‘‘(9) LIMITED
ENGLISH
PROFICIENT.—The 
term ‘limited English proficient’ means with respect 
to an individual, that such individual— 
‘‘(A)(i) was not born in the United States 
or has a native language that is not English; 
‘‘(ii)(I) is a Native American, an Alaska 
Native, or a native resident of a territory or 
possession of the United States; and 
‘‘(II) comes from an environment in which 
a language that is not English has had a sig-
nificant impact on such individual’s level of 
English language proficiency; or 
‘‘(iii) is migratory, has a native language 
that is not English, and comes from an environ-
ment in which a language that is not English 
is dominant; and 
‘‘(B) has difficultly in speaking or under-
standing the English language to an extent that 
may be sufficient to deny such individual— 
‘‘(i) the ability to successfully achieve 
in classrooms in which the language of in-
struction is English; or 
‘‘(ii) the opportunity to fully partici-
pate in society.’’.
SEC. 2029. WAIVER AUTHORITY TO EXPAND THE AVAIL-
ABILITY OF SERVICES UNDER CHILD CARE 
AND DEVELOPMENT BLOCK GRANT ACT OF 
1990. 
(a) WAIVER AUTHORITY.—For such period up to 
June 30, 2006, and to such extent as the Secretary con-
siders to be appropriate, the Secretary of Health and 
Human Service may waive or modify, for any affected 
State, and any State serving significant numbers of indi-
viduals adversely affected by a Gulf hurricane disaster, 
provisions of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9858 et seq.)— 
(1) relating to Federal income limitations on 
eligibility to receive child care services for which as-
sistance is provided under such Act, 
(2) relating to work requirements applicable to 
eligibility to receive child care services for which as-
sistance is provided under such Act, 
(3) relating to limitations on the use of funds 
under section 658G of the Child Care and Develop-
ment Block Grant Act of 1990, and 
(4) preventing children designated as evacuees 
from receiving priority for child care services pro-
vided under such Act, except that children residing 
in a State and currently receiving services should
not lose such services in order to accommodate evac-
uee children, 
for purposes of easing State fiscal burdens and providing 
child care services to children orphaned, or of families dis-
placed, as a result of a Gulf hurricane disaster. 
(b) DEFINITIONS.—For purposes of this section: 
(1) AFFECTED
STATE.—The term ‘‘affected 
State’’ means the State of Alabama, Florida, Lou-
isiana, Mississippi, or Texas. 
(2) GULF
HURRICANE
DISASTER.—The term 
‘‘Gulf hurricane disaster’’ means a major disaster 
that the President declared to exist, in accordance 
with section 401 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act, and that was 
caused by Hurricane Katrina or Hurricane Rita. 
(3) INDIVIDUAL ADVERSELY AFFECTED BY A 
GULF HURRICANE DISASTER.—The term ‘‘individual 
adversely affected by a Gulf hurricane disaster’’ 
means an individual who, on August 29, 2005, was 
living, working, or attending school in an area in 
which the President has declared to exist a Gulf hur-
ricane disaster.
PART 4—STATE AND LOCAL FLEXIBILITY 
SEC. 2041. PROGRAM COORDINATION DEMONSTRATION 
PROJECTS. 
(a) PURPOSE.—The purpose of this section is to es-
tablish a program of demonstration projects in a State or 
portion of a State to coordinate multiple public assistance, 
workforce development, and other programs, for the pur-
pose of supporting working individuals and families, help-
ing families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using inno-
vative approaches to strengthen service systems and pro-
vide more coordinated and effective service delivery. 
(b) DEFINITIONS.—In this section: 
(1) ADMINISTERING
SECRETARY.—The term 
‘‘administering Secretary’’ means, with respect to a 
qualified program, the head of the Federal agency 
responsible for administering the program. 
(2) QUALIFIED PROGRAM.—The term ‘‘qualified 
program’’ means— 
(A) activities funded under title I of the 
Workforce Investment Act of 1998, except sub-
title C of such title; 
(B) a demonstration project authorized 
under section 505 of the Family Support Act of 
1988;
(C) activities funded under the Wagner- 
Peyser Act; 
(D) activities funded under the Adult Edu-
cation and Family Literacy Act; or 
(E) activities funded under the Child Care 
and Development Block Grant Act of 1990; 
(c) APPLICATION REQUIREMENTS.—The head of a 
State entity or of a sub-State entity administering 2 or 
more qualified programs proposed to be included in a dem-
onstration project under this section shall (or, if the 
project is proposed to include qualified programs adminis-
tered by 2 or more such entities, the heads of the admin-
istering entities (each of whom shall be considered an ap-
plicant for purposes of this section) shall jointly) submit 
to the administering Secretary of each such program an 
application that contains the following: 
(1) PROGRAMS INCLUDED.—A statement identi-
fying each qualified program to be included in the 
project, and describing how the purposes of each 
such program will be achieved by the project. 
