled at 
        such institution, which shall include the following activities:
                    ``(A) Serving as a link between student veterans 
                and the staff of the institution.
                    ``(B) Serving as a link between student veterans 
                and local facilities of the Department of Veterans 
                Affairs.
                    ``(C) Organizing and advising student veterans 
                organization.
                    ``(D) Organizing veterans oriented group functions 
                and events.
                    ``(E) Maintaining newsletters and listserves to 
                distribute news and information to all student 
                veterans.
                    ``(F) Organizing new student veterans campus 
                orientation.
                    ``(G) Ensuring that the Department of Veterans 
                Affairs certifying official at such institution is 
                properly trained.
            ``(3) Priority.--To the extent practicable, each 
        institution described in paragraph (1) shall give priority to 
        hiring a veteran to serve as a Veterans Resource Officer.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2010 and each succeeding fiscal year.''.

SEC. 103. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES 
              AND OTHER MINORITY-SERVING INSTITUTIONS.

    Section 371 (20 U.S.C. 1067q) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``section 502'' 
                and inserting ``section 502(a)'';
                    (B) in paragraph (3), by striking ``section 316'' 
                and inserting ``section 316(b)'';
                    (C) in paragraph (5), by striking ``in subsection 
                (c)'' and inserting ``in section 318(b)'';
                    (D) in paragraph (6), by striking ``in subsection 
                (c)'' and inserting ``in section 320(b)''; and
                    (E) in paragraph (7), by striking ``in subsection 
                (c)'' and inserting ``in section 319(b)'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(A), by striking 
                ``$255,000,000'' and all that follows and inserting 
                ``$255,000,000 for each of the fiscal years 2008 
                through 2019.''; and
                    (B) by amending paragraph (2)(B) to read as 
                follows:
                    ``(B) Stem and articulation programs.--From the 
                amount made available for allocation under this 
                subparagraph by subparagraph (A)(i) for any fiscal 
                year--
                            ``(i) 90 percent shall be available for 
                        Hispanic-serving institutions for activities 
                        described in sections 503 and 513, with a 
                        priority given to applications that propose--
                                    ``(I) to increase the number of 
                                Hispanic and other low-income students 
                                attaining degrees in the fields of 
                                science, technology, engineering, or 
                                mathematics; and
                                    ``(II) to develop model transfer 
                                and articulation agreements between 2-
                                year Hispanic-serving institutions and 
                                4-year institutions in such fields; and
                            ``(ii) 10 percent shall be available for 
                        grants under section 355.'';
                    (C) in paragraph (2)(C)(ii), by striking ``and 
                shall be available for a competitive'' and all that 
                follows and inserting ``and shall be made available as 
                grants under section 318 and allotted among such 
                institutions under section 318(e), treating such 
                amount, plus the amount appropriated for such fiscal 
                year in a regular or supplemental appropriation Act to 
                carry out section 318, as the amount appropriated to 
                carry out section 318 for purposes of allotments under 
                section 318(e)''; and
                    (D) in paragraph (2)(D)--
                            (i) in clause (iii), by striking ``for 
                        activities described in section 311(c)'' and 
                        inserting ``and shall be made available as 
                        grants under section 320, treating such 
                        $5,000,000 as part of the amount appropriated 
                        for such fiscal year in a regular or 
                        supplemental appropriation Act to carry out 
                        such section and using such $5,000,000 for 
                        purposes described in subsection (c) of such 
                        section''; and
                            (ii) in clause (iv), by striking 
                        ``described in subsection (a)(7)--'' and all 
                        that follows and inserting ``and shall be made 
                        available as grants under section 319, treating 
                        such $5,000,000 as part of the amount 
                        appropriated for such fiscal year in a regular 
                        or supplemental appropriation Act to carry out 
                        such section and using such $5,000,000 for 
                        purposes described in subsection (c) of such 
                        section''; and
            (3) by striking subsection (c).

SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION.

    There are authorized to be appropriated, and there are 
appropriated, to carry out part N of title VIII of the Higher Education 
Act of 1965 (20 U.S.C. 1161n) (in addition to any other amounts 
appropriated to carry out such part and out of any money in the 
Treasury not otherwise appropriated), $10,000,000 for fiscal year 2010.

SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS ACTIVATED FOR DUTY.

    (a) In General.--Section 484B(b)(2) (20 U.S.C. 1091b(b)(2)) is 
amended by adding at the end the following:
                    ``(F) Tuition relief for students called to 
                military service.--
                            ``(i) Waiver of repayment by students 
                        called to military service.--In addition to the 
                        waivers authorized by subparagraphs (D) and 
                        (E), the Secretary shall waive the amounts that 
                        students are required to return under this 
                        section if the withdrawals on which the returns 
                        are based are withdrawals necessitated by 
                        reason of service in the uniformed services.
                            ``(ii) Loan forgiveness authorized.--
                        Whenever a student's withdrawal from an 
                        institution of higher education is necessitated 
                        by reason of service in the uniformed services, 
                        the Secretary shall, with respect to the 
                        payment period or period of enrollment for 
                        which such student did not receive academic 
                        credit as a result of such withdrawal, carry 
                        out a program--
                                    ``(I) through the holder of the 
                                loan, to assume the obligation to 
                                repay--
                                            ``(aa) the outstanding 
                                        principal and accrued interest 
                                        on any loan assistance awarded 
                                        to the student under part B 
                                        (including to a parent on 
                                        behalf of the student under 
                                        section 428B) for such payment 
                                        period or period of enrollment; 
                                        minus
                                            ``(bb) any amount of such 
                                        loan assistance returned by the 
                                        institution in accordance with 
                                        paragraph (1) of this 
                                        subsection for such payment 
                                        period or period of enrollment; 
                                        and
                                    ``(II) to cancel--
                                            ``(aa) the outstanding 
                                        principal and accrued interest 
                                        on the loan assistance awarded 
                                        to the student under part D or 
                                        E (including a Federal Direct 
                                        PLUS loan awarded to a parent 
                                        on behalf of the student) for 
                                        such payment period or period 
                                        of enrollment; minus
                                            ``(bb) any amount of such 
                                        loan assistance returned by the 
                                        institution in accordance with 
                                        paragraph (1) of this 
                                        subsection for such payment 
                                        period or period of enrollment.
                            ``(iii) Reimbursement for cancellation of 
                        perkins loans.--The Secretary shall pay to each 
                        institution for each fiscal year an amount 
                        equal to the aggregate of the amounts of 
                        Federal Perkins loans in such institutions's 
                        student loan fund which are cancelled pursuant 
                        to clause (iii)(II) for such fiscal year, minus 
                        an amount equal to the aggregate of the amounts 
                        of any such loans so canceled which were made 
                        from Federal capital contributions to its 
                        student loan fund provided by the Secretary 
                        under section 468. None of the funds 
                        appropriated pursuant to section 461(b) shall 
                        be available for payments pursuant to this 
                        paragraph. To the extent feasible, the 
                        Secretary shall pay the amounts for which any 
                        institution qualifies under this paragraph not 
                        later than 3 months after the institution files 
                        an institutional application for campus-based 
                        funds.
                            ``(iv) Loan eligibility and limits for 
                        students.--Any amounts that are returned by an 
                        institution in accordance with paragraph (1), 
                        or forgiven or waived by the Secretary under 
                        this subparagraph, with respect to a payment 
                        period or period of enrollment for which a 
                        student did not receive academic credit as a 
                        result of withdrawal necessitated by reason of 
                        service in the uniformed services, shall not be 
                        included in the calculation of the student's 
                        annual or aggregate loan limits for assistance 
                        under this title, or otherwise affect the 
                        student's eligibility for grants or loans under 
                        this title.
                            ``(v) Definition.--In this subparagraph, 
                        the term `service in the uniformed services' 
                        has the meaning given such term in section 
                        484C(a).''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect for periods of service in the uniformed services 
        beginning after the date of the enactment of this Act.
            (2) Definition.--In this paragraph, the term ``period of 
        service in the uniformed services'' means the period beginning 
        30 days prior to the date a student is required to report to 
        service in the uniformed services (as defined in section 
        484C(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1091c(a)) and ending when such student returns from such 
        service.

SEC. 106. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

    (a) Veterans Educational Equity Supplemental Grant Program.--
Subpart 1 of part A of title IV (20 U.S.C. 1070a et seq.) is amended by 
adding at the end the following:

``SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

    ``(a) Veterans Educational Equity Supplemental Grants Authorized.--
The Secretary shall award a grant to each eligible student, in an 
amount determined in accordance with subsection (c), to assist such 
student with paying the cost of tuition incurred by the student for a 
program of education at an institution of higher education.
    ``(b) Definitions.--In this section--
            ``(1) Eligible student.--The term `eligible student' means 
        a student who--
                    ``(A) is a covered individual, as such term is 
                defined in section 3311(b) of title 38, United States 
                Code;
                    ``(B) is enrolled at an institution of higher 
                education that--
                            ``(i) is not a public institution of higher 
                        education; and
                            ``(ii) is located in a State with a zero, 
                        or very low, maximum tuition charge per credit 
                        hour compared to the maximum tuition charge per 
                        credit hour in all other States, as determined 
                        by the Secretary of Veterans Affairs (based on 
                        the determinations of maximum tuition charged 
                        per credit hour in each State for the purposes 
                        of chapter 33 of title 38, United States Code); 
                        and
                    ``(C) is eligible for educational assistance for an 
                academic year, and will receive an amount of such 
                assistance for such year for fees charged the 
                individual that is less than the maximum amount of such 
                assistance available for fees charged for such year in 
                such State.
            ``(2) Educational assistance.--The term `educational 
        assistance' means the amount of educational assistance from the 
        Secretary of Veterans Affairs an eligible student receives or 
        will receive under section 3313(c)(1)(A) of title 38, United 
        States Code, or a similar amount of such assistance under 
        paragraphs (2) through (7) of such section 3313(c).
    ``(c) Grant Amount.--A grant to an eligible student under this 
section be equal to an amount that is--
            ``(1) the maximum amount of educational assistance for fees 
        charged that the eligible student would receive, in accordance 
        with section 3313(c) of title 38, United States Code, if such 
        student attended the public institution of higher education in 
        the State in which the eligible student is enrolled that has 
        the highest fees charged to an individual for a year in such 
        State (as determined by the Secretary of Veterans Affairs for 
        the purposes of chapter 33 of such title 38), less
            ``(2) the educational assistance the eligible student will 
        receive, in accordance with such section, for fees charged to 
        the student for such year at the institution of higher 
        education at which the student is enrolled.
    ``(d) Uses of Funds.--An eligible student who receives a grant 
under this section shall use such grant to pay tuition incurred by the 
student for a program of education at an institution of higher 
education.
    ``(e) Notification.--The Secretary, in coordination with Secretary 
of Veterans Affairs, shall establish a system of notification to ensure 
the timely delivery to each eligible student of--
            ``(1) educational assistance received by the student; and
            ``(2) grants awarded to the student under this section.
    ``(f) Authorization and Appropriation.--There are authorized to be 
appropriated, and there are appropriated, such sums as may be necessary 
to carry out this section (in addition to any other amounts 
appropriated to carry out this section and out of any money in the 
Treasury not otherwise appropriated).''.
    (b) Conforming Amendment.--The header for subpart 1 of part A of 
title IV (20 U.S.C. 1070a et seq.) is amended by inserting ``; Veterans 
Educational Equity Supplemental Grants'' after ``Pell Grants''.

         Subtitle B--Student Financial Aid Form Simplification

SEC. 121. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this subtitle, amendments made by 
this subtitle shall be effective with respect to determinations of need 
for assistance under title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) for award years beginning on or after July 1, 
2011.

SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS.

    (a) Amount of Need.--Section 471 (20 U.S.C. 1087kk) is amended--
            (1) by striking ``Except'' and inserting the following:
    ``(a) In General.--Except'';
            (2) by inserting ``and subject to subsection (b)'' after 
        ``therein''; and
            (3) by adding at the end the following:
    ``(b) Asset Cap for Need-based Aid.--Notwithstanding any other 
provision of this title, a student shall not be eligible to receive a 
Federal Pell Grant, a Federal Direct Stafford Loan, or work assistance 
under this title if--
            ``(1) in the case of a dependent student, the combined net 
        assets of the student and the student's parents are equal to an 
        amount greater than $150,000 (or a successor amount prescribed 
        by the Secretary under section 478(c)); or
            ``(2) in the case of an independent student, the net assets 
        of the student (and the student's spouse, if applicable) are 
        equal to an amount greater than $150,000 (or a successor amount 
        prescribed by the Secretary under section 478(c)).''.
    (b) Data Elements.--Section 474(b) (20 U.S.C. 1087nn(b)) is 
amended--
            (1) by striking paragraph (4); and
            (2) by redesignating paragraphs (5), (6), and (7) as 
        paragraphs (4), (5), and (6), respectively.
    (c) Dependent Students.--Section 475 (20 U.S.C. 1087oo) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``adjusted''; and
                            (ii) by inserting ``and'' after the 
                        semicolon;
                    (B) in paragraph (2), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (3);
            (2) in subsection (b)--
                    (A) in the header, by striking ``Adjusted'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``adjusted'';
                    (C) by striking paragraph (1);
                    (D) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively;
                    (E) in paragraph (1) (as redesignated by 
                subparagraph (D) of this paragraph), by striking 
                ``adjusted''; and
                    (F) in paragraph (2) (as redesignated by 
                subparagraph (D) of this paragraph), by striking 
                ``paragraph (2)'' and inserting ``paragraph (1)'';
            (3) by repealing subsection (d);
            (4) in subsection (e)--
                    (A) by striking ``The adjusted available'' and 
                inserting ``The available'';
                    (B) by striking ``to as `AAI')'' and inserting ``to 
                as `AI')'';
                    (C) by striking ``From Adjusted Available Income 
                (AAI)'' and inserting ``From Available Income (AI)''; 
                and
                    (D) in the table--
                            (i) by striking ``If AAI'' and inserting 
                        ``If AI''; and
                            (ii) by striking ``of AAI'' each place it 
                        appears and inserting ``of AI'';
            (5) in subsection (f)--
                    (A) by striking ``and assets'' each place it 
                appears;
                    (B) in paragraph (2)(B), by striking ``or assets''; 
                and
                    (C) in paragraph (3)--
                            (i) by striking ``are taken into'' and 
                        inserting ``is taken into''; and
                            (ii) by striking ``adjusted'';
            (6) in subsection (g)(6), by striking ``exceeds the sum 
        of'' and all that follows and inserting ``exceeds the parents' 
        total income (as defined in section 480)'';
            (7) by repealing subsection (h); and
            (8) in subsection (i), by striking ``adjusted'' each place 
        it appears.
    (d) Family Contribution for Independent Students Without Dependents 
Other Than a Spouse.--Section 476 (20 U.S.C. 1087pp) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1);
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively;
                    (C) in paragraph (1) (as redesignated by 
                subparagraph (B)), by striking ``the sum resulting 
                under paragraph (1)'' and inserting ``the family's 
                contribution from available income (determined in 
                accordance with subsection (b))''; and
                    (D) in paragraph (2)(A) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (2)'' and 
                inserting ``paragraph (1)'';
            (2) by repealing subsection (c); and
            (3) in subsection (d)--
                    (A) by striking ``and assets''; and
                    (B) by striking ``or assets''.
    (e) Family Contribution for Independent Students With Dependents 
Other Than a Spouse.--Section 477 (20 U.S.C. 1087qq) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1);
                    (B) by redesignating paragraphs (2), (3), and (4) 
                as paragraphs (1), (2), and (3), respectively;
                    (C) in paragraph (1) (as redesignated by 
                subparagraph (B)), by striking ``such adjusted 
                available income'' and inserting ``the family's 
                available income (determined in accordance with 
                subsection (b))'';
                    (D) in paragraph (2) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (2)'' and 
                inserting ``paragraph (1)''; and
                    (E) in paragraph (3)(A) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (3)'' and 
                inserting ``paragraph (2)'';
            (2) by repealing subsection (c); and
            (3) in subsection (d)--
                    (A) by striking ``The adjusted available'' and 
                inserting ``The available'';
                    (B) by striking ``to as `AAI')'' and inserting ``to 
                as `AI')'';
                    (C) by striking ``From Adjusted Available Income 
                (AAI)'' and inserting ``From Available Income (AI)''; 
                and
                    (D) in the table--
                            (i) by striking ``If AAI'' and inserting 
                        ``If AI''; and
                            (ii) by striking ``of AAI'' each place it 
                        appears and inserting ``of AI''; and
                    (E) in subsection (e)--
                            (i) by striking ``and assets''; and
                            (ii) by striking ``or assets''.
    (f) Regulations; Updated Tables.--Section 478 (20 U.S.C. 1087rr) is 
amended--
            (1) in subsection (a), by inserting ``or amounts, as the 
        case may be,'' after ``tables'' each place the term appears;
            (2) by amending subsection (c) to read as follows:
    ``(c) Asset Cap for Need-based Aid.--For each award year after 
award year 2011-2012, the Secretary shall publish in the Federal 
Register a revised net asset cap for the purposes of section 471(b). 
Such revised cap shall be determined by increasing the dollar amount in 
such section by a percentage equal to the estimated percentage change 
in the Consumer Price Index (as determined by the Secretary) between 
December 2010 and the December preceding the beginning of such award 
year, and rounding the result to the nearest $5.'';
            (3) by repealing subsection (d); and
            (4) in subsection (e), by striking ``adjusted'' both places 
        it appears.

SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY.

    (a) Definition of Untaxed Income and Benefits.--Section 480(b)(1) 
(20 U.S.C. 1087vv(b)(1)), as amended by the Higher Education 
Opportunity Act (Public Law 110-315), is amended--
            (1) by striking subparagraphs (A), (B), (C), (E), (F), and 
        (I);
            (2) by redesignating subparagraphs (D), (G), and (H) as 
        subparagraphs (A), (B), and (C), respectively;
            (3) in subparagraph (B) (as redesignated by paragraph (2)), 
        by inserting ``and'' after the semicolon; and
            (4) in subparagraph (C) (as redesignated by paragraph (2)), 
        by striking ``; and'' and inserting a period.
    (b) Definition of Assets.--Section 480(f)(2) (20 U.S.C. 
1087vv(f)(2)) is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(D) an employee pension benefit plan (as defined 
                in section 3(2) of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1002(2))).''.
    (c) Financial Administrator Discretion.--Section 479A(b) (20 U.S.C. 
1087tt) is amended in the subsection heading, by striking ``to 
Assets''.
    (d) Suspension of Eligibility for Drug-related Offenses.--Section 
484(r)(1) (20 U.S.C. 1091(r)(1)) is amended to read as follows:
            ``(1) In general.--A student who is convicted of any 
        offense under any Federal or State law involving the sale of a 
        controlled substance for conduct that occurred during a period 
        of enrollment for which the student was receiving any grant, 
        loan, or work assistance under this title shall not be eligible 
        to receive any grant, loan, or work assistance under this title 
        from the date of that conviction for the period of time 
        specified in the following subparagraphs:
                    ``(A) For a first offense, the period of 
                ineligibility shall be 2 years.
                    ``(B) For a second offense, the period of 
                ineligibility shall be indefinite.''.

                     TITLE II--STUDENT LOAN REFORM

                    Subtitle A--Stafford Loan Reform

SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS.

    Section 421 (20 U.S.C. 1071) is amended--
            (1) in subsection (b), in the matter following paragraph 
        (6), by inserting ``, except that no sums may be expended after 
        June 30, 2010, with respect to loans under this part for which 
        the first disbursement would be made after such date'' after 
        ``expended''; and
            (2) by adding at the end the following new subsection:
    ``(d) Termination of Authority To Make or Insure New Loans.--
Notwithstanding paragraphs (1) through (6) of subsection (b) or any 
other provision of law--
            ``(1) no new loans (including consolidation loans) may be 
        made or insured under this part after June 30, 2010; and
            ``(2) no funds are authorized to be appropriated, or may be 
        expended, under this Act or any other Act to make or insure 
        loans under this part (including consolidation loans) for which 
        the first disbursement would be made after June 30, 2010,
except as expressly authorized by an Act of Congress enacted after the 
date of enactment of Student Aid and Fiscal Responsibility Act of 
2009.''.

SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.

    Section 424(a) (20 U.S.C. 1074(a)) is amended by striking 
``September 30, 1976,'' and all that follows and inserting ``September 
30, 1976, for each of the succeeding fiscal years ending prior to 
October 1, 2009, and for the period from October 1, 2009, to June 30, 
2010, for loans first disbursed on or before June 30, 2010.''.

SEC. 203. APPLICABLE INTEREST RATES.

    Section 427A(l) (20 U.S.C. 1077a(l)) is amended--
            (1) in paragraph (1), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (2) in paragraph (2), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (3) in paragraph (3), by inserting ``and that was disbursed 
        before July 1, 2010,'' after ``July 1, 2006,''; and
            (4) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``July 1, 2012'' and inserting ``July 1, 
                2010''; and
                    (B) by repealing subparagraphs (D) and (E).

SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

    (a) Higher Education Act of 1965.--Section 428 (20 U.S.C. 1078) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting ``for which the first 
                disbursement is made before July 1, 2010, and'' after 
                ``eligible institution''; and
                    (B) in paragraph (5), by striking ``September 30, 
                2014,'' and all that follows through the period and 
                inserting ``June 30, 2010.'';
            (2) in subsection (b)(1)--
                    (A) in subparagraph (G)(ii), by inserting ``and 
                before July 1, 2010,'' after ``July 1, 2006,''; and
                    (B) in subparagraph (H)(ii), by inserting ``and 
                that are first disbursed before July 1, 2010,'' after 
                ``July 1, 2006,'';
            (3) in subsection (f)(1)(A)(ii)--
                    (A) by striking ``during fiscal years beginning''; 
                and
                    (B) by inserting ``and first disbursed before July 
                1, 2010,'' after ``October 1, 2003,''; and
            (4) in subsection (j)(1), by inserting ``, before July 1, 
        2010,'' after ``section 435(d)(1)(D) of this Act shall''.
    (b) College Cost Reduction and Access Act.--Section 303 of the 
College Cost Reduction and Access Act (Public Law 110-84) is repealed.

SEC. 205. FEDERAL PLUS LOANS.

    Section 428B(a)(1) (20 U.S.C. 1078-2(a)(1)) is amended by striking 
``A graduate'' and inserting ``Prior to July 1, 2010, a graduate''.

SEC. 206. FEDERAL CONSOLIDATION LOAN.

    (a) Amendments.--Section 428C (20 U.S.C. 1078-3) is amended--
            (1) in subsection (a)--
                    (A) by amending paragraph (3)(B)(i)(V) to read as 
                follows:
                            ``(V) an individual who has a consolidation 
                        loan under this section and does not have a 
                        consolidation loan under section 455(g) may 
                        obtain a subsequent consolidation loan under 
                        section 455(g).''; and
                    (B) in paragraph (4)(A), by inserting ``, and first 
                disbursed before July 1, 2010'' after ``under this 
                part'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(E), by inserting before the 
                semicolon ``, and before July 1, 2010''; and
                    (B) in paragraph (5), by striking ``In the event 
                that'' and inserting ``If, before July 1, 2010,'';
            (3) in subsection (c)(1)--
                    (A) in subparagraph (A)(ii), by inserting ``and 
                that is disbursed before July 1, 2010,'' after 
                ``2006,''; and
                    (B) in subparagraph (C), by inserting ``and first 
                disbursed before July 1, 2010,'' after ``1994,''; and
            (4) in subsection (e), by striking ``September 30, 2014.'' 
        and inserting ``June 30, 2010. No loan may be made under this 
        section for which the first disbursement would be on or after 
        July 1, 2010.''.
    (b) Effective Date.--The amendments made by subsection (a)(1)(A) 
shall be effective at the close of June 30, 2010.

SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.

    Section 428H (20 U.S.C. 1078-8) is amended--
            (1) in subsection (a), by inserting ``that are first 
        disbursed before July 1, 2010,'' after ``under this part'';
            (2) in subsection (b)--
                    (A) by striking ``Any student'' and inserting 
                ``Prior to July 1, 2010, any student''; and
                    (B) by inserting ``for which the first disbursement 
                is made before such date'' after ``unsubsidized Federal 
                Stafford Loan''; and
            (3) in subsection (h), by inserting ``and that are first 
        disbursed before July 1, 2010,'' after ``July 1, 2006,''.

SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.

    Section 428L(b)(2)(A) (20 U.S.C. 1078-12(b)(2)(A)) is amended--
            (1) by amending clause (i) to read as follows:
                            ``(i) subject to clause (ii)--
                                    ``(I) a loan made, insured, or 
                                guaranteed under this part, and that is 
                                first disbursed before July 1, 2010; or
                                    ``(II) a loan made under part D or 
                                part E; and''; and
            (2) in clause (ii)--
                    (A) by striking ``428C or 455(g)'' and inserting 
                ``428C, that is disbursed before July 1, 2010, or 
                section 455(g)''; and
                    (B) in subclause (II), by inserting ``for which the 
                first disbursement is made before July 1, 2010,'' after 
                ``or 428H''.

SEC. 209. SPECIAL ALLOWANCES.

    Section 438 (20 U.S.C. 1087-1) is amended--
            (1) in subsection (b)(2)(I)--
                    (A) in the header, by inserting ``, and before july 
                1, 2010'' after ``2000'';
                    (B) in clause (i), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (C) in clause (ii)(II), by inserting ``and before 
                July 1, 2010,'' after ``2006,'';
                    (D) in clause (iii), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (E) in clause (iv), by inserting ``and that is 
                disbursed before July 1, 2010,'' after ``2000,'';
                    (F) in clause (v)(I), by inserting ``and before 
                July 1, 2010,'' after ``2006,''; and
                    (G) in clause (vi)--
                            (i) in the header, by inserting ``, and 
                        before july 1, 2010'' after ``2007''; and
                            (ii) in the matter preceding subclause (I), 
                        by inserting ``and before July 1, 2010,'' after 
                        ``2007,'';
            (2) in subsection (c)--
                    (A) in paragraph (2)(B)--
                            (i) in clause (iii), by inserting ``and'' 
                        after the semicolon;
                            (ii) in clause (iv), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (v); and
                    (B) in paragraph (6), by inserting ``and first 
                disbursed before July 1, 2010,'' after ``1992,''; and
            (3) in subsection (d)(2)(B), by inserting ``, and before 
        July 1, 2010'' after ``2007''.

SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION.

    (a) Revised Calculation Rule.--Section 438(b)(2)(I) of the Higher 
Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(I)) is amended by adding 
at the end the following new clause:
                            ``(vii) Revised calculation rule to reflect 
                        financial market conditions.--
                                    ``(I) Calculation based on libor.--
                                For the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, in computing the 
                                special allowance paid pursuant to this 
                                subsection with respect to loans 
                                described in subclause (II), clause 
                                (i)(I) of this subparagraph shall be 
                                applied by substituting `of the 1-month 
                                London Inter Bank Offered Rate (LIBOR) 
                                for United States dollars in effect for 
                                each of the days in such quarter as 
                                compiled and released by the British 
                                Bankers Association' for `of the quotes 
                                of the 3-month commercial paper 
                                (financial) rates in effect for each of 
                                the days in such quarter as reported by 
                                the Federal Reserve in Publication H-15 
                                (or its successor) for such 3-month 
                                period'.
                                    ``(II) Loans eligible for libor-
                                based calculation.--The special 
                                allowance paid pursuant to this 
                                subsection shall be calculated as 
                                described in subclause (I) with respect 
                                to special allowance payments for the 
                                3-month period ending December 31, 
                                2009, and each succeeding 3-month 
                                period, on loans for which the first 
                                disbursement is made--
                                            ``(aa) on or after the date 
                                        of enactment of the Student Aid 
                                        and Fiscal Responsibility Act 
                                        of 2009, and before July 1, 
                                        2010; and
                                            ``(bb) on or after January 
                                        1, 2000, and before the date of 
                                        enactment of the Student Aid 
                                        and Fiscal Responsibility Act 
                                        of 2009, if, not later than the 
                                        last day of the second full 
                                        fiscal quarter after the date 
                                        of enactment of such Act, the 
                                        holder of the loan 
                                        affirmatively and permanently 
                                        waives all contractual, 
                                        statutory or other legal rights 
                                        to a special allowance paid 
                                        pursuant to this subsection 
                                        that is calculated using the 
                                        formula in effect at the time 
                                        the loans were first disbursed.
                                    ``(III) Terms of waiver.--A waiver 
                                pursuant to subclause (II)(bb) shall--
                                            ``(aa) be applicable to all 
                                        loans described in such 
                                        subclause that are held under 
                                        any lender identification 
                                        number associated with the 
                                        holder (pursuant to section 
                                        487B); and
                                            ``(bb) apply with respect 
                                        to all future calculations of 
                                        the special allowance on loans 
                                        described in such subclause 
                                        that are held on the date of 
                                        such waiver or that are 
                                        acquired by the holder after 
                                        such date.
                                    ``(IV) Participant's yield.--For 
                                the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, the Secretary's 
                                participant yield in any loan for which 
                                the first disbursement is made on or 
                                after January 1, 2000, and before 
                                October 1, 2009, and that is held by a 
                                lender that has sold any participation 
                                interest in such loan to the Secretary 
                                shall be determined by using the LIBOR-
                                based rate described in subclause (I) 
                                as the substitute rate (for the 
                                commercial paper rate) referred to in 
                                the participation agreement between the 
                                Secretary and such lender.'';
    (b) Conforming Amendment.--Section 438(b)(2)(I) (20 U.S.C. 1087-
1(b)(2)(I)) is further amended--
            (1) in clause (i)(II), by striking ``such average bond 
        equivalent rate'' and inserting ``the rate determined under 
        subclause (I)''; and
            (2) in clause (v)(III) by striking ``(iv), and (vi)'' and 
        inserting ``(iv), (vi), and (vii)''.

SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS LOCATED OUTSIDE 
              THE UNITED STATES.

    (a) Loans for Students Attending Institutions Located Outside the 
United States.--Section 452 (20 U.S.C. 1087b) is amended by adding at 
the end the following:
    ``(d) Institutions Located Outside the United States.--Loan funds 
for students (and parents of students) attending institutions located 
outside the United States shall be disbursed through a financial 
institution located in the United States and designated by the 
Secretary to serve as the agent of such institutions with respect to 
the receipt of the disbursements of such loan funds and the transfer of 
such funds to such institutions. To be eligible to receive funds under 
this part, an otherwise eligible institution located outside the United 
States shall make arrangements, subject to regulations by the 
Secretary, with the agent designated by the Secretary under this 
subsection to receive funds under this part.''.
    (b) Conforming Amendments.--
            (1) Amendments.--Section 102 (20 U.S.C. 1002), as amended 
        by section 102 of the Higher Education Opportunity Act (Public 
        Law 110-315) and section 101 of Public Law 111-39, is amended--
                    (A) by striking ``part B'' each place it appears 
                and inserting ``part D'';
                    (B) in subsection (a)(1)(C), by inserting ``, 
                consistent with the requirements of section 452(d)'' 
                before the period at the end; and
                    (C) in subsection (a)(2)(A)--
                            (i) in the matter preceding clause (i), by 
                        striking ``made, insured, or guaranteed'' and 
                        inserting ``made''; and
                            (ii) in clause (iii)--
                                    (I) in subclause (III), by striking 
                                ``only Federal Stafford'' and all that 
                                follows through ``section 428B'' and 
                                inserting ``only Federal Direct 
                                Stafford Loans under section 
                                455(a)(2)(A), Federal Direct 
                                Unsubsidized Stafford Loans under 
                                section 455(a)(2)(D), or Federal Direct 
                                PLUS Loans under section 
                                455(a)(2)(B)''; and
                                    (II) in subclause (V), by striking 
                                ``a Federal Stafford'' and all that 
                                follows through ``section 428B'' and 
                                inserting ``a Federal Direct Stafford 
                                Loan under section 455(a)(2)(A), a 
                                Federal Direct Unsubsidized Stafford 
                                Loan under section 455(a)(2)(D), or a 
                                Federal Direct PLUS Loan under section 
                                455(a)(2)(B)''.
            (2) Effective date.--The amendments made by subparagraph 
        (C) of paragraph (1) shall be effective on July 1, 2010, as if 
        enacted as part of section 102(a)(1) of the Higher Education 
        Opportunity Act (Public Law 110-315).

SEC. 212. AGREEMENTS WITH INSTITUTIONS.

    Section 454 (20 U.S.C. 1087d) is amended--
            (1) in subsection (a), by striking paragraph (4) and 
        redesignating the succeeding paragraphs accordingly; and
            (2) in subsection (b)(2), by striking ``(5), (6), and (7)'' 
        and inserting ``(5), and (6)''.

SEC. 213. TERMS AND CONDITIONS OF LOANS.

    (a) Amendments.--Section 455 (20 U.S.C. 1087e) is amended--
            (1) in subsection (a)(1), by inserting ``, and first 
        disbursed on June 30, 2010,'' before ``under sections 428''; 
        and
            (2) in subsection (g)--
                    (A) by inserting ``, including any loan made under 
                part B and first disbursed before July 1, 2010'' after 
                ``section 428C(a)(4)''; and
                    (B) by striking the third sentence.
    (b) Effective Date.--The amendment made by subsection (a)(1) shall 
apply with respect to loans first disbursed under part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after 
July 1, 2010.

SEC. 214. CONTRACTS.

    Section 456 (20 U.S.C. 1087f) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in the header, by striking ``In 
                        general'' and inserting ``Awarding of 
                        contracts'';
                            (ii) by striking ``The Secretary'' and 
                        inserting the following:
                    ``(A) In general.--The Secretary''; and
                            (iii) by adding at the end the following:
                    ``(B) Awarding contracts for servicing loans.--The 
                Secretary shall, if practicable, award multiple 
                contracts, through a competitive bidding process, to 
                entities, including eligible not-for-profit servicers, 
                to service loans originated under this part. The 
                competitive bidding process shall take into account 
                price, servicing capacity, and capability, and may take 
                into account the capacity and capability to provide 
                default aversion activities and outreach services.
                    ``(C) Job retention incentive payment.--(i) In a 
                contract with an entity under subparagraph (B) for the 
                servicing of loans, the Secretary shall provide a job 
                retention incentive payment, in an amount and manner 
                determined by the Secretary, if such entity agrees to 
                give priority for hiring for positions created as a 
                result of such a contract to those geographical 
                locations at which the entity performed student loan 
                origination or servicing activities under the Federal 
                Family Education Loan Program as of the date of 
                enactment of the Student Aid and Fiscal Responsibility 
                Act of 2009.
                    ``(ii) In determining the allocation of loans to be 
                serviced by an entity awarded such a contract, the 
                Secretary shall consider the retention of highly 
                qualified employees of such entity a positive factor in 
                determining such allocation.'';
                    (B) in paragraph (2)--
                            (i) in the first sentence, by inserting ``, 
                        including eligible not-for-profit servicers,'' 
                        after ``The entities'';
                            (ii) by amending the third sentence to read 
                        as follows: ``The entities with which the 
                        Secretary may enter into such contracts shall 
                        include, where practicable, agencies with 
                        agreements with the Secretary under sections 
                        428(b) and (c) on the date of the enactment of 
                        the Student Aid and Fiscal Responsibility Act 
                        of 2009, and eligible not-for-profit servicers, 
                        if such agencies or servicers meet the 
                        qualifications as determined by the Secretary 
                        under this subsection and if those agencies or 
                        servicers have such experience and demonstrated 
                        effectiveness.''; and
                            (iii) by striking the last sentence and 
                        inserting the following: ``In awarding 
                        contracts to such State agencies, and such 
                        eligible not-for-profit servicers, the 
                        Secretary shall, to the extent practicable and 
                        consistent with the purposes of this part, give 
                        special consideration to State agencies and 
                        such servicers with a history of high quality 
                        performance and demonstrated integrity in 
                        conducting operations with institutions of 
                        higher education and the Secretary.'';
                    (C) by redesignating paragraph (3) as paragraph 
                (4), and by inserting in such paragraph ``, or of any 
                eligible not-for-profit servicer to enter into an 
                agreement for the purposes of this section as a member 
                of a consortium of such entities'' before the period at 
                the end; and
                    (D) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) Servicing by eligible not-for-profit servicers.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, in each State where one or 
                more eligible not-for-profit servicer has its principal 
                place of business, the Secretary shall contract with 
                each such servicer to service loans originated under 
                this part on behalf of borrowers attending institutions 
                located within such State, provided that the servicer 
                demonstrates that it meets the standards for servicing 
                Federal assets and providing quality service and agrees 
                to service the loans at a competitive market rate, as 
                determined by the Secretary. In determining such a 
                competitive market rate, the Secretary may take into 
                account the volume of loans serviced by the servicer. 
                Contracts awarded under this paragraph shall be subject 
                to the same requirements for quality, performance, and 
                accountability as contracts awarded under paragraph (2) 
                for similar activities.
                    ``(B) Allocations.--(i) One servicer.--In the case 
                of a State with only one eligible not-for-profit 
                servicer with a contract described in subparagraph (A), 
                the Secretary shall, at a minimum, allocate to such 
                servicer, on an annual basis and subject to such 
                contract, the servicing rights for the lesser of--
                            ``(I) the loans of 100,000 borrowers 
                        (including borrowers who borrowed loans in a 
                        prior year that were serviced by the servicer) 
                        attending institutions located within the 
                        State; or
                            ``(II) the loans of all the borrowers 
                        attending institutions located within the 
                        State.
                    ``(ii) Multiple servicers.--In the case of a State 
                with more than one eligible not-for-profit servicer 
                with a contract described in subparagraph (A), the 
                Secretary shall, at a minimum, allocate to each such 
                servicer, on an annual basis and subject to such 
                contract, the servicing rights for the lesser of--
                            ``(I) the loans of 100,000 borrowers 
                        (including borrowers who borrowed loans in a 
                        prior year that were serviced by the servicer) 
                        attending institutions located within the 
                        State; or
                            ``(II) an equal share of the loans of all 
                        borrowers attending institutions located within 
                        the State, except the Secretary shall adjust 
                        such shares as necessary to ensure that the 
                        loans of any single borrower remain with a 
                        single servicer.
                    ``(iii) Additional allocation.--The Secretary may 
                allocate additional servicing rights to an eligible 
                not-for-profit servicer based on the performance of 
                such servicer, as determined by the Secretary, 
                including performance in the areas of customer service 
                and default aversion.
                    ``(C) Multiple loans.--Notwithstanding the 
                allocations required by subparagraph (B), the Secretary 
                may transfer loans among servicers who are awarded 
                contracts to service loans pursuant to this section to 
                ensure that the loans of any single borrower remain 
                with a single servicer.''; and
            (2) by adding at the end the following:
    ``(c) Report to Congress.--Not later than 3 years after the date of 
the enactment of the Student Aid and Fiscal Responsibility Act of 2009, 
the Secretary shall prepare and submit to the authorizing committees, a 
report evaluating the performance of all eligible not-for-profit 
servicers awarded a contract under this section to service loans 
originated under this part. Such report shall give consideration to--
            ``(1) customer satisfaction of borrowers and institutions 
        with respect to the loan servicing provided by the servicers;
            ``(2) compliance with applicable regulations by the 
        servicers; and
            ``(3) the effectiveness of default aversion activities, and 
        outreach services (if any), provided by the servicers.
    ``(d) Definitions.--In this section:
            ``(1) Default aversion activities.--The term `default 
        aversion activities' means activities that are directly related 
        to providing collection assistance to the Secretary on a 
        delinquent loan, prior to the loan being legally in a default 
        status, including due diligence activities required pursuant to 
        regulations.
            ``(2) Eligible not-for-profit servicer.--
                    ``(A) In general.--The term `eligible not-for-
                profit servicer' means an entity that, on the date of 
                enactment of the Student Aid and Fiscal Responsibility 
                Act of 2009--
                            ``(i) meets the definition of an eligible 
                        not-for-profit holder under section 435(p), 
                        except that such term does not include eligible 
                        lenders described in paragraph (1)(D) of such 
                        section;
                            ``(ii) notwithstanding clause (i), is the 
                        sole beneficial owner of a loan for which the 
                        special allowance rate is calculated under 
                        section 438(b)(2)(I)(vi)(II) because the loan 
                        is held by an eligible lender trustee that is 
                        an eligible not-for-profit holder as defined 
                        under section 435(p)(1)(D); or
                            ``(iii) is an affiliated entity of an 
                        eligible not-for-profit servicer described in 
                        clause (i) or (ii) that--
                                    ``(I) directly employs, or will 
                                directly employ (on or before the date 
                                the entity begins servicing loans under 
                                a contract awarded by the Secretary 
                                pursuant to subsection (a)(3)(A)), the 
                                majority of individuals who perform 
                                student loan servicing functions; and
                                    ``(II) on such date of enactment, 
                                was performing, or had entered into a 
                                contract with a third party servicer 
                                (as such term is defined in section 
                                481(c)) who was performing, student 
                                loan servicing functions for loans made 
                                under part B of this title.
                    ``(B) Affiliated entity.--For the purposes of 
                subparagraph (A), the term `affiliated entity' means an 
                entity contracted to perform services for an eligible 
                not-for-profit servicer that--
                            ``(i) is a nonprofit entity or is wholly 
                        owned by a nonprofit entity; and
                            ``(ii) is not owned or controlled, in whole 
                        or in part, by--
                                    ``(I) a for-profit entity; or
                                    ``(II) an entity having its 
                                principal place of business in another 
                                State.
            ``(3) Outreach services.--The term `outreach services' 
        means programs offered to students and families, including 
        programs delivered in coordination with institutions of higher 
        education that--
                    ``(A) encourage--
                            ``(i) students to attend and complete a 
                        degree or certification program at an 
                        institution of higher education; and
                            ``(ii) students and families to obtain 
                        financial aid, but minimize the borrowing of 
                        education loans; and
                    ``(B) deliver financial literacy and counseling 
                tools.''.

