H. R. 6—60
‘‘(c) AUTHORIZED ACTIVITIES.—
‘‘(1) IN GENERAL.—Grants awarded under this section shall
be used by Tribal Colleges or Universities to assist such institu-
tions to plan, develop, undertake, and carry out activities to
improve and expand such institutions’ capacity to serve Indian
students.
‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—The activities
described in paragraph (1) may include—
‘‘(A) purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional
and research purposes;
‘‘(B) 
construction, 
maintenance, 
renovation, 
and
improvement in classrooms, libraries, laboratories, and
other instructional facilities, including purchase or rental
of telecommunications technology equipment or services;
‘‘(C) support of faculty exchanges, faculty development,
and faculty fellowships to assist in attaining advanced
degrees in the faculty’s field of instruction;
‘‘(D) academic instruction in disciplines in which
Indians are underrepresented;
‘‘(E) purchase of library books, periodicals, and other
educational materials, including telecommunications pro-
gram material;
‘‘(F) tutoring, counseling, and student service programs
designed to improve academic success;
‘‘(G) funds management, administrative management,
and acquisition of equipment for use in strengthening funds
management;
‘‘(H) joint use of facilities, such as laboratories and
libraries;
‘‘(I) establishing or improving a development office to
strengthen or improve contributions from alumni and the
private sector;
‘‘(J) establishing or enhancing a program of teacher
education designed to qualify students to teach in
elementary schools or secondary schools, with a particular
emphasis on teaching Indian children and youth, that shall
include, as part of such program, preparation for teacher
certification;
‘‘(K) establishing community outreach programs that
encourage Indian elementary school and secondary school
students to develop the academic skills and the interest
to pursue postsecondary education; and
‘‘(L) other activities proposed in the application submit-
ted pursuant to subsection (d) that—
‘‘(i) contribute to carrying out the activities
described in subparagraphs (A) through (K); and
‘‘(ii) are approved by the Secretary as part of the
review and acceptance of such application.
‘‘(3) ENDOWMENT FUND.—
‘‘(A) IN GENERAL.—A Tribal College or University may
use not more than 20 percent of the grant funds provided
under this section to establish or increase an endowment
fund at the institution.
‘‘(B) MATCHING REQUIREMENT.—In order to be eligible
to use grant funds in accordance with subparagraph (A),
the Tribal College or University shall provide matching
H. R. 6—61
funds, in an amount equal to the Federal funds used in
accordance with subparagraph (A), for the establishment
or increase of the endowment fund.
‘‘(C) COMPARABILITY.—The provisions of part C regard-
ing the establishment or increase of an endowment fund,
that the Secretary determines are not inconsistent with
this paragraph, shall apply to funds used under subpara-
graph (A).
‘‘(d) APPLICATION PROCESS.—
‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligible to receive
assistance under this section, a Tribal College or University
shall be an eligible institution under section 312(b).
‘‘(2) APPLICATION.—Any Tribal College or University desir-
ing to receive assistance under this section shall submit an
application to the Secretary at such time, and in such manner,
as the Secretary may by regulation reasonably require. Each
such application shall include—
‘‘(A) a 5-year plan for improving the assistance provided
by the Tribal College or University to Indian students,
increasing the rates at which Indian secondary school stu-
dents enroll in higher education, and increasing overall
postsecondary retention rates for Indian students; and
‘‘(B) such enrollment data and other information and
assurances as the Secretary may require to demonstrate
compliance with paragraph (1).
‘‘(3) SPECIAL RULE.—For the purposes of this part, no Tribal
College or University that is eligible for and receives funds
under this section may concurrently receive other funds under
this part or part B.’’.
(f ) ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITU-
TIONS.—Part A of title III (20 U.S.C. 1057 et seq.) is amended
by adding at the end the following:
‘‘SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITU-
TIONS.
‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants
and related assistance to Alaska Native-serving institutions and
Native Hawaiian-serving institutions to enable such institutions
to improve and expand their capacity to serve Alaska Natives
and Native Hawaiians.
‘‘(b) DEFINITIONS.—For the purpose of this section—
‘‘(1) the term ‘Alaska Native’ has the meaning given the
term in section 9308 of the Elementary and Secondary Edu-
cation Act of 1965;
‘‘(2) the term ‘Alaska Native-serving institution’ means an
institution of higher education that—
‘‘(A) is an eligible institution under section 312(b); and
‘‘(B) at the time of application, has an enrollment of
undergraduate students that is at least 20 percent Alaska
Native students;
‘‘(3) the term ‘Native Hawaiian’ has the meaning given
the term in section 9212 of the Elementary and Secondary
Education Act of 1965; and
‘‘(4) the term ‘Native Hawaiian-serving institution’ means
an institution of higher education which—
‘‘(A) is an eligible institution under section 312(b); and
H. R. 6—62
‘‘(B) at the time of application, has an enrollment of
undergraduate students that is at least 10 percent Native
Hawaiian students.
‘‘(c) AUTHORIZED ACTIVITIES.—
‘‘(1) TYPES
OF
ACTIVITIES
AUTHORIZED.—Grants awarded
under this section shall be used by Alaska Native-serving
institutions and Native Hawaiian-serving institutions to assist
such institutions to plan, develop, undertake, and carry out
activities to improve and expand such institutions’ capacity
to serve Alaska Natives or Native Hawaiians.
‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs
may include—
‘‘(A) purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional
and research purposes;
‘‘(B) renovation and improvement in classroom, library,
laboratory, and other instructional facilities;
‘‘(C) support of faculty exchanges, and faculty develop-
ment and faculty fellowships to assist in attaining advanced
degrees in the faculty’s field of instruction;
‘‘(D) curriculum development and academic instruction;
‘‘(E) purchase of library books, periodicals, microfilm,
and other educational materials;
‘‘(F) funds and administrative management, and
acquisition of equipment for use in strengthening funds
management;
‘‘(G) joint use of facilities such as laboratories and
libraries; and
‘‘(H) academic tutoring and counseling programs and
student support services.
‘‘(d) APPLICATION PROCESS.—
‘‘(1) INSTITUTIONAL ELIGIBILITY.—Each Alaska Native-serv-
ing institution and Native Hawaiian-serving institution desiring
to receive assistance under this section shall submit to the
Secretary such enrollment data as may be necessary to dem-
onstrate that the institution is an Alaska Native-serving
institution or a Native Hawaiian-serving institution as defined
in subsection (b), along with such other information and data
as the Secretary may by regulation require.
‘‘(2) APPLICATIONS.—Any institution which is determined
by the Secretary to be an Alaska Native-serving institution
or a Native Hawaiian-serving institution may submit an
application for assistance under this section to the Secretary.
Such application shall include—
‘‘(A) a 5-year plan for improving the assistance provided
by the Alaska Native-serving institution or the Native
Hawaiian-serving institution to Alaska Native or Native
Hawaiian students; and
‘‘(B) such other information and assurance as the Sec-
retary may require.
‘‘(e) SPECIAL RULE.—For the purposes of this section, no Alaska
Native-serving institution or Native Hawaiian-serving institution
which is eligible for and receives funds under this section may
concurrently receive other funds under this part or part B.’’.
SEC. 304. STRENGTHENING HBCU’s.
(a) GRANTS.—Section 323 (20 U.S.C. 1062) is amended—
H. R. 6—63
(1) by redesignating subsection (b) as subsection (c);
(2) by inserting after subsection (a) the following:
‘‘(b) ENDOWMENT FUND.—
‘‘(1) IN GENERAL.—An institution may use not more than
20 percent of the grant funds provided under this part to
establish or increase an endowment fund at the institution.
‘‘(2) MATCHING REQUIREMENT.—In order to be eligible to
use grant funds in accordance with paragraph (1), the eligible
institution shall provide matching funds from non-Federal
sources, in an amount equal to or greater than the Federal
funds used in accordance with paragraph (1), for the establish-
ment or increase of the endowment fund.
‘‘(3) COMPARABILITY.—The provisions of part C regarding
the establishment or increase of an endowment fund, that
the Secretary determines are not inconsistent with this sub-
section, shall apply to funds used under paragraph (1).’’; and
(3) in subsection (c) (as redesignated by paragraph (1)),
by striking paragraph (3).
(b) PROFESSIONAL OR GRADUATE INSTITUTIONS.—
(1) GENERAL
AUTHORIZATION.—Section 326(a) (20 U.S.C.
1063b(a)) is amended—
(A) in subsection (a)—
(i) in paragraph (1), by inserting ‘‘in mathematics,
engineering, or the physical or natural sciences’’ after
‘‘graduate education opportunities’’; and
(ii) in paragraph (2)—
(I) by striking ‘‘$500,000’’ and inserting
‘‘$1,000,000’’; and
(II) by striking ‘‘except that’’ and all that fol-
lows and inserting the following: ‘‘, except that
no institution shall be required to match any por-
tion of the first $1,000,000 of the institution’s
award from the Secretary. After funds are made
available to each eligible institution under the
funding rules described in subsection (f ), the Sec-
retary shall distribute, on a pro rata basis, any
amounts which were not so made available (by
reason of the failure of an institution to comply
with the matching requirements of this paragraph)
among the institutions that have complied with
such matching requirement.’’; and
(B) in subsection (d)(2), by striking ‘‘$500,000’’ and
inserting ‘‘$1,000,000’’.
(2) USE
OF
FUNDS.—Section 326(c) (20 U.S.C. 1063b(c))
is amended by striking paragraphs (1) through (3) and inserting
the following:
‘‘(1) purchase, rental or lease of scientific or laboratory
equipment for educational purposes, including instructional and
research purposes;
‘‘(2) construction, maintenance, renovation, and improve-
ment in classroom, library, laboratory, and other instructional
facilities, including purchase or rental of telecommunications
technology equipment or services;
‘‘(3) purchase of library books, periodicals, technical and
other scientific journals, microfilm, microfiche, and other edu-
cational materials, including telecommunications program
materials;
H. R. 6—64
‘‘(4) scholarships, fellowships, and other financial assistance
for needy graduate and professional students to permit the
enrollment of the students in and completion of the doctoral
degree in medicine, dentistry, pharmacy, veterinary medicine,
law, and the doctorate degree in the physical or natural
sciences, engineering, mathematics, or other scientific dis-
ciplines in which African Americans are underrepresented;
‘‘(5) establish or improve a development office to strengthen
and increase contributions from alumni and the private sector;
‘‘(6) assist in the establishment or maintenance of an
institutional endowment to facilitate financial independence
pursuant to section 331; and
‘‘(7) funds and administrative management, and the
acquisition of equipment, including software, for use in
strengthening funds management and management information
systems.’’.
(3) ELIGIBILITY.—Section 326(e) (20 U.S.C. 1063b(e)) is
amended—
(A) in paragraph (1)—
(i) by striking ‘‘include—’’ and inserting ‘‘are the
following’’;
(ii) by inserting ‘‘and other qualified graduate pro-
grams’’ before the semicolon at the end of subpara-
graphs (E) through (J);
(iii) by striking ‘‘and’’ at the end of subparagraph
(O); and
(iv) in subparagraph (P)—
(I) by inserting ‘‘University’’ after ‘‘State’’; and
(II) by striking the period and inserting a
semicolon; and
(III) by adding at the end the following:
‘‘(Q) Norfolk State University qualified graduate
programs; and
‘‘(R) Tennessee State University qualified graduate
programs.’’;
(B) by striking paragraphs (2) and (3) and inserting
the following:
‘‘(2) QUALIFIED GRADUATE PROGRAM.—(A) For the purposes
of this section, the term ‘qualified graduate program’ means
a graduate or professional program that provides a program
of instruction in the physical or natural sciences, engineering,
mathematics, or other scientific discipline in which African
Americans are underrepresented and has students enrolled in
such program at the time of application for a grant under
this section.
‘‘(B) Notwithstanding the enrollment requirement con-
tained in subparagraph (A), an institution may use an amount
equal to not more than 10 percent of the institution’s grant
under this section for the development of a new qualified grad-
uate program.
‘‘(3) SPECIAL RULE.—Institutions that were awarded grants
under this section prior to October 1, 1998, shall continue
to receive such grants, subject to the availability of appropriated
funds, regardless of the eligibility of the institutions described
in subparagraphs (Q) and (R) of paragraph (1).’’; and
(C) by adding at the end the following:
H. R. 6—65
‘‘(5) INSTITUTIONAL CHOICE.—The president or chancellor
of the institution may decide which graduate or professional
school or qualified graduate program will receive funds under
the grant in any 1 fiscal year, if the allocation of funds among
the schools or programs is delineated in the application for
funds submitted to the Secretary under this section.’’.
(4) FUNDING
RULE.—Section 326(f ) (20 U.S.C. 1063b(f ))
is amended—
(A) by striking ‘‘Of the amount appropriated’’ and
inserting ‘‘Subject to subsection (g), of the amount appro-
priated’’;
(B) in paragraph (1)—
(i) 
by 
striking 
‘‘$12,000,000’’ 
and 
inserting
‘‘$26,600,000’’; and
(ii) by striking ‘‘(A) through (E)’’ and inserting
‘‘(A) through (P)’’;
(C) by striking paragraph (2) and inserting the
following:
‘‘(2) any amount in excess of $26,600,000, but not in excess
of $28,600,000, shall be available for the purpose of making
grants to institutions or programs described in subparagraphs
(Q) and (R) of subsection (e)(1); and
‘‘(3) any amount in excess of $28,600,000, shall be made
available to each of the institutions or programs identified
in subparagraphs (A) through (R) pursuant to a formula devel-
oped by the Secretary that uses the following elements:
‘‘(A) The ability of the institution to match Federal
funds with non-Federal funds.
‘‘(B) The number of students enrolled in the programs
for which the eligible institution received funding under
this section in the previous year.
‘‘(C) The average cost of education per student, for
all full-time graduate or professional students (or the
equivalent) enrolled in the eligible professional or graduate
school, or for doctoral students enrolled in the qualified
graduate programs.
‘‘(D) The number of students in the previous year who
received their first professional or doctoral degree from
the programs for which the eligible institution received
funding under this section in the previous year.
‘‘(E) The contribution, on a percent basis, of the pro-
grams for which the institution is eligible to receive funds
under this section to the total number of African Americans
receiving graduate or professional degrees in the profes-
sions or disciplines related to the programs for the previous
year.’’.
(5) HOLD HARMLESS RULE.—Section 326 is further amended
by adding at the end the following new subsection:
‘‘(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2)
and (3) of subsection (f ), no institution or qualified program identi-
fied in subsection (e)(1) that received a grant for fiscal year 1998
and that is eligible to receive a grant in a subsequent fiscal year
shall receive a grant amount in any such subsequent fiscal year
that is less than the grant amount received for fiscal year 1998,
unless the amount appropriated is not sufficient to provide such
H. R. 6—66
grant amounts to all such institutions and programs, or the institu-
tion cannot provide sufficient matching funds to meet the require-
ments of this section.’’.
SEC. 305. ENDOWMENT CHALLENGE GRANTS.
Section 331(b) (20 U.S.C. 1065(b)) is amended—
(1) in paragraph (1), by striking ‘‘360’’ and inserting ‘‘399’’;
and
(2) in paragraph (2), by striking subparagraphs (B) and
(C) and inserting the following:
‘‘(B) The Secretary may make a grant under this part to an
eligible institution in any fiscal year if the institution—
‘‘(i) applies for a grant in an amount not exceeding
$500,000; and
‘‘(ii) has deposited in the eligible institution’s endowment
fund established under this section an amount which is equal
to 1⁄2 of the amount of such grant.
‘‘(C) An eligible institution of higher education that is awarded
a grant under subparagraph (B) shall not be eligible to receive
an additional grant under subparagraph (B) until 10 years after
the date on which the grant period terminates.’’.
SEC. 306. HBCU CAPITAL FINANCING.
(a) DEFINITION.—Section 342(5) (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c–1(5)) is amended—
(1) by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (G), and (H), respectively;
(2) by inserting after subparagraph (A) the following:
‘‘(B) a facility for the administration of an educational
program, or a student center or student union, except that
not more than 5 percent of the loan proceeds provided
under this part may be used for the facility, center or
union if the facility, center or union is owned, leased,
managed, or operated by a private business, that, in return
for such use, makes a payment to the eligible institution;’’;
(3) in subparagraph (C) (as redesignated by paragraph
(1)), insert ‘‘technology,’’ after ‘‘instructional equipment’’;
(4) by inserting after subparagraph (C) (as redesignated
by paragraph (1)) the following:
‘‘(D) a maintenance, storage, or utility facility that
is essential to the operation of a facility, a library, a dor-
mitory, equipment, instrumentation, a fixture, real prop-
erty or an interest therein, described in this paragraph;
‘‘(E) a facility designed to provide primarily outpatient
health care for students or faculty;
‘‘(F) physical infrastructure essential to support the
projects authorized under this paragraph, including roads,
sewer and drainage systems, and water, power, lighting,
telecommunications, and other utilities;’’; and
(5) in subparagraph (H) (as redesignated by paragraph
(2)), by striking ‘‘(C)’’ and inserting ‘‘(G)’’.
(b) RESPONSIBILITIES.—Section 343 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c–2) is amended—
(1) in subsection (b)(8) (as redesignated by section 301(a)(4))
(20 U.S.C. 1132c–2(b)(8)), by striking ‘‘10 percent’’ each place
the term appears and inserting ‘‘5 percent’’; and
(2) by adding at the end the following:
H. R. 6—67
‘‘(e) Notwithstanding any other provision of law, a qualified
bond guaranteed under this part may be sold to any party that
offers terms that the Secretary determines are in the best interest
of the eligible institution.’’.
(c) TECHNICAL ASSISTANCE.—Section 345 (as redesignated by
section 301(a)(4)) (20 U.S.C. 1132c–4) is amended—
(1) in paragraph (5), by striking ‘‘and’’ after the semicolon;
(2) in paragraph (6), by striking the period and inserting
‘‘; and’’; and
(3) by adding at the end the following:
‘‘(7) may, directly or by grant or contract, provide technical
assistance to eligible institutions to prepare the institutions
to qualify, apply for, and maintain a capital improvement loan,
including a loan under this part.’’.
(d) PROHIBITION.—Section 346 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c–5) is repealed.
(e) ADVISORY BOARD.—Section 347 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c–6) is amended—
(1) in subsection (b)—
(A) in subparagraph (D), by inserting ‘‘, or the presi-
dent’s designee.’’ after the period; and
(B) in subparagraph (E), by inserting ‘‘, or the designee
of the Association’’ before the period; and
(2) by striking subsection (c).
SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT
PROGRAM.
(a) MINORITY
SCIENCE
AND
ENGINEERING
IMPROVEMENT
PROGRAM FINDINGS.—Subpart 1 of part E of title III (as redesig-
nated by paragraphs (6) and (7) of section 301) (20 U.S.C. 1135b
et seq.) is amended by inserting after the subpart heading the
following:
‘‘SEC. 350. FINDINGS.
‘‘Congress makes the following findings:
‘‘(1) It is incumbent on the Federal Government to support
the technological and economic competitiveness of the United
States by improving and expanding the scientific and techno-
logical capacity of the United States. More and better prepared
scientists, engineers, and technical experts are needed to
improve and expand such capacity.
‘‘(2) As the Nation’s population becomes more diverse, it
is important that the educational and training needs of all
Americans are met. Underrepresentation of minorities in
science and technological fields diminishes our Nation’s
competitiveness by impairing the quantity of well prepared
scientists, engineers, and technical experts in these fields.
‘‘(3) Despite significant limitations in resources, minority
institutions provide an important educational opportunity for
minority students, particularly in science and engineering
fields. Aid to minority institutions is a good way to address
the underrepresentation of minorities in science and techno-
logical fields.
‘‘(4) There is a strong Federal interest in improving science
and engineering programs at minority institutions as such pro-
grams lag behind in program offerings and in student enroll-
ment compared to such programs at other institutions of higher
education.’’.
H. R. 6—68
(b) ELIGIBILITY FOR GRANTS.—Section 361 (as redesignated by
section 301(a)(7)) (20 U.S.C. 1135d) is amended to read as follows:
‘‘SEC. 361. ELIGIBILITY FOR GRANTS.
‘‘Eligibility to receive grants under this part is limited to—
‘‘(1) public and private nonprofit institutions of higher edu-
cation that—
‘‘(A) award baccalaureate degrees; and
‘‘(B) are minority institutions;
‘‘(2) public or private nonprofit institutions of higher edu-
cation that—
‘‘(A) award associate degrees; and
‘‘(B) are minority institutions that—
‘‘(i) have a curriculum that includes science or
engineering subjects; and
‘‘(ii) enter into a partnership with public or private
nonprofit institutions of higher education that award
baccalaureate degrees in science and engineering;
‘‘(3) nonprofit science-oriented organizations, professional
scientific societies, and institutions of higher education that
award baccalaureate degrees, that—
‘‘(A) provide a needed service to a group of minority
institutions; or
‘‘(B) provide in-service training for project directors,
scientists, and engineers from minority institutions; or
‘‘(4) consortia of organizations, that provide needed services
to one or more minority institutions, the membership of which
may include—
‘‘(A) institutions of higher education which have a
curriculum in science or engineering;
‘‘(B) institutions of higher education that have a grad-
uate or professional program in science or engineering;
‘‘(C) research laboratories of, or under contract with,
the Department of Energy;
‘‘(D) private organizations that have science or
engineering facilities; or
‘‘(E) quasi-governmental entities that have a significant
scientific or engineering mission.’’.
(c) DEFINITIONS.—Section 365(4) (as redesignated by section
301(a)(7)) (20 U.S.C. 1135d–5(4)) is amended by inserting ‘‘behav-
ioral,’’ after ‘‘physical,’’.
(d) CONFORMING AMENDMENTS.—The heading for subpart 1 of
part E of title III (as redesignated by paragraphs (6) and (7)
of section 301(a)) is amended by inserting ‘‘and Engineering’’ before
‘‘Improvement Program’’.
SEC. 308. GENERAL PROVISIONS.
(a) APPLICATIONS FOR ASSISTANCE.—Subsection (a) of section
391(a) (as redesignated by section 301(a)(2)) (20 U.S.C. 1066(a))
is amended to read as follows:
‘‘(a) APPLICATIONS.—
‘‘(1) APPLICATIONS
REQUIRED.—Any institution which is
eligible for assistance under this title shall submit to the Sec-
retary an application for assistance at such time, in such form,
and containing such information, as may be necessary to enable
the Secretary to evaluate the institution’s need for the assist-
ance. Subject to the availability of appropriations to carry out
H. R. 6—69
this title, the Secretary may approve an application for assist-
ance under this title only if the Secretary determines that—
‘‘(A) the application meets the requirements of sub-
section (b);
‘‘(B) the applicant is eligible for assistance in accord-
ance with the part of this title under which the assistance
is sought; and
‘‘(C) the applicant’s performance goals are sufficiently
rigorous as to meet the purposes of this title and the
performance objectives and indicators for this title estab-
lished by the Secretary pursuant to the Government
Performance and Results Act of 1993 and the amendments
made by such Act.