(2) POPULATION SERVED.—A statement identi-
fying the population to be served by the project and 
specifying the eligibility criteria to be used. 
(3) DESCRIPTION AND JUSTIFICATION.—A de-
tailed description of the project, including—
(A) a description of how the project is ex-
pected to improve or enhance achievement of 
the purposes of the programs to be included in 
the project, from the standpoint of quality, of 
cost-effectiveness, or of both; and 
(B) a description of the performance objec-
tives for the project, including any proposed 
modifications to the performance measures and 
reporting requirements used in the programs. 
(4) WAIVERS
REQUESTED.—A description of 
the statutory and regulatory requirements with re-
spect to which a waiver is requested in order to 
carry out the project, and a justification of the need 
for each such waiver. 
(5) COST NEUTRALITY.—Such information and 
assurances as necessary to establish to the satisfac-
tion of the administering Secretary, in consultation 
with the Director of the Office of Management and 
Budget, that the proposed project is reasonably ex-
pected to meet the applicable cost neutrality require-
ments of subsection (d)(4). 
(6) EVALUATION AND REPORTS.—An assurance 
that the applicant will conduct ongoing and final 
evaluations of the project, and make interim and 
final reports to the administering Secretary, at such
times and in such manner as the administering Sec-
retary may require. 
(7) OTHER INFORMATION AND ASSURANCES.— 
Such other information and assurances as the ad-
ministering Secretary may require. 
(d) APPROVAL OF APPLICATIONS.— 
(1) IN GENERAL.—The administering Secretary 
with respect to a qualified program that is identified 
in an application submitted pursuant to subsection 
(c) may approve the application and, except as pro-
vided in paragraph (2), waive any requirement appli-
cable to the program, to the extent consistent with 
this section and necessary and appropriate for the 
conduct of the demonstration project proposed in the 
application, if the administering Secretary deter-
mines that the project— 
(A) has a reasonable likelihood of achieving 
the objectives of the programs to be included in 
the project; 
(B) may reasonably be expected to meet 
the applicable cost neutrality requirements of 
paragraph (4), as determined by the Director of 
the Office of Management and Budget; and 
(C) includes the coordination of 2 or more 
qualified programs.
(2) PROVISIONS EXCLUDED FROM WAIVER AU-
THORITY.—A waiver shall not be granted under 
paragraph (1)— 
(A) with respect to any provision of law re-
lating to— 
(i) civil rights or prohibition of dis-
crimination; 
(ii) purposes or goals of any program; 
(iii) maintenance of effort require-
ments; 
(iv) health or safety; 
(v) labor standards under the Fair 
Labor Standards Act of 1938; or 
(vi) environmental protection; 
(B) with respect to section 241(a) of the 
Adult Education and Family Literacy Act; 
(C) in the case of a program under the 
Workforce Investment Act, with respect to any 
requirement the waiver of which would violate 
section 189(i)(4)(A)(i) of such Act; 
(D) with respect to any requirement that a 
State pass through to a sub-State entity part or 
all of an amount paid to the State; 
(E) if the waiver would waive any funding 
restriction or limitation provided in an appro-
priations Act, or would have the effect of trans-
ferring appropriated funds from 1 appropria-
tions account to another; or 
(F) except as otherwise provided by stat-
ute, if the waiver would waive any funding re-
striction applicable to a program authorized 
under an Act which is not an appropriations 
Act (but not including program requirements 
such as application procedures, performance 
standards, reporting requirements, or eligibility 
standards), or would have the effect of transfer-
ring funds from a program for which there is 
direct spending (as defined in section 250(c)(8) 
of the Balanced Budget and Emergency Deficit 
Control Act of 1985) to another program. 
(3) AGREEMENT OF EACH ADMINISTERING SEC-
RETARY REQUIRED.— 
(A) IN GENERAL.—An applicant may not 
conduct a demonstration project under this sec-
tion unless each administering Secretary with 
respect to any program proposed to be included 
in the project has approved the application to 
conduct the project. 