SEC. 215. INTEREST RATES.

    Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding at 
the end the following new subparagraph:
                    ``(E) Reduced rates for undergraduate fdsl on and 
                after july 1, 2012.--Notwithstanding the preceding 
                paragraphs of this subsection and subparagraph (A) of 
                this paragraph, for Federal Direct Stafford Loans made 
                to undergraduate students for which the first 
                disbursement is made on or after July 1, 2012, 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) 2.5 percent,
                except that such rate shall not exceed 6.8 percent.''.

                    Subtitle B--Perkins Loan Reform

SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND CONDITIONS.

    Part D of title IV (20 U.S.C. 1087a et seq.) is amended by 
inserting after section 455 the following new section:

``SEC. 455A. FEDERAL DIRECT PERKINS LOANS.

    ``(a) Designation of Loans.--Loans made to borrowers under this 
section shall be known as `Federal Direct Perkins Loans'.
    ``(b) In General.--It is the purpose of this section to authorize 
loans to be awarded by institutions of higher education through 
agreements established under section 463(f). Unless otherwise specified 
in this section, all terms and conditions and other requirements 
applicable to Federal Direct Unsubsidized Stafford loans established 
under section 455(a)(2)(D) shall apply to loans made pursuant to this 
section.
    ``(c) Eligible Borrowers.--Any student meeting the requirements for 
student eligibility under section 464(b) (including graduate and 
professional students as defined in regulations promulgated by the 
Secretary) shall be eligible to borrow a Federal Direct Perkins Loan, 
provided the student attends an eligible institution with an agreement 
with the Secretary under section 463(f), and the institution uses its 
authority under that agreement to award the student a loan.
    ``(d) Loan Limits.--The annual and aggregate limits for loans under 
this section shall be the same as those established under section 464, 
and aggregate limits shall include loans made by institutions under 
agreements under section 463(a).
    ``(e) Applicable Rates of Interest.--Loans made pursuant to this 
section shall bear interest, on the unpaid balance of the loan, at the 
rate of 5 percent per year.''.

SEC. 222. AUTHORIZATION OF APPROPRIATIONS.

    Section 461 (20 U.S.C. 1087aa) is amended--
            (1) in subsection (a), by inserting ``, before July 1, 
        2010,'' after ``The Secretary shall'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) For the purpose'' and 
                        inserting ``For the purpose''; and
                            (ii) by striking ``and for each of the five 
                        succeeding fiscal years''; and
                    (B) by striking paragraph (2); and
            (3) by striking subsection (c).

SEC. 223. ALLOCATION OF FUNDS.

    Section 462 (20 U.S.C. 1087bb) is amended--
            (1) in subsection (a)(1), by striking ``From'' and 
        inserting ``For any fiscal year before fiscal year 2010, 
        from''; and
            (2) in subsection (i)(1), by striking ``for any fiscal 
        year,'' and inserting ``for any fiscal year before fiscal year 
        2010,''.

SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

    Part E of title IV is further amended by inserting after section 
462 (20 U.S.C. 1087bb) the following:

``SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to allocate, among eligible and participating 
        institutions (as such terms are defined in this section), the 
        authority to make Federal Direct Perkins Loans under section 
        455A with a portion of the annual loan authority described in 
        subsection (b); and
            ``(2) to make funds available, in accordance with section 
        452, to each participating institution from a portion of the 
        annual loan authority described in subsection (b), in an amount 
        not to exceed the sum of an institution's allocation of funds 
        under subparagraphs (A), (B), and (C) of subsection (b)(1) to 
        enable each such institution to make Federal Direct Perkins 
        Loans to eligible students at the institution.
    ``(b) Available Direct Perkins Annual Loan Authority.--
            ``(1) Availability and allocations.--There are hereby made 
        available, from funds made available for loans made under part 
        D, not to exceed $6,000,000,000 of annual loan authority for 
        award year 2010-2011 and each succeeding award year, to be 
        allocated as follows:
                    ``(A) The Secretary shall allocate not more than 
                \1/2\ of such funds for each award year by allocating 
                to each participating institution an amount equal to 
                the adjusted self-help need amount of the institution, 
                as determined in accordance with subsection (c) for 
                such award year.
                    ``(B) The Secretary shall allocate not more than 
                \1/4\ of such funds for each award year by allocating 
                to each participating institution an amount equal to 
                the low tuition incentive amount of the institution, as 
                determined in accordance with subsection (d).
                    ``(C) The Secretary shall allocate not more than 
                \1/4\ of such funds for each award year by allocating 
                to each participating institution an amount which bears 
                the same ratio to the funds allocated under this 
                subparagraph as the ratio determined in accordance with 
                subsection (e) for the calculation of the Federal Pell 
                Grant and degree recipient amount of the institution.
            ``(2) No funds to non-participating institutions.--The 
        Secretary shall not make funds available under this subsection 
        to any eligible institution that is not a participating 
        institution. The adjusted self-help need amount (determined in 
        accordance with subsection (c)) of an eligible institution that 
        is not a participating institution shall not be made available 
        to any other institution.
    ``(c) Adjusted Self-help Need Amount.--For the purposes of 
subsection (b)(1)(A), the Secretary shall calculate the adjusted self-
help need amount of each eligible institution for an award year as 
follows:
            ``(1) Use of base self-help need amounts.--
                    ``(A) In general.--Except as provided in paragraphs 
                (2), (3), and (4), the adjusted self-help need amount 
                of each eligible institution shall be the institution's 
                base self-help need amount, which is the sum of--
                            ``(i) the self-help need of the 
                        institution's eligible undergraduate students 
                        for such award year; and
                            ``(ii) the self-help need of the 
                        institution's eligible graduate and 
                        professional students for such award year.
                    ``(B) Undergraduate student self-help need.--To 
                determine the self-help need of an institution's 
                eligible undergraduate students, the Secretary shall 
                determine the sum of each eligible undergraduate 
                student's average cost of attendance for the second 
                preceding award year less each such student's expected 
                family contribution (computed in accordance with part 
                F) for the second preceding award year, except that, 
                for each such eligible undergraduate student, the 
                amount computed by such subtraction shall not be less 
                than zero or more than the lesser of--
                            ``(i) 25 percent of the average cost of 
                        attendance with respect to such eligible 
                        student; or
                            ``(ii) $5,500.
                    ``(C) Graduate and professional student self-help 
                need.--To determine the self-help need of an 
                institution's eligible graduate and professional 
                students, the Secretary shall determine the sum of each 
                eligible graduate and professional student's average 
                cost of attendance for the second preceding award year 
                less each such student's expected family contribution 
                (computed in accordance with part F) for such second 
                preceding award year, except that, for each such 
                eligible graduate and professional student, the amount 
                computed by such subtraction shall not be less than 
                zero or more than $8,000.
            ``(2) Ratable reduction adjustments.--If the sum of the 
        base self-help need amounts of all eligible institutions for an 
        award year as determined under paragraph (1) exceeds \1/2\ of 
        the annual loan authority under subsection (b) for such award 
        year, the Secretary shall ratably reduce the base self-help 
        need amounts of all eligible institutions until the sum of such 
        amounts is equal to the amount that is \1/2\ of the annual loan 
        authority under subsection (b).
            ``(3) Required minimum amount.--Notwithstanding paragraph 
        (2), the adjusted self-help need amount of each eligible 
        institution shall not be less than the average of the 
        institution's total principal amount of loans made under this 
        part for each of the 5 most recent award years.
            ``(4) Additional adjustments.--If the Secretary determines 
        that a ratable reduction under paragraph (2) results in the 
        adjusted self-help need amount of any eligible institution 
        being reduced below the minimum amount required under paragraph 
        (3), the Secretary shall--
                    ``(A) for each institution for which the minimum 
                amount under paragraph (3) is not satisfied, increase 
                the adjusted self-help need amount to the amount of the 
                required minimum under such subparagraph; and
                    ``(B) ratably reduce the adjusted self-help need 
                amounts of all eligible institutions not described in 
                subparagraph (A) until the sum of the adjusted self-
                help need amounts of all eligible institutions is equal 
                to the amount that is \1/2\ of the annual loan 
                authority under subsection (b).
    ``(d) Low Tuition Incentive Amount.--
            ``(1) In general.--For purposes of subsection (b)(1)(B), 
        the Secretary shall determine the low tuition incentive amount 
        for each participating institution for each award year, by 
        calculating for each such institution the sum of--
                    ``(A) the total amount, if any (but not less than 
                zero), by which--
                            ``(i) the average tuition and required fees 
                        for the institution's sector for the second 
                        preceding award year; exceeds
                            ``(ii) the tuition and required fees for 
                        the second preceding award year for each 
                        undergraduate and graduate student attending 
                        the institution who had financial need (as 
                        determined under part F); plus
                    ``(B) the total amount, if any (but not less than 
                zero), by which--
                            ``(i) the total amount for the second 
                        preceding award year of non-Federal grant aid 
                        provided to meet the financial need of all 
                        undergraduate students attending the 
                        institution (as determined without regard to 
                        financial aid not received under this title); 
                        exceeds
                            ``(ii) the total amount for the second 
                        preceding award year, if any, by which--
                                    ``(I) the tuition and required fees 
                                of each such student with such 
                                financial need; exceeds
                                    ``(II) the average tuition and 
                                required fees for the institution's 
                                sector.
            ``(2) Ratable reduction.--If the sum of the low tuition 
        incentive amounts of all participating institutions for an 
        award year as determined under paragraph (1) exceeds \1/4\ of 
        the annual loan authority under subsection (b) for such award 
        year, the Secretary shall ratably reduce the low tuition 
        incentive amounts of all participating institutions until the 
        sum of such amounts is equal to the amount that is \1/4\ of the 
        annual loan authority under subsection (b).
    ``(e) Federal Pell Grant and Degree Recipient Amount.--For purposes 
of subsection (b)(1)(C), the Secretary shall determine the Federal Pell 
Grant and degree recipient amount for each participating institution 
for each award year, by calculating for each such institution the ratio 
of--
            ``(1) the number of students who, during the most recent 
        year for which data are available, obtained an associate's 
        degree or other postsecondary degree from such participating 
        institution and, prior to obtaining such degree, received a 
        Federal Pell Grant for attendance at any institution of higher 
        education; to
            ``(2) the sum of the number of students who, during the 
        most recent year for which data are available, obtained an 
        associate's degree or other postsecondary degree from each 
        participating institution and, prior to obtaining such degree, 
        received a Federal Pell Grant for attendance at any institution 
        of higher education.
    ``(f) Definitions.--As used in this section:
            ``(1) Annual loan authority.--The term `annual loan 
        authority' means the total original principal amount of loans 
        that may be allocated and made available for an award year to 
        make Federal Direct Perkins Loans under section 455A.
            ``(2) Average cost of attendance.--
                    ``(A) In general.--The term `average cost of 
                attendance' means the average of the attendance costs 
                for undergraduate students and for graduate and 
                professional students, respectively, for the second 
                preceding award year which shall include--
                            ``(i) tuition and required fees determined 
                        in accordance with subparagraph (B);
                            ``(ii) standard living expenses determined 
                        in accordance with subparagraph (C); and
                            ``(iii) books and supplies determined in 
                        accordance with subparagraph (D).
                    ``(B) Tuition and required fees.--The average 
                undergraduate and graduate and professional tuition and 
                required fees described in subparagraph (A)(i) shall be 
                computed on the basis of information reported by the 
                institution to the Secretary, which shall include--
                            ``(i) total revenue received by the 
                        institution from undergraduate and graduate and 
                        professional students, respectively, for 
                        tuition and required fees for the second 
                        preceding award year; and
                            ``(ii) the institution's full-time 
                        equivalent enrollment of undergraduate and 
                        graduate and professional students, 
                        respectively, for such second preceding award 
                        year.
                    ``(C) Standard living expenses.--The standard 
                living expense described in subparagraph (A)(ii) is 
                equal to the allowance, determined by an institution, 
                for room and board costs incurred by a student, as 
                computed in accordance with part F for the second 
                preceding award year.
                    ``(D) Books and supplies.--The allowance for books 
                and supplies described in subparagraph (A)(iii) is 
                equal to the allowance, determined by an institution, 
                for books, supplies, transportation, and miscellaneous 
                personal expenses, including a reasonable allowance for 
                the documented rental or purchase of a personal 
                computer, as computed in accordance with part F for the 
                second preceding award year.
            ``(3) Average tuition and required fees for the 
        institution's sector.--The term `average tuition and required 
        fees for the institution's sector' shall be determined by the 
        Secretary for each of the categories described in section 
        132(d).
            ``(4) Eligible institution.--The term `eligible 
        institution' means an institution of higher education that 
        participates in the Federal Direct Stafford Loan Program.
            ``(5) Participating institution.--The term `participating 
        institution' means an institution of higher education that has 
        an agreement under section 463(f).
            ``(6) Sector.--The term `sector' means each of the 
        categories described in section 132(d).''.

SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

    (a) Amendments.--Section 463 (20 U.S.C. 1087cc) is amended--
            (1) in subsection (a)--
                    (A) in the heading, by inserting ``for Loans Made 
                Before July 1, 2010'' after ``Agreements'';
                    (B) in paragraph (3)(A), by inserting ``before July 
                1, 2010'' after ``students'';
                    (C) in paragraph (4), by striking ``thereon--'' and 
                all that follows and inserting ``thereon, if the 
                institution has failed to maintain an acceptable 
                collection record with respect to such loan, as 
                determined by the Secretary in accordance with criteria 
                established by regulation, the Secretary may require 
                the institution to assign such note or agreement to the 
                Secretary, without recompense;''; and
                    (D) in paragraph (5), by striking ``and the 
                Secretary shall apportion'' and all that follows 
                through ``in accordance with section 462'' and 
                inserting ``and the Secretary shall return a portion of 
                funds from loan repayments to the institution as 
                specified in section 466(b)'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Administrative Expenses.--An institution that has entered 
into an agreement under subsection (a) shall be entitled, for each 
fiscal year during which it services student loans from a student loan 
fund established under such agreement, to a payment in lieu of 
reimbursement for its expenses in servicing student loans made before 
July 1, 2010. Such payment shall be equal to 0.50 percent of the 
outstanding principal and interest balance of such loans being serviced 
by the institution as of September 30 of each fiscal year.''; and
            (3) by adding at the end the following:
    ``(f) Contents of Agreements for Loans Made on or After July 1, 
2010.--An agreement with any institution of higher education that 
elects to participate in the Federal Direct Perkins Loan program under 
section 455A shall provide--
            ``(1) for the establishment and maintenance of a Direct 
        Perkins Loan program at the institution under which the 
        institution shall use loan authority allocated under section 
        462A to make loans to eligible students attending the 
        institution;
            ``(2) that the institution, unless otherwise specified in 
        this subsection, shall operate the program consistent with the 
        requirements of agreements established under section 454;
            ``(3) that the institution will pay matching funds, 
        quarterly, in an amount agreed to by the institution and the 
        Secretary, to an escrow account approved by the Secretary, for 
        the purpose of providing loan benefits to borrowers;
            ``(4) that if the institution fails to meet the 
        requirements of paragraph (3), the Secretary shall suspend or 
        terminate the institution's eligibility to make Federal Direct 
        Perkins Loans under section 455A until such time as the 
        Secretary determines, in accordance with section 498, that the 
        institution has met the requirements of such paragraph; and
            ``(5) that if the institution ceases to be an eligible 
        institution within the meaning of section 435(a) by reason of 
        having a cohort default rate that exceeds the threshold 
        percentage specified paragraph (2) of such section, the 
        Secretary shall suspend or terminate the institution's 
        eligibility to make Federal Direct Perkins Loans under section 
        455A unless and until the institution would qualify for a 
        resumption of eligible institution status under such 
        section.''.
    (b) Effective Date.--The amendments made by paragraph (2) of 
subsection (a) shall take effect on October 1, 2010.

SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.

    Section 463A (20 U.S.C. 1087cc-1) is amended--
            (1) in subsection (a), by striking ``Each institution'' and 
        inserting ``For loans made before July 1, 2010, each 
        institution''; and
            (2) in subsection (b), by striking ``Each institution'' and 
        inserting ``For loans made before July 1, 2010, each 
        institution''.

SEC. 227. TERMS OF LOANS.

    (a) Section 464 (20 U.S.C. 1087dd) is amended--
            (1) in subsection (a)(1), by striking ``section 463'' and 
        inserting ``section 463(a)'';
            (2) in subsection (b)(1), by inserting ``made before July 
        1, 2010,'' after ``A loan'';
            (3) in subsection (c)--
                    (A) in paragraph (1), by inserting ``made before 
                July 1, 2010,'' after ``a loan'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by inserting 
                        ``made before July 1, 2010,'' after ``any 
                        loan''; and
                            (ii) in subparagraph (B), by inserting 
                        ``made before July 1, 2010,'' after ``any 
                        loan'';
                    (C) in paragraph (3)(B), by inserting ``for a loan 
                made before July 1, 2010,'' after ``during the 
                repayment period'';
                    (D) in paragraph (4), by inserting ``before July 1, 
                2010,'' after ``for a loan made'';
                    (E) in paragraph (5), by striking ``The 
                institution'' and inserting ``For loans made before 
                July 1, 2010, the institution''; and
                    (F) in paragraph (6), by inserting ``made before 
                July 1, 2010,'' after ``of loans'';
            (4) in subsection (d), by inserting ``made before July 1, 
        2010,'' before ``from the student loan fund'';
            (5) in subsection (e), by inserting ``with respect to loans 
        made before July 1, 2010, and'' before ``as documented in 
        accordance with paragraph (2),'';
            (6) by repealing subsection (f);
            (7) in subsection (g)(1), by inserting ``and before July 1, 
        2010,'' after ``January 1, 1986,'';
            (8) in subsection (h)--
                    (A) in paragraph (1)(A) by inserting ``before July 
                1, 2010,'' after ``made under this part''; and
                    (B) in paragraph (2), by inserting ``before July 1, 
                2010,'' after ``under this part''; and
            (9) in subsection (j)(1), by inserting ``before July 1, 
        2010,'' after ``under this part''.

SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

    (a) Section 465 (20 U.S.C. 1087ee) is amended--
            (1) in subsection (a), by inserting ``and before July 1, 
        2010,'' after ``June 30, 1972,''; and
            (2) by amending subsection (b) to read as follows:
    ``(b) Reimbursement for Cancellations.--
            ``(1) Assigned loans.--In the case of loans made under this 
        part before July 1, 2010, and that are assigned to the 
        Secretary, the Secretary shall, from amounts repaid each 
        quarter on assigned Perkins Loans made before July 1, 2010, pay 
        to each institution for each quarter an amount equal to--
                    ``(A) the aggregate of the amounts of loans from 
                its student loan fund that are canceled pursuant to 
                this section for such quarter, minus
                    ``(B) an amount equal to the aggregate of the 
                amounts of any such loans so canceled that were made 
                from Federal capital contributions to its student loan 
                fund.
            ``(2) Retained loans.--In the case of loans made under this 
        part before July 1, 2010, and that are retained by the 
        institution for servicing, the institution shall deduct from 
        loan repayments owed to the Secretary under section 466, an 
        amount equal to--
                    ``(A) the aggregate of the amounts of loans from 
                its student loan fund that are canceled pursuant to 
                this section for such quarter, minus
                    ``(B) an amount equal to the aggregate of the 
                amounts of any such loans so canceled that were made 
                from Federal capital contributions to its student loan 
                fund.''.
    (b) Section 466 (20 U.S.C. 1087ff) is amended to read as follows:

``SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

    ``(a) Capital Distribution.--Beginning July 1, 2010, there shall be 
a capital distribution of the balance of the student loan fund 
established under this part by each institution of higher education as 
follows:
            ``(1) For the quarter beginning July 1, 2010, the Secretary 
        shall first be paid, no later than September 30, 2010, an 
        amount that bears the same ratio to the cash balance in such 
        fund at the close of June 30, 2010, as the total amount of the 
        Federal capital contributions to such fund by the Secretary 
        under this part bears to--
                    ``(A) the sum of such Federal contributions and the 
                institution's capital contributions to such fund, less
                    ``(B) an amount equal to--
                            ``(i) the institution's outstanding 
                        administrative costs as calculated under 
                        section 463(b),
                            ``(ii) outstanding charges assessed under 
                        section 464(c)(1)(H), and
                            ``(iii) outstanding loan cancellation costs 
                        incurred under section 465.
            ``(2) At the end of each quarter subsequent to the quarter 
        ending September 30, 2010, the Secretary shall first be paid an 
        amount that bears the same ratio to the cash balance in such 
        fund at the close of the preceding quarter, as the total amount 
        of the Federal capital contributions to such fund by the 
        Secretary under this part bears to--
                    ``(A) the sum of such Federal contributions and the 
                institution's capital contributions to such fund, less
                    ``(B) an amount equal to--
                            ``(i) the institution's administrative 
                        costs incurred for that quarter as calculated 
                        under section 463(b),
                            ``(ii) charges assessed for that quarter 
                        under section 464(c)(1)(H), and
                            ``(iii) loan cancellation costs incurred 
                        for that quarter under section 465.
            ``(3)(A) The Secretary shall calculate the amounts due to 
        the Secretary under paragraph (1) (adjusted in accordance with 
        subparagraph (B), as appropriate) and paragraph (2) and shall 
        promptly inform the institution of such calculated amounts.
            ``(B) In the event that, prior to the date of enactment of 
        the Student Aid and Fiscal Responsibility Act of 2009, an 
        institution made a short-term, interest-free loan to the 
        institution's student loan fund established under this part in 
        anticipation of collections or receipt of Federal capital 
        contributions, and the institution demonstrates to the 
        Secretary, on or before June 30, 2010, that such loan will 
        still be outstanding after June 30, 2010, the Secretary shall 
        subtract the amount of such outstanding loan from the cash 
        balance of the institution's student loan fund that is used to 
        calculate the amount due to the Secretary under paragraph (1). 
        An adjustment of an amount due to the Secretary under this 
        subparagraph shall be made by the Secretary on a case-by-case 
        basis.
            ``(4) Any remaining balance at the end of a quarter after a 
        payment under paragraph (1) or (2) shall be retained by the 
        institution for use at its discretion. Any balance so retained 
        shall be withdrawn from the student loan fund and shall not be 
        counted in calculating amounts owed to the Secretary for 
        subsequent quarters.
            ``(5) Each institution shall make the quarterly payments to 
        the Secretary described in paragraph (2) until all outstanding 
        Federal Perkins Loans at that institution have been assigned to 
        the Secretary and there are no funds remaining in the 
        institution's student loan fund.
            ``(6) In the event that the institution's administrative 
        costs, charges, and cancellation costs described in paragraph 
        (2) for a quarter exceed the amount owed to the Secretary under 
        paragraphs (1) and (2) for that quarter, no payment shall be 
        due to the Secretary from the institution for that quarter and 
        the Secretary shall pay the institution, from funds realized 
        from the collection of assigned Federal Perkins Loans made 
        before July 1, 2010, an amount that, when combined with the 
        amount retained by the institution under paragraphs (1) and 
        (2), equals the full amount of such administrative costs, 
        charges, and cancellation costs.
    ``(b) Assignment of Outstanding Loans.--Beginning July 1, 2010, an 
institution of higher education may assign all outstanding loans made 
under this part before July 1, 2010, to the Secretary, consistent with 
the requirements of section 463(a)(5). In collecting loans so assigned, 
the Secretary shall pay an institution an amount that constitutes the 
same fraction of such collections as the fraction of the cash balance 
that the institution retains under subsection (a)(2), but determining 
such fraction without regard to subparagraph (B)(i) of such 
subsection.''.

SEC. 229. IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.

    (a) Amendments.--Section 487(d) (20 U.S.C. 1094(d)) is amended--
            (1) in paragraph (1)(E), by striking ``July 1, 2011'' and 
        inserting ``July 1, 2012'';
            (2) in paragraph (1)(F)--
                    (A) by redesignating clauses (iii), (iv), and (v) 
                as clauses (iv), (v), and (vi), respectively; and
                    (B) by inserting after clause (ii) the following 
                new clause:
                            ``(iii) for the period beginning July 1, 
                        2010, and ending July 1, 2012, the amount of 
                        funds the institution received from loans 
                        disbursed under section 455A;'';.
            (3) in paragraph (2)(A), by striking ``two consecutive'' 
        and inserting ``three consecutive''; and
            (4) in paragraph (2)(B)--
                    (A) by striking ``any institutional fiscal year'' 
                and inserting ``two consecutive institutional fiscal 
                years'';
                    (B) by striking ``the two institutional fiscal 
                years after the institutional fiscal year'' and 
                inserting ``the institutional fiscal year after the 
                second consecutive institutional fiscal year''; and
                    (C) by striking ``two consecutive'' in clause (ii) 
                of such paragraph and inserting ``three consecutive''.
    (b) Temporary Effect.--The amendments made by paragraphs (3) and 
(4) of subsection (a)--
            (1) shall take effect on the date of enactment of this Act; 
        and
            (2) shall cease to be effective on July 1, 2012.

SEC. 230. ADMINISTRATIVE EXPENSES.

    Section 489(a) (20 U.S.C. 1096(a)) is amended--
            (1) in the second sentence, by striking ``or under part E 
        of this title''; and
            (2) in the third sentence--
                    (A) by inserting ``and'' after ``subpart 3 of part 
                A,''; and
                    (B) by striking ``compensation of students,'' and 
                all that follows through the period and inserting 
                ``compensation of students.''.

            TITLE III--MODERNIZATION, RENOVATION, AND REPAIR

             Subtitle A--Elementary and Secondary Education

SEC. 301. DEFINITIONS.

    In this subtitle:
            (1) The term ``Bureau-funded school'' has the meaning given 
        such term in section 1141 of the Education Amendments of 1978 
        (25 U.S.C. 2021).
            (2) The term ``charter school'' has the meaning given such 
        term in section 5210 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7221i).
            (3) The term ``CHPS Criteria'' means the green building 
        rating program developed by the Collaborative for High 
        Performance Schools.
            (4) The term ``Energy Star'' means the Energy Star program 
        of the United States Department of Energy and the United States 
        Environmental Protection Agency.
            (5) The term ``Green Globes'' means the Green Building 
        Initiative environmental design and rating system referred to 
        as Green Globes.
            (6) The term ``LEED Green Building Rating System'' means 
        the United States Green Building Council Leadership in Energy 
        and Environmental Design green building rating standard 
        referred to as LEED Green Building Rating System.
            (7) The term ``local educational agency''--
                    (A) has the meaning given such term in section 9101 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7801);
                    (B) includes any public charter school that 
                constitutes a local educational agency under State law; 
                and
                    (C) includes the Recovery School District of 
                Louisiana.
            (8) The term ``outlying area''--
                    (A) means the United States Virgin Islands, Guam, 
                American Samoa, and the Commonwealth of the Northern 
                Mariana Islands; and
                    (B) includes the Republic of Palau.
            (9) The term ``public school facilities'' means existing 
        public elementary or secondary school facilities, including 
        public charter school facilities and other existing facilities 
        planned for adaptive reuse as public charter school facilities.
            (10) The term ``Secretary'' means the Secretary of 
        Education.
            (11) The term ``State'' means each of the 50 States, the 
        District of Columbia, and the Commonwealth of Puerto Rico.

 CHAPTER 1--GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF PUBLIC 
                           SCHOOL FACILITIES

SEC. 311. PURPOSE.

    Grants under this chapter shall be for the purpose of modernizing, 
renovating, or repairing public school facilities (including early 
learning facilities, as appropriate), based on the need of the 
facilities for such improvements, to ensure that public school 
facilities are safe, healthy, high-performing, and technologically up-
to-date.

SEC. 312. ALLOCATION OF FUNDS.

    (a) Reservation.--
            (1) In general.--From the amount appropriated to carry out 
        this chapter for each fiscal year pursuant to section 345(a), 
        the Secretary shall reserve 2 percent of such amount, 
        consistent with the purpose described in section 311--
                    (A) to provide assistance to the outlying areas; 
                and
                    (B) for payments to the Secretary of the Interior 
                to provide assistance to Bureau-funded schools.
            (2) Use of reserved funds.--In each fiscal year, the amount 
        reserved under paragraph (1) shall be divided between the uses 
        described in subparagraphs (A) and (B) of such paragraph in the 
        same proportion as the amount reserved under section 1121(a) of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6331(a)) is divided between the uses described in paragraphs 
        (1) and (2) of such section 1121(a) in such fiscal year.
            (3) Distressed areas and natural disasters.--From the 
        amount appropriated to carry out this chapter for each fiscal 
        year pursuant to section 345(a), the Secretary shall reserve 5 
        percent of such amount for grants to--
                    (A) local educational agencies serving geographic 
                areas with significant economic distress, to be used 
                consistent with the purpose described in section 311 
                and the allowable uses of funds described in section 
                313; and
                    (B) local educational agencies serving geographic 
                areas recovering from a natural disaster, to be used 
                consistent with the purpose described in section 321 
                and the allowable uses of funds described in section 
                323.
    (b) Allocation to States.--
            (1) State-by-state allocation.--Of the amount appropriated 
        to carry out this chapter for each fiscal year pursuant to 
        section 345(a), and not reserved under subsection (a), each 
        State shall be allocated an amount in proportion to the amount 
        received by all local educational agencies in the State under 
        part A of title I of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6311 et seq.) for the previous fiscal year 
        relative to the total amount received by all local educational 
        agencies in every State under such part for such fiscal year.
            (2) State administration.--A State may reserve up to 1 
        percent of its allocation under paragraph (1) to carry out its 
        responsibilities under this chapter, which include--
                    (A) providing technical assistance to local 
                educational agencies;
                    (B) developing an online, publicly searchable 
                database that includes an inventory of public school 
                facilities in the State, including for each such 
                facility, its design, condition, modernization, 
                renovation and repair needs, utilization, energy use, 
                and carbon footprint; and
                    (C) creating voluntary guidelines for high-
                performing school buildings, including guidelines 
                concerning the following:
                            (i) Site location, storm water management, 
                        outdoor surfaces, outdoor lighting, and 
                        transportation, including public transit and 
                        pedestrian and bicycle accessability.
                            (ii) Outdoor water systems, landscaping to 
                        minimize water use, including elimination of 
                        irrigation systems for landscaping, and indoor 
                        water use reduction.
                            (iii) Energy efficiency (including minimum 
                        and superior standards, such as for heating, 
                        ventilation, and air conditioning systems), use 
                        of alternative energy sources, commissioning, 
                        and training.
                            (iv) Use of durable, sustainable materials 
                        and waste reduction.
                            (v) Indoor environmental quality, such as 
                        day lighting in classrooms, lighting quality, 
                        indoor air quality (including with reference to 
                        reducing the incidence and effects of asthma 
                        and other respiratory illnesses), acoustics, 
                        and thermal comfort.
                            (vi) Operations and management, such as use 
                        of energy-efficient equipment, indoor 
                        environmental management plan, maintenance 
                        plan, and pest management.
            (3) Grants to local educational agencies.--From the amount 
        allocated to a State under paragraph (1), each eligible local 
        educational agency in the State shall receive an amount in 
        proportion to the amount received by such local educational 
        agency under part A of title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6311 et seq.) for the previous 
        fiscal year relative to the total amount received by all local 
        educational agencies in the State under such part for such 
        fiscal year, except that no local educational agency that 
        received funds under such part for such fiscal year shall 
        receive a grant of less than $5,000 in any fiscal year under 
        this chapter.
            (4) Special rule.--Section 1122(c)(3) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6332(c)(3)) shall 
        not apply to paragraph (1) or (3).
    (c) Special Rules.--
            (1) Distributions by secretary.--The Secretary shall make 
        and distribute the reservations and allocations described in 
        subsections (a) and (b) not later than 120 days after an 
        appropriation of funds for this chapter is made.
            (2) Distributions by states.--A State shall make and 
        distribute the allocations described in subsection (b)(3) 
        within 90 days of receiving such funds from the Secretary.

SEC. 313. ALLOWABLE USES OF FUNDS.

    A local educational agency receiving a grant under this chapter 
shall use the grant for modernization, renovation, or repair of public 
school facilities (including early learning facilities, as 
appropriate), including--
            (1) repair, replacement, or installation of roofs, 
        including extensive, intensive or semi-intensive green roofs, 
        electrical wiring, water supply and plumbing systems, sewage 
        systems, storm water runoff systems, lighting systems, building 
        envelope, windows, ceilings, flooring, or doors, including 
        security doors;
            (2) repair, replacement, or installation of heating, 
        ventilation, or air conditioning systems, including insulation, 
        and conducting indoor air quality assessments;
            (3) compliance with fire, health, seismic, and safety 
        codes, including professional installation of fire and life 
        safety alarms, and modernizations, renovations, and repairs 
        that ensure that schools are prepared for emergencies, such as 
        improving building infrastructure to accommodate security 
        measures and installing or upgrading technology to ensure that 
        schools are able to respond to emergencies such as acts of 
        terrorism, campus violence, and natural disasters;
            (4) retrofitting necessary to increase the energy 
        efficiency and water efficiency of public school facilities;
            (5) modifications necessary to make facilities accessible 
        in compliance with the Americans with Disabilities Act of 1990 
        (42 U.S.C. 12101 et seq.) and section 504 of the Rehabilitation 
        Act of 1973 (29 U.S.C. 794);
            (6) abatement, removal, or interim controls of asbestos, 
        polychlorinated biphenyls, mold, mildew, lead-based hazards, 
        including lead-based paint hazards, or a proven carcinogen;
            (7) measures designed to reduce or eliminate human exposure 
        to classroom noise and environmental noise pollution;
            (8) modernization, renovation, or repair necessary to 
        reduce the consumption of coal, electricity, land, natural gas, 
        oil, or water;
            (9) installation or upgrading of educational technology 
        infrastructure;
            (10) modernization, renovation, or repair of science and 
        engineering laboratories, libraries, and career and technical 
        education facilities, and improvements to building 
        infrastructure to accommodate bicycle and pedestrian access;
            (11) installation or upgrading of renewable energy 
        generation and heating systems, including solar, photovoltaic, 
        wind, biomass (including wood pellet and woody biomass), waste-
        to-energy, and solar-thermal and geothermal systems, and for 
        energy audits;
            (12) measures designed to reduce or eliminate human 
        exposure to airborne particles such as dust, sand, and pollens;
            (13) creating greenhouses, gardens (including trees), and 
        other facilities for environmental, scientific, or other 
        educational purposes, or to produce energy savings;
            (14) modernizing, renovating, or repairing physical 
        education facilities for students, including upgrading or 
        installing recreational structures made from post-consumer 
        recovered materials in accordance with the comprehensive 
        procurement guidelines prepared by the Administrator of the 
        Environmental Protection Agency under section 6002(e) of the 
        Solid Waste Disposal Act (42 U.S.C. 6962(e));
            (15) other modernization, renovation, or repair of public 
        school facilities to--
                    (A) improve teachers' ability to teach and 
                students' ability to learn;
                    (B) ensure the health and safety of students and 
                staff;
                    (C) make them more energy efficient; or
                    (D) reduce class size; and
            (16) required environmental remediation related to 
        modernization, renovation, or repair described in paragraphs 
        (1) through (15).

SEC. 314. PRIORITY PROJECTS.

    In selecting a project under section 313, a local educational 
agency may give priority to projects involving the abatement, removal, 
or interim controls of asbestos, polychlorinated biphenyls, mold, 
mildew, lead-based hazards, including lead-based paint hazards, or a 
proven carcinogen.

 CHAPTER 2--SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND ALABAMA

SEC. 321. PURPOSE.

    Grants under this chapter shall be for the purpose of modernizing, 
renovating, repairing, or constructing public school facilities, 
including, where applicable, early learning facilities, based on the 
need for such improvements or construction, to ensure that public 
school facilities are safe, healthy, high-performing, and 
technologically up-to-date.

SEC. 322. ALLOCATION TO LOCAL EDUCATIONAL AGENCIES.

    (a) In General.--Of the amount appropriated to carry out this 
chapter for each fiscal year pursuant to section 345(b), the Secretary 
shall allocate to local educational agencies in Louisiana, Mississippi, 
and Alabama an amount equal to the infrastructure damage inflicted on 
public school facilities in each such district by Hurricane Katrina or 
Hurricane Rita in 2005 relative to the total of such infrastructure 
damage so inflicted in all such districts, combined.
    (b) Distribution by Secretary.--The Secretary shall determine and 
distribute the allocations described in subsection (a) not later than 
120 days after an appropriation of funds for this chapter is made.

SEC. 323. ALLOWABLE USES OF FUNDS.

    A local educational agency receiving a grant under this chapter 
shall use the grant for one or more of the activities described in 
section 313, except that an agency receiving a grant under this chapter 
also may use the grant for the construction of new public school 
facilities.

                     CHAPTER 3--GENERAL PROVISIONS

SEC. 331. IMPERMISSIBLE USES OF FUNDS.

    No funds received under this subtitle may be used for--
            (1) payment of maintenance costs, including routine repairs 
        classified as current expenditures under State or local law;
            (2) stadiums or other facilities primarily used for 
        athletic contests or exhibitions or other events for which 
        admission is charged to the general public;
            (3) improvement or construction of facilities the purpose 
        of which is not the education of children, including central 
        office administration or operations or logistical support 
        facilities; or
            (4) purchasing carbon offsets.

SEC. 332. SUPPLEMENT, NOT SUPPLANT.

    A local educational agency receiving a grant under this subtitle 
shall use such Federal funds only to supplement and not supplant the 
amount of funds that would, in the absence of such Federal funds, be 
available for modernization, renovation, repair, and construction of 
public school facilities.

SEC. 333. PROHIBITION REGARDING STATE AID.

    A State shall not take into consideration payments under this 
subtitle in determining the eligibility of any local educational agency 
in that State for State aid, or the amount of State aid, with respect 
to free public education of children.

SEC. 334. MAINTENANCE OF EFFORT.