‘‘(2) PRELIMINARY
APPLICATIONS.—In carrying out para-
graph (1), the Secretary may develop a preliminary application
for use by eligible institutions applying under part A prior
to the submission of the principal application.’’.
(b) APPLICATIONS.—Paragraph (1) of section 391(b) (as redesig-
nated by section 301(a)(2)) (20 U.S.C. 1066(b)) is amended by insert-
ing ‘‘, D or E’’ after ‘‘part C’’.
(c) CONTENTS OF APPLICATIONS.—Section 391(b)(6) (as redesig-
nated by section 301(a)(2)) is amended by inserting before the
semicolon the following: ‘‘, except that for purposes of section 316,
paragraphs (2) and (3) of section 396 shall not apply’’.
(d) WAIVERS.—Section 392(a) (as redesignated by section
301(a)(2)) (20 U.S.C. 1067(a)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph (5);
(2) by redesignating paragraph (6) as paragraph (7); and
(3) by inserting after paragraph (5) the following new para-
graph:
‘‘(6) that is a tribally controlled college or university as
defined in section 2 of the Tribally Controlled College or Univer-
sity Assistance Act of 1978; or’’.
(e) APPLICATION REVIEW PROCESS.—Section 393(a) (as redesig-
nated by section 301(a)(2)) (20 U.S.C. 1068(a)) is amended—
(1) in paragraph (2), by striking ‘‘Native American colleges
and universities’’ and inserting ‘‘Tribal Colleges and Univer-
sities’’; and
(2) by adding at the end the following:
‘‘(d) EXCLUSION.—The provisions of this section shall not apply
to applications submitted under part D.’’.
(f ) WAIVERS.—Paragraph (2) of section 395(b) (as redesignated
by section 301(a)(2)) (20 U.S.C. 1069b(b)) is amended by striking
‘‘title IV, VII, or VIII’’ and inserting ‘‘part D or title IV’’.
(g) CONTINUATION AWARDS.—Part F of title III is amended
by inserting after section 397 (as redesignated by section 301(a)(2))
(20 U.S.C. 1069d) the following:
‘‘SEC. 398. CONTINUATION AWARDS.
‘‘The Secretary shall make continuation awards under this title
for the second and succeeding years of a grant only after determin-
ing that the recipient is making satisfactory progress in carrying
out the grant.’’.
(h) AUTHORIZATION
OF APPROPRIATIONS.—Section 399(a) (as
redesignated by section 301(a)(2)) (20 U.S.C. 1069f) is amended—
(1) in paragraph (1)—
H. R. 6—70
(A) in subparagraph (A), by striking ‘‘1993’’ and insert-
ing ‘‘1999’’;
(B) in subparagraph (B)—
(i) in clause (i), by striking ‘‘$45,000,000 for fiscal
year 1993’’ and inserting ‘‘$10,000,000 for fiscal year
1999’’;
(ii) by striking clause (ii); and
(iii) by striking ‘‘(B)(i) There’’ and inserting ‘‘(B)
There’’; and
(C) by adding at the end the following:
‘‘(C) There are authorized to be appropriated to carry out
section 317, $5,000,000 for fiscal year 1999 and such sums
as may be necessary for each of the 4 succeeding fiscal years.’’;
(2) in paragraph (2)—
(A) in subparagraph (A), by striking ‘‘1993’’ and insert-
ing ‘‘1999’’; and
(B) in subparagraph (B), by striking ‘‘$20,000,000 for
fiscal year 1993’’ and inserting ‘‘$35,000,000 for fiscal year
1999’’;
(3) in paragraph (3), by striking ‘‘$50,000,000 for fiscal
year 1993’’ and inserting ‘‘$10,000,000 for fiscal year 1999’’;
(4) by adding at the end the following:
‘‘(4) PART D.—(A) There are authorized to be appropriated
to carry out part D (other than section 345(7), but including
section 347), $110,000 for fiscal year 1999, and such sums
as may be necessary for each of the 4 succeeding fiscal years.
‘‘(B) There are authorized to be appropriated to carry out
section 345(7), such sums as may be necessary for fiscal year
1999 and each of the 4 succeeding fiscal years.
‘‘(5) PART E.—There are authorized to be appropriated to
carry out part E, $10,000,000 for fiscal year 1999, and such
sums as may be necessary for each of the 4 succeeding fiscal
years.’’; and
(5) by striking subsections (c), (d), and (e).
TITLE IV—STUDENT ASSISTANCE
PART A—GRANTS TO STUDENTS
SEC. 401. FEDERAL PELL GRANTS.
(a) EXTENSION
OF AUTHORITY.—Section 401(a)(1) (20 U.S.C.
1070a(a)(1)) is amended—
(1) in the first sentence, by striking ‘‘The Secretary shall,
during the period beginning July 1, 1972, and ending September
30, 1998,’’ and inserting ‘‘For each fiscal year through fiscal
year 2004, the Secretary shall’’; and
(2) in the second sentence, by inserting ‘‘until such time
as the Secretary determines and publishes in the Federal Reg-
ister with an opportunity for comment, an alternative payment
system that provides payments to institutions in an accurate
and timely manner,’’ after ‘‘pay eligible students’’.
(b) AMOUNT
OF GRANT.—Paragraph (2)(A) of section 401(b)
is amended to read as follows:
‘‘(2)(A) The amount of the Federal Pell Grant for a student
eligible under this part shall be—
‘‘(i) $4,500 for academic year 1999–2000;
H. R. 6—71
‘‘(ii) $4,800 for academic year 2000–2001;
‘‘(iii) $5,100 for academic year 2001–2002;
‘‘(iv) $5,400 for academic year 2002–2003; and
‘‘(v) $5,800 for academic year 2003–2004,
less an amount equal to the amount determined to be the expected
family contribution with respect to that student for that year.’’.
(c) RELATION OF MAXIMUM GRANT TO TUITION AND EXPENSES.—
Paragraph (3) of section 401(b) is amended to read as follows:
‘‘(3)(A) For any academic year for which an appropriation Act
provides a maximum basic grant in an amount in excess of $2,700,
the amount of a student’s basic grant shall equal $2,700 plus—
‘‘(i) one-half of the amount by which such maximum basic
grant exceeds $2,700; plus
‘‘(ii) the lesser of—
‘‘(I) the remaining one-half of such excess; or
‘‘(II) the sum of the student’s tuition and, if the student
has dependent care expenses (as described in section
472(8)) or disability-related expenses (as described in sec-
tion 472(9)), an allowance determined by the institution
for such expenses.
‘‘(B) An institution that charged only fees in lieu of tuition
as of October 1, 1998, may include in the institution’s determination
of tuition charged, fees that would normally constitute tuition.’’.
(d) REGULATIONS
FOR MULTIPLE AWARDS.—Section 401(b)(6)
is amended—
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(2) by inserting ‘‘(A)’’ after the paragraph designation; and
(3) by adding at the end the following:
‘‘(B) The Secretary shall promulgate regulations implementing
this paragraph.’’.
(e) TIME LIMIT TO RECEIVE GRANTS.—Section 401(c) is amended
by adding at the end the following:
‘‘(4) Notwithstanding paragraph (1), the Secretary may allow,
on a case-by-case basis, a student to receive a basic grant if the
student—
‘‘(A) is carrying at least one-half the normal full-time work
load for the course of study the student is pursuing, as deter-
mined by the institution of higher education; and
‘‘(B) 
is 
enrolled 
or 
accepted 
for 
enrollment 
in 
a
postbaccalaureate program that does not lead to a graduate
degree, and in courses required by a State in order for the
student to receive a professional certification or licensing
credential that is required for employment as a teacher in
an elementary school or secondary school in that State,
except that this paragraph shall not apply to a student who is
enrolled in an institution of higher education that offers a bacca-
laureate degree in education.’’.
(f ) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.—
Section 401 is amended by adding at the end the following:
‘‘( j) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.—
‘‘(1) IN GENERAL.—No institution of higher education shall
be an eligible institution for purposes of this subpart if such
institution of higher education is ineligible to participate in
a loan program under part B or D as a result of a final
default rate determination made by the Secretary under part
H. R. 6—72
B or D after the final publication of cohort default rates for
fiscal year 1996 or a succeeding fiscal year.
‘‘(2) SANCTIONS
SUBJECT
TO
APPEAL
OPPORTUNITY.—No
institution may be subject to the terms of this subsection unless
the institution has had the opportunity to appeal the institu-
tion’s default rate determination under regulations issued by
the Secretary for the loan program authorized under part B
or D, as applicable. This subsection shall not apply to an
institution that was not participating in the loan program
authorized under part B or D on the date of enactment of
the Higher Education Amendments of 1998, unless the institu-
tion subsequently participates in the loan programs.’’.
(g) CONFORMING AMENDMENTS.—
(1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by
striking ‘‘basic educational opportunity grants’’ and inserting
‘‘Federal Pell Grants’’.
(2) The heading of subpart 1 of part A of title IV (20
U.S.C. 1070a et seq.) is amended to read as follows:
‘‘Subpart 1—Federal Pell Grants’’.
(3) Section 401 is amended—
(A) in the heading of the section, by striking ‘‘BASIC
EDUCATIONAL
OPPORTUNITY’’ and inserting ‘‘FEDERAL
PELL’’;
(B) in subsection (a)(3), by striking ‘‘Basic grants’’ and
inserting ‘‘Grants’’;
(C) by striking ‘‘basic grant’’ each place the term
appears and inserting ‘‘Federal Pell Grant’’; and
(D) by striking ‘‘basic grants’’ each place the term
appears and inserting ‘‘Federal Pell Grants’’.
(4) Section 401(f )(3) is amended by striking ‘‘Education
and Labor’’ and inserting ‘‘Education and the Workforce’’.
(5) Section 452(c) (20 U.S.C. 1087b(c)) is amended by strik-
ing ‘‘basic grants’’ and inserting ‘‘Federal Pell Grants’’.
(6) Subsections ( j)(2) and (k)(3) of section 455 (20 U.S.C.
1087e) are each amended by striking ‘‘basic grants’’ and insert-
ing ‘‘Federal Pell Grants’’.
SEC. 402. FEDERAL TRIO PROGRAMS.
(a) PROGRAM
AUTHORITY; AUTHORIZATION
OF
APPROPRIA-
TIONS.—
(1) DURATION OF GRANTS.—Section 402A(b)(2) (20 U.S.C.
1070a–11(b)(2)) is amended—
(A) by striking ‘‘and’’ at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph
(B) and inserting ‘‘; and’’; and
(C) by inserting after subparagraph (B) the following
new subparagraph:
‘‘(C) grants under section 402H shall be awarded for
a period determined by the Secretary.’’.
(2) MINIMUM GRANTS.—Section 402A(b)(3) is amended to
read as follows:
‘‘(3) MINIMUM GRANTS.—Unless the institution or agency
requests a smaller amount, individual grants under this chapter
shall be no less than—
‘‘(A) $170,000 for programs authorized by sections 402D
and 402G;
H. R. 6—73
‘‘(B) $180,000 for programs authorized by sections 402B
and 402F; and
‘‘(C) $190,000 for programs authorized by sections 402C
and 402E.’’.
(3) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.—
Subsection (c) of section 402A is amended to read as follows:
‘‘(c) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.—
‘‘(1) APPLICATION REQUIREMENTS.—An eligible entity that
desires to receive a grant or contract under this chapter shall
submit an application to the Secretary in such manner and
form, and containing such information and assurances, as the
Secretary may reasonably require.
‘‘(2) PRIOR EXPERIENCE.—In making grants under this chap-
ter, the Secretary shall consider each applicant’s prior experi-
ence of service delivery under the particular program for which
funds are sought. The level of consideration given the factor
of prior experience shall not vary from the level of consideration
given such factor during fiscal years 1994 through 1997, except
that grants made under section 402H shall not be given prior
experience consideration.
‘‘(3) ORDER OF AWARDS; PROGRAM FRAUD.—(A) Except with
respect to grants made under sections 402G and 402H and
as provided in subparagraph (B), the Secretary shall award
grants and contracts under this chapter in the order of the
scores received by the application for such grant or contract
in the peer review process required under paragraph (4) and
adjusted for prior experience in accordance with paragraph
(2) of this subsection.
‘‘(B) The Secretary is not required to provide assistance
to a program otherwise eligible for assistance under this chap-
ter, if the Secretary has determined that such program has
involved the fraudulent use of funds under this chapter.
‘‘(4) PEER REVIEW PROCESS.—(A) The Secretary shall ensure
that, to the extent practicable, members of groups underrep-
resented in higher education, including African Americans, His-
panics, Native Americans, Alaska Natives, Asian Americans,
and Native American Pacific Islanders (including Native
Hawaiians), are represented as readers of applications submit-
ted under this chapter. The Secretary shall also ensure that
persons from urban and rural backgrounds are represented
as readers.
‘‘(B) The Secretary shall ensure that each application
submitted under this chapter is read by at least three readers
who are not employees of the Federal Government (other than
as readers of applications).
‘‘(5) NUMBER
OF
APPLICATIONS
FOR
GRANTS
AND
CON-
TRACTS.—The Secretary shall not limit the number of applica-
tions submitted by an entity under any program authorized
under this chapter if the additional applications describe pro-
grams serving different populations or campuses.
‘‘(6) COORDINATION WITH OTHER PROGRAMS FOR DISADVAN-
TAGED STUDENTS.—The Secretary shall encourage coordination
of programs assisted under this chapter with other programs
for disadvantaged students operated by the sponsoring institu-
tion or agency, regardless of the funding source of such pro-
grams. The Secretary shall not limit an entity’s eligibility to
receive funds under this chapter because such entity sponsors
H. R. 6—74
a program similar to the program to be assisted under this
chapter, regardless of the funding source of such program.
The Secretary shall permit the Director of a program receiving
funds under this chapter to administer one or more additional
programs for disadvantaged students operated by the sponsor-
ing institution or agency, regardless of the funding sources
of such programs.
‘‘(7) APPLICATION STATUS.—The Secretary shall inform each
entity operating programs under this chapter regarding the
status of their application for continued funding at least 8
months prior to the expiration of the grant or contract. The
Secretary, in the case of an entity that is continuing to operate
a successful program under this chapter, shall ensure that
the start-up date for a new grant or contract for such program
immediately follows the termination of the preceding grant
or contract so that no interruption of funding occurs for such
successful reapplicants. The Secretary shall inform each entity
requesting assistance under this chapter for a new program
regarding the status of their application at least 8 months
prior to the proposed startup date of such program.’’.
(4) AUTHORIZATION OF APPROPRIATIONS.—Section 402A(f )
is amended by striking ‘‘$650,000,000 for fiscal year 1993’’
and inserting ‘‘$700,000,000 for fiscal year 1999’’.
(5) WAIVER.—Section 402A(g) is amended by adding at
the end the following:
‘‘(4) WAIVER.—The Secretary may waive the service require-
ments in subparagraph (A) or (B) of paragraph (3) if the Sec-
retary determines the application of the service requirements
to a veteran will defeat the purpose of a program under this
chapter.’’.
(b) TALENT SEARCH.—Section 402B(b) (20 U.S.C. 1070a–12(b))
is amended—
(1) by striking paragraph (4) and inserting the following:
‘‘(4) guidance on and assistance in secondary school reentry,
entry to general educational development (GED) programs,
other alternative education programs for secondary school drop-
outs, or postsecondary education;’’;
(2) in paragraph (5), by inserting ‘‘, or activities designed
to acquaint individuals from disadvantaged backgrounds with
careers in which the individuals are particularly underrep-
resented’’ before the semicolon;
(3) in paragraph (8), by striking ‘‘parents’’ and inserting
‘‘families’’; and
(4) in paragraph (9), by inserting ‘‘or counselors’’ after
‘‘teachers’’.
(c) UPWARD BOUND.—Section 402C (20 U.S.C. 1070a–13) is
amended—
(1) in subsection (b)—
(A) in paragraph (2), by striking ‘‘personal counseling’’
and inserting ‘‘counseling and workshops’’;
(B) in paragraph (9)—
(i) by inserting ‘‘or counselors’’ after ‘‘teachers’’;
and
(ii) by striking ‘‘and’’ after the semicolon;
(C) by redesignating paragraph (10) as paragraph (12);
(D) by inserting after paragraph (9) the following:
H. R. 6—75
‘‘(10) work-study positions where youth participating in
the project are exposed to careers requiring a postsecondary
degree;
‘‘(11) special services to enable veterans to make the transi-
tion to postsecondary education; and’’; and
(E) in paragraph (12) (as redesignated by subparagraph
(C)), by striking ‘‘(9)’’ and inserting ‘‘(11)’’; and
(2) in subsection (e), by striking ‘‘and not in excess of
$40 per month during the remaining period of the year.’’ and
inserting ‘‘except that youth participating in a work-study posi-
tion under subsection (b)(10) may be paid a stipend of $300
per month during June, July, and August. Youths participating
in a project proposed to be carried out under any application
may be paid stipends not in excess of $40 per month during
the remaining period of the year.’’.
(d) STUDENT SUPPORT SERVICES.—Paragraph (6) of section
402D(c) (20 U.S.C. 1070a–14(c)(6)) is amended to read as follows:
‘‘(6) consider, in addition to such other criteria as the
Secretary may prescribe, the institution’s effort, and where
applicable past history, in—
‘‘(A) providing sufficient financial assistance to meet
the full financial need of each student in the project; and
‘‘(B) maintaining the loan burden of each such student
at a manageable level.’’.
(e) POSTBACCALAUREATE
ACHIEVEMENT
PROGRAM.—Section
402E(e)(1) (20 U.S.C. 1070a–15(e)(1)) is amended by striking
‘‘$2,400’’ and inserting ‘‘$2,800’’.
(f ) STAFF DEVELOPMENT ACTIVITIES.—Section 402G (20 U.S.C.
1070a–17) is amended—
(1) in subsection (a), by inserting ‘‘participating in,’’ after
‘‘leadership personnel employed in,’’; and
(2) in subsection (b), by inserting after paragraph (3) the
following new paragraph:
‘‘(4) The use of appropriate educational technology in the
operation of projects assisted under this chapter.’’.
(g) EVALUATION AND DISSEMINATION.—Section 402H (20 U.S.C.
1070a–18) is amended to read as follows:
‘‘SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT
AND DISSEMINATION PARTNERSHIP PROJECTS.
‘‘(a) EVALUATIONS.—
‘‘(1) IN
GENERAL.—For the purpose of improving the
effectiveness of the programs and projects assisted under this
chapter, the Secretary may make grants to or enter into con-
tracts with institutions of higher education and other public
and private institutions and organizations to evaluate the
effectiveness of the programs and projects assisted under this
chapter.
‘‘(2) PRACTICES.—The evaluations described in paragraph
(1) shall identify institutional, community, and program or
project practices that are particularly effective in enhancing
the access of low-income individuals and first-generation college
students to postsecondary education, the preparation of the
individuals and students for postsecondary education, and the
success of the individuals and students in postsecondary edu-
cation. Such evaluations shall also investigate the effectiveness
of alternative and innovative methods within Federal TRIO
H. R. 6—76
programs of increasing access to, and retention of, students
in postsecondary education.
‘‘(b) GRANTS.—The Secretary may award grants to institutions
of higher education or other private and public institutions and
organizations, that are carrying out a program or project assisted
under this chapter prior to the date of enactment of the Higher
Education Amendments of 1998, to enable the institutions and
organizations to expand and leverage the success of such programs
or projects by working in partnership with other institutions,
community-based organizations, or combinations of such institutions
and organizations, that are not receiving assistance under this
chapter and are serving low-income students and first generation
college students, in order to—
‘‘(1) disseminate and replicate best practices of programs
or projects assisted under this chapter; and
‘‘(2) provide technical assistance regarding programs and
projects assisted under this chapter.
‘‘(c) RESULTS.—In order to improve overall program or project
effectiveness, the results of evaluations and grants described in
this section shall be disseminated by the Secretary to similar pro-
grams or projects assisted under this subpart, as well as other
individuals concerned with postsecondary access for and retention
of low-income individuals and first-generation college students.’’.
SEC. 403. GEAR UP PROGRAM.
Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 1070a–
21 et seq.) is amended to read as follows:
‘‘CHAPTER 2—GAINING EARLY AWARENESS
AND 
READINESS 
FOR 
UNDERGRADUATE
PROGRAMS
‘‘SEC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PRO-
GRAM AUTHORIZED.
‘‘(a) PROGRAM AUTHORIZED.—The Secretary is authorized, in
accordance with the requirements of this chapter, to establish a
program that—
‘‘(1) encourages eligible entities to provide or maintain a
guarantee to eligible low-income students who obtain a second-
ary school diploma (or its recognized equivalent), of the financial
assistance necessary to permit the students to attend an institu-
tion of higher education; and
‘‘(2) supports eligible entities in providing—
‘‘(A) additional counseling, mentoring, academic sup-
port, outreach, and supportive services to elementary
school, middle school, and secondary school students who
are at risk of dropping out of school; and
‘‘(B) information to students and their parents about
the advantages of obtaining a postsecondary education and
the college financing options for the students and their
parents.
‘‘(b) AWARDS.—
‘‘(1) IN GENERAL.—From funds appropriated under section
404H for each fiscal year, the Secretary shall make awards
H. R. 6—77
to eligible entities described in paragraphs (1) and (2) of sub-
section (c) to enable the entities to carry out the program
authorized under subsection (a).
‘‘(2) PRIORITY.—In making awards to eligible entities
described in paragraph (c)(1), the Secretary shall—
‘‘(A) give priority to eligible entities that—
‘‘(i) on the day before the date of enactment of
the Higher Education Amendments of 1998, carried
out successful educational opportunity programs under
this chapter (as this chapter was in effect on such
day); and
‘‘(ii) have a prior, demonstrated commitment to
early intervention leading to college access through
collaboration and replication of successful strategies;
‘‘(B) ensure that students served under this chapter
on the day before the date of enactment of the Higher
Education Amendments of 1998 continue to receive assist-
ance through the completion of secondary school.