(B) AGREEMENT WITH RESPECT TO FUND-
ING AND IMPLEMENTATION.—Before approving
an application to conduct a demonstration 
project under this section, an administering 
Secretary shall have in place an agreement with 
the applicant with respect to the payment of 
funds and responsibilities required of the ad-
ministering Secretary with respect to the 
project. 
(4) COST-NEUTRALITY REQUIREMENT.— 
(A) 
GENERAL
RULE.—Notwithstanding 
any other provision of law (except subparagraph 
(B)), the total of the amounts that may be paid 
by the Federal Government for a fiscal year 
with respect to the programs in the State in 
which an entity conducting a demonstration 
project under this section is located that are af-
fected by the project shall not exceed the esti-
mated total amount that the Federal Govern-
ment would have paid for the fiscal year with 
respect to the programs if the project had not 
been conducted, as determined by the Director 
of the Office of Management and Budget. 
(B) SPECIAL RULE.—If an applicant sub-
mits to the Director of the Office of Manage-
ment and Budget a request to apply the rules 
of this subparagraph to the programs in the
State in which the applicant is located that are 
affected by a demonstration project proposed in 
an application submitted by the applicant pur-
suant to this section, during such period of not 
more than 5 consecutive fiscal years in which 
the project is in effect, and the Director deter-
mines, on the basis of supporting information 
provided by the applicant, to grant the request, 
then, notwithstanding any other provision of 
law, the total of the amounts that may be paid 
by the Federal Government for the period with 
respect to the programs shall not exceed the es-
timated total amount that the Federal Govern-
ment would have paid for the period with re-
spect to the programs if the project had not 
been conducted. 
(5) 90-DAY APPROVAL DEADLINE.— 
(A) IN
GENERAL.—If an administering 
Secretary receives an application to conduct a 
demonstration project under this section and 
does not disapprove the application within 90 
days after the receipt, then— 
(i) the administering Secretary is 
deemed to have approved the application 
for such period as is requested in the ap-
plication, except to the extent inconsistent 
with subsection (e); and 
(ii) any waiver requested in the appli-
cation which applies to a qualified program 
that is identified in the application and is 
administered by the administering Sec-
retary is deemed to be granted, except to 
the extent inconsistent with paragraph (2) 
or (4) of this subsection. 
(B) DEADLINE EXTENDED IF ADDITIONAL 
INFORMATION IS SOUGHT.—The 90-day period 
referred to in subparagraph (A) shall not in-
clude any period that begins with the date the 
Secretary requests the applicant to provide ad-
ditional information with respect to the applica-
tion and ends with the date the additional in-
formation is provided. 
(e) DURATION
OF
PROJECTS.—A demonstration 
project under this section may be approved for a term of 
not more than 5 years. 
(f) REPORTS TO CONGRESS.— 
(1) REPORT
ON
DISPOSITION
OF
APPLICA-
TIONS.—Within 90 days after an administering Sec-
retary receives an application submitted pursuant to 
this section, the administering Secretary shall sub-
mit to each Committee of the Congress which has 
jurisdiction over a qualified program identified in 
the application notice of the receipt, a description of 
the decision of the administering Secretary with re-
spect to the application, and the reasons for approv-
ing or disapproving the application. 
(2) REPORTS
ON
PROJECTS.—Each admin-
istering Secretary shall provide annually to the Con-
gress a report concerning demonstration projects ap-
proved under this section, including— 
(A) the projects approved for each appli-
cant; 
(B) the number of waivers granted under 
this section, and the specific statutory provi-
sions waived; 
(C) how well each project for which a waiv-
er is granted is improving or enhancing pro-
gram achievement from the standpoint of qual-
ity, cost-effectiveness, or both; 
(D) how well each project for which a 
waiver is granted is meeting the performance 
objectives specified in subsection (c)(3)(B); 
(E) how each project for which a waiver is 
granted is conforming with the cost-neutrality 
requirements of subsection (d)(4); and
(F) to the extent the administering Sec-
retary deems appropriate, recommendations for 
modification of programs based on outcomes of 
the projects. 
PART 5—EFFECTIVE DATE 
SEC. 2051. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as otherwise provided in 
this subtitle, this subtitle and the amendments made by 
this subtitle shall take effect on the date of the enactment 
of this Act. 
