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the transition from such program to the Federal Di-
rect Student Loan program under part D of this
title, including additional duties as specified by the
Secretary of Education or the Secretary of the
Treasury;
‘‘(3) consider any appropriate change to part D
of title VII, relating to the College Construction
Loan Insurance Association; and
‘‘(4) be considered by the Secretaries of Edu-
cation and the Treasury in developing any legislative
proposals concerning any changes to the status of
the Association as a Government-sponsored enter-
prise or its duties under the Federal Family Edu-
cation Loan program.’’.
SEC. 4029. AMENDMENT TO THE BALANCED BUDGET AND
EMERGENCY DEFICIT CONTROL ACT OF 1985.
The Balanced Budget and Emergency Deficit Control
Act of 1985 is amended—
(1) in section 252(c)(1)(B), by striking ‘‘guar-
anteed’’;
(2) in section 256(b)—
(A) by striking the subsection designation
and heading and inserting the following:
‘‘(b) EFFECT OF ORDERS ON STUDENT LOAN PRO-
GRAMS.—
172
‘‘(1) FEDERAL FAMILY EDUCATION LOAN PRO-
GRAM.—(A)’’;
(B) by redesignating paragraphs (2) and
(3) as subparagraphs (B) and (C), respectively,
and by indenting such subparagraphs by an ad-
ditional 2 ems spaces;
(C) in paragraph (1)(A) (as redesignated
in subparagraph (B)), by striking ‘‘described in
paragraphs (2) and (3)’’ and inserting ‘‘de-
scribed in subparagraphs (B) and (C)’’;
(D) in paragraph (1)(B) (as redesignated
in subparagraph (C)), by redesignating sub-
paragraphs (A) and (B) as clauses (i) and (ii),
respectively; and
(E) by adding at the end thereof the fol-
lowing new paragraph:
‘‘(2) FEDERAL
DIRECT
STUDENT
LOAN
PRO-
GRAM.—(A) Any reductions that are required to be
achieved from the Federal Direct Student Loan pro-
gram operated under part D of title IV of the High-
er Education Act of 1965 as a consequence of an
order issued pursuant to section 254, shall be
achieved only by the application of the measures de-
scribed in subparagraph (B).
173
‘‘(B) For any loan made during the period be-
ginning on the date that an order issued under sec-
tion 254 takes effect with respect to a fiscal year,
and ending at the close of such fiscal year, the loan
fee that is authorized to be collected pursuant to
section 456(c) of such Act shall be increased by 0.50
percent.’’.
CHAPTER 3—EFFECTIVE DATES; STUDY
SEC. 4031. EFFECTIVE DATES.
(a) IN GENERAL.—Except as otherwise provided in
this section, the amendments made by this subtitle shall
be effective upon enactment.
(b) 
INCOME
CONTINGENT
REPAYMENT.—The
amendments made by section 4023 of this Act shall be
effective for loans made in accordance with section 428
for periods of instruction beginning on or after July 1,
1993, or made on or after July 1, 1993, in the case of
loans made in accordance with section 428A, 428B, or
428C of the Act.
(c) 
ADMINISTRATIVE
COST
ALLOWANCE.—The
amendments made by section 4026 of this Act shall be
effective on October 1, 1994.
(d) 
CONSOLIDATION
LOANS.—The 
amendments
made by section 4027 of this Act (other than the amend-
ment made by section 4027(2)(B)) shall be effective for
174
loans made in accordance with section 428C of the Act
or after July 1, 1994.
SEC. 4032. STUDY OF INTERNAL REVENUE SERVICE COL-
LECTION OF STUDENT LOANS.
(a) GENERAL RULE.—The Secretary of Education,
in consultation with the Secretary of the Treasury, shall
conduct a study of the feasibility of implementing a system
for the repayment of Federal student loans through wage
withholding or other means involving the Internal Revenue
Service. Such study shall include an examination of—
(1) whether the Internal Revenue Service could
implement such a system within its current re-
sources and without adversely affecting the ability of
the Internal Revenue Service to collect tax revenues,
(2) the cumulative impact on voluntary compli-
ance with the tax system of increased disclosure of
tax return information and increased Internal Reve-
nue Service involvement in nontax collection activi-
ties,
(3) the anticipated effect on the management of
Federal student loan collections and on borrower re-
payment of such loans, and
(4) the ability of the Internal Revenue Service
to effectively service student loans.
175
(b) RECOMMENDATIONS.—Not later than the date 6
months after the date of the enactment of this Act, the
Secretary of Education shall submit to the Congress a re-
port on the study conducted under subsection (a), together
with such legislative recommendations as such Secretary
may deem advisable.
SEC. 4033. PREFERENCE OF COMMITTEE FOR IRS COLLEC-
TION MECHANISM.
It is the sense of the Committee on Education and
Labor that—
(1) the Committee may not, consistent with its
jurisdiction under the Rules of the House of Rep-
resentatives, amend this Act to include provisions
providing for the collection of student loans pursu-
ant to the Internal Revenue Code of 1986 using the
Internal Revenue Service of the Department of the
Treasury;
(2) the Committee would support the amend-
ment of this Act to include such provisions, as well
as amendments to the Higher Education Act of
1965, in the manner proposed by H.R. llll as
introduced on May 11, 1993; and
(3) the Committee recommends that the House
of Representatives consider and adopt such amend-
ments.
176
Subtitle B—Cost Sharing by States
SEC. 4101. COST SHARING BY STATES.
(a) AMENDMENT.—Section 428 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended
by adding at the end thereof the following new subsection:
‘‘(n) STATE SHARE OF DEFAULT COSTS.—(1) In the
case of any State in which there are located any institu-
tions of higher education with cohort default rates that
exceed 20 percent, such State shall pay to the Secretary
an amount equal to—
‘‘(A) the new loan volume attributable to all in-
stitutions in the State for the current fiscal year,
multiplied by
‘‘(B) the percentage specified in paragraph (2),
multiplied by
‘‘(C) the quotient of—
‘‘(i) the sum of the amounts calculated
under paragraph (3) for each such institution
in the State, divided by
‘‘(ii) the total amount of loan volume at-
tributable to current and former students of in-
stitutions located in that State entering repay-
ment in the period used to calculate the cohort
default rate.
192
(1) in subclause (II), by striking ‘‘or 1995’’,
and
(2) in subclause (III), by striking ‘‘3’’ and in-
serting ‘‘5’’.
SEC. 5003. CLASSIFICATION OF PRIMARY CARE SERVICES
AS A SEPARATE CATEGORY OF SERVICES.
(a) IN GENERAL.—Section 1848(j)(1) (42 U.S.C.
1395w–4(j)(1)) is amended by inserting ‘‘, primary care
services (as defined in section 1842(i)(4)),’’ after ‘‘Sec-
retary)’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply—
(1) to volume performance standard rates of
increase established under section 1848(f) of the
Social Security Act for fiscal years beginning with
fiscal year 1994, and
(2) to updates in the conversion factors for phy-
sicians’ services established under section 1848(d) of
such Act for physicians’ services to be furnished in
calendar years beginning with 1996.