‘‘(c) DEFINITION OF ELIGIBLE ENTITY.—For the purposes of this
chapter, the term ‘eligible entity’ means—
‘‘(1) a State; or
‘‘(2) a partnership consisting of—
‘‘(A) one or more local educational agencies acting on
behalf of—
‘‘(i) one or more elementary schools or secondary
schools; and
‘‘(ii) the secondary schools that students from the
schools described in clause (i) would normally attend;
‘‘(B) one or more degree granting institutions of higher
education; and
‘‘(C) at least two community organizations or entities,
such as businesses, professional associations, community-
based organizations, philanthropic organizations, State
agencies, institutions or agencies sponsoring programs
authorized under subpart 4, or other public or private
agencies or organizations.
‘‘SEC. 404B. REQUIREMENTS.
‘‘(a) FUNDING RULES.—
‘‘(1) CONTINUATION
AWARDS.—From the amount appro-
priated under section 404H for a fiscal year, the Secretary
shall continue to award grants to States under this chapter
(as this chapter was in effect on the day before the date of
enactment of the Higher Education Amendments of 1998) in
accordance with the terms and conditions of such grants.
‘‘(2) DISTRIBUTION.—From the amount appropriated under
section 404H that remains after making continuation awards
under paragraph (1) for a fiscal year, the Secretary shall—
‘‘(A) make available—
‘‘(i) not less than 33 percent of the amount to
eligible entities described in section 404A(c)(1); and
‘‘(ii) not less than 33 percent of the amount to
eligible entities described in section 404A(c)(2); and
‘‘(B) award the remainder of the amount to eligible
entities described in paragraph (1) or (2) of section 404A(c).
‘‘(3) 
SPECIAL
RULE.—The 
Secretary 
shall 
annually
reevaluate the distribution of funds described in paragraph
H. R. 6—78
(2)(B) based on number, quality, and promise of the applications
and adjust the distribution accordingly.’’.
‘‘(b) LIMITATION.—Each eligible entity described in section
404A(c)(1), and each eligible entity described in section 404A(c)(2)
that conducts a scholarship component under section 404E, shall
use not less than 25 percent and not more than 50 percent of
grant funds received under this chapter for the early intervention
component of an eligible entity’s program under this chapter, except
that the Secretary may waive the 50 percent limitation if the
eligible entity demonstrates that the eligible entity has another
means of providing the students with financial assistance that
is described in the plan submitted under section 404C.
‘‘(c) COORDINATION.—Each eligible entity shall ensure that the
activities assisted under this chapter are, to the extent practicable,
coordinated with, and complement and enhance—
‘‘(1) services under this chapter provided by other eligible
entities serving the same school district or State; and
‘‘(2) related services under other Federal or non-Federal
programs.
‘‘(d) DESIGNATION
OF
FISCAL
AGENT.—An eligible entity
described in section 404A(c)(2) shall designate an institution of
higher education or a local educational agency as the fiscal agent
for the eligible entity.
‘‘(e) COORDINATORS.—An eligible entity described in section
404A(c)(2) shall have a full-time program coordinator or a part-
time program coordinator, whose primary responsibility is a project
under section 404C.
‘‘(f ) DISPLACEMENT.—An eligible entity described in 404A(c)(2)
shall ensure that the activities assisted under this chapter will
not displace an employee or eliminate a position at a school assisted
under this chapter, including a partial displacement such as a
reduction in hours, wages or employment benefits.
‘‘(g) COHORT APPROACH.—
‘‘(1) IN GENERAL.—The Secretary shall require that eligible
entities described in section 404A(c)(2)—
‘‘(A) provide services under this chapter to at least
one grade level of students, beginning not later than 7th
grade, in a participating school that has a 7th grade and
in which at least 50 percent of the students enrolled are
eligible for free or reduced-price lunch under the National
School Lunch Act (or, if an eligible entity determines that
it would promote the effectiveness of a program, an entire
grade level of students, beginning not later than the 7th
grade, who reside in public housing as defined in section
3(b)(1) of the United States Housing Act of 1937); and
‘‘(B) ensure that the services are provided through
the 12th grade to students in the participating grade level.
‘‘(2) COORDINATION REQUIREMENT.—In order for the Sec-
retary to require the cohort approach described in paragraph
(1), the Secretary shall, where applicable, ensure that the cohort
approach is done in coordination and collaboration with existing
early intervention programs and does not duplicate the services
already provided to a school or community.
‘‘SEC. 404C. ELIGIBLE ENTITY PLANS.
‘‘(a) PLAN REQUIRED FOR ELIGIBILITY.—
H. R. 6—79
‘‘(1) IN GENERAL.—In order for an eligible entity to qualify
for a grant under this chapter, the eligible entity shall submit
to the Secretary a plan for carrying out the program under
this chapter. Such plan shall provide for the conduct of a
scholarship component if required or undertaken pursuant to
section 404E and an early intervention component required
pursuant to section 404D.
‘‘(2) CONTENTS.—Each plan submitted pursuant to para-
graph (1) shall be in such form, contain or be accompanied
by such information or assurances, and be submitted at such
time as the Secretary may require by regulation. Each such
plan shall—
‘‘(A) describe the activities for which assistance under
this chapter is sought; and
‘‘(B) provide such additional assurances as the Sec-
retary determines necessary to ensure compliance with the
requirements of this chapter.
‘‘(b) MATCHING REQUIREMENT.—
‘‘(1) IN GENERAL.—The Secretary shall not approve a plan
submitted under subsection (a) unless such plan—
‘‘(A) provides that the eligible entity will provide, from
State, local, institutional, or private funds, not less than
50 percent of the cost of the program, which matching
funds may be provided in cash or in kind;
‘‘(B) specifies the methods by which matching funds
will be paid; and
‘‘(C) includes provisions designed to ensure that funds
provided under this chapter shall supplement and not sup-
plant funds expended for existing programs.
‘‘(2) SPECIAL RULE.—Notwithstanding the matching require-
ment described in paragraph (1)(A), the Secretary may by regu-
lation modify the percentage requirement described in para-
graph (1)(A) for eligible entities described in section 404A(c)(2).
‘‘(c) METHODS
FOR
COMPLYING
WITH
MATCHING
REQUIRE-
MENT.—An eligible entity may count toward the matching require-
ment described in subsection (b)(1)(A)—
‘‘(1) the amount of the financial assistance paid to students
from State, local, institutional, or private funds under this
chapter;
‘‘(2) the amount of tuition, fees, room or board waived
or reduced for recipients of financial assistance under this
chapter; and
‘‘(3) the amount expended on documented, targeted, long-
term mentoring and counseling provided by volunteers or paid
staff of nonschool organizations, including businesses, religious
organizations, community groups, postsecondary educational
institutions, nonprofit and philanthropic organizations, and
other organizations.
‘‘(d) PEER REVIEW PANELS.—The Secretary shall convene peer
review panels to assist in making determinations regarding the
awarding of grants under this chapter.
‘‘SEC. 404D. EARLY INTERVENTION.
‘‘(a) SERVICES.—
‘‘(1) IN GENERAL.—In order to receive a grant under this
chapter, an eligible entity shall demonstrate to the satisfaction
of the Secretary, in the plan submitted under section 404C,
H. R. 6—80
that the eligible entity will provide comprehensive mentoring,
counseling, outreach, and supportive services to students
participating in programs under this chapter. Such counseling
shall include—
‘‘(A) financial aid counseling and information regarding
the opportunities for financial assistance under this title;
and
‘‘(B) activities or information regarding—
‘‘(i) fostering and improving parent involvement
in promoting the advantages of a college education,
academic admission requirements, and the need to take
college preparation courses;
‘‘(ii) college admissions and achievement tests; and
‘‘(iii) college application procedures.
‘‘(2) METHODS.—The eligible entity shall demonstrate
in such plan, pursuant to regulations of the Secretary,
the methods by which the eligible entity will target services
on priority students described in subsection (c), if
applicable.
‘‘(b) USES OF FUNDS.—
‘‘(1) IN GENERAL.—The Secretary shall, by regulation, estab-
lish criteria for determining whether comprehensive mentoring,
counseling, outreach, and supportive services programs may
be used to meet the requirements of subsection (a).
‘‘(2) PERMISSIBLE ACTIVITIES.—Examples of activities that
meet the requirements of subsection (a) include the following:
‘‘(A) Providing eligible students in preschool through
grade 12 with a continuing system of mentoring and advis-
ing that—
‘‘(i) is coordinated with the Federal and State
community service initiatives; and
‘‘(ii) may include such support services as after
school and summer tutoring, assistance in obtaining
summer jobs, career mentoring, and academic counsel-
ing.
‘‘(B) Requiring each student to enter into an agreement
under which the student agrees to achieve certain academic
milestones, such as completing a prescribed set of courses
and maintaining satisfactory progress described in section
484(c), in exchange for receiving tuition assistance for a
period of time to be established by each eligible entity.
‘‘(C) Activities designed to ensure secondary school
completion and college enrollment of at-risk children, such
as identification of at-risk children, after school and sum-
mer tutoring, assistance in obtaining summer jobs, aca-
demic counseling, volunteer and parent involvement,
providing former or current scholarship recipients as men-
tor or peer counselors, skills assessment, providing access
to rigorous core courses that reflect challenging academic
standards, personal counseling, family counseling and home
visits, staff development, and programs and activities
described in this subparagraph that are specially designed
for students of limited English proficiency.
‘‘(D) Summer programs for individuals who are in their
sophomore or junior years of secondary school or are plan-
ning to attend an institution of higher education in the
succeeding academic year that—
H. R. 6—81
‘‘(i) are carried out at an institution of higher
education that has programs of academic year support-
ive services for disadvantaged students through
projects authorized under section 402D or through com-
parable projects funded by the State or other sources;
‘‘(ii) provide for the participation of the individuals
who are eligible for assistance under section 402D
or who are eligible for comparable programs funded
by the State;
‘‘(iii)(I) provide summer instruction in remedial,
developmental or supportive courses;
‘‘(II) provide such summer services as counseling,
tutoring, or orientation; and
‘‘(III) provide financial assistance to the individuals
to cover the individuals’ summer costs for books, sup-
plies, living costs, and personal expenses; and
‘‘(iv) provide the individuals with financial assist-
ance during each academic year the individuals are
enrolled at the participating institution after the sum-
mer program.
‘‘(E) Requiring eligible students to meet other stand-
ards or requirements as the State determines necessary
to meet the purposes of this section.
‘‘(c) PRIORITY STUDENTS.—For eligible entities not using a
cohort approach, the eligible entity shall treat as priority students
any student in preschool through grade 12 who is eligible—
‘‘(1) to be counted under section 1124(c) of the Elementary
and Secondary Education Act of 1965;
‘‘(2) for free or reduced price meals under the National
School Lunch Act; or
‘‘(3) for assistance pursuant to part A of title IV of the
Social Security Act.
‘‘(d) ALLOWABLE PROVIDERS.—In the case of eligible entities
described in section 404A(c)(1), the activities required by this section
may be provided by service providers such as community-based
organizations, schools, institutions of higher education, public and
private 
agencies, 
nonprofit 
and 
philanthropic 
organizations,
businesses, institutions and agencies sponsoring programs author-
ized under subpart 4, and other organizations the State deems
appropriate.
‘‘SEC. 404E. SCHOLARSHIP COMPONENT.
‘‘(a) IN GENERAL.—
‘‘(1) STATES.—In order to receive a grant under this chapter,
an eligible entity described in section 404A(c)(1) shall establish
or maintain a financial assistance program that awards scholar-
ships to students in accordance with the requirements of this
section. The Secretary shall encourage the eligible entity to
ensure that a scholarship provided pursuant to this section
is available to an eligible student for use at any institution
of higher education.
‘‘(2) PARTNERSHIPS.—An eligible entity described in section
404A(c)(2) may award scholarships to eligible students in
accordance with the requirements of this section.
‘‘(b) GRANT AMOUNTS.—The maximum amount of a scholarship
that an eligible student shall be eligible to receive under this
section shall be established by the eligible entity. The minimum
H. R. 6—82
amount of the scholarship for each fiscal year shall not be less
than the lesser of—
‘‘(1) 75 percent of the average cost of attendance for an
in-State student, in a 4-year program of instruction, at public
institutions of higher education in such State, as determined
in accordance with regulations prescribed by the Secretary;
or
‘‘(2) the maximum Federal Pell Grant funded under section
401 for such fiscal year.
‘‘(c) RELATION TO OTHER ASSISTANCE.—Scholarships provided
under this section shall not be considered for the purpose of award-
ing Federal grant assistance under this title, except that in no
case shall the total amount of student financial assistance awarded
to a student under this title exceed such student’s total cost of
attendance.
‘‘(d) ELIGIBLE STUDENTS.—A student eligible for assistance
under this section is a student who—
‘‘(1) is less than 22 years old at time of first scholarship
award under this section;
‘‘(2) receives a secondary school diploma or its recognized
equivalent on or after January 1, 1993;
‘‘(3) is enrolled or accepted for enrollment in a program
of undergraduate instruction at an institution of higher edu-
cation that is located within the State’s boundaries, except
that, at the State’s option, an eligible entity may offer scholar-
ship program portability for recipients who attend institutions
of higher education outside such State; and
‘‘(4) who participated in the early intervention component
required under section 404D.
‘‘(e) PRIORITY.—The Secretary shall ensure that each eligible
entity places a priority on awarding scholarships to students who
will receive a Federal Pell Grant for the academic year for which
the scholarship is awarded under this section.
‘‘(f ) SPECIAL RULE.—An eligible entity may consider students
who have successfully participated in programs funded under chap-
ter 1 to have met the requirements of subsection (d)(4).
‘‘SEC. 404F. 21ST CENTURY SCHOLAR CERTIFICATES.
‘‘(a) AUTHORITY.—The Secretary, using funds appropriated
under section 404H that do not exceed $200,000 for a fiscal year—
‘‘(1) shall ensure that certificates, to be known as 21st
Century Scholar Certificates, are provided to all students
participating in programs under this chapter; and
‘‘(2) may, as practicable, ensure that such certificates are
provided to all students in grades 6 through 12 who attend
schools at which at least 50 percent of the students enrolled
are eligible for a free or reduced price lunch under the National
School Lunch Act.
‘‘(b) INFORMATION REQUIRED.—A 21st Century Scholar Certifi-
cate shall be personalized for each student and indicate the amount
of Federal financial aid for college which a student may be eligible
to receive.
‘‘SEC. 404G. EVALUATION AND REPORT.
‘‘(a) EVALUATION.—Each eligible entity receiving a grant under
this chapter shall biennially evaluate the activities assisted under
H. R. 6—83
this chapter in accordance with the standards described in sub-
section (b) and shall submit to the Secretary a copy of such evalua-
tion. The evaluation shall permit service providers to track eligible
student progress during the period such students are participating
in the activities and shall be consistent with the standards devel-
oped by the Secretary pursuant to subsection (b).
‘‘(b) EVALUATION STANDARDS.—The Secretary shall prescribe
standards for the evaluation described in subsection (a). Such stand-
ards shall—
‘‘(1) provide for input from eligible entities and service
providers; and
‘‘(2) ensure that data protocols and procedures are consist-
ent and uniform.
‘‘(c) FEDERAL EVALUATION.—In order to evaluate and improve
the impact of the activities assisted under this chapter, the Sec-
retary shall, from not more than 0.75 percent of the funds appro-
priated under section 404H for a fiscal year, award one or more
grants, contracts, or cooperative agreements to or with public and
private institutions and organizations, to enable the institutions
and organizations to evaluate the effectiveness of the program
and, as appropriate, disseminate the results of the evaluation.
‘‘(d) REPORT.—The Secretary shall biennially report to Congress
regarding the activities assisted under this chapter and the evalua-
tions conducted pursuant to this section.
‘‘SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out this
chapter $200,000,000 for fiscal year 1999 and such sums as may
be necessary for each of the 4 succeeding fiscal years.’’.
SEC. 404. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS.
Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 1070a–
31 et seq.) is amended to read as follows:
‘‘CHAPTER 3—ACADEMIC ACHIEVEMENT INCENTIVE
SCHOLARSHIPS
‘‘SEC. 406A. SCHOLARSHIPS AUTHORIZED.
‘‘The Secretary is authorized to award scholarships to students
who graduate from secondary school after May 1, 2000, to enable
the students to pay the cost of attendance at an institution of
higher education during the students first 2 academic years of
undergraduate education, if the students—
‘‘(1) are eligible to receive Federal Pell Grants for the
year in which the scholarships are awarded; and
‘‘(2) demonstrate academic achievement by graduating in
the top 10 percent of their secondary school graduating class.
‘‘SEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS.
‘‘(a) AMOUNT OF AWARD.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the amount of a scholarship awarded under this chapter for
any academic year shall be equal to 100 percent of the amount
of the Federal Pell Grant for which the recipient is eligible
for the academic year.
‘‘(2) ADJUSTMENT FOR INSUFFICIENT APPROPRIATIONS.—If,
after the Secretary determines the total number of eligible
applicants for an academic year in accordance with section
H. R. 6—84
406C, funds available to carry out this chapter for the academic
year are insufficient to fully fund all awards under this chapter
for the academic year, the amount of the scholarship paid
to each student under this chapter shall be reduced proportion-
ately.
‘‘(b) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE.—A
scholarship awarded under this chapter to any student, in combina-
tion with the Federal Pell Grant assistance and other student
financial assistance available to such student, may not exceed the
student’s cost of attendance.
‘‘SEC. 406C. ELIGIBILITY OF SCHOLARS.
‘‘(a) PROCEDURES ESTABLISHED BY REGULATION.—The Secretary
shall establish by regulation procedures for the determination of
eligibility of students for the scholarships awarded under this chap-
ter. Such procedures shall include measures to prevent any second-
ary school from certifying more than 10 percent of the school’s
students for eligibility under this section.
‘‘(b) COORDINATION.—In prescribing procedures under sub-
section (a), the Secretary shall ensure that the determination of
eligibility and the amount of the scholarship is determined in a
timely and accurate manner consistent with the requirements of
section 482 and the submission of the financial aid form required
by section 483. For such purposes, the Secretary may provide that,
for the first academic year of a student’s 2 academic years of
eligibility under this chapter, class rank may be determined prior
to graduation from secondary school, at such time and in such
manner as the Secretary may specify in regulations prescribed
under this chapter.
‘‘SEC. 406D. STUDENT REQUIREMENTS.
‘‘(a) IN GENERAL.—Each eligible student desiring a scholarship
under this chapter shall submit an application to the Secretary
at such time, in such manner, and containing such information
as the Secretary may reasonably require.
‘‘(b) CONTINUING ELIGIBILITY.—In order for a student to con-
tinue to be eligible to receive a scholarship under this chapter
for the second year of undergraduate education, the eligible student
shall maintain eligibility to receive a Federal Pell Grant for that
year, including fulfilling the requirements for satisfactory progress
described in section 484(c).
‘‘SEC. 407E. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out this
chapter $200,000,000 for fiscal year 1999 and such sums as may
be necessary for each of the 4 succeeding fiscal years.’’.
SEC. 405. REPEALS.
Chapters 4 through 8 of subpart 2 of part A of title IV (20
U.S.C. 1070a–41 et seq. and 1070a–81 et seq.) are repealed.
SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY
GRANTS.
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 413A(b)(1) (20
U.S.C. 1070b(b)(1)) is amended by striking ‘‘1993’’ and inserting
‘‘1999’’.
H. R. 6—85
(b) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.—Sub-
section (d) of section 413C (20 U.S.C. 1070b–2) is amended to
read as follows:
‘‘(d) USE
OF FUNDS
FOR LESS-THAN-FULL-TIME STUDENTS.—
If the institution’s allocation under this subpart is directly or
indirectly based in part on the financial need demonstrated by
students who are independent students or attending the institution
on less than a full-time basis, then a reasonable proportion of
the allocation shall be made available to such students.’’.
(c) ALLOCATION OF FUNDS.—
(1) UPDATING
THE
BASE
PERIOD.—Section 413D(a) (20
U.S.C. 1070b–3(a)) is amended—
(A) in paragraph (1), by striking ‘‘received and used
under this part for fiscal year 1985’’ and inserting ‘‘received
under subsections (a) and (b) of this section for fiscal year
1999 (as such subsections were in effect with respect to
allocations for such fiscal year)’’;
(B) in paragraph (2)—
(i) in subparagraphs (A) and (B), by striking ‘‘1985’’
each place the term appears and inserting ‘‘1999’’; and
(ii) in subparagraph (C)(i), by striking ‘‘1986’’ and
inserting ‘‘2000’’.
(2) ELIMINATION
OF
PRO
RATA
SHARE.—Section 413D is
further amended—
(A) by striking subsection (b);
(B) in subsection (c)(1), by striking ‘‘three-quarters of
the remainder’’ and inserting ‘‘the remainder’’;
(C) in subsection (c)(2)(A)(i), by striking ‘‘subsection
(d)’’ and inserting ‘‘subsection (c)’’; and
(D) by redesignating subsections (c), (d), (e), and (f )
as subsections (b), (c), (d), and (e), respectively.
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply with respect to allocations of amounts appro-
priated pursuant to section 413A(b) of the Higher Education
Act of 1965 for fiscal year 2000 or any succeeding fiscal year.
(d) CARRYOVER AND CARRYBACK AUTHORITY.—Subpart 3 of part
A of title IV (20 U.S.C. 1070b et seq.) is amended by adding
at the end the following:
‘‘SEC. 413E. CARRYOVER AND CARRYBACK AUTHORITY.
‘‘(a) CARRYOVER AUTHORITY.—Of the sums made available to
an eligible institution under this subpart for a fiscal year, not
more than 10 percent may, at the discretion of the institution,
remain available for expenditure during the succeeding fiscal year
to carry out the program under this subpart.
‘‘(b) CARRYBACK AUTHORITY.—
‘‘(1) IN GENERAL.—Of the sums made available to an eligible
institution under this subpart for a fiscal year, not more than
10 percent may, at the discretion of the institution, be used
by the institution for expenditure for the fiscal year preceding
the fiscal year for which the sums were appropriated.
‘‘(2) USE OF CARRIED-BACK FUNDS.—An eligible institution
may make grants to students after the end of the academic
year, but prior to the beginning of the succeeding fiscal year,
from such succeeding fiscal year’s appropriations.’’.
H. R. 6—86
SEC. 407. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP
PROGRAM.
(a) AMENDMENT TO SUBPART HEADING.—
(1) IN
GENERAL.—The heading for subpart 4 of part A
of title IV (20 U.S.C. 1070c et seq.) is amended to read as
follows:
‘‘SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP
PROGRAM’’.