(b) EXCEPTION.—In the case of a State plan under 
part A of title IV of the Social Security Act which the 
Secretary determines requires State legislation in order 
for the plan to meet the additional requirements imposed 
by the amendments made by this subtitle, the effective 
date of the amendments imposing the additional require-
ments shall be 3 months after the first day of the first 
calendar quarter beginning after the close of the first reg-
ular session of the State legislature that begins after the 
date of the enactment of this Act. For purposes of the 
preceding sentence, in the case of a State that has a 2- 
year legislative session, each year of the session shall be 
considered to be a separate regular session of the State 
legislature.
Subtitle B—Higher Education 
SEC. 2101. SHORT TITLE. 
This subtitle may be cited as the ‘‘Higher Education 
Budget Reconciliation Act of 2005’’. 
PART 1—AMENDMENTS TO THE HIGHER 
EDUCATION ACT OF 1965 
SEC. 2111. REFERENCES; EFFECTIVE DATE. 
(a) REFERENCES.—Except as otherwise expressly 
provided, whenever in this part an amendment or repeal 
is expressed in terms of an amendment to, or repeal of, 
a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 
(b) EFFECTIVE DATE.—Except as otherwise provided 
in this part, the amendments made by this part shall be 
effective on the date of enactment of this Act. 
SEC. 2112. MODIFICATION OF 50/50 RULE. 
Section 102(a)(3) (20 U.S.C. 1002(a)(3)) is amend-
ed— 
(1) in subparagraph (A), by inserting ‘‘(exclud-
ing courses offered by telecommunications as defined 
in section 484(l)(4))’’ after ‘‘courses by correspond-
ence’’; and 
(2) in subparagraph (B), by inserting ‘‘(exclud-
ing courses offered by telecommunications as defined
in 
section 
484(l)(4))’’ 
after 
‘‘correspondence 
courses’’. 
SEC. 2113. REAUTHORIZATION OF FEDERAL FAMILY EDU-
CATION LOAN PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
421(b)(5) (20 U.S.C. 1071(b)(5)) is amended by striking 
‘‘an administrative cost allowance’’ and inserting ‘‘a loan 
processing and issuance fee’’. 
(b) EXTENSION OF AUTHORITY.— 
(1) FEDERAL INSURANCE LIMITATIONS.—Sec-
tion 424(a) (20 U.S.C. 1074(a)) is amended— 
(A) by striking ‘‘2004’’ and inserting 
‘‘2012’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2016’’. 
(2) GUARANTEED
LOANS.—Section 428(a)(5) 
(20 U.S.C. 1078(a)(5)) is amended— 
(A) by striking ‘‘2004’’ and inserting 
‘‘2012’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2016’’. 
(3) CONSOLIDATION LOANS.—Section 428C(e) 
(20 U.S.C. 1078–3(e)) is amended by striking 
‘‘2004’’ and inserting ‘‘2012’’.
SEC. 2114. LOAN LIMITS. 
(a) 
FEDERAL
INSURANCE
LIMITS.—Section 
425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended— 
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(b) GUARANTEE LIMITS.—Section 428(b)(1)(A) (20 
U.S.C. 1078(b)(1)(A)) is amended— 
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(c) COUNTING OF CONSOLIDATION LOANS AGAINST 
LIMITS.—Section 428C(a)(3)(B) (20 U.S.C. 1078– 
3(a)(3)(B)) is amended by adding at the end the following 
new clause: 
‘‘(ii) Loans made under this section shall, to 
the extent used to pay off the outstanding principal 
balance on loans made under this title, excluding 
capitalized interest, be counted against the applica-
ble limitations on aggregate indebtedness contained 
in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, 
and 464(a)(2)(B).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to any loan made, in-
sured, or guaranteed under part B or part D of title IV 
of the Higher Education Act of 1965 for which the first 
disbursement of principal is made on or after July 1, 
2007. 
SEC. 2115. INTEREST RATES AND SPECIAL ALLOWANCES. 
(a) FFEL INTEREST RATES.—Section 427A (20 
U.S.C. 1077a(k)) is amended— 
(1) in subsection (k)— 
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such subsection; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears in paragraphs (1), 
(2), and (3); 
(2) by striking subsection (l); and 
(3) by redesignating subsections (m) and (n) as 
subsections (l) and (m), respectively. 
(b) DIRECT
LOAN
INTEREST
RATES.—Section 
455(b) (20 U.S.C. 1087e(b)) is amended— 
(1) in paragraph (6)— 
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such paragraph; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears in subparagraphs 
(A), (B), and (C); 
(2) by striking paragraph (7); and