    (a) In General.--A local educational agency may receive a grant 
under this subtitle for any fiscal year only if either the combined 
fiscal effort per student or the aggregate expenditures of the agency 
and the State involved with respect to the provision of free public 
education by the agency for the preceding fiscal year was not less than 
90 percent of the combined fiscal effort or aggregate expenditures for 
the second preceding fiscal year.
    (b) Reduction in Case of Failure To Meet Maintenance of Effort 
Requirement.--
            (1) In general.--The State educational agency shall reduce 
        the amount of a local educational agency's grant in any fiscal 
        year in the exact proportion by which a local educational 
        agency fails to meet the requirement of subsection (a) by 
        falling below 90 percent of both the combined fiscal effort per 
        student and aggregate expenditures (using the measure most 
        favorable to the local agency).
            (2) Special rule.--No such lesser amount shall be used for 
        computing the effort required under subsection (a) for 
        subsequent years.
    (c) Waiver.--The Secretary shall waive the requirements of this 
section if the Secretary determines that a waiver would be equitable 
due to--
            (1) exceptional or uncontrollable circumstances, such as a 
        natural disaster; or
            (2) a precipitous decline in the financial resources of the 
        local educational agency.

SEC. 335. SPECIAL RULE ON CONTRACTING.

    Each local educational agency receiving a grant under this subtitle 
shall ensure that, if the agency carries out modernization, renovation, 
repair, or construction through a contract, the process for any such 
contract ensures the maximum number of qualified bidders, including 
local, small, minority, and women- and veteran-owned businesses, 
through full and open competition.

SEC. 336. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS.

    (a) In General.--None of the funds appropriated or otherwise made 
available by this subtitle may be used for a project for the 
modernization, renovation, repair, or construction of a public school 
facility unless all of the iron, steel, and manufactured goods used in 
the project are produced in the United States.
    (b) Exceptions.--Subsection (a) shall not apply in any case or 
category of cases in which the Secretary finds that--
            (1) applying subsection (a) would be inconsistent with the 
        public interest;
            (2) iron, steel, and the relevant manufactured goods are 
        not produced in the United States in sufficient and reasonably 
        available quantities and of a satisfactory quality; or
            (3) inclusion of iron, steel, and manufactured goods 
        produced in the United States will increase the cost of the 
        overall project by more than 25 percent.
    (c) Publication of Justification.--If the Secretary determines that 
it is necessary to waive the application of subsection (a) based on a 
finding under subsection (b), the Secretary shall publish in the 
Federal Register a detailed written justification of the determination.
    (d) Construction.--This section shall be applied in a manner 
consistent with United States obligations under international 
agreements.

SEC. 337. LABOR STANDARDS.

    The grant programs under this subtitle are applicable programs (as 
that term is defined in section 400 of the General Education Provisions 
Act (20 U.S.C. 1221)) subject to section 439 of such Act (20 U.S.C. 
1232b).

SEC. 338. CHARTER SCHOOLS.

    (a) In General.--A local educational agency receiving an allocation 
under this subtitle shall reserve an amount of that allocation for 
charter schools within its jurisdiction for modernization, renovation, 
repair, and construction of charter school facilities.
    (b) Determination of Reserved Amount.--The amount to be reserved by 
a local educational agency under subsection (a) shall be determined 
based on the combined percentage of students counted under section 
1113(a)(5) of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6313(a)(5)) in the schools of the agency who--
            (1) are enrolled in charter schools; and
            (2) the local educational agency, in consultation with the 
        authorized public chartering agency, expects to be enrolled, 
        during the year with respect to which the reservation is made, 
        in charter schools that are scheduled to commence operation 
        during such year.
    (c) School Share.--Individual charter schools shall receive a share 
of the amount reserved under subsection (a) based on the need of each 
school for modernization, renovation, repair, or construction, as 
determined by the local educational agency in consultation with charter 
school administrators.
    (d) Excess Funds.--After the consultation described in subsection 
(c), if the local educational agency determines that the amount of 
funds reserved under subsection (a) exceeds the modernization, 
renovation, repair, and construction needs of charter schools within 
the local educational agency's jurisdiction, the agency may use the 
excess funds for other public school facility modernization, 
renovation, repair, or construction consistent with this subtitle and 
is not required to carry over such funds to the following fiscal year 
for use for charter schools.

SEC. 339. GREEN SCHOOLS.

    (a) In General.--Of the funds appropriated for a given fiscal year 
and made available to a local educational agency to carry out this 
subtitle, the local educational agency shall use not less than the 
applicable percentage (described in subsection (b)) of such funds for 
public school modernization, renovation, repair, or construction that 
are certified, verified, or consistent with any applicable provisions 
of--
            (1) the LEED Green Building Rating System;
            (2) Energy Star;
            (3) the CHPS Criteria;
            (4) Green Globes; or
            (5) an equivalent program adopted by the State, or another 
        jurisdiction with authority over the local educational agency, 
        that includes a verifiable method to demonstrate compliance 
        with such program.
    (b) Applicable Percentages.--The applicable percentage described in 
subsection (a) is--
            (1) for funds appropriated in fiscal year 2010, 50 percent; 
        and
            (2) for funds appropriated in fiscal year 2011, 75 percent.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a local educational agency from using 
sustainable, domestic hardwood lumber as ascertained through the forest 
inventory and analysis program of the Forest Service of the Department 
of Agriculture under the Forest and Rangeland Renewable Resources 
Research Act of 1978 (16 U.S.C. 1641 et seq.) for public school 
modernization, renovation, repairs, or construction.
    (d) Technical Assistance.--The Secretary, in consultation with the 
Secretary of Energy and the Administrator of the Environmental 
Protection Agency, shall provide outreach and technical assistance to 
States and local educational agencies concerning the best practices in 
school modernization, renovation, repair, and construction, including 
those related to student academic achievement, student and staff 
health, energy efficiency, and environmental protection.

SEC. 340. REPORTING.

    (a) Reports by Local Educational Agencies.--Local educational 
agencies receiving a grant under this subtitle shall annually compile a 
report describing the projects for which such funds were used, 
including--
            (1) the number and identity of public schools in the 
        agency, including the number of charter schools, and for each 
        school, the total number of students, and the number of 
        students counted under section 1113(a)(5) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6313(a)(5));
            (2) the total amount of funds received by the local 
        educational agency under this subtitle, and for each public 
        school in the agency, including each charter school, the amount 
        of such funds expended, and the types of modernization, 
        renovation, repair, or construction projects for which such 
        funds were used;
            (3) the number of students impacted by such projects, 
        including the number of students so impacted who are counted 
        under section 1113(a)(5) of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6313(a)(5));
            (4) the number of public schools in the agency with a 
        metro-centric locale code of 41, 42, or 43 as determined by the 
        National Center for Education Statistics and the percentage of 
        funds received by the agency under chapter 1 or chapter 2 of 
        this subtitle that were used for projects at such schools;
            (5) the number of public schools in the agency that are 
        eligible for schoolwide programs under section 1114 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314) 
        and the percentage of funds received by the agency under 
        chapter 1 or chapter 2 of this subtitle that were used for 
        projects at such schools;
            (6) for each project--
                    (A) the cost;
                    (B) the standard described in section 339(a) with 
                which the use of the funds complied or, if the use of 
                funds did not comply with a standard described in 
                section 339(a), the reason such funds were not able to 
                be used in compliance with such standards and the 
                agency's efforts to use such funds in an 
                environmentally sound manner; and
                    (C) any demonstrable or expected benefits as a 
                result of the project (such as energy savings, improved 
                indoor environmental quality, student and staff health, 
                including the reduction of the incidence and effects of 
                asthma and other respiratory illnesses, and improved 
                climate for teaching and learning); and
            (7) the total number and amount of contracts awarded, and 
        the number and amount of contracts awarded to local, small, 
        minority, women, and veteran-owned businesses.
    (b) Availability of Reports.--A local educational agency shall--
            (1) submit the report described in subsection (a) to the 
        State educational agency, which shall compile such information 
        and report it annually to the Secretary; and
            (2) make the report described in subsection (a) publicly 
        available, including on the agency's website.
    (c) Reports by Secretary.--Not later than March 31 of each fiscal 
year, the Secretary shall submit to the Committee on Education and 
Labor of the House of Representatives and the Committee on Health, 
Education, Labor and Pensions of the Senate, and make available on the 
Department of Education's website, a report on grants made under this 
subtitle, including the information from the reports described in 
subsection (b)(1).

SEC. 341. SPECIAL RULES.

    Notwithstanding any other provision of this subtitle, none of the 
funds authorized by this subtitle may be--
            (1) used to employ workers in violation of section 274A of 
        the Immigration and Nationality Act (8 U.S.C. 1324a); or
            (2) distributed to a local educational agency that does not 
        have a policy that requires a criminal background check on all 
        employees of the agency.

SEC. 342. PROMOTION OF EMPLOYMENT EXPERIENCES.

    The Secretary of Education, in consultation with the Secretary of 
Labor, shall work with recipients of funds under this subtitle to 
promote appropriate opportunities to gain employment experience working 
on modernization, renovation, repair, and construction projects funded 
under this subtitle for--
            (1) participants in a YouthBuild program (as defined in 
        section 173A of the Workforce Investment Act of 1998 (29 U.S.C. 
        2918a));
            (2) individuals enrolled in the Job Corps program carried 
        out under subtitle C of title I of the Workforce Investment Act 
        of 1998 (29 U.S.C. 2881 et seq.);
            (3) individuals enrolled in a junior or community college 
        (as defined in section 312(f) of the Higher Education Act of 
        1965 (20 U.S.C. 1088(f))) certificate or degree program 
        relating to projects described in section 339(a); and
            (4) participants in preapprenticeship programs that have 
        direct linkages with apprenticeship programs that are 
        registered with the Department of Labor or a State 
        Apprenticeship Agency under the National Apprenticeship Act of 
        1937 (29 U.S.C. 50 et seq.).

SEC. 343. ADVISORY COUNCIL ON GREEN, HIGH-PERFORMING PUBLIC SCHOOL 
              FACILITIES.

    (a) Establishment of Advisory Council.--The Secretary shall 
establish an advisory council to be known as the ``Advisory Council on 
Green, High-Performing Public School Facilities'' (in this section 
referred to as the ``Advisory Council'') which shall be composed of--
            (1) appropriate officials from the Department of Education;
            (2) representatives of the academic, architectural, 
        business, education, engineering, environmental, labor, and 
        scientific communities; and
            (3) such other representatives as the Secretary deems 
        appropriate.
    (b) Duties of Advisory Council.--
            (1) Advisory duties.--The Advisory Council shall advise the 
        Secretary on the impact of green, high-performing schools, on--
                    (A) teaching and learning;
                    (B) health;
                    (C) energy costs;
                    (D) environmental impact; and
                    (E) other areas that the Secretary and the Advisory 
                Council deem appropriate.
            (2) Other duties.--The Advisory Council shall assist the 
        Secretary in--
                    (A) making recommendations on Federal policies to 
                increase the number of green, high-performing schools;
                    (B) identifying Federal policies that are barriers 
                to helping States and local educational agencies make 
                green, high-performing schools;
                    (C) providing technical assistance and outreach to 
                States and local educational agencies under section 
                339(d); and
                    (D) providing the Secretary such other assistance 
                as the Secretary deems appropriate.
    (c) Consultation.--In carrying out its duties under subsection (b), 
the Advisory Council shall consult with the Chair of the Council on 
Environmental Quality and the heads of appropriate Federal agencies, 
including the Secretary of Commerce, the Secretary of Energy, the 
Secretary of Health and Human Services, the Secretary of Labor, the 
Administrator of the Environmental Protection Agency, and the 
Administrator of the General Services Administration (through the 
Office of Federal High-Performance Green Buildings).

SEC. 344. EDUCATION REGARDING PROJECTS.

    A local educational agency receiving funds under this subtitle may 
encourage schools at which projects are undertaken with such funds to 
educate students about the project, including, as appropriate, the 
functioning of the project and its environmental, energy, 
sustainability, and other benefits.

SEC. 345. AVAILABILITY OF FUNDS.

    (a) Chapter 1.--There are authorized to be appropriated, and there 
are appropriated, to carry out chapter 1 of this subtitle (in addition 
to any other amounts appropriated to carry out such chapter and out of 
any money in the Treasury not otherwise appropriated), $2,020,000,000 
for each of fiscal years 2010 and 2011.
    (b) Chapter 2.--There are authorized to be appropriated, and there 
are appropriated, to carry out chapter 2 of this subtitle (in addition 
to any other amounts appropriated to carry out such chapter and out of 
any money in the Treasury not otherwise appropriated), $30,000,000 for 
each of fiscal years 2010 and 2011.
    (c) Prohibition on Earmarks.--None of the funds appropriated under 
this section may be used for a Congressional earmark as defined in 
clause 9(d) of rule XXI of the Rules of the House of Representatives.

                      Subtitle B--Higher Education

SEC. 351. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION AND 
              CONSTRUCTION.

    (a) In General.--
            (1) Grant program.--From the amounts made available under 
        subsection (i), the Secretary shall award grants to States for 
        the purposes of constructing new community college facilities 
        and modernizing, renovating, and repairing existing community 
        college facilities. Grants awarded under this section shall be 
        used by a State for one or more of the following:
                    (A) To reduce financing costs of loans for new 
                construction, modernization, renovation, or repair 
                projects at community colleges (such as paying interest 
                or points on such loans).
                    (B) To provide matching funds for a community 
                college capital campaign to attract private donations 
                of funds for new construction, modernization, 
                renovation, or repair projects at the community 
                college.
                    (C) To capitalize a revolving loan fund to finance 
                new construction, modernization, renovation, and repair 
                projects at community colleges.
            (2) Allocation.--
                    (A) Determination of available amount.--The 
                Secretary shall determine the amount available for 
                allocation to each State by determining the amount 
                equal to the total number of students in the State who 
                are enrolled in community colleges and who are pursuing 
                a degree or certificate that is not a bachelor's, 
                master's, professional, or other advanced degree, 
                relative to the total number of such students in all 
                States, combined.
                    (B) Allocation.--The Secretary shall allocate to 
                each State selected by the Secretary to receive a grant 
                under this section an amount equal to the amount 
                determined to be available for allocation to such State 
                under subparagraph (A), less any portion of that amount 
                that is subject to a limitation under paragraph (3).
                    (C) Reallocation.--Amounts not allocated under this 
                section to a State because--
                            (i) the State did not submit an application 
                        under subsection (b);
                            (ii) the State submitted an application 
                        that the Secretary determined did not meet the 
                        requirements of such subsection; or
                            (iii) the State is subject to a limitation 
                        under paragraph (3) that prevents the State 
                        from using a portion of the allocation,
                shall be proportionately reallocated under this 
                paragraph to the States that are not described in 
                clause (i), (ii), or (iii) of this subparagraph.
            (3) Grant amount limitations.--A grant awarded to a State 
        under this section--
                    (A) to reduce financing costs of loans for new 
                construction, modernization, renovation, or repair 
                projects at community colleges under paragraph (1)(A) 
                shall be for an amount that is not more than 25 percent 
                of the total principal amount of the loans for which 
                financing costs are being reduced; and
                    (B) to provide matching funds for a community 
                college capital campaign under paragraph (1)(B) shall 
                be for an amount that is not more than 25 percent of 
                the total amount of the private donations of funds 
                raised through such campaign over the duration of such 
                campaign, as such duration is determined by the State 
                in the application submitted under subsection (b).
            (4) Supplement, not supplant.--Funds made available under 
        this section shall be used to supplement, and not supplant, 
        other Federal, State, and local funds that would otherwise be 
        expended to construct new community college facilities or 
        modernize, renovate, or repair existing community college 
        facilities.
    (b) Application.--A State that desires to receive a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information and assurances as the 
Secretary may require. Such application shall include a certification 
by the State that the funds provided under this section for the 
construction of new community college facilities and the modernization, 
renovation, and repair of existing community college facilities will 
improve instruction at such colleges and will improve the ability of 
such colleges to educate and train students to meet the workforce needs 
of employers in the State.
    (c) Use of Funds by Community Colleges.--
            (1) Permissible uses of funds.--Funds made available to 
        community colleges through a loan described in subsection 
        (a)(1)(A), a capital campaign described in subsection 
        (a)(1)(B), or a loan from a revolving loan fund described in 
        subsection (a)(1)(C) shall be used only for the construction, 
        modernization, renovation, or repair of community college 
        facilities that are primarily used for instruction, research, 
        or student housing, which may include any of the following:
                    (A) Repair, replacement, or installation of roofs, 
                including extensive, intensive, or semi-intensive green 
                roofs, electrical wiring, water supply and plumbing 
                systems, sewage systems, storm water runoff systems, 
                lighting systems, building envelope, windows, ceilings, 
                flooring, or doors, including security doors.
                    (B) Repair, replacement, or installation of 
                heating, ventilation, or air conditioning systems, 
                including insulation, and conducting indoor air quality 
                assessments.
                    (C) Compliance with fire, health, seismic, and 
                safety codes, including professional installation of 
                fire and life safety alarms, and modernizations, 
                renovations, and repairs that ensure that the community 
                college's facilities are prepared for emergencies, such 
                as improving building infrastructure to accommodate 
                security measures and installing or upgrading 
                technology to ensure that the community college is able 
                to respond to emergencies such as acts of terrorism, 
                campus violence, and natural disasters.
                    (D) Retrofitting necessary to increase the energy 
                efficiency of the community college's facilities.
                    (E) Modifications necessary to make facilities 
                accessible in compliance with the Americans with 
                Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and 
                section 504 of the Rehabilitation Act of 1973 (29 
                U.S.C. 794).
                    (F) Abatement, removal, or interim controls of 
                asbestos, polychlorinated biphenyls, mold, mildew, or 
                lead-based hazards, including lead-based paint hazards 
                from the community college's facilities.
                    (G) Modernization, renovation, or repair necessary 
                to reduce the consumption of coal, electricity, land, 
                natural gas, oil, or water.
                    (H) Modernization, renovation, and repair relating 
                to improving science and engineering laboratories, 
                libraries, or instructional facilities.
                    (I) Installation or upgrading of educational 
                technology infrastructure.
                    (J) Installation or upgrading of renewable energy 
                generation and heating systems, including solar, 
                photovoltaic, wind, biomass (including wood pellet and 
                woody biomass), waste-to-energy, solar-thermal and 
                geothermal systems, and energy audits.
                    (K) Other modernization, renovation, or repair 
                projects that are primarily for instruction, research, 
                or student housing.
                    (L) Required environmental remediation related to 
                modernization, renovation, or repair described in 
                subparagraphs (A) through (K).
            (2) Green school requirement.--A community college 
        receiving assistance through a loan described in subsection 
        (a)(1)(A), a capital campaign described in subsection 
        (a)(1)(B), or a loan from a revolving loan fund described in 
        subsection (a)(1)(C) shall use not less than 50 percent of such 
        assistance to carry out projects for construction, 
        modernization, renovation, or repair that are certified, 
        verified, or consistent with the applicable provisions of--
                    (A) the LEED Green Building Rating System;
                    (B) Energy Star;
                    (C) the CHPS Criteria, as applicable;
                    (D) Green Globes; or
                    (E) an equivalent program adopted by the State or 
                the State higher education agency that includes a 
                verifiable method to demonstrate compliance with such 
                program.
            (3) Prohibited uses of funds.--
                    (A) In general.--No funds awarded under this 
                section may be used for--
                            (i) payment of maintenance costs;
                            (ii) construction, modernization, 
                        renovation, or repair of stadiums or other 
                        facilities primarily used for athletic contests 
                        or exhibitions or other events for which 
                        admission is charged to the general public; or
                            (iii) construction, modernization, 
                        renovation, or repair of facilities--
                                    (I) used for sectarian instruction, 
                                religious worship, or a school or 
                                department of divinity; or
                                    (II) in which a substantial portion 
                                of the functions of the facilities are 
                                subsumed in a religious mission.
                    (B) Four-year institutions.--No funds awarded to a 
                four-year public institution of higher education under 
                this section may be used for any facility, service, or 
                program of the institution that is not available to 
                students who are pursuing a degree or certificate that 
                is not a bachelor's, master's, professional, or other 
                advanced degree.
    (d) Application of GEPA.--The grant program authorized in this 
section is an applicable program (as that term is defined in section 
400 of the General Education Provisions Act (20 U.S.C. 1221)) subject 
to section 439 of such Act (20 U.S.C. 1232b). The Secretary shall, 
notwithstanding section 437 of such Act (20 U.S.C. 1232) and section 
553 of title 5, United States Code, establish such program rules as may 
be necessary to implement such grant program by notice in the Federal 
Register.
    (e) Concurrent Funding.--Funds made available under this section 
shall not be used to assist any community college that receives funding 
for the construction, modernization, renovation, and repair of 
facilities under any other program under this Act, the Higher Education 
Act of 1965, or the American Recovery and Reinvestment Act of 2009.
    (f) Reports by the States.--Each State that receives a grant under 
this section shall, not later than September 30, 2012, and annually 
thereafter for each fiscal year in which the State expends funds 
received under this section, submit to the Secretary a report that 
includes--
            (1) a description the projects for which the grant funding 
        was, or will be, used;
            (2) a list of the community colleges that have received, or 
        will receive, assistance from the grant through a loan 
        described in subsection (a)(1)(A), a capital campaign described 
        in subsection (a)(1)(B), or a loan from a revolving loan fund 
        described in subsection (a)(1)(C); and
            (3) a description of the amount and nature of the 
        assistance provided to each such college.
    (g) Report by the Secretary.--The Secretary shall submit to the 
authorizing committees (as defined in section 103 of the Higher 
Education Act of 1965) an annual report on the grants made under this 
section, including the information described in subsection (f).
    (h) Definitions.--
            (1) Community college.--As used in this section, the term 
        ``community college'' means--
                    (A) a junior or community college, as such term is 
                defined in section 312(f) of the Higher Education Act 
                of 1965 (20 U.S.C. 1085(f)); or
                    (B) a four-year public institution of higher 
                education (as defined in section 101 of the Higher 
                Education Act of 1965) that awards a significant number 
                of degrees and certificates that are not--
                            (i) bachelor's degrees (or an equivalent); 
                        or
                            (ii) master's, professional, or other 
                        advanced degrees.
            (2) CHPS criteria.--The term ``CHPS Criteria'' means the 
        green building rating program developed by the Collaborative 
        for High Performance Schools.
            (3) Energy star.--The term ``Energy Star'' means the Energy 
        Star program of the United States Department of Energy and the 
        United States Environmental Protection Agency.
            (4) Green globes.--The term ``Green Globes'' means the 
        Green Building Initiative environmental design and rating 
        system referred to as Green Globes.
            (5) Leed green building rating system.--The term ``LEED 
        Green Building Rating System'' means the United States Green 
        Building Council Leadership in Energy and Environmental Design 
        green building rating standard referred to as the LEED Green 
        Building Rating System.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (7) State.--The term ``State'' has the meaning given such 
        term in section 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003).
    (i) Availability of Funds.--There are authorized to be 
appropriated, and there are appropriated, to carry out this section (in 
addition to any other amounts appropriated to carry out this section 
and out of any money in the Treasury not otherwise appropriated), 
$2,500,000,000 for fiscal year 2011, which shall remain available until 
expended.