(2) CONFORMING AMENDMENTS.—Subpart 4 of part A of
title IV (20 U.S.C. 1070c et seq.) is amended—
(A) in section 415B(b) (20 U.S.C. 1070c–1(b)), by strik-
ing 
‘‘State 
student 
grant 
incentive’’ 
and 
inserting
‘‘leveraging educational assistance partnership’’; and
(B) in the heading for section 415C (20 U.S.C. 1070c–
2), by striking ‘‘STATE STUDENT INCENTIVE GRANT’’ and
inserting ‘‘LEVERAGING EDUCATIONAL ASSISTANCE PART-
NERSHIP’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 415A(b) (20
U.S.C. 1070c(b)) is amended—
(1) in paragraph (1), by striking ‘‘1993’’ and inserting
‘‘1999’’;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
‘‘(2) RESERVATION.—For any fiscal year for which the
amount appropriated under paragraph (1) exceeds $30,000,000,
the excess shall be available to carry out section 415E.’’.
(c) SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PARTNER-
SHIP PROGRAM.—Subpart 4 of part A of title IV (20 U.S.C. 1070c
et seq.) is amended—
(1) by redesignating section 415E as 415F; and
(2) by inserting after section 415D the following:
‘‘SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PART-
NERSHIP PROGRAM.
‘‘(a) IN
GENERAL.—From amounts reserved under section
415A(b)(2) for each fiscal year, the Secretary shall—
‘‘(1) make allotments among States in the same manner
as the Secretary makes allotments among States under section
415B; and
‘‘(2) award grants to States, from allotments under para-
graph (1), to enable the States to pay the Federal share of
the cost of the authorized activities described in subsection
(c).
‘‘(b) APPLICABILITY RULE.—The provisions of this subpart which
are not inconsistent with this section shall apply to the program
authorized by this section.
‘‘(c) AUTHORIZED ACTIVITIES.—Each State receiving a grant
under this section may use the grant funds for—
‘‘(1) increasing the dollar amount of grants awarded under
section 415B to eligible students who demonstrate financial
need;
‘‘(2) carrying out transition programs from secondary school
to postsecondary education for eligible students who dem-
onstrate financial need;
H. R. 6—87
‘‘(3) carrying out a financial aid program for eligible stu-
dents who demonstrate financial need and wish to enter careers
in information technology, or other fields of study determined
by the State to be critical to the State’s workforce needs;
‘‘(4) making funds available for community service work-
study activities for eligible students who demonstrate financial
need;
‘‘(5) creating a postsecondary scholarship program for
eligible students who demonstrate financial need and wish
to enter teaching;
‘‘(6) creating a scholarship program for eligible students
who demonstrate financial need and wish to enter a program
of study leading to a degree in mathematics, computer science,
or engineering;
‘‘(7) carrying out early intervention programs, mentoring
programs, and career education programs for eligible students
who demonstrate financial need; and
‘‘(8) awarding merit or academic scholarships to eligible
students who demonstrate financial need.
‘‘(d) MAINTENANCE
OF
EFFORT
REQUIREMENT.—Each State
receiving a grant under this section for a fiscal year shall provide
the Secretary an assurance that the aggregate amount expended
per student or the aggregate expenditures by the State, from funds
derived from non-Federal sources, for the authorized activities
described in subsection (c) for the preceding fiscal year were not
less than the amount expended per student or the aggregate
expenditures by the State for the activities for the second preceding
fiscal year.
‘‘(e) FEDERAL SHARE.—The Federal share of the cost of the
authorized activities described in subsection (c) for any fiscal year
shall be not more than 331⁄3 percent.’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) PURPOSE.—Subsection (a) of section 415A (20 U.S.C.
1070c(a)) is amended to read as follows:
‘‘(a) PURPOSE OF SUBPART.—It is the purpose of this subpart
to make incentive grants available to States to assist States in—
‘‘(1) providing grants to—
‘‘(A) eligible students attending institutions of higher
education or participating in programs of study abroad
that are approved for credit by institutions of higher edu-
cation at which such students are enrolled; and
‘‘(B) eligible students for campus-based community
service work-study; and
‘‘(2) carrying out the activities described in section 415F.’’.
(2) ALLOTMENT.—Section 415B(a)(1) (20 U.S.C. 1070c–
1(a)(1)) is amended by inserting ‘‘and not reserved under section
415A(b)(2)’’ after ‘‘415A(b)(1)’’.
SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE
ENGAGED IN MIGRANT AND SEASONAL FARMWORK.
(a) COORDINATION.—Section 418A(d) (20 U.S.C. 1070d–2(d)) is
amended by inserting after ‘‘contains assurances’’ the following:
‘‘that the grant recipient will coordinate the project, to the extent
feasible, with other local, State, and Federal programs to maximize
the resources available for migrant students, and’’.
H. R. 6—88
(b) AUTHORIZATION
OF APPROPRIATIONS.—Section 418A(g) is
amended by striking ‘‘1993’’ each place the term appears and insert-
ing ‘‘1999’’.
(c) DATA COLLECTION.—Section 418A is amended—
(1) by redesignating subsection (g) (as amended by sub-
section (b)) as subsection (h); and
(2) by inserting after subsection (f ) the following:
‘‘(g) DATA COLLECTION.—The National Center for Education
Statistics shall collect postsecondary education data on migrant
students.’’.
(d) TECHNICAL AMENDMENT.—Section 418A(e) is amended by
striking ‘‘authorized by subpart 4 of this part in accordance with
section 417A(b)(2)’’ and inserting ‘‘in accordance with section
402A(c)(1)’’.
SEC. 409. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM.
(a) FAS ELIGIBILITY.—Section 419D (20 U.S.C. 1070d–34) is
amended by adding at the end thereof the following:
‘‘(e) FAS ELIGIBILITY.—
‘‘(1) FISCAL
YEARS
2000
THROUGH
2004.—Notwithstanding
any other provision of this subpart, in the case of students
from the Freely Associated States who may be selected to
receive a scholarship under this subpart for the first time
for any of the fiscal years 2000 through 2004—
‘‘(A) there shall be 10 scholarships in the aggregate
awarded to such students for each of the fiscal years 2000
through 2004; and
‘‘(B) the Pacific Regional Educational Laboratory shall
administer the program under this subpart in the case
of scholarships for students in the Freely Associated States.
‘‘(2) TERMINATION
OF
ELIGIBILITY.—A student from the
Freely Associated States shall not be eligible to receive a schol-
arship under this subpart after September 30, 2004.’’.
(b) AUTHORIZATION
OF APPROPRIATIONS.—Section 419K (20
U.S.C. 1070d–41) is amended by striking ‘‘$10,000,000 for fiscal
year 1993’’ and inserting ‘‘$45,000,000 for fiscal year 1999’’.
SEC. 410. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.
Part A of title IV (20 U.S.C. 1070 et seq.) is amended by
inserting after subpart 6 (20 U.S.C. 1070d–31 et seq.) the following:
‘‘Subpart 7—Child Care Access Means Parents in
School
‘‘SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.
‘‘(a) PURPOSE.—The purpose of this section is to support the
participation of low-income parents in postsecondary education
through the provision of campus-based child care services.
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) AUTHORITY.—The Secretary may award grants to
institutions of higher education to assist the institutions in
providing campus-based child care services to low-income stu-
dents.
‘‘(2) AMOUNT OF GRANTS.—
‘‘(A) IN GENERAL.—The amount of a grant awarded
to an institution of higher education under this section
for a fiscal year shall not exceed 1 percent of the total
H. R. 6—89
amount of all Federal Pell Grant funds awarded to students
enrolled at the institution of higher education for the
preceding fiscal year.
‘‘(B) MINIMUM.—A grant under this section shall be
awarded in an amount that is not less than $10,000.
‘‘(3) DURATION; RENEWAL; AND PAYMENTS.—
‘‘(A) DURATION.—The Secretary shall award a grant
under this section for a period of 4 years.
‘‘(B) PAYMENTS.—Subject to subsection (e)(2), the Sec-
retary shall make annual grant payments under this sec-
tion.
‘‘(4) ELIGIBLE INSTITUTIONS.—An institution of higher edu-
cation shall be eligible to receive a grant under this section
for a fiscal year if the total amount of all Federal Pell Grant
funds awarded to students enrolled at the institution of higher
education for the preceding fiscal year equals or exceeds
$350,000.
‘‘(5) USE OF FUNDS.—Grant funds under this section shall
be used by an institution of higher education to support or
establish a campus-based child care program primarily serving
the needs of low-income students enrolled at the institution
of higher education. Grant funds under this section may be
used to provide before and after school services to the extent
necessary to enable low-income students enrolled at the institu-
tion of higher education to pursue postsecondary education.
‘‘(6) CONSTRUCTION.—Nothing in this section shall be con-
strued to prohibit an institution of higher education that
receives grant funds under this section from serving the child
care needs of the community served by the institution.
‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—For the purpose
of this section, the term ‘‘low-income student’’ means a student
who is eligible to receive a Federal Pell Grant for the fiscal
year for which the determination is made.
‘‘(c) APPLICATIONS.—An institution of higher education desiring
a grant under this section shall submit an application to the Sec-
retary at such time, in such manner, and accompanied by such
information as the Secretary may require. Each application shall—
‘‘(1) demonstrate that the institution is an eligible institu-
tion described in subsection (b)(4);
‘‘(2) specify the amount of funds requested;
‘‘(3) demonstrate the need of low-income students at the
institution for campus-based child care services by including
in the application—
‘‘(A) information regarding student demographics;
‘‘(B) an assessment of child care capacity on or near
campus;
‘‘(C) information regarding the existence of waiting
lists for existing child care;
‘‘(D) information regarding additional needs created
by concentrations of poverty or by geographic isolation;
and
‘‘(E) other relevant data;
‘‘(4) contain a description of the activities to be assisted,
including whether the grant funds will support an existing
child care program or a new child care program;
‘‘(5) identify the resources, including technical expertise
and financial support, the institution will draw upon to support
H. R. 6—90
the child care program and the participation of low-income
students in the program, such as accessing social services fund-
ing, using student activity fees to help pay the costs of child
care, using resources obtained by meeting the needs of parents
who are not low-income students, and accessing foundation,
corporate or other institutional support, and demonstrate that
the use of the resources will not result in increases in student
tuition;
‘‘(6) contain an assurance that the institution will meet
the child care needs of low-income students through the provi-
sion of services, or through a contract for the provision of
services;
‘‘(7) describe the extent to which the child care program
will coordinate with the institution’s early childhood education
curriculum, to the extent the curriculum is available, to meet
the needs of the students in the early childhood education
program at the institution, and the needs of the parents and
children participating in the child care program assisted under
this section;
‘‘(8) in the case of an institution seeking assistance for
a new child care program—
‘‘(A) provide a timeline, covering the period from receipt
of the grant through the provision of the child care services,
delineating the specific steps the institution will take to
achieve the goal of providing low-income students with
child care services;
‘‘(B) specify any measures the institution will take
to assist low-income students with child care during the
period before the institution provides child care services;
and
‘‘(C) include a plan for identifying resources needed
for the child care services, including space in which to
provide child care services, and technical assistance if nec-
essary;
‘‘(9) contain an assurance that any child care facility
assisted under this section will meet the applicable State or
local government licensing, certification, approval, or registra-
tion requirements; and
‘‘(10) contain a plan for any child care facility assisted
under this section to become accredited within 3 years of the
date the institution first receives assistance under this section.
‘‘(d) PRIORITY.—The Secretary shall give priority in awarding
grants under this section to institutions of higher education that
submit applications describing programs that—
‘‘(1) leverage significant local or institutional resources,
including in-kind contributions, to support the activities
assisted under this section; and
‘‘(2) utilize a sliding fee scale for child care services provided
under this section in order to support a high number of low-
income parents pursuing postsecondary education at the
institution.
‘‘(e) REPORTING REQUIREMENTS; CONTINUING ELIGIBILITY.—
‘‘(1) REPORTING REQUIREMENTS.—
‘‘(A) REPORTS.—Each institution of higher education
receiving a grant under this section shall report to the
Secretary 18 months, and 36 months, after receiving the
first grant payment under this section.
H. R. 6—91
‘‘(B) CONTENTS.—The report shall include—
‘‘(i) data on the population served under this
section;
‘‘(ii) information on campus and community
resources and funding used to help low-income stu-
dents access child care services;
‘‘(iii) information on progress made toward accredi-
tation of any child care facility; and
‘‘(iv) information on the impact of the grant on
the quality, availability, and affordability of campus-
based child care services.
‘‘(2) CONTINUING ELIGIBILITY.—The Secretary shall make
the third annual grant payment under this section to an institu-
tion of higher education only if the Secretary determines, on
the basis of the 18-month report submitted under paragraph
(1), that the institution is making a good faith effort to ensure
that low-income students at the institution have access to
affordable, quality child care services.
‘‘(f ) CONSTRUCTION.—No funds provided under this section shall
be used for construction, except for minor renovation or repair
to meet applicable State or local health or safety requirements.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $45,000,000 for fiscal
year 1999 and such sums as may be necessary for each of the
4 succeeding fiscal years.’’.
SEC. 411. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.
Subpart 8 of part A of title IV (20 U.S.C. 1070 et seq.) is
amended to read as follows:
‘‘Subpart 8—Learning Anytime Anywhere
Partnerships
‘‘SEC. 420D. FINDINGS.
‘‘Congress makes the following findings:
‘‘(1) The nature of postsecondary education delivery is
changing, and new technology and other related innovations
can provide promising education opportunities for individuals
who are currently not being served, particularly for individuals
without easy access to traditional campus-based postsecondary
education or for whom traditional courses are a poor match
with education or training needs.
‘‘(2) Individuals, including individuals seeking basic or tech-
nical skills or their first postsecondary experience, individuals
with disabilities, dislocated workers, individuals making the
transition from welfare-to-work, and individuals who are lim-
ited by time and place constraints can benefit from nontradi-
tional, noncampus-based postsecondary education opportunities
and appropriate support services.
‘‘(3) The need for high-quality, nontraditional, technology-
based education opportunities is great, as is the need for skill
competency credentials and other measures of educational
progress and attainment that are valid and widely accepted,
but neither need is likely to be adequately addressed by the
uncoordinated efforts of agencies and institutions acting
independently and without assistance.
H. R. 6—92
‘‘(4) Partnerships, consisting of institutions of higher edu-
cation, community organizations, or other public or private
agencies or organizations, can coordinate and combine institu-
tional resources—
‘‘(A) to provide the needed variety of education options
to students; and
‘‘(B) to develop new means of ensuring accountability
and quality for innovative education methods.
‘‘SEC. 420E. PURPOSE; PROGRAM AUTHORIZED.
‘‘(a) PURPOSE.—It is the purpose of this subpart to enhance
the delivery, quality, and accountability of postsecondary education
and career-oriented lifelong learning through technology and related
innovations.
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) GRANTS.—
‘‘(A) IN
GENERAL.—The Secretary may, from funds
appropriated under section 420J make grants to, or enter
into contracts or cooperative agreements with, eligible part-
nerships to carry out the authorized activities described
in section 420G.
‘‘(B) DURATION.—Grants under this subpart shall be
awarded for periods that do not exceed 5 years.
‘‘(2) DEFINITION OF ELIGIBLE PARTNERSHIP.—For purposes
of this subpart, the term ‘eligible partnership’ means a partner-
ship consisting of 2 or more independent agencies, organiza-
tions, or institutions. The agencies, organizations, or institu-
tions may include institutions of higher education, community
organizations, and other public and private institutions, agen-
cies, and organizations.
‘‘SEC. 420F. APPLICATION.
‘‘(a) REQUIREMENT.—An eligible partnership desiring to receive
a grant under this subpart shall submit an application to the
Secretary, in such form and containing such information, as the
Secretary may require.
‘‘(b) CONTENTS.—Each application shall include—
‘‘(1) the name of each partner and a description of the
responsibilities of the partner, including the designation of
a nonprofit organization as the fiscal agent for the partnership;
‘‘(2) a description of the need for the project, including
a description of how the project will build on any existing
services and activities;
‘‘(3) a listing of human, financial (other than funds provided
under this subpart), and other resources that each member
of the partnership will contribute to the partnership, and a
description of the efforts each member of the partnership will
make in seeking additional resources; and
‘‘(4) a description of how the project will operate, including
how funds awarded under this subpart will be used to meet
the purpose of this subpart.
‘‘SEC. 420G. AUTHORIZED ACTIVITIES.
‘‘Funds awarded to an eligible partnership under this subpart
shall be used to—
‘‘(1) develop and assess model distance learning programs
or innovative educational software;
H. R. 6—93
‘‘(2) develop methodologies for the identification and
measurement of skill competencies;
‘‘(3) develop and assess innovative student support services;
or
‘‘(4) support other activities that are consistent with the
purpose of this subpart.
‘‘SEC. 420H. MATCHING REQUIREMENT.
‘‘Federal funds shall provide not more than 50 percent of the
cost of a project under this subpart. The non-Federal share of
project costs may be in cash or in kind, fairly evaluated, including
services, supplies, or equipment.
‘‘SEC. 420I. PEER REVIEW.
‘‘The Secretary shall use a peer review process to review
applications under this subpart and to make recommendations for
funding under this subpart to the Secretary.
‘‘SEC. 420J. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out this
subpart $10,000,000 for fiscal year 1999 and such sums as may
be necessary for each of the 4 succeeding fiscal years.’’.
PART B—FEDERAL FAMILY EDUCATION LOAN
PROGRAM
SEC. 411. LIMITATION REPEALED.
Section 421 (20 U.S.C. 1071) is amended by striking subsection
(d).
SEC. 412. ADVANCES TO RESERVE FUNDS.
Section 422 (20 U.S.C. 1072) is amended—
(1) in subsection (a)(2), by striking ‘‘428(c)(10)(E)’’ and
inserting ‘‘428(c)(9)(E)’’;
(2) in subsection (c)—
(A) in paragraph (6)(B)(i), by striking ‘‘written’’ and
inserting ‘‘written, electronic,’’;
(B) in paragraph (7)(A), by striking ‘‘during the transi-
tion from the Federal Family Education Loan Program
under this part to the Federal Direct Student Loan Pro-
gram under part D of this title’’; and
(C) in paragraph (7)(B), by striking ‘‘428(c)(10)(F)(v)’’
and inserting ‘‘428(c)(9)(F)(v)’’;
(3) in the first and second sentences of subsection (g)(1),
by striking ‘‘or the program authorized by part D of this title’’
each place it appears; and
(4) by adding at the end the following:
‘‘(i) ADDITIONAL RECALL OF RESERVES.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
law and subject to paragraph (4), the Secretary shall recall,
from reserve funds held in the Federal Student Loan Reserve
Funds established under section 422A by guaranty agencies—
‘‘(A) $85,000,000 in fiscal year 2002;
‘‘(B) $82,500,000 in fiscal year 2006; and
‘‘(C) $82,500,000 in fiscal year 2007.
‘‘(2) DEPOSIT.—Funds recalled by the Secretary under this
subsection shall be deposited in the Treasury.
H. R. 6—94
‘‘(3) REQUIRED SHARE.—The Secretary shall require each
guaranty agency to return reserve funds under paragraph (1)
on the basis of the agency’s required share. For purposes of
this paragraph, a guaranty agency’s required share shall be
determined as follows:
‘‘(A) EQUAL PERCENTAGE.—The Secretary shall require
each guaranty agency to return an amount representing
an equal percentage reduction in the amount of reserve
funds held by the agency on September 30, 1996.
‘‘(B) CALCULATION.—The equal percentage reduction
shall be the percentage obtained by dividing—
‘‘(i) $250,000,000, by
‘‘(ii) the total amount of all guaranty agencies’
reserve funds held on September 30, 1996, less any
amounts subject to recall under subsection (h).
‘‘(C) SPECIAL RULE.—Notwithstanding subparagraphs
(A) and (B), the percentage reduction under subparagraph
(B) shall not result in the depletion of the reserve funds
of any agency which charges the 1.0 percent insurance
premium pursuant to section 428(b)(1)(H) below an amount
equal to the amount of lender claim payments paid during
the 90 days prior to the date of the return under this
subsection. If any additional amount is required to be
returned after deducting the total of the required shares
under subparagraph (B) and as a result of the preceding
sentence, such additional amount shall be obtained by
imposing on each guaranty agency to which the preceding
sentence does not apply, an equal percentage reduction
in the amount of the agency’s remaining reserve funds.
‘‘(4) OFFSET OF REQUIRED SHARES.—If any guaranty agency
returns to the Secretary any reserve funds in excess of the
amount required under this subsection or subsection (h), the
total amount required to be returned under paragraph (1) shall
be reduced by the amount of such excess reserve funds returned.
‘‘(5) DEFINITION
OF
RESERVE
FUNDS.—The term ‘reserve
funds’ when used with respect to a guaranty agency—
‘‘(A) includes any reserve funds in cash or liquid assets
held by the guaranty agency, or held by, or under the
control of, any other entity; and
‘‘(B) does not include buildings, equipment, or other
nonliquid assets.’’.
SEC. 413. GUARANTY AGENCY REFORMS.
(a) FEDERAL STUDENT LOAN RESERVE FUND.—Part B of title
IV is amended by inserting after section 422 (20 U.S.C. 1072)
the following new section:
‘‘SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.
‘‘(a) ESTABLISHMENT.—Each guaranty agency shall, not later
than 60 days after the date of enactment of this section, deposit
all funds, securities, and other liquid assets contained in the reserve
fund established pursuant to section 422 into a Federal Student
Loan Reserve Fund (in this section and section 422B referred to
as the ‘Federal Fund’), which shall be an account of a type selected
by the agency, with the approval of the Secretary.
‘‘(b) INVESTMENT OF FUNDS.—Funds transferred to the Federal
Fund shall be invested in obligations issued or guaranteed by
the United States or a State, or in other similarly low-risk securities
H. R. 6—95
selected by the guaranty agency, with the approval of the Secretary.
Earnings from the Federal Fund shall be the sole property of
the Federal Government.
‘‘(c) ADDITIONAL DEPOSITS.—After the establishment of the Fed-
eral Fund, a guaranty agency shall deposit into the Federal Fund—
‘‘(1) all amounts received from the Secretary as payment
of reinsurance on loans pursuant to section 428(c)(1);
‘‘(2) from amounts collected on behalf of the obligation
of a defaulted borrower, a percentage amount equal to the
complement of the reinsurance percentage in effect when pay-
ment under the guaranty agreement was made—
‘‘(A) with respect to the defaulted loan pursuant to
sections 428(c)(6)(A) and 428F(a)(1)(B); and
‘‘(B) with respect to a loan that the Secretary has
repaid or discharged under section 437;
‘‘(3) insurance premiums collected from borrowers pursuant
to sections 428(b)(1)(H) and 428H(h);
‘‘(4) all amounts received from the Secretary as payment
for supplemental preclaims activity performed prior to the date
of enactment of this section;
‘‘(5) 70 percent of amounts received after such date of
enactment from the Secretary as payment for administrative
cost allowances for loans upon which insurance was issued
prior to such date of enactment; and
‘‘(6) other receipts as specified in regulations of the Sec-
retary.
‘‘(d) USES OF FUNDS.—Subject to subsection (f ), the Federal
Fund may only be used by a guaranty agency—
‘‘(1) to pay lender claims pursuant to sections 428(b)(1)(G),
428( j), 437, and 439(q); and
‘‘(2) to pay into the Agency Operating Fund established
pursuant to section 422B (in this section and section 422B
referred to as the ‘‘Operating Fund’’) a default aversion fee
in accordance with section 428(l).
‘‘(e) OWNERSHIP OF FEDERAL FUND.—The Federal Fund, and
any nonliquid asset (such as a building or equipment) developed
or purchased by the guaranty agency in whole or in part with
Federal reserve funds, regardless of who holds or controls the
Federal reserve funds or such asset, shall be considered to be
the property of the United States, prorated based on the percentage
of such asset developed or purchased with Federal reserve funds,
which property shall be used in the operation of the program
authorized by this part, as provided in subsection (d). The Secretary
may restrict or regulate the use of such asset only to the extent
necessary to reasonably protect the Secretary’s prorated share of
the value of such asset. The Secretary may direct a guaranty
agency, or such agency’s officers or directors, to cease any activity
involving expenditures, use, or transfer of the Federal Fund
administered by the guaranty agency that the Secretary determines
is a misapplication, misuse, or improper expenditure of the Federal
Fund or the Secretary’s share of such asset.
‘‘(f ) TRANSITION.—
‘‘(1) IN GENERAL.—In order to establish the Operating Fund,
each guaranty agency may transfer not more than 180 days’
cash expenses for normal operating expenses (not including
claim payments) as a working capital reserve as defined in
H. R. 6—96
Office of Management and Budget Circular A–87 (Cost Account-
ing Standards) from the Federal Fund for deposit into the
Operating Fund for use in the performance of the guaranty
agency’s duties under this part. Such transfers may occur dur-
ing the first 3 years following the establishment of the Operat-
ing Fund. However, no agency may transfer in excess of 45
percent of the balance, as of September 30, 1998, of the agency’s
Federal Fund to the agency’s Operating Fund during such
3-year period. In determining the amount that may be trans-
ferred, the agency shall ensure that sufficient funds remain
in the Federal Fund to pay lender claims within the required
time periods and to meet the reserve recall requirements of
this section and subsections (h) and (i) of section 422.
‘‘(2) SPECIAL RULE.—A limited number of guaranty agencies
may transfer interest earned on the Federal Fund to the
Operating Fund during the first 3 years after the date of
enactment of this section if the guaranty agency demonstrates
to the Secretary that—
‘‘(A) the cash flow in the Operating Fund will be nega-
tive without the transfer of such interest; and
‘‘(B) the transfer of such interest will substantially
improve the financial circumstances of the guaranty
agency.
‘‘(3) REPAYMENT PROVISIONS.—Each guaranty agency shall
begin repayment of sums transferred pursuant to this sub-
section not later than the start of the fourth year after the
establishment of the Operating Fund, and shall repay all
amounts transferred not later than 5 years from the date
of the establishment of the Operating Fund. With respect to
amounts transferred from the Federal Fund, the guaranty
agency shall not be required to repay any interest on the
funds transferred and subsequently repaid. The guaranty
agency shall provide to the Secretary a reasonable schedule
for repayment of the sums transferred and an annual financial
analysis demonstrating the agency’s ability to comply with the
schedule and repay all outstanding sums transferred.
‘‘(4) PROHIBITION.—If a guaranty agency transfers funds
from the Federal Fund in accordance with this section, and
fails to make scheduled repayments to the Federal Fund, the
agency may not receive any other funds under this part until
the Secretary determines that the agency has made such repay-
ments. The Secretary shall pay to the guaranty agency any
funds withheld in accordance with this paragraph immediately
upon making the determination that the guaranty agency has
made all such repayments.
‘‘(5) WAIVER.—The Secretary may—
‘‘(A) waive the requirements of paragraph (3), but only
with respect to repayment of interest that was transferred
in accordance with paragraph (2); and
‘‘(B) waive paragraph (4);
for a guaranty agency, if the Secretary determines that there
are extenuating circumstances (such as State constitutional
prohibitions) beyond the control of the agency that justify such
a waiver.
‘‘(6) EXTENSION
OF
REPAYMENT
PERIOD
FOR
INTEREST.—
H. R. 6—97
‘‘(A) EXTENSION
PERMITTED.—The Secretary shall
extend the period for repayment of interest that was trans-
ferred in accordance with paragraph (2) from 2 years to
5 years if the Secretary determines that—
‘‘(i) the cash flow of the Operating Fund will be
negative as a result of repayment as required by para-
graph (3);
‘‘(ii) the repayment of the interest transferred will
substantially diminish the financial circumstances of
the guaranty agency; and
‘‘(iii) the guaranty agency has demonstrated—
‘‘(I) that the agency is able to repay all trans-
ferred funds by the end of the 8th year following
the date of establishment of the Operating Fund;
and
‘‘(II) that the agency will be financially sound
on the completion of repayment.
‘‘(B) REPAYMENT OF INCOME ON TRANSFERRED FUNDS.—
All repayments made to the Federal Fund during the 6th,
7th, and 8th years following the establishment of the
Operating Fund of interest that was transferred shall
include the sums transferred plus any income earned from
the investment of the sums transferred after the 5th year.
‘‘(7) INVESTMENT OF FEDERAL FUNDS.—Funds transferred
from the Federal Fund to the Operating Fund for operating
expenses shall be invested in obligations issued or guaranteed
by the United States or a State, or in other similarly low-
risk securities selected by the guaranty agency, with the
approval of the Secretary.
‘‘(8) SPECIAL RULE.—In calculating the minimum reserve
level required by section 428(c)(9)(A), the Secretary shall
include all amounts owed to the Federal Fund by the guaranty
agency in the calculation.’’.
(b) AGENCY OPERATING FUND ESTABLISHED.—Part B of title
IV is further amended by inserting after section 422A (as added
by subsection (a)) the following new section:
‘‘SEC. 422B. AGENCY OPERATING FUND.
‘‘(a) ESTABLISHMENT.—Each guaranty agency shall, not later
than 60 days after the date of enactment of this section, establish
a fund designated as the Operating Fund.
‘‘(b) INVESTMENT OF FUNDS.—Funds deposited into the Operat-
ing Fund shall be invested at the discretion of the guaranty agency
in accordance with prudent investor standards.
‘‘(c) ADDITIONAL DEPOSITS.—After the establishment of the
Operating Fund, the guaranty agency shall deposit into the Operat-
ing Fund—
‘‘(1) the loan processing and issuance fee paid by the
Secretary pursuant to section 428(f );
‘‘(2) 30 percent of amounts received after the date of enact-
ment of this section from the Secretary as payment for adminis-
trative cost allowances for loans upon which insurance was
issued prior to such date of enactment;
‘‘(3) the account maintenance fee paid by the Secretary
in accordance with section 458;
‘‘(4) the default aversion fee paid in accordance with section
428(l);
H. R. 6—98
‘‘(5) amounts remaining pursuant to section 428(c)(6)(B)
from collection on defaulted loans held by the agency, after
payment of the Secretary’s equitable share, excluding amounts
deposited in the Federal Fund pursuant to section 422A(c)(2);
and
‘‘(6) other receipts as specified in regulations of the
Secretary.
‘‘(d) USES OF FUNDS.—
‘‘(1) IN GENERAL.—Funds in the Operating Fund shall be
used for application processing, loan disbursement, enrollment
and repayment status management, default aversion activities
(including those described in section 422(h)(8)), default collec-
tion activities, school and lender training, financial aid aware-
ness and related outreach activities, compliance monitoring,
and other student financial aid related activities, as selected
by the guaranty agency.
‘‘(2) SPECIAL RULE.—The guaranty agency may, in the agen-
cy’s discretion, transfer funds from the Operating Fund to
the Federal Fund for use pursuant to section 422A. Such trans-
fer shall be irrevocable, and any funds so transferred shall
become the sole property of the United States.
‘‘(3) DEFINITIONS.—For purposes of this subsection:
‘‘(A) DEFAULT
COLLECTION
ACTIVITIES.—The term
‘default collection activities’ means activities of a guaranty
agency that are directly related to the collection of the
loan on which a default claim has been paid to the partici-
pating lender, including the due diligence activities
required pursuant to regulations of the Secretary.
‘‘(B) DEFAULT AVERSION ACTIVITIES.—The term ‘default
aversion activities’ means activities of a guaranty agency
that are directly related to providing collection assistance
to the lender on a delinquent loan, prior to the loan’s
being legally in a default status, including due diligence
activities required pursuant to regulations of the Secretary.
‘‘(C) ENROLLMENT
AND
REPAYMENT
STATUS
MANAGE-
MENT.—The term ‘enrollment and repayment status
management’ means activities of a guaranty agency that
are directly related to ascertaining the student’s enrollment
status, including prompt notification to the lender of such
status, an audit of the note or written agreement to deter-
mine if the provisions of that note or agreement are consist-
ent with the records of the guaranty agency as to the
principal amount of the loan guaranteed, and an examina-
tion of the note or agreement to assure that the repayment
provisions are consistent with the provisions of this part.
‘‘(e) OWNERSHIP AND REGULATION OF OPERATING FUND.—
‘‘(1) OWNERSHIP.—The Operating Fund, with the exception
of funds transferred from the Federal Fund in accordance with
section 422A(f ), shall be considered to be the property of the
guaranty agency.
‘‘(2) REGULATION.—Except as provided in paragraph (3),
the Secretary may not regulate the uses or expenditure of
moneys in the Operating Fund, but the Secretary may require
such necessary reports and audits as provided in section
428(b)(2).
H. R. 6—99
‘‘(3) EXCEPTION.—Notwithstanding paragraphs (1) and (2),
during any period in which funds are owed to the Federal
Fund as a result of transfer under section 422A(f )—
‘‘(A) moneys in the Operating Fund may only be used
for expenses related to the student loan programs author-
ized under this part; and
‘‘(B) the Secretary may regulate the uses or expenditure
of moneys in the Operating Fund.’’.
SEC. 414. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PRO-
GRAM.
Section 424(a) (20 U.S.C. 1074(a)) is amended—
(1) by striking ‘‘October 1, 2002’’ and inserting ‘‘October
1, 2004’’; and
(2) by striking ‘‘September 30, 2006’’ and inserting ‘‘Septem-
ber 30, 2008’’.
SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS
AND FEDERAL LOAN INSURANCE.
Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended—
(1) in clause (i)—
(A) by inserting ‘‘and’’ after the semicolon at the end
of subclause (I); and
(B) by striking subclauses (II) and (III) and inserting
the following:
‘‘(II) if such student is enrolled in a program of
undergraduate education which is less than one aca-
demic year, the maximum annual loan amount that
such student may receive may not exceed the amount
that bears the same ratio to the amount specified
in subclause (I) as the length of such program meas-
ured in semester, trimester, quarter, or clock hours
bears to one academic year;’’; and
(2) by inserting ‘‘and’’ after the semicolon at the end of
clause (iii).
SEC. 416. APPLICABLE INTEREST RATES.
(a) APPLICABLE INTEREST RATES.—
(1) AMENDMENT.—Section 427A (20 U.S.C. 1077a) is
amended—
(A) by redesignating subsections (k) and (l) as sub-
sections (l) and (m), respectively; and
(B) by inserting after subsection ( j) the following:
‘‘(k) INTEREST RATES FOR NEW LOANS ON OR AFTER OCTOBER
1, 1998, AND BEFORE JULY 1, 2003.—
‘‘(1) IN GENERAL.—Notwithstanding subsection (h) and sub-
ject to paragraph (2) of this subsection, with respect to any
loan made, insured, or guaranteed under this part (other than
a loan made pursuant to section 428B or 428C) for which
the first disbursement is made on or after October 1, 1998,
and before July 1, 2003, the applicable rate of interest shall,
during any 12-month period beginning on July 1 and ending
on June 30, be determined on the preceding June 1 and be
equal to—
‘‘(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June
1; plus
‘‘(B) 2.3 percent,
H. R. 6—100
except that such rate shall not exceed 8.25 percent.
‘‘(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstand-
ing subsection (h), with respect to any loan under this part
(other than a loan made pursuant to section 428B or 428C)
for which the first disbursement is made on or after October
1, 1998, and before July 1, 2003, the applicable rate of interest
for interest which accrues—
‘‘(A) prior to the beginning of the repayment period
of the loan; or
‘‘(B) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section 427(a)(2)(C)
or 428(b)(1)(M),
shall be determined under paragraph (1) by substituting ‘1.7
percent’ for ‘2.3 percent’.
‘‘(3) PLUS LOANS.—Notwithstanding subsection (h), with
respect to any loan under section 428B for which the first
disbursement is made on or after October 1, 1998, and before
July 1, 2003, the applicable rate of interest shall be determined
under paragraph (1)—
‘‘(A) by substituting ‘3.1 percent’ for ‘2.3 percent’; and
‘‘(B) by substituting ‘9.0 percent’ for ‘8.25 percent’.
‘‘(4) CONSOLIDATION LOANS.—With respect to any consolida-
tion loan under section 428C for which the application is
received by an eligible lender on or after October 1, 1998,
and before July 1, 2003, the applicable rate of interest shall
be at an annual rate on the unpaid principal balance of the
loan that is equal to the lesser of—
‘‘(A) the weighted average of the interest rates on
the loans consolidated, rounded to the nearest higher one-
eighth of 1 percent; or
‘‘(B) 8.25 percent.
‘‘(5) CONSULTATION.—The Secretary shall determine the
applicable rate of interest under this subsection after consulta-
tion with the Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.’’.
(2) CONFORMING
AMENDMENT.—Section 428B(d)(4) (20
U.S.C. 1078–2(d)(4)) is amended by striking ‘‘section 427A(c)’’
and inserting ‘‘section 427A’’.
(b) SPECIAL ALLOWANCES.—
(1) AMENDMENT.—Section 438(b)(2) (20 U.S.C. 1087–1(b)(2))
is amended by adding at the end the following:
‘‘(H) LOANS DISBURSED ON OR AFTER OCTOBER 1, 1998,
AND BEFORE JULY 1, 2003.—
‘‘(i) IN
GENERAL.—Subject to paragraph (4) and
clauses (ii), (iii), and (iv) of this subparagraph, and
except as provided in subparagraph (B), the special
allowance paid pursuant to this subsection on loans
for which the first disbursement is made on or after
October 1, 1998, and before July 1, 2003, shall be
computed—
‘‘(I) by determining the average of the bond
equivalent rates of 91-day Treasury bills auctioned
for such 3-month period;
H. R. 6—101
‘‘(II) by subtracting the applicable interest
rates on such loans from such average bond equiva-
lent rate;
‘‘(III) by adding 2.8 percent to the resultant
percent; and
‘‘(IV) by dividing the resultant percent by 4.
‘‘(ii) IN SCHOOL AND GRACE PERIOD.—In the case
of any loan for which the first disbursement is made
on or after October 1, 1998, and before July 1, 2003,
and for which the applicable rate of interest is
described in section 427A(k)(2), clause (i)(III) of this
subparagraph shall be applied by substituting ‘2.2 per-
cent’ for ‘2.8 percent’.
‘‘(iii) PLUS LOANS.—In the case of any loan for
which the first disbursement is made on or after Octo-
ber 1, 1998, and before July 1, 2003, and for which
the applicable rate of interest is described in section
427A(k)(3), clause (i)(III) of this subparagraph shall
be applied by substituting ‘3.1 percent’ for ‘2.8 percent’,
subject to clause (v) of this subparagraph.
‘‘(iv) CONSOLIDATION LOANS.—In the case of any
consolidation loan for which the application is received
by an eligible lender on or after October 1, 1998, and
before July 1, 2003, and for which the applicable
interest rate is determined under section 427A(k)(4),
clause (i)(III) of this subparagraph shall be applied
by substituting ‘3.1 percent’ for ‘2.8 percent’, subject
to clause (vi) of this subparagraph.
‘‘(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS
LOANS.—In the case of PLUS loans made under section
428B and first disbursed on or after October 1, 1998,
and before July 1, 2003, for which the interest rate
is determined under section 427A(k)(3), a special allow-
ance shall not be paid for such loan during any 12-
month period beginning on July 1 and ending on June
30 unless, on the June 1 preceding such July 1—
‘‘(I) the bond equivalent rate of 91-day Treas-
ury bills auctioned at the final auction held prior
to such June 1 (as determined by the Secretary
for purposes of such section); plus
‘‘(II) 3.1 percent,
exceeds 9.0 percent.
‘‘(vi) LIMITATION
ON
SPECIAL
ALLOWANCES
FOR
CONSOLIDATION LOANS.—In the case of consolidation
loans made under section 428C and for which the
application is received on or after October 1, 1998,
and before July 1, 2003, for which the interest rate
is determined under section 427A(k)(4), a special allow-
ance shall not be paid for such loan during any 3-
month period ending March 31, June 30, September
30, or December 31 unless—
‘‘(I) the average of the bond equivalent rate
of 91-day Treasury bills auctioned for such 3-
month period; plus
‘‘(II) 3.1 percent,
exceeds the rate determined under section 427A(k)(4).’’.
H. R. 6—102
(2) CONSOLIDATION LOANS.—Section 428C(c)(1) (20 U.S.C.
1078–3(c)(1)) is amended by striking everything preceding
subparagraph (B) and inserting the following:
‘‘(1) INTEREST RATE.—(A) Notwithstanding subparagraphs
(B) and (C), with respect to any loan made under this section
for which the application is received by an eligible lender on
or after October 1, 1998, and before July 1, 2003, the applicable
interest rate shall be determined under section 427A(k)(4).’’.
(3) CONFORMING AMENDMENT.—Section 438(b)(2) (20 U.S.C.
1087–1(b)(2)(C)(ii)) is amended—
(A) in subparagraph (A), by striking ‘‘(F), and (G)’’
and inserting ‘‘(F), (G), and (H)’’;
(B) in subparagraph (B)(iv), by striking ‘‘(F), or (G)’’
and inserting ‘‘(F), (G), or (H)’’; and
(C) in subparagraph (C)(ii), by striking ‘‘subparagraph
(G)’’ and inserting ‘‘subparagraphs (G) and (H)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to any loan made, insured, or guaranteed
under part B of title IV of the Higher Education Act of 1965
for which the first disbursement is made on or after October 1,
1998, and before July 1, 2003, except that such amendments shall
apply with respect to any loan made under section 428C of such
Act for which the application is received by an eligible lender
on or after October 1, 1998, and before July 1, 2003.
SEC. 417. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.
(a) FEDERAL INTEREST SUBSIDIES.—
(1) REQUIREMENTS TO RECEIVE SUBSIDY.—Section 428(a)(2)
(20 U.S.C. 1078(a)(2)) is amended—
(A) in subparagraph (A)(i), by striking subclauses (I),
(II), and (III) and inserting the following:
‘‘(I) sets forth the loan amount for which the stu-
dent shows financial need; and
‘‘(II) sets forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with
the requirements of section 428G; and’’; and
(B) by amending subparagraph (B) to read as follows:
‘‘(B) For the purpose of clause (ii) of subparagraph (A),
a student shall qualify for a portion of an interest payment
under paragraph (1) if the eligible institution has determined
and documented the student’s amount of need for a loan based
on the student’s estimated cost of attendance, estimated finan-
cial assistance, and, for the purpose of an interest payment
pursuant to this section, expected family contribution (as deter-
mined under part F), subject to the provisions of subparagraph
(D).’’;
(C) by amending subparagraph (C) to read as follows:
‘‘(C) For the purpose of subparagraph (B) and this
paragraph—
‘‘(i) a student’s cost of attendance shall be determined
under section 472;
‘‘(ii) a student’s estimated financial assistance means,
for the period for which the loan is sought—
‘‘(I) the amount of assistance such student will
receive under subpart 1 of part A (as determined in
accordance with section 484(b)), subpart 3 of part A,
and parts C and E;
H. R. 6—103
‘‘(II) any veterans’ education benefits paid because
of enrollment in a postsecondary education institution,
including veterans’ education benefits (as defined in
section 480(c), but excluding benefits described in para-
graph (2)(E) of such section); plus
‘‘(III) other scholarship, grant, or loan assistance,
but excluding any national service education award
or post-service benefit under title I of the National
and Community Service Act of 1990; and
‘‘(iii) the determination of need and of the amount
of a loan by an eligible institution under subparagraph
(B) with respect to a student shall be calculated in accord-
ance with part F.’’; and
(D) by striking subparagraph (F).
(2) 
DURATION
OF
AUTHORITY.—Section 
428(a)(5) 
is
amended—
(A) by striking ‘‘September 30, 2002’’ and inserting
‘‘September 30, 2004’’; and
(B) by striking ‘‘September 30, 2006’’ and inserting
‘‘September 30, 2008’’.
(b) INSURANCE PROGRAM AGREEMENTS.—
(1) 
ANNUAL
LOAN
LIMITS.—Section 
428(b)(1)(A) 
is
amended—
(A) in the matter preceding clause (i), by inserting
‘‘, as defined in section 481(a)(2),’’ after ‘‘academic year’’;
(B) in clause (i)—
(i) in subclause (I), by striking ‘‘length (as deter-
mined under section 481);’’ and inserting ‘‘length; and’’;
and
(ii) by striking subclauses (II) and (III) and insert-
ing the following:
‘‘(II) if such student is enrolled in a program
of undergraduate education which is less than 1
academic year, the maximum annual loan amount
that such student may receive may not exceed
the amount that bears the same ratio to the
amount specified in subclause (I) as the length
of such program measured in semester, trimester,
quarter, or clock hours bears to 1 academic year;’’;
(C) in clause (iv), by striking ‘‘and’’ after the semicolon;
(D) in clause (v), by inserting ‘‘and’’ after the semicolon;
and
(E) by inserting before the matter following clause
(v) the following:
‘‘(vi) in the case of a student enrolled in coursework
specified in sections 484(b)(3)(B) and 484(b)(4)(B)—
‘‘(I) $2,625 for coursework necessary for enroll-
ment in an undergraduate degree or certificate
program, and, in the case of a student who has
obtained a baccalaureate degree, $5,500 for
coursework necessary for enrollment in a graduate
or professional degree or certification program; and
‘‘(II) in the case of a student who has obtained
a baccalaureate degree, $5,500 for coursework nec-
essary for a professional credential or certification
from a State required for employment as a teacher
in an elementary school or secondary school;’’.