                TITLE IV--EARLY LEARNING CHALLENGE FUND

SEC. 401. PURPOSE.

    The purpose of this title is to provide grants on a competitive 
basis to States for the following:
            (1) To promote standards reform of State early learning 
        programs serving children from birth through age 5 in order to 
        support the healthy development and improve the school 
        readiness outcomes of young children.
            (2) To establish a high standard of quality in early 
        learning programs that integrates appropriate early learning 
        and development standards across early learning settings.
            (3) To fund and implement quality initiatives that improve 
        the skills and effectiveness of early learning providers, and 
        improve the quality of existing early learning programs, in 
        order to increase the number of disadvantaged children who 
        participate in comprehensive and high-quality early learning 
        programs.
            (4) To ensure that a greater number of disadvantaged 
        children enter kindergarten with the cognitive, social, 
        emotional, and physical skills and abilities needed to be 
        successful in school.
            (5) To increase parents' abilities to access comprehensive 
        and high quality early learning programs across settings for 
        their children.

SEC. 402. PROGRAMS AUTHORIZED.

    (a) Quality Pathways Grants.--The Secretary shall use funds made 
available to carry out this title for a fiscal year to award grants on 
a competitive basis to States in accordance with section 403.
    (b) Development Grants.--The Secretary shall use funds made 
available to carry out this title for a fiscal year to award grants in 
accordance with section 404 on a competitive basis to States that 
demonstrate a commitment to establishing a system of early learning 
that will include the components described in section 403(c)(3) but are 
not--
            (1) eligible to be awarded a grant under subsection (a); or
            (2) are not awarded such a grant after application.
    (c) Reservations of Federal Funds.--
            (1) Research, evaluation, and administration.--From the 
        amount made available to carry out this title for a fiscal 
        year, the Secretary--
                    (A) shall reserve up to 2 percent jointly to 
                administer this title with the Secretary of Health and 
                Human Services; and
                    (B) shall reserve up to 3 percent to carry out 
                activities under section 405.
            (2) Tribal school readiness planning demonstration.--After 
        making the reservations under paragraph (1), the Secretary 
        shall reserve 0.25 percent for a competitive grant program for 
        Indian tribes to develop and implement school readiness plans 
        that--
                    (A) are coordinated with local educational agencies 
                serving children who are members of the tribe; and
                    (B) include American Indian and Alaska Native Head 
                Start and Early Head Start programs, tribal child care 
                programs, Indian Health Service programs, and other 
                tribal programs serving children.
            (3) Quality pathways grants.--
                    (A) In general.--From the amount made available to 
                carry out this title for a fiscal year and not reserved 
                under paragraph (1) or (2), the Secretary shall reserve 
                a percent (which shall be not greater than 65 percent 
                for fiscal years 2010 through 2012 and not greater than 
                85 percent for fiscal year 2013 and each succeeding 
                fiscal year) determined under subparagraph (B) to carry 
                out subsection (a).
                    (B) Determination of amount.--In determining the 
                amount to reserve under subparagraph (A), the 
                Secretary, consistent with section 403(e), shall take 
                into account the following:
                            (i) The total number of States determined 
                        by the Secretary to qualify for receipt of a 
                        grant under this title for the year.
                            (ii) The number of children under age 5 
                        from low-income families in each State with an 
                        approved application under section 403 for the 
                        year.
                    (C) Reallocation.--For fiscal year 2013 and 
                subsequent fiscal years, the Secretary may reallocate 
                funds allocated for development grants under subsection 
                (b) for the purpose of providing additional grants 
                under subsection (a), if the Secretary determines that 
                there is an insufficient number of applications that 
                meet the requirements for a grant under subsection (b).
    (d) State Applications.--In applying for a grant under this title, 
a State--
            (1) shall designate a State-level entity for administration 
        of the grant;
            (2) shall coordinate proposed activities with the State 
        Advisory Council on Early Childhood Education and Care 
        (established pursuant to section 642B(b)(1)(A) of the Head 
        Start Act (42 U.S.C. 9837b(b)(1)(A))) and shall incorporate 
        plans and recommendations from such Council in the application, 
        where applicable; and
            (3) otherwise shall submit the application to the Secretary 
        at such time, in such manner, and containing such information 
        as the Secretary may reasonably require.
    (e) Priority in Awarding Grants.--In awarding grants under this 
title, the Secretary shall give priority to States--
            (1) whose applications contain assurances that the State 
        will use, in part, funds reserved under section 658G of the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858e) for activities described in section 403(f);
            (2) that will commit to dedicating a significant increase, 
        in comparison to recent fiscal years, in State expenditures on 
        early learning programs and services; and
            (3) that demonstrate efforts to build public-private 
        partnerships designed to accomplish the purposes of this title.
    (f) Maintenance of Effort.--
            (1) In general.--With respect to each period for which a 
        State is awarded a grant under this title, the aggregate 
        expenditures by the State and its political subdivisions on 
        early learning programs and services shall be not less than the 
        level of the expenditures for such programs and services by the 
        State and its political subdivisions for fiscal year 2006.
            (2) State expenditures.--For purposes of paragraph (1), 
        expenditures by the State on early learning programs and 
        services shall include, at a minimum, the following:
                    (A) State matching and maintenance of effort funds 
                for the Child Care and Development Block Grant Act of 
                1990 (42 U.S.C. 9858 et seq.).
                    (B) State matching funds for the State Advisory 
                Council on Early Childhood Education and Care 
                (established pursuant to section 642B(b)(1)(A) of the 
                Head Start Act (42 U.S.C. 9837b(b)(1)(A))).
                    (C) State expenditures on public pre-kindergarten, 
                Head Start (including Early Head Start), and other 
                State early learning programs and services dedicated to 
                children (including State expenditures under part C of 
                the Individuals with Disabilities Education Act (20 
                U.S.C. 1431 et seq.)).
    (g) Prohibitions on Use of Funds.--Funds under this title may not 
be used for any of the following:
            (1) Assessments that provide rewards or sanctions for 
        individual children or teachers.
            (2) A single assessment used as the primary or sole method 
        for assessing program effectiveness.
            (3) Evaluating children other than for--
                    (A) improving instruction or classroom environment;
                    (B) targeting professional development;
                    (C) determining the need for health, mental health, 
                disability, or family support services;
                    (D) informing the quality improvement process at 
                the State level;
                    (E) program evaluation for the purposes of program 
                improvement and parent information; or
                    (F) research conducted as part of the national 
                evaluation required by section 405(2).
    (h) Federal Administration.--
            (1) In general.--With respect to this title, the Secretary 
        shall bear responsibility for obligating and disbursing funds 
        and ensuring compliance with applicable laws and administrative 
        requirements, subject to paragraph (2).
            (2) Interagency agreement.--The Secretary of Education and 
        the Secretary of Health and Human Services shall jointly 
        administer this title on such terms as such secretaries shall 
        set forth in an interagency agreement.

SEC. 403. QUALITY PATHWAYS GRANTS.

    (a) Grant Period.--Grants under section 402(a)--
            (1) may be awarded for a period not to exceed 5 years; and
            (2) may be renewed, subject to approval by the Secretary, 
        and based on the State's progress in--
                    (A) increasing the percentage of disadvantaged 
                children in each age group (infants, toddlers, and 
                preschoolers) who participate in high-quality early 
                learning programs;
                    (B) increasing the number of high-quality early 
                learning programs in low-income communities;
                    (C) implementing an early learning system that 
                includes the components described in subsection (c)(3); 
                and
                    (D) incorporating the findings and recommendations 
                reported by the commission established under section 
                405(1) into the State system of early learning.
    (b) Matching Requirement.--
            (1) In general.--Subject to subsection (g), to be eligible 
        to receive a grant under section 402(a), a State shall 
        contribute to the activities assisted under the grant non-
        Federal matching funds in an amount equal to not less than the 
        applicable percent of the amount of the grant.
            (2) Applicable percent.--For purposes of paragraph (1), the 
        applicable percent means--
                    (A) 10 percent in the first fiscal year of the 
                grant;
                    (B) 10 percent in the second fiscal year of the 
                grant;
                    (C) 15 percent in the third fiscal year of the 
                grant; and
                    (D) 20 percent in the fourth fiscal year of the 
                grant and subsequent fiscal years.
            (3) Non-federal funds.--A State may use the following to 
        satisfy the requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (4) Private contributions.--Private contributions made as 
        part of public-private partnerships to increase the number of 
        low-income children in high-quality early learning programs in 
        a State may be used by the State to satisfy the requirement of 
        paragraph (1).
            (5) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State that has submitted an 
        application for a grant under section 402(a) if the State 
        demonstrates a need for such waiver or reduction due to extreme 
        financial hardship, as defined by the Secretary by regulation.
    (c) State Applications.--In order to be considered for a grant 
under section 402(a), a State's application under section 402(d) shall 
include the following:
            (1) A description of how the State will use the grant to 
        implement quality initiatives to improve early learning 
        programs serving disadvantaged children from birth to age 5 to 
        lead to a greater percentage of such children participating in 
        higher quality early learning programs.
            (2) A description of the goals and benchmarks the State 
        will establish to lead to a greater percentage of disadvantaged 
        children participating in higher quality early learning 
        programs to improve school readiness outcomes, including an 
        established baseline of the number of disadvantaged children in 
        high-quality early learning programs.
            (3) A description of how the State will implement a 
        governance structure and a system of early learning programs 
        and services that includes the following components:
                    (A) Not later than 12 months after receiving notice 
                of an award of the grant, complete State early learning 
                and development standards that include social and 
                emotional, cognitive, and physical development domains, 
                and approaches to learning that are developmentally 
                appropriate (including culturally and linguistically 
                appropriate) for all children.
                    (B) A process to ensure that State early learning 
                and development standards are integrated into the 
                instructional and programmatic practices of early 
                learning programs and services, including services 
                provided to children under section 619 and part C of 
                the Individuals with Disabilities Education Act (20 
                U.S.C. 1419, 1431 et seq.).
                    (C) A program rating system that builds on 
                licensing requirements, as appropriate, and other State 
                regulatory standards and that--
                            (i) is designed to improve quality and 
                        effectiveness across different types of early 
                        learning settings;
                            (ii) integrates evidence-based program 
                        quality standards that reflect standard levels 
                        of quality and has progressively higher levels 
                        of program quality;
                            (iii) integrates the State's early learning 
                        and development standards for the purpose of 
                        improving instructional and programmatic 
                        practices;
                            (iv) addresses quality and effective 
                        inclusion of children with disabilities or 
                        developmental delays across different types of 
                        early learning settings;
                            (v) addresses staff qualifications and 
                        professional development;
                            (vi) provides financial incentives and 
                        other supports to help programs meet and 
                        sustain higher levels of quality;
                            (vii) includes mechanisms for evaluating 
                        how programs are meeting those standards and 
                        progressively higher levels of quality; and
                            (viii) includes a mechanism for public 
                        awareness and understanding of the program 
                        rating system, including rating levels of 
                        individual programs.
                    (D) A system of program review and monitoring that 
                is designed to rate providers using the system 
                described in subparagraph (C) and to assess and improve 
                programmatic practices, instructional practices, and 
                classroom environment.
                    (E) A process to support early learning programs 
                integrating instructional and programmatic practices 
                that--
                            (i) include developmentally appropriate 
                        (including culturally and linguistically 
                        appropriate), ongoing, classroom-based 
                        instructional assessments for each domain of 
                        child development and learning (including 
                        social and emotional, cognitive, and physical 
                        development domains and approaches to learning) 
                        to guide and improve instructional practice, 
                        professional development of staff, and 
                        services; and
                            (ii) are aligned with the curricula used in 
                        the early learning program and with the State 
                        early learning and development standards or the 
                        Head Start Child Outcomes Framework (as 
                        described in the Head Start Act), as 
                        applicable.
                    (F) Minimum preservice early childhood development 
                and education training requirements for providers in 
                early learning programs.
                    (G) A comprehensive plan for supporting the 
                professional preparation and the ongoing professional 
                development of an effective, well-compensated early 
                learning workforce, which plan includes training and 
                education that is sustained, intensive, and classroom-
                focused and leads toward a credential or degree and is 
                tied to improved compensation.
                    (H) An outreach strategy to promote understanding 
                by parents and families of--
                            (i) how to support their child's early 
                        development and learning;
                            (ii) the State's program rating system, as 
                        described in subparagraph (C); and
                            (iii) the rating of the program in which 
                        their child is enrolled.
                    (I) A coordinated system to facilitate screening, 
                referral, and provision of services related to health, 
                mental health, disability, and family support for 
                children participating in early learning programs.
                    (J) A process for evaluating school readiness in 
                children that reflects all of the major domains of 
                development, and that is used to guide practice and 
                improve early learning programs.
                    (K) A coordinated data infrastructure that 
                facilitates--
                            (i) uniform data collection about the 
                        quality of early learning programs, essential 
                        information about the children and families 
                        that participate in such programs, and the 
                        qualifications and compensation of the early 
                        learning workforce in such programs; and
                            (ii) alignment and interoperability between 
                        the data system for early learning programs for 
                        children and data systems for elementary and 
                        secondary education.
            (4) A description of how the funds provided under the grant 
        will be targeted to prioritize increasing the number and 
        percentage of low-income children in high-quality early 
        learning programs, including children--
                    (A) in each age group (infants, toddlers, and 
                preschoolers);
                    (B) with developmental delays and disabilities;
                    (C) with limited English proficiency; and
                    (D) living in rural areas.
            (5) An assurance that the grant will be used to improve the 
        quality of early learning programs across a range of types of 
        settings and providers of such programs.
            (6) A description of the steps the State will take to make 
        progress toward including all center-based child care programs, 
        family child care programs, State-funded prekindergarten, Head 
        Start programs, and other early learning programs, such as 
        those funded under title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6301 et seq.) or receiving 
        funds under section 619 or part C of the Individuals with 
        Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.) in 
        the State program rating system described in paragraph (3)(C).
            (7) An assurance that the State, not later than 18 months 
        after receiving notice of an award of the grant, will conduct 
        an analysis of the alignment of the State's early learning and 
        development standards with--
                    (A) appropriate academic content standards for 
                grades kindergarten through 3; and
                    (B) elements of program quality standards for early 
                learning programs.
            (8) An assurance that the grant will be used only to 
        supplement, and not to supplant, Federal, State, and local 
        funds otherwise available to support existing early learning 
        programs and services.
            (9) A description of any disparity by age group (infants, 
        toddlers, and preschoolers) of available high-quality early 
        learning programs in low-income communities and the steps the 
        State will take to decrease such disparity, if applicable.
            (10) A description of how the State early learning and 
        development standards will address the needs of children with 
        limited English proficiency, including by incorporating 
        benchmarks related to English language development.
            (11) A description of how the State's professional 
        development plan will prepare the early learning workforce to 
        support the early learning needs of children with limited 
        English proficiency.
            (12) A description of how the State will improve 
        interagency collaboration and coordinate the purposes of this 
        title with the activities funded under--
                    (A) section 658G of the Child Care and Development 
                Block Grant Act of 1990 (42 U.S.C. 9858e);
                    (B) section 619 and part C of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1419, 1431 et 
                seq.);
                    (C) title I of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 6301 et seq.);
                    (D) State-funded pre-kindergarten programs (where 
                applicable);
                    (E) Head Start programs; and
                    (F) other early childhood programs and services.
            (13) A description of how the State's early learning 
        policies, including child care policies, facilitate access to 
        high-quality early learning programs for children from low-
        income families.
            (14) An assurance that the State will continue to 
        participate in part C of the Individuals with Disabilities 
        Education Act (20 U.S.C. 1431 et seq.) for the duration of the 
        grant.
    (d) Criteria Used in Awarding Grants.--In awarding grants under 
section 402(a), the Secretary shall evaluate the applications, and 
award grants under such section on a competitive basis, based on--
            (1) the quality of the application submitted pursuant to 
        section 402(d);
            (2) the priority factors described in section 402(e);
            (3) evidence of significant progress in establishing a 
        system of early learning for children that includes the 
        components described in subsection (c)(3); and
            (4) the State's capacity to fully complete implementation 
        of such a system.
    (e) Criterion Used in Determining Amount of Award.--In determining 
the amount to award a State under section 402(a), the Secretary shall 
take into account--
            (1) the proportion of children under age 5 from low-income 
        families in the State relative to such proportion in other 
        States; and
            (2) the State plan and capacity to implement the criteria 
        described in paragraphs (3) and (4) of subsection (d).
    (f) State Uses of Funds.--
            (1) In general.--A State receiving a grant under section 
        402(a) shall use the grant as follows:
                    (A) Not less than 65 percent of the grant amount 
                shall be used for two or more of the following 
                activities to improve the quality of early learning 
                programs serving disadvantaged children:
                            (i) Initiatives that improve the 
                        credentials of early learning providers and are 
                        tied to increased compensation.
                            (ii) Initiatives that help early learning 
                        programs meet and sustain higher program 
                        quality standards, such as--
                                    (I) improving the ratio of early 
                                learning provider to children in early 
                                learning settings;
                                    (II) reducing group size;
                                    (III) improving the qualifications 
                                of early learning providers; and
                                    (IV) supporting effective education 
                                and training for early learning 
                                providers.
                            (iii) Implementing classroom observation 
                        assessments and data-driven decisions (which 
                        may include implementation of a research-based 
                        prevention and intervention framework designed 
                        to build social competence and prevent 
                        challenging behaviors) tied to activities that 
                        improve instructional practices, programmatic 
                        practices, or classroom environment and promote 
                        school readiness.
                            (iv) Providing financial incentives to 
                        early learning programs--
                                    (I) for undertaking quality 
                                improvements that promote healthy 
                                development and school readiness; and
                                    (II) maintaining quality 
                                improvements that promote healthy 
                                development and school readiness.
                            (v) Integrating State early learning and 
                        development standards into instructional and 
                        programmatic practices in early learning 
                        programs.
                            (vi) Providing high-quality, sustained, 
                        intensive, and classroom-focused professional 
                        development that improves the knowledge and 
                        skills of early learning providers, including 
                        professional development related to meeting the 
                        needs of diverse populations.
                            (vii) Building the capacity of early 
                        learning programs and communities to promote 
                        the understanding of parents and families of 
                        the State's early learning system and the 
                        rating of the program in which their child is 
                        enrolled and to encourage the active 
                        involvement and engagement of parents and 
                        families in the learning and development of 
                        their children.
                            (viii) Building the capacity of early 
                        learning programs and communities to facilitate 
                        screening, referral, and provision of services 
                        related to health, mental health, disability, 
                        and family support for children participating 
                        in early learning programs.
                            (ix) Other innovative activities, proposed 
                        by the State and approved in advance by the 
                        Secretary that are--
                                    (I) based on successful practices;
                                    (II) designed to improve the 
                                quality of early learning programs and 
                                services; and
                                    (III) advance the system components 
                                described in subsection (c)(3).
                    (B) The remainder of the grant amount may be used 
                for one or more of the following:
                            (i) Implementation or enhancement of the 
                        State's data system described in subsection 
                        (c)(3)(K), including interoperability across 
                        agencies serving children, and unique child and 
                        program identifiers.
                            (ii) Enhancement of the State's oversight 
                        system for early learning programs, including 
                        the implementation of a program rating system.
                            (iii) The development and implementation of 
                        measures of school readiness of children that 
                        reflect all of the major domains of child 
                        development and that inform the quality 
                        improvement process.
            (2) Priority.--A State receiving a grant under section 
        402(a) shall use the grant so as to prioritize improving the 
        quality of early learning programs serving children from low-
        income families.
    (g) Special Rule.--
            (1) In general.--Beginning with the second fiscal year of a 
        grant under section 402(a), a State with respect to which the 
        Secretary certifies that the State has made sufficient progress 
        in implementing the requirements of the grant may apply to the 
        Secretary to reserve up to 25 percent of the amount of the 
        grant to expand access for children from low-income families to 
        the highest quality early learning programs that offer full-day 
        services, except that the State must agree to contribute for 
        such purpose non-Federal matching funds in an amount equal to 
        not less than 20 percent of the amount reserved under this 
        subsection. One-half of such non-Federal matching funds may be 
        provided by a private entity.
            (2) Non-federal funds.--A State may use the following to 
        satisfy the matching requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (3) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State under paragraph (1) if 
        the State demonstrates a need for such waiver or reduction due 
        to extreme financial hardship, as defined by the Secretary by 
        regulation.
    (h) Improvement Plan.--If the Secretary determines that a State 
receiving a grant under section 402(a) is encountering barriers to 
reaching goals described in subsection (c)(2), the State shall develop 
a plan for improvement in consultation with, and subject to approval 
by, the Secretary.