H. R. 6—104
(2) SELECTION OF REPAYMENT PLANS.—Clause (ii) of section
428(b)(1)(D) is amended to read as follows: ‘‘(ii) the student
borrower may annually change the selection of a repayment
plan under this part, and’’.
(3) REPAYMENT
PLANS.—Subparagraph (E) of section
428(b)(1) is amended to read as follows:
‘‘(E) subject to subparagraphs (D) and (L), and except
as provided by subparagraph (M), provides that—
‘‘(i) not more than 6 months prior to the date
on which the borrower’s first payment is due, the
lender shall offer the borrower of a loan made, insured,
or guaranteed under this section or section 428H, the
option of repaying the loan in accordance with a stand-
ard, graduated, income-sensitive, or extended repay-
ment schedule (as described in paragraph (9)) estab-
lished by the lender in accordance with regulations
of the Secretary; and
‘‘(ii) repayment of loans shall be in installments
in accordance with the repayment plan selected under
paragraph (9) and commencing at the beginning of
the repayment period determined under paragraph
(7);’’;
(4) COINSURANCE.—Section 428(b)(1)(G) is amended by
striking ‘‘not less than’’.
(5) 
PAYMENT
AMOUNTS.—Section 
428(b)(1)(L)(i) 
is
amended—
(A) by inserting ‘‘except as otherwise provided by a
repayment plan selected by the borrower under clause (ii)
or (iii) of paragraph (9)(A),’’ before ‘‘during any’’; and
(B) by inserting ‘‘, notwithstanding any payment plan
under paragraph (9)(A)’’ after ‘‘due and payable’’.
(6) DEFERMENTS.—Section 428(b)(1)(M) is amended—
(A) in clause (i)(I), by inserting before the semicolon
the following: ‘‘, except that no borrower, notwithstanding
the provisions of the promissory note, shall be required
to borrow an additional loan under this title in order to
be eligible to receive a deferment under this clause’’; and
(B) in clause (ii), by inserting before the semicolon
the following: ‘‘, except that no borrower who provides
evidence of eligibility for unemployment benefits shall be
required to provide additional paperwork for a deferment
under this clause’’.
(7) LIMITATION, SUSPENSION, AND
TERMINATION.—Section
428(b)(1)(U) is amended—
(A) by striking ‘‘emergency action,,’’ each place the
term appears and inserting ‘‘emergency action,’’; and
(B) in clause (iii)(I), by inserting ‘‘that originates or
holds more than $5,000,000 in loans made under this title
for any lender fiscal year (except that each lender described
in section 435(d)(1)(A)(ii)(III) shall annually submit the
results of an audit required by this clause),’’ before ‘‘at
least once a year’’.
(8) ADDITIONAL
INSURANCE
PROGRAM
REQUIREMENTS.—
Section 428(b)(1) is further amended—
(A) by striking ‘‘and’’ at the end of subparagraph (W);
(B) in subparagraph (X)—
H. R. 6—105
(i) by striking ‘‘428(c)(10)’’ and inserting ‘‘428(c)(9)’’;
and
(ii) by striking the period at the end and inserting
‘‘; and’’;
(C) by adding at the end the following new sub-
paragraph:
‘‘(Y) provides that—
‘‘(i) the lender shall determine the eligibility of
a borrower for a deferment described in subparagraph
(M)(i) based on receipt of—
‘‘(I) a request for deferment from the borrower
and documentation of the borrower’s eligibility for
the deferment;
‘‘(II) a newly completed loan application that
documents 
the 
borrower’s 
eligibility 
for 
a
deferment; or
‘‘(III) student status information received by
the lender that the borrower is enrolled on at
least a half-time basis; and
‘‘(ii) the lender will notify the borrower of the
granting of any deferment under clause (i)(II) or (III)
of this subparagraph and of the option to continue
paying on the loan.’’.
(9) RESTRICTIONS ON INDUCEMENTS.—Section 428(b)(3) is
amended—
(A) by striking subparagraph (C) and inserting the
following:
‘‘(C) conduct unsolicited mailings of student loan
application forms to students enrolled in secondary school
or a postsecondary institution, or to parents of such stu-
dents, except that applications may be mailed to borrowers
who have previously received loans guaranteed under this
part by the guaranty agency; or’’; and
(B) by adding at the end the following new sentence:
‘‘It shall not be a violation of this paragraph for a guaranty
agency to provide assistance to institutions of higher education
comparable to the kinds of assistance provided to institutions
of higher education by the Department of Education.’’.
(10) DELAY IN COMMENCEMENT OF REPAYMENT PERIOD.—
Section 428(b)(7) is amended by adding at the end the following:
‘‘(D) There shall be excluded from the 6-month period that
begins on the date on which a student ceases to carry at
least one-half the normal full-time academic workload as
described in subparagraph (A)(i) any period not to exceed 3
years during which a borrower who is a member of a reserve
component of the Armed Forces named in section 10101 of
title 10, United States Code, is called or ordered to active
duty for a period of more than 30 days (as defined in section
101(d)(2) of such title). Such period of exclusion shall include
the period necessary to resume enrollment at the borrower’s
next available regular enrollment period.’’.
(11) REPAYMENT
PLANS.—Section 428(b) is amended by
adding at the end the following:
‘‘(9) REPAYMENT PLANS.—
‘‘(A) DESIGN AND SELECTION.—In accordance with regu-
lations promulgated by the Secretary, the lender shall offer
a borrower of a loan made under this part the plans
H. R. 6—106
described in this subparagraph for repayment of such loan,
including principal and interest thereon. No plan may
require a borrower to repay a loan in less than 5 years
unless the borrower, during the 6 months immediately
preceding the start of the repayment period, specifically
requests that repayment be made over of a shorter period.
The borrower may choose from—
‘‘(i) a standard repayment plan, with a fixed
annual repayment amount paid over a fixed period
of time, not to exceed 10 years;
‘‘(ii) a graduated repayment plan paid over a fixed
period of time, not to exceed 10 years;
‘‘(iii) an income-sensitive repayment plan, with
income-sensitive repayment amounts paid over a fixed
period of time, not to exceed 10 years, except that
the borrower’s scheduled payments shall not be less
than the amount of interest due; and
‘‘(iv) for new borrowers on or after the date of
enactment of the Higher Education Amendments of
1998 who accumulate (after such date) outstanding
loans under this part totaling more than $30,000, an
extended repayment plan, with a fixed annual or grad-
uated repayment amount paid over an extended period
of time, not to exceed 25 years, except that the bor-
rower shall repay annually a minimum amount deter-
mined in accordance with paragraph (1)(L)(i).
‘‘(B) LENDER SELECTION OF OPTION IF BORROWER DOES
NOT SELECT.—If a borrower of a loan made under this
part does not select a repayment plan described in subpara-
graph (A), the lender shall provide the borrower with a
repayment plan described in subparagraph (A)(i).’’.
(c) GUARANTEE AGREEMENTS.—
(1) REINSURANCE PAYMENTS.—
(A) 
AMENDMENTS.—Section 
428(c)(1) 
(20 
U.S.C.
1078(c)(1)) is amended—
(i) in subparagraph (A), by striking ‘‘98 percent’’
and inserting ‘‘95 percent’’;
(ii) in subparagraph (B)(i), by striking ‘‘88 percent’’
and inserting ‘‘85 percent’’;
(iii) in subparagraph (B)(ii), by striking ‘‘78 per-
cent’’ and inserting ‘‘75 percent’’;
(iv) in subparagraph (E)—
(I) in clause (i), by striking ‘‘98 percent’’ and
inserting ‘‘95 percent’’;
(II) in clause (ii), by striking ‘‘88 percent’’ and
inserting ‘‘85 percent’’; and
(III) in clause (iii), by striking ‘‘78 percent’’
and inserting ‘‘75 percent’’; and
(v) in subparagraph (F)—
(I) in clause (i), by striking ‘‘98 percent’’ and
inserting ‘‘95 percent’’;
(II) in clause (ii), by striking ‘‘88 percent’’ and
inserting ‘‘85 percent’’; and
(III) in clause (iii), by striking ‘‘78 percent’’
and inserting ‘‘75 percent’’.
H. R. 6—107
(B) EFFECTIVE
DATE.—The amendments made by
subparagraph (A) of this paragraph apply to loans for which
the first disbursement is made on or after October 1, 1998.
(2) 
NOTICE
TO
INSTITUTIONS
OF
DEFAULTS.—Section
428(c)(2) is amended—
(A) in subparagraph (A), by striking ‘‘proof that reason-
able attempts were made’’ and inserting ‘‘proof that the
institution was contacted and other reasonable attempts
were made’’; and
(B) in subparagraph (G), by striking ‘‘certifies to the
Secretary that diligent attempts have been made’’ and
inserting ‘‘certifies to the Secretary that diligent attempts,
including contact with the institution, have been made’’.
(3) GUARANTY AGENCY INFORMATION TO ELIGIBLE INSTITU-
TIONS.—Section 428(c)(2)(H)(ii) is amended to read as follows:
‘‘(ii) the guaranty agency shall not require the
payment from the institution of any fee for such
information; and’’.
(4) FORBEARANCE.—Section 428(c)(3) is amended—
(A) in subparagraph (A)(i), by striking ‘‘written’’;
(B) in subparagraph (B), by striking ‘‘and’’ after the
semicolon;
(C) in subparagraph (C), by striking the period and
inserting ‘‘; and’’; and
(D) by inserting before the matter following subpara-
graph (C) the following:
‘‘(D) shall contain provisions that specify that—
‘‘(i) forbearance for a period not to exceed 60 days
may be granted if the lender reasonably determines
that such a suspension of collection activity is war-
ranted following a borrower’s request for deferment,
forbearance, a change in repayment plan, or a request
to consolidate loans, in order to collect or process appro-
priate supporting documentation related to the request,
and
‘‘(ii) during such period interest shall accrue but
not be capitalized.’’.
(5) EQUITABLE SHARE.—Paragraph (6) of section 428(c) is
amended to read as follows:
‘‘(6) SECRETARY’S EQUITABLE SHARE.—For the purpose of
paragraph (2)(D), the Secretary’s equitable share of payments
made by the borrower shall be that portion of the payments
remaining after the guaranty agency with which the Secretary
has an agreement under this subsection has deducted from
such payments—
‘‘(A) a percentage amount equal to the complement
of the reinsurance percentage in effect when payment under
the guaranty agreement was made with respect to the
loan; and
‘‘(B) an amount equal to 24 percent of such payments
for use in accordance with section 422B, except that, begin-
ning on October 1, 2003, this subparagraph shall be applied
by substituting ‘23 percent’ for ‘24 percent’.’’.
(6) ASSIGNMENT.—Section 428(c)(8) is amended—
(A) by striking ‘‘(A) If’’ and inserting ‘‘If’’; and
(B) by striking subparagraph (B).
H. R. 6—108
(7) GUARANTY
AGENCY
RESERVE
LEVEL; AGENCY
TERMI-
NATION.—Section 428(c)(9) is amended—
(A) in subparagraph (A), by striking ‘‘maintain a cur-
rent minimum reserve level of at least .5 percent’’ and
inserting ‘‘maintain in the agency’s Federal Student Loan
Reserve Fund established under section 422A a current
minimum reserve level of at least 0.25 percent’’;
(B) in subparagraph (C)—
(i) by striking ‘‘80 percent pursuant to section
428(c)(1)(B)(ii)’’ and inserting ‘‘85 percent pursuant to
paragraph (1)(B)(i)’’;
(ii) by striking ‘‘, as appropriate,’’; and
(iii) by striking ‘‘30 working days’’ and inserting
‘‘45 working days’’;
(C) in subparagraph (E)—
(i) by inserting ‘‘or’’ at the end of clause (iv);
(ii) by striking ‘‘; or’’ at the end of clause (v) and
inserting a period; and
(iii) by striking clause (vi);
(D) in subparagraph (F)(vii), by striking ‘‘to avoid
disruption’’ and everything that follows and inserting ‘‘and
to avoid disruption of the student loan program.’’;
(E) in subparagraph (I), by inserting ‘‘that, if com-
menced after September 24, 1998, shall be on the record’’
after ‘‘for a hearing’’; and
(F) in subparagraph (K)—
(i) by striking ‘‘and Labor’’ and inserting ‘‘and the
Workforce’’; and
(ii) by striking everything after ‘‘guaranty agency
system’’ and inserting a period.
(d) PAYMENT FOR LENDER REFERRAL SERVICES; INCOME-SEN-
SITIVE REPAYMENT.—Subsection (e) of section 428 is amended to
read as follows:
‘‘(e) NOTICE OF AVAILABILITY OF INCOME-SENSITIVE REPAYMENT
OPTION.—At the time of offering a borrower a loan under this
part, and at the time of offering the borrower the option of repaying
a loan in accordance with this section, the lender shall provide
the borrower with a notice that informs the borrower, in a form
prescribed by the Secretary by regulation—
‘‘(1) that all borrowers are eligible for income-sensitive
repayment, including through loan consolidation under section
428C;
‘‘(2) the procedures by which the borrower may elect
income-sensitive repayment; and
‘‘(3) where and how the borrower may obtain additional
information concerning income-sensitive repayment.’’.
(e) PAYMENT OF CERTAIN COSTS.—Subsection (f ) of section 428
is amended to read as follows:
‘‘(f ) PAYMENTS OF CERTAIN COSTS.—
‘‘(1) PAYMENT FOR CERTAIN ACTIVITIES.—
‘‘(A) IN GENERAL.—The Secretary—
‘‘(i) for loans originated during fiscal years begin-
ning on or after October 1, 1998, and before October
1, 2003, and in accordance with the provisions of this
paragraph, shall, except as provided in subparagraph
(C), pay to each guaranty agency, a loan processing
and issuance fee equal to 0.65 percent of the total
H. R. 6—109
principal amount of the loans on which insurance was
issued under this part during such fiscal year by such
agency; and
‘‘(ii) for loans originated during fiscal years begin-
ning on or after October 1, 2003, and in accordance
with the provisions of this paragraph, shall, except
as provided in subparagraph (C), pay to each guaranty
agency, a loan processing and issuance fee equal to
0.40 percent of the total principal amount of the loans
on which insurance was issued under this part during
such fiscal year by such agency.
‘‘(B) PAYMENT.—The payment required by subpara-
graph (A) shall be paid on a quarterly basis. The guaranty
agency shall be deemed to have a contractual right against
the United States to receive payments according to the
provisions of this paragraph. Payments shall be made
promptly and without administrative delay to any guaranty
agency submitting an accurate and complete application
under this subparagraph.
‘‘(C) REQUIREMENT FOR PAYMENT.—No payment may
be made under this paragraph for loans for which the
disbursement checks have not been cashed or for which
electronic funds transfers have not been completed.’’.
(f ) ACTION ON AGREEMENTS.—Section 428(g) is amended by
striking ‘‘and Labor’’ and inserting ‘‘and the Workforce’’.
(g) LENDERS-OF-LAST-RESORT.—Paragraph (3) of section 428( j)
is amended—
(1) in the paragraph heading, by striking ‘‘DURING TRANSI-
TION TO DIRECT LENDING’’;
(2) in subparagraph (A)—
(A) by striking ‘‘during the transition from the Federal
Family Education Loan Program under this part to the
Federal Direct Student Loan Program under part D of
this title,’’ and inserting a comma;
(B) by inserting ‘‘designated for a State’’ after ‘‘a
guaranty agency’’; and
(C) by inserting ‘‘subparagraph (C) and’’ before ‘‘section
422(c)(7),’’; and
(3) by adding at the end thereof the following:
‘‘(C) The Secretary shall exercise the authority described
in subparagraph (A) only if the Secretary determines that
eligible borrowers are seeking and are unable to obtain loans
under this part, and that the guaranty agency designated for
that State has the capability to provide lender-of-last-resort
loans in a timely manner, in accordance with the guaranty
agency’s obligations under paragraph (1), but cannot do so
without advances provided by the Secretary under this para-
graph. If the Secretary makes the determinations described
in the preceding sentence and determines that it would be
cost-effective to do so, the Secretary may provide advances
under this paragraph to such guaranty agency. If the Secretary
determines that such guaranty agency does not have such
capability, or will not provide such loans in a timely fashion,
the Secretary may provide such advances to enable another
guaranty agency, that the Secretary determines to have such
capability, to make lender-of-last-resort loans to eligible borrow-
ers in that State who are experiencing loan access problems.’’.
H. R. 6—110
(h) DEFAULT AVERSION ASSISTANCE.—Subsection (l) of section
428 is amended to read as follows:
‘‘(l) DEFAULT AVERSION ASSISTANCE.—
‘‘(1) ASSISTANCE REQUIRED.—Upon receipt of a complete
request from a lender received not earlier than the 60th day
of delinquency, a guaranty agency having an agreement with
the Secretary under subsection (c) shall engage in default aver-
sion activities designed to prevent the default by a borrower
on a loan covered by such agreement.
‘‘(2) REIMBURSEMENT.—
‘‘(A) IN GENERAL.—A guaranty agency, in accordance
with the provisions of this paragraph, may transfer from
the Federal Student Loan Reserve Fund under section
422A to the Agency Operating Fund under section 422B
a default aversion fee. Such fee shall be paid for any
loan on which a claim for default has not been paid as
a result of the loan being brought into current repayment
status by the guaranty agency on or before the 300th
day after the loan becomes 60 days delinquent.
‘‘(B) AMOUNT.—The default aversion fee shall be equal
to 1 percent of the total unpaid principal and accrued
interest on the loan at the time the request is submitted
by the lender. A guaranty agency may transfer such fees
earned under this subsection not more frequently than
monthly. Such a fee shall not be paid more than once
on any loan for which the guaranty agency averts the
default unless—
‘‘(i) at least 18 months has elapsed between the
date the borrower entered current repayment status
and the date the lender filed a subsequent default
aversion assistance request; and
‘‘(ii) during the period between such dates, the
borrower was not more than 30 days past due on
any payment of principal and interest on the loan.
‘‘(C) DEFINITION.—For the purpose of earning the
default aversion fee, the term ‘current repayment status’
means that the borrower is not delinquent in the payment
of any principal or interest on the loan.’’.
(i) INCOME CONTINGENT REPAYMENT.—Section 428(m) is amend-
ed by striking ‘‘shall require at least 10 percent of the borrowers’’
and inserting ‘‘may require borrowers’’.
( j) STATE SHARE OF DEFAULT COSTS.—Subsection (n) of section
428 is repealed.
(k) BLANKET
CERTIFICATE
OF
GUARANTY.—Section 428 is
amended by adding at the end the following:
‘‘(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), any guaranty
agency that has entered into or enters into any insurance
program agreement with the Secretary under this part may—
‘‘(A) offer eligible lenders participating in the agency’s
guaranty program a blanket certificate of loan guaranty
that permits the lender to make loans without receiving
prior approval from the guaranty agency of individual loans
for eligible borrowers enrolled in eligible programs at
eligible institutions; and
‘‘(B) provide eligible lenders with the ability to transmit
electronically data to the agency concerning loans the
H. R. 6—111
lender has elected to make under the agency’s insurance
program via standard reporting formats, with such report-
ing to occur at reasonable and standard intervals.
‘‘(2) LIMITATIONS ON BLANKET CERTIFICATE OF GUARANTY.—
(A) An eligible lender may not make a loan to a borrower
under this section after such lender receives a notification
from the guaranty agency that the borrower is not an eligible
borrower.
‘‘(B) A guaranty agency may establish limitations or restric-
tions on the number or volume of loans issued by a lender
under the blanket certificate of guaranty.
‘‘(3) PARTICIPATION LEVEL.—During fiscal years 1999 and
2000, the Secretary may permit, on a pilot basis, a limited
number of guaranty agencies to offer blanket certificates of
guaranty under this subsection. Beginning in fiscal year 2001,
any guaranty agency that has an insurance program agreement
with the Secretary may offer blanket certificates of guaranty
under this subsection.
‘‘(4) REPORT REQUIRED.—The Secretary shall, at the conclu-
sion of the pilot program under paragraph (3), provide a report
to the Committee on Education and the Workforce of the House
of Representatives and the Committee on Labor and Human
Resources of the Senate on the impact of the blanket certificates
of guaranty on program efficiency and integrity.’’.
SEC. 418. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY
AGENCIES.
Part B of title IV (20 U.S.C. 1071 et seq.) is amended by
inserting after section 428 (20 U.S.C. 1078) the following:
‘‘SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY
AGENCIES.
‘‘(a) VOLUNTARY AGREEMENTS.—
‘‘(1) AUTHORITY.—Subject to paragraph (2), the Secretary
may enter into a voluntary, flexible agreement with a guaranty
agency under this section, in lieu of agreements with a guaranty
agency under subsections (b) and (c) of section 428. The Sec-
retary may waive or modify any requirement under such sub-
sections, except that the Secretary may not waive—
‘‘(A) any statutory requirement pertaining to the terms
and conditions attached to student loans or default claim
payments made to lenders; or
‘‘(B) the prohibitions on inducements contained in sec-
tion 428(b)(3) unless the Secretary determines that such
a waiver is consistent with the purposes of this section
and is limited to activities of the guaranty agency within
the State or States for which the guaranty agency serves
as the designated guarantor.
‘‘(2) SPECIAL RULE.—If the Secretary grants a waiver pursu-
ant to paragraph (1)(B), any guaranty agency doing business
within the affected State or States may request, and the Sec-
retary shall grant, an identical waiver to such guaranty agency
under the same terms and conditions (including service area
limitations) as govern the original waiver.
‘‘(3) ELIGIBILITY.—During fiscal years 1999, 2000, and 2001,
the Secretary may enter into a voluntary, flexible agreement
with not more than 6 guaranty agencies that had 1 or more
agreements with the Secretary under subsections (b) and (c)
H. R. 6—112
of section 428 as of the day before the date of enactment
of the Higher Education Amendments of 1998. Beginning in
fiscal year 2002, any guaranty agency or consortium thereof
may enter into a voluntary flexible agreement with the Sec-
retary.
‘‘(4) REPORT
REQUIRED.—Not later than September 30,
2001, the Secretary shall report to the Committee on Labor
and Human Resources of the Senate and the Committee on
Education and the Workforce of the House of Representatives
regarding the impact that the voluntary flexible agreements
have had upon program integrity, program and cost efficiencies,
and the availability and delivery of student financial aid. Such
report shall include—
‘‘(A) a description of each voluntary flexible agreement
and the performance goals established by the Secretary
for each agreement;
‘‘(B) a list of participating guaranty agencies and the
specific statutory or regulatory waivers provided to each
guaranty agency and any waivers provided to other guar-
anty agencies under paragraph (2);
‘‘(C) a description of the standards by which each
agency’s performance under the agency’s voluntary flexible
agreement was assessed and the degree to which each
agency achieved the performance standards; and
‘‘(D) an analysis of the fees paid by the Secretary,
and the costs and efficiencies achieved under each vol-
untary agreement.
‘‘(b) TERMS OF AGREEMENT.—An agreement between the Sec-
retary and a guaranty agency under this section—
‘‘(1) shall be developed by the Secretary, in consultation
with the guaranty agency, on a case-by-case basis;
‘‘(2) may only include provisions—
‘‘(A) specifying the responsibilities of the guaranty
agency under the agreement, with respect to—
‘‘(i) administering the issuance of insurance on
loans made under this part on behalf of the Secretary;
‘‘(ii) monitoring insurance commitments made
under this part;
‘‘(iii) default aversion activities;
‘‘(iv) review of default claims made by lenders;
‘‘(v) payment of default claims;
‘‘(vi) collection of defaulted loans;
‘‘(vii) adoption of internal systems of accounting
and auditing that are acceptable to the Secretary, and
reporting the result thereof to the Secretary in a timely
manner, and on an accurate, and auditable basis;
‘‘(viii) timely and accurate collection and reporting
of such other data as the Secretary may require to
carry out the purposes of the programs under this
title;
‘‘(ix) monitoring of institutions and lenders partici-
pating in the program under this part; and
‘‘(x) informational outreach to schools and students
in support of access to higher education;
‘‘(B) regarding the fees the Secretary shall pay, in
lieu of revenues that the guaranty agency may otherwise
receive under this part, to the guaranty agency under
H. R. 6—113
the agreement, and other funds that the guaranty agency
may receive or retain under the agreement, except that
in no case may the cost to the Secretary of the agreement,
as reasonably projected by the Secretary, exceed the cost
to the Secretary, as similarly projected, in the absence
of the agreement;
‘‘(C) regarding the use of net revenues, as described
in the agreement under this section, for such other activi-
ties in support of postsecondary education as may be agreed
to by the Secretary and the guaranty agency;
‘‘(D) regarding the standards by which the guaranty
agency’s performance of the agency’s responsibilities under
the agreement will be assessed, and the consequences for
a guaranty agency’s failure to achieve a specified level
of performance on 1 or more performance standards;
‘‘(E) regarding the circumstances in which a guaranty
agency’s agreement under this section may be ended in
advance of the agreement’s expiration date;
‘‘(F) regarding such other businesses, previously pur-
chased or developed with reserve funds, that relate to
the program under this part and in which the Secretary
permits the guaranty agency to engage; and
‘‘(G) such other provisions as the Secretary may deter-
mine to be necessary to protect the United States from
the risk of unreasonable loss and to promote the purposes
of this part;
‘‘(3) shall provide for uniform lender participation with
the guaranty agency under the terms of the agreement; and
‘‘(4) shall not prohibit or restrict borrowers from selecting
a lender of the borrower’s choosing, subject to the prohibitions
and restrictions applicable to the selection under this Act.
‘‘(c) PUBLIC NOTICE.—
‘‘(1) IN
GENERAL.—The Secretary shall publish in the
Federal Register a notice to all guaranty agencies that sets
forth—
‘‘(A) an invitation for the guaranty agencies to enter
into agreements under this section; and
‘‘(B) the criteria that the Secretary will use for selecting
the guaranty agencies with which the Secretary will enter
into agreements under this section.
‘‘(2) AGREEMENT NOTICE.—The Secretary shall notify the
Chairperson and the Ranking Minority Member of the Commit-
tee on Labor and Human Resources of the Senate and the
Committee on Education and the Workforce of the House of
Representatives not later than 30 days prior to concluding
an agreement under this section. The notice shall contain—
‘‘(A) a description of the voluntary flexible agreement
and the performance goals established by the Secretary
for the agreement;
‘‘(B) a list of participating guaranty agencies and the
specific statutory or regulatory waivers provided to each
guaranty agency;
‘‘(C) a description of the standards by which each guar-
anty agency’s performance under the agreement will be
assessed; and
‘‘(D) a description of the fees that will be paid to
each participating guaranty agency.
H. R. 6—114
‘‘(3) WAIVER NOTICE.—The Secretary shall notify the Chair-
person and the Ranking Minority Member of the Committee
on Labor and Human Resources of the Senate and the Commit-
tee on Education and the Workforce of the House of Representa-
tives not later than 30 days prior to the granting of a waiver
pursuant to subsection (a)(2) to a guaranty agency that is
not a party to a voluntary flexible agreement.
‘‘(4) PUBLIC AVAILABILITY.—The text of any voluntary flexi-
ble agreement, and any subsequent revisions, and any waivers
related to section 428(b)(3) that are not part of such an agree-
ment, shall be readily available to the public.
‘‘(5) MODIFICATION NOTICE.—The Secretary shall notify the
Chairperson and the Ranking Minority Members of the
Committee on Labor and Human Resources of the Senate and
the Committee on Education and the Workforce of the House
of Representatives 30 days prior to any modifications to an
agreement under this section.
‘‘(d) TERMINATION.—At the expiration or early termination of
an agreement under this section, the Secretary shall reinstate the
guaranty agency’s prior agreements under subsections (b) and (c)
of section 428, subject only to such additional requirements as
the Secretary determines to be necessary in order to ensure the
efficient transfer of responsibilities between the agreement under
this section and the agreements under subsections (b) and (c) of
section 428, and including the guaranty agency’s compliance with
reserve requirements under sections 422 and 428.’’.
SEC. 419. FEDERAL PLUS LOANS.
Section 428B (20 U.S.C. 1078–2) is amended—
(1) by amending subsection (a) to read as follows:
‘‘(a) AUTHORITY TO BORROW.—
‘‘(1) AUTHORITY AND ELIGIBILITY.—Parents of a dependent
student shall be eligible to borrow funds under this section
in amounts specified in subsection (b), if—
‘‘(A) the parents do not have an adverse credit history
as determined pursuant to regulations promulgated by the
Secretary; and
‘‘(B) the parents meet such other eligibility criteria
as the Secretary may establish by regulation, after con-
sultation with guaranty agencies, eligible lenders, and
other organizations involved in student financial assist-
ance.
‘‘(2) TERMS, CONDITIONS, AND BENEFITS.—Except as pro-
vided in subsections (c), (d), and (e), loans made under this
section shall have the same terms, conditions, and benefits
as all other loans made under this part.
‘‘(3) SPECIAL RULE.—Whenever necessary to carry out the
provisions of this section, the terms ‘student’ and ‘borrower’
as used in this part shall include a parent borrower under
this section.’’; and
(2) by adding at the end the following:
‘‘(f ) VERIFICATION
OF
IMMIGRATION
STATUS
AND
SOCIAL
SECURITY NUMBER.—A parent who wishes to borrow funds under
this section shall be subject to verification of the parent’s—
‘‘(1) immigration status in the same manner as immigration
status is verified for students under section 484(g); and
H. R. 6—115
‘‘(2) social security number in the same manner as social
security numbers are verified for students under section
484(p).’’.
SEC. 420. FEDERAL CONSOLIDATION LOANS.
(a) DEFINITION OF ELIGIBLE BORROWER.—Section 428C(a)(3) (20
U.S.C. 1078–3(a)(3)) is amended by striking everything preceding
subparagraph (C) and inserting the following:
‘‘(3) DEFINITION
OF
ELIGIBLE
BORROWER.—(A) For the
purpose of this section, the term ‘eligible borrower’ means a
borrower who—
‘‘(i) is not subject to a judgment secured through litiga-
tion with respect to a loan under this title or to an order
for wage garnishment under section 488A; and
‘‘(ii) at the time of application for a consolidation loan—
‘‘(I) is in repayment status;
‘‘(II) is in a grace period preceding repay-
ment; or
‘‘(III) is a defaulted borrower who has made
arrangements to repay the obligation on the defaulted
loans satisfactory to the holders of the defaulted loans.
‘‘(B)(i) An individual’s status as an eligible borrower under
this section terminates upon receipt of a consolidation loan
under this section, except that—
‘‘(I) an individual who receives eligible student loans
after the date of receipt of the consolidation loan may
receive a subsequent consolidation loan;
‘‘(II) loans received prior to the date of the consolidation
loan may be added during the 180-day period following
the making of the consolidation loan;
‘‘(III) loans received following the making of the consoli-
dation loan may be added during the 180-day period follow-
ing the making of the consolidation loan; and
‘‘(IV) loans received prior to the date of the first consoli-
dation loan may be added to a subsequent consolidation
loan.’’.
(b) DEFINITION OF ELIGIBLE STUDENT LOAN.—Section 428C(a)(4)
is amended by striking subparagraph (C) and inserting the
following:
‘‘(C) made under part D of this title;’’.
(c) CONTENTS OF AGREEMENTS.—Section 428C(b) is amended—
(1) in paragraph (1)(A)(i), by inserting ‘‘except that this
clause shall not apply in the case of a borrower with multiple
holders of loans under this part,’’ after ‘‘under this section,’’;
(2) in paragraph (4)(C)(ii)—
(A) in the matter preceding subclause (I), by inserting
‘‘during any such period’’ after ‘‘and be paid’’;
(B) in subclause (I), by striking ‘‘, or on or after October
1, 1998,’’; and
(C) in subclause (II), by striking ‘‘and before October
1, 1998,’’;
(3) in paragraph (6)(A), by inserting before the semicolon
at the end the following: ‘‘, except that a lender is not required
to consolidate loans described in subparagraph (D) or (E) of
subsection (a)(4) or subsection (d)(1)(C)(ii)’’.
H. R. 6—116
(d) EXTENSION
OF AUTHORITY.—Section 428C(e) is amended
by striking ‘‘September 30, 2002’’ and inserting ‘‘September 30,
2004’’.
(e) SPECIAL RULE.—Section 428C(f ) is amended—
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
‘‘(2) SPECIAL
RULE.—For consolidation loans based on
applications received during the period from October 1, 1998
through January 31, 1999, inclusive, the rebate described in
paragraph (1) shall be equal to 0.62 percent of the principal
plus accrued unpaid interest on such loan.’’.
SEC. 421. DEFAULT REDUCTION PROGRAM.
The heading for subsection (b) of section 428F (20 U.S.C. 1078–
6) is amended by striking ‘‘SPECIAL RULE’’ and inserting ‘‘SATISFAC-
TORY REPAYMENT ARRANGEMENTS TO RENEW ELIGIBILITY’’.
SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS.
(a) SPECIAL RULE.—Section 428G(a) (20 U.S.C. 1078–7(a)) is
amended by adding at the end the following:
‘‘(3) SPECIAL RULE.—An institution whose cohort default
rate (as determined under section 435(m)) for each of the 3
most recent fiscal years for which data are available is less
than 10 percent may disburse any loan made, insured, or
guaranteed under this part in a single installment for any
period of enrollment that is not more than 1 semester, 1 tri-
mester, 1 quarter, or 4 months.’’.
(b) DISBURSEMENT.—Section 428G(b)(1) is amended by adding
at the end the following new sentence: ‘‘An institution whose cohort
default rate (as determined under section 435(m)) for each of the
three most recent fiscal years for which data are available is less
than 10 percent shall be exempt from the requirements of this
paragraph.’’.
(c) EXCLUSIONS.—Section 428G(e) is amended—
(1) by striking ‘‘or made’’ and inserting ‘‘, made’’; and
(2) by inserting ‘‘, or made to a student to cover the cost
of attendance in a program of study abroad approved by the
home eligible institution if the home eligible institution has
a cohort default rate (as calculated under section 435(m)) of
less than 5 percent’’ before the period.
(d) EFFECTIVE DATE.—The amendments made by subsections
(a) and (b) shall be effective during the period beginning on October
1, 1998, and ending on September 30, 2002.
SEC. 423. UNSUBSIDIZED LOANS.
(a) ELIGIBLE BORROWERS.—Subsection (b) of section 428H (20
U.S.C. 1078–8(b)) is amended to read as follows:
‘‘(b) ELIGIBLE BORROWERS.—Any student meeting the require-
ments for student eligibility under section 484 (including graduate
and professional students as defined in regulations promulgated
by the Secretary) shall be entitled to borrow an unsubsidized Fed-
eral Stafford Loan if the eligible institution at which the student
has been accepted for enrollment, or at which the student is in
attendance, has—
‘‘(1) determined and documented the student’s need for
the loan based on the student’s estimated cost of attendance
(as determined under section 472) and the student’s estimated
H. R. 6—117
financial assistance, including a loan which qualifies for interest
subsidy payments under section 428; and
‘‘(2) provided the lender a statement—
‘‘(A) certifying the eligibility of the student to receive
a loan under this section and the amount of the loan
for which such student is eligible, in accordance with sub-
section (c); and
‘‘(B) setting forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with the
requirements of section 428G.’’.
(b) LOAN LIMITS.—Section 428H(d) is amended—
(1) in paragraph (2)—
(A) in the matter preceding subparagraph (A)—
(i) by inserting ‘‘(as defined in section 481(a)(2))’’
after ‘‘academic year’’; and
(ii) by striking ‘‘or in any period of 7 consecutive
months, whichever is longer,’’;
(B) in subparagraph (A)—
(i) in clause (i), by striking ‘‘length (as determined
under section 481);’’ and inserting ‘‘length; and’’; and
(ii) by striking clauses (ii) and (iii) and inserting
the following:
‘‘(ii) if such student is enrolled in a program of
undergraduate education which is less than one aca-
demic year, the maximum annual loan amount that
such student may receive may not exceed the amount
that bears the same ratio to the amount specified
in clause (i) as the length of such program measured
in semester, trimester, quarter, or clock hours bears
to one academic year;’’.
(C) in subparagraph (C), by inserting ‘‘and’’ after the
semicolon; and
(D) by inserting before the matter following subpara-
graph (C) the following:
‘‘(D) in the case of a student enrolled in coursework
specified in sections 484(b)(3)(B) and 484(b)(4)(B)—
‘‘(i) $4,000 for coursework necessary for enrollment
in an undergraduate degree or certificate program,
and, in the case of a student who has obtained a
baccalaureate degree, $5,000 for coursework necessary
for enrollment in a graduate or professional program;
and
‘‘(ii) in the case of a student who has obtained
a baccalaureate degree, $5,000 for coursework nec-
essary for a professional credential or certification from
a State required for employment as a teacher in an
elementary or secondary school;’’; and
(2) in paragraph (3), by adding at the end the following:
‘‘Interest capitalized shall not be deemed to exceed such maxi-
mum aggregate amount.’’.
(c) CAPITALIZATION
OF INTEREST.—Paragraph (2) of section
428H(e) is amended to read as follows:
‘‘(2) CAPITALIZATION OF INTEREST.—(A) Interest on loans
made under this section for which payments of principal are
not required during the in-school and grace periods or for
which payments are deferred under sections 427(a)(2)(C) and
H. R. 6—118
428(b)(1)(M) shall, if agreed upon by the borrower and the
lender—
‘‘(i) be paid monthly or quarterly; or
‘‘(ii) be added to the principal amount of the loan
by the lender only—
‘‘(I) when the loan enters repayment;
‘‘(II) at the expiration of a grace period, in the
case of a loan that qualifies for a grace period;
‘‘(III) at the expiration of a period of deferment
or forbearance; or
‘‘(IV) when the borrower defaults.
‘‘(B) The capitalization of interest described in subpara-
graph (A) shall not be deemed to exceed the annual insurable
limit on account of the student.’’.
(d) 
EXTENDED
REPAYMENT
PLAN.—Section 
428H(e)(6) 
is
amended by striking ‘‘10 year repayment period under section
428(b)(1)(D)’’ and inserting ‘‘repayment period under section
428(b)(9)’’.
(e) QUALIFICATION.—Section 428H(e) is amended by adding at
the end the following:
‘‘(7) QUALIFICATION
FOR
FORBEARANCE.—A lender may
grant the borrower of a loan under this section a forbearance
for a period not to exceed 60 days if the lender reasonably
determines that such a forbearance from collection activity
is warranted following a borrower’s request for forbearance,
deferment, or a change in repayment plan, or a request to
consolidate loans in order to collect or process appropriate
supporting documentation related to the request. During any
such period, interest on the loan shall accrue but not be capital-
ized.’’.
(f ) REPEAL.—Subsection (f ) of section 428H is repealed.
SEC. 424. LOAN FORGIVENESS FOR TEACHERS.
Section 428J (20 U.S.C. 1078–10) is amended to read as follows:
‘‘SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.
‘‘(a) STATEMENT OF PURPOSE.—It is the purpose of this section
to encourage individuals to enter and continue in the teaching
profession.
‘‘(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a
program, through the holder of the loan, of assuming the obligation
to repay a qualified loan amount for a loan made under section
428 or 428H, in accordance with subsection (c), for any new borrower
on or after October 1, 1998, who—
‘‘(1) has been employed as a full-time teacher for 5 consecu-
tive complete school years—
‘‘(A) in a school that qualifies under section 465(a)(2)(A)
for loan cancellation for Perkins loan recipients who teach
in such schools;
‘‘(B) if employed as a secondary school teacher, is teach-
ing a subject area that is relevant to the borrower’s aca-
demic major as certified by the chief administrative officer
of the public or nonprofit private secondary school in which
the borrower is employed; and
‘‘(C) if employed as an elementary school teacher, has
demonstrated, as certified by the chief administrative offi-
cer of the public or nonprofit private elementary school
in which the borrower is employed, knowledge and teaching
H. R. 6—119
skills in reading, writing, mathematics, and other areas
of the elementary school curriculum; and
‘‘(2) is not in default on a loan for which the borrower
seeks forgiveness.
‘‘(c) QUALIFIED LOANS AMOUNT.—
‘‘(1) IN GENERAL.—The Secretary shall repay not more than
$5,000 in the aggregate of the loan obligation on a loan made
under section 428 or 428H that is outstanding after the comple-
tion of the fifth complete school year of teaching described
in subsection (b)(1). No borrower may receive a reduction of
loan obligations under both this section and section 460.
‘‘(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount
for a loan made under section 428C may be a qualified loan
amount for the purposes of this subsection only to the extent
that such loan amount was used to repay a Federal Direct
Stafford Loan, a Federal Direct Unsubsidized Stafford Loan,
or a loan made under section 428 or 428H for a borrower
who meets the requirements of subsection (b), as determined
in accordance with regulations prescribed by the Secretary.
‘‘(d) REGULATIONS.—The Secretary is authorized to issue such
regulations as may be necessary to carry out the provisions of
this section.
‘‘(e) CONSTRUCTION.—Nothing in this section shall be construed
to authorize any refunding of any repayment of a loan.
‘‘(f ) LIST.—If the list of schools in which a teacher may perform
service pursuant to subsection (b) is not available before May 1
of any year, the Secretary may use the list for the year preceding
the year for which the determination is made to make such service
determination.
‘‘(g) ADDITIONAL ELIGIBILITY PROVISIONS.—
‘‘(1) CONTINUED ELIGIBILITY.—Any teacher who performs
service in a school that—
‘‘(A) meets the requirements of subsection (b)(1)(A) in
any year during such service; and
‘‘(B) in a subsequent year fails to meet the require-
ments of such subsection,
may continue to teach in such school and shall be eligible
for loan forgiveness pursuant to subsection (b).
‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may,
for the same service, receive a benefit under both this sub-
section and subtitle D of title I of the National and Community
Service Act of 1990 (42 U.S.C. 12571 et seq.).
‘‘(h) DEFINITION.—For purposes of this section, the term ‘year’,
where applied to service as a teacher, means an academic year
as defined by the Secretary.’’.
SEC. 425. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.
Part B (20 U.S.C. 1071 et seq.) is amended by inserting after
section 428J (20 U.S.C. 1078–10) the following:
‘‘SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.
‘‘(a) PURPOSE.—It is the purpose of this section—
‘‘(1) to bring more highly trained individuals into the early
child care profession; and
‘‘(2) to keep more highly trained child care providers in
the early child care field for longer periods of time.
‘‘(b) DEFINITIONS.—In this section:
H. R. 6—120
‘‘(1) CHILD CARE FACILITY.—The term ‘child care facility’
means a facility, including a home, that—
‘‘(A) provides child care services; and
‘‘(B) meets applicable State or local government licens-
ing, certification, approval, or registration requirements,
if any.
‘‘(2) CHILD CARE SERVICES.—The term ‘child care services’
means activities and services provided for the education and
care of children from birth through age 5 by an individual
who has a degree in early childhood education.
‘‘(3) DEGREE.—The term ‘degree’ means an associate’s or
bachelor’s degree awarded by an institution of higher education.
‘‘(4) EARLY CHILDHOOD EDUCATION.—The term ‘early child-
hood education’ means education in the areas of early child
education, child care, or any other educational area related
to child care that the Secretary determines appropriate.
‘‘(5) INSTITUTION OF HIGHER EDUCATION.—Notwithstanding
section 102, the term ‘institution of higher education’ has the
meaning given the term in section 101.
‘‘(c) DEMONSTRATION PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary may carry out a dem-
onstration program of assuming the obligation to repay, pursu-
ant to subsection (d), a loan made, insured, or guaranteed
under this part or part D (excluding loans made under sections
428B and 428C or comparable loans made under part D) for
any new borrower after the date of enactment of the Higher
Education Amendments of 1998, who—
‘‘(A) completes a degree in early childhood education;
‘‘(B) obtains employment in a child care facility; and
‘‘(C) has worked full time for the 2 consecutive years
preceding the year for which the determination is made
as a child care provider in a low-income community.
‘‘(2) LOW-INCOME COMMUNITY.—For the purposes of this
subsection, the term ‘low-income community’ means a commu-
nity in which 70 percent of households within the community
earn less than 85 percent of the State median household income.
‘‘(3) AWARD BASIS; PRIORITY.—
‘‘(A) AWARD BASIS.—Subject to subparagraph (B), loan
repayment under this section shall be on a first-come,
first-served basis and subject to the availability of appro-
priations.
‘‘(B) PRIORITY.—The Secretary shall give priority in
providing loan repayment under this section for a fiscal
year to student borrowers who received loan repayment
under this section for the preceding fiscal year.
‘‘(4) REGULATIONS.—The Secretary is authorized to pre-
scribe such regulations as may be necessary to carry out the
provisions of this section.
‘‘(d) LOAN REPAYMENT.—
‘‘(1) IN GENERAL.—The Secretary shall assume the obliga-
tion to repay—
‘‘(A) after the second consecutive year of employment
described in subparagraphs (B) and (C) of subsection (c)(1),
20 percent of the total amount of all loans made after
date of enactment of the Higher Education Amendments
of 1998, to a student under this part or part D;
H. R. 6—121
‘‘(B) after the third consecutive year of such employ-
ment, 20 percent of the total amount of all such loans;
and
‘‘(C) after each of the fourth and fifth consecutive years
of such employment, 30 percent of the total amount of
all such loans.
‘‘(2) CONSTRUCTION.—Nothing in this section shall be con-
strued to authorize the refunding of any repayment of a loan
made under this part or part D.
‘‘(3) INTEREST.—If a portion of a loan is repaid by the
Secretary under this section for any year, the proportionate
amount of interest on such loan which accrues for such year
shall be repaid by the Secretary.
‘‘(4) SPECIAL RULE.—In the case where a student borrower
who is not participating in loan repayment pursuant to this
section returns to an institution of higher education after
graduation from an institution of higher education for the pur-
pose of obtaining a degree in early childhood education, the
Secretary is authorized to assume the obligation to repay the
total amount of loans made under this part or part D incurred
for a maximum of two academic years in returning to an
institution of higher education for the purpose of obtaining
a degree in early childhood education. Such loans shall only
be repaid for borrowers who qualify for loan repayment pursu-
ant to the provisions of this section, and shall be repaid in
accordance with the provisions of paragraph (1).
‘‘(5) INELIGIBILITY
OF
NATIONAL
SERVICE
AWARD
RECIPI-
ENTS.—No student borrower may, for the same volunteer serv-
ice, receive a benefit under both this section and subtitle D
of title I of the National and Community Service Act of 1990
(42 U.S.C. 12601 et seq.).
‘‘(e) REPAYMENT TO ELIGIBLE LENDERS.—The Secretary shall
pay to each eligible lender or holder for each fiscal year an amount
equal to the aggregate amount of loans which are subject to repay-
ment pursuant to this section for such year.
‘‘(f ) APPLICATION FOR REPAYMENT.—
‘‘(1) IN GENERAL.—Each eligible individual desiring loan
repayment under this section shall submit a complete and
accurate application to the Secretary at such time, in such
manner, and containing such information as the Secretary may
require.
‘‘(2) CONDITIONS.—An eligible individual may apply for loan
repayment under this section after completing each year of
qualifying employment. The borrower shall receive forbearance
while engaged in qualifying employment unless the borrower
is in deferment while so engaged.
‘‘(g) EVALUATION.—
‘‘(1) IN GENERAL.—The Secretary shall conduct, by grant
or contract, an independent national evaluation of the impact
of the demonstration program assisted under this section on
the field of early childhood education.
‘‘(2) COMPETITIVE BASIS.—The grant or contract described
in subsection (b) shall be awarded on a competitive basis.
‘‘(3) CONTENTS.—The evaluation described in this sub-
section shall—
H. R. 6—122
‘‘(A) determine the number of individuals who were
encouraged by the demonstration program assisted under
this section to pursue early childhood education;
‘‘(B) determine the number of individuals who remain
employed in a child care facility as a result of participation
in the program;
‘‘(C) identify the barriers to the effectiveness of the
program;
‘‘(D) assess the cost-effectiveness of the program in
improving the quality of—
‘‘(i) early childhood education; and
‘‘(ii) child care services;
‘‘(E) identify the reasons why participants in the pro-
gram have chosen to take part in the program;
‘‘(F) identify the number of individuals participating
in the program who received an associate’s degree and
the number of such individuals who received a bachelor’s
degree; and
‘‘(G) identify the number of years each individual
participates in the program.
‘‘(4) INTERIM AND FINAL EVALUATION REPORTS.—The Sec-
retary shall prepare and submit to the President and the Con-
gress such interim reports regarding the evaluation described
in this subsection as the Secretary deems appropriate, and
shall prepare and so submit a final report regarding the evalua-
tion by January 1, 2002.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $10,000,000 for fiscal
year 1999, and such sums as may be necessary for each of the
4 succeeding fiscal years.’’.
SEC. 426. NOTICE TO SECRETARY AND PAYMENT OF LOSS.
The third sentence of section 430(a) (20 U.S.C. 1080(a)) is
amended by inserting ‘‘the institution was contacted and other’’
after ‘‘submit proof that’’.
SEC. 427. LEGAL POWERS AND RESPONSIBILITIES.
(a) AUDIT OF FINANCIAL TRANSACTIONS.—Section 432(f )(1) is
amended—
(1) in subparagraph (B), by striking ‘‘section 435(d)(1) (D),
(F), or (H);’’ and inserting ‘‘section 435(d)(1); and’’;
(2) in subparagraph (C)—
(A) by striking ‘‘and Labor’’ and inserting ‘‘and the
Workforce’’; and
(B) by striking ‘‘; and’’ inserting a period; and
(3) by striking subparagraph (D).
(b) PROGRAM
OF ASSISTANCE.—Section 432(k)(3) is amended
by striking ‘‘Within 1 year’’ and everything that follows through
‘‘1992, the’’ and inserting ‘‘The’’.
(c) 
COMMON
FORMS
AND
FORMATS.—Section 
432(m) 
is
amended—
(1) in paragraph (1)—
(A) in subparagraph (A), by striking ‘‘a common
application form and promissory note’’ and inserting ‘‘com-
mon application forms and promissory notes, or master
promissory notes,’’;
(B) in subparagraph (B)—
H. R. 6—160
‘‘(iv) To outstanding balances on subsidized loans
made under part D for the payment period or period
of enrollment for which a return of funds is required.
‘‘(v) To outstanding balances on loans made under
part E for the payment period or period of enrollment
for which a return of funds is required.
‘‘(vi) To outstanding balances on loans made under
section 428B for the payment period or period of enroll-
ment for which a return of funds is required.
‘‘(vii) To outstanding balances on parent loans
made under part D for the payment period or period
of enrollment for which a return of funds is required.
‘‘(B) REMAINING
EXCESSES.—If excess funds remain
after repaying all outstanding loan amounts, the remaining
excess shall be credited in the following order:
‘‘(i) To awards under subpart 1 of part A for the
payment period or period of enrollment for which a
return of funds is required.
‘‘(ii) To awards under subpart 3 of part A for
the payment period or period of enrollment for which
a return of funds is required.
‘‘(iii) To other assistance awarded under this title
for which a return of funds is required.
‘‘(c) WITHDRAWAL DATE.—
‘‘(1) IN GENERAL.—In this section, the term ‘day the student
withdrew’—
‘‘(A) is the date that the institution determines—
‘‘(i) the student began the withdrawal process pre-
scribed by the institution;
‘‘(ii) 
the 
student 
otherwise 
provided 
official
notification to the institution of the intent to withdraw;
or
‘‘(iii) in the case of a student who does not begin
the withdrawal process or otherwise notify the institu-
tion of the intent to withdraw, the date that is the
mid-point of the payment period for which assistance
under this title was disbursed or a later date docu-
mented by the institution; or
‘‘(B) for institutions required to take attendance, is
determined by the institution from such attendance records.
‘‘(2) SPECIAL RULE.—Notwithstanding paragraph (1), if the
institution determines that a student did not begin the with-
drawal process, or otherwise notify the institution of the intent
to withdraw, due to illness, accident, grievous personal loss,
or other such circumstances beyond the student’s control, the
institution may determine the appropriate withdrawal date.
‘‘(d) PERCENTAGE
OF
THE PAYMENT PERIOD
OR PERIOD
OF
ENROLLMENT COMPLETED.—For purposes of subsection (a)(3)(B)(i),
the percentage of the payment period or period of enrollment for
which assistance was awarded that was completed, is determined—
‘‘(1) in the case of a program that is measured in credit
hours, by dividing the total number of calendar days comprising
the payment period or period of enrollment for which assistance
is awarded into the number of calendar days completed in
that period as of the day the student withdrew; and
‘‘(2) in the case of a program that is measured in clock
hours, by dividing the total number of clock hours comprising
H. R. 6—179
‘‘Subpart 1—State Role
‘‘SEC. 495. STATE RESPONSIBILITIES.
‘‘(a) STATE RESPONSIBILITIES.—As part of the integrity program
authorized by this part, each State, through one State agency
or several State agencies selected by the State, shall—
‘‘(1) furnish the Secretary, upon request, information with
respect to the process for licensing or other authorization for
institutions of higher education to operate within the State;
‘‘(2) notify the Secretary promptly whenever the State
revokes a license or other authority to operate an institution
of higher education; and
‘‘(3) notify the Secretary promptly whenever the State has
credible evidence that an institution of higher education within
the State—
‘‘(A) has committed fraud in the administration of the
student assistance programs authorized by this title; or
‘‘(B) has substantially violated a provision of this title.
‘‘(b) INSTITUTIONAL RESPONSIBILITY.—Each institution of higher
education shall provide evidence to the Secretary that the institu-
tion has authority to operate within a State at the time the institu-
tion is certified under subpart 3.’’.
SEC. 492. ACCREDITING AGENCY RECOGNITION.
(a) RECOGNITION.—
(1) SUBPART HEADING.—The heading of subpart 2 of part
H is amended by striking ‘‘Approval’’ and inserting ‘‘Recogni-
tion’’.
(2) SECTION 496 HEADING.—The heading of section 496 is
amended by striking ‘‘APPROVAL’’ and inserting ‘‘RECOGNI-
TION’’.
(b) STANDARDS.—Section 496(a) (20 U.S.C. 1099b(a)) is
amended—
(1) in the subsection heading, by striking ‘‘STANDARDS’’
and inserting ‘‘CRITERIA’’;
(2) in the matter preceding paragraph (1), by striking
‘‘standards’’ each place the term appears and inserting ‘‘cri-
teria’’;
(3) in paragraph (4)—
(A) by striking ‘‘at the institution’’ and inserting
‘‘offered by the institution’’; and
(B) by inserting ‘‘, including distance education courses
or programs,’’ after ‘‘higher education’’; and
(4) in paragraph (5)—
(A) by striking ‘‘of accreditation’’ and inserting ‘‘for
accreditation’’;
(B) by striking subparagraphs (H), (I), and (J);
(C) by redesignating subparagraphs (A) through (G)
as subparagraphs (B) through (H), respectively;
(D) by redesignating subparagraphs (K) and (L) as
subparagraphs (I) and (J), respectively;
(E) by inserting before subparagraph (B) the following:
‘‘(A) success with respect to student achievement in
relation to the institution’s mission, including, as appro-
priate, consideration of course completion, State licensing
examinations, and job placement rates;’’;
H. R. 6—180
(F) in subparagraph (H) (as redesignated by subpara-
graph (C)), by striking ‘‘program length and tuition and
fees in relation to the subject matters taught’’ and inserting
‘‘measures of program length’’;
(G) in subparagraph (J) (as redesignated by subpara-
graph (D))—
(i) by inserting ‘‘record of’’ before ‘‘compliance’’;
(ii) by striking ‘‘Act, including any’’ and inserting
‘‘Act based on the most recent student loan default
rate data provided by the Secretary, the’’; and
(iii) by inserting ‘‘any’’ after ‘‘reviews, and’’; and
(H) in the matter following subparagraph (J) (as
redesignated by subparagraph (D)), by striking ‘‘(G), (H),
(I), (J), and (L)’’ and inserting ‘‘(A), (H), and (J)’’;
(5) in paragraph (7), by striking ‘‘State postsecondary
review entity’’ and inserting ‘‘State licensing or authorizing
agency’’; and
(6) in paragraph (8), by striking ‘‘State postsecondary’’ and
everything that follows through ‘‘is located’’ and inserting ‘‘State
licensing or authorizing agency’’.
(c) OPERATING PROCEDURES.—Section 496(c) is amended—
(1) by striking ‘‘approved by the Secretary’’ and inserting
‘‘recognized by the Secretary’’; and
(2) in paragraph (1), by striking ‘‘(at least’’ and everything
that follows through ‘‘unannounced),’’ and inserting ‘‘(which
may include unannounced site visits)’’.
(d) 
CONFORMING
AMENDMENTS.—Section 
496 
is 
further
amended—
(1) in subsection (d)—
(A) by striking ‘‘APPROVAL’’ in the heading of such
subsection and inserting ‘‘RECOGNITION’’; and
(B) by striking ‘‘approved’’ and inserting ‘‘recognized’’;
(2) in subsection (f ), by striking ‘‘approved’’ and inserting
‘‘recognized’’;
(3) in subsection (g)—
(A) in the heading of such subsection, by striking
‘‘STANDARDS’’ and inserting ‘‘CRITERIA’’; and
(B) by striking ‘‘standards’’ the first place such term
appears and inserting ‘‘criteria’’;
(4) in subsection (k)—
(A) in the matter preceding paragraph (1), by striking
‘‘section 481’’ and inserting ‘‘section 102’’; and
(B) in paragraph (2), by striking ‘‘standards’’ and
inserting ‘‘criteria’’;
(5) in subsection (l), by striking everything preceding para-
graph (2) and inserting the following:
‘‘(l) LIMITATION, SUSPENSION, OR TERMINATION
OF RECOGNI-
TION.—(1) If the Secretary determines that an accrediting agency
or association has failed to apply effectively the criteria in this
section, or is otherwise not in compliance with the requirements
of this section, the Secretary shall—
‘‘(A) after notice and opportunity for a hearing, limit, sus-
pend, or terminate the recognition of the agency or association;
or
‘‘(B) require the agency or association to take appropriate
action to bring the agency or association into compliance with
H. R. 6—242
PART I—SUMMER TRAVEL AND WORK
PROGRAMS
SEC. 846. AUTHORITY TO ADMINISTER SUMMER TRAVEL AND WORK
PROGRAMS.
The Director of the United States Information Agency is author-
ized to administer summer travel and work programs without
regard to preplacement requirements.
PART J—WEB-BASED EDUCATION
COMMISSION
SEC. 851. SHORT TITLE; DEFINITIONS.
(a) IN GENERAL.—This part may be cited as the ‘‘Web-Based
Education Commission Act’’.
(b) DEFINITIONS.—In this part:
(1) COMMISSION.—The term ‘‘Commission’’ means the Web-
Based Education Commission established under section 852.
(2) INFORMATION
TECHNOLOGY.—The term ‘‘information
technology’’ has the meaning given that term in section 5002
of the Information Technology Management Reform Act of 1996
(110 Stat. 679).
(3) STATE.—The term ‘‘State’’ means each of the several
States of the United States and the District of Columbia.
SEC. 852. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION.
(a) ESTABLISHMENT.—There is established a commission to be
known as the Web-Based Education Commission.
(b) MEMBERSHIP.—
(1) COMPOSITION.—The Commission shall be composed of
14 members, of which—
(A) three members shall be appointed by the President,
from among individuals representing the Internet tech-
nology industry;
(B) three members shall be appointed by the Secretary,
from among individuals with expertise in accreditation,
establishing statewide curricula, and establishing informa-
tion technology networks pertaining to education curricula;
(C) two members shall be appointed by the Majority
Leader of the Senate;
(D) two members shall be appointed by the Minority
Leader of the Senate;
(E) two members shall be appointed by the Speaker
of the House of Representatives; and
(F) two members shall be appointed by the Minority
Leader of the House of Representatives.
(2) DATE.—The appointments of the members of the
Commission shall be made not later than 45 days after the
date of enactment of this Act.
(c) PERIOD OF APPOINTMENT; VACANCIES.—Members shall be
appointed for the life of the Commission. Any vacancy in the
Commission shall not affect its powers, but shall be filled in the
same manner as the original appointment.
(d) INITIAL MEETING.—Not later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold the Commission’s first meeting.
H. R. 6—248
(4) in the heading for section 107, by striking ‘‘COMMUNITY
COLLEGES’’ and inserting ‘‘COLLEGES OR UNIVERSITIES’’;
(5) in sections 2(a)(4), 2(a)(7), 2(b)(4), 102(b), 103, 105,
106(b), 
107(a), 
107(b), 
108(a), 
108(b)(3)(A), 
108(b)(3)(B),
108(b)(4), 109(b)(2), 109(b)(3), 109(d), 113(a), 113(b), 113(c)(1),
113(c)(2), 302(b), 303, 304, 305(a), and 305(b) (25 U.S.C.
1801(a)(4), 1801(a)(7), 1801(b)(4), 1803(b), 1804, 1805, 1806(b),
1807(a), 
1807(b), 
1808(a), 
1808(b)(3)(A), 
1808(b)(3)(B),
1808(b)(4), 1809(b)(2), 1809(b)(3), 1809(d), 1813(a), 1813(b),
1813(c)(1), 1813(c)(2), 1832(b), 1833, 1834, 1835(a), and
1835(b)), by striking ‘‘community college’’ each place the term
appears and inserting ‘‘college or university’’;
(6) in sections 101, 102(a), 104(a)(1), 107(a), 108(c)(2),
109(b)(1), 111(a)(2), 112(a), 112(a)(2), 112(c)(2)(B), 301, 302(a),
and 402(a) (25 U.S.C. 1802, 1803(a), 1804a(a)(1), 1807(a),
1808(c)(2), 
1809(b)(1), 
1811(a)(2), 
1812(a), 
1812(a)(2),
1812(c)(2)(B), 1831, 1832(a), and 1851(a)), by striking ‘‘commu-
nity colleges’’ each place the term appears and inserting ‘‘col-
leges or universities’’;
(7) in sections 108(a)(1), 108(a), 113(b)(2), 113(c)(2), 302(a),
302(b), 302(b)(2)(B), 302(b)(4), 303, 304, 305(a), and 305(b) (25
U.S.C. 1808(a)(1), 1808(a), 1813(b)(2), 1813(c)(2), 1832(a),
1832(b), 1832(b)(2)(B), 1832(b)(4), 1833, 1834, 1835(a), and
1835(b)), by striking ‘‘such college’’ each place the term appears
and inserting ‘‘such college or university’’;
(8) in sections 104(a)(2), 109(b)(1), and 111(a)(2) (25 U.S.C.
1804a(a)(2), 1809(b)(1), and 1811(a)(2)), by striking ‘‘such col-
leges’’ and inserting ‘‘such colleges or universities’’;
(9) in section 2(b)(5) (25 U.S.C. 1801(b)(5)), by striking
‘‘community college’s’’ and inserting ‘‘college or university’s’’;
(10) in section 109(a) (25 U.S.C. 1809(a)), by inserting
‘‘or university’’ after ‘‘tribally controlled college’’;
(11) in section 110(a)(4) (25 U.S.C. 1810(a)(4)), by striking
‘‘Tribally Controlled Community Colleges’’ and inserting ‘‘trib-
ally controlled colleges or universities’’;
(12) in sections 102(b), 109(d), 113(c)(2)(E), 302(b)(6), and
305(a) (25 U.S.C. 1803(b), 1809(d), 1813(c)(2)(E), 1832(b)(6),
and 1835(a)), by striking ‘‘the college’’ and inserting ‘‘the college
or university’’;
(13) in section 112(c)(1) (25 U.S.C. 1812(c)(1)), by striking
‘‘colleges’’ and inserting ‘‘colleges or universities’’;
(14) in sections 302(b)(4) and 305(a) (25 U.S.C. 1832(b)(4)
and 1835(a)), by striking ‘‘that college’’ and inserting ‘‘that
college or university’’; and
(15) in section 302(b)(4) (25 U.S.C. 1832(b)(4)), by striking
‘‘other colleges’’ and inserting ‘‘other colleges or universities’’.
(c) ADDITIONAL CONFORMING AMENDMENTS.—
(1) RECOMMENDED
LEGISLATION.—The Secretary of Edu-
cation shall prepare and submit to Congress recommended
legislation containing technical and conforming amendments
to reflect the changes made by subsection (b).
(2) SUBMISSION TO CONGRESS.—Not later than 6 months
after the effective date of this title, the Secretary of Education
shall submit the recommended legislation referred to under
paragraph (1).
(d) REFERENCES.—Any reference to a section or other provision
of the Tribally Controlled Community College Assistance Act of
H. R. 6—249
1978 shall be deemed to be a reference to the Tribally Controlled
College or University Assistance Act of 1978.
(e) CLERICAL AMENDMENT.—Section 109 of the Tribally Con-
trolled Colleges or University Act of 1978 (as renamed by subsection
(b)(1)) (25 U.S.C. 1809) is amended by redesignating subsection
(d) as subsection (c).
SEC. 902. REAUTHORIZATION OF NAVAJO COMMUNITY COLLEGE ACT.
Section 5(a)(1) of the Navajo Community College Act (25 U.S.C.
640c–1) is amended by striking ‘‘1993’’ and inserting ‘‘1999’’.
PART B—EDUCATION OF THE DEAF
SEC. 911. SHORT TITLE.
This part may be cited as the ‘‘Education of the Deaf Amend-
ments of 1998’’.
SEC. 912. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.
Section 104(b) of the Education of the Deaf Act of 1986 (20
U.S.C. 4304(b)) is amended—
(1) in paragraph (1)—
(A) in subparagraph (A), by inserting ‘‘and’’ after the
semicolon;
(B) in subparagraph (B), by striking ‘‘; and’’ and
inserting a period; and
(C) by striking subparagraph (C);
(2) in the matter preceding subparagraph (A) of paragraph
(2)—
(A) by striking ‘‘paragraph (1)’’ and inserting ‘‘para-
graph (1)(B)’’; and
(B) by striking ‘‘section 618(b)’’ and inserting ‘‘section
618(a)(1)(A)’’;
(3) in paragraph (3), by striking ‘‘intermediate educational
unit’’ and inserting ‘‘educational service agency’’;
(4) in paragraph (4)—
(A) in subparagraph (A), by striking ‘‘intermediate edu-
cational unit’’ and inserting ‘‘educational service agency’’;
and
(B) in subparagraph (B), by striking ‘‘intermediate edu-
cational units’’ and inserting ‘‘educational service agencies’’;
and
(5) by amending subparagraph (C) to read as follows:
‘‘(C) provide the child a free appropriate public edu-
cation in accordance with part B of the Individuals with
Disabilities Education Act and procedural safeguards in
accordance with the following provisions of section 615
of such Act:
‘‘(i) Paragraphs (1), and (3) through (6) of sub-
section (b).
‘‘(ii) Subsections (c) through (g).
‘‘(iii) Subsection (h), except for the matter in para-
graph (4) pertaining to transmission of findings and
decisions to a State advisory panel.
‘‘(iv) Paragraphs (1) and (2) of subsection (i).
‘‘(v) Subsection ( j)—
‘‘(I) except that such subsection shall not be
applicable to a decision by the University to refuse
to admit a child; or