SEC. 404. DEVELOPMENT GRANTS.

    (a) Grant Period.--Grants under section 402(b) may be awarded for a 
period not to exceed 3 years, and may not be renewed.
    (b) State Uses of Funds.--
            (1) In general.--A State receiving a grant under section 
        402(b) shall use the grant to undertake activities to develop 
        the early learning system components described in section 
        403(c)(3) and that will allow a State to become eligible and 
        competitive for a grant described in section 402(a).
            (2) Priority.--A State receiving a grant under section 
        402(b) shall use the grant so as to prioritize improving the 
        quality of early learning programs serving low-income children.
    (c) Matching Requirement.--
            (1) In general.--To be eligible to receive a grant under 
        section 402(b), a State shall contribute to the activities 
        assisted under the grant non-Federal matching funds in an 
        amount equal to not less than the applicable percent of the 
        amount of the grant.
            (2) Applicable percent.--For purposes of paragraph (1), the 
        applicable percent means--
                    (A) 20 percent in the first fiscal year of the 
                grant;
                    (B) 25 percent in the second fiscal year of the 
                grant; and
                    (C) 30 percent in the third fiscal year of the 
                grant.
            (3) Non-federal funds.--A State may use the following to 
        satisfy the requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (4) Private contributions.--Private contributions made as 
        part of public-private partnerships to increase the number of 
        low-income children in high-quality early learning programs in 
        a State may be used by the State to satisfy the requirement of 
        paragraph (1).
            (5) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State that has submitted an 
        application for a grant under section 402(b) if the State 
        demonstrates a need for such waiver or reduction due to extreme 
        financial hardship, as defined by the Secretary by regulation.

SEC. 405. RESEARCH AND EVALUATION.

    From funds reserved under section 402(c)(1), the Secretary of 
Education and the Secretary of Health and Human Services, acting 
jointly, shall carry out the following activities:
            (1) Establishing a national commission whose duties shall 
        include--
                    (A) reviewing the status of State and Federal early 
                learning program quality standards and early learning 
                and development standards;
                    (B) recommending benchmarks for program quality 
                standards and early learning and development standards, 
                including taking into consideration the school 
                readiness needs of children with limited English 
                proficiency; and
                    (C) reporting to the Secretaries of Education and 
                Health and Human Services not later than 2 years after 
                the date of the enactment of this Act on the 
                commission's findings and recommendations.
            (2) Conducting a national evaluation of the grants made 
        under this title through the Institute of Education Science in 
        collaboration with the appropriate research divisions within 
        the Department of Health and Human Services.
            (3) Supporting a research collaborative among the Institute 
        of Education Sciences, the National Institute of Child Health 
        and Human Development, the Office of Planning, Research, and 
        Evaluation within the Administration for Children and Families 
        in the Department of Health and Human Services, and, as 
        appropriate, other Federal entities to support research on 
        early learning that can inform improved State and other 
        standards and licensing requirements and improved child 
        outcomes, which collaborative shall--
                    (A) biennially prepare and publish for public 
                comment a detailed research plan;
                    (B) support early learning research activities that 
                could include determining--
                            (i) the characteristics of early learning 
                        programs that produce positive developmental 
                        outcomes for children;
                            (ii) the effects of program quality 
                        standards on child outcomes;
                            (iii) the relationships between specific 
                        interventions and types of child and family 
                        outcomes;
                            (iv) the effectiveness of early learning 
                        provider training in raising program quality 
                        and improving child outcomes;
                            (v) the effectiveness of professional 
                        development strategies in raising program 
                        quality and improving child outcomes; and
                            (vi) how to improve the school readiness 
                        outcomes of children with limited English 
                        proficiency, special needs, and homeless 
                        children, including evaluation of professional 
                        development programs for working with such 
                        children; and
                    (C) disseminate relevant research findings and best 
                practices.
            (4) Evaluating barriers to improving the quality of early 
        learning programs serving low-income children, including 
        evaluating barriers to successful interagency collaboration and 
        coordination, by conducting a review of the statewide strategic 
        reports developed by the State Advisory Councils on Early Care 
        and Education and other relevant reports, reporting the 
        findings of such review to Congress, and disseminating relevant 
        research findings and best practices.

SEC. 406. REPORTING REQUIREMENTS.

    (a) Reports to Congress.--For each year in which funding is 
provided under this title, the Secretary shall submit an annual report 
to the Committee on Education and Labor of the House of Representatives 
and the Committee on Health, Education, Labor and Pensions of the 
Senate on the activities carried out under this title, including, at a 
minimum, information on the following:
            (1) The activities undertaken by States to increase the 
        availability of high-quality early learning programs.
            (2) The number of children in high-quality early learning 
        programs, and the change from the prior year, disaggregated by 
        State, age, and race.
            (3) The number of early learning providers enrolled, with 
        assistance from funds under this title, in a program to obtain 
        a credential or degree in early childhood education and the 
        settings in which such providers work.
            (4) A summary of State progress in implementing a system of 
        early learning with the components described in section 
        403(c)(3).
            (5) A summary of the research activities being conducted 
        under section 405 and the findings of such research.
    (b) Reports to Secretary.--Each State that receives a grant under 
this title shall submit to the Secretary an annual report that 
includes, at a minimum, information on the activities carried out by 
the State under this title, including the following:
            (1) The progress on fully implementing and integrating into 
        a system of early learning each of the components described in 
        section 403(c)(3).
            (2) The State's progress in meeting its goals for 
        increasing the number of disadvantaged children participating 
        in high-quality early learning programs, disaggregated by child 
        age.
            (3) The number and percentage of disadvantaged children 
        participating in early learning programs at each level of 
        quality, disaggregated by race, family income, child age, 
        disability, and limited English proficiency status.
            (4) The number of providers participating in the State 
        quality rating system, disaggregated by setting, rating, and 
        the number of high-quality providers available in low-income 
        communities.
            (5) Information on how the funds provided under this title 
        were used to increase the availability of high-quality early 
        learning programs for each age group, disaggregated by race and 
        limited English proficient status, to the maximum extent 
        practicable.
            (6) Information on professional development and training 
        expenditures, including--
                    (A) the number of early learning providers engaged 
                in such activities; and
                    (B) the number of early learning providers enrolled 
                in programs to obtain a credential or degree in early 
                childhood education, disaggregated by the type of 
                credential and degree.
            (7) The change in the number and percentage of early 
        learning providers with appropriate credentials or degrees in 
        early childhood education, including the change in compensation 
        given to such providers, in comparison to the prior fiscal 
        year, disaggregated by early learning setting and the type of 
        credential or degree.
            (8) In the case of a State receiving a grant under section 
        402(a), the percentage of children receiving assistance under 
        the Child Care and Development Block Grant Act of 1990 (42 
        U.S.C. 9858 et seq.) who participate in the highest quality 
        early learning programs, disaggregated by program setting and 
        child age.
            (9) Barriers to expanding access to high-quality early 
        learning programs for disadvantaged children.

SEC. 407. CONSTRUCTION.

    Nothing in this title--
            (1) shall be construed to require a child to participate in 
        an early learning program; or
            (2) shall be used to deny entry to kindergarten for any 
        individual if the individual is legally eligible, as defined by 
        State or local law.

SEC. 408. DEFINITIONS.

    For purposes of this title:
            (1) Child.--The term ``child'' refers to an individual from 
        birth through the day the individual enters kindergarten.
            (2) Disadvantaged.--The term ``disadvantaged'', when used 
        with respect to a child, means a child whose family income is 
        described in section 658P(4)(B) of the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)).
            (3) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 637 of the Head Start Act 
        (42 U.S.C. 9832).
            (4) Limited english proficient.--The term ``limited English 
        proficient'' has the meaning given such term in section 637 of 
        the Head Start Act (42 U.S.C. 9832).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (6) State.--The term ``State'' has the meaning given such 
        term in section 9101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7801).

SEC. 409. AVAILABILITY OF FUNDS.

    There are authorized to be appropriated, and there are 
appropriated, to carry out this title (in addition to any other amounts 
appropriated to carry out this title and out of any money in the 
Treasury not otherwise appropriated) $1,000,000,000 for each of fiscal 
years 2010 through 2017.

                TITLE V--AMERICAN GRADUATION INITIATIVE

SEC. 501. AUTHORIZATION AND APPROPRIATION.

    (a) Authorization and Appropriation.--There are authorized to be 
appropriated, and there are appropriated, to carry out this title (in 
addition to any other amounts appropriated to carry out this title and 
out of any money in the Treasury not otherwise appropriated), 
$730,000,000 for each of the fiscal years 2010 through 2013, and 
$680,000,000 for each of the fiscal years 2014 through 2019.
    (b) Allocations.--Of the amount appropriated under subsection (a)--
            (1) $630,000,000 shall be made available for each of the 
        fiscal years 2010 through 2013 to carry out section 503;
            (2) $630,000,000 shall be made available for each of the 
        fiscal years 2014 through 2019 to carry out section 504;
            (3) $50,000,000 shall be made available for each of the 
        fiscal years 2010 through 2019 to carry out subsection (a) of 
        section 505; and
            (4) $50,000,000 shall be made available for each of the 
        fiscal years 2010 through 2013 to carry out subsections (b) and 
        (c) of section 505.
    (c) Responsibility.--
            (1) In general.--With respect to sections 503 and 504, the 
        Secretary of Education shall bear the responsibility for 
        obligating and disbursing funds under such sections and 
        ensuring compliance with applicable law and administrative 
        requirements, subject to paragraph (2).
            (2) Interagency agreement.--The Secretary of Education and 
        the Secretary of Labor shall jointly administer sections 503 
        and 504 on such terms as such Secretaries shall set forth in an 
        interagency agreement.

SEC. 502. DEFINITIONS; GRANT PRIORITY.

    (a) Definitions.--In this title:
            (1) Area career and technical education school.--The term 
        ``area career and technical education school'' has the meaning 
        given such term in section 3 of the Carl D. Perkins Career and 
        Technical Education Act of 2006 (20 U.S.C. 2302).
            (2) Community college.--The term ``community college'' 
        means a public institution of higher education at which the 
        highest degree that is predominantly awarded to students is an 
        associate's degree.
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) a community college or community college 
                district;
                    (B) an area career and technical education school;
                    (C) a public four-year institution of higher 
                education that--
                            (i) offers two-year degrees;
                            (ii) will use funds provided under this 
                        section for activities at the certificate and 
                        associate degree levels; and
                            (iii) is not reasonably close, as 
                        determined by the Secretary, to a community 
                        college;
                    (D) a public four-year institution of higher 
                education that is in partnership with an eligible 
                entity described in subparagraph (A), (B), or (C);
                    (E) a State that--
                            (i) is in compliance with section 137 of 
                        the Higher Education Act of 1965 (20 U.S.C. 
                        1015f);
                            (ii) has an articulation agreement pursuant 
                        to section 486A of such Act (20 U.S.C. 1093a); 
                        and
                            (iii) is in partnership with an eligible 
                        entity described in subparagraph (A), (B), (C), 
                        or (D); or
                    (F) a consortium of at least 2 entities described 
                in subparagraphs (A) through (E).
            (4) Industry or sector partnership.--The term ``industry or 
        sector partnership'' has the meaning given such term in section 
        782(f) of the Higher Education Act of 1965.
            (5) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            (6) Philanthropic organization.--The term ``philanthropic 
        organization'' has the meaning given such term in section 
        781(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)).
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (8) State.--The term ``State'' has the meaning given such 
        term in section 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003).
            (9) State public employment service.--The term ``State 
        public employment service'' refers to a State public employment 
        service established under the Wagner-Peyser Act (29 U.S.C. 49 
        et seq.).
            (10) State workforce investment board; local workforce 
        investment board.--The terms ``State workforce investment 
        board'' and ``local workforce investment board'' refer to a 
        State workforce investment board established under section 111 
        of the Workforce Investment Act (29 U.S.C. 2821) and a local 
        workforce investment board established under section 117 of 
        such Act (29 U.S.C. 2832), respectively.
            (11) Supportive services.--The term ``supportive services'' 
        has the meaning given such term in section 101(46) of the 
        Workforce Investment Act of 1998 (29 U.S.C. 2801(46)).
    (b) Grant Priority.--In addition to any grant priorities 
established under any other provision of this title, the Secretary, in 
awarding grants under this title, shall give priority to applications 
focused on serving low-income, nontraditional students who do not have 
a bachelor's degree, and who have one or more of the following 
characteristics:
            (1) Are the first generation in their family to attend 
        college.
            (2) Have delayed enrollment in college.
            (3) Have dependents.
            (4) Are independent students.
            (5) Work at least 25 hours per week.
            (6) Are out-of-school youth without a high school diploma.

SEC. 503. GRANTS TO ELIGIBLE ENTITIES FOR COMMUNITY COLLEGE REFORM.

    (a) Program Authorization.--
            (1) Grants authorized.--
                    (A) In general.--Subject to paragraph (2), from the 
                amount appropriated to carry out this section, the 
                Secretary, in coordination with the Secretary of Labor, 
                shall award grants to eligible entities, on a 
                competitive basis, to establish and support programs 
                described in subparagraph (B) at eligible entities 
                described in subparagraphs (A) through (D) of section 
                502(a)(3).
                    (B) Programs.--The programs to be established and 
                supported with grants under subparagraph (A) (and 
                carried out through activities described in subsection 
                (f)) shall be programs--
                            (i) that are--
                                    (I) innovative programs; or
                                    (II) programs of demonstrated 
                                effectiveness, based on the evaluations 
                                of similar programs funded by the 
                                Department of Education or the 
                                Department of Labor, or other research 
                                of similar programs; and
                            (ii) that lead to the completion of a 
                        postsecondary degree, certificate, or industry-
                        recognized credential leading to a skilled 
                        occupation in a high-demand industry.
            (2) Limitation.--For each fiscal year for which funds are 
        appropriated to carry out this section, the aggregate amount of 
        the grants awarded to eligible entities that are States, or 
        consortia that include a State, shall be not more than 50 
        percent of the total amount appropriated under section 
        501(b)(1) for such fiscal year.
            (3) Prohibition.--The Secretary shall not award a grant to 
        an eligible entity for the same activities that are being 
        supported by other Federal funds.
    (b) Grant Duration and Amount.--
            (1) Duration.--A grant under this section shall be awarded 
        to an eligible entity for a 4-year period, except that if the 
        Secretary determines that the eligible entity has not made 
        demonstrable progress in achieving the benchmarks developed 
        pursuant to subsection (g) by the end of the third year of such 
        grant period, no further grant funds shall be made available to 
        the entity after the date of such determination.
            (2) Amount.--The minimum amount of a total grant award 
        under this section over the 4-year period of the award shall be 
        $750,000.
    (c) Priority.--In awarding grants under this section, the Secretary 
shall give priority to eligible entities that--
            (1) enter into partnerships with--
                    (A) philanthropic or research organizations with 
                expertise in meeting the goals of this section;
                    (B) businesses or industry or sector partnerships 
                that--
                            (i) design and implement programs described 
                        in subsection (a)(1)(B);
                            (ii) pay a portion of the costs of such 
                        programs; and
                            (iii) agree to collaborate with one or more 
                        eligible entities to hire individuals who have 
                        completed a particular postsecondary degree, 
                        certificate, or credential program; or
                    (C) labor organizations that provide technical 
                expertise for occupationally specific education 
                necessary for an industry-recognized credential leading 
                to a skilled occupation in a high-demand industry; or
            (2) are institutions of higher education eligible for 
        assistance under title III or V of the Higher Education Act of 
        1965, or consortia that include such an institution.
    (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
            (1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be not greater than \1/2\ 
        of the costs of the programs, services, and policies described 
        in subsection (f) that are carried out under the grant.
            (2) Non-federal share.--
                    (A) In general.--The amount of the non-Federal 
                share under this section for a fiscal year shall be not 
                less than \1/2\ of the costs of the programs, services, 
                and policies described in subsection (f) that are 
                carried out under the grant. The non-Federal share may 
                be in cash or in kind, and may be provided from State 
                resources, local resources, contributions from private 
                organizations, or a combination thereof.
                    (B) Financial hardship waiver.--The Secretary may 
                waive or reduce the non-Federal share of an eligible 
                entity that has submitted an application under this 
                section if the entity demonstrates a need for such 
                waiver or reduction due to extreme financial hardship, 
                as defined by the Secretary by regulation.
            (3) Supplement, not supplant.--The Federal and non-Federal 
        shares required by this section shall be used to supplement, 
        and not supplant, State and private resources that would 
        otherwise be expended to establish and support programs 
        described in subsection (a)(1)(B) at eligible entities.
    (e) Application.--An eligible entity seeking to receive a grant 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require. Such application shall describe the programs under 
subsection (a)(1)(B) that the eligible entity will carry out using the 
grant funds, (including the programs, services, and policies under 
subsection (f)), including--
            (1) the goals of such programs, services, and policies;
            (2) how the eligible entity will allocate grant funds for 
        such programs, services, and policies;
            (3) how such programs, services, and policies, and the 
        resources of the eligible entity, will enable the eligible 
        entity to meet the benchmarks developed pursuant to subsection 
        (g), and how the eligible entity will track and report the 
        entity's progress in reaching such benchmarks;
            (4) how the eligible entity will use such programs, 
        services, and policies to establish quantifiable targets for 
        improving graduation rates and employment-related outcomes;
            (5) how the eligible entity will serve high-need 
        populations through such programs, services, and policies;
            (6) how the eligible entity will partner with industry or 
        sector partnerships in the State, the State public employment 
        service, and State or local workforce investment boards in 
        carrying out such programs, services, and policies;
            (7) an assurance that the eligible entity will share 
        information with the Learning and Earning Research Center 
        established under section 505(b), once such Center is 
        established;
            (8) an assurance that the eligible entity will participate 
        in the evaluation of such programs, services, and policies 
        under subsection (i); and
            (9) the potential for such programs, services, and policies 
        to be replicated at other institutions of higher education.
    (f) Uses of Funds.--An eligible entity receiving a grant under this 
section shall use the grant funds to carry out the programs described 
in subsection (a)(1)(B), which shall include at least 2 of the 
following activities:
            (1) Developing and implementing policies and programs to 
        expand opportunities for students at eligible entities 
        described in subparagraphs (A) through (D) of section 502(a)(3) 
        to earn bachelor's degrees by--
                    (A) facilitating the transfer of academic credits 
                between institutions of higher education, including the 
                transfer of academic credits for courses in the same 
                field of study; and
                    (B) expanding articulation agreements and 
                guaranteed transfer agreements between such 
                institutions, including through common course numbering 
                and general core curriculum.
            (2) Expanding, enhancing, or creating academic programs or 
        training programs, which shall be carried out with industry or 
        sector partnerships or in partnership with employers and may 
        include other relevant partners, that provide relevant job-
        skill training (including apprenticeships and worksite learning 
        and training opportunities) for skilled occupations in high-
        demand industries.
            (3) Providing student support services, including--
                    (A) intensive career and academic advising;
                    (B) labor market information and job counseling; 
                and
                    (C) transitional job support, supportive services, 
                or assistance in connecting students with community 
                resources.
            (4) Creating workforce programs that provide a sequence of 
        education and occupational training that leads to industry-
        recognized credentials, including programs that--
                    (A) blend basic skills and occupational training 
                that lead to industry-recognized credentials;
                    (B) integrate developmental education curricula and 
                instruction with for-credit coursework toward degree or 
                certificate pathways; or
                    (C) advance individuals on a career path toward 
                high-wage occupations in high-demand industries.
            (5) Building or enhancing linkages, including the 
        development of dual enrollment programs and early college high 
        schools, between--
                    (A) secondary education or adult education programs 
                (including programs established under the Carl D. 
                Perkins Career and Technical Education Act of 2006 and 
                title II of the Workforce Investment Act of 1998 (29 
                U.S.C. 9201 et seq.)); and
                    (B) eligible entities described in subparagraphs 
                (A) through (D) of section 502(a)(3).
            (6) Implementing other innovative programs, services, and 
        policies designed to--
                    (A) increase postsecondary degree, certificate, and 
                industry-recognized credential completion rates, 
                particularly with respect to groups underrepresented in 
                higher education, at eligible entities described in 
                subparagraphs (A) through (D) of section 502(a)(3); and
                    (B) increase the provision of training for students 
                to enter skilled occupations in high-demand industries.
            (7) Improving the timeliness of the process for creating 
        degree, certificate, and industry-recognized credential 
        programs at eligible entities described in subparagraphs (A) 
        through (D) of section 502(a)(3) that--
                    (A) reflect and respond to regional labor market 
                developments and trends;
                    (B) effectively address the workforce needs of 
                employers in the State; and
                    (C) are designed in consultation with such 
                employers.
    (g) Benchmarks.--
            (1) In general.--Each eligible entity receiving a grant 
        under this section shall develop quantifiable benchmarks on the 
        following indicators (where applicable), to be approved by the 
        Secretary:
                    (A) Closing gaps in enrollment and completion rates 
                for--
                            (i) groups underrepresented in higher 
                        education; and
                            (ii) groups of students enrolled at the 
                        eligible entity (or at an institution of higher 
                        education under the jurisdiction of the 
                        eligible entity, in the case of an entity that 
                        is not an institution) who have the lowest 
                        enrollment and completion rates.
                    (B) Addressing local and regional workforce needs.
                    (C) Establishing articulation agreements between 
                two-year and four-year public institutions of higher 
                education within a State.
                    (D) Improving comprehensive employment and 
                educational outcomes for postsecondary education and 
                training programs, including--
                            (i) student persistence from one academic 
                        year to the following academic year;
                            (ii) the number of credits students earn 
                        toward a certificate or an associate's degree;
                            (iii) the number of students in 
                        developmental education courses who 
                        subsequently enroll in credit bearing 
                        coursework;
                            (iv) transfer of general education credits 
                        between institutions of higher education, as 
                        applicable;
                            (v) completion of industry-recognized 
                        credentials or associate's degrees to work in 
                        skilled occupations in high-demand industries;
                            (vi) transfers to four-year institutions of 
                        higher education; and
                            (vii) job placement related to skills 
                        training or associate's degree completion.
            (2) Report.--The eligible entity receiving such a grant 
        shall annually measure and report to the Secretary the progress 
        of the entity in achieving the benchmarks developed pursuant to 
        paragraph (1).
    (h) Provision of Transfer of Credit Information in Community 
College Course Schedules.--To the maximum extent practicable, each 
community college receiving a grant under this section shall include in 
each electronic and printed publication of the college's course 
schedule, in a manner of the college's choosing, for each course listed 
in the college's course schedule, whether such course is transferable 
for credit toward the completion of a 4-year baccalaureate degree at a 
public institution of higher education in the State in which the 
college is located.
    (i) Evaluation.--The Secretary shall allocate not more than two 
percent of the funds appropriated under section 501(b)(1) to the 
Institute of Education Sciences to conduct evaluations, ending not 
later than January 30, 2014, that--
            (1) assess the effectiveness of the grant programs carried 
        out by each eligible entity receiving such a grant in--
                    (A) improving postsecondary education completion 
                rates (disaggregated by age, race, ethnicity, sex, 
                income, and disability);
                    (B) improving employment-related outcomes for 
                students served by such programs;
                    (C) serving high-need populations; and
                    (D) building or enhancing working partnerships with 
                the State public employment service or State or local 
                workforce investment boards; and
            (2) include any other information or assessments the 
        Secretary may require.
    (j) Report.--The Secretary shall submit to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Education and Labor of the House of Representatives an annual report on 
grants awarded under this section, including--
            (1) the amount awarded to each eligible entity under this 
        section;
            (2) a description of the activities conducted by each 
        eligible entity receiving a grant under this section; and
            (3) a summary of the results of the evaluations submitted 
        to the Secretary under subsection (i) and the progress each 
        eligible entity made toward achieving the benchmarks developed 
        under subsection (g).

SEC. 504. GRANTS TO ELIGIBLE STATES FOR COMMUNITY COLLEGE PROGRAMS.

    (a) Program Authorization.--From the amount appropriated to carry 
out this section, the Secretary, in coordination with the Secretary of 
Labor, shall award grants to eligible States, on a competitive basis, 
to implement the systematic reform of community colleges located in the 
State by carrying out programs, services, and policies that 
demonstrated effectiveness under the evaluation described in section 
503(i).
    (b) Eligible State.--In this section, the term ``eligible State'' 
means a State that demonstrates to the Secretary in the application 
submitted pursuant to subsection (e) that the State--
            (1) has a plan under section 782 of the Higher Education 
        Act of 1965 to increase the State's rate of persistence in and 
        completion of postsecondary education that takes into 
        consideration and involves community colleges located in such 
        State;
            (2) has a statewide longitudinal data system that includes 
        data with respect to community colleges;
            (3) has an articulation agreement pursuant to section 486A 
        of the Higher Education Act of 1965 (20 U.S.C. 1093a);
            (4) is in compliance with section 137 of such Act (20 
        U.S.C. 1015f); and
            (5) meets any other requirements the Secretary may require.
    (c) Grant Duration; Renewal.--A grant awarded under this section 
shall be awarded to an eligible State for a 6-year period, except that 
if the Secretary determines that the eligible State has not made 
demonstrable progress in achieving the benchmarks developed pursuant to 
subsection (g) by the end of the third year of the grant period, no 
further grant funds shall be made available to the entity after the 
date of such determination.
    (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
            (1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be not greater than \1/2\ 
        of the costs of the reform described in subsection (f) that is 
        carried out with the grant.
            (2) Non-federal share.--
                    (A) In general.--The amount of the Non-Federal 
                share under this section for a fiscal year shall be not 
                less than \1/2\ of the costs of the reform described in 
                subsection (f) that is carried out with the grant. The 
                non-Federal share may be in cash or in kind, and may be 
                provided from State resources, local resources, 
                contributions from private organizations, or a 
                combination thereof.
                    (B) Financial hardship waiver.--The Secretary may 
                waive or reduce the non-Federal share of an eligible 
                State that has submitted an application under this 
                section if the State demonstrates a need for such 
                waiver or reduction due to extreme financial hardship, 
                as defined by the Secretary by regulation.
            (3) Supplement, not supplant.--The Federal and non-Federal 
        share required by this section shall be used to supplement, and 
        not supplant, State and private resources that would otherwise 
        be expended to carry out the systematic reform of community 
        colleges in a State.
    (e) Application.--An eligible State desiring to receive a grant 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require. Such application shall describe the programs, service, and 
policies to be used by the State to achieve the systematic reform 
described in subsection (f), including--
            (1) the goals of such programs, services, and policies;
            (2) how the State will allocate grant funds to carry out 
        such programs, services, and policies, including identifying 
        any State or private entity that will administer such programs, 
        services, and policies;
            (3) how such programs, services, and policies will enable 
        the State to--
                    (A) meet the benchmarks developed pursuant to 
                subsection (g), and how the State will track and report 
                the State's progress in reaching such benchmarks; and
                    (B) benefit students attending all community 
                colleges within the State;
            (4) how the State will use such programs, services, and 
        policies to establish quantifiable targets for improving 
        graduation rates and employment-related outcomes;
            (5) how the State will serve high-need populations through 
        such programs, services, and policies;
            (6) how the State will partner with the State public 
        employment service and State or local workforce investment 
        boards in carrying out such programs, services, and policies;
            (7) how the State will evaluate such programs, services, 
        and policies, which may include participation in national 
        evaluations; and
            (8) how the State will involve community colleges and 
        community college faculty in the planning, implementation, and 
        evaluation of such programs, services, and policies.
    (f) Uses of Funds.--An eligible State receiving a grant under this 
section shall use the grant funds to implement the systematic reform of 
community colleges located in the State by carrying out programs, 
services, and policies that the Secretary has determined to have 
demonstrated effectiveness based on the results of the evaluation 
described in section 503(i). States shall allocate not less than 90 
percent of such grant funds to community colleges within the State.
    (g) Benchmarks.--
            (1) In general.--Each eligible State receiving a grant 
        under this section shall, in consultation with the Secretary, 
        develop quantifiable benchmarks on the indicators identified in 
        section 503(f)(1).
            (2) Progress.--An eligible State receiving such a grant 
        shall annually measure and report to the Secretary progress in 
        achieving the benchmarks developed pursuant to paragraph (1).
    (h) Report.--
            (1) Reports to the secretary.--Each eligible State 
        receiving a grant under this section shall annually submit to 
        the Secretary and the Secretary of Labor a report on such 
        grant, including--
                    (A) a description of the systematic reform carried 
                out by the State using such grant; and
                    (B) the outcome of such reform, including the 
                State's progress in achieving the benchmarks developed 
                under subsection (g).
            (2) Reports to congress.--Not later than 6 months after the 
        end of the grant period, the Secretary shall submit to the 
        Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Education and Labor of the House of 
        Representatives a summary of the reports submitted under 
        paragraph (1) with respect to such grant period.
    (i) Sense of Congress.--It is the sense of Congress that--
            (1) community colleges play an important role in preparing 
        and training students seeking to enter the workforce;
            (2) it is vital that all States have access to the 
        resources and assistance needed to compete for grants 
        authorized under this section; and
            (3) in executing the grant program authorized under this 
        section, the Secretary will make available any and all 
        assistance, guidance, and support to States seeking to compete 
        for grants authorized under this section and will work to 
        ensure that such grants are distributed in a fair and equitable 
        manner.

SEC. 505. NATIONAL ACTIVITIES.

    (a) Open Online Education.--From the amount appropriated to carry 
out this section, the Secretary is authorized to make competitive 
grants to, or enter into contracts with, institutions of higher 
education, philanthropic organizations, and other appropriate entities 
to develop, evaluate, and disseminate freely-available high-quality 
online training, high school courses, and postsecondary education 
courses. Entities receiving funds under this subsection shall ensure 
that electronic and information technology activities meet the access 
standards established under section 508 of the Rehabilitation Act of 
1973 (29 U.S.C. 794d).
    (b) Learning and Earning Research Center.--
            (1) In general.--From the amount appropriated to carry out 
        this section, the Director of the Institute of Education 
        Sciences is authorized to award a grant to, or enter into a 
        contract with, an organization with demonstrated expertise in 
        the research and evaluation of community colleges to establish 
        and operate the Learning and Earning Research Center (in this 
        section referred to as the ``Center'').
            (2) Grant term.--The grant or contract awarded under this 
        section shall be awarded for a period of not more than 4 years.
            (3) Board.--The Center shall have an independent advisory 
        board of 9 individuals who--
                    (A) are appointed by the Secretary, based on 
                recommendations from the organization receiving the 
                grant or contract under this section; and
                    (B) who have demonstrated expertise in--
                            (i) data collection;
                            (ii) data analysis; and
                            (iii) econometrics, postsecondary 
                        education, and workforce development research.
            (4) Center activities.--The Center shall--
                    (A) develop--
                            (i) peer-reviewed metrics to help consumers 
                        make sound education and training choices, and 
                        to help students, workers, schools, businesses, 
                        researchers, and policymakers assess the 
                        effectiveness of community colleges, and 
                        courses of study at such colleges, in meeting 
                        education and employment objectives and serving 
                        groups that are underrepresented in 
                        postsecondary education;
                            (ii) common metrics and data elements to 
                        measure the education and employment outcomes 
                        of students attending community colleges;
                    (B) coordinate with the Institute of Education 
                Sciences and States receiving a grant under subsection 
                (c) to develop--
                            (i) standardized data elements, 
                        definitions, and data-sharing protocols to make 
                        it possible for data systems related to 
                        postsecondary education to be linked and 
                        interoperable, and for best practices to be 
                        shared among States;
                            (ii) standards and processes for 
                        facilitating sharing of data in a manner that 
                        safeguards student privacy; and
                    (C) develop and make widely available materials 
                analyzing best practices and research on successful 
                postsecondary education and training efforts;
                    (D) make the data and metrics developed pursuant to 
                subparagraph (A) available to the public in a 
                transparent, user-friendly format that is accessible to 
                individuals with disabilities; and
                    (E) consult with representatives from States with 
                respect to the activities of the Center.
    (c) State Systems.--
            (1) In general.--From the amount appropriated to carry out 
        this section, the Secretary is authorized to award grants to 
        States or consortia of States to establish cooperative 
        agreements to develop, implement, and expand interoperable 
        statewide longitudinal data systems that--
                    (A) collect, maintain, disaggregate (by 
                institution, income, race, ethnicity, sex, disability, 
                and age), and analyze student data from community 
                colleges, including data on the programs of study and 
                education and employment outcomes for particular 
                students, tracked over time; and
                    (B) can be linked to other data systems, as 
                applicable, including elementary and secondary 
                education and workforce data systems.
            (2) Supplement, not supplant.--Funds appropriated to carry 
        out this subsection shall be used to supplement, and not 
        supplant, other Federal and State resources that would 
        otherwise be expended to carry out statewide longitudinal data 
        systems, including funding appropriated for State Longitudinal 
        Data Systems in the American Recovery and Reinvestment Act of 
        2009 (Public Law 111-5; 123 Stat. 115).
            (3) Privacy and access to data.--
                    (A) In general.--Each State or consortia that 
                receives a grant under this subsection or any other 
                provision of this Act shall implement measures to--
                            (i) ensure that the statewide longitudinal 
                        data system under this subsection and any other 
                        data system the State or consortia is operating 
                        for the purposes of this Act meet the 
                        requirements of section 444 of the General 
                        Education Provisions Act (20 U.S.C. 1232g) 
                        (commonly known as the ``Family Educational 
                        Rights and Privacy Act of 1974'');
                            (ii) limit the use of information in any 
                        such data system by governmental agencies in 
                        the State, including State agencies, State 
                        educational authorities, local educational 
                        agencies, community colleges, and institutions 
                        of higher education, to education and workforce 
                        related activities under this Act or education 
                        and workforce related activities otherwise 
                        permitted by Federal or State law;
                            (iii) prohibit the disclosure of personally 
                        identifiable information except as permitted 
                        under section 444 of the General Education 
                        Provisions Act and any additional limitations 
                        set forth in State law;
                            (iv) keep an accurate accounting of the 
                        date, nature, and purpose of each disclosure of 
                        personally identifiable information in any such 
                        data system, a description of the information 
                        disclosed, and the name and address of the 
                        person, agency, institution, or entity to whom 
                        the disclosure is made, which accounting shall 
                        be made available on request to parents of any 
                        student whose information has been disclosed;
                            (v) notwithstanding section 444 of the 
                        General Education Provisions Act, require any 
                        non-governmental party obtaining personally 
                        identifiable information to sign a data use 
                        agreement prior to disclosure that--
                                    (I) prohibits the party from 
                                further disclosing the information;
                                    (II) prohibits the party from using 
                                the information for any purpose other 
                                than the purpose specified in the 
                                agreement; and
                                    (III) requires the party to destroy 
                                the information when the purpose for 
                                which the disclosure was made is 
                                accomplished;
                            (vi) maintain adequate security measures to 
                        ensure the confidentiality and integrity of any 
                        such data system, such as protecting a student 
                        record from identification by a unique 
                        identifier;
                            (vii) where rights are provided to parents 
                        under this clause, provide those rights to the 
                        student instead of the parent if the student 
                        has reached the age of 18 or is enrolled in a 
                        postsecondary educational institution; and
                            (viii) ensure adequate enforcement of the 
                        requirements of this paragraph.
                    (B) Use of unique identifiers.--It shall be 
                unlawful for any Federal, State, or local governmental 
                agency to--
                            (i) use the unique identifiers employed in 
                        such data systems for any purpose other than as 
                        authorized by Federal or State law; or
                            (ii) deny any individual any right, 
                        benefit, or privilege provided by law because 
                        of such individual's refusal to disclose the 
                        individual's unique identifier.
    (d) Report.--The Secretary shall submit to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Education and Labor of the House of Representatives an annual report on 
the amounts awarded to entities receiving grants or contracts under 
this section, and the activities carried out by such entities under 
such grants and contracts.
                                                 Union Calendar No. 129

111th CONGRESS

  1st Session

                               H. R. 3221

                          [Report No. 111-232]

_______________________________________________________________________

                                 A BILL

   To amend the Higher Education Act of 1965, and for other purposes.

_______________________________________________________________________

                             July 27, 2009

